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) July 26, 2001
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
FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT:
July 26, 2001 Media: Patricia Cameron (318) 388-9674
patricia.cameron@centurytel.com
Investors: Jeffrey S. Glover (318) 388-9648
jeff.glover@centurytel.com
CenturyTel Achieves Second Quarter Earnings Per Share of 38 Cents
MONROE, La..CenturyTel,Inc.(NYSE Symbol:CTL) announces operating results
for second quarter 2001.
o Revenues climbed 22.6% to $518.9 million.
o Excluding nonrecurring gains and losses, earnings before interest, taxes,
depreciation and amortization (EBITDA) increased 18.9% to $261.3 million.
o Net income, excluding nonrecurring gains and losses, was $53.5 million.
o Excluding nonrecurring gains and losses, cash earnings per share was $.48.
o Diluted earnings per share, excluding nonrecurring gains and losses, was $.38.
Second Quarter Highlights Qtr Ended Qtr Ended % Change
(Excluding nonrecurring gains and losses) 6/30/2001 6/30/2000
(Dollars in thousands, except per share amounts)
---------------------------------------------------------------------------------------
Revenues $ 518,936 $ 423,156 22.6%
EBITDA 261,270 219,649 18.9%
Net Income 53,538 57,845 (7.4%)
Cash Earnings Per Share .48 .50 (4.0%)
Diluted Earnings Per Share .38 .41 (7.3%)
Average Diluted Shares Outstanding 142,059 141,732 .2%
Telephone Revenues 367,884 276,088 33.2%
Wireless Revenues 109,686 111,142 (1.3%)
Other Operations Revenues 41,366 35,926 15.1%
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Telephone Access Lines 1,807,950 1,296,043 39.5%
Wireless Units in Majority-Owned Markets 779,958 749,400 4.1%
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"CenturyTel achieved revenue growth of more than 22% as a result of
contributions from acquisitions coupled with strong growth in our long distance
and Internet businesses," said Glen F. Post, III, President and Chief Executive
Officer. "Despite a sluggish economy which has led to weaker telephone access
line growth, we continue to see strong demand for data services. Excluding
acquisitions, data revenues jumped 29% this quarter. During the quarter we
reached another milestone in our long distance business as we surpassed the
400,000 customer mark."
CenturyTel experienced non-recurring pre-tax items of $158.6 million
related to a gain on sale of PCS spectrum net of the write-down of certain
non-operating assets. Financial data presented in the body of the press release
excludes these one-time items.
Consolidated revenues rose 22.6% to $518.9 million from $423.2 million.
EBITDA grew to $261.3 million from $219.6 million, an 18.9% increase. CenturyTel
achieved a consolidated EBITDA margin of 50.3% during the quarter. Net income
was $53.5 million in the second quarter of 2001 compared to $57.8 million in the
second quarter 2000. The decline in net income is due to higher interest
expense, amortization of goodwill stemming from acquisitions, certain regulatory
issues that are being addressed, and higher expenses related to CLEC and DSL
growth initiatives. Cash earnings per share was $.48 in second quarter 2001
compared to $.50 in second quarter 2000. Diluted earnings per share was $.38 in
the second quarter 2001 compared to $.41 in second quarter 2000.
Telephone revenues grew 33.2% to $367.9 million during the quarter
compared with $276.1 million in second quarter 2000. The 493,000 access lines
acquired from Verizon during 2000 contributed $86.7 million in telephone
revenues during the second quarter. Telephone operating income increased 20.0%,
reaching $99.4 million from $82.8 million in second quarter 2000, and EBITDA
rose 31.8% to $198.3 million from $150.5 million a year ago. CenturyTel's second
quarter telephone EBITDA margin was 53.9% while the operating income margin was
27.0%.
"CenturyTel continues to make solid progress resolving regulatory
issues in Arkansas and Wisconsin, which, once resolved, should enhance our
financial performance over the remainder of the year," Post said.
Wireless revenues declined 1.3% to $109.7 million in second quarter
2001 compared with $111.1 million in second quarter 2000. Roaming revenues
declined 3.6% to $22.4 million compared to $23.2 million a year ago. Wireless
operating income was $31.0 million compared to $32.8 million, a 5.5% decrease,
and EBITDA decreased 5.9% to $46.6 million compared to $49.6 million a year ago.
CenturyTel's second quarter wireless EBITDA margin was 43.5% based on service
revenues, and the operating income margin was 29.0% based on service revenues.
Net wireless subscriber additions were 11,100 for the quarter. Average monthly
cellular service revenue per user was $46 during second quarter 2001.
"CenturyTel's continued focus on post-paid wireless customer growth
resulted in a 36% increase in post-paid net additions from first quarter 2001
levels," Post said.
Other operations revenues grew 15.1% to $41.4 million during second
quarter 2001 compared with $35.9 million in second quarter 2000. CenturyTel's
long distance revenues increased 13.6% to $28.5 million from $25.1 million.
CenturyTel now serves more than 414,000 long distance customers, adding more
than 21,500 during the quarter. Internet revenues rose 65.3% to $8.7 million
from $5.3 million. The company experienced a $3.1 million operating loss this
quarter in its Internet operations due to startup expenses pertaining to the
rapid growth of DSL. CenturyTel now serves more than 15,700 DSL customers,
adding more than 4,300 during the quarter. CLEC operating losses were $2.7
million during the quarter.
"DSL and Internet service remain the fastest growing areas of our
business. We are pleased with the demand for these services," Post said.
During the first six months of 2001, net income decreased 4.0% to
$101.5 million from $105.7 million in 2000. Diluted earnings per share declined
5.3% to $.71 from $.75, and consolidated revenues increased 23.8% to $1,034.9
million from $836.1 million. Earnings before interest, taxes, depreciation and
amortization (EBITDA) was $518.5 million compared with $422.2 million a year
ago.
CenturyTel provides updated financial guidance for 2001. Due
principally to continued weakness in the general economy, CenturyTel is reducing
its 2001 revenue and operating cash flow guidance. For the year, the company
anticipates achieving total revenues and operating cash flow in the range of
$2.10 billion to $2.14 billion and $1.01 billion to $1.04 billion, respectively.
The company still believes it can achieve the annual 2001 earnings guidance
provided last quarter. The company continues to estimate that cash earnings per
share, before one-time items, will be $1.94 to $2.04. For 2001, earnings per
share, before one-time items, will be within the range of $1.52 to $1.62.
For the third quarter, total revenues are expected to range from $520
million to $535 million. CenturyTel believes third quarter operating cash flow
will be in the range of $250 million to $265 million. Cash earnings per share is
anticipated to be $.47 to $.52, while earnings per share is expected to be in
the range of $.37 to $.42.
All amounts disclosed above exclude one-time items.
--------------------------
In addition to historical information, this release includes forward-looking
statements, 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, or if underlying assumptions prove
incorrect. Factors that could affect actual results 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 on-going changes in the regulation of the Company or the
communications industry 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 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 for the year ended December 31, 2000. The information
contained in this release is as of July 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 July 26 at
10:30 A.M. Central time to discuss second 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 and data services to more
than 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 Web site at (www.centurytel.com)
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED JUNE 30, 2001 AND 2000
(UNAUDITED)
INCREASE
In thousands, except per share amounts 2001 2000 (DECREASE)
------------------------------------------------------------------------------------
TELEPHONE OPERATIONS
Operating revenues
Local service $ 123,293 90,527 36.2%
Network access 212,570 160,933 32.1%
Other 32,021 24,628 30.0%
----------------------------------------------------------------------
367,884 276,088 33.2%
----------------------------------------------------------------------
Operating expenses
Plant operations 93,490 59,763 56.4%
Customer operations 28,814 25,509 13.0%
Corporate and other 47,271 40,336 17.2%
Depreciation and amortization 98,927 67,631 46.3%
----------------------------------------------------------------------
268,502 193,239 38.9%
----------------------------------------------------------------------
Telephone operating income 99,382 82,849 20.0%
----------------------------------------------------------------------
WIRELESS OPERATIONS
Operating revenues
Service revenues 107,102 107,351 (0.2%)
Equipment sales 2,584 3,791 (31.8%)
----------------------------------------------------------------------
109,686 111,142 (1.3%)
----------------------------------------------------------------------
Operating expenses
Cost of equipment sold 5,837 6,356 (8.2%)
System operations 17,175 16,380 4.9%
General, administrative and customer service 21,055 19,421 8.4%
Sales and marketing 18,996 19,431 (2.2%)
Depreciation and amortization 15,606 16,742 (6.8%)
----------------------------------------------------------------------
78,669 78,330 0.4%
----------------------------------------------------------------------
Wireless operating income 31,017 32,812 (5.5%)
----------------------------------------------------------------------
OTHER OPERATIONS
Operating revenues
Long distance 28,514 25,099 13.6%
Internet 8,718 5,273 65.3%
Other 4,134 5,554 (25.6%)
----------------------------------------------------------------------
41,366 35,926 15.1%
----------------------------------------------------------------------
Operating expenses
Cost of sales and other 34,897 25,299 37.9%
Depreciation and amortization 1,663 1,396 19.1%
----------------------------------------------------------------------
36,560 26,695 37.0%
----------------------------------------------------------------------
Other operating income 4,806 9,231 (47.9%)
----------------------------------------------------------------------
TOTAL OPERATING INCOME 135,205 124,892 8.3%
OTHER INCOME (EXPENSE)
Nonrecurring gains and losses 156,428 - -
Interest expense (57,358) (35,267) 62.6%
Income from unconsolidated cellular entities 10,705 9,475 13.0%
Minority interest (3,263) (2,871) 13.7%
Other income and expense 4,578 2,384 92.0%
Income tax expense (92,054) (40,768) 125.8%
----------------------------------------------------------------------
NET INCOME $ 154,241 57,845 166.6%
======================================================================
EARNINGS PER SHARE
Basic $ 1.10 0.41 168.3%
Diluted $ 1.09 0.41 165.9%
SHARES OUTSTANDING
Basic 140,720 139,995 0.5%
Diluted 142,059 141,732 0.2%
DIVIDENDS PER COMMON SHARE $ 0.0500 0.0475 5.3%
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED JUNE 30, 2001 AND 2000
(UNAUDITED)
Excludes nonrecurring gains and losses INCREASE
In thousands, except per share amounts 2001 2000 (DECREASE)
----------------------------------------------------------------------------------
TELEPHONE OPERATIONS
Operating revenues
Local service $ 123,293 90,527 36.2%
Network access 212,570 160,933 32.1%
Other 32,021 24,628 30.0%
----------------------------------------------------------------------
367,884 276,088 33.2%
----------------------------------------------------------------------
Operating expenses
Plant operations 93,490 59,763 56.4%
Customer operations 28,814 25,509 13.0%
Corporate and other 47,271 40,336 17.2%
Depreciation and amortization 98,927 67,631 46.3%
----------------------------------------------------------------------
268,502 193,239 38.9%
----------------------------------------------------------------------
Telephone operating income 99,382 82,849 20.0%
----------------------------------------------------------------------
WIRELESS OPERATIONS
Operating revenues
Service revenues 107,102 107,351 (0.2%)
Equipment sales 2,584 3,791 (31.8%)
----------------------------------------------------------------------
109,686 111,142 (1.3%)
----------------------------------------------------------------------
Operating expenses
Cost of equipment sold 5,837 6,356 (8.2%)
System operations 17,175 16,380 4.9%
General, administrative and customer service 21,055 19,421 8.4%
Sales and marketing 18,996 19,431 (2.2%)
Depreciation and amortization 15,606 16,742 (6.8%)
----------------------------------------------------------------------
78,669 78,330 0.4%
----------------------------------------------------------------------
Wireless operating income 31,017 32,812 (5.5%)
----------------------------------------------------------------------
OTHER OPERATIONS
Operating revenues
Long distance 28,514 25,099 13.6%
Internet 8,718 5,273 65.3%
Other 4,134 5,554 (25.6%)
----------------------------------------------------------------------
----------------------------------------------------------------------
41,366 35,926 15.1%
----------------------------------------------------------------------
Operating expenses
Cost of sales and other 34,897 25,299 37.9%
Depreciation and amortization 1,663 1,396 19.1%
----------------------------------------------------------------------
36,560 26,695 37.0%
----------------------------------------------------------------------
Other operating income 4,806 9,231 (47.9%)
----------------------------------------------------------------------
TOTAL OPERATING INCOME 135,205 124,892 8.3%
OTHER INCOME (EXPENSE)
Interest expense (57,358) (35,267) 62.6%
Income from unconsolidated cellular entities 8,541 9,475 (9.9%)
Minority interest (3,250) (2,871) 13.2%
Other income and expense 4,578 2,384 92.0%
Income tax expense (34,178) (40,768) (16.2%)
----------------------------------------------------------------------
NET INCOME $ 53,538 57,845 (7.4%)
======================================================================
EARNINGS PER SHARE
Basic $ 0.38 0.41 (7.3%)
Diluted $ 0.38 0.41 (7.3%)
SHARES OUTSTANDING
Basic 140,720 139,995 0.5%
Diluted 142,059 141,732 0.2%
DIVIDENDS PER COMMON SHARE $ 0.0500 0.0475 5.3%
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 2001 AND 2000
(UNAUDITED)
INCREASE
In thousands, except per share amounts 2001 2000 (DECREASE)
--------------------------------------------------------------------------------
TELEPHONE OPERATIONS
Operating revenues
Local service $ 244,454 178,592 36.9%
Network access 426,437 323,186 31.9%
Other 68,242 51,236 33.2%
------------------------------------------------------------------
739,133 553,014 33.7%
------------------------------------------------------------------
Operating expenses
Plant operations 187,375 122,539 52.9%
Customer operations 58,071 48,270 20.3%
Corporate and other 94,036 79,868 17.7%
Depreciation and amortization 196,288 134,991 45.4%
------------------------------------------------------------------
535,770 385,668 38.9%
------------------------------------------------------------------
Telephone operating income 203,363 167,346 21.5%
------------------------------------------------------------------
WIRELESS OPERATIONS
Operating revenues
Service revenues 208,202 203,974 2.1%
Equipment sales 5,890 7,572 (22.2%)
------------------------------------------------------------------
214,092 211,546 1.2%
------------------------------------------------------------------
Operating expenses
Cost of equipment sold 11,681 14,536 (19.6%)
System operations 34,641 32,033 8.1%
General, administrative and
customer service 41,792 37,627 11.1%
Sales and marketing 37,821 41,556 (9.0%)
Depreciation and amortization 32,220 33,091 (2.6%)
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158,155 158,843 (0.4%)
------------------------------------------------------------------
Wireless operating income 55,937 52,703 6.1%
------------------------------------------------------------------
OTHER OPERATIONS
Operating revenues
Long distance 56,114 49,926 12.4%
Internet 17,117 10,285 66.4%
Other 8,488 11,341 (25.2%)
------------------------------------------------------------------
81,719 71,552 14.2%
------------------------------------------------------------------
Operating expenses
Cost of sales and other 68,486 52,789 29.7%
Depreciation and amortization 3,120 2,498 24.9%
------------------------------------------------------------------
71,606 55,287 29.5%
------------------------------------------------------------------
Other operating income 10,113 16,265 (37.8%)
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TOTAL OPERATING INCOME 269,413 236,314 14.0%
OTHER INCOME (EXPENSE)
Nonrecurring gains and losses 156,428 9,910 1,478.5%
Interest expense (119,061) (71,309) 67.0%
Income from unconsolidated
cellular entities 16,026 8,016 99.9%
Minority interest (5,912) (5,163) 14.5%
Other income and expense 7,501 6,613 13.4%
Income tax expense (123,432) (77,252) 59.8%
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NET INCOME $ 200,963 107,129 87.6%
==================================================================
EARNINGS PER SHARE
Basic $ 1.43 0.76 88.2%
Diluted $ 1.41 0.76 85.5%
SHARES OUTSTANDING
Basic 140,656 139,874 0.6%
Diluted 142,271 141,729 0.4%
DIVIDENDS PER COMMON SHARE $ 0.1000 0.0950 5.3%
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 2001 AND 2000
(UNAUDITED)
Excludes nonrecurring gains and losses INCREASE
In thousands, except per share amounts 2001 2000 (DECREASE)
------------------------------------------------------------
TELEPHONE OPERATIONS
Operating revenues
Local service $ 244,454 178,592 36.9%
Network access 426,437 323,186 31.9%
Other 68,242 51,236 33.2%
------------------------------------------------------------------
739,133 553,014 33.7%
------------------------------------------------------------------
Operating expenses
Plant operations 185,375 122,539 51.3%
Customer operations 58,071 48,270 20.3%
Corporate and other 94,036 79,868 17.7%
Depreciation and amortization 196,288 134,991 45.4%
------------------------------------------------------------------
533,770 385,668 38.4%
------------------------------------------------------------------
Telephone operating income 205,363 167,346 22.7%
------------------------------------------------------------------
WIRELESS OPERATIONS
Operating revenues
Service revenues 208,202 203,974 2.1%
Equipment sales 5,890 7,572 (22.2%)
------------------------------------------------------------------
214,092 211,546 1.2%
------------------------------------------------------------------
Operating expenses
Cost of equipment sold 11,681 14,536 (19.6%)
System operations 34,641 32,033 8.1%
General, administrative and
customer service 41,792 37,627 11.1%
Sales and marketing 37,821 41,556 (9.0%)
Depreciation and amortization 32,220 33,091 (2.6%)
------------------------------------------------------------------
158,155 158,843 (0.4%)
------------------------------------------------------------------
Wireless operating income 55,937 52,703 6.1%
------------------------------------------------------------------
OTHER OPERATIONS
Operating revenues
Long distance 56,114 49,926 12.4%
Internet 17,117 10,285 66.4%
Other 8,488 11,341 (25.2%)
------------------------------------------------------------------
81,719 71,552 14.2%
------------------------------------------------------------------
Operating expenses
Cost of sales and other 68,486 52,285 31.0%
Depreciation and amortization 3,120 2,498 24.9%
------------------------------------------------------------------
71,606 54,783 30.7%
------------------------------------------------------------------
Other operating income 10,113 16,769 (39.7%)
------------------------------------------------------------------
TOTAL OPERATING INCOME 271,413 236,818 14.6%
OTHER INCOME (EXPENSE)
Interest expense (119,061) (71,309) 67.0%
Income from unconsolidated
cellular entities 13,862 13,346 3.9%
Minority interest (5,899) (5,163) 14.3%
Other income and expense 7,501 6,613 13.4%
Income tax expense (66,356) (74,564) (11.0%)
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NET INCOME $ 101,460 105,741 (4.0%)
==================================================================
EARNINGS PER SHARE
Basic $ 0.72 0.75 (4.0%)
Diluted $ 0.71 0.75 (5.3%)
SHARES OUTSTANDING
Basic 140,656 139,874 0.6%
Diluted 142,271 141,729 0.4%
DIVIDENDS PER COMMON SHARE $ 0.1000 0.0950 5.3%
CenturyTel, Inc.
CONSOLIDATED BALANCE SHEETS
June 30, 2001 and December 31, 2000
(UNAUDITED)
June 30, December 31,
2001 2000
----------------------------------------------------------------------------
(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 39,323 19,039
Other current assets 390,571 357,465
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Total current assets 429,894 376,504
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PROPERTY, PLANT AND EQUIPMENT
Telephone 5,149,185 4,999,808
Wireless 533,451 522,684
Other 425,702 392,024
Accumulated depreciation (3,143,285) (2,955,223)
----------------------------------------------------------------------------
Net property, plant and equipment 2,965,053 2,959,293
----------------------------------------------------------------------------
INVESTMENTS AND OTHER ASSETS
Excess cost of net assets acquired 2,511,255 2,509,033
Other 605,703 548,460
----------------------------------------------------------------------------
Total investments and other assets 3,116,958 3,057,493
----------------------------------------------------------------------------
TOTAL ASSETS $ 6,511,905 6,393,290
============================================================================
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term debt and current maturities
of long-term debt $ 369,987 425,962
Other current liabilities 405,661 317,408
----------------------------------------------------------------------------
Total current liabilities 775,648 743,370
LONG-TERM DEBT 2,961,748 3,050,292
DEFERRED CREDITS AND OTHER LIABILITIES 537,790 567,549
STOCKHOLDERS' EQUITY 2,236,719 2,032,079
----------------------------------------------------------------------------
TOTAL LIABILITIES AND EQUITY $ 6,511,905 6,393,290
============================================================================
CAPITAL EXPENDITURES
SIX MONTHS ENDED JUNE 30, 2001 AND 2000
INC
2001 2000 (DEC)
-----------------------------------------------------------------------------
(in thousands)
Telephone $ 161,817 75,414 114.6%
Wireless 33,596 14,685 128.8%
Other 47,905 49,308 (2.8%)
------------------------------------------------------------------
Total capital expenditures $ 243,318 139,407 74.5%
==================================================================
CAPITAL EXPENDITURES
THREE MONTHS ENDED JUNE 30, 2001 AND 2000
INC
2001 2000 (DEC)
-----------------------------------------------------------------------------
(in thousands)
Telephone $ 89,137 46,105 93.3%
Wireless 15,264 11,006 38.7%
Other 18,332 24,131 (24.0%)
------------------------------------------------------------------
Total capital expenditures $ 122,733 81,242 51.1%
==================================================================
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