Lumen Technologies, Inc. — Annual Report 1994

Jun 29, 1994

Securities and Exchange Commission Washington, D.C. 20549 Form 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1993 OR [] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-7784 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: CENTURY TELEPHONE ENTERPRISES, INC. 100 CENTURY PARK DRIVE MONROE, LA 71203 1 Independent Auditors' Report The Board of Directors Century Telephone Enterprises, Inc.: We have audited the accompanying statements of net assets available for benefits of Century Telephone Enterprises, Inc. Retirement Savings Plan for Bargaining Unit Employees and Trust (Combined Funds and individual S & P 500 Stock Fund, Century Common Stock Fund, Money Market Fund, Bond Index Fund, Loan Fund, and Sweep Account Fund) as of December 31, 1993 and 1992, and the related combined and individual fund statements of changes in net assets available for benefits for the period from April 1, 1992 (inception) to December 31, 1992, and for the year ended December 31, 1993. In connection with our audits of the aforementioned financial statements, we have also audited the related financial statement schedules of Assets Held for Investment Purposes as of December 31, 1993 and Reportable Transactions for the year ended December 31, 1993. These financial statements and financial statement schedules are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of Century Telephone Enterprises, Inc. Retirement Savings Plan for Bargaining Unit Employees and Trust (Combined Funds and individual S & P 500 Stock Fund, Century Common Stock Fund, Money Market Fund, Bond Index Fund, Loan Fund, and Sweep Account Fund) as of December 31, 1993, and the combined and individual fund changes in net assets available for benefits for the period from April 1, 1992 (inception) to December 31, 1992, and for the year ended December 31, 1993, in conformity with generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly, in all material respects, the information set forth therein. KPMG PEAT MARWICK /s/ KPMG PEAT MARWICK Shreveport, Louisiana June 24, 1994 2 CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST Statements of Net Assets Available for Benefits Combined Funds

3 CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST Statements of Changes in Net Assets Available for Benefits Combined Funds

4 CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST Statements of Net Assets Available for Benefits S & P 500 Stock Fund

5 CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST Statements of Changes in Net Assets Available for Benefits S & P 500 Stock Fund

6 CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST Statements of Net Assets Available for Benefits Century Common Stock Fund

7 CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST Statements of Changes in Net Assets Available for Benefits Century Common Stock Fund

8 CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST Statements of Net Assets Available for Benefits Money Market Fund

9 CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST Statements of Changes in Net Assets Available for Benefits Money Market Fund

10 CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST Statements of Net Assets Available for Benefits Bond Index Fund

11 CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST Statements of Changes in Net Assets Available for Benefits Bond Index Fund

12 CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST Statements of Net Assets Available for Benefits Loan Fund

13 CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST Statements of Changes in Net Assets Available for Benefits Loan Fund

14 CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST Statements of Net Assets Available for Benefits Sweep Account Fund

15 CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST Statements of Changes in Net Assets Available for Benefits Sweep Account Fund

16 CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST Notes to Financial Statements December 31, 1993 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PROVISIONS OF THE PLAN Basis of Presentation The Century Telephone Enterprises, Inc. Retirement Savings Plan for Bargaining Unit Employees and Trust (the Plan) was established on April 1, 1992. The accompanying financial statements of the Plan have been prepared on the accrual basis of accounting and present the net assets available for benefits and changes in net assets available for benefits. The assets of the Plan are invested by the Trustee in various investment programs (funds) which are described in Note 2. The following description of the Plan provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. Participation Participation in the Plan is available to each of the employees whose compensation and conditions of employment are covered by a collective bargaining agreement of Century Telephone Enterprises, Inc. and its participating subsidiaries (the Company). Employees may allocate a portion of their base pay to the plan by executing a Salary Deferral Agreement with the Company. In the Salary Deferral Agreement, an employee agrees to a deferral of between one percent and ten percent of their base wages on a pre-tax basis, or between one percent and sixteen percent of their base salary on an after-tax basis. An employee may elect a deferral of their base salary using a combination of pre-tax and after-tax elections provided the total deferral does not exceed sixteen percent and the before- tax deferral does not exceed ten percent. The amount of compensation deferred by each participant is credited to an account (Participant Contribution Account) maintained for each participant by the Trustee. As of the end of each payroll period, the Company contributes to the account (Employer Contribution Account) of each participant a contribution equal to 70% of each such participant's contribution during such payroll period, however, this matching contribution shall apply only to the first 6% of such participant's base compensation. The Company will contribute an additional amount of not less than 1% to an account (Profit Sharing Contribution Account) on behalf of all employees enrolled in the Plan. During 1993 and 1992, the Company contributed $275,915 and $185,667, respectively, to the Plan, of which $213,659 and $143,374 relates to contributions made to the Employer Contribution Account and $62,256 and $42,293 relates to contributions made to the Profit Sharing Contribution Account. 17 CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST Notes to Financial Statements An employee is permitted to transfer to the Plan as a contribution his interest in another plan qualified under Section 401(k) of the Internal Revenue Code, as amended (the Code). Such contribution must qualify as a "rollover" amount described in Section 402(a)(5) of the Code, or a "rollover" contribution described in Section 408(d)(3) of the Code. Such a rollover will be credited to a rollover account on behalf of the participant (the Participant Rollover Account). The interest of a participant in his Participant Contribution Account and his Participant Rollover Account is fully vested and non-forfeitable at all times. The interest of a participant in his Employer Contribution Account and Profit Sharing Contribution Account becomes fully vested after five years of service. A participant with less than five years of service has no vested interest in these accounts. Reports to Participants All participants are furnished with quarterly statements which set forth the status of their accounts in the Plan. Forfeitures A participant's non-vested account balances shall be forfeited as of the date upon which the participant's employment has terminated with the Company. Forfeiture amounts shall be utilized to reduce Company contributions or may be added to profit sharing contributions as directed by the administrator. Distributions and Withdrawals If the employment of a participant with the employer ceases because of death, the attainment of age 65, disability, termination of employment or for any other reason, the participant's vested interest in the Plan will be distributed to him or to his beneficiary in a lump sum. If the participant dies without designating a beneficiary, his interest in the Plan will be paid to his spouse, if any. A participant who is an employee and over age 59 1/2 may make one withdrawal from his contribution accounts prior to normal distribution requirements being met. No withdrawals will be permitted from an Employer Contribution Account except in this manner. A withdrawal may be made from a Participant Contribution Account or a Rollover Account only as a result of financial hardship related to unreimbursable educational expenses, medical expenses which are not reimbursable by insurance, the need to pay for the funeral expenses of a family member, to prevent eviction or foreclosure from the Participant's principal residence or for the purchase of the employee's principal residence. The determination of the existence of a financial hardship and the amount required to be distributed to meet the need created by the hardship shall be made uniformly and without discrimination at the sole discretion of the Plan Administrator. 18 CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST Notes to Financial Statements Loans to Participants The Plan has a provision whereby a participant can borrow from his Participant Contribution Account or Participant Rollover Account. The maximum loan is 50% of the vested account balance, up to $50,000. The loans are repaid through payroll deductions and the interest rate is the Wells Fargo Bank Prime Rate plus 3%. The loan repayment period may be for any period not to exceed five years except for loans for the purchase of the Participant's principal residence which may be for any period not to exceed ten years. Trustee The Trustee of the Plan, as of December 31, 1993, was Wells Fargo Bank, N.A. The Board of Directors of the Company may remove the Trustee and appoint a successor trustee. The Company and the Trustee have entered into a Trust Agreement which provides for the establishment of a Trust for the purpose of holding and investing the contributions to the Trust pursuant to the provisions of the Plan. Administration The Company has appointed a committee to administer the Plan. The individuals who administer the Plan serve at the discretion of the Board of Directors of the Company and may be removed by the Board of Directors at any time. The cost of plan administration is absorbed by the Company. Realized Gains and Losses The Department of Labor requires the Plan to report realized gains and losses on the disposition of Plan investments based on a revalued cost of the investments. Revalued cost is defined as the current value of the investments at the beginning of the plan year, as carried forward from the end of the prior plan year, or historical cost if the investment was acquired since the beginning of the plan year. Market Value Determination Investments in Century Common Stock are valued at the closing market quote on December 31, 1993 and 1992, respectively. Other investments in the funds, which consist of units of mutual investment funds, are valued by the Trustee based on the market value at year-end of the underlying assets of each fund. Loans to participants are valued at principle amount outstanding which approximates market value. Plan Termination Although it has not expressed any intention to do so, the Company has the right under the Plan to change, suspend or terminate the Plan at any time, subject to the provisions set forth in the Employee Retirement Income Security Act of 1974. The Company, however, is bound to maintain the Plan under the terms of the labor agreement. 19 CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST Notes to Financial Statements (2) PROVISIONS OF THE FUNDS The following is a description of each of the funds available to Plan participants. (a) S & P 500 Stock Fund - consists primarily of investments in the same stocks and in substantially the same percentages as the S & P 500 Index (37.6% and 36.0% of net assets at December 31, 1993 and 1992, respectively). (b) Century Common Stock Fund - consists primarily of shares of Century Common Stock (36.8% and 35.4% of net assets at December 31, 1993 and 1992, respectively). (c) Money Market Fund - consists primarily of short-term investments in various money market instruments (14.6% and 14.4% of net assets at December 31, 1993 and 1992, respectively). (d) Bond Index Fund - consists primarily of investments in government and corporate bonds (9.3% and 9.4% of net assets at December 31, 1993 and 1992, respectively). (e) Loan Fund - represents loans to participants from the participants' investment accounts (1.3% and 0.2% of net assets at December 31, 1993 and 1992, respectively). A participant may instruct that his contribution be allocated among the various funds. A participant may change his investment allocation instructions at any time, however, the participant can only change the contribution percentage on a quarterly basis. 20 CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST Notes to Financial Statements (3) INCOME TAXES The Plan and related trust meet the necessary requirements of Internal Revenue Code Section 401(a) and, accordingly, the trust underlying the Plan is exempt from income taxation pursuant to Internal Revenue Code Section 501(a). The Plan is in the process of obtaining a determination letter. (4) RELATED PARTY TRANSACTIONS Certain Plan investments are shares of mutual funds managed by Wells Fargo Bank, N.A. Wells Fargo Bank, N.A. is the Trustee as defined by the plan and, therefore, these transactions qualify as party-in-interest. Fees paid by the Plan to Wells Fargo Bank, N.A. for investment management services amounted to $13,052 for the year ended December 31, 1993. (5) CONCENTRATION OF INVESTMENTS As of December 31, 1993, 36.8% of the net assets available for benefits were invested in the common stock of the Company. All of the remaining net assets available for benefits are shares of mutual funds managed by Wells Fargo Bank, N.A. 21 Schedule I CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST Item 27a - Schedule of Assets Held for Investment Purposes December 31, 1993

Note 1: The above data is based on information which has been certified as accurate and complete by the trustee, Wells Fargo Bank, N.A. Wells Fargo Bank, N. A. sponsors these funds and, accordingly, is a party- in-interest. Additionally, Century Telephone Enterprises, Inc. as sponsor of the Plan is considered a party-in-interest. Note 2: These investments represent amounts greater than 5% of net plan assets available for benefits. 22 Schedule II CENTURY TELEPHONE ENTERPRISES, INC. RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST Item 27d - Schedule of Reportable Transactions For the Year Ended December 31, 1993

Notes: (1) The above data is based on information which has been certified as accurate and complete by the trustee Wells Fargo Bank, N.A. Wells Fargo Bank, N.A. sponsors these funds and, accordingly, is a party-in-interest. Additionally, Century Telephone Enterprises, Inc. as sponsor of the Plan is considered a party-in-interest. (2) The purchase price also denotes cost and current value of the security on transaction date. (3) Current value is substantially the same amount as purchase price or selling price of the security at the transaction date. 23 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administration Committee has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. Century Telephone Enterprises,Inc. Retirement Savings Plan For Bargaining Unit Employees and Trust June 28, 1994 /s/ Ray B. Finney -------------------------------- Ray B. Finney Plan Administration Committee Member 24 CENTURY TELEPHONE ENTERPRISES, INC. Index to Exhibit Exhibit Number - - ----------------------------------------------------------------------------- 23.1 Consent of KPMG Peat Marwick 25