Louisiana
|
72-0651161
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
|
incorporation
or organization)
|
Identification
No.)
|
Large
accelerated filer [X]
|
Accelerated
filer [ ]
|
Non-accelerated
filer [ ]
|
Part
I.
|
Financial
Information:
|
|||
Item
1.
|
Financial
Statements
|
|||
Consolidated
Statements of Income--Three Months and Six Months
|
||||
Ended
June 30, 2007 and 2006
|
3
|
|||
Consolidated
Statements of Comprehensive Income--
|
||||
Three
Months and Six Months Ended June 30, 2007 and 2006
|
4
|
|||
Consolidated
Balance Sheets--June 30, 2007 and
|
||||
December
31, 2006
|
5
|
|||
Consolidated
Statements of Cash Flows--
|
||||
Six
Months Ended June 30, 2007 and 2006
|
6
|
|||
Consolidated
Statements of Stockholders' Equity--
|
||||
Six
Months Ended June 30, 2007 and 2006
|
7
|
|||
Notes
to Consolidated Financial Statements*
|
8-15
|
|||
Item
2.
|
Management's
Discussion and Analysis of Financial
|
|||
Condition
and Results of Operations
|
16-23
|
|||
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
24
|
||
Item
4.
|
Controls
and Procedures
|
25
|
||
Part
II.
|
|
Other
Information
|
||
Item
1.
|
Legal
Proceedings
|
26
|
||
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
26
|
||
Item 4. | Submission of Matters to a Vote of Security Holders |
26-27
|
||
Item
6.
|
Exhibits
and Reports on Form 8-K
|
27-28
|
||
Signature
|
28
|
Three
months
|
Six
months
|
|||||||||||||||
ended
June 30,
|
ended
June 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
(Dollars,
except per share amounts,
and
shares in thousands)
|
||||||||||||||||
OPERATING
REVENUES
|
$ |
689,991
|
608,907
|
1,290,846
|
1,220,198
|
|||||||||||
OPERATING
EXPENSES
|
||||||||||||||||
Cost
of services and products (exclusive of
|
||||||||||||||||
depreciation
and amortization)
|
226,388
|
216,191
|
439,919
|
438,746
|
||||||||||||
Selling,
general and administrative
|
97,456
|
95,596
|
188,913
|
191,536
|
||||||||||||
Depreciation
and amortization
|
134,311
|
132,127
|
262,095
|
266,999
|
||||||||||||
Total
operating expenses
|
458,155
|
443,914
|
890,927
|
897,281
|
||||||||||||
OPERATING
INCOME
|
231,836
|
164,993
|
399,919
|
322,917
|
||||||||||||
OTHER
INCOME (EXPENSE)
|
||||||||||||||||
Interest
expense
|
(57,667 | ) | (50,639 | ) | (104,628 | ) | (100,725 | ) | ||||||||
Other
income (expense)
|
8,080
|
123,459
|
13,370
|
128,056
|
||||||||||||
Total
other income (expense)
|
(49,587 | ) |
72,820
|
(91,258 | ) |
27,331
|
||||||||||
INCOME
BEFORE INCOME TAX EXPENSE
|
182,249
|
237,813
|
308,661
|
350,248
|
||||||||||||
Income
tax expense
|
69,984
|
85,603
|
118,526
|
128,778
|
||||||||||||
NET
INCOME
|
$ |
112,265
|
152,210
|
190,135
|
221,470
|
|||||||||||
BASIC
EARNINGS PER SHARE
|
$ |
1.03
|
1.32
|
1.73
|
1.86
|
|||||||||||
DILUTED
EARNINGS PER SHARE
|
$ |
1.00
|
1.26
|
1.67
|
1.79
|
|||||||||||
DIVIDENDS
PER COMMON SHARE
|
$ |
.065
|
.0625
|
.13
|
.125
|
|||||||||||
AVERAGE
BASIC SHARES OUTSTANDING
|
108,405
|
115,441
|
109,718
|
118,917
|
||||||||||||
AVERAGE
DILUTED SHARES OUTSTANDING
|
113,721
|
121,636
|
115,015
|
124,798
|
Three
months
ended
June 30,
|
Six
months
ended
June 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
(Dollars
in thousands)
|
||||||||||||||||
NET
INCOME
|
$ |
112,265
|
152,210
|
190,135
|
221,470
|
|||||||||||
OTHER
COMPREHENSIVE INCOME, NET OF TAX:
|
||||||||||||||||
Minimum
pension liability adjustment,
|
||||||||||||||||
net
of $799 and ($25) tax
|
-
|
1,282
|
-
|
(41 | ) | |||||||||||
Unrealized
gain (loss) on investments, net of
|
||||||||||||||||
$355,
($133), $304 and ($92) tax
|
570
|
(213 | ) |
488
|
(148 | ) | ||||||||||
Derivative
instruments:
|
||||||||||||||||
Net
loss on derivatives hedging the
|
||||||||||||||||
variability
of cash flows, net of $294 tax
|
-
|
-
|
471
|
-
|
||||||||||||
Reclassification
adjustment for losses
|
||||||||||||||||
included
in net income, net of $61, $59,
|
||||||||||||||||
$120
and $117 tax
|
99
|
94
|
193
|
188
|
||||||||||||
Items
related to employee benefit plans*:
|
||||||||||||||||
Change
in net actuarial loss, net of $5,755
|
||||||||||||||||
and
$5,973 tax
|
9,233
|
-
|
9,582
|
-
|
||||||||||||
Amortization
of net actuarial loss,
|
||||||||||||||||
net
of $908 and $1,815 tax
|
1,456
|
-
|
2,912
|
-
|
||||||||||||
Amortization
of net prior service credit,
|
||||||||||||||||
net
of ($178) and ($356) tax
|
(285 | ) |
-
|
(571 | ) |
-
|
||||||||||
Amortization
of unrecognized transition asset,
|
||||||||||||||||
net
of ($14) and ($28) tax
|
(22 | ) |
-
|
(44 | ) |
-
|
||||||||||
Net
change in other comprehensive income
|
||||||||||||||||
(loss),
net of tax
|
11,051
|
1,163
|
13,031
|
(1 | ) | |||||||||||
COMPREHENSIVE
INCOME
|
$ |
123,316
|
153,373
|
203,166
|
221,469
|
Six
months
|
||||||||
ended
June 30,
|
||||||||
2007
|
2006
|
|||||||
(Dollars
in thousands)
|
||||||||
OPERATING
ACTIVITIES
|
||||||||
Net
income
|
$ |
190,135
|
221,470
|
|||||
Adjustments
to reconcile net income to net cash provided
|
||||||||
by
operating activities:
|
||||||||
Depreciation
and amortization
|
262,095
|
266,999
|
||||||
Gain
on asset dispositions
|
-
|
(118,649 | ) | |||||
Deferred
income taxes
|
30,005
|
22,151
|
||||||
Changes
in current assets and current liabilities:
|
||||||||
Accounts
receivable
|
24,316
|
21,641
|
||||||
Accounts
payable
|
1,106
|
(2,707 | ) | |||||
Accrued
income and other taxes
|
27,071
|
(28,113 | ) | |||||
Other
current assets and other current liabilities, net
|
18,342
|
8,719
|
||||||
Retirement
benefits
|
14,647
|
14,926
|
||||||
Excess
tax benefits from share-based compensation
|
(6,312 | ) | (4,947 | ) | ||||
Decrease
in other noncurrent assets
|
3,653
|
297
|
||||||
Increase
(decrease) in other noncurrent liabilities
|
(11,667 | ) |
2,286
|
|||||
Other,
net
|
4,634
|
2,244
|
||||||
Net
cash provided by operating activities
|
558,025
|
406,317
|
||||||
INVESTING
ACTIVITIES
|
||||||||
Acquisitions,
net of cash acquired
|
(307,424 | ) |
-
|
|||||
Payments
for property, plant and equipment
|
(106,856 | ) | (130,455 | ) | ||||
Proceeds
from redemption of Rural Telephone Bank stock
|
-
|
122,819
|
||||||
Proceeds
from sale of assets
|
-
|
5,865
|
||||||
Investment
in unconsolidated cellular entity
|
-
|
(5,222 | ) | |||||
Other,
net
|
1,523
|
(1,296 | ) | |||||
Net
cash used in investing activities
|
(412,757 | ) | (8,289 | ) | ||||
FINANCING
ACTIVITIES
|
||||||||
Payments
of debt
|
(667,132 | ) | (12,559 | ) | ||||
Net
proceeds from issuance of long-term debt
|
741,840
|
-
|
||||||
Net
proceeds from the issuance of short-term debt
|
64,000
|
-
|
||||||
Proceeds
from issuance of common stock
|
42,292
|
41,206
|
||||||
Repurchase
of common stock
|
(302,033 | ) | (573,888 | ) | ||||
Cash
dividends
|
(14,480 | ) | (14,661 | ) | ||||
Excess
tax benefits from share-based compensation
|
6,312
|
4,947
|
||||||
Other,
net
|
1,790
|
(150 | ) | |||||
Net
cash used in financing activities
|
(127,411 | ) | (555,105 | ) | ||||
Net
increase (decrease) in cash and cash equivalents
|
17,857
|
(157,077 | ) | |||||
Cash
and cash equivalents at beginning of period
|
25,668
|
158,846
|
||||||
Cash
and cash equivalents at end of period
|
$ |
43,525
|
1,769
|
|||||
Supplemental
cash flow information:
|
||||||||
Income
taxes paid
|
$ |
72,928
|
132,666
|
|||||
Interest
paid (net of capitalized interest of $522 and $1,005)
|
$ |
96,227
|
96,562
|
Six
months
ended
June 30,
|
||||||||
2007
|
2006
|
|||||||
(Dollars
in thousands)
|
||||||||
COMMON
STOCK
|
||||||||
Balance
at beginning of period
|
$ |
113,254
|
131,074
|
|||||
Issuance
of common stock through dividend reinvestment,
|
||||||||
incentive
and benefit plans and other
|
1,552
|
1,740
|
||||||
Repurchase
of common stock
|
(6,606 | ) | (16,523 | ) | ||||
Conversion
of preferred stock into common stock
|
1
|
10
|
||||||
Balance
at end of period
|
108,201
|
116,301
|
||||||
PAID-IN
CAPITAL
|
||||||||
Balance
at beginning of period
|
24,256
|
129,806
|
||||||
Issuance
of common stock through dividend
|
||||||||
reinvestment,
incentive and benefit plans
|
40,740
|
39,466
|
||||||
Repurchase
of common stock
|
-
|
(71,362 | ) | |||||
Conversion
of preferred stock into common stock
|
10
|
179
|
||||||
Excess
tax benefits from share-based compensation
|
6,312
|
4,947
|
||||||
Share-based
compensation and other
|
10,348
|
4,891
|
||||||
Balance
at end of period
|
81,666
|
107,927
|
||||||
ACCUMULATED
OTHER COMPREHENSIVE LOSS, NET OF TAX
|
||||||||
Balance
at beginning of period
|
(104,942 | ) | (9,619 | ) | ||||
Change
in other comprehensive loss, net of tax
|
13,031
|
(1 | ) | |||||
Balance
at end of period
|
(91,911 | ) | (9,620 | ) | ||||
RETAINED
EARNINGS
|
||||||||
Balance
at beginning of period
|
3,150,933
|
3,358,162
|
||||||
Net
income
|
190,135
|
221,793
|
||||||
Repurchase
of common stock
|
(295,427 | ) | (486,003 | ) | ||||
Cumulative
effect of adoption of FIN 48 (see Note 7)
|
478
|
-
|
||||||
Cash
dividends declared
|
||||||||
Common
stock - $.13 and $.125 per share, respectively
|
(14,294 | ) | (14,467 | ) | ||||
Preferred
stock
|
(186 | ) | (194 | ) | ||||
Balance
at end of period
|
3,031,639
|
3,079,291
|
||||||
PREFERRED
STOCK - NON-REDEEMABLE
|
||||||||
Balance at beginning of period
|
7,450
|
7,850
|
||||||
Conversion of preferred stock into common stock
|
(11 | ) | (189 | ) | ||||
Balance at end of period
|
7,439
|
7,661
|
||||||
TOTAL
STOCKHOLDERS' EQUITY
|
$ |
3,137,034
|
3,301,560
|
(1)
|
Basis
of Financial Reporting
|
(2)
|
Acquisition
|
Cash
paid at closing (1)
|
$ |
322,187
|
||
Closing
costs (2)
|
5,217
|
|||
Total
purchase price
|
$ |
327,404
|
Current
assets (1)
|
$ |
33,761
|
||
Net
property, plant and equipment
|
242,822
|
|||
Identifiable
intangible assets
|
||||
Customer
list
|
148,800
|
|||
Goodwill
|
568,390
|
|||
Other
assets
|
9,827
|
|||
Current
liabilities (2)
|
(22,200 | ) | ||
Long-term
debt (2)
|
(520,000 | ) | ||
Deferred
income taxes
|
(111,174 | ) | ||
Other
liabilities
|
(22,822 | ) | ||
Total
purchase price
|
$ |
327,404
|
||
(1)
|
Includes
approximately
$20.0 million of acquired cash and cash
equivalents.
|
(2)
|
We
paid all the
long-term debt and $2.2 million of related accrued interest (included
in
“current liabilities” in the above table) immediately after
closing.
|
(3)
|
Goodwill
and Other Intangible
Assets
|
June
30,
|
Dec.
31,
|
|||||||
2007
|
2006
|
|||||||
(Dollars
in thousands)
|
||||||||
Goodwill
|
$ |
3,999,526
|
3,431,136
|
|||||
Intangible
assets subject to amortization
|
||||||||
Customer
base
|
||||||||
Gross
carrying amount
|
$ |
173,894
|
25,094
|
|||||
Accumulated
amortization
|
(9,858 | ) | (7,022 | ) | ||||
Net
carrying amount
|
$ |
164,036
|
18,072
|
|||||
Contract
rights
|
||||||||
Gross
carrying amount
|
$ |
4,186
|
4,186
|
|||||
Accumulated
amortization
|
(4,186 | ) | (3,256 | ) | ||||
Net
carrying amount
|
$ |
-
|
930
|
|||||
Intangible
asset not subject to amortization
|
$ |
36,690
|
36,690
|
(4)
|
Postretirement
Benefits
|
Three
months
|
Six
months
|
|||||||||||||||
ended
June 30,
|
ended
June 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
(Dollars
in thousands)
|
||||||||||||||||
Service
cost
|
$ |
1,732
|
1,783
|
3,450
|
3,491
|
|||||||||||
Interest
cost
|
5,039
|
4,846
|
10,057
|
9,490
|
||||||||||||
Expected
return on plan assets
|
(620 | ) | (623 | ) | (1,241 | ) | (1,219 | ) | ||||||||
Amortization
of unrecognized actuarial loss
|
899
|
950
|
1,798
|
1,860
|
||||||||||||
Amortization
of unrecognized prior service cost
|
(505 | ) | (221 | ) | (1,010 | ) | (433 | ) | ||||||||
Net
periodic postretirement benefit cost
|
$ |
6,545
|
6,735
|
13,054
|
13,189
|
(5)
|
Defined
Benefit Retirement Plans
|
Three
months
|
Six
months
|
|||||||||||||||
ended
June 30,
|
ended
June 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
(Dollars
in thousands)
|
||||||||||||||||
Service
cost
|
$ |
4,609
|
4,220
|
9,226
|
8,483
|
|||||||||||
Interest
cost
|
7,071
|
6,160
|
13,976
|
12,377
|
||||||||||||
Expected
return on plan assets
|
(9,170 | ) | (8,183 | ) | (18,219 | ) | (16,367 | ) | ||||||||
Recognized
net losses
|
291
|
1,962
|
556
|
3,840
|
||||||||||||
Net
amortization and deferral
|
1,301
|
(123 | ) |
3,260
|
6
|
|||||||||||
Net
periodic pension expense
|
$ |
4,102
|
4,036
|
8,799
|
8,339
|
(6)
|
Stock-based
Compensation
|
Average
|
||||||||||||||||
remaining
|
Aggregate
|
|||||||||||||||
Number
|
Average
|
contractual
|
intrinsic
|
|||||||||||||
of
options
|
price
|
term
(in years)
|
value
|
|||||||||||||
Outstanding
|
3,680,843
|
$ |
36.70
|
7.2
|
$ |
45,450,000
|
||||||||||
Exercisable
|
2,104,158
|
$ |
32.83
|
5.7
|
$ |
34,129,000
|
(7)
|
Income
Tax Uncertainties
|
(8)
|
Debt
Offerings
|
(9)
|
Business
Segments
|
Three
months
ended
June 30,
|
Six
months
ended
June 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
(Dollars
in thousands)
|
||||||||||||||||
Voice
|
$ |
219,803
|
216,485
|
428,878
|
433,499
|
|||||||||||
Network
access
|
266,202
|
221,663
|
477,601
|
446,986
|
||||||||||||
Data
|
108,206
|
84,447
|
204,070
|
167,685
|
||||||||||||
Fiber
transport and CLEC
|
40,714
|
36,051
|
79,040
|
71,831
|
||||||||||||
Other
|
55,066
|
50,261
|
101,257
|
100,197
|
||||||||||||
Total
operating revenues
|
$ |
689,991
|
608,907
|
1,290,846
|
1,220,198
|
(10)
|
Gain
on Asset Dispositions
|
(11)
|
Recent
Accounting Pronouncement
|
(12)
|
Commitments
and Contingencies
|
(13)
|
Subsequent
Event
|
Three
months
|
||||||||
ended
June 30,
|
||||||||
2007
|
2006
|
|||||||
(Dollars,
except per share amounts,
|
||||||||
and
shares in thousands)
|
||||||||
Operating
income
|
$ |
231,836
|
164,993
|
|||||
Interest
expense
|
(57,667 | ) | (50,639 | ) | ||||
Other
income (expense)
|
8,080
|
123,459
|
||||||
Income
tax expense
|
(69,984 | ) | (85,603 | ) | ||||
Net
income
|
$ |
112,265
|
152,210
|
|||||
Basic
earnings per share
|
$ |
1.03
|
1.32
|
|||||
Diluted
earnings per share
|
$ |
1.00
|
1.26
|
|||||
Average
basic shares outstanding
|
108,405
|
115,441
|
||||||
Average
diluted shares outstanding
|
113,721
|
121,636
|
Three
months
ended
June 30,
|
||||||||
2007
|
2006
|
|||||||
(Dollars
in thousands)
|
||||||||
Voice
|
$ |
219,803
|
216,485
|
|||||
Network
access
|
266,202
|
221,663
|
||||||
Data
|
108,206
|
84,447
|
||||||
Fiber
transport and CLEC
|
40,714
|
36,051
|
||||||
Other
|
55,066
|
50,261
|
||||||
$ |
689,991
|
608,907
|
Three
months
ended
June 30,
|
||||||||
2007
|
2006
|
|||||||
(Dollars
in thousands)
|
||||||||
Cost
of services and products (exclusive of depreciation and
amortization)
|
$ |
226,388
|
216,191
|
|||||
Selling,
general and administrative
|
97,456
|
95,596
|
||||||
Depreciation
and amortization
|
134,311
|
132,127
|
||||||
$ |
458,155
|
443,914
|
Six
months
ended
June 30,
|
||||||||
2007
|
2006
|
|||||||
(Dollars,
except per share amounts,
|
||||||||
and
shares in thousands)
|
||||||||
Operating
income
|
$ |
399,919
|
322,917
|
|||||
Interest
expense
|
(104,628 | ) | (100,725 | ) | ||||
Other
income (expense)
|
13,370
|
128,056
|
||||||
Income
tax expense
|
(118,526 | ) | (128,778 | ) | ||||
Net
income
|
$ |
190,135
|
221,470
|
|||||
Basic
earnings per share
|
$ |
1.73
|
1.86
|
|||||
Diluted
earnings per share
|
$ |
1.67
|
1.79
|
|||||
Average
basic shares outstanding
|
109,718
|
118,917
|
||||||
Average
diluted shares outstanding
|
115,015
|
124,798
|
Six
months
|
|||||||||
ended
June 30,
|
|||||||||
2007
|
2006
|
||||||||
(Dollars
in thousands)
|
|||||||||
Voice
|
$ |
428,878
|
433,499
|
||||||
Network
access
|
477,601
|
446,986
|
|||||||
Data
|
204,070
|
167,685
|
|||||||
Fiber
transport and CLEC
|
79,040
|
71,831
|
|||||||
Other
|
101,257
|
100,197
|
|||||||
$ |
1,290,846
|
1,220,198
|
Six
months
|
||||||||
ended
June 30,
|
||||||||
2007
|
2006
|
|||||||
(Dollars
in thousands)
|
||||||||
Cost
of services and products (exclusive of depreciation and
amortization)
|
$ |
439,919
|
438,746
|
|||||
Selling,
general and administrative
|
188,913
|
191,536
|
||||||
Depreciation
and amortization
|
262,095
|
266,999
|
||||||
$ |
890,927
|
897,281
|
Total
|
Approximate
|
|||||||||||||||
Number
of
|
Dollar
Value
|
|||||||||||||||
Shares
|
of
Shares
|
|||||||||||||||
Purchased
as
|
that
|
|||||||||||||||
Part
of Publicly
|
May
Yet Be
|
|||||||||||||||
Total
Number
|
Announced
|
Purchased
|
||||||||||||||
of
Shares
|
Average
Price
|
Plans
or
|
Under
the Plans
|
|||||||||||||
Period
|
Purchased
|
Per
Share
|
Programs
|
or
Programs
|
||||||||||||
April
1 – April 30, 2007
|
981,600
|
$ |
45.77
|
981,600
|
$ |
91,378,071
|
||||||||||
May
1 – May 31, 2007
|
1,031,975
|
$ |
47.89
|
1,031,975
|
$ |
41,954,387
|
||||||||||
June
1 – June 30, 2007
|
856,997
|
$ |
48.95
|
856,997
|
$ |
-
|
||||||||||
Total
|
2,870,572
|
$ |
47.49
|
2,870,572
|
Class
I Nominees
|
For
|
Withheld
|
William
R. Boles, Jr
|
129,619,737
|
14,934,579
|
W.
Bruce Hanks
|
134,045,353
|
10,508,963
|
C.
G. Melville, Jr.
|
136,143,133
|
8,411,183
|
Glen
F. Post, III
|
135,817,890
|
8,736,426
|
Class
II
|
Class
III
|
||||
Virginia
Boulet
|
Fred
R. Nichols
|
||||
Calvin
Czeschin
|
Harvey
P. Perry
|
||||
James
B. Gardner
|
Jim
D. Reppond
|
||||
Gregory
J. McCray
|
Joseph
R. Zimmel
|
For
|
128,302,227
|
|||
Against
|
12,195,821
|
|||
Abstain
|
4,056,268
|
For
|
24,390,597
|
|||
Against
|
105,841,147
|
|||
Abstain
|
4,963,316
|
|||
Broker
non-votes
|
9,359,256
|
|
4.2(l)
|
Fourth
Supplemental Indenture, dated as of March 26, 2007, to Indenture
dated
March 31, 1994, by and between CenturyTel and Regions Bank, as
trustee
(incorporated by reference to Exhibit 4.1 of our Current Report
on Form
8-K dated March 29, 2007).
|
|
4.2(m)
|
Form
of the 6.0% Senior Notes, Series N, due 2017 and 5.5% Senior Notes,
Series
O, due 2013 (included in Exhibit
4.2(l)).
|
|
10.1
|
Amendment
No. 6 to Registrant’s Key Employee Incentive Compensation Plan, dated
February 27, 2007.
|
|
11
|
Computations
of Earnings Per Share.
|
|
31.1
|
Registrant’s
Chief Executive Officer certification pursuant to Section 302 of
the
Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Registrant’s
Chief Financial Officer certification pursuant to Section 302 of
the
Sarbanes-Oxley Act of 2002.
|
|
32
|
Registrant’s
Chief Executive Officer and Chief Financial Officer certification
pursuant
to Section 906 of the Sarbanes-Oxley Act of
2002.
|
CenturyTel,
Inc.
|
|
Date:
August 8, 2007
|
/s/
Neil
A. Sweasy
|
Neil
A. Sweasy
|
|
Vice
President and Controller
|
|
(Principal
Accounting Officer)
|
CENTURYTEL,
INC.
|
|
By:
/s/ R. Stewart Ewing, Jr.
|
|
Name:
R. Stewart Ewing, Jr.
|
|
Title: EVP
and CFO
|
Three
months
|
Six
months
|
|||||||||||||||
ended
June 30,
|
ended
June 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
(Dollars,
except per share amounts,
|
||||||||||||||||
and
shares in thousands)
|
||||||||||||||||
Income
(Numerator):
|
||||||||||||||||
Net
income
|
$ |
112,265
|
152,210
|
190,135
|
221,470
|
|||||||||||
Dividends
applicable to preferred stock
|
(93 | ) | (96 | ) | (186 | ) | (194 | ) | ||||||||
Net
income applicable to common stock
|
112,172
|
152,114
|
189,949
|
221,276
|
||||||||||||
Interest
on convertible debentures, net of tax
|
1,207
|
1,207
|
2,414
|
2,414
|
||||||||||||
Dividends
applicable to preferred stock
|
93
|
96
|
186
|
194
|
||||||||||||
Net
income as adjusted for purposes of
|
||||||||||||||||
computing
diluted earnings per share
|
$ |
113,472
|
153,417
|
192,549
|
223,884
|
|||||||||||
Shares
(Denominator):
|
||||||||||||||||
Weighted
average number of shares:
|
||||||||||||||||
Outstanding during period
|
109,263
|
116,165
|
110,506
|
119,572
|
||||||||||||
Nonvested restricted stock
|
(858 | ) | (724 | ) | (788 | ) | (655 | ) | ||||||||
Number
of shares for computing basic
|
||||||||||||||||
earnings
per share
|
108,405
|
115,441
|
109,718
|
118,917
|
||||||||||||
Incremental
common shares attributable
|
||||||||||||||||
to
dilutive securities:
|
||||||||||||||||
Shares
issuable under convertible securities
|
4,485
|
4,496
|
4,485
|
4,502
|
||||||||||||
Shares
issuable upon settlement of accelerated
|
||||||||||||||||
share
repurchase agreements
|
-
|
1,045
|
-
|
729
|
||||||||||||
Shares
issuable under incentive compensation
|
||||||||||||||||
and
employee benefit plans
|
831
|
654
|
812
|
650
|
||||||||||||
Number
of shares as adjusted for purposes
|
||||||||||||||||
of
computing diluted earnings per share
|
113,721
|
121,636
|
115,015
|
124,798
|
||||||||||||
Basic
earnings per share
|
$ |
1.03
|
1.32
|
1.73
|
1.86
|
|||||||||||
Diluted
earnings per share
|
$ |
1.00
|
1.26
|
1.67
|
1.79
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of CenturyTel,
Inc.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15 (e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
a)
|
designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
b)
|
designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
c)
|
evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
d)
|
disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter that has materially affected, or is reasonably likely
to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting,
to
the registrant’s auditors and the audit committee of the registrant’s
board of directors:
|
a)
|
all
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
b)
|
any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date: August
8, 2007
|
/s/
Glen F. Post III
|
Glen
F. Post, III
|
|
Chairman
of the Board and
|
|
Chief
Executive Officer
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of CenturyTel,
Inc.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15 (e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
a)
|
designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
b)
|
designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
c)
|
evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
d)
|
disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter that has materially affected, or is reasonably likely
to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting,
to
the registrant’s auditors and the audit committee of the registrant’s
board of directors:
|
a)
|
all
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
b)
|
any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date: August
8, 2007
|
/s/
R. Stewart Ewing, Jr.
|
R.
Stewart Ewing, Jr.
|
|
Executive
Vice President and
|
|
Chief Financial
Officer
|
|
Re:
|
CenturyTel,
Inc.
|
/s/ Glen F. Post, III | /s/ R. Stewart Ewing, Jr. |
Glen
F. Post, III
|
R.
Stewart Ewing, Jr.
|
Chairman
of the Board and
|
Executive
Vice President and
|
Chief
Executive Officer
|
Chief
Financial Officer
|