MONROE, La.--(BUSINESS WIRE)--Oct. 27, 2005--CenturyTel, Inc.
(NYSE: CTL) announces operating results for third quarter 2005.
-- Operating revenues, excluding nonrecurring items, increased
8.2% to $657.1 million from $607.4 million. Reported under
GAAP, operating revenues increased 8.8% to $657.1 million from
$603.9 million.
-- Operating cash flow (as defined in the attached financial
schedules), excluding nonrecurring items, was $340.6 million.
-- Net income, excluding nonrecurring items, was $99.0 million
compared to $81.1 million in third quarter 2004. Net income,
reported under GAAP, was $91.4 million compared to $86.2
million in third quarter 2004.
-- Diluted earnings per share, excluding nonrecurring items, was
$.74 in third quarter 2005 and $.59 in third quarter 2004,
while GAAP diluted earnings per share was $.68 in third
quarter 2005 and $.63 in third quarter 2004.
-- Free cash flow (as defined in the attached financial
schedules), excluding nonrecurring items, was $127.5 million
in third quarter 2005.
Third Quarter Highlights
(Excluding nonrecurring items)
(In thousands, except per share Quarter Quarter
amounts and customer units) Ended Ended
9/30/05 9/30/04 % Change
----------------------------------------------- ---------------------
Operating Revenues (1) $ 657,085 $ 607,392 8.2 %
Operating Cash Flow (2) $ 340,621 $ 308,239 10.5 %
Net Income $ 98,977 $ 81,135 22.0 %
Diluted Earnings Per Share $ .74 $ .59 25.4 %
Average Diluted Shares Outstanding 135,916 139,816 (2.8) %
Capital Expenditures $ 105,044 $ 97,583 7.6 %
------------------------------------ ---------- --------------------
Telephone Access Lines 2,250,416 2,336,517 (3.7) %
Long Distance Lines 1,142,209 1,037,293 10.1 %
DSL Connections 219,879 120,869 81.9 %
------------------------------------ ---------- --------------------
(1) Third quarter 2005 Operating Revenues increased approximately
$34.2 million compared to third quarter 2004 due to the recognition of
prior period revenue settlements.
(2) 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.
"We continue to see strong demand for broadband and fiber
transport services in our markets," Glen F. Post, III, chairman and
chief executive officer, said. "The mid-year addition of the KMC metro
fiber assets and continued solid internal growth in our LightCore
operations drove revenue growth of $17.2 million, a 90% increase in
fiber transport and CLEC revenues since third quarter 2004."
Operating revenues, excluding nonrecurring items, rose 8.2% to
$657.1 million in third quarter 2005 from $607.4 million in third
quarter 2004. Revenue increases aggregating $56 million resulted
primarily from approximately $13.8 million of revenues generated by
the metro fiber assets acquired in second quarter 2005, $34.2 million
related to adjustments to recognize prior period revenue settlements,
and data revenue growth from DSL subscribers. These increases more
than offset revenue declines of $10.2 million attributable to
previously anticipated lower intrastate toll revenues, universal
service funding and access line losses.
Operating expenses, excluding nonrecurring items, increased 5.6%
to $450.0 million from $426.2 million in third quarter 2004 due
primarily to the fiber assets acquired during second quarter 2005 and
strong growth in the broadband business.
"One of our key strategies is to be the broadband provider of
choice in our markets. We continued to make progress in this area as
we added more than 25,000 DSL connections during the third quarter,
more than double the 12,000 added in third quarter 2004," Post said.
Operating cash flow, excluding nonrecurring items, increased 10.5%
to $340.6 million from $308.2 million. CenturyTel
achieved an
operating cash flow margin, excluding nonrecurring items, of 51.8%
during the quarter versus 50.7% in third quarter 2004.
Net income, excluding nonrecurring items, was $99.0 million
compared to $81.1 million in third quarter 2004. Diluted earnings per
share, excluding nonrecurring items, was $.74 in third quarter 2005
and $.59 in third quarter 2004.
As of October 26, 2005, approximately 82% of the 12.9 million
shares under the Company's accelerated share repurchase agreements had
been repurchased at a weighted average price per share of
approximately $34.50.
For the first nine months of 2005, operating revenues, excluding
nonrecurring items, increased to $1.859 billion from $1.805 billion
for the same period in 2004, a 3.0% increase. Operating cash flow,
excluding nonrecurring items, was $966.0 million for 2005 compared to
$939.5 million a year ago. Operating income, excluding nonrecurring
items, increased to $569.8 million from $554.6 million in 2004.
Under generally accepted accounting principles (GAAP), net income
for third quarter 2005 was $91.4 million compared to $86.2 million for
third quarter 2004. Diluted earnings per share for third quarter 2005
and 2004 was $.68 and $.63, respectively. For the first nine months of
2005 and 2004, net income was $256.1 million and $252.8 million,
respectively, while diluted earnings per share was $1.91 and $1.79,
respectively. As explained further in the attached financial
schedules, third quarter 2005 results reflect a net after-tax charge
of $7.6 million from expenses associated with Hurricanes Katrina and
Rita and transactions related to certain non-operating investments.
Third quarter 2004 results reflect an after-tax $6.0 million
adjustment for over depreciated assets and the related revenue effect.
Other nonrecurring items that affected the third quarters and first
nine months of 2005 and 2004 are detailed in the accompanying
financial information.
Outlook. For fourth quarter 2005, CenturyTel
expects total
revenues of $610 to $620 million and diluted earnings per share of
$.52 to $.56. As a result of better than anticipated third quarter
performance, the Company has increased and narrowed the range of
anticipated full year 2005 diluted earnings per share guidance to
$2.49 to $2.53. All outlook figures provided under this section are
presented excluding the potential impact of any future mergers,
acquisitions, divestitures, share repurchases or other unusual events.
CenturyTel
expects to provide full year 2006 earnings per share
guidance in January 2006. The Company has, however, identified several
items that can be expected to affect 2006 results when compared to
2005. Increased national average loop costs are expected to negatively
impact the Company's 2006 Universal Service Fund receipts and diluted
earnings per share by $.06 to $.08. Revenue settlements related to
prior periods are anticipated to decline and negatively impact 2006
diluted earnings per share by $.14 to $.18. The change in accounting
for stock options is anticipated to negatively impact 2006 diluted
earnings per share by $.05 to $.06. CenturyTel
currently expects lower
2006 interest expense to contribute $.03 to $.05 to 2006 diluted
earnings per share. Upon completion of its accelerated share
repurchase program later this year, the Company currently anticipates
completing the remaining $86 million outstanding under its $200
million share repurchase program. Additionally, CenturyTel
believes it
will continue to drive growth in its broadband and fiber transport
businesses. These and other items that may affect 2006 results will be
discussed further during the Company's fourth quarter 2005 earnings
call in early 2006.
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 866.259.7123. The
call will be accessible for replay through November 2, 2005, by
calling 888.266.2081 and entering the conference ID number 788978.
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 November 16, 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 should be aware that new factors may
emerge from time to time and it is not possible for management to
identify all such factors, nor can it predict the impact of each such
factor on the business or the extent to which any one or more factors
may cause actual results to differ from those reflected in any
forward-looking statements. You are further 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 October 27, 2005. The Company undertakes no
obligation to update any of its forward-looking statements for any
reason.
CenturyTel
(NYSE: CTL) delivers advanced communications with a
personal touch. The Company, included in the S&P 500 Index, is a
leading provider of consumer and business communications solutions in
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 SEPTEMBER 30, 2005 AND 2004
(UNAUDITED)
Three months ended
September 30, 2005
-------------------------------------
As
adjusted
Less excluding
non- non-
In thousands, except per share As recurring recurring
amounts reported items items
--------- ---------- ----------
OPERATING REVENUES
Local service $ 176,069 176,069
Network access 257,586 257,586
Long distance 49,788 49,788
Data 88,911 88,911
Fiber transport and CLEC 36,361 36,361
Other 48,370 48,370
--------- ---------- ----------
657,085 - 657,085
--------- ---------- ----------
OPERATING EXPENSES
Cost of services and products 222,724 5,853 (1) 216,871
Selling, general and
administrative 99,593 99,593
Depreciation and amortization 133,526 133,526
--------- ---------- ----------
455,843 5,853 449,990
--------- ---------- ----------
OPERATING INCOME 201,242 (5,853) 207,095
OTHER INCOME (EXPENSE)
Interest expense (49,904) (49,904)
Income from unconsolidated
cellular entity 1,270 1,270
Other income and expense (4,214) (6,429) (2) 2,215
Income tax expense (56,983) 4,716 (3) (61,699)
--------- ---------- ----------
NET INCOME $ 91,411 (7,566) 98,977
========= ========== ==========
BASIC EARNINGS PER SHARE $ 0.70 (0.06) 0.76
DILUTED EARNINGS PER SHARE $ 0.68 (0.06) 0.74
SHARES OUTSTANDING
Basic 130,150 130,150
Diluted 135,916 135,916
DIVIDENDS PER COMMON SHARE $ 0.0600 0.0600
NONRECURRING ITEMS
(1) - Expenses associated with Hurricanes Katrina and Rita.
(2) - Includes (i) $9.9 million impairment of non-operating
investment, net of (ii) $3.5 million gain on sale of a
separate non-operating investment.
(3) - Tax effect of items (1) and (2).
(4) - Adjustment for overdepreciated assets, including related
revenue effect.
(5) - Impairment of non-operating investment.
(6) - Tax effect of items (4) and (5).
Three months ended
September 30, 2004
------------------------------------
As
adjusted
Less excluding
non- non-
In thousands, except per share As recurring recurring
amounts reported items items
--------- ---------- ----------
OPERATING REVENUES
Local service 179,793 179,793
Network access 237,522 (3,091) (4) 240,613
Long distance 49,743 49,743
Data 69,570 (422) (4) 69,992
Fiber transport and CLEC 19,113 19,113
Other 48,138 48,138
--------- ---------- ----------
603,879 (3,513) 607,392
--------- ---------- ----------
OPERATING EXPENSES
Cost of services and products 191,000 191,000
Selling, general and
administrative 108,153 108,153
Depreciation and amortization 113,857 (13,221) (4) 127,078
--------- ---------- ----------
413,010 (13,221) 426,231
--------- ---------- ----------
OPERATING INCOME 190,869 9,708 181,161
OTHER INCOME (EXPENSE)
Interest expense (52,174) (52,174)
Income from unconsolidated
cellular entity 1,929 1,929
Other income and expense (822) (1,500) (5) 678
Income tax expense (53,610) (3,151) (6) (50,459)
--------- ---------- ----------
NET INCOME 86,192 5,057 81,135
========= ========== ==========
BASIC EARNINGS PER SHARE 0.64 0.04 0.60
DILUTED EARNINGS PER SHARE 0.63 0.04 0.59
SHARES OUTSTANDING
Basic 134,885 134,885
Diluted 139,816 139,816
DIVIDENDS PER COMMON SHARE 0.0575 0.0575
NONRECURRING ITEMS
(1) - Expenses associated with Hurricanes Katrina and Rita.
(2) - Includes (i) $9.9 million impairment of non-operating
investment, net of (ii) $3.5 million gain on sale of a
separate non-operating investment.
(3) - Tax effect of items (1) and (2).
(4) - Adjustment for overdepreciated assets, including related
revenue effect.
(5) - Impairment of non-operating investment.
(6) - Tax effect of items (4) and (5).
Increase
(decrease)
Increase excluding
(decrease) non-
In thousands, except per share as recurring
amounts reported items
--------- ----------
OPERATING REVENUES
Local service (2.1%) (2.1%)
Network access 8.4% 7.1%
Long distance 0.1% 0.1%
Data 27.8% 27.0%
Fiber transport and CLEC 90.2% 90.2%
Other 0.5% 0.5%
8.8% 8.2%
OPERATING EXPENSES
Cost of services and products 16.6% 13.5%
Selling, general and
administrative (7.9%) (7.9%)
Depreciation and amortization 17.3% 5.1%
10.4% 5.6%
OPERATING INCOME 5.4% 14.3%
OTHER INCOME (EXPENSE)
Interest expense (4.4%) (4.4%)
Income from unconsolidated
cellular entity (34.2%) (34.2%)
Other income and expense 412.7% 226.7%
Income tax expense 6.3% 22.3%
NET INCOME 6.1% 22.0%
BASIC EARNINGS PER SHARE 9.4% 26.7%
DILUTED EARNINGS PER SHARE 7.9% 25.4%
SHARES OUTSTANDING
Basic (3.5%) (3.5%)
Diluted (2.8%) (2.8%)
DIVIDENDS PER COMMON SHARE 4.3% 4.3%
NONRECURRING ITEMS
(1) - Expenses associated with Hurricanes Katrina and Rita.
(2) - Includes (i) $9.9 million impairment of non-operating
investment, net of (ii) $3.5 million gain on sale of a
separate non-operating investment.
(3) - Tax effect of items (1) and (2).
(4) - Adjustment for overdepreciated assets, including related
revenue effect.
(5) - Impairment of non-operating investment.
(6) - Tax effect of items (4) and (5).
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(UNAUDITED)
Nine months ended
September 30, 2005
------------------------- ----------
As
adjusted
Less excluding
non- non-
As recurring recurring
In thousands, except per share reported items items
amounts
---------- ---------- ----------
OPERATING REVENUES
Local service $ 530,319 530,319
Network access 727,268 727,268
Long distance 141,746 141,746
Data 237,866 237,866
Fiber transport and CLEC 78,240 78,240
Other 143,341 143,341
---------- ---------- ----------
1,858,780 - 1,858,780
---------- ---------- ----------
OPERATING EXPENSES
Cost of services and products 609,590 5,853 (1) 603,737
Selling, general and
administrative 289,053 289,053
Depreciation and amortization 396,153 396,153
---------- ---------- ----------
1,294,796 5,853 1,288,943
---------- ---------- ----------
OPERATING INCOME 563,984 (5,853) 569,837
OTHER INCOME (EXPENSE)
Interest expense (152,176) (1,196) (2) (150,980)
Income from unconsolidated
cellular entity 3,307 3,307
Other income and expense (1,459) (8,003) (3) 6,544
Income tax expense (157,511) 7,111 (4) (164,622)
---------- ---------- ----------
NET INCOME $ 256,145 (7,941) 264,086
========== ========== ==========
BASIC EARNINGS PER SHARE $ 1.95 (0.06) 2.02
DILUTED EARNINGS PER SHARE $ 1.91 (0.06) 1.97
SHARES OUTSTANDING
Basic 130,877 130,877
Diluted 136,143 136,143
DIVIDENDS PER COMMON SHARE $ 0.1800 0.1800
NONRECURRING ITEMS
(1) - Expenses associated with Hurricanes Katrina and Rita.
(2) - Write-off of unamortized deferred debt costs associated with
purchasing and retiring approximately $400 million of Series
J notes.
(3) - Includes (i) a $9.9 million impairment of non-operating
investment and a $4.8 million debt extinguishment charge
related to purchasing and retiring approximately $400 million
of Series J notes, net of (ii) a $3.5 million gain on sale of
non-operating investment and $3.2 million of interest income
related to the settlement of various income tax audits.
(4) - Includes (i) $1.3 million tax benefit related to the
settlement of various income tax audits and (ii) $5.8 million
net tax benefit of items (1), (2) and (3).
(5) - Adjustment for overdepreciated assets, including related
revenue effect.
(6) - Impairment of non-operating investment.
(7) - Tax effect of items (5) and (6).
Nine months ended
September 30, 2004
------------------------- ----------
As
adjusted
Less excluding
non- non-
As recurring recurring
In thousands, except per share reported items items
amounts
---------- ---------- ----------
OPERATING REVENUES
Local service 537,993 537,993
Network access 723,994 (3,091) (5) 727,085
Long distance 140,059 140,059
Data 203,367 (422) (5) 203,789
Fiber transport and CLEC 54,866 54,866
Other 140,859 140,859
---------- ---------- ----------
1,801,138 (3,513) 1,804,651
---------- ---------- ----------
OPERATING EXPENSES
Cost of services and products 562,775 562,775
Selling, general and
administrative 302,426 302,426
Depreciation and amortization 371,600 (13,221) (5) 384,821
---------- ---------- ----------
1,236,801 (13,221) 1,250,022
---------- ---------- ----------
OPERATING INCOME 564,337 9,708 554,629
OTHER INCOME (EXPENSE)
Interest expense (157,806) (157,806)
Income from unconsolidated
cellular entity 6,114 6,114
Other income and expense (2,329) (1,500) (6) (829)
Income tax expense (157,561) (3,151) (7) (154,410)
---------- ---------- ----------
NET INCOME 252,755 5,057 247,698
========== ========== ==========
BASIC EARNINGS PER SHARE 1.82 0.04 1.79
DILUTED EARNINGS PER SHARE 1.79 0.04 1.75
SHARES OUTSTANDING
Basic 138,512 138,512
Diluted 143,403 143,403
DIVIDENDS PER COMMON SHARE 0.1725 0.1725
NONRECURRING ITEMS
(1) - Expenses associated with Hurricanes Katrina and Rita.
(2) - Write-off of unamortized deferred debt costs associated with
purchasing and retiring approximately $400 million of Series
J notes.
(3) - Includes (i) a $9.9 million impairment of non-operating
investment and a $4.8 million debt extinguishment charge
related to purchasing and retiring approximately $400 million
of Series J notes, net of (ii) a $3.5 million gain on sale of
non-operating investment and $3.2 million of interest income
related to the settlement of various income tax audits.
(4) - Includes (i) $1.3 million tax benefit related to the
settlement of various income tax audits and (ii) $5.8 million
net tax benefit of items (1), (2) and (3).
(5) - Adjustment for overdepreciated assets, including related
revenue effect.
(6) - Impairment of non-operating investment.
(7) - Tax effect of items (5) and (6).
Increase
(decrease)
Increase excluding
(decrease) non-
In thousands, except per share as recurring
amounts reported items
---------- ----------
OPERATING REVENUES
Local service (1.4%) (1.4%)
Network access 0.5% 0.0%
Long distance 1.2% 1.2%
Data 17.0% 16.7%
Fiber transport and CLEC 42.6% 42.6%
Other 1.8% 1.8%
3.2% 3.0%
OPERATING EXPENSES
Cost of services and products 8.3% 7.3%
Selling, general and
administrative (4.4%) (4.4%)
Depreciation and amortization 6.6% 2.9%
4.7% 3.1%
OPERATING INCOME (0.1%) 2.7%
OTHER INCOME (EXPENSE)
Interest expense (3.6%) (4.3%)
Income from unconsolidated
cellular entity (45.9%) (45.9%)
Other income and expense (37.4%) (889.4%)
Income tax expense (0.0%) 6.6%
NET INCOME 1.3% 6.6%
BASIC EARNINGS PER SHARE 7.1% 12.8%
DILUTED EARNINGS PER SHARE 6.7% 12.6%
SHARES OUTSTANDING
Basic (5.5%) (5.5%)
Diluted (5.1%) (5.1%)
DIVIDENDS PER COMMON SHARE 4.3% 4.3%
NONRECURRING ITEMS
(1) - Expenses associated with Hurricanes Katrina and Rita.
(2) - Write-off of unamortized deferred debt costs associated with
purchasing and retiring approximately $400 million of Series
J notes.
(3) - Includes (i) a $9.9 million impairment of non-operating
investment and a $4.8 million debt extinguishment charge
related to purchasing and retiring approximately $400 million
of Series J notes, net of (ii) a $3.5 million gain on sale of
non-operating investment and $3.2 million of interest income
related to the settlement of various income tax audits.
(4) - Includes (i) $1.3 million tax benefit related to the
settlement of various income tax audits and (ii) $5.8 million
net tax benefit of items (1), (2) and (3).
(5) - Adjustment for overdepreciated assets, including related
revenue effect.
(6) - Impairment of non-operating investment.
(7) - Tax effect of items (5) and (6).
CenturyTel, Inc.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2005 AND DECEMBER 31, 2004
(UNAUDITED)
September December
30, 31,
2005 2004
----------- -----------
(in
thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 268,501 167,215
Other current assets 259,850 252,632
----------- -----------
Total current assets 528,351 419,847
----------- -----------
NET PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment 7,699,418 7,431,017
Accumulated depreciation (4,400,303) (4,089,616)
----------- -----------
Net property, plant and equipment 3,299,115 3,341,401
----------- -----------
GOODWILL AND OTHER ASSETS
Goodwill 3,432,623 3,433,864
Other 582,447 601,841
----------- -----------
Total goodwill and other assets 4,015,070 4,035,705
----------- -----------
TOTAL ASSETS $ 7,842,536 7,796,953
=========== ===========
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 334,576 249,617
Other current liabilities 472,991 442,001
----------- -----------
Total current liabilities 807,567 691,618
LONG-TERM DEBT 2,500,270 2,762,019
DEFERRED CREDITS AND OTHER LIABILITIES 979,264 933,551
STOCKHOLDERS' EQUITY 3,555,435 3,409,765
----------- -----------
TOTAL LIABILITIES AND EQUITY $ 7,842,536 7,796,953
=========== ===========
CenturyTel, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Three months ended September 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 $ 201,242 (5,853) (1) 207,095
Add: Depreciation and
amortization 133,526 - 133,526
--------- ---------- ----------
Operating cash flow $ 334,768 (5,853) 340,621
========= ========== ==========
Revenues $ 657,085 - 657,085
========= ========== ==========
Operating income margin
(operating income divided by
revenues) 30.6% 31.5%
========= ==========
Operating cash flow margin
(operating cash flow divided
by revenues) 50.9% 51.8%
========= ==========
Free cash flow (prior to debt
service requirements and
dividends)
Net income $ 91,411 (7,566) (2) 98,977
Add: Depreciation and
amortization 133,526 - 133,526
Less: Capital expenditures (105,044) - (105,044)
--------- ---------- ----------
Free cash flow $ 119,893 (7,566) 127,459
========= ========== ==========
Free cash flow $ 119,893
Income from unconsolidated
cellular entity (1,270)
Deferred income taxes 7,471
Changes in current assets and
current liabilities 10,413
(Increase) decrease in other
noncurrent assets 535
Increase (decrease) in other
noncurrent liabilities 3,080
Retirement benefits 1,472
Other, net 7,818
Add: Capital expenditures 105,044
---------
Net cash provided by
operating activities $ 254,456
=========
NONRECURRING ITEMS
(1) - Expenses associated with Hurricanes Katrina and Rita
(presented on a pre-tax basis).
(2) - Includes (i) a $6.1 million after-tax impairment of non-
operating investment and a $3.6 million after-tax expense
associated with Hurricanes Katrina and Rita, net of (ii) a
$2.2 million after-tax gain on sale of a separate non-
operating investment.
(3) - Adjustment for overdepreciated assets, including related
revenue effect (presented on a pre-tax basis).
(4) - Adjustment for overdepreciated assets, including related
revenue effect, and impairment of non-operating investment
(presented on an after-tax basis).
Three months ended September 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 190,869 9,708 (3) 181,161
Add: Depreciation and
amortization 113,857 (13,221) (3) 127,078
--------- ---------- ----------
Operating cash flow 304,726 (3,513) 308,239
========= ========== ==========
Revenues 603,879 (3,513) (3) 607,392
========= ========== ==========
Operating income margin
(operating income divided by
revenues) 31.6% 29.8%
========= ==========
Operating cash flow margin
(operating cash flow divided
by revenues) 50.5% 50.7%
========= ==========
Free cash flow (prior to debt
service requirements and
dividends)
Net income 86,192 5,057 (4) 81,135
Add: Depreciation and
amortization 113,857 (13,221) (3) 127,078
Less: Capital expenditures (97,583) - (97,583)
--------- ---------- ----------
Free cash flow 102,466 (8,164) 110,630
========= ========== ==========
Free cash flow 102,466
Income from unconsolidated
cellular entity (1,929)
Deferred income taxes 18,370
Changes in current assets and
current liabilities 13,622
(Increase) decrease in other
noncurrent assets (4,401)
Increase (decrease) in other
noncurrent liabilities (1,152)
Retirement benefits 5,137
Other, net 2,740
Add: Capital expenditures 97,583
---------
Net cash provided by operating
activities 232,436
=========
NONRECURRING ITEMS
(1) - Expenses associated with Hurricanes Katrina and Rita
(presented on a pre-tax basis).
(2) - Includes (i) a $6.1 million after-tax impairment of non-
operating investment and a $3.6 million after-tax expense
associated with Hurricanes Katrina and Rita, net of (ii) a
$2.2 million after-tax gain on sale of a separate non-
operating investment.
(3) - Adjustment for overdepreciated assets, including related
revenue effect (presented on a pre-tax basis).
(4) - Adjustment for overdepreciated assets, including related
revenue effect, and impairment of non-operating investment
(presented on an after-tax basis).
CenturyTel, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Nine months ended September 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 $ 563,984 (5,853) (1) 569,837
Add: Depreciation and
amortization 396,153 - 396,153
---------- ---------- ----------
Operating cash flow $ 960,137 (5,853) 965,990
========== ========== ==========
Revenues $1,858,780 - 1,858,780
========== ========== ==========
Operating income margin
(operating income divided by
revenues) 30.3% 30.7%
========== ==========
Operating cash flow margin
(operating cash flow divided
by revenues) 51.7% 52.0%
========== ==========
Free cash flow (prior to debt
service requirements and
dividends)
Net income $ 256,145 (7,941) (2) 264,086
Add: Depreciation and
amortization 396,153 - 396,153
Less: Capital expenditures (281,958) - (281,958)
---------- ---------- ----------
Free cash flow $ 370,340 (7,941) 378,281
========== ========== ==========
Free cash flow $ 370,340
Income from unconsolidated
cellular entity (3,307)
Deferred income taxes 33,418
Changes in current assets and
current liabilities 29,367
(Increase) decrease in other
noncurrent assets (4,207)
Increase (decrease) in other
noncurrent liabilities 2,496
Retirement benefits 13,989
Other, net 9,315
Add: Capital expenditures 281,958
----------
Net cash provided by
operating activities $ 733,369
==========
NONRECURRING ITEMS
(1) - Expenses associated with Hurricanes Katrina and Rita
(presented on a pre-tax basis).
(2) - Includes (i) a $6.1 million after-tax impairment of non-
operating investment, a $3.7 million after-tax expense
related to purchasing and retiring approximately $400 million
of Series J notes and a $3.6 million after-tax expense
associated with Hurricanes Katrina and Rita, net of (ii) a
$3.3 million net benefit related to the settlement of various
income tax audits and a $2.2 million after-tax gain on sale
of non-operating investment.
(3) - Adjustment for overdepreciated assets, including related
revenue effect (presented on a pre-tax basis).
(4) - Adjustment for overdepreciated assets, including related
revenue effect, and impairment of non-operating investment
(presented on an after-tax basis).
Nine months ended
September 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 564,337 9,708 (3) 554,629
Add: Depreciation and
amortization 371,600 (13,221) (3) 384,821
----------- ---------- ----------
Operating cash flow 935,937 (3,513) 939,450
=========== ========== ==========
Revenues 1,801,138 (3,513) (3) 1,804,651
=========== ========== ==========
Operating income margin
(operating income divided by
revenues) 31.3% 30.7%
=========== ==========
Operating cash flow margin
(operating cash flow divided
by revenues) 52.0% 52.1%
=========== ==========
Free cash flow (prior to debt
service requirements and
dividends)
Net income 252,755 5,057 (4) 247,698
Add: Depreciation and
amortization 371,600 (13,221) (3) 384,821
Less: Capital expenditures (253,597) - (253,597)
----------- ---------- ----------
Free cash flow 370,758 (8,164) 378,922
=========== ========== ==========
Free cash flow 370,758
Income from unconsolidated
cellular entity (6,114)
Deferred income taxes 75,408
Changes in current assets and
current liabilities 45,892
(Increase) decrease in other
noncurrent assets (26,555)
Increase (decrease) in other
noncurrent liabilities (4,696)
Retirement benefits 23,000
Other, net 4,504
Add: Capital expenditures 253,597
-----------
Net cash provided by
operating activities 735,794
===========
NONRECURRING ITEMS
(1) - Expenses associated with Hurricanes Katrina and Rita
(presented on a pre-tax basis).
(2) - Includes (i) a $6.1 million after-tax impairment of non-
operating investment, a $3.7 million after-tax expense
related to purchasing and retiring approximately $400 million
of Series J notes and a $3.6 million after-tax expense
associated with Hurricanes Katrina and Rita, net of (ii) a
$3.3 million net benefit related to the settlement of various
income tax audits and a $2.2 million after-tax gain on sale
of non-operating investment.
(3) - Adjustment for overdepreciated assets, including related
revenue effect (presented on a pre-tax basis).
(4) - Adjustment for overdepreciated assets, including related
revenue effect, and impairment of non-operating investment
(presented on an after-tax basis).
MULTIMEDIA AVAILABLE:
http://www.businesswire.com/cgi-bin/mmg.cgi?eid=5005678
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.