MONROE, La.--(BUSINESS WIRE)--April 28, 2005--CenturyTel, Inc.
(NYSE: CTL) announces operating results for first quarter 2005.
-- Operating revenues rose to $595.3 million from $593.7 million
in first quarter 2004.
-- Net income, excluding nonrecurring items, was $80.0 million
compared to $83.3 million in first quarter 2004. Reported
under GAAP, first quarter 2005 net income was $79.6 million
compared to $83.3 million in first quarter 2004.
-- Diluted earnings per share increased 3.5% to $.59 from $.57 in
first quarter 2004 due to share repurchases during 2004.
-- Free cash flow (as defined in the attached financial
schedules) was $137.3 million in first quarter 2005.
-- During the first quarter, the Company repurchased 1.78 million
shares of common stock for approximately $60 million under its
$200 million share repurchase program.
First Quarter Highlights (1) Quarter Quarter
(In thousands, except per share Ended Ended
amounts and customer units) 3/31/05 3/31/04 % Change
----------------------------------------------------------------------
Operating Revenues $ 595,282 $ 593,704 0.3 %
Operating Cash Flow $ 309,035 $ 310,549 (0.5)%
Net Income $ 79,991 $ 83,279 (3.9)%
Diluted Earnings Per Share $ .59 $ .57 3.5 %
Average Diluted Shares
Outstanding 137,169 147,426 (7.0)%
Capital Expenditures $ 74,903 $ 61,745 21.3 %
----------------------------------------------------------------------
Telephone Access Lines 2,298,491 2,366,420 (2.9)%
Long Distance Lines 1,097,209 961,832 14.1 %
DSL Connections 173,768 97,092 79.0 %
----------------------------------------------------------------------
(1) These results include adjustments for nonrecurring items
and other non-GAAP financial measures. A reconciliation of
these items to comparable GAAP measures is included in the
attached financial schedules.
"CenturyTel
achieved solid financial results during the first
quarter with increased revenues from DSL, long distance and fiber
operations," Glen F. Post, III, chairman and chief executive officer,
said. "Our revenue from enhanced calling features also continues to
grow as customer demand for our bundle offerings remains strong. More
than 17% of our residential access lines were served through a bundle
at the end of the first quarter with more than 60% of those bundles
also including Internet or long distance service."
Operating revenues rose to $595.3 million in first quarter 2005
from $593.7 million in first quarter 2004. Revenue growth of
approximately $15.0 million was driven primarily by growth in DSL
connections, data circuits, long distance lines and our fiber
transport business and the continued penetration of enhanced calling
features. These increases more than offset revenue declines of
approximately $14.0 million primarily attributable to lower access
revenues, universal service funding and intrastate toll revenues,
along with access line losses.
Operating expenses increased 2.0% to $418.4 million compared to
$410.1 million in first quarter 2004. Cost of services and products
increased $10.4 million primarily due to growth in DSL connections,
data circuits, long distance lines and the fiber transport business.
Selling, general and administrative expenses decreased $7.4 million
primarily due to lower bad debt expense and employee costs.
Depreciation and amortization increased $5.2 million primarily due to
higher levels of plant in service and increased amortization
associated with the Company's new billing system.
Operating cash flow decreased to $309.0 million from $310.5
million. CenturyTel
achieved an operating cash flow margin of 51.9%
during the quarter versus 52.3% in first quarter 2004.
Net income, excluding nonrecurring items, was $80.0 million
compared to $83.3 million in first quarter 2004, reflecting the
decrease in operating income, which was partially offset by lower
interest and income tax expense. Diluted earnings per share, excluding
nonrecurring items, increased 3.5% to $.59 from $.57, due to a 7.0%
reduction in diluted shares outstanding.
"CenturyTel
experienced stronger than expected broadband demand
during the quarter, adding more than 31,000 DSL connections and ending
the quarter with a penetration rate of nearly 10.5% of DSL-enabled
lines. These results reflect the success of our strategic focus of
owning the broadband connection to customers in our markets," Post
said.
Under generally accepted accounting principles (GAAP), CenturyTel
reported operating revenues of $595.3 million in first quarter 2005
compared to $593.7 million in first quarter 2004. In first quarter
2005, the Company reported net income of $79.6 million and diluted
earnings per share of $.59, compared to $83.3 million and $.57 per
diluted share, respectively, in first quarter 2004. Net income in
first quarter 2005 includes $3.7 million after-tax expense related to
CenturyTel's
purchase and retirement of approximately $400 million of
Series J Notes and $3.3 million net benefit related to the settlement
of various income tax audits.
For second quarter 2005, CenturyTel
expects total revenues of $590
to $605 million and diluted earnings per share of $.53 to $.57. The
decline in diluted earnings per share from first quarter to second
quarter 2005 is primarily due to increased operating costs related to
expected growth in our DSL, long distance and fiber operations, annual
wage adjustments effective in the second quarter and the seasonal
impact of maintenance activities for our outside plant.
For the full year 2005, diluted earnings per share is expected to
be in the range of $2.25 to $2.35 versus the previous guidance of
$2.20 to $2.35, reflecting the higher than anticipated first quarter
diluted earnings per share, fewer fully diluted shares outstanding as
a result of share repurchases during the first quarter and
postponement of the effective date for the change in accounting for
stock options.
These outlook figures for the second quarter and full year 2005
assume the successful mitigation of the dilutive effect of the Equity
Units currently scheduled to settle in May 2005, and exclude any costs
associated with transactions related to the Equity Units, future share
repurchases, mergers, acquisitions, divestitures or other nonrecurring
items.
Reconciliation to GAAP. This release includes certain non-GAAP
financial measures, including but not limited to operating cash flow,
free cash flow and adjustments to GAAP measures to exclude the effect
of nonrecurring items. In addition to providing key metrics for
management to evaluate the Company's performance, we believe these
measurements assist readers in their understanding of period-to-period
operating performance and in identifying historical and prospective
trends. Reconciliations of non-GAAP financial measures to the most
comparable GAAP measures are included in the attached financial
statements. Reconciliation of additional non-GAAP financial measures
that may be discussed during the earnings call described below will be
available on the Company's Web site at www.centurytel.com. Investors
are urged to consider these non-GAAP measures in addition to, and not
in substitution for, measures prepared in accordance with GAAP.
Investor Call. As previously announced, CenturyTel's
management
will host a conference call at 10:30 a.m. Central Time today.
Interested parties can access the call by dialing 866.802.4324. The
call will be accessible for replay through May 4, 2005, by calling
888.266.2081 and entering the conference ID number 680045. Investors
can also listen to CenturyTel's
earnings conference call and replay by
accessing the Investor Relations portion of the Company's Web site at
www.centurytel.com through May 18, 2005.
In addition to historical information, this release includes
certain forward-looking statements, estimates and projections that are
based on current expectations only, and are subject to a number of
risks, uncertainties and assumptions, many of which are beyond the
control of the Company. Actual events and results may differ
materially from those anticipated, estimated or projected if one or
more of these risks or uncertainties materialize, or if underlying
assumptions prove incorrect. Factors that could affect actual results
include but are not limited to: the timing, success and overall
effects of competition from a wide variety of competitive providers;
the risks inherent in rapid technological change; the effects of
ongoing changes in the regulation of the communications industry; the
Company's ability to effectively manage its growth, including
integrating newly-acquired businesses into the Company's operations
and hiring adequate numbers of qualified staff; possible changes in
the demand for, or pricing of, the Company's products and services;
the Company's ability to successfully introduce new product or service
offerings on a timely and cost-effective basis; the Company's ability
to successfully take steps to mitigate the dilutive effect of the
Equity Units currently scheduled to settle in May 2005; the Company's
ability to collect its receivables from financially troubled
communications companies; the Company's ability to successfully
negotiate collective bargaining agreements on reasonable terms; other
risks referenced from time to time in the Company's filings with the
Securities and Exchange Commission; and the effects of more general
factors such as changes in interest rates, in accounting policies or
practices, in operating, medical or administrative costs, in general
market, labor or economic conditions, or in legislation, regulation or
public policy. These and other uncertainties related to the Company's
business are described in greater detail in the Company's Annual
Report on Form 10-K for the year ended December 31, 2004. You are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this release. The
information contained in this release is as of April 28, 2005. The
Company undertakes no obligation to update any of its forward-looking
statements.
CenturyTel, Inc.
(NYSE: CTL) provides a full range of local, long
distance, Internet and broadband services to consumers in 22 states.
Included in the S&P 500 Index, CenturyTel
is a leading provider of
integrated communications services to rural areas and small to
mid-size cities in the United States. Visit CenturyTel
at
www.centurytel.com.
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(UNAUDITED)
Three months ended March 31, 2005
---------------------------------
As
adjusted
Less excluding
non- non-
In thousands, As recurring recurring
except per share amounts reported items items
--------- ---------- ----------
OPERATING REVENUES
Local service $ 176,985 176,985
Network access 230,278 230,278
Long distance 47,515 47,515
Data 72,906 72,906
Fiber transport and CLEC 20,243 20,243
Other 47,355 47,355
--------- ---------- ----------
595,282 - 595,282
--------- ---------- ----------
OPERATING EXPENSES
Cost of services and products 191,993 191,993
Selling, general and
administrative 94,254 94,254
Depreciation and amortization 132,175 132,175
--------- ---------- ----------
418,422 - 418,422
--------- ---------- ----------
OPERATING INCOME 176,860 - 176,860
OTHER INCOME (EXPENSE)
Interest expense (52,625) (1,196)(1) (51,429)
Income from unconsolidated
cellular entity 1,313 1,313
Other income (expense) 1,535 (1,574)(2) 3,109
Income tax expense (47,467) 2,395 (3) (49,862)
--------- ---------- ----------
NET INCOME $ 79,616 (375) 79,991
========= ========== ==========
BASIC EARNINGS PER SHARE $ 0.60 0.00 0.60
DILUTED EARNINGS PER SHARE $ 0.59 0.00 0.59
SHARES OUTSTANDING
Basic 132,183 132,183
Diluted 137,169 137,169
DIVIDENDS PER COMMON SHARE $ 0.06 0.06
Three months ended March 31, 2004
-------------------------------
As
adjusted
Less excluding
non- non-
In thousands, As recurring recurring
except per share amounts reported items items
--------- ---------- ----------
OPERATING REVENUES
Local service 178,058 178,058
Network access 240,957 240,957
Long distance 44,589 44,589
Data 65,628 65,628
Fiber transport and CLEC 17,432 17,432
Other 47,040 47,040
--------- ---------- ----------
593,704 - 593,704
--------- ---------- ----------
OPERATING EXPENSES
Cost of services and products 181,549 181,549
Selling, general and administrative 101,606 101,606
Depreciation and amortization 126,992 126,992
--------- ---------- ----------
410,147 - 410,147
--------- ---------- ----------
OPERATING INCOME 183,557 - 183,557
OTHER INCOME (EXPENSE)
Interest expense (52,543) (52,543)
Income from unconsolidated cellular
entity 2,059 2,059
Other income (expense) 2,304 2,304
Income tax expense (52,098) (52,098)
--------- ---------- ----------
NET INCOME 83,279 - 83,279
========= ========== ==========
BASIC EARNINGS PER SHARE 0.58 0.58
DILUTED EARNINGS PER SHARE 0.57 0.57
SHARES OUTSTANDING
Basic 142,585 142,585
Diluted 147,426 147,426
DIVIDENDS PER COMMON SHARE 0.0575 0.0575
Increase
Increase (decrease)
(decrease) excluding
as nonrecurring
In thousands, except per share amounts reported items
----------- -----------
OPERATING REVENUES
Local service (0.6%) (0.6%)
Network access (4.4%) (4.4%)
Long distance 6.6% 6.6%
Data 11.1% 11.1%
Fiber transport and CLEC 16.1% 16.1%
Other 0.7% 0.7%
0.3% 0.3%
OPERATING EXPENSES
Cost of services and products 5.8% 5.8%
Selling, general and administrative (7.2%) (7.2%)
Depreciation and amortization 4.1% 4.1%
2.0% 2.0%
OPERATING INCOME (3.6%) (3.6%)
OTHER INCOME (EXPENSE)
Interest expense 0.2% (2.1%)
Income from unconsolidated cellular entity (36.2%) (36.2%)
Other income (expense) (33.4%) 34.9%
Income tax expense (8.9%) (4.3%)
NET INCOME (4.4%) (3.9%)
BASIC EARNINGS PER SHARE 3.4% 3.4%
DILUTED EARNINGS PER SHARE 3.5% 3.5%
SHARES OUTSTANDING
Basic (7.3%) (7.3%)
Diluted (7.0%) (7.0%)
DIVIDENDS PER COMMON SHARE 4.3% 4.3%
NONRECURRING ITEMS
(1) - Write-off of unamortized deferred debt costs associated with
purchasing and retiring approximately $400 million of Series
J notes.
(2) - Includes (i) $4.8 million debt extinguishment charge related
to purchasing and retiring approximately $400 million of
Series J notes, net of (ii) $3.2 million of interest income
related to the settlement of various income tax audits.
(3) - Includes (i) $1.1 million net tax benefit of Items (1) and
(2) and (ii) $1.3 million tax benefit related to the
settlement of various income tax audits.
CenturyTel, Inc.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2005 AND DECEMBER 31, 2004
(UNAUDITED)
March 31, December 31,
2005 2004
----------- -----------
(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 129,331 167,215
Other current assets 249,275 252,632
----------- -----------
Total current assets 378,606 419,847
----------- -----------
NET PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment 7,496,363 7,431,017
Accumulated depreciation (4,208,514) (4,089,616)
----------- -----------
Net property, plant and equipment 3,287,849 3,341,401
----------- -----------
GOODWILL AND OTHER ASSETS
Goodwill 3,433,864 3,433,864
Other 609,512 601,841
----------- -----------
Total goodwill and other assets 4,043,376 4,035,705
----------- -----------
TOTAL ASSETS $ 7,709,831 7,796,953
=========== ===========
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 144,811 249,617
Other current liabilities 466,267 442,001
----------- -----------
Total current liabilities 611,078 691,618
LONG-TERM DEBT 2,694,203 2,762,019
DEFERRED CREDITS AND OTHER LIABILITIES 970,865 933,551
STOCKHOLDERS' EQUITY 3,433,685 3,409,765
----------- -----------
TOTAL LIABILITIES AND EQUITY $ 7,709,831 7,796,953
=========== ===========
CenturyTel, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Three months ended March 31, 2005
---------------------------------
As
adjusted
Less excluding
non- non-
In thousands As recurring recurring
reported items items
--------- ---------- ----------
Operating cash flow and cash flow
margin
Operating income $ 176,860 - 176,860
Add: Depreciation and
amortization 132,175 132,175
--------- ---------- ----------
Operating cash flow $ 309,035 - 309,035
========= ========== ==========
Revenues $ 595,282 - 595,282
========= ========== ==========
Operating income margin (operating
income divided by revenues) 29.7% 29.7%
========= ==========
Operating cash flow margin
(operating cash flow divided by
revenues) 51.9% 51.9%
========= ==========
Free cash flow (prior to debt service
requirements and dividends)
Net income $ 79,616 (375)(1) 79,991
Add: Depreciation and
amortization 132,175 - 132,175
Less: Capital expenditures (74,903) - (74,903)
--------- ---------- ----------
Free cash flow $ 136,888 (375) 137,263
========= ========== ==========
Free cash flow $ 136,888
Income from unconsolidated
cellular entity (1,313)
Deferred income taxes 22,141
Changes in current assets and
current liabilities 27,623
Increase in other noncurrent
assets (1,358)
Decrease in other noncurrent
liabilities (729)
Retirement benefits 6,004
Other, net (7,340)
Add: Capital expenditures 74,903
---------
Net cash provided by operating
activities $ 256,819
=========
Three months ended March 31, 2004
---------------------------------
As
adjusted
Less excluding
non- non-
In thousands As recurring recurring
reported items items
--------- ---------- ----------
Operating cash flow and cash flow
margin
Operating income 183,557 - 183,557
Add: Depreciation and amortization 126,992 126,992
--------- ---------- ----------
Operating cash flow 310,549 - 310,549
========= ========== ==========
Revenues 593,704 - 593,704
========= ========== ==========
Operating income margin (operating
income divided by revenues) 30.9% 30.9%
========= ==========
Operating cash flow margin
(operating cash flow divided by
revenues) 52.3% 52.3%
========= ==========
Free cash flow (prior to debt service
requirements and dividends)
Net income 83,279 - 83,279
Add: Depreciation and amortization 126,992 - 126,992
Less: Capital expenditures (61,745) - (61,745)
--------- ---------- ----------
Free cash flow 148,526 - 148,526
========= ========== ==========
Free cash flow 148,526
Income from unconsolidated cellular
entity (2,059)
Deferred income taxes 26,673
Changes in current assets and
current liabilities 57,695
Increase in other noncurrent assets (11,032)
Decrease in other noncurrent
liabilities (3,949)
Retirement benefits 10,830
Other, net (4,989)
Add: Capital expenditures 61,745
---------
Net cash provided by operating
activities 283,440
=========
NONRECURRING ITEMS
(1) - Includes (i) $3.7 million after-tax expense related to
purchasing and retiring approximately $400 million of Series J
notes, net of (ii) $3.3 million net benefit related to the
settlement of various income tax audits.
MULTIMEDIA AVAILABLE:
http://www.businesswire.com/cgi-bin/mmg.cgi?eid=4875564
CONTACT: CenturyTel, Inc.
, Monroe
Media:
Patricia Cameron, 318-388-9674
patricia.cameron@centurytel.com
or
Investors:
Tony Davis, 318-388-9525
tony.davis@centurytel.com
www.centurytel.com
SOURCE: CenturyTel, Inc.