CenturyTel Achieves Solid First Quarter Revenue and Cash Flow Growth.Business Editors MONROE Monroe. 1 Industrial city (1990 pop. 54,909), seat of Ouachita parish, SE La., on the Ouachita River; founded c.1785, inc. as a city 1900. The center of the great Monroe Natural Gas Field (discovered 1915), it has important chemical plants, as well as , La.--(BUSINESS WIRE)--April 26, 2001 CenturyTel CenturyTel, Inc. (NYSE: CTL) formerly named Century Telephone Enterprises, Inc. is a United States telecommunications firm, headquartered in Monroe, Louisiana. , Inc. (NYSE NYSE See: New York Stock Exchange :CTL See control key. 1. CTL - Checkout Test language. 2. CTL - Compiler Target Language. 3. CTL - Computational Tree Logic ) announces operating results for first quarter 2001.
-- Revenues climbed 25.0% to $516.0 million.
-- Excluding one-time items, earnings before interest, taxes, depreciation and
amortization increased 27.0% to $257.2 million.
-- Net income, excluding one-time items, was $47.9 million.
-- Excluding one-time items, cash earnings per share was $.44.
-- Diluted earnings per share, excluding one-time items, was $.34.
First Quarter Highlights
(Dollars in thousands, except per share amounts)
Qtr Ended Qtr Ended % Change
3/31/01 3/31/00
--------- --------- --------
Revenues $516,008 $412,956 25.0%
EBITDA (a) 257,235 202,545 27.0%
Net Income (a) 47,922 47,897 0.1%
Cash Earnings Per Share (a) $.44 $.42 4.8%
Diluted Earnings Per Share (a) .34 .34 --
Average Diluted Shares Outstanding 142,482 141,728 0.5%
Telephone Revenues 371,249 276,926 34.1%
Wireless Revenues 104,406 100,404 4.0%
Other Operations Revenues 40,353 35,626 13.3%
--------- --------- --------
Telephone Access Lines 1,803,062 1,282,237 40.6%
Wireless Units in Majority-Owned Markets 768,815 727,507 5.7%
(a) Excludes one-time expenses in first quarter 2001 of $1.2 million
after tax, or $.01 per share, related to ice storm damages; also
excludes an after-tax gain on asset sales of $5.2 million, or
$.04 per share, and nonrecurring after-tax charges of $3.8
million, or $.03 per share, in first quarter 2000
"CenturyTel achieved solid revenue and cash flow growth this quarter despite a weaker than anticipated economy, a major ice-storm in our Southern markets, and additional expenses related to our CLEC (Competitive Local Exchange Carrier) An organization offering local telephone service that is not one of the traditional telephone companies. The Telecommunications Act of 1996 allowed competition to the incumbent telcos (ILECs), enabling new companies (CLECs) and DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary growth initiatives," Glen F. Post, III, President and Chief Executive Officer, said. "Data revenues, excluding acquisitions, rose 37% during the quarter. We also achieved strong long distance and DSL customer growth as CenturyTel added 29,600 long distance customers and 5,400 DSL customers representing 90% growth in DSL subscribers since fourth quarter 2000. While we remain confident regarding CenturyTel's growth initiatives and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. outlook, we are concerned about weaker consumer demand over the remainder of 2001." Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: revenues rose 25.0% to $516.0 million from $413.0 million. Excluding non-recurring items, EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become grew to $257.2 million from $202.5 million, a 27.0% increase. CenturyTel achieved a consolidated EBITDA margin of 49.9% during the quarter. Excluding non-recurring items, net income was $47.9 million in both the first quarter of 2001 and 2000. The lack of growth in net income is due to higher interest expense, amortization of goodwill stemming stemming - stemmer from acquisitions, certain regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. issues that are being addressed, and higher expenses related to CLEC and DSL growth initiatives. Excluding non-recurring items, cash earnings per share was $.44 in first quarter 2001 compared to $.42 in first quarter 2000. Excluding non-recurring items, diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of was $.34 in both periods. "In the near term, we remain focused on resolving the regulatory issues that are adversely affecting the revenues and expenses of several of our acquired properties," Post said. "Although the process is not going as fast as we would like, we believe CenturyTel is making solid progress in enhancing the financial performance of these acquired properties, and we look forward to seeing these issues resolved over the remainder of the year." Telephone revenues grew 34.1% to $371.2 million during the quarter compared with $276.9 million in first quarter 2000. The 493,000 access lines acquired from Verizon during 2000 contributed $88.4 million in telephone revenues during the first quarter. Telephone operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased 23.1%, reaching $104.0 million from $84.5 million in first quarter 2000, and EBITDA rose 32.6% to $201.3 million from $151.9 million a year ago. CenturyTel's first quarter telephone EBITDA margin was 54.2% while the operating income margin was 28.0%. "After a review of the profitability of our rate plans on a market-by-market basis, we discovered a major expense issue with some of the unlimited calling plans in the properties acquired from Verizon in Arkansas Arkansas, river, United States Arkansas (ärkăn`zəs, är`kənsô'), river, c.1,450 mi (2,330 km) long, rising in the Rocky Mts., central Colo. ," Post said. "These plans cost CenturyTel $.02 per share during the quarter, and we are seeking to cap them in order to lower our expenses." On April 19, the Wisconsin Wisconsin, state, United States Wisconsin (wĭskŏn`sən, –sĭn), upper midwestern state of the United States. It is bounded by Lake Superior and the Upper Peninsula of Michigan, from which it is divided by the Menominee Public Service Commission approved an interim rate increase of $8.8 million annually on the former Ameritech AMERITECH American Information Technologies properties pending the determination of final rates in a rate case CenturyTel has filed with the commission. Separately, the commission ordered CenturyTel to make a refund TO REFUND. To pay back by the party who has received it, to the party who has paid it, money which ought not to have been paid. 2. On a deficiency of assets, executors and administrators cum testamento annexo, are entitled to have refunded to them legacies of $14.7 million related to access charges collected on the former Ameritech properties from December December: see month. 1998 through 2000. The company is challenging the refund order in Wisconsin State Court. Should CenturyTel lose the appeal, the company will have to take a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge of $.03 per share. Wireless revenues grew 4.0% to $104.4 million in first quarter 2001 compared with $100.4 million in first quarter 2000. Wireless operating income was $24.9 million compared to $19.9 million, a 25.3% increase, and EBITDA increased 14.6% to $41.5 million compared to $36.2 million a year ago. CenturyTel's first quarter wireless EBITDA margin was 41.1% based on service revenues, and operating income margin was 24.6% based on service revenues. Net wireless subscriber subscriber, n the person, usually the employee, who represents the family unit in relation to the prepayment plan. Other family members are dependents. Also called certificate holders or enrollees. additions were 17,600 for the quarter. Average monthly cellular service revenue per user was $44 during first quarter 2001, reflecting a 2.2% decline from first quarter 2000. The average monthly churn rate (1) The percentage of customers who cancel their online, cellphone or other subscription service during a certain time period. (2) The percentage of employees who leave the company during a certain time period. See churning. was 2.36% for contract customers. Other operations revenues grew 13.3% to $40.4 million during first quarter 2001 compared with $35.6 million in first quarter 2000. CenturyTel's long distance revenues increased 11.2% to $27.6 million from $24.8 million. CenturyTel now serves more than 392,900 long distance customers, adding more than 29,600 during the quarter. Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the revenues rose 67.6% to $8.4 million from $5.0 million. The company experienced a $2.8 million operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. this quarter in its Internet operations due to startup (STARTing UP) "At startup" means when the computer is first turned on or when a program is first loaded. See Startup folder. expenses pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to the rapid growth of DSL. CenturyTel now serves more than 11,400 DSL customers, adding more than 5,400 during the quarter. CLEC operating losses were $2.1 million during the quarter. "CenturyTel's aggressive broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. has enabled us to implement high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. data services ahead of the cable providers in most of our markets," Post said. "We increased the number of DSL-enabled access lines more than 80% from year end 2000 to nearly 1.2 million DSL-enabled lines at the end of the first quarter." CenturyTel provides updated financial guidance for 2001. For the year, the company anticipates achieving total revenues and EBITDA at the low end of its previous guidance pending the outcome of state regulatory issues. Cash earnings per share before one-time items is estimated to be $1.94 to $2.04. For 2001, earnings per share, before one-time items, is anticipated to be in the range of $1.52 to $1.62. For the second quarter, total revenues are expected to range from $520 million to $535 million. CenturyTel believes second quarter operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. will be in the range of $250 million to $260 million. Operating income is anticipated to be approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $130 million to $145 million. Cash earnings per share is anticipated to be $.46 to $.51, while earnings per share is expected to be in the range of $.35 to $.40. There are a number of factors which have led to the revised guidance: (1) a weaker economy which has led CenturyTel to reduce its revenue growth expectations; (2) lower expectations for earnings from unconsolidated cellular partnerships; (3) higher than anticipated wireline expenses related to unprofitable local calling plans in several of the Verizon markets in Arkansas--an issue the company believes it can resolve during third quarter 2001; and (4) greater expenses related to the rapid growth of CenturyTel's DSL subscriber base. All amounts disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). above exclude one-time items. In addition to historical information, this release includes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , 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 CenturyTel. Actual events and results may differ materially from those anticipated, estimated or projected if one or more of these risks or uncertainties materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. , or if underlying assumptions prove incorrect Incorrect means to not be correct and may also refer to:
ongoing current - occurring in or belonging to the present time; "current events"; "the current topic"; "current negotiations"; "current psychoanalytic theories"; "the ship's current position" changes in the regulation of the Company or the communications industry communications industry, broadly defined, the business of conveying information. Although communication by means of symbols and gestures dates to the beginning of human history, the term generally refers to mass communications. generally; the effects of greater than anticipated competition in the Company's markets; possible changes in the demand for, or pricing of, the Company's products and services; the Company's ability to successfully introduce new offerings on a timely and cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. basis; higher than anticipated interest rates; and the effects of more general factors such as changes in overall market 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31,2000. The information contained in this release is as of April 26, 2001. The Company undertakes no obligation to update or revise any of this information whether a result of new information, future events or developments, or otherwise. CenturyTel's management will be hosting a conference call April 26 at 9:30 A.M. Central time to discuss first quarter earnings and the outlook for 2001. Investors can access CenturyTel's earnings conference call and replay by accessing the company's Web site at www.centurytel.com. CenturyTel, Inc. provides communications services including local exchange, wireless, long distance, Internet access See how to access the Internet. and data services to nearly three million customers in 21 states. The company, headquartered in Monroe, Louisiana The city of Monroe is the parish seat of Ouachita Parish, in the US state of Louisiana. [1] [2] It is the principal city of the Monroe, Louisiana Metropolitan Statistical Area (pop. , is publicly traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol CTL. CenturyTel is the 8th largest local exchange telephone company, based on access lines, and the 8th largest cellular company, based on population equivalents owned, in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Visit CenturyTel's corporate Web site at www.centurytel.com.
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 2001 AND 2000
(UNAUDITED)
INCREASE
In thousands, except per share amounts 2001 2000 (DECREASE)
--------- --------- --------
TELEPHONE OPERATIONS
Operating revenues
Local service $121,161 88,065 37.6%
Network access 213,867 162,253 31.8%
Other 36,221 26,608 36.1%
--------- ---------
371,249 276,926 34.1%
--------- ---------
Plant operations 93,885 62,776 49.6%
Customer operations 29,257 22,761 28.5%
Corporate and other 46,765 39,532 18.3%
Depreciation and amortization 97,361 67,360 44.5%
--------- ---------
267,268 192,429 38.9%
--------- ---------
Telephone operating income 103,981 84,497 23.1%
--------- ---------
WIRELESS OPERATIONS
Operating revenues
Service revenues 101,100 96,623 4.6%
Equipment sales 3,306 3,781 (12.6%)
--------- ---------
104,406 100,404 4.0%
--------- ---------
Operating expenses
Cost of equipment sold 5,844 8,180 (28.6%)
System operations 17,466 15,653 11.6%
General, administrative and customer
service 20,737 18,206 13.9%
Sales and marketing 18,825 22,125 (14.9%)
Depreciation and amortization 16,614 16,349 1.6%
--------- ---------
79,486 80,513 (1.3%)
--------- ---------
Wireless operating income 24,920 19,891 25.3%
--------- ---------
OTHER OPERATIONS
Operating revenues 40,353 35,626 13.3%
--------- ---------
Operating expenses
Cost of sales and other 33,589 27,490 22.2%
Depreciation and amortization 1,457 1,102 32.2%
--------- ---------
35,046 28,592 22.6%
--------- ---------
Other operating income 5,307 7,034 (24.6%)
--------- ---------
TOTAL OPERATING INCOME 134,208 111,422 20.5%
OTHER INCOME (EXPENSE)
Gain on sales of assets -- 9,910 (100.0%)
Interest expense (61,703) (36,042) 71.2%
Income (loss) from unconsolidated
cellular entities 5,321 (1,459) 464.7%
Minority interest (2,649) (2,292) 15.6%
Other income and expense 2,923 4,229 (30.9%)
Income tax expense (31,378) (36,484) (14.0%)
--------- ---------
NET INCOME $46,722 49,284 (5.2%)
========= =========
NET INCOME EXCLUDING NONRECURRING ITEMS (b) $47,922 47,897 0.1%
========= =========
EARNINGS PER SHARE
Basic $0.33 0.35 (5.7%)
Diluted $0.33 0.35 (5.7%)
EARNINGS PER SHARE EXCLUDING NONRECURRING
ITEMS (b)
Basic $0.34 0.34 --
Diluted $0.34 0.34 --
SHARES OUTSTANDING
Basic 140,572 139,737 0.6%
Diluted 142,482 141,728 0.5%
DIVIDENDS PER COMMON SHARE $0.0500 0.0475 5.3%
(b) Nonrecurring after-tax items include (i) $1.2 million ($.01 per
share) of ice storm expenses in 2001 and (ii) gain on asset
sales of $5.2 million ($.04 per share) and nonrecurring charges
of $3.8 million ($.03 per share) in 2000
CenturyTel, Inc.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2001 AND DECEMBER 31, 2000
(UNAUDITED)
March 31, December 31,
2001 2000
---------- -----------
(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 15,873 19,039
Other current assets 319,446 357,465
---------- -----------
Total current assets 335,319 376,504
---------- -----------
PROPERTY, PLANT AND EQUIPMENT
Telephone 5,067,201 4,999,808
Wireless 518,901 522,684
Other 415,165 392,024
Accumulated depreciation (3,046,600) (2,955,223)
---------- -----------
Net property, plant
and equipment 2,954,667 2,959,293
---------- -----------
INVESTMENTS AND OTHER ASSETS
Excess cost of net assets acquired 2,526,785 2,509,033
Other 571,954 548,460
---------- -----------
Total investments and other
assets 3,098,739 3,057,493
---------- -----------
TOTAL ASSETS $6,388,725 6,393,290
========== ===========
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term debt and current
maturities of long-term debt $ 474,921 425,962
Other current liabilities 317,980 317,408
---------- -----------
Total current liabilities 792,901 743,370
LONG-TERM DEBT 2,980,442 3,050,292
DEFERRED CREDITS AND OTHER LIABILITIES 540,376 567,549
STOCKHOLDERS' EQUITY 2,075,006 2,032,079
---------- -----------
TOTAL LIABILITIES AND EQUITY $6,388,725 6,393,290
========== ===========
CAPITAL EXPENDITURES
THREE MONTHS ENDED MARCH 31, 2001 AND 2000
INC
2001 2000 (DEC)
--------- --------- --------
(in thousands)
Telephone $72,680 29,309 148.0%
Wireless 18,332 3,679 398.3%
Other 29,573 25,177 17.5%
--------- ---------
Total capital expenditures $120,585 58,165 107.3%
========= =========
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