MONROE, La.--(BUSINESS WIRE)--July 28, 2005--CenturyTel, Inc.
(NYSE: CTL) announces operating results for second quarter 2005.
-- Operating revenues increased to $606.4 million from $603.6
million in second quarter 2004.
-- Net income rose 2.2% to $85.1 million compared to $83.3
million in second quarter 2004.
-- Diluted earnings per share increased 8.5% to $.64 from $.59 in
second quarter 2004.
-- Free cash flow (as defined in the attached financial
schedules) was $113.6 million in second quarter 2005.
-- Through the second quarter, the Company had invested $114
million to repurchase 3.5 million shares of common stock under
its $200 million share repurchase program.
Second Quarter Highlights Quarter Quarter
(In thousands, except per share Ended Ended
amounts and customer units) 6/30/05 6/30/04 %Change
----------------------------------------------------------------------
Operating Revenues
Operating Cash Flow (1) $ 606,413 $ 603,555 0.5%
Net Income $ 316,334 $ 320,662 (1.3)%
Diluted Earnings Per Share $ 85,118 $ 83,284 2.2%
Average Diluted Shares $ .64 $ .59 8.5%
Outstanding 135,345 142,968 (5.3)%
Capital Expenditures $ 102,011 $ 94,269 8.2%
----------------------------------------------------------------------
Telephone Access Lines 2,273,279 2,350,505 (3.3)%
Long Distance Lines 1,122,343 1,003,328 11.9%
DSL Connections 194,847 108,820 79.1%
----------------------------------------------------------------------
(1) Operating Cash Flow is a non-GAAP financial measure. A
reconciliation of this item to comparable GAAP measures is included in
the attached financial schedules.
"CenturyTel
continued to diversify its revenue mix in the second
quarter with solid year over year revenue growth in data and fiber
transport services of 11.6% and 18.1%, respectively," Glen F. Post,
III, chairman and chief executive officer, said. "Further executing on
this strategy, we acquired metropolitan fiber networks in 16 markets
expanding the opportunity for our enterprise business and positioning
us as a leading fiber transport provider near our existing markets."
Operating revenues rose 0.5% to $606.4 million in second quarter
2005 from $603.6 million in second quarter 2004. This increase
primarily resulted from revenue generated by data revenue growth from
DSL subscribers, growth in our fiber transport business and increased
enhanced calling feature penetration. These increases more than offset
revenue declines attributable to access line losses and lower access
and long distance revenues.
Operating expenses increased 1.7% to $420.5 million from $413.6
million in second quarter 2004 primarily due to growth in our DSL
subscriber base and increases in access expense and employee related
expenses that were partially offset by lower operating taxes.
Operating cash flow decreased to $316.3 million from $320.7
million. CenturyTel
achieved an operating cash flow margin of 52.2%
during the quarter versus 53.1% in second quarter 2004.
"We generated over $113 million of free cash flow and returned
more than $60 million to shareholders through share repurchases and
cash dividends during the second quarter," Post said.
Net income increased 2.2% to $85.1 million from $83.3 million in
second quarter 2004. The increase was primarily driven by lower
interest expense and a $4.6 million pre-tax charge in second quarter
2004 associated with the prepayment of the Company's $100 million
Series B Senior Notes. Diluted earnings per share was $.64 for second
quarter 2005, an 8.5% increase from the $.59 reported in second
quarter 2004, driven by higher net income and the decline in fully
diluted shares outstanding as a result of share repurchases since
second quarter 2004.
As of July 27, 2005, the investment banks that sold approximately
12.9 million shares to the Company in late May 2005 under accelerated
share repurchase agreements had repurchased approximately 32% of these
12.9 million shares at a weighted average price per share of
approximately $33.94.
The results for second quarter 2005 and second quarter 2004
discussed above reflect results reported in accordance with generally
accepted accounting principles (GAAP).
For the first six months of 2005, operating revenues increased to
$1.202 billion from $1.197 billion for the same period in 2004.
Operating cash flow was $625.4 million for the first half of 2005
compared to $631.2 million a year ago. Net income, excluding
nonrecurring items, was $165.1 million in the first six months of 2005
compared to $166.6 million during the same period in 2004. Diluted
earnings per share, excluding nonrecurring items, increased 6.0% to
$1.23 during the first half of 2005 compared to $1.16 in the first
half of 2004.
For the first six months of 2005, under generally accepted
accounting principles (GAAP), net income was $164.7 compared to $166.6
million for the first six months of 2004. The $164.7 million of net
income for the first half of 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 the third quarter 2005, CenturyTel
expects total revenues of
$635 to $650 million and diluted earnings per share of $.65 to $.70.
For the full year 2005, diluted earnings per share is expected to be
in the range of $2.40 to $2.50, an increase over the $2.25 to $2.35
range previously provided. This increase in 2005 diluted earnings per
share guidance is primarily due to the better than anticipated results
during second quarter 2005, continuation of our successful cost
containment efforts and fewer fully diluted shares outstanding as a
result of share repurchases during the second quarter. Third quarter
and full year 2005 guidance also include the anticipated results of
operations attributable to the metro fiber assets acquired from KMC at
the end of the second quarter.
These outlook figures are presented on a GAAP basis, excluding
nonrecurring items and the potential impact of any future mergers,
acquisitions, divestitures, share repurchases or other similar
business transactions.
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 in the Investor Relations portion of 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 888.423.4863. The
call will be accessible for replay through August 3, 2005, by calling
888.266.2081 and entering the access code: 736032. 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 prior to August 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 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 July 28, 2005. The Company undertakes no obligation to update
any of its forward-looking statements.
Included in the S&P 500 Index, CenturyTel
(NYSE: CTL) is a leading
provider of a full array of communications services primarily to rural
areas and small to mid-size cities in 26 states. Visit CenturyTel
at
www.centurytel.com.
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED JUNE 30, 2005 AND 2004
(UNAUDITED)
Three Three
months months
ended ended
In thousands, except June 30, June 30, Increase
per share amounts 2005 2004 (decrease)
-------- -------- -----------
OPERATING REVENUES
Local service $177,265 180,142 (1.6%)
Network access 239,404 245,515 (2.5%)
Long distance 44,443 45,727 (2.8%)
Data 76,049 68,169 11.6%
Fiber transport and CLEC 21,636 18,321 18.1%
Other 47,616 45,681 4.2%
-------- --------
606,413 603,555 0.5%
-------- --------
OPERATING EXPENSES
Cost of services and products 194,873 190,226 2.4%
Selling, general and
administrative 95,206 92,667 2.7%
Depreciation and amortization 130,452 130,751 (0.2%)
-------- --------
420,531 413,644 1.7%
-------- --------
OPERATING INCOME 185,882 189,911 (2.1%)
OTHER INCOME (EXPENSE)
Interest expense (49,647) (53,089) (6.5%)
Income from unconsolidated
cellular entity 724 2,126 (65.9%)
Other income (expense) 1,220 (3,811) (132.0%)
Income tax expense (53,061) (51,853) 2.3%
-------- --------
NET INCOME $ 85,118 83,284 2.2%
======== ========
BASIC EARNINGS PER SHARE $ 0.65 0.60 8.3%
DILUTED EARNINGS PER SHARE $ 0.64 0.59 8.5%
SHARES OUTSTANDING
Basic 130,299 138,066 (5.6%)
Diluted 135,345 142,968 (5.3%)
DIVIDENDS PER COMMON SHARE $ 0.06 0.0575 4.3%
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(UNAUDITED)
Six months ended June 30, 2005
------------------------------------
As adjusted
Less excluding
non- non-
In thousands, except per As recurring recurring
share amounts reported items items
----------- ---------- -----------
OPERATING REVENUES
Local service $ 354,250 354,250
Network access 469,682 469,682
Long distance 91,958 91,958
Data 148,955 148,955
Fiber transport and CLEC 41,879 41,879
Other 94,971 94,971
----------- ---------- -----------
1,201,695 - 1,201,695
----------- ---------- -----------
OPERATING EXPENSES
Cost of services and
products 386,866 386,866
Selling, general and
administrative 189,460 189,460
Depreciation and
amortization 262,627 262,627
----------- ---------- -----------
838,953 - 838,953
----------- ---------- -----------
OPERATING INCOME 362,742 - 362,742
OTHER INCOME (EXPENSE)
Interest expense (102,272) (1,196)(1) (101,076)
Income from unconsolidated
cellular entity 2,037 2,037
Other income (expense) 2,755 (1,574)(2) 4,329
Income tax expense (100,528) 2,395 (3) (102,923)
----------- ---------- -----------
NET INCOME $ 164,734 (375) 165,109
=========== ========== ===========
BASIC EARNINGS PER SHARE $ 1.25 1.26
DILUTED EARNINGS PER SHARE $ 1.23 1.23
SHARES OUTSTANDING
Basic 131,241 131,241
Diluted 136,257 136,257
DIVIDENDS PER COMMON SHARE $ 0.1200 0.1200
Six months ended June 30, 2004
------------------------------------
As adjusted
Less excluding
non- non-
In thousands, except per As recurring recurring
share amounts reported items items
----------- ---------- ------------
OPERATING REVENUES
Local service 358,200 358,200
Network access 486,472 486,472
Long distance 90,316 90,316
Data 133,797 133,797
Fiber transport and CLEC 35,753 35,753
Other 92,721 92,721
----------- ---------- ------------
1,197,259 - 1,197,259
----------- ---------- ------------
OPERATING EXPENSES
Cost of services and
products 371,775 371,775
Selling, general and
administrative 194,273 194,273
Depreciation and
amortization 257,743 257,743
----------- ---------- ------------
823,791 - 823,791
----------- ---------- ------------
OPERATING INCOME 373,468 - 373,468
OTHER INCOME (EXPENSE)
Interest expense (105,632) (105,632)
Income from unconsolidated
cellular entity 4,185 4,185
Other income (expense) (1,507) (1,507)
Income tax expense (103,951) (103,951)
----------- ---------- ------------
NET INCOME 166,563 - 166,563
=========== ========== ============
BASIC EARNINGS PER SHARE 1.19 1.19
DILUTED EARNINGS PER SHARE 1.16 1.16
SHARES OUTSTANDING
Basic 140,325 140,325
Diluted 145,197 145,197
DIVIDENDS PER COMMON SHARE 0.1150 0.1150
Increase
(decrease)
Increase excluding
In thousands, except per (decrease) nonrecurring
share amounts as reported items
-------------- -------------
OPERATING REVENUES
Local service (1.1%) (1.1%)
Network access (3.5%) (3.5%)
Long distance 1.8% 1.8%
Data 11.3% 11.3%
Fiber transport and CLEC 17.1% 17.1%
Other 2.4% 2.4%
0.4% 0.4%
OPERATING EXPENSES
Cost of services and
products 4.1% 4.1%
Selling, general and
administrative (2.5%) (2.5%)
Depreciation and
amortization 1.9% 1.9%
1.8% 1.8%
OPERATING INCOME (2.9%) (2.9%)
OTHER INCOME (EXPENSE)
Interest expense (3.2%) (4.3%)
Income from unconsolidated
cellular entity (51.3%) (51.3%)
Other income (expense) (282.8%) (387.3%)
Income tax expense (3.3%) (1.0%)
NET INCOME (1.1%) (0.9%)
BASIC EARNINGS PER SHARE 5.0% 5.9%
DILUTED EARNINGS PER SHARE 6.0% 6.0%
SHARES OUTSTANDING
Basic (6.5%) (6.5%)
Diluted (6.2%) (6.2%)
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
JUNE 30, 2005 AND DECEMBER 31, 2004
(UNAUDITED)
June 30, Dec. 31,
2005 2004
----------- -----------
(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 100,462 167,215
Other current assets 250,895 252,632
----------- -----------
Total current assets 351,357 419,847
----------- -----------
NET PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment 7,633,844 7,431,017
Accumulated depreciation (4,313,990) (4,089,616)
----------- -----------
Net property, plant and equipment 3,319,854 3,341,401
----------- -----------
GOODWILL AND OTHER ASSETS
Goodwill 3,444,198 3,433,864
Other 594,629 601,841
----------- -----------
Total goodwill and other assets 4,038,827 4,035,705
----------- -----------
TOTAL ASSETS $ 7,710,038 7,796,953
=========== ===========
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 144,135 249,617
Other current liabilities 457,163 442,001
----------- -----------
Total current liabilities 601,298 691,618
LONG-TERM DEBT 2,709,399 2,762,019
DEFERRED CREDITS AND OTHER LIABILITIES 956,234 933,551
STOCKHOLDERS' EQUITY 3,443,107 3,409,765
----------- -----------
TOTAL LIABILITIES AND EQUITY $ 7,710,038 7,796,953
=========== ===========
CenturyTel, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Three Three
months months
In thousands ended ended
June 30, June 30,
2005 2004
--------- --------
Operating cash flow and cash flow margin
Operating income $ 185,882 189,911
Add: Depreciation and amortization 130,452 130,751
--------- --------
Operating cash flow $ 316,334 320,662
========= ========
Revenues $ 606,413 603,555
========= ========
Operating income margin (operating income
divided by revenues) 30.7% 31.5%
========= ========
Operating cash flow margin (operating cash
flow divided by revenues) 52.2% 53.1%
========= ========
Free cash flow (prior to debt service requirements
and dividends)
Net income $ 85,118 83,284
Add: Depreciation and amortization 130,452 130,751
Less: Capital expenditures (102,011) (94,269)
--------- --------
Free cash flow $ 113,559 119,766
========= ========
Free cash flow $ 113,559 119,766
Income from unconsolidated cellular entity (724) (2,126)
Deferred income taxes 3,806 30,365
Changes in current assets and current
liabilities (8,669) (25,425)
Increase in other noncurrent assets (119) (6,877)
Increase in other noncurrent liabilities 145 405
Retirement benefits 6,513 7,033
Other, net 5,572 2,508
Add: Capital expenditures 102,011 94,269
--------- --------
Net cash provided by operating activities $ 222,094 219,918
========= ========
CenturyTel, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Six months ended June 30, 2005
-----------------------------------
As adjusted
Less excluding
non- non-
In thousands As recurring recurring
reported items items
---------- ---------- ----------
Operating cash flow and cash
flow margin
Operating income $ 362,742 362,742
Add: Depreciation and
amortization 262,627 262,627
---------- ---------- ----------
Operating cash flow $ 625,369 - 625,369
========== ========== ==========
Revenues $1,201,695 - 1,201,695
========== ========== ==========
Operating income margin
(operating income divided
by revenues) 30.2% 30.2%
========== ==========
Operating cash flow margin
(operating cash flow divided
by revenues) 52.0% 52.0%
========== ==========
Free cash flow (prior to debt
service requirements and
dividends)
Net income $ 164,734 (375)(1) 165,109
Add: Depreciation and
amortization 262,627 262,627
Less: Capital expenditures (176,914) (176,914)
---------- ---------- ----------
Free cash flow $ 250,447 (375) 250,822
========== ========== ==========
Free cash flow $ 250,447
Income from unconsolidated
cellular entity (2,037)
Deferred income taxes 25,947
Changes in current assets and
current liabilities 18,954
Increase in other noncurrent
assets (1,477)
Decrease in other noncurrent
liabilities (584)
Retirement benefits 12,517
Other, net (1,768)
Add: Capital expenditures 176,914
----------
Net cash provided by operating
activities $ 478,913
==========
Six months ended June 30, 2004
------------------------------------
As adjusted
Less excluding
non- non-
In thousands As recurring recurring
reported items items
---------- ---------- -------------
Operating cash flow and cash
flow margin
Operating income 373,468 373,468
Add: Depreciation and
amortization 257,743 257,743
---------- ---------- -------------
Operating cash flow 631,211 - 631,211
========== ========== =============
Revenues 1,197,259 - 1,197,259
========== ========== =============
Operating income margin
(operating income divided
by revenues) 31.2% 31.2%
========== =============
Operating cash flow margin
(operating cash flow divided
by revenues) 52.7% 52.7%
========== =============
Free cash flow (prior to debt
service requirements and
dividends)
Net income 166,563 166,563
Add: Depreciation and
amortization 257,743 257,743
Less: Capital expenditures (156,014) (156,014)
---------- ---------- -------------
Free cash flow 268,292 - 268,292
========== ========== =============
Free cash flow 268,292
Income from unconsolidated
cellular entity (4,185)
Deferred income taxes 57,038
Changes in current assets and
current liabilities 32,270
Increase in other noncurrent
assets (17,909)
Decrease in other noncurrent
liabilities (3,544)
Retirement benefits 17,863
Other, net (2,481)
Add: Capital expenditures 156,014
----------
Net cash provided by operating
activities 503,358
==========
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=4940750
CONTACT: CenturyTel, Inc.
Media:
Patricia Cameron, 318-388-9674
patricia.cameron@centurytel.com
or
Investors:
Tony Davis, 318-388-9525
tony.davis@centurytel.com
SOURCE: CenturyTel, Inc.