Lumen Technologies, Inc. — Earnings Release 1999

Nov 2, 1999

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) October 26, 1999 CenturyTel, Inc. (Exact name of registrant as specified in its charter) Louisiana 1-7784 72-0651161 (State or other (Commission File (IRS Employer jurisdiction of Number) Identification No.) incorporation) 100 Century Park Drive, Monroe, Louisiana 71203 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (318) 388-9000 Item 5. Other Events The following press release was issued by CenturyTel,Inc. on October 26, 1999: FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT: October 26, 1999 Jeffrey S. Glover (318) 388-9648 jeff.glover@centurytel.com CenturyTel Posts 17 Percent Rise in Third Quarter Net Income - ------------------------------------------------------------ Monroe, LA. . . CenturyTel, Inc. (NYSE Symbol: CTL) announces operating results for third quarter 1999. o Revenues climbed 4.3% to $419.2 million (14.4% excluding the effect of divestitures). o Net income jumped 16.7% to $63.8 million (20.6% excluding the effect of divestitures). o Diluted earnings per share rose 15.4% to $.45 (18.4% excluding the effect of divestitures). o Earnings before interest, taxes, depreciation, amortization and gain on sales of assets, advanced 2.9% to $222.8 million (12.2% excluding the effect of divestitures). Third Quarter Highlights (In thousands, except per share amounts)

(1) Earnings before interest, taxes, depreciation, amortization and gain on sales of assets (2) Excludes after-tax gain on asset sales of $741,000, or $.005 per share, in third quarter 1999 (3) Reflects a three-for-two stock split effected as a stock dividend distributed March 31, 1999 "CenturyTel's strong financial performance continued in the third quarter," Glen F. Post, III, President and Chief Executive Officer, said. "The second quarter sale of certain non-strategic assets including telephone operations in Alaska and cellular properties in South Texas adversely affected prior period comparisons. Revenue growth in our core operations was 14.4% excluding these divestitures. In recent months, CenturyTel has announced the pending acquisition of nearly half a million telephone access lines which, along with CenturyTel's other growth initiatives, will more than offset the effect of these divestitures." Net income for the quarter, excluding gain on sales of assets, climbed 16.7% to $63.8 million from $54.7 million in third quarter 1998. Diluted earnings per share increased 15.4% to $.45 from $.39. Consolidated revenues rose 4.3% to $419.2 million from $401.9 million. Earnings before interest, taxes, depreciation, amortization and gain on sales of assets (EBITDA) grew to $222.8 million from $216.5 million, a 2.9% increase. Third Quarter Highlights, excluding the effect of asset divestitures (In thousands, except per share amounts)

(1) Earnings before interest, taxes, depreciation, amortization and gain on sales of assets (2) Excludes after-tax gain on asset sales of $741,000, or $.005 per share, in third quarter 1999 (3) Reflects a three-for-two stock split effected as a stock dividend distributed March 31, 1999 Net income for the quarter, excluding the effect of asset divestitures and gain on sales of assets, climbed 20.6% to $63.8 million from $52.9 million in third quarter 1998. Diluted earnings per share, excluding the effect of asset divestitures and gains, increased 18.4% to $.45 from $.38. Consolidated revenues excluding divestitures rose 14.4% to $419.2 million from $366.5 million. Excluding divestitures, EBITDA grew to $222.8 million from $198.5 million, a 12.2% increase. CenturyTel achieved a consolidated EBITDA margin of 53.2% during the quarter. "We achieved strong internal revenue growth in our core operations this quarter," Post said. "CenturyTel's telephone operations produced internal revenue growth of nearly 9% while other operations, driven primarily by long distance, posted internal revenue growth of approximately 52%. Wireless customer growth exceeded prior year levels, and our long distance customer base grew 10% during the quarter as CenturyTel added 25,600 long distance customers." Telephone revenues, excluding the effect of asset divestitures, grew 13.8% to $277.4 million during the quarter, compared with $243.7 million in third quarter 1998. A prior-year acquisition contributed $11.6 million to telephone revenues during the quarter. Telephone operating income excluding divestitures increased 3.2%, reaching $81.9 million from $79.3 million, and EBITDA excluding divestitures rose 7.9% to $148.2 million from $137.4 million a year ago. CenturyTel's third quarter telephone EBITDA margin was 53.5% while the operating income margin was 29.5%. An increase in Y2K expenses of $3.3 million negatively affected margins for the quarter. Internal access line growth was a strong 5.3% in the quarter. "CenturyTel's Internet revenues increased by 55% from third quarter last year," Post said. "During the quarter we deployed the new G-lite DSL standard, and CenturyTel is on track to address 10% of our customer base with this high-speed data service before year end." Wireless revenues, excluding the effect of asset divestitures, grew 8.4% to $111.7 million in third quarter 1999, compared with $103.0 million in third quarter 1998. Wireless operating income excluding divestitures advanced 13.8%, reaching $40.7 million from $35.8 million, and EBITDA excluding divestitures climbed 14.9% to $57.9 million from $50.4 million a year ago. CenturyTel's third quarter wireless EBITDA margin was 51.8% (52.9% based on service revenues), and operating income margin was 36.5% (37.2% based on service revenues). Average monthly cellular service revenue per user (ARPU) was $56.57 during third quarter 1999, a 4.7% decrease from $59.39 a year ago. The average monthly churn rate was 1.9%. "CenturyTel's average monthly churn declined nearly half a percentage point to 1.9% during the quarter as compared with prior year levels," Post said. Revenues from other operations, excluding asset divestitures, grew 51.9% to $30.2 million during third quarter 1999, compared with $19.9 million in third quarter 1998. CenturyTel's long distance business generated $9.3 million of the increase in other operations revenues. CenturyTel now serves more than 285,500 long distance customers, adding more than 25,600 during the quarter. During the first nine months of 1999, net income excluding gain on sales of assets climbed 22.8% to $179.4 million from $146.0 million in 1998. Diluted earnings per share increased 21.0% to $1.27 from $1.05, and consolidated revenues rose 7.6% to $1.3 billion from $1.2 billion. EBITDA grew to $674.6 million from $619.4 million, an 8.9% increase. In addition to historical information, this release includes certain forward-looking statements 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 in the telecommunications 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 basis; the risks inherent in rapid technological change; the Company's ability to effectively manage its growth, including the timely consummation of pending acquisitions, and integrating newly-acquired properties into the Company's operations; the success and expense of the remediation efforts of the Company and 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 for the year ended December 31, 1998. CenturyTel, Inc. provides integrated communications services including local exchange, wireless, long distance, Internet access and security monitoring services to more than two million customers in 21 states. The company, headquartered in Monroe, Louisiana, is publicly traded on the New York Stock Exchange under the symbol CTL. CenturyTel is the 8th largest local exchange telephone company, based on access lines, and the 10th largest cellular company, based on population equivalents owned, in the United States. Visit CenturyTel's corporate website at (www.centurytel.com). CenturyTel, Inc. CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998 (UNAUDITED)

(1) Reflects a three-for-two stock split effected as a stock dividend distributed March 31, 1999 (2) Excluding the effect of asset sales, diluted earnings per share were $.45 for 1999 - ------------------ CenturyTel, Inc. CONSOLIDATED STATEMENTS OF INCOME NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998 (UNAUDITED)

(1) Reflects a three-for-two stock split effected as a stock dividend distributed March 31, 1999 (2) Excluding the effect of asset sales, basic earnings per share were $1.29 and $1.06 for 1999 and 1998, respectively (3) Excluding the effect of asset sales, diluted earnings per share were $1.27 and $1.05 for 1999 and 1998, respectively - ---------------------- CenturyTel, Inc. CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 1999 AND DECEMBER 31, 1998 (UNAUDITED)

CAPITAL EXPENDITURES NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

CAPITAL EXPENDITURES THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CenturyTel, Inc. By: /s/ Neil A. Sweasy ------------------------- Neil A. Sweasy Vice President and Controller