Excellent Growth in CenturyTel's Core Businesses Drives 32 Percent Increase in Third Quarter Net Income.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)--Oct. 27, 1998--CenturyTel (Century Telephone Enterprises, 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 third quarter 1998. -- Revenues jumped 84.1% to $401.9 million. -- Net income climbed 32.0% to $54.7 million. -- 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 rose 31.1% to $.59. -- Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Third Quarter Highlights
(Dollars, except per share data, and shares in thousands)
Quarter Ended Quarter Ended % Change
9/30/98 9/30/97
Revenues $ 401,949 $218,351 84.1%
EBITDA (1) $ 216,496 $114,617 88.9%
Net Income $ 54,678 $ 41,433 32.0%
Diluted Earnings Per Share $ .59 $ .45 31.1%
Average Diluted Shares
Outstanding 93,548 91,710 2.0%
Telephone Revenues $ 275,397 $121,934 125.9%
Wireless Revenues $ 106,662 $ 80,163 33.1%
Other Operations Revenues $ 19,890 $ 16,254 22.4%
Telephone Access Lines 1,251,735 530,936 135.8%
Cellular Units in Majority-Owned
Markets 591,598 429,599 37.7%
(1) Earnings before interest, taxes, depreciation and
amortization
"CenturyTel's third quarter results reflect excellent growth in revenues and increased operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: in our core businesses," Glen F. Post, III, President and Chief Executive Officer, said. "CenturyTel's net income and earnings per share growth exceeded 30% during the quarter, while cash flow nearly doubled, rising 88.9%. We were able to bring a greater percentage of incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. revenues to bottom line earnings which enabled CenturyTel CenturyTel, Inc. (NYSE: CTL) formerly named Century Telephone Enterprises, Inc. is a United States telecommunications firm, headquartered in Monroe, Louisiana. to achieve record results this quarter." Net income for the quarter rose 32.0% to $54.7 million from $41.4 million. Diluted earnings per share increased 31.1% to $.59 from $.45, and 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 84.1% to $401.9 million from $218.4 million. Earnings before interest, taxes, depreciation and amortization (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 $216.5 million from $114.6 million, an 88.9% increase. Acquisitions completed during the past four quarters contributed $162.9 million to revenues and were accretive to earnings during the third quarter. "The December December: see month. 1997 acquisition of Pacific Telecom continues to positively impact our operating results as it has strengthened our market position and accelerated our earnings growth," Post said. Telephone revenues grew 125.9% to $275.4 million during the quarter, compared with $121.9 million in third quarter 1997. 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 119.9% reaching $88.2 million from $40.1 million, and 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. rose 131.3% to $153.5 million from $66.4 million a year ago. CenturyTel's third quarter telephone operating cash flow margin was 55.7% while the operating income margin was 32.0%. The PTI PTI - Portable Tool Interface acquisition contributed $139.8 million in revenues to the telephone segment during the quarter. "CenturyTel achieved excellent margins in our wireline operations during the quarter resulting from solid revenue growth combined with the realization (specification) realization - A UML semantic relationship between a classifier that specifies a contract and another classifier that guarantees to carry it out. [Handout by Mr. David Gillibrand]. of additional acquisition synergies," Post said. CenturyTel's wireline operations experienced strong internal access line growth at an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. rate of 4.6% during the quarter. Demand for second lines contributed 20.8% of CenturyTel's internal access line growth during the period. Wireless revenues grew 33.1% to $106.7 million in third quarter 1998, compared with $80.2 million in third quarter 1997. Wireless service revenues rose 32.6% to $104.5 million during the quarter. Wireless operating income surged 33.9%, reaching $36.7 million from $27.4 million, and operating cash flow climbed 38.9% to $52.2 million from $37.6 million a year ago. CenturyTel's third quarter wireless operating cash flow margin was 49.0% (50.0% based on service revenues), and operating income margin was 34.4% (35.1% based on service revenues). The former PTI wireless operations contributed $21.2 million in revenues to the wireless segment during the quarter. "CenturyTel's wireless operations once again achieved excellent results. This is the second consecutive quarter wireless cash flow margins have reached 50%," Post said. Average monthly cellular service revenue per user (ARPU (Average Revenue Per User) A calculation often used to determine the overall value of an application. It is also used to rate particular customers, especially in the wireless space, by comparing someone's account to the overall average. ) was $59 during third quarter 1998, a 7.8% decrease from $64 a year ago. Cellular net additions were more than 7,600 for the quarter, while 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 2.3%. Revenues from other operations grew 22.4% to $19.9 million during third quarter 1998, compared with $16.3 million in third quarter 1997. CenturyTel now serves more than 214,500 long distance customers, adding more than 9,800 during the third quarter. During the first nine months of 1998, net income, excluding gain on sale or exchange of assets Exchange of assets Acquisition of another company by purchase of its assets in exchange for cash or stock. , rose 30.2% to $146.0 million from $112.2 million. Diluted earnings per share, excluding gains, rose 27.6% to $1.57 from $1.23, and consolidated revenues increased 85.1% to $1.2 billion from $627.9 million. Earnings before interest, taxes, depreciation, amortization and gain on sale or exchange of assets (EBITDA) grew to $619.4 million from $320.2 million, a 93.5% increase. "CenturyTel's excellent cash flow generation combined with non-strategic asset dispositions has allowed us to reduce long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. by $227 million since year end. Free-cash flow for the first nine months of 1998 increased 100% over 1997," Post said. In addition to historical information, this release includes certain 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. that are subject to uncertainties that could cause the Company's actual results to differ materially from such statements. Such uncertainties include but are not limited to: the effects of ongoing deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. in the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. industry; the effects of greater than anticipated competition in the Company's markets; possible changes in the demand for 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; the risks inherent in rapid technological change; the Company's ability to effectively manage its growth, including integrating the operations of Pacific Telecom, Inc. into the Company's operations; the success and expense of the remediation efforts of the Company and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. its vendors in achieving year 2000 compliance; 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, 1997. CenturyTel (Century Telephone Enterprises, Inc.) provides integrated communications services including local exchange, wireless, long distance, Internet access See how to access the Internet. and security services Security services are state institutions for the provision of intelligence, primarily of a strategic nature, but also including protective security intelligence. Examples include the Security Service (MI5) and the Secret Intelligence Service (MI6) in the United Kingdom, and the to more than two 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 10th largest local exchange telephone company, based on access lines, and the 10th 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 website at www.centurytel.com . -0-
CENTURY TELEPHONE ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
INCREASE
In thousands, except per share amounts 1998 1997 (DECREASE)
-------- -------- ----------
TELEPHONE OPERATIONS
Operating revenues
Local service $ 84,082 33,443 151.4%
Network access 159,422 73,385 117.2%
Other 31,893 15,106 111.1%
--------- --------
275,397 121,934 125.9%
--------- --------
Operating expenses
Plant operations 62,402 24,971 149.9%
Customer operations 22,107 11,931 85.3%
Corporate and other 37,436 18,679 100.4%
Depreciation and amortization 65,242 26,239 148.6%
--------- --------
187,187 81,820 128.8%
--------- --------
Telephone operating income 88,210 40,114 119.9%
--------- --------
WIRELESS OPERATIONS
Operating revenues
Cellular revenues 104,527 78,839 32.6%
Equipment sales 2,135 1,324 61.3%
--------- --------
106,662 80,163 33.1%
--------- --------
Operating expenses
Cost of equipment sold 3,784 2,987 26.7%
System operations 15,326 12,549 22.1%
General, administrative and customer
service 21,991 15,090 45.7%
Sales and marketing 13,312 11,918 11.7%
Depreciation and amortization 15,556 10,216 52.3%
--------- --------
69,969 52,760 32.6%
--------- --------
Wireless operating income 36,693 27,403 33.9%
--------- --------
OTHER OPERATIONS
Operating revenues 19,890 16,254 22.4%
--------- --------
Operating expenses
Cost of sales and other 15,797 13,337 18.4%
Depreciation and amortization 812 619 31.2%
--------- --------
16,609 13,956 19.0%
--------- --------
Other operating income 3,281 2,298 42.8%
--------- --------
TOTAL OPERATING INCOME 128,184 69,815 83.6%
OTHER INCOME (EXPENSE)
Interest expense (41,904) (11,175) 275.0%
Income from unconsolidated cellular
entities 9,162 8,371 9.4%
Minority interest (3,619) (1,817) 99.2%
Other income and expense 1,159 1,174 (1.3%)
Income tax expense (38,304) (24,935) 53.6%
--------- --------
NET INCOME $ 54,678 41,433 32.0%
========= ========
EARNINGS PER SHARE
Basic $ 0.60 0.46 30.4%
Diluted $ 0.59 0.45 31.1%
SHARES OUTSTANDING
Basic 91,471 90,134 1.5%
Diluted 93,548 91,710 2.0%
DIVIDENDS PER COMMON SHARE $ 0.065 0.0617 5.3%
CENTURY TELEPHONE ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
INCREASE
In thousands, except per share amounts 1998 1997 (DECREASE)
-------- -------- ----------
TELEPHONE OPERATIONS
Operating revenues
Local service $ 243,664 98,749 146.8%
Network access 462,576 217,407 112.8%
Other 94,292 43,298 117.8%
--------- --------
800,532 359,454 122.7%
--------- --------
Operating expenses
Plant operations 176,609 73,013 141.9%
Customer operations 67,956 34,674 96.0%
Corporate and other 116,444 54,916 112.0%
Depreciation and amortization 194,516 77,241 151.8%
--------- --------
555,525 239,844 131.6%
--------- --------
Telephone operating income 245,007 119,610 104.8%
--------- --------
WIRELESS OPERATIONS
Operating revenues
Cellular revenues 299,391 216,476 38.3%
Equipment sales 6,308 3,996 57.9%
--------- --------
305,699 220,472 38.7%
--------- --------
Operating expenses
Cost of equipment sold 11,182 10,373 7.8%
System operations 44,211 33,946 30.2%
General, administrative and customer
service 60,435 43,568 38.7%
Sales and marketing 40,745 37,345 9.1%
Depreciation and amortization 45,267 29,488 53.5%
--------- --------
201,840 154,720 30.5%
--------- --------
Wireless operating income 103,859 65,752 58.0%
--------- --------
OTHER OPERATIONS
Operating revenues 55,816 47,986 16.3%
--------- --------
Operating expenses
Cost of sales and other 42,373 41,419 2.3%
Depreciation and amortization 2,505 2,011 24.6%
--------- --------
44,878 43,430 3.3%
--------- --------
Other operating income 10,938 4,556 140.1%
--------- --------
TOTAL OPERATING INCOME 359,804 189,918 89.5%
OTHER INCOME (EXPENSE)
Gain on sale or exchange of assets 49,859 70,121 (28.9%)
Interest expense (126,785) (33,539) 278.0%
Income from unconsolidated cellular
entities 25,105 21,750 15.4%
Minority interest (10,264) (3,722) 175.8%
Other income and expense 2,454 3,467 (29.2%)
Income tax expense (123,610) (90,251) 37.0%
--------- --------
NET INCOME $ 176,563 157,744 11.9%
========= ========
EARNINGS PER SHARE
Basic $ 1.93(1) 1.75(1) 10.3%
Diluted $ 1.90(2) 1.73(2) 9.8%
SHARES OUTSTANDING
Basic 91,238 89,802 1.6%
Diluted 93,272 91,325 2.1%
DIVIDENDS PER COMMON SHARE $ 0.195 0.1851 5.3%
(1) Includes $.33 and $.51 in 1998 and 1997, respectively,
resulting from gain on sale or exchange of assets.
(2) Includes $.33 and $.50 in 1998 and 1997, respectively,
resulting from gain on sale or exchange of assets.
CENTURY TELEPHONE ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
(UNAUDITED)
SEPT. 30, DEC. 31,
1998 1997
---------- ---------
( in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 3,940 26,017
Other current assets 214,400 257,463
---------- ----------
Total current assets 218,340 283,480
---------- ----------
PROPERTY, PLANT AND EQUIPMENT
Telephone 3,414,234 3,295,860
Wireless 421,412 380,218
Other 191,138 169,420
Accumulated depreciation (1,781,339)(1,586,935)
---------- ----------
Net property, plant and equipment 2,245,445 2,258,563
---------- ----------
INVESTMENTS AND OTHER ASSETS
Excess cost of net assets acquired 1,741,491 1,767,352
Other 430,894 400,006
---------- ----------
Total investments and other assets 2,172,385 2,167,358
---------- ----------
TOTAL ASSETS $ 4,636,170 4,709,401
========== ==========
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 45,015 55,244
Other current liabilities 219,884 266,764
---------- ----------
Total current liabilities 264,899 322,008
LONG-TERM DEBT 2,392,685 2,609,541
DEFERRED CREDITS AND OTHER LIABILITIES 509,951 477,580
STOCKHOLDERS' EQUITY 1,468,635 1,300,272
---------- ----------
TOTAL LIABILITIES AND EQUITY $ 4,636,170 4,709,401
========== ==========
CAPITAL EXPENDITURES
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
INC
1998 1997 (DEC)
---------- ---------- -------
(in thousands)
( in thousands)
Telephone $ 141,963 77,333 83.6%
Wireless 42,836 30,451 40.7%
Corporate and other 24,230 15,560 55.7%
---------- ----------
Total capital expenditures $ 209,029 123,344 69.5%
========== ==========
CAPITAL EXPENDITURES
THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
INC
1998 1997 (DEC)
---------- ---------- -------
(in thousands)
( in thousands)
Telephone $ 63,908 28,106 127.4
Wireless 8,536 5,639 51.4%
Corporate and other 10,165 2,180 366.3%
---------- ----------
Total capital expenditures $ 82,609 35,925 129.9%
========== ==========
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