United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission file number 1-7784
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
CENTURYTEL, INC.
DOLLARS AND SENSE PLAN
(Formerly Century Telephone Enterprises, Inc.
Dollars and Sense Plan)
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
CENTURYTEL, INC.
100 CENTURYTEL DRIVE
MONROE, LA 71203
Independent Auditors' Report
The Board of Directors
CenturyTel, Inc.:
We have audited the accompanying statements of net assets available for benefits
of CenturyTel, Inc. Dollars and Sense Plan as of December 31, 2000 and 1999, and
the related statement of changes in net assets available for benefits for the
year ended December 31, 2000. These financial statements are the responsibility
of the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of CenturyTel, Inc.
Dollars and Sense Plan as of December 31, 2000 and 1999, and the changes in net
assets available for benefits for the year ended December 31, 2000, in
conformity with accounting principles generally accepted in the United States of
America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
(held at end of year) and reportable transactions are presented for the purpose
of additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. These supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
KPMG LLP
/S/ KPMG LLP
Shreveport, Louisiana
June 14, 2001
CENTURYTEL, INC.
DOLLARS AND SENSE PLAN
Statements of Net Assets Available for Benefits
December 31, 2000 and 1999
2000 1999
--------------------------------------------------------------------------------
PLAN ASSETS
Investments, at fair value $ 201,064,486 226,743,026
Cash 147,882 -
Contributions receivable - employer 572,288 350,814
Contributions receivable - participants 463,810 -
Receivables, other - 4,103
-------------------------------------------------------------------------------
TOTAL ASSETS 202,248,466 227,097,943
-------------------------------------------------------------------------------
PLAN LIABILITIES
Cash overdraft - 54,632
-------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 202,248,466 227,043,311
===============================================================================
See accompanying notes to financial statements.
CENTURYTEL, INC.
DOLLARS AND SENSE PLAN
Statement of Changes in Net Assets Available for Benefits
For the year ended December 31, 2000
Additions to net assets:
Investment income (loss)
Net depreciation in fair value of investments:
Mutual funds $ (12,798,991)
Common stocks (26,366,294)
Dividend and other income 7,865,449
Interest income 660,824
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Net investment income (loss) (30,639,012)
---------------------------------------------------------------------------
Contributions:
Participants 12,806,265
Company 4,954,158
Transfer from merged plan 6,349,232
---------------------------------------------------------------------------
Total contributions 23,709,655
---------------------------------------------------------------------------
Total investment income (loss) and contributions (6,929,357)
---------------------------------------------------------------------------
Deductions from net assets:
Participant withdrawals 18,190,999
Other, net 74,489
---------------------------------------------------------------------------
Total deductions 18,265,488
---------------------------------------------------------------------------
Net decrease (25,194,845)
---------------------------------------------------------------------------
Net assets available for benefits:
Beginning of year 227,043,311
---------------------------------------------------------------------------
End of year $ 202,248,466
===========================================================================
See accompanying notes to financial statements.
CENTURYTEL, INC.
DOLLARS AND SENSE PLAN
Notes to Financial Statements
December 31, 2000
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PROVISIONS OF THE PLAN
Basis of Presentation
The CenturyTel, Inc. Dollars and Sense Plan (the Plan) (formerly the
Century Telephone Enterprises, Inc. Dollars and Sense Plan) was
established on May 1, 1986. The accompanying financial statements of the
Plan have been prepared on the accrual basis of accounting and present the
net assets available for benefits and changes in net assets available for
benefits. The Plan has made estimates in preparing the accompanying
financial statements in accordance with accounting principles generally
accepted in the United States of America. Actual results could differ from
those estimates.
The assets of the Plan are invested by the Trustee in various investment
programs (funds) which are described in Note 2.
The following description of the Plan provides only general information.
Participants should refer to the Plan Document for a more complete
description of the Plan's provisions.
Participation
Participation in the Plan is available to each employee of CenturyTel,
Inc. and its participating subsidiaries (the Company), other than those
who are classified as temporary employees or employees covered under a
collective bargaining agreement.
In order to participate in the Plan, an employee must execute a Salary
Deferral Agreement with the Company. In the Salary Deferral Agreement, an
employee agrees to a deferral of between one percent and sixteen percent
of compensation. The percentage of compensation a participant elects to
defer applies to the participant's base pay plus certain incentive
compensation received, including certain cash bonuses, commissions, and
lump sums granted in lieu of pay increases. The amount of compensation
deferred by each participant is credited to an account (Elective Deferral
Account) maintained for each participant by the Trustee. The Elective
Deferral Account is self-directed.
As of the end of each payroll period, the Company contributes to an
account (Employer Match Account) for each participant a contribution equal
to 55% of each such participant's contribution during such payroll period;
however, this matching contribution applies only to the first 6% of such
participant's compensation contributed to the Plan. The Board of Directors
of the Company may, at its discretion, elect at the end of each year to
contribute an additional amount to participants' accounts (Additional
Match Account). Company contributions may be made in cash or CenturyTel,
Inc. Common Stock (CenturyTel Common Stock). If made in cash, such cash is
applied by the Trustee to the purchase of CenturyTel Common Stock.
During 2000, the Company contributed $4,954,158 to the Plan, of which
$4,544,158 related to contributions made to the Employer Match Account and
$400,000 related to contributions made to the Additional Match Account.
An employee is permitted to transfer to the Plan as a contribution his
interest in another plan qualified under Section 401(k) of the Internal
Revenue Code, as amended (the Code). Such contribution must qualify as a
"rollover" contribution described in Section 402(c) or 408 (d)(3) of the
Code. Such a rollover will be credited to a rollover account on behalf of
the participant (the Rollover/Transfer Account).
The interest of a participant in his Elective Deferral Account, his
Rollover/Transfer Account, his Employer Match Account and his Additional
Match Account is fully vested and non-forfeitable at all times.
Reports to Participants
All participants are furnished with quarterly statements which set forth
the status of their accounts in the Plan.
Distributions
If the employment of a participant with the employer ceases because of
death, retirement, disability, termination of employment or for any other
reason, the participant's entire interest in the Plan may be distributed
to him or to his beneficiary in a lump sum or in periodic installments. If
the participant dies without designating a beneficiary, his beneficiary
shall be, in the order listed, (i) his spouse, (ii) his children, or (iii)
his estate.
Withdrawals
A participant who is an employee and over age 59 1/2 may make withdrawals
from his vested accounts prior to meeting normal distribution
requirements. In addition, a hardship withdrawal may be made from an
Elective Deferral Account or a Rollover/Transfer Account only as a result
of financial hardship related to unreimbursable educational expenses,
medical expenses which are not reimbursable by insurance, the need to pay
for the funeral expenses of a family member, purchase of a primary
residence, or the prevention of eviction or foreclosure from the
Participant's principal residence. The determination of the existence of a
financial hardship and the amount required to be distributed to meet the
need created by the hardship shall be made uniformly and without
discrimination at the sole discretion of the Plan Administrator.
Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
change, suspend or terminate the Plan subject to the provisions of the
Employee Retirement Income Security Act of 1974.
Loans to Participants
The Plan has a provision whereby a participant can borrow from his
Elective Deferral Account or Rollover/Transfer Account. The maximum loan
is 50% of the account balance, up to $50,000. The loans are repaid through
payroll deductions and the interest rate is the prime rate published in
the Wall Street Journal on the last day of the previous quarter plus 1%.
The loan repayment period may not exceed five years except for loans for
the purchase of the Participant's principal residence which may be for any
period not to exceed fifteen years.
Trustee
The Trustee of the Plan, as of December 31, 2000, was T. Rowe Price Trust
Company (T. Rowe Price). Prior to September 1, 2000, the Trustee of the
Plan was Merrill Lynch Trust Company, FSB (Merrill Lynch). The Board of
Directors of the Company may remove the Trustee and appoint a successor
trustee. The Company and the Trustee have entered into a Trust Agreement
which provides for the establishment of a Trust for the purpose of holding
and investing the contributions to the Trust pursuant to the provisions of
the Plan.
Administration
The Company has appointed a committee to administer the Plan. The
individuals who administer the Plan serve at the discretion of the Board
of Directors of the Company and may be removed by the Board of Directors
at any time. The administrative costs of the Plan are paid by the Company.
Market Value Determination
Investments in CenturyTel Common Stock are valued at the closing market
price on December 31, 2000 and 1999, respectively. Other investments in
the funds, which consist of shares of mutual funds, are valued by the
Trustee based on the market value at year-end of the underlying assets of
each fund. Purchases and sales of securities are recorded on a trade date
basis. Loans to participants are valued at principal amount outstanding
which approximates market value.
New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS No.133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS
No.133"). SFAS No. 133 requires that an entity recognize all derivatives
and measure those instruments at fair value.
SFAS No. 133 is effective for fiscal years beginning after June 15, 2000.
Pursuant to SFAS No. 137, the Plan is required to adopt SFAS No. 133
effective January 1, 2001. Management has determined that the impact of
SFAS No. 133 on the Plan Financial statements would be immaterial.
(2) DESCRIPTION OF THE FUNDS
The following is a description of each of the funds available to Plan
participants as of December 31, 2000:
(a) CenturyTel Common Stock Fund - consists of shares of CenturyTel
Common Stock ($92,607,866 and $112,022,408 at December 31, 2000 and
1999, respectively).
(b) T. Rowe Price Equity Index 500 Fund - consists primarily of
investments in the same stocks and in substantially the same
percentages as the S & P 500 Index ($35,793,036 at December 31,
2000).
(c) BGI Asset Allocation Fund - consists primarily of investments in
common stocks, U. S. Treasury bonds and money market instruments
($20,590,494 and $22,073,760 at December 31, 2000 and 1999,
respectively).
(d) Loan Fund - represents loans to participants from the participants'
investment accounts ($7,481,252 and $7,252,283 at December 31, 2000
and 1999, respectively).
(e) BGI LifePath Income Fund - consists primarily of investments in U.S.
and foreign equity and debt securities and money market instruments
and is managed for investors planning to retire (or begin to withdraw
substantial portions of their investment) around the year 2000
($544,967 and $419,536 at December 31, 2000 and 1999, respectively).
(f) BGI LifePath 2010 Fund - consists primarily of investments in U.S.
and foreign equity and debt securities and money market instruments
and is managed for investors planning to retire (or begin to withdraw
substantial portions of their investment) around the year 2010
($2,440,306 and $2,332,692 at December 31, 2000 and 1999,
respectively).
(g) BGI LifePath 2020 Fund - consists primarily of investments in U.S.
and foreign equity and debt securities and money market instruments
and is managed for investors planning to retire (or begin to withdraw
substantial portions of their investment) around the year 2020
($1,932,294 and $1,729,839 at December 31, 2000 and 1999,
respectively).
(h) BGI LifePath 2030 Fund - consists primarily of investments in U. S.
and foreign equity and debt securities and money market instruments
and is managed for investors planning to retire (or begin to withdraw
substantial portions of their investment) around the year 2030
($1,515,156 and $1,637,234 at December 31, 2000 and 1999,
respectively).
(i) BGI LifePath 2040 Fund - consists primarily of investments in U. S.
and foreign equity and debt securities and money market instruments
and is managed for investors planning to retire (or begin to withdraw
substantial portions of their investment) around the year 2040
($3,496,717 and $3,799,135 at December 31, 2000 and 1999,
respectively).
(j) Janus Fund - consists primarily of investments in U. S. and foreign
equity securities ($15,818,645 at December 31, 2000).
(k) T. Rowe Price Summit Cash Reserves Fund - consists primarily of
investments in various money market instruments ($13,884,584 at
December 31, 2000).
(l) T. Rowe Price Equity Income Fund - consists primarily of investments
in U. S. and foreign common stocks ($117,267 at December 31, 2000).
(m) Janus Overseas Fund - consists primarily of investments in foreign
equity securities ($301,872 at December 31, 2000).
(n) T.Rowe Price Mid-Cap Growth Fund - consists primarily of investments
in common stocks of companies whose market capitalization falls
within the range of companies in the S&P MidCap 400 Index ($756,559
at December 31, 2000).
(o) Morgan Stanley Dean Witter Small Company Growth Portfolio Fund -
consists primarily of investments in equity securities of small
companies ($471,278) at December 31, 2000).
(p) PIMCO Total Return Fund - consists primarily of investments in debt
securities ($3,312,193 at December 31, 2000).
Investments in CenturyTel Common Stock Fund, BGI Asset Allocation Fund,
Janus Fund, T. Rowe Price Summit Cash Reserves Fund, and T. Rowe Price
Equity Index 500 Fund were each greater than 5% of net assets available
for benefits at December 31, 2000.
A participant may instruct that his contribution be allocated among the
various funds. A participant may change his investment allocation
instructions and his contribution percentage at any time.
All amounts allocated to a participant's Employer Match Account are
invested in the CenturyTel Common Stock Fund. Participants who have not
attained age 55 have no power to transfer amounts in the Employer Match
Account to an investment fund other than the CenturyTel Common Stock Fund.
Participants who have attained age 55 may redirect the investment of the
balance in their Employer Match Account.
(3) INCOME TAXES
The Plan and related trust were designed to meet the necessary
requirements of Internal Revenue Code Section 401(a) and, accordingly, the
trust underlying the Plan is exempt from income taxation pursuant to
Internal Revenue Code Section 501(a). A favorable determination letter was
received in July 1996 related to the Plan. The Plan has been amended since
receiving the determination letter. However, the Plan administrator
believes that the Plan is designed and is currently being operated in
compliance with the applicable provisions of the Internal Revenue Code.
(4) RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by
Barclays Global Investors Funds, Inc. (Barclays), Janus Capital
Corporation (Janus), Morgan Stanley Dean Witter Investment Management,
Inc. (Morgan Stanley), Pacific Investment Management Company (PIMCO)
or T. Rowe Price. T. Rowe Price is the Trustee as defined by the Plan.
Merrill Lynch was Trustee of the Plan until September 1, 2000.
Therefore, Barclays, Morgan Stanley, PIMCO, Janus, T. Rowe Price, and
Merrill Lynch qualify as parties-in-interest. Fees paid by the Company
to T. Rowe Price and Merrill Lynch for trustee, record keeping and
other services amounted to $138,070 and $174,086, respectively, for
the year ended December 31, 2000.
(5) TRANSFER FROM MERGED PLAN
On September 1, 2000, the assets of the Century Telephone Enterprises,
Inc. Frozen Savings Plan (Frozen Savings Plan) were transferred into the
Plan. The Frozen Savings Plan contains the net assets of various plans
that were merged into the Frozen Savings Plan after the Company made
certain corporate acquisitions. Activity in the Frozen Savings Plan
subsequent to September 1, 2000 is included in the Statements of Net
Assets Available for Benefits. The total Frozen Savings Plan account
balances transferred to the Plan was $6,349,232.
(6) CONCENTRATION OF INVESTMENTS
As of December 31, 2000 and 1999, 45.8% and 49.3%, respectively, of the
net assets available for benefits were invested in CenturyTel Common
Stock. Substantially all of the remaining net assets available for
benefits were invested in mutual funds managed by T. Rowe Price, Barclays,
Morgan Stanley, PIMCO, or Janus.
(7) COMPANY/PARTICIPANT DIRECTED FUNDS
The CenturyTel Common Stock Fund includes contributions from the Company
and participants. Participant contributions are directed solely by the
participants. Contributions from the Company are directed by the Company,
except for contributions made on behalf of participants who are age 55 or
older. Such contributions can be redirected by these participants to the
funds of their choice. All other funds are participant directed.
The following tables set forth information related to the CenturyTel
Common Stock Fund's assets available for benefits as of December 31, 2000
and 1999 and the changes in such assets for the year ended December 31,
2000.
December 31, 2000 1999
-------------------------------------------------------------------------------
PLAN ASSETS
Investments $ 92,607,866 112,022,408
Contributions receivable - employer 572,288 350,814
Contributions receivable - participant 154,991 -
-------------------------------------------------------------------------------
ASSETS AVAILABLE FOR BENEFITS $ 93,335,145 112,373,222
===============================================================================
For the year ended
December 31, 2000
-------------------------------------------------------------------------------
Additions to assets:
Investment income (loss)
Net depreciation in fair value of investments $ (26,366,294)
Other income 295,055
Interest income 273,574
------------------------------------------------------------------------------
Net investment income (loss) (25,797,665)
------------------------------------------------------------------------------
Contributions
Participants 4,435,230
Company 4,954,158
-------------------------------------------------------------------------------
Total contributions 9,389,388
-------------------------------------------------------------------------------
Total investment income (loss) and contributions (16,408,277)
------------------------------------------------------------------------------
Deductions from assets:
Participant withdrawals 4,777,517
Other, net 22,690
------------------------------------------------------------------------------
Total deductions 4,800,207
------------------------------------------------------------------------------
Net decrease prior to interfund transfers (21,208,484)
Interfund transfers 2,170,407
------------------------------------------------------------------------------
Net decrease (19,038,077)
Net assets available for benefits:
Beginning of year 112,373,222
------------------------------------------------------------------------------
End of year $ 93,335,145
==============================================================================
CENTURYTEL, INC.
DOLLARS AND SENSE PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2000
Identity of issuer, borrower, Description Current Value Per
lessor or similar party of Investment Value Share
---------------------------------------------------------------------------------------------------------------
Investment in CenturyTel Common Stock 2,590,430 shares $ 92,607,866 (Notes 1 & 2) 35.75
Loan Fund (interest rates ranged from
8.75% to 12.50%) - 7,481,252 -
Investment in Mutual Funds for
Qualified Employee Benefit Plans:
Managed by Barclays:
Asset Allocation Fund 1,882,129 shares 20,590,494 (Note 1) 10.94
LifePath Income Fund 50,789 shares 544,967 10.73
LifePath 2010 Fund 193,521 shares 2,440,306 12.61
LifePath 2020 Fund 128,477 shares 1,932,294 15.04
LifePath 2030 Fund 91,828 shares 1,515,156 16.50
LifePath 2040 Fund 196,445 shares 3,496,717 17.80
Managed by Janus:
Janus Overseas Fund 11,374 shares 301,872 26.54
Janus Fund 475,177 shares 15,818,645 (Note 1) 33.29
Managed by Morgan Stanley:
Small Co. Growth Portfolio Fund 44,127 shares 471,278 10.68
Managed by PIMCO:
PIMCO Total Return Fund 318,787 shares 3,312,193 10.39
Managed by T. Rowe Price:
Equity Income Fund 4,753 shares 117,267 24.67
Equity Index 500 Fund 1,008,255 shares 35,793,036 (Note 1) 35.50
Mid-Cap Growth Fund 19,014 shares 756,559 39.79
Summit Cash Reserves Fund 13,884,584 shares 13,884,584 (Note 1) 1.00
---------------------------------------------------------------------------------------------------------------
$ 201,064,486
===============================================================================================================
Barclays, Janus, Morgan Stanley, PIMCO and T. Rowe Price are considered
parties-in-interest. Additionally, CenturyTel, Inc., as sponsor of the Plan,
is considered a party-in-interest.
Notes: (1) These investments are greater than 5% of assets available for
benefits.
(2) Information on cost of investments is excluded as all investments
except CenturyTel Common Stock Fund are participant directed. The
CenturyTel Common Stock Fund is considered to be nonparticipant
directed. The cost of investment in CenturyTel Common Stock is
$60,953,125.
CENTURYTEL, INC.
DOLLARS AND SENSE PLAN
Schedule 4j- Schedule of Reportable Transactions
For the Year Ended December 31, 2000
Current Value of
Redemption Asset at Date of
Purchase or Selling Lease Expense Cost of Acquisition or Net
Description of Transaction Price Price Rental Incurred Asset Disposition Gain (Loss)
-----------------------------------------------------------------------------------------------------------------------------
(Note 1)
Category (3) - A series of
transactions in excess
of 5% of beginning of
year Plan assets
available for benefits
Transactions in CenturyTel
Common Stock (465
purchases, 624 sales) $ 16,429,564 6,753,783 - - 4,735,404 (Note 2) 2,018,379
T. Rowe Price and Merrill Lynch are considered a party-in-interest.
Additionally, CenturyTel, Inc., as sponsor of the Plan, is considered a
party-in-interest.
Notes: (1) The purchase price denotes cost and current value of the security on
the transaction date.
(2) Current value is substantially the same as purchase price or selling
price of the security on the transaction date .
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Retirement Committee has duly caused this annual report to be signed on its
behalf by the undersigned thereunto duly authorized.
CenturyTel, Inc.
Dollars and Sense Plan
July 12, 2001 /s/ R. Stewart Ewing, Jr.
----------------------------
R. Stewart Ewing, Jr.
Retirement Committee Member
and Executive Officer of
Issuer of Plan Securities
CENTURYTEL, INC.
DOLLARS AND SENSE PLAN
Index to Exhibit
Exhibit
Number
------------------------------------------------------------------------------
23.1 Independent Auditors' Consent
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
CenturyTel, Inc.:
We consent to incorporation by reference in the registration statement (No.
333-67815) on Form S-8 of CenturyTel, Inc. of our report dated June 14, 2001,
relating to the statements of net assets available for benefits of CenturyTel,
Inc. Dollars and Sense Plan as of December 31, 2000 and 1999, and the related
statement of changes in net assets available for benefits for the year ended
December 31, 2000, and related financial statement schedules as of December 31,
2000, which report appears in the December 31, 2000 annual report on Form 11-K
of CenturyTel, Inc. Dollars and Sense Plan.
KPMG LLP
/s/ KPMG LLP
---------------------
Shreveport, Louisiana
July 10, 2001