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):
November 14, 2002
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 AND FD DISCLOSURE.
The information set forth below supplements and updates information
previously reported by CenturyTel, Inc. (the "Company") concerning the
disposition of its wireless operations and its acquisitions of telephone
properties during the third quarter of 2002.
Wireless Disposition
On August 1, 2002, the Company completed the sale of substantially all of
its wireless operations to an affiliate of ALLTEL Corporation ("Alltel"). The
Company received approximately $1.591 billion in connection with the transaction
(which the Company expects to be $1.285 billion after-tax). See the Company's
Current Report on Form 8-K dated August 1, 2002 and filed August 13, 2002 for
additional information concerning this transaction.
The Company used a portion of the proceeds received from the sale of its
wireless operations to finance the $1.179 billion acquisition of access lines in
the state of Missouri from Verizon Communications, Inc. ("Verizon") on August
31, 2002, as discussed further below.
Verizon Acquisitions
On July 1, 2002, an affiliate of the Company purchased from affiliates of
Verizon assets comprising all of Verizon's local exchange telephone operations
in the state of Alabama for approximately $1.022 billion cash. See the Company's
Current Report on Form 8-K dated July 1, 2002 and filed July 15, 2002 for
additional information concerning this transaction.
On August 31, 2002, an affiliate of the Company purchased from affiliates
of Verizon assets comprising all of Verizon's local exchange telephone
operations in the state of Missouri for approximately $1.179 billion cash. See
the Company's Current Report on Form 8-K dated August 31, 2002 and filed October
8, 2002 for additional information concerning this transaction.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of properties acquired
Financial statements of the Verizon properties acquired were previously
filed in the Company's Current Report on Form 8-K dated August 31, 2002
and filed October 8, 2002.
(b) Unaudited Pro Forma Consolidated Condensed Financial Information
1. Introduction.
2. Pro Forma Consolidated Condensed Statement of Income for the year
ended December 31, 2001.
3. Pro Forma Consolidated Condensed Statement of Income for the
nine months ended September 30, 2002.
4. Notes to Unaudited Pro Forma Consolidated Condensed Financial
Information.
(c) Exhibits
2.1 (a) Stock Purchase Agreement, dated March 19, 2002, between
CenturyTel, Inc. and Alltel Communications, Inc.
(incorporated by reference to Registrant's Current Report
on Form 8-K filed March 22, 2002).
2.1 (b) Amendment No. 1 to Stock Purchase Agreement, dated July 31,
2002, between CenturyTel, Inc. and Alltel Communications,
Inc. (incorporated by reference to Registrant's Current
Report on Form 8-K and Form 8-K/A filed August 13, 2002).
2.1 (c) Asset Purchase Agreement, dated as of October 22, 2001,
between GTE Midwest Incorporated (d/b/a Verizon Midwest)
and CenturyTel of Missouri, LLC (incorporated by reference
to Exhibit 2(a) of Registrant's Quarterly Report on Form
10-Q for the quarter ended September 30, 2001).
2.1 (d) Asset Purchase Agreement, dated as of October 22, 2001,
between Verizon South, Inc., Contel of the South, Inc.
(d/b/a Verizon Mid-States) and CenturyTel of Alabama, LLC
(incorporated by reference to Exhibit 2(b) of Registrant's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 2001).
CenturyTel, Inc.
Unaudited Pro Forma Consolidated Condensed Financial Information
Introduction
Background
On July 1, 2002, an affiliate of the Company acquired approximately
300,000 telephone access lines and related property and equipment comprising
Verizon's local exchange operations in 90 exchanges in predominantly rural
markets throughout Alabama for approximately $1.022 billion cash. On August 31,
2002, an affiliate of the Company acquired approximately 354,000 telephone
access lines and related property and equipment comprising Verizon's local
exchange operations in 98 exchanges in predominantly rural markets throughout
Missouri for approximately $1.179 billion cash. The acquired assets include
Verizon's assets used to provide digital subscriber line ("DSL") and other high
speed data services within the purchased exchanges in both states and an
aggregate of approximately 2,800 route miles of fiber optic cable within the
purchased exchanges in both states. In addition to the continued provision of
traditional local exchange telephone services, the Company intends to provide
long distance, Internet access (including DSL access service), and other
communications services in certain of the acquired service areas. For a
discussion of the Company's financing of these acquisitions, see "- Pro Forma
Information" below.
On August 1, 2002, the Company sold substantially all of its wireless
operations to an affiliate of Alltel for approximately $1.591 billion in cash.
In connection with this transaction, the Company divested its (i) interests in
its majority-owned and operated cellular systems, which at June 30, 2002 served
approximately 783,000 customers and had access to approximately 7.8 million pops
(as defined in the Company's most recent 10-K Report), (ii) minority cellular
equity interests representing approximately 1.8 million pops at June 30, 2002,
and (iii) licenses to provide personal communications services covering 1.3
million pops in Wisconsin and Iowa.
The results of operations of the properties acquired are included in the
Company's consolidated financial statements from and after their respective
dates of acquisition. The results of operations of the properties sold are
included in the Company's consolidated financial statements as discontinued
operations through August 1, 2002.
Pro Forma Information
The following unaudited pro forma consolidated condensed statements of
income for the year ended December 31, 2001 and the nine months ended September
30, 2002 are based on the historical consolidated results of operations of
CenturyTel, Inc. and its subsidiaries, and reflect the Company's wireless
operations as discontinued operations. No interest expense was allocated to
discontinued operations and corporate overhead costs previously absorbed by the
wireless operations are reflected as an expense within continuing operations.
Because the Company's September 30, 2002 balance sheet (included in the
Company's Quarterly Report on Form 10-Q for the period ended September 30, 2002)
reflects all of the transactions described herein, a pro forma balance sheet as
of September 30, 2002 is not presented.
In addition, the unaudited pro forma consolidated condensed statements of
income for the year ended December 31, 2001 and the nine months ended September
30, 2002 also reflect (i) the effects of acquiring the Verizon properties for an
aggregate of $2.201 billion cash, (ii) the effects of divesting the Company's
wireless operations for cash proceeds that approximated $1.591 billion pre-tax
(which are anticipated to be approximately $1.285 billion after-tax) and (iii)
steps the Company has taken through the date of this Current Report on Form 8-K
to finance the Verizon acquisitions, as described further below.
The pro forma financial information reflects that the Company financed the
aggregate purchase price for the Verizon assets of $2.201 billion with (i)
$1.285 billion of after-tax proceeds from the August 1, 2002 sale of its
wireless business and (ii) $916 million of net indebtedness incurred, consisting
of (a) all of the $494 million of net proceeds from the sale of senior notes due
2012 (which bear interest at 7.875%) in August 2002, (b) all of the $161 million
of net proceeds from the third quarter 2002 sale of convertible senior
debentures due 2032 (which bear interest at 4.75% and which may be converted
into shares of CenturyTel common stock at a conversion price of $40.455 per
share), and (c) $261 million of a total of $483.4 million of net proceeds from
the sale of equity units (which was reflected entirely as long-term debt upon
issuance) in May 2002 (the remaining portion of which was utilized to repay
outstanding indebtedness).
In accordance with Statement of Financial Accounting Standards No. 142,
"Accounting for Goodwill and Other Intangible Assets", effective January 1,
2002, goodwill is no longer subject to amortization; therefore, the accompanying
2001 pro forma statement of income does not reflect amortization of the
estimated goodwill associated with the acquisitions of the Verizon properties.
Pro forma adjustments, and the assumptions on which they are based, are
described in the accompanying notes to the unaudited pro forma consolidated
condensed financial information. For purposes of the pro forma information,
adjustments for estimated transaction costs have been excluded.
The pro forma financial information related to the Verizon acquisitions
has been prepared using the purchase method of accounting and is based on the
assumption that the purchases of all of the Verizon properties took place as of
January 1, 2001. In accordance with the purchase method of accounting, the
actual consolidated financial statements of the Company reflect the Verizon
acquisitions only from and after their respective dates of acquisition. The
Company has not finalized the allocation of the purchase price related to the
Verizon acquisitions. See note (C) for additional information.
The pro forma financial information related to the sale of the wireless
operations has been prepared based on the assumption that the sale of those
operations took place as of January 1, 2001. The actual consolidated financial
statements of the Company reflect the operations of the wireless properties (as
discontinued operations) until August 1, 2002.
The unaudited pro forma consolidated condensed financial data included
below does not give effect to any potential revenue enhancements, cost
reductions, or other operating efficiencies that could result from the Verizon
acquisitions, including but not limited to (i) offering long distance, Internet
access and other communications services to an increased number of customers in
the acquired markets or (ii) cost savings that may be associated with operating
and administering the acquired properties with the Company's existing personnel
and operating assets.
The pro forma information is presented for illustrative purposes only and
is not necessarily indicative of the operating results that would have occurred
if such transactions had been consummated on the dates and in accordance with
the assumptions described herein, nor is it necessarily indicative of future
operating results. The historical Verizon financial information reflects the
operating and management structure of Verizon and is not necessarily indicative
of the results of operations that may be obtained with respect to the acquired
properties under the Company's operating and management structure.
You are urged to read the financial information below, along with the
Company's publicly available historical consolidated financial statements and
accompanying notes and the special purpose financial statements of the Verizon
operations acquired appearing in the Company's previously-filed Current Reports
on Form 8-K.
CENTURYTEL, INC.
Pro Forma Consolidated Condensed Statement of Income
Year ended December 31, 2001
(Unaudited)
Pro forma Pro forma
CenturyTel Verizon adjustments consolidated
--------------------------------------------------------------------------------------------------------------
(Dollars in thousands, except per share amounts)
OPERATING REVENUES
Telephone $ 1,505,733 552,127 - 2,057,860
Other 173,771 - - 173,771
--------------------------------------------------------------------------------------------------------------
Total operating revenues 1,679,504 552,127 - 2,231,631
--------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Cost of sales and operating expenses
(exclusive of depreciation and amortization) 826,948 233,108 14,900 1,074,956
Corporate overhead costs allocable to
discontinued operations 20,213 - - 20,213
Depreciation and amortization 407,038 81,498 - 488,536
--------------------------------------------------------------------------------------------------------------
Total operating expenses 1,254,199 314,606 14,900 1,583,705
--------------------------------------------------------------------------------------------------------------
OPERATING INCOME 425,305 237,521 (14,900) 647,926
--------------------------------------------------------------------------------------------------------------
OTHER INCOME AND EXPENSE
Nonrecurring gains and losses, net 33,043 - - 33,043
Interest expense (225,523) (21,388) (42,732) (289,643)
Other income and expense 32 (2,482) - (2,450)
--------------------------------------------------------------------------------------------------------------
Total other income (expense) (192,448) (23,870) (42,732) (259,050)
--------------------------------------------------------------------------------------------------------------
Income from continuing operations
before income tax expense 232,857 213,651 (57,632) 388,876
Income tax expense 88,711 87,312 (23,053) 152,970
--------------------------------------------------------------------------------------------------------------
Income from continuing operations 144,146 126,339 (34,579) 235,906
Discontinued operations, net of tax 198,885 - (198,885) -
--------------------------------------------------------------------------------------------------------------
Net income $ 343,031 126,339 (233,464) 235,906
==============================================================================================================
BASIC EARNINGS PER SHARE
From continuing operations $ 1.02 1.67
From continuing operations, as adjusted
for goodwill amortization $ 1.35 2.00
From discontinued operations $ 1.41 -
From discontinued operations, as adjusted
for goodwill amortization $ 1.48 -
Basic earnings per share $ 2.43 (1) 1.67
Basic earnings per share, as adjusted
for goodwill amortization $ 2.83 2.00
DILUTED EARNINGS PER SHARE
From continuing operations $ 1.01 1.66
From continuing operations, as adjusted
for goodwill amortization $ 1.34 1.98
From discontinued operations $ 1.40 -
From discontinued operations, as adjusted
for goodwill amortization $ 1.47 -
Diluted earnings per share $ 2.41 (1) 1.66
Diluted earnings per share, as adjusted
for goodwill amortization $ 2.81 1.98
AVERAGE BASIC SHARES
OUTSTANDING 140,743 140,743
==============================================================================================================
AVERAGE DILUTED SHARES
OUTSTANDING 142,307 142,307
==============================================================================================================
(1) CenturyTel's basic earnings per share and diluted earnings per share
for the year ended December 31, 2001 were $1.72 and $1.70, after
eliminating the effect of nonrecurring net gains associated with our
wireless operations.
See accompanying notes to unaudited pro forma consolidated condensed financial
information.
CENTURYTEL, INC.
Pro Forma Consolidated Condensed Statement of Income
Nine months ended September 30, 2002
(Unaudited)
Pro forma Pro forma
CenturyTel (1) Verizon (2) adjustments consolidated
----------------------------------------------------------------------------------------------------------------
(Dollars in thousands, except per share amounts)
OPERATING REVENUES
Telephone $ 1,214,165 313,870 - 1,528,035
Other 171,952 - - 171,952
--------------------------------------------------------------------------------------------------------------
Total operating revenues 1,386,117 313,870 - 1,699,987
--------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Cost of sales and operating expenses
(exclusive of depreciation and amortization) 694,801 127,217 8,428 830,446
Corporate overhead costs allocable to
discontinued operations 11,275 - - 11,275
Depreciation and amortization 293,745 50,336 - 344,081
--------------------------------------------------------------------------------------------------------------
Total operating expenses 999,821 177,553 8,428 1,185,802
--------------------------------------------------------------------------------------------------------------
OPERATING INCOME 386,296 136,317 (8,428) 514,185
--------------------------------------------------------------------------------------------------------------
OTHER INCOME AND EXPENSE
Interest expense (164,826) (9,615) (27,321) (201,762)
Nonrecurring gains and losses 3,709 - - 3,709
Other income and expense (356) 19 - (337)
--------------------------------------------------------------------------------------------------------------
Total other income (expense) (161,473) (9,596) (27,321) (198,390)
--------------------------------------------------------------------------------------------------------------
Income from continuing operations
before income tax expense 224,823 126,721 (35,749) 315,795
Income tax expense 78,139 49,070 (14,299) 112,910
--------------------------------------------------------------------------------------------------------------
Income from continuing operations 146,684 77,651 (21,450) 202,885
Discontinued operations, net of tax 610,595 - (610,595) -
--------------------------------------------------------------------------------------------------------------
Net income $ 757,279 77,651 (632,045) 202,885
==============================================================================================================
BASIC EARNINGS PER SHARE
From continuing operations $ 1.04 1.43
From discontinued operations $ 4.32 -
--------------------------------------------------------------------------------------------------------------
Basic earnings per share $ 5.36 (3) 1.43
==============================================================================================================
DILUTED EARNINGS PER SHARE
From continuing operations $ 1.03 1.42
From discontinued operations $ 4.28 -
--------------------------------------------------------------------------------------------------------------
Diluted earnings per share $ 5.31 (3) 1.42
==============================================================================================================
AVERAGE BASIC SHARES
OUTSTANDING 141,324 141,324
==============================================================================================================
AVERAGE DILUTED SHARES
OUTSTANDING 142,710 142,710
===============================================================================================================
(1) Includes the results of operations of the acquired Verizon Alabama
properties since July 1, 2002 and the acquired Verizon Missouri
properties since August 31, 2002.
(2) Includes results of the Verizon Alabama properties for the six months
ended June 30, 2002 and results of the Verizon Missouri properties for
the eight months ended August 31, 2002. The results of the Verizon
properties after these dates are reflected in CenturyTel's operating
results presented above.
(3) CenturyTel's basic earnings per share and diluted earnings per share
for the nine months ended September 30, 2002 were $1.60 and $1.58,
after eliminating the effect of nonrecurring net gains associated with
our wireless operations. See Note 1 for additional information.
See accompanying notes to unaudited pro forma consolidated condensed financial
information.
Notes to Unaudited Pro Forma Consolidated Condensed Financial Information
(A) Purchase of Verizon assets.
Costs of acquisitions. The total cash purchase price of the Verizon assets
was $2.201 billion.
Operations. As explained further above, the pro forma adjustments do not
consider the effect of possible revenue enhancements, cost reductions or
other operating efficiencies that may occur in connection with combining
the operations of the acquired properties with the Company's operations.
(B) Sale of Wireless Operations.
Presentation of wireless operations. The wireless operations have been
reflected as discontinued operations on the Company's statements of
income.
Proceeds from disposition. The after-tax proceeds from the sale of the
wireless operations has been assumed to be $1.285 billion.
(C) Allocations and Assumptions
The pro forma adjustments applicable to the acquisitions of the Verizon
properties, as set forth below, reflect preliminary allocations of the
aggregate purchase price to the acquired properties. Such preliminary
allocations include the assumptions that the fair value of property, plant
and equipment will approximate the carrying value on the dates of
acquisition and that the estimated useful lives of property, plant and
equipment used by the Company are comparable to those used by Verizon. The
preliminary estimates of the fair value of the noncurrent assets and
liabilities are subject to change upon completion of our valuation
analysis.
The Company anticipates assigning a portion of the purchase price to
identifiable intangible assets (including customer base) in accordance
with Statement of Financial Accounting Standards No. 141 and amortizing
such asset over its useful life. However, the Company has not yet
completed its valuation process. Thus, an estimate to allocate a portion
of the purchase price to identifiable intangibles, the amortization of
which will reduce net income, has not been included in the accompanying
pro forma information. The Company believes the impact of the amortization
of such identifiable intangible assets will not be material to its results
of operations.
To the extent that final allocations of the purchase price cause our
depreciation and amortization expense to differ from that presented in the
accompanying pro forma information, annual earnings per share will be
effected by $.01 per share for every $2.4 million difference in annual
depreciation and amortization expense. Thus, for example, if the Company
ultimately allocates an additional $95.7 million of the aggregate purchase
price to property, plant and equipment (representing a 15% increase in the
amount that was preliminarily allocated to such assets), the annual
depreciation and amortization expense would increase by approximately $9.6
million (assuming a composite depreciation rate of 10%) and the annual
earnings per share would decrease by approximately $.04 per share from the
amounts presented in the pro forma information.
As explained further above under "Introduction - Pro Forma Information,"
the pro forma financial information has been prepared assuming that the
aggregate purchase price of $2.201 billion was financed on a long-term
basis with (i) $1.285 billion of after-tax proceeds from the August 1,
2002 sale of its wireless business and (ii) $916 million of net
indebtedness incurred, consisting of (a) all of the $494 million of net
proceeds from the sale of senior notes in August 2002, (b) all of the $161
million of net proceeds from the sale of convertible senior debentures in
third quarter 2002, and (c) $261 million of a total of $483.4 million of
net proceeds from the sale of equity units in May 2002 (the remaining
portion of which was utilized to repay outstanding indebtedness).
(D) December 31, 2001 Income Statement Pro Forma Adjustments.
Set forth below are the pro forma adjustments applicable to the
acquisitions of the Verizon assets and to the divestiture of the wireless
operations with respect to the unaudited pro forma consolidated condensed
statement of income for the year ended December 31, 2001. These
adjustments have been prepared assuming a 7.0% weighted average interest
rate on the $916 million net indebtedness incurred ($2.201 billion cash
purchase price of the Verizon assets less after-tax proceeds from the
sale of the wireless operations of $1.285 billion). This assumed 7.0%
rate is based on the actual interest rates accruing on the debt
securities issued by the Company in the second and third quarter of 2002,
adjusted for the rates on borrowings under revolving credit facilities
utilized for interim financing of the Verizon acquisitions.
December 31, 2001 Income Statement Pro Forma Adjustments
Cost of Sales Discontinued
and Operating Interest Income operations,
Expenses expense tax expense net of tax
------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
Interest on 12 months of net borrowings of
$916 million at an assumed rate of 7.0% (1) $ 64,120
Eliminate Verizon interest expense on parent
debt and equity funding (21,388)
Eliminate pension credit related to excess
pension assets which will remain with Verizon (2) 14,900
Tax benefit relating to pro forma adjustments
(assuming a 40% tax rate) (23,053)
Eliminate discontinued operations
of wireless business (198,885)
-------------------------------------------------------------------------------------------------------------------
$ 14,900 42,732 (23,053) (198,885)
===================================================================================================================
(1) See footnote (C). Use of an assumed rate .125% higher or lower than 7.0%
on net borrowings would have changed net income by approximately $687,000.
(2) Reflects the elimination of Verizon's excess pension assets. Verizon has
retained these assets, together with all income generated by such assets.
Verizon's historical financial statements reflect such assets and income.
(E) September 30, 2002 Income Statement Pro Forma Adjustments.
Set forth below are the pro forma adjustments applicable to the
acquisitions of the Verizon assets and to the divestiture of the wireless
operations with respect to the unaudited pro forma consolidated condensed
statement of income for the nine months ended September 30, 2002. These
adjustments have been prepared assuming a 7.0% weighted average interest
rate on the $916 million net indebtedness incurred ($2.201 billion cash
purchase price of the Verizon assets less after-tax proceeds from the
sale of the wireless operations of $1.285 billion). For further
information on this assumed 7.0% rate, see footnote (D).
September 30, 2002 Income Statement Pro Forma Adjustments
Cost of Sales Discontinued
and Operating Interest Income operations,
Expenses expense tax expense net of tax
-------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
Interest on nine months of net borrowings of $916
million at an assumed rate of 7.0% (1) $ 48,090
Interest expense incurred for the nine months
ended September 30, 2002 related
to 2002 debt issuances which is included
in the Company's historical results (2) (11,154)
Eliminate Verizon interest expense on parent
debt and equity funding (9,615)
Eliminate pension credit related to excess
pension assets which will remain with Verizon (3) 8,428
Tax benefit relating to pro forma adjustments
(assuming a 40% tax rate) (14,299)
Eliminate discontinued operations
of wireless business (610,595)
-------------------------------------------------------------------------------------------------------------------
$ 8,428 27,321 (14,299) (610,595)
===================================================================================================================
(1) See footnote (C). Use of an assumed rate .125% higher or lower than 7.0% on
net borrowings would have changed net income by approximately $515,000.
(2) Because the $48.1 million interest expense adjustment in the chart above
reflects nine months of assumed interest incurred on debt hypothetically
issued on January 1, 2001, this offsetting entry of $11.2 million is
necessary to avoid double-counting the interest actually paid (and
reflected in the Company's historical financial information) with respect
to debt issued by the Company during the second and third quarter of 2002.
The $11.2 million adjustment amount represents the actual net interest
expense incurred for the nine months ended September 30, 2002 related to
debt issuances in the second and third quarters of 2002, net of a reduction
in interest expense as a result of repaying part of the Company's revolving
credit facility indebtedness using proceeds from such issuances.
(3) Reflects the elimination of Verizon's excess pension assets. Verizon has
retained these assets, together with all income generated by such assets.
Verizon's historical financial statements reflect such assets and income.
(F) Convertible Debentures
In connection with the long-term financing of the Verizon acquisitions,
the Company issued $165 million of 4.75% convertible senior debentures in
the third quarter of 2002. The debentures are convertible into the
Company's common stock at a conversion price of $40.455 per share upon
the occurrence of certain events. As of September 30, 2002, shares
issuable upon conversion of the debentures were not included in the
Company's historical average diluted shares outstanding because none of
these conversion events had occurred. If the debentures become
convertible in the future, average diluted shares outstanding would
increase by 4.1 million shares (subject to adjustment under certain
circumstances). If these 4.1 million shares issuable upon conversion of
the debentures had been included in the pro forma diluted earnings per
share calculations, pro forma diluted earnings per share for the year
ended December 31, 2001 (as adjusted for goodwill amortization) and the
nine months ended September 30, 2002 would have been $1.96 and $1.41,
respectively.
(G) Reclassifications.
Certain reclassifications have been made to the historical financial
information to conform to the presentation of the condensed pro forma
information.
(H) Verizon Historical Results.
All amounts reflected above under the headings "Verizon" are based on
special purpose financial statements of the Verizon acquired operations.
In connection with the preparation of these special purpose financial
statements, Verizon made numerous assumptions and allocations where
specific data was not available pertaining to the acquired assets.
Because of the significant amount of allocations and estimates used to
prepare these special purpose financial statements and because the
Company will operate these assets under a different operating and
management structure, they may not reflect the financial position and
results of operations of the acquired properties after such properties
are acquired by the Company.
FORWARD-LOOKING STATEMENTS
In addition to historical information, this Current Report on Form 8-K
includes certain forward-looking statements and estimates 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 the Company. 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 integrate
new businesses into its operations; 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; and
the effects of more general factors such as changes in overall market or
economic conditions, in prevailing interest rates or in legislation, regulation
or public policy. These and other uncertainties related to the business are
described in greater detail in Item 1 to the Company's Annual Report on Form
10-K for the year ended December 31, 2001. You are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
hereof. The Company undertakes no obligation to update any of its
forward-looking statements for any reason.
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.
Dated: January 13, 2003 By: /s/ Neil A. Sweasy
----------------------
Neil A. Sweasy
Vice President and Controller