MONROE, La., May 1 /PRNewswire-FirstCall/ -- CenturyTel, Inc. (NYSE: CTL)
announces operating results for first quarter 2008.
-- Operating revenues increased 7.9% to $648.6 million from $600.9
million in first quarter 2007.
-- Operating cash flow (as defined in the attached financial schedules)
grew 7.9% to $319.2 million from $295.9 million in first quarter 2007.
-- Net income, excluding nonrecurring items, rose 10.7% to $86.2 million
from $77.9 million in first quarter 2007. Reported under GAAP, net
income was $88.8 million in first quarter 2008.
-- Diluted earnings per share, excluding nonrecurring items, increased
19.1% to $.81 in first quarter 2008 from $.68 in first quarter 2007.
Reported under GAAP, diluted earnings per share was $.83 in first
quarter 2008.
-- Free cash flow (as defined in the attached financial schedules),
excluding nonrecurring items, was $167.1 million in first quarter 2008
compared to $156.8 million in first quarter 2007.
-- High-speed Internet customers increased by more than 30,000 in first
quarter 2008, resulting in more than 586,000 high-speed Internet
customers in service at the end of the quarter, or nearly 28% of total
access lines.
First Quarter Highlights
(Excluding nonrecurring items Quarter Ended Quarter Ended % Change
reflected in the attached 3/31/08 3/31/07
financial schedules)
(In thousands, except per share
amounts and subscriber data)
Operating Revenues $648,614 $600,855 7.9%
Operating Cash Flow (1) $319,177 $295,867 7.9%
Net Income $86,171 $77,870 10.7%
Diluted Earnings Per Share $.81 $.68 19.1%
Average Diluted Shares Outstanding 106,997 116,308 (8.0)%
Capital Expenditures $54,739 $48,880 12.0%
Access Lines (2) 2,108,000 2,070,000 1.8%
High-Speed Internet Customers (2) 586,000 413,000 41.9%
(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 3/31/2008 access lines and high-speed Internet
customers include the effects of our April 2007 Madison River
acquisition. Excluding the effects of this acquisition, access lines
decreased 5.8% and high-speed Internet customers increased 27.8%.
"CenturyTel's first quarter net income and earnings per share grew nearly
11% and more than 19% year-over-year, respectively," Glen F. Post, III,
chairman and chief executive officer, said. "We are pleased with the
integration and performance of the Madison River properties acquired last
year, our broadband customer growth, and our ability to continue to repurchase
CenturyTel stock, all of which contributed to the first quarter earnings per
share growth."
Operating revenues increased 7.9% to $648.6 million in first quarter 2008
from $600.9 million in first quarter 2007. Revenue increases during the
quarter of approximately $71 million resulted primarily from nearly $48
million in revenue contribution from the Madison River properties acquired in
second quarter 2007, along with growth in high-speed Internet customers and
long distance revenues. These increases were partially offset by revenue
declines of approximately $23 million, primarily attributable to access line
declines and lower access revenues.
Operating expenses for first quarter 2008 were $465.1 million compared to
$432.8 million in first quarter 2007. This increase was principally due to
expenses associated with the Madison River properties, growth in high-speed
Internet customers and increased marketing expenses, which were partially
offset by lower depreciation expense associated with fully depreciated assets
and lower bad debt expense and personnel costs.
Operating cash flow increased 7.9% to $319.2 million in first quarter 2008
from $295.9 million in first quarter 2007. CenturyTel achieved an operating
cash flow margin of 49.2% during the quarter, the same as in first quarter
2007.
"CenturyTel generated strong free cash flow of more than $167 million
during the quarter," said Post. "We also returned more than $100 million to
shareholders through the repurchase of 2.5 million shares for approximately
$94 million, along with more than $7 million in cash dividends. Our solid
balance sheet and strong cash flows afford us the flexibility to continue to
invest in our networks, acquire valuable 700 MHz spectrum and remain committed
to completing our current $750 million share repurchase program."
Net income, excluding nonrecurring items, grew 10.7% to $86.2 million in
first quarter 2008 from $77.9 million in first quarter 2007. Diluted earnings
per share, excluding nonrecurring items, increased 19.1% to $.81 in first
quarter 2008 from $.68 in first quarter 2007. First quarter 2008 diluted
earnings per share was favorably impacted by the increase in net income and
8.0% fewer average diluted shares outstanding due to share repurchases during
the twelve months ended March 31, 2008.
Under generally accepted accounting principles (GAAP), the Company
reported net income of $88.8 million and diluted earnings per share of $.83,
in first quarter 2008 compared to $77.9 million and $.68, respectively, in
first quarter 2007. Net income and diluted earnings per share in first quarter
2008 include a $2.6 million net after-tax gain on the sale of a non-operating
investment during the quarter.
For second quarter 2008, CenturyTel expects total revenues of $647 to $657
million and diluted earnings per share of $.78 to $.82. An expected slight
increase in revenues, driven primarily by revenue settlements, is anticipated
to be offset primarily by annual wage adjustments effective in the second
quarter, higher marketing expenses and the seasonal impact of outside plant
maintenance activities.
For the full year 2008, diluted earnings per share is expected to be in
the range of $3.05 to $3.20 versus the previous guidance of $2.90 to $3.00,
primarily due to first quarter results exceeding expectations, share
repurchases completed through April 30, 2008, and the expectation that
expenses for the remainder of 2008 will be lower than originally anticipated
when 2008 guidance was provided earlier this year.
These outlook figures for the second quarter and full year 2008 exclude
nonrecurring items, any share repurchases made after April 30, 2008, and any
future mergers, acquisitions, divestitures 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 on the Company's Web site at http://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 866.837.9789. The call will be accessible for
replay through May 7, 2008, by calling 888.266.2081 and entering the
conference ID number 1222754. 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 http://www.centurytel.com through May 21,
2008.
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 adjust to changes in 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, 2007, 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 May 1,
2008. 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 MARCH 31, 2008 AND 2007
(UNAUDITED)
Three months ended March 31, 2008
Less As adjusted
non- excluding
In thousands, except per share As recurring nonrecurring
amounts reported items items
OPERATING REVENUES
Voice $220,480 220,480
Network access 208,698 208,698
Data 126,772 126,772
Fiber transport and CLEC 39,633 39,633
Other 53,031 53,031
648,614 - 648,614
OPERATING EXPENSES
Cost of services and products 237,812 237,812
Selling, general and administrative 91,625 91,625
Depreciation and amortization 135,684 135,684
465,121 - 465,121
OPERATING INCOME 183,493 - 183,493
OTHER INCOME (EXPENSE)
Interest expense (50,122) (50,122)
Other income (expense) 8,417 4,136 (1) 4,281
Income tax expense (53,028) (1,547)(2) (51,481)
NET INCOME $88,760 2,589 86,171
BASIC EARNINGS PER SHARE $0.84 0.02 0.81
DILUTED EARNINGS PER SHARE $0.83 0.02 0.81
AVERAGE SHARES OUTSTANDING
Basic 106,142 106,142
Diluted 106,997 106,997
DIVIDENDS PER COMMON SHARE $0.0675 0.0675
Three months ended March 31, 2007
As
Less adjusted
non- excluding
In thousands, except per share As recurring nonrecurring
amounts reported items items
OPERATING REVENUES
Voice 211,896 211,896
Network access 211,399 211,399
Data 95,864 95,864
Fiber transport and CLEC 38,326 38,326
Other 43,370 43,370
600,855 - 600,855
OPERATING EXPENSES
Cost of services and products 213,531 213,531
Selling, general and administrative 91,457 91,457
Depreciation and amortization 127,784 127,784
432,772 - 432,772
OPERATING INCOME 168,083 - 168,083
OTHER INCOME (EXPENSE)
Interest expense (46,961) (46,961)
Other income (expense) 5,290 5,290
Income tax expense (48,542) (48,542)
NET INCOME 77,870 - 77,870
BASIC EARNINGS PER SHARE 0.70 - 0.70
DILUTED EARNINGS PER SHARE 0.68 - 0.68
AVERAGE SHARES OUTSTANDING
Basic 111,031 111,031
Diluted 116,308 116,308
DIVIDENDS PER COMMON SHARE 0.065 0.065
Increase
(decrease)
Increase excluding
In thousands, except per share (decrease) nonrecurring
amounts as reported items
OPERATING REVENUES
Voice 4.1% 4.1%
Network access (1.3%) (1.3%)
Data 32.2% 32.2%
Fiber transport and CLEC 3.4% 3.4%
Other 22.3% 22.3%
7.9% 7.9%
OPERATING EXPENSES
Cost of services and products 11.4% 11.4%
Selling, general and
administrative 0.2% 0.2%
Depreciation and amortization 6.2% 6.2%
7.5% 7.5%
OPERATING INCOME 9.2% 9.2%
OTHER INCOME (EXPENSE)
Interest expense 6.7% 6.7%
Other income (expense) 59.1% (19.1%)
Income tax expense 9.2% 6.1%
NET INCOME 14.0% 10.7%
BASIC EARNINGS PER SHARE 20.0% 15.7%
DILUTED EARNINGS PER SHARE 22.1% 19.1%
AVERAGE SHARES OUTSTANDING
Basic (4.4%) (4.4%)
Diluted (8.0%) (8.0%)
DIVIDENDS PER COMMON SHARE 3.8% 3.8%
NONRECURRING ITEMS
(1) - Gain on the sale of a nonoperating investment.
(2) - Tax effect of item (1).
CenturyTel, Inc.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2008 AND DECEMBER 31, 2007
(UNAUDITED)
March 31, December 31,
2008 2007
(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $37,539 34,402
Other current assets 254,698 257,997
Total current assets 292,237 292,399
NET PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment 8,706,712 8,666,106
Accumulated depreciation (5,673,578) (5,557,730)
Net property, plant and
equipment 3,033,134 3,108,376
GOODWILL AND OTHER ASSETS
Goodwill 4,010,916 4,010,916
Other 781,840 772,862
Total goodwill and other assets 4,792,756 4,783,778
TOTAL ASSETS $8,118,127 8,184,553
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term debt and current
maturities of long-term debt $85,444 279,898
Other current liabilities 440,589 456,637
Total current liabilities 526,033 736,535
LONG-TERM DEBT 2,881,310 2,734,357
DEFERRED CREDITS AND OTHER LIABILITIES 1,310,800 1,304,456
STOCKHOLDERS' EQUITY 3,399,984 3,409,205
TOTAL LIABILITIES AND EQUITY $8,118,127 8,184,553
CenturyTel, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Three months ended March 31, 2008
As adjusted
Less excluding
In thousands As nonrecurring nonrecurring
reported items items
Operating cash flow
and cash flow margin
Operating income $183,493 - 183,493
Add: Depreciation
and amortization 135,684 135,684
Operating cash flow $319,177 - 319,177
Revenues $648,614 - 648,614
Operating income margin
(operating income divided
by revenues) 28.3% 28.3%
Operating cash flow
margin (operating cash
flow divided by revenues) 49.2% 49.2%
Free cash flow (prior to debt
service requirements and
dividends)
Net income $88,760 2,589 (1) 86,171
Add: Depreciation
and amortization 135,684 - 135,684
Less: Capital expenditures (54,739) - (54,739)
Free cash flow $169,705 2,589 167,116
Free cash flow $169,705
Gain on asset disposition (4,135)
Deferred income taxes 8,357
Changes in current assets
and current liabilities (12,277)
(Increase) decrease in other
noncurrent assets (789)
Decrease in other
noncurrent liabilities (2,790)
Retirement benefits 5,474
Excess tax benefits from
share-based compensation 136
Other, net 11,790
Add: Capital expenditures 54,739
Net cash provided by
operating activities $230,210
Three months ended March 31, 2007
As adjusted
Less excluding
In thousands As nonrecurring nonrecurring
reported items items
Operating cash flow and cash
flow margin
Operating income 168,083 - 168,083
Add: Depreciation and
amortization 127,784 127,784
Operating cash flow 295,867 - 295,867
Revenues 600,855 - 600,855
Operating income margin
(operating income divided
by revenues) 28.0% 28.0%
Operating cash flow margin
(operating cash flow divided
by revenues) 49.2% 49.2%
Free cash flow (prior to debt
service requirements and
dividends)
Net income 77,870 - 77,870
Add: Depreciation and
amortization 127,784 - 127,784
Less: Capital expenditures (48,880) - (48,880)
Free cash flow 156,774 - 156,774
Free cash flow 156,774
Gain on asset disposition -
Deferred income taxes 13,371
Changes in current assets
and current liabilities 33,892
(Increase) decrease in other
noncurrent assets 1,032
Decrease in other
noncurrent liabilities (401)
Retirement benefits 5,636
Excess tax benefits from
share-based compensation (3,032)
Other, net 2,558
Add: Capital expenditures 48,880
Net cash provided by
operating activities 258,710
NONRECURRING ITEMS
(1) - Gain on the sale of a nonoperating investment, net of tax.
FOR MORE INFORMATION CONTACT:
Tony Davis 318.388.9525
tony.davis@centurytel.com
SOURCE CenturyTel, Inc.
Contact: Tony Davis of CenturyTel, Inc., +1-318-388-9525, tony.davis@centurytel.com