MONROE, La., Aug. 2 /PRNewswire-FirstCall/ -- CenturyTel, Inc. (NYSE: CTL)
announces operating results for second quarter 2007.
-- Operating revenues, excluding nonrecurring items, increased 5.0% to
$639.1 million compared to $608.9 million in second quarter 2006.
Reported under GAAP, operating revenues increased 13.3% to $690.0
million.
-- Operating cash flow (as defined in the attached financial schedules),
excluding nonrecurring items, rose 4.7% to $311.2 million from $297.1
million in second quarter 2006.
-- Net income, excluding nonrecurring items, increased 6.9% to $78.4
million from $73.4 million in second quarter 2006. Net income, reported
under GAAP, was $112.3 million compared to $152.2 million in second
quarter 2006.
-- Diluted earnings per share, excluding nonrecurring items, rose 14.8% to
$.70 in second quarter 2007 compared to $.61 in second quarter 2006,
while GAAP diluted earnings per share was $1.00 in second quarter 2007
and $1.26 in second quarter 2006.
-- Free cash flow (as defined in the attached financial schedules),
excluding nonrecurring items, was $154.8 million in second quarter
2007.
Second Quarter Highlights
(Excluding nonrecurring items)
(In thousands, except per
share amounts and operating data)
Quarter Ended Quarter Ended % Change
6/30/07 6/30/06
Operating Revenues $ 639,122 $ 608,907 5.0 %
Operating Cash Flow (1) $ 311,226 $ 297,120 4.7 %
Net Income $ 78,434 $ 73,404 6.9 %
Diluted Earnings
Per Share $ .70 $ .61 14.8 %
Average Diluted Shares
Outstanding $ 113,721 $ 121,636 (6.5) %
Capital Expenditures $ 57,976 $ 70,367 (17.6) %
Access Lines (2) (3) 2,205,000 2,153,000 2.4 %
High-speed Internet
Customers (3) 500,000 313,000 59.7 %
(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) Quarter ended 6/30/2006 access lines include adjustments made during
2006 to reflect the removal of test lines and database conversion and
clean-up.
(3) Quarter ended 6/30/2007 access lines and high-speed Internet
customers include the Madison River acquisition. Excluding the
effects of this acquisition, access lines decreased 5.2% and
high-speed Internet customers increased 41.8%.
"CenturyTel achieved strong financial results for the second quarter as
the recently acquired Madison River properties contributed to revenue growth
and effective cost containment contributed to earnings growth during the
quarter," Glen F. Post, III, chairman and chief executive officer, said. "We
achieved solid growth of more than 30,000 broadband connections during the
quarter and, with the addition of Madison River, CenturyTel now serves more
than 500,000 broadband customers."
Operating revenues, excluding nonrecurring items, increased 5.0% to $639.1
million in second quarter 2007 compared to $608.9 million in second quarter
2006, driven by the $32.1 million in revenues contributed by the Madison River
properties acquired April 30, 2007. Other revenue increases during the quarter
of approximately $23 million resulted primarily from an increase in high-speed
Internet customers and growth in fiber transport revenues. These increases
were more than offset by revenue declines of approximately $25 million
primarily attributable to previously anticipated lower access revenues, access
line losses and lower revenues under the amended satellite television
agreement.
Operating expenses, excluding nonrecurring items, increased 4.1% to $462.2
million from $443.9 million in second quarter 2006, primarily due to operating
costs associated with the Madison River properties. Excluding costs associated
with the Madison River properties, operating expenses declined in second
quarter 2007 compared to second quarter 2006, primarily due to lower bad debt
expense, reduced personnel expenses and outside labor costs, lower expenses
under the amended satellite television agreement, and lower depreciation
expense associated with fully depreciated assets. These declines more than
offset increased expenses associated with growth in high-speed Internet and
fiber transport customers.
"CenturyTel's financial strength allowed us to complete both the Madison
River acquisition and our $1 billion share repurchase program with the
repurchase of 2.9 million shares for $136 million during the quarter," Post
said. "We continue to retain significant financial flexibility and expect to
utilize free cash flow to drive long-term shareholder value."
Operating cash flow, excluding nonrecurring items, for second quarter 2007
was $311.2 million. CenturyTel achieved an operating cash flow margin of 48.7%
during the quarter versus 48.8% in second quarter 2006.
Net income, excluding nonrecurring items, was $78.4 million compared to
$73.4 million in second quarter 2007. Diluted earnings per share, excluding
nonrecurring items, increased to $.70 in second quarter 2007 compared to $.61
in second quarter 2006, primarily due to increased operating income and the
reduction in diluted shares outstanding as a result of share repurchases
during the twelve months ended June 30, 2007.
For the first six months of 2007, operating revenues, excluding
nonrecurring items, were $1.240 billion compared to $1.219 billion in 2006, a
1.7% increase. Operating cash flow, excluding nonrecurring items, was $607.1
million for 2007 compared to $594.8 million a year ago. Net income, excluding
nonrecurring items, was $156.3 million compared to $145.7 million in 2006,
while diluted earnings per share was $1.38 compared to $1.19 in 2006.
Under generally accepted accounting principles (GAAP), net income for
second quarter 2007 was $112.3 million compared to $152.2 million for second
quarter 2006. Diluted earnings per share was $1.00 in second quarter 2007
compared to $1.26 in second quarter 2006. Second quarter 2007 results include
a $30.2 million after-tax positive revenue settlement related to the
resolution of network access disputes and a $3.6 million after-tax benefit
related to the amended satellite television agreement with Echostar. Second
quarter 2006 results 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.
For the first six months of 2007, prepared in accordance with GAAP, the
Company reported net income of $190.1 million, or $1.67 per diluted share,
compared to net income of $221.5 million, or $1.79 per diluted share, for the
six months ended June 30, 2006. See the accompanying financial schedules for
detail of the Company's nonrecurring items for the years 2007 and 2006.
For the third quarter 2007, CenturyTel expects total revenues of $690 to
$700 million and diluted earnings per share of $.87 to $.92. The finalization
of revenue settlements during the third quarter is expected to result in an
approximate $.23 increase in diluted earnings per share. For the full year
2007, diluted earnings per share is expected to be in the range of $2.90 to
$3.00, an increase over the $2.75 to $2.85 range previously provided. This
increase in 2007 diluted earnings per share guidance is primarily due to the
better than anticipated results during second quarter 2007, projected
increases in Internet and long distance revenues, and the expectation that
operating expenses will be lower in the second half of 2007 than previously
forecast, along with the anticipation of a modest contribution from the
Madison River properties.
These outlook figures assume conversion of our $165 million of Series K
convertible debentures and exclude nonrecurring items and the potential impact
of any future mergers, acquisitions, divestitures, refinancing, share
repurchases or other similar business transactions.
Other. As previously reported, CenturyTel adopted the requirements of
Staff Accounting Bulletin No. 108 (SAB 108) in fourth quarter 2006, which
required the results of operations previously reported in the first, second
and third quarters of 2006 to be adjusted. Second quarter 2006 and six months
ended June 30, 2006 amounts included in this press release reflect amounts
adjusted for the application of SAB 108.
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 schedules. 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 866.837.9781. The call will be accessible for
replay through August 8, 2007, by calling 888.258.7854 and entering the
conference ID number 1109813. 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 23,
2007.
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 successfully
integrating newly-acquired properties into the Company's operations and
retaining and hiring key personnel; possible changes in the demand for, or
pricing of, the Company's products and services; the Company's continued
access to credit markets on favorable terms; 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, 2006, 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 August 2,
2007. 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 http://www.centurytel.com.
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED JUNE 30, 2007 AND 2006
(UNAUDITED)
Three months ended June 30, 2007
As adjusted
Less excluding
non- non-
In thousands, As recurring recurring
except per share amounts reported items items
OPERATING REVENUES
Voice $219,803 219,803
Network access 266,202 48,987 (1) 217,215
Data 108,206 108,206
Fiber transport and CLEC 40,714 13 (1) 40,701
Other 55,066 1,869 (2) 53,197
689,991 50,869 639,122
OPERATING EXPENSES
Cost of services and products 226,388 (4,052)(2) 230,440
Selling, general and
administrative 97,456 97,456
Depreciation and amortization 134,311 134,311
458,155 (4,052) 462,207
OPERATING INCOME 231,836 54,921 176,915
OTHER INCOME (EXPENSE)
Interest expense (57,667) (57,667)
Other income (expense) 8,080 8,080
Income tax expense (69,984) (21,090)(3) (48,894)
NET INCOME $112,265 33,831 78,434
BASIC EARNINGS PER SHARE $1.03 0.31 0.72
DILUTED EARNINGS PER SHARE $1.00 0.30 0.70
AVERAGE SHARES OUTSTANDING
Basic 108,405 108,405
Diluted 113,721 113,721
DIVIDENDS PER COMMON SHARE $0.0650 0.0650
Three months ended June 30, 2006
As adjusted
Less excluding
non- non-
In thousands, As recurring recurring
except per share amounts reported items items
OPERATING REVENUES
Voice 216,485 216,485
Network access 221,663 221,663
Data 84,447 84,447
Fiber transport and CLEC 36,051 36,051
Other 50,261 50,261
608,907 - 608,907
OPERATING EXPENSES
Cost of services and products 216,191 216,191
Selling, general and
administrative 95,596 95,596
Depreciation and amortization 132,127 132,127
443,914 - 443,914
OPERATING INCOME 164,993 - 164,993
OTHER INCOME (EXPENSE)
Interest expense (50,639) (50,639)
Other income (expense) 123,459 118,649 (4) 4,810
Income tax expense (85,603) (39,843)(5) (45,760)
NET INCOME 152,210 78,806 73,404
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
Increase
(decrease)
Increase excluding
In thousands, except per share (decrease) nonrecurring
amounts as reported items
OPERATING REVENUES
Voice 1.5% 1.5%
Network access 20.1% (2.0%)
Data 28.1% 28.1%
Fiber transport and CLEC 12.9% 12.9%
Other 9.6% 5.8%
13.3% 5.0%
OPERATING EXPENSES
Cost of services and products 4.7% 6.6%
Selling, general and
administrative 1.9% 1.9%
Depreciation and amortization 1.7% 1.7%
3.2% 4.1%
OPERATING INCOME 40.5% 7.2%
OTHER INCOME (EXPENSE)
Interest expense 13.9% 13.9%
Other income (expense) (93.5%) 68.0%
Income tax expense (18.2%) 6.8%
NET INCOME (26.2%) 6.9%
BASIC EARNINGS PER SHARE (22.0%) 12.5%
DILUTED EARNINGS PER SHARE (20.6%) 14.8%
AVERAGE SHARES OUTSTANDING
Basic (6.1%) (6.1%)
Diluted (6.5%) (6.5%)
DIVIDENDS PER COMMON SHARE 4.0% 4.0%
NONRECURRING ITEMS
(1) - Revenue recorded upon settlement of a dispute with a carrier.
(2) - Reimbursement of amounts upon a change in our satellite
television arrangement.
(3) - Tax effects of items (1) and (2).
(4) - Includes gain recorded upon redemption of Rural Telephone
Bank stock ($117.8 million) and gain recorded upon sale of
Arizona properties ($.9 million).
(5) - Includes $46.3 million aggregate tax expense related to
Item (4), net of $6.4 million net tax benefit due to the
resolution of various income tax audit issues.
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 2007 AND 2006
(UNAUDITED)
Six months ended June 30, 2007
As adjusted
Less excluding
non- non-
In thousands, except per share As recurring recurring
amounts reported items items
OPERATING REVENUES
Voice $428,878 428,878
Network access 477,601 48,987 (1) 428,614
Data 204,070 204,070
Fiber transport and CLEC 79,040 13 (1) 79,027
Other 101,257 1,869 (2) 99,388
1,290,846 50,869 1,239,977
OPERATING EXPENSES
Cost of services and products 439,919 (4,052)(2) 443,971
Selling, general and
administrative 188,913 188,913
Depreciation and amortization 262,095 262,095
890,927 (4,052) 894,979
OPERATING INCOME 399,919 54,921 344,998
OTHER INCOME (EXPENSE)
Interest expense (104,628) (104,628)
Other income (expense) 13,370 13,370
Income tax expense (118,526) (21,090)(3) (97,436)
NET INCOME $190,135 33,831 156,304
BASIC EARNINGS PER SHARE $1.73 0.31 1.42
DILUTED EARNINGS PER SHARE $1.67 0.29 1.38
AVERAGE SHARES OUTSTANDING
Basic 109,718 109,718
Diluted 115,015 115,015
DIVIDENDS PER COMMON SHARE $0.1300 0.1300
Six 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 433,499 433,499
Network access 446,986 1,128 (4) 445,858
Data 167,685 184 (4) 167,501
Fiber transport and CLEC 71,831 71,831
Other 100,197 100,197
1,220,198 1,312 1,218,886
OPERATING EXPENSES
Cost of services and products 438,746 5,493 (4) 433,253
Selling, general and
administrative 191,536 682 (4) 190,854
Depreciation and amortization 266,999 266,999
897,281 6,175 891,106
OPERATING INCOME 322,917 (4,863) 327,780
OTHER INCOME (EXPENSE)
Interest expense (100,725) (100,725)
Other income (expense) 128,056 118,649 (5) 9,407
Income tax expense (128,778) (37,976)(6) (90,802)
NET INCOME 221,470 75,810 145,660
BASIC EARNINGS PER SHARE 1.86 0.64 1.22
DILUTED EARNINGS PER SHARE 1.79 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
Increase
(decrease)
Increase excluding
In thousands, except per share (decrease) nonrecurring
amounts as reported items
OPERATING REVENUES
Voice (1.1%) (1.1%)
Network access 6.8% (3.9%)
Data 21.7% 21.8%
Fiber transport and CLEC 10.0% 10.0%
Other 1.1% (0.8%)
5.8% 1.7%
OPERATING EXPENSES
Cost of services and products 0.3% 2.5%
Selling, general and
administrative (1.4%) (1.0%)
Depreciation and amortization (1.8%) (1.8%)
(0.7%) 0.4%
OPERATING INCOME 23.8% 5.3%
OTHER INCOME (EXPENSE)
Interest expense 3.9% 3.9%
Other income (expense) (89.6%) 42.1%
Income tax expense (8.0%) 7.3%
NET INCOME (14.1%) 7.3%
BASIC EARNINGS PER SHARE (7.0%) 16.4%
DILUTED EARNINGS PER SHARE (6.7%) 16.0%
AVERAGE SHARES OUTSTANDING
Basic (7.7%) (7.7%)
Diluted (7.8%) (7.8%)
DIVIDENDS PER COMMON SHARE 4.0% 4.0%
NONRECURRING ITEMS
(1) - Revenue recorded upon settlement of a dispute with a carrier.
(2) - Reimbursement of amounts upon a change in our satellite
television arrangement.
(3) - Tax effects of items (1) and (2).
(4) - Severance and related costs due to workforce reduction,
including revenue impact.
(5) - Includes gain recorded upon redemption of Rural Telephone
Bank stock ($117.8 million) and gain recorded upon sale of
Arizona properties ($.9 million).
(6) - Includes $44.4 million net tax expense related to Items (4)
and (5), net of $6.4 million net tax benefit due to the
resolution of various income tax audit issues.
CenturyTel, Inc.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2007 AND DECEMBER 31, 2006
(UNAUDITED)
June 30, Dec. 31,
2007 2006
(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $43,525 25,668
Other current assets 250,881 264,449
Total current assets 294,406 290,117
NET PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment 8,560,266 7,893,760
Accumulated depreciation (5,355,716) (4,784,483)
Net property, plant and
equipment 3,204,550 3,109,277
GOODWILL AND OTHER ASSETS
Goodwill 3,999,526 3,431,136
Other 775,054 610,477
Total goodwill and other
assets 4,774,580 4,041,613
TOTAL ASSETS $8,273,536 7,441,007
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term debt and current
maturities of long-term debt $511,307 178,012
Other current liabilities 448,967 439,553
Total current liabilities 960,274 617,565
LONG-TERM DEBT 2,735,073 2,412,852
DEFERRED CREDITS AND OTHER
LIABILITIES 1,441,155 1,219,639
STOCKHOLDERS' EQUITY 3,137,034 3,190,951
TOTAL LIABILITIES AND EQUITY $8,273,536 7,441,007
CenturyTel, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Three months ended June 30, 2007
As adjusted
Less excluding
non- non-
In thousands As recurring recurring
reported items items
Operating cash flow and cash flow
margin
Operating income $231,836 54,921 (1) 176,915
Add: Depreciation and
amortization 134,311 134,311
Operating cash flow $366,147 54,921 311,226
Revenues $689,991 50,869 (1) 639,122
Operating income margin (operating
income divided by revenues) 33.6% 27.7%
Operating cash flow margin
(operating cash flow divided by
revenues) 53.1% 48.7%
Free cash flow (prior to debt
service requirements and dividends)
Net income $112,265 33,831 (1) 78,434
Add: Depreciation and
amortization 134,311 - 134,311
Less: Capital expenditures (57,976) - (57,976)
Free cash flow $188,600 33,831 154,769
Free cash flow $188,600
Gain on asset dispositions -
Deferred income taxes 16,634
Changes in current assets and
current liabilities 36,943
Decrease in other noncurrent
assets 2,621
Increase (decrease) in other
noncurrent liabilities (11,266)
Retirement benefits 9,011
Excess tax benefits from share-
based compensation (3,280)
Other, net 2,076
Add: Capital expenditures 57,976
Net cash provided by operating
activities $299,315
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 164,993 - 164,993
Add: Depreciation and
amortization 132,127 132,127
Operating cash flow 297,120 - 297,120
Revenues 608,907 - 608,907
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 152,210 78,806 (2) 73,404
Add: Depreciation and
amortization 132,127 - 132,127
Less: Capital expenditures (70,367) - (70,367)
Free cash flow 213,970 78,806 135,164
Free cash flow 213,970
Gain on asset dispositions (118,649)
Deferred income taxes 12,732
Changes in current assets and
current liabilities 31,597
Decrease in other noncurrent
assets 2,887
Increase (decrease) in other
noncurrent liabilities 894
Retirement benefits 7,548
Excess tax benefits from share-
based compensation (761)
Other, net 1,702
Add: Capital expenditures 70,367
Net cash provided by operating
activities 222,287
NONRECURRING ITEMS
(1) - Includes $49.0 million revenue recorded upon settlement of a
dispute with a carrier and $5.9 million reimbursement of amounts
(of which $1.9 million increased revenues) upon a change in our
satellite television arrangement (presented on both a pre-tax and
after-tax basis).
(2) - 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, 2007
As adjusted
Less excluding
non- non-
In thousands As recurring recurring
reported items items
Operating cash flow and cash flow
margin
Operating income $399,919 54,921 (1) 344,998
Add: Depreciation and
amortization 262,095 262,095
Operating cash flow $662,014 54,921 607,093
Revenues $1,290,846 50,869 (1) 1,239,977
Operating income margin (operating
income divided by revenues) 31.0% 27.8%
Operating cash flow margin
(operating cash flow divided by
revenues) 51.3% 49.0%
Free cash flow (prior to debt
service requirements and dividends)
Net income $190,135 33,831 (1) 156,304
Add: Depreciation and
amortization 262,095 - 262,095
Less: Capital expenditures (106,856) - (106,856)
Free cash flow $345,374 33,831 311,543
Free cash flow $345,374
Gain on asset dispositions -
Deferred income taxes 30,005
Changes in current assets and
current liabilities 70,835
Decrease in other noncurrent
assets 3,653
Increase (decrease) in other
noncurrent liabilities (11,667)
Retirement benefits 14,647
Excess tax benefits from share-
based compensation (6,312)
Other, net 4,634
Add: Capital expenditures 106,856
Net cash provided by operating
activities $558,025
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 322,917 (4,863)(2) 327,780
Add: Depreciation and
amortization 266,999 266,999
Operating cash flow 589,916 (4,863) 594,779
Revenues 1,220,198 1,312 (2) 1,218,886
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 221,470 75,810 (3) 145,660
Add: Depreciation and
amortization 266,999 - 266,999
Less: Capital expenditures (130,455) - (130,455)
Free cash flow 358,014 75,810 282,204
Free cash flow 358,014
Gain on asset dispositions (118,649)
Deferred income taxes 22,151
Changes in current assets and
current liabilities (460)
Decrease in other noncurrent
assets 297
Increase (decrease) in other
noncurrent liabilities 2,286
Retirement benefits 14,926
Excess tax benefits from share-
based compensation (4,947)
Other, net 2,244
Add: Capital expenditures 130,455
Net cash provided by operating
activities 406,317
NONRECURRING ITEMS
(1) - Includes $49.0 million revenue recorded upon settlement of a
dispute with a carrier and $5.9 million reimbursement of amounts
(of which $1.9 million increased revenues) upon a change in our
satellite television arrangement (presented on both a pre-tax and
after-tax basis).
(2) - Severance and related costs due to workforce reduction, including
revenue impact.
(3) - 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.
SOURCE CenturyTel, Inc.
Contact: Tony Davis of CenturyTel, Inc., +1-318-388-9525, tony.davis@centurytel.com