MONROE, La.--(BUSINESS WIRE)--July 27, 2006--
CenturyTel, Inc. (NYSE: CTL) announces operating results
for second quarter 2006.
-- Net income, excluding nonrecurring items, declined 13.6% to
$73.6 million compared to $85.1 million in second quarter
2005. Reported under GAAP, second quarter 2006 net income was
$152.4 million.
-- Diluted earnings per share, excluding nonrecurring items,
decreased 4.7% to $.61 from $.64 in second quarter 2005.
Reported under GAAP, second quarter 2006 diluted earnings per
share was $1.26.
-- Free cash flow (as defined in the attached financial
schedules), excluding nonrecurring items, was $135.0 million
in second quarter 2006 compared to $113.6 million in second
quarter 2005.
----------------------------------------------------------------------
Second Quarter Highlights Quarter Ended Quarter Ended % Change
(Excluding nonrecurring items) 6/30/06 6/30/05
(In thousands, except per share
amounts and customer units)
----------------------------------------------------------------------
Operating Revenues
Operating Cash Flow (1) $ 609,131 $ 606,413 0.4%
Net Income $ 297,069 $ 316,334 (6.1)%
Diluted Earnings Per Share $ 73,562 $ 85,118 (13.6)%
Average Diluted Shares $ .61 $ .64 (4.7)%
Outstanding 121,636 135,345 (10.1)%
Capital Expenditures $ 70,367 $ 102,011 (31.0)%
----------------------------------------------------------------------
Telephone Access Lines 2,168,317 2,273,279 (4.6)%
High-speed Internet Customers 312,853 194,847 (2) 60.6%
----------------------------------------------------------------------
(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.
(2) Includes approximately 2,000 access lines in our Arizona
telephone properties which were sold in second quarter 2006.
"CenturyTel delivered solid results as we experienced strong
demand for broadband services and communications bundles during the
quarter," Glen F. Post, III, chairman and chief executive officer,
said. "The 60% growth in high-speed Internet customers and 45% growth
in related revenues over the past twelve months reflect CenturyTel's
focus on being the broadband provider of choice in our markets."
Operating revenues rose 0.4% to $609.1 million in second quarter
2006 from $606.4 million in second quarter 2005. This increase
primarily resulted from revenues from metro fiber assets acquired in
mid-2005 and data revenue growth from high-speed Internet subscribers.
These increases more than offset revenue declines attributable to
access line losses and lower access revenues.
Operating expenses increased 5.6% to $443.9 million from $420.5
million in second quarter 2005 primarily due to growth in our
high-speed Internet connections and expenses related to the metro
fiber assets acquired in mid-2005.
Operating cash flow decreased to $297.1 million from $316.3
million. CenturyTel achieved an operating cash flow margin of 48.8%
during the quarter versus 52.2% in second quarter 2005. This margin
decline was principally driven by access line losses and lower USF and
access revenues, along with the growth in lower margin services such
as high-speed Internet, fiber transport and CLEC.
Net income, excluding nonrecurring items, was $73.6 million in
second quarter 2006 compared to $85.1 million in second quarter 2005.
The decrease was primarily driven by the decline in operating cash
flow discussed above. Diluted earnings per share, excluding
nonrecurring items, was $.61 for second quarter 2006, a 4.7% decrease
from the $.64 reported in second quarter 2005. This decrease was
driven by lower net income, which was partially offset by the 10.1%
decline in average diluted shares outstanding that was a result of
share repurchases since second quarter 2005.
As announced July 19, 2006, all repurchases under the Company's
February 2006 accelerated share repurchase agreements entered into
with investment banks for approximately 14.36 million shares were
recently completed and CenturyTel paid the banks $28.4 million cash as
final settlement of the agreements. The Company has $500 million
remaining under its $1 billion share repurchase program authorized in
February of this year.
"We are pleased that the accelerated share repurchase program was
completed in less than five months. We currently expect to continue
purchasing shares under the remaining $500 million in the open
market," Post said.
For the first six months of 2006, operating revenues, excluding
nonrecurring items, increased to $1.219 billion from $1.202 billion
for the same period in 2005. Operating cash flow, excluding
nonrecurring items, was $594.7 million for the first half of 2006
compared to $625.4 million a year ago. Net income, excluding
nonrecurring items, was $146.0 million in the first six months of 2006
compared to $165.1 million during the same period in 2005. Diluted
earnings per share, excluding nonrecurring items, was $1.19 during the
first half of 2006 compared to $1.23 in the first half of 2005.
Under generally accepted accounting principles (GAAP), net income
for second quarter 2006 was $152.4 million compared to $85.1 million
for second quarter 2005 and diluted earnings per share for second
quarter 2006 was $1.26 compared to $.64 for second quarter 2005.
Second quarter 2006 net income and diluted earnings per share include
a $72.4 million after-tax benefit related to the dissolution of the
Rural Telephone Bank and a $6.4 million positive impact from the
resolution of various income tax audit issues.
Net income under GAAP for the first six months of 2006 was $221.8
million compared to $164.7 million for the first six months of 2005
and diluted earnings per share for the first six months of 2006 was
$1.80 compared to $1.23 for the first six months of 2005. See the
accompanying financial schedules for detail of the Company's
nonrecurring items for the six months ended June 30, 2006 and 2005.
For the third quarter 2006, CenturyTel expects total revenues of
$605 to $615 million and diluted earnings per share of $.57 to $.61.
For the full year 2006, diluted earnings per share is expected to be
in the range of $2.35 to $2.45, an increase over the $2.30 to $2.40
range previously provided. This increase in 2006 diluted earnings per
share guidance is primarily due to the better than anticipated results
during second quarter 2006 and the expectation of operating costs
being lower in the second half of 2006 than previously anticipated.
These outlook figures exclude nonrecurring items and the potential
impact of any future mergers, acquisitions, divestitures, refinancing,
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 investors 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 866.814.1912. The
call will be accessible for replay through August 2, 2006, by calling
888.266.2081 and entering the access code: 930453. 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 17, 2006.
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 expansion opportunities,
including retaining and hiring key personnel; 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 without work stoppages; the
effect of adverse weather; other risks referenced from time to time in
the Company's filings with the Securities and Exchange Commission (the
"SEC"); and the effects of more general factors such as changes in
interest rates, in tax 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, 2005, as updated
by the Company's subsequent SEC reports. 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 July 27, 2006. The Company undertakes no obligation
to update any of its forward-looking statements for any reason.
CenturyTel (NYSE:CTL) is a leading provider of communications,
high-speed Internet and entertainment services in small-to-mid-size
cities through our broadband and fiber transport networks. Included in
the S&P 500 Index, CenturyTel delivers advanced communications with a
personal touch to customers in 25 states. Visit us at
www.centurytel.com.
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED JUNE 30, 2006 AND 2005
(UNAUDITED)
Three months ended June 30, 2006
---------------------------------
As
adjusted
Less excluding
non- non-
In thousands, except per share As recurring recurring
amounts reported items items
--------- ---------- ----------
OPERATING REVENUES
Voice(a) $ 216,786 216,786
Network access 221,586 221,586
Data 84,447 84,447
Fiber transport and CLEC 36,051 36,051
Other 50,261 50,261
--------- ---------- ----------
609,131 - 609,131
--------- ---------- ----------
OPERATING EXPENSES
Cost of services and products 216,466 216,466
Selling, general and
administrative 95,596 95,596
Depreciation and amortization 131,820 131,820
--------- ---------- ----------
443,882 - 443,882
--------- ---------- ----------
OPERATING INCOME 165,249 - 165,249
OTHER INCOME (EXPENSE)
Interest expense (50,639) (50,639)
Income from unconsolidated
cellular entity 2,076 2,076
Nonrecurring gains 118,649 118,649 (1) -
Other income (expense) 2,734 2,734
Income tax expense (85,701) (39,843)(2) (45,858)
--------- ---------- ----------
NET INCOME $ 152,368 78,806 73,562
========= ========== ==========
BASIC EARNINGS PER SHARE $ 1.32 0.68 0.64
DILUTED EARNINGS PER SHARE $ 1.26 0.65 0.61
AVERAGE SHARES OUTSTANDING
Basic 115,441 115,441
Diluted 121,636 121,636
DIVIDENDS PER COMMON SHARE $ 0.0625 0.0625
Three months ended June 30, 2005
-------------------------------
As
adjusted
Less excluding
non- non-
As recurring recurring
In thousands, except per share reported items items
amounts
--------- ---------- ----------
OPERATING REVENUES
Voice(a) 221,708 221,708
Network access 239,404 239,404
Data 76,049 76,049
Fiber transport and CLEC 21,636 21,636
Other 47,616 47,616
--------- ---------- ----------
606,413 - 606,413
--------- ---------- ----------
OPERATING EXPENSES
Cost of services and products 194,873 194,873
Selling, general and administrative 95,206 95,206
Depreciation and amortization 130,452 130,452
--------- ---------- ----------
420,531 - 420,531
--------- ---------- ----------
OPERATING INCOME 185,882 - 185,882
OTHER INCOME (EXPENSE)
Interest expense (49,647) (49,647)
Income from unconsolidated cellular
entity 724 724
Nonrecurring gains - -
Other income (expense) 1,220 1,220
Income tax expense (53,061) (53,061)
--------- ---------- ----------
NET INCOME 85,118 - 85,118
========= ========== ==========
BASIC EARNINGS PER SHARE 0.65 0.65
DILUTED EARNINGS PER SHARE 0.64 0.64
AVERAGE SHARES OUTSTANDING
Basic 130,299 130,299
Diluted 135,345 135,345
DIVIDENDS PER COMMON SHARE 0.0600 0.0600
Increase
(decrease)
Increase excluding
(decrease) nonrecurring
In thousands, except per share amounts as reported items
---------- -------------
OPERATING REVENUES
Voice(a) (2.2%) (2.2%)
Network access (7.4%) (7.4%)
Data 11.0% 11.0%
Fiber transport and CLEC 66.6% 66.6%
Other 5.6% 5.6%
0.4% 0.4%
OPERATING EXPENSES
Cost of services and products 11.1% 11.1%
Selling, general and administrative 0.4% 0.4%
Depreciation and amortization 1.0% 1.0%
5.6% 5.6%
OPERATING INCOME (11.1%) (11.1%)
OTHER INCOME (EXPENSE)
Interest expense 2.0% 2.0%
Income from unconsolidated cellular entity 186.7% 186.7%
Nonrecurring gains - -
Other income (expense) 124.1% 124.1%
Income tax expense 61.5% (13.6%)
NET INCOME 79.0% (13.6%)
BASIC EARNINGS PER SHARE 103.1% (1.5%)
DILUTED EARNINGS PER SHARE 96.9% (4.7%)
AVERAGE SHARES OUTSTANDING
Basic (11.4%) (11.4%)
Diluted (10.1%) (10.1%)
DIVIDENDS PER COMMON SHARE 4.2% 4.2%
NONRECURRING ITEMS
(1) - Includes gain recorded upon redemption of Rural Telephone
Bank stock ($117.8 million) and gain recorded upon sale of
Arizona properties ($.9 million).
(2) - Includes $46.3 million aggregate tax expense related to Item
(1), net of $6.4 million net tax benefit due to the
resolution of various income tax audit issues.
(a) Revenues previously reported as "Local service" and "Long
distance" have been combined into this "Voice" category for
all periods presented.
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 2006 AND 2005
(UNAUDITED)
Six months ended June 30, 2006
----------------------------------
As
adjusted
Less excluding
non- non-
As recurring recurring
In thousands, except per share reported items items
amounts ---------- ---------- ----------
OPERATING REVENUES
Voice(a) $ 434,235 434,235
Network access 446,832 1,128 (1) 445,704
Data 167,685 184 (1) 167,501
Fiber transport and CLEC 71,831 71,831
Other 100,197 100,197
---------- ---------- ----------
1,220,780 1,312 1,219,468
---------- ---------- ----------
OPERATING EXPENSES
Cost of services and products 439,418 5,493 (1) 433,925
Selling, general and
administrative 191,536 682 (1) 190,854
Depreciation and amortization 266,385 266,385
---------- ---------- ----------
897,339 6,175 891,164
---------- ---------- ----------
OPERATING INCOME 323,441 (4,863) 328,304
OTHER INCOME (EXPENSE)
Interest expense (100,725) (100,725)
Income from unconsolidated
cellular entity 4,149 4,149
Nonrecurring gains 118,649 118,649 (2) -
Other income (expense) 5,258 5,258
Income tax expense (128,979) (37,976)(3) (91,003)
---------- ---------- ----------
NET INCOME $ 221,793 75,810 145,983
========== ========== ==========
BASIC EARNINGS PER SHARE $ 1.86 0.64 1.23
DILUTED EARNINGS PER SHARE $ 1.80 0.61 1.19
AVERAGE SHARES OUTSTANDING
Basic 118,917 118,917
Diluted 124,798 124,798
DIVIDENDS PER COMMON SHARE $ 0.1250 0.1250
Six months ended June 30, 2005
----------------------------------
As
adjusted
Less excluding
non- non-
As recurring recurring
In thousands, except per share reported items items
amounts
---------- ---------- ----------
OPERATING REVENUES
Voice(a) 446,208 446,208
Network access 469,682 469,682
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)(4) (101,076)
Income from unconsolidated
cellular entity 2,037 2,037
Nonrecurring gains - -
Other income (expense) 2,755 (1,574)(5) 4,329
Income tax expense (100,528) 2,395 (6) (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
AVERAGE SHARES OUTSTANDING
Basic 131,241 131,241
Diluted 136,257 136,257
DIVIDENDS PER COMMON
SHARE 0.1200 0.1200
Increase
(decrease)
Increase excluding
(decrease) nonrecurring
In thousands, except per share amounts as reported items
------------ -------------
OPERATING REVENUES
Voice(a) (2.7%) (2.7%)
Network access (4.9%) (5.1%)
Data 12.6% 12.5%
Fiber transport and CLEC 71.5% 71.5%
Other 5.5% 5.5%
1.6% 1.5%
OPERATING EXPENSES
Cost of services and products 13.6% 12.2%
Selling, general and administrative 1.1% 0.7%
Depreciation and amortization 1.4% 1.4%
7.0% 6.2%
OPERATING INCOME (10.8%) (9.5%)
OTHER INCOME (EXPENSE)
Interest expense (1.5%) (0.3%)
Income from unconsolidated cellular
entity 103.7% 103.7%
Nonrecurring gains - -
Other income (expense) 90.9% 21.5%
Income tax expense 28.3% (11.6%)
NET INCOME 34.6% (11.6%)
BASIC EARNINGS PER SHARE 48.8% (2.4%)
DILUTED EARNINGS PER SHARE 46.3% (3.3%)
AVERAGE SHARES OUTSTANDING
Basic (9.4%) (9.4%)
Diluted (8.4%) (8.4%)
DIVIDENDS PER COMMON SHARE 4.2% 4.2%
NONRECURRING ITEMS
(1) - Severance and related costs due to workforce reduction,
including revenue impact.
(2) - Includes gain recorded upon redemption of Rural Telephone
Bank stock ($117.8 million) and gain recorded upon sale of
Arizona properties ($.9 million).
(3) - Includes $44.4 million net tax expense related to Items (1)
and (2), net of $6.4 million net tax benefit due to the
resolution of various income tax audit issues.
(4) - Write-off of unamortized deferred debt costs associated with
purchasing and retiring approximately $400 million of Series
J notes.
(5) - 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.
(6) - Includes (i) $1.1 million net tax benefit of Items (4) and
(5) and (ii) $1.3 million tax benefit related to the
settlement of various income tax audits.
(a) Revenues previously reported as "Local service" and "Long
distance" have been combined into this "Voice" category for
all periods presented.
CenturyTel, Inc.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2006 AND DECEMBER 31, 2005
(UNAUDITED)
June 30, Dec. 31,
2006 2005
----------- -----------
(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,769 158,846
Other current assets 238,483 264,170
----------- -----------
Total current assets 240,252 423,016
----------- -----------
NET PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment 7,844,529 7,801,377
Accumulated depreciation (4,672,522) (4,496,891)
----------- -----------
Net property, plant and equipment 3,172,007 3,304,486
----------- -----------
GOODWILL AND OTHER ASSETS
Goodwill 3,431,136 3,432,649
Other 590,589 602,556
----------- -----------
Total goodwill and other assets 4,021,725 4,035,205
----------- -----------
TOTAL ASSETS $ 7,433,984 7,762,707
=========== ===========
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 381,455 276,736
Other current liabilities 438,641 469,494
----------- -----------
Total current liabilities 820,096 746,230
LONG-TERM DEBT 2,239,263 2,376,070
DEFERRED CREDITS AND OTHER LIABILITIES 1,073,065 1,023,134
STOCKHOLDERS' EQUITY 3,301,560 3,617,273
----------- -----------
TOTAL LIABILITIES AND EQUITY $ 7,433,984 7,762,707
=========== ===========
CenturyTel, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Three months ended June 30, 2006
---------------------------------
As
adjusted
Less excluding
non- non-
In thousands As recurring recurring
reported items items
-------------------- ----------
Operating cash flow and cash flow
margin
Operating income $ 165,249 - 165,249
Add: Depreciation and
amortization 131,820 131,820
--------- ---------- ----------
Operating cash flow $ 297,069 - 297,069
========= ========== ==========
Revenues $ 609,131 - 609,131
========= ========== ==========
Operating income margin (operating
income divided by revenues) 27.1% 27.1%
========= ==========
Operating cash flow margin
(operating cash flow divided by
revenues) 48.8% 48.8%
========= ==========
Free cash flow (prior to debt
service requirements and
dividends)
Net income $ 152,368 78,806 (1) 73,562
Add: Depreciation and
amortization 131,820 - 131,820
Less: Capital expenditures (70,367) - (70,367)
--------- ---------- ----------
Free cash flow $ 213,821 78,806 135,015
========= ========== ==========
Free cash flow $ 213,821
Nonrecurring gains (118,649)
Income from unconsolidated
cellular entity (2,076)
Deferred income taxes 12,830
Changes in current assets and
current liabilities 31,674
(Increase) decrease in other
noncurrent assets 3,162
Increase in other noncurrent
liabilities 593
Retirement benefits 7,548
Excess tax benefits from share-
based compensation (761)
Other, net 3,778
Add: Capital expenditures 70,367
---------
Net cash provided by operating
activities $ 222,287
=========
Three 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 185,882 - 185,882
Add: Depreciation and
amortization 130,452 130,452
--------- ---------- ----------
Operating cash flow 316,334 - 316,334
========= ========== ==========
Revenues 606,413 - 606,413
========= ========== ==========
Operating income margin (operating
income divided by revenues) 30.7% 30.7%
========= ==========
Operating cash flow margin
(operating cash flow divided by
revenues) 52.2% 52.2%
========= ==========
Free cash flow (prior to
debt service requirements
and dividends)
Net income 85,118 - 85,118
Add: Depreciation and
amortization 130,452 - 130,452
Less: Capital expenditures (102,011) - (102,011)
--------- ---------- ----------
Free cash flow 113,559 - 113,559
========= ========== ==========
Free cash flow 113,559
Nonrecurring gains -
Income from unconsolidated
cellular entity (724)
Deferred income taxes 3,806
Changes in current assets
and current liabilities (8,669)
(Increase) decrease in
other noncurrent assets (119)
Increase in other
noncurrent liabilities 145
Retirement benefits 6,513
Excess tax benefits from
share-based compensation -
Other, net 5,572
Add: Capital expenditures 102,011
---------
Net cash provided by
operating activities 222,094
=========
NONRECURRING ITEMS
(1) - Includes (i) $72.4 million after-tax gains recorded upon
redemption of Rural Telephone Bank stock and sale of Arizona
properties and (ii) $6.4 million net tax benefit due to the
resolution of various income tax audit issues.
CenturyTel, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Six months ended June 30, 2006
----------------------------------
As
adjusted
Less excluding
non- non-
In thousands As recurring recurring
reported items items
--------------------- ----------
Operating cash flow and cash flow
margin
Operating income $ 323,441 (4,863)(1) 328,304
Add: Depreciation and
amortization 266,385 266,385
---------- ---------- ----------
Operating cash flow $ 589,826 (4,863) 594,689
========== ========== ==========
Revenues $1,220,780 1,312 (1)1,219,468
========== ========== ==========
Operating income margin
(operating income divided by
revenues) 26.5% 26.9%
========== ==========
Operating cash flow margin
(operating cash flow divided by
revenues) 48.3% 48.8%
========== ==========
Free cash flow (prior to debt
service requirements and
dividends)
Net income $ 221,793 75,810 (2) 145,983
Add: Depreciation and
amortization 266,385 - 266,385
Less: Capital expenditures (130,455) - (130,455)
---------- ---------- ----------
Free cash flow $ 357,723 75,810 281,913
========== ========== ==========
Free cash flow $ 357,723
Nonrecurring gains (118,649)
Income from unconsolidated
cellular entity (4,149)
Deferred income taxes 22,352
Changes in current assets and
current liabilities (306)
(Increase) decrease in other
noncurrent assets 969
Increase (decrease) in other
noncurrent liabilities 1,550
Retirement benefits 14,926
Excess tax benefits from share-
based compensation (4,947)
Other, net 6,393
Add: Capital expenditures 130,455
----------
Net cash provided by operating
activities $ 406,317
==========
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)(3) 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
Nonrecurring gains -
Income from unconsolidated
cellular entity (2,037)
Deferred income taxes 25,947
Changes in current assets and
current liabilities 18,954
(Increase) decrease in other
noncurrent assets (1,477)
Increase (decrease) in other
noncurrent liabilities (584)
Retirement benefits 12,517
Excess tax benefits from share-
based compensation -
Other, net (1,768)
Add: Capital expenditures 176,914
----------
Net cash provided by operating
activities 478,913
==========
NONRECURRING ITEMS
(1) - Severance and related costs due to workforce reduction,
including revenue impact.
(2) - Includes (i) $72.4 million after-tax gains recorded upon
redemption of Rural Telephone Bank stock and sale of Arizona
properties, (ii) $3.0 million severance and related costs
due to workforce reduction, including revenue impact, net of
tax, and (iii) $6.4 million net tax benefit due to the
resolution of various income tax audit issues.
(3) - 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.
Source: CenturyTel, Inc.