Lumen Technologies, Inc. — Interim / Quarterly Report 2000

Nov 13, 2000

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, 2000 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 CenturyTel 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, 2000: FOR IMMEDIATE RELEASE: FOR MORE INFORMATION CONTACT: October 26, 2000 Media: Patricia Cameron (318) 388-9674 patricia.cameron@centurytel.com Investors: Jeffrey S. Glover (318) 388-9648 jeff.glover@centurytel.com CenturyTel Achieves 16 Percent Third Quarter Revenue Growth Fueled by - --------------------------------------------------------------------- Acquisitions and Strong Core Business Unit Performance - ------------------------------------------------------ Monroe, LA . . CenturyTel, Inc.(NYSE Symbol: CTL) announces operating results for third quarter 2000. o Revenues from recurring operations climbed 16.4% to $482.1 million. o Earnings from recurring operations before interest, taxes, depreciation, amortization and gain on sales of assets, advanced 16.7% to $260.0 million. o Net income from recurring operations increased 3.9% to $66.6 million. o Diluted earnings per share from recurring operations rose 4.4% to $.47. o Cash earnings per share from recurring operations increased 7.5% to $.57. - -------------------------------------------------------------------- Third Quarter Highlights (Dollars, except per share Quarter Ended Quarter Ended amounts, in thousands) 9/30/00 9/30/99 % Change - -------------------------------------------------------------------- Revenues (1) $ 482,067 $ 413,979 16.4% EBITDA (2) $ 260,020 $ 222,807 16.7% Net Income (3) $ 66,646 $ 64,175 3.9% Diluted Earnings Per Share (3) $ .47 $ .45 4.4% Average Diluted Shares Outstanding 141,848 141,504 0.2% Telephone Revenues (1) $ 324,608 $ 273,644 18.6% Wireless Revenues $ 120,232 $ 109,778 9.5% Other Operations Revenues $ 37,227 $ 30,557 21.8% - -------------------------------------------------------------------- Telephone Access Lines 1,800,728 1,263,036 42.6% Wireless Units in Majority-Owned Markets 741,183 640,311 15.8% - -------------------------------------------------------------------- Excluding the effects of asset divestitures and nonrecurring gains and losses (1) Includes $41.0 million revenue contribution from acquisitions in third quarter 2000 (2) Earnings from recurring operations before interest, taxes, depreciation, amortization and gain on sales of assets (3) Excludes one-time net gains of $1.3 million, or $.01 per share, in third quarter 2000 and $741,000, or $.005 per share, in third quarter 1999 ----------------------------- "CenturyTel achieved strong operating results for the quarter driven by excellent revenue and cash flow growth," Glen F. Post, III, President and Chief Executive Officer, said. "The Verizon acquisitions were completed this quarter, and the integration is on track. Our revenue growth was driven by acquisitions, increased digital wireless customers, and higher data services revenue." Net income from recurring operations for the quarter rose 3.9% to $66.6 million from $64.2 million in third quarter 1999. Diluted earnings per share from recurring operations increased 4.4% to $.47 from $.45. Cash earnings per share from recurring operations increased 7.5% to $.57 from $.53. Consolidated revenues from recurring operations rose 16.4% to $482.1 million from $414.0 million. EBITDA from recurring operations grew to $260.0 million from $222.8 million, a 16.7% increase. CenturyTel achieved a consolidated EBITDA margin of 53.9% during the quarter. "The acquisition of nearly 500,000 telephone access lines from Verizon this quarter represents a 40% increase in our telephone operations. We look forward to realizing a full revenue contribution from these acquisitions in the fourth quarter," Post said. Telephone revenues grew 18.6% to $324.6 million during the quarter, compared with $273.6 million in third quarter 1999. The Verizon acquisitions contributed $41.0 million to quarterly revenues. Telephone operating income increased 22.2%, reaching $99.8 million from $81.6 million, and EBITDA rose 23.4% to $182.1 million from $147.6 million a year ago. CenturyTel's third quarter telephone EBITDA margin was 56.1% while the operating income margin was 30.7%. "CenturyTel's rollout of high-speed Internet access continues to gain momentum. At the end of the third quarter, high-speed Internet access via DSL was available to 26% of CenturyTel's telephone access lines, excluding newly acquired markets," Post said. Wireless revenues from recurring operations grew 9.5% to $120.2 million in third quarter 2000, compared with $109.8 million in third quarter 1999. Wireless operating income from recurring operations was $39.3 million compared to $40.0 million in 1999, and EBITDA from recurring operations was $55.4 million compared to $56.9 million a year ago. CenturyTel's third quarter wireless EBITDA margin was 46.1% (47.4% based on service revenues), and operating income margin was 32.7% (33.6% based on service revenues). Average monthly cellular service revenue per user (ARPU) was $52 during third quarter 2000, an 8.8% decrease from $57 a year ago. CenturyTel added 21,900 contract customers while 30,100 non-revenue-generating prepaid customers were disconnected during the quarter. The average monthly contract customer churn rate was 1.9%. "The addition of 21,900 contract customers this quarter compares with 1,100 contract additions in third quarter 1999. The vast majority of these new customers are on digital rate plans that typically produce an above average ARPU. We continue to focus on adding contract customers while decreasing our focus on prepaid plans for customer growth," Post said. Other operations revenues from recurring operations grew 21.8% to $37.2 million during third quarter 2000, compared with $30.6 million in third quarter 1999. CenturyTel's long distance business generated $4.5 million of the increase in other operations revenues. CenturyTel now serves more than 347,000 long distance customers, adding nearly 21,000 during the quarter. During the first nine months of 2000, net income from recurring operations was $174.0 million, a 3.3% decrease from $179.9 million in 1999. Diluted earnings per share from recurring operations declined 3.1% to $1.23 from $1.27, and cash earnings per share declined 1.3% to $1.49 from $1.51. Consolidated revenues from recurring operations rose 11.0% to $1.3 billion from $1.2 billion. EBITDA grew to $683.9 million from $646.5 million, a 5.8% increase. Free cash flow generation was $130.3 million during the first nine months of 2000. During the third quarter 2000, CenturyTel borrowed $1.46 billion under its credit facilities to finance the Verizon acquisitions. A substantial portion of this debt was refinanced longer term with the issuance of $900 million of senior notes in mid-October 2000. 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 Company's ability to effectively manage its growth; including integrating newly acquired businesses into our operations; hiring adequate numbers of qualified staff and successfully upgrading our billing and other information systems; the inherent risk of rapid technological change; the effects of regulatory decisions affecting the Company or the telecommunications industry generally; 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; 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, 1999. Investors can access CenturyTel's earnings conference call and replay by accessing the company's website at (www.centurytel.com) A separate dial-up replay number is available until the close of business on Monday, October 30. The replay number is 1-800-625-5288 and the access code is 827283. CenturyTel, Inc. provides communications services including local exchange, wireless, long distance, Internet access and security monitoring services to nearly three 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 8th 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, 2000 AND 1999 (UNAUDITED)

CenturyTel, Inc. CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 (UNAUDITED)

CenturyTel, Inc. CONSOLIDATED STATEMENTS OF INCOME NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 (UNAUDITED)

CenturyTel, Inc. CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2000 AND DECEMBER 31, 1999 (UNAUDITED)

CAPITAL EXPENDITURES NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

CAPITAL EXPENDITURES THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

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