MONROE, La., May 1 /PRNewswire-FirstCall/ -- CenturyTel, Inc. (NYSE: CTL) announces operating results for first quarter 2008.

-- Operating revenues increased 7.9% to $648.6 million from $600.9 million in first quarter 2007.

-- Operating cash flow (as defined in the attached financial schedules) grew 7.9% to $319.2 million from $295.9 million in first quarter 2007.

-- Net income, excluding nonrecurring items, rose 10.7% to $86.2 million from $77.9 million in first quarter 2007. Reported under GAAP, net income was $88.8 million in first quarter 2008.

-- Diluted earnings per share, excluding nonrecurring items, increased 19.1% to $.81 in first quarter 2008 from $.68 in first quarter 2007. Reported under GAAP, diluted earnings per share was $.83 in first quarter 2008.

-- Free cash flow (as defined in the attached financial schedules), excluding nonrecurring items, was $167.1 million in first quarter 2008 compared to $156.8 million in first quarter 2007.

-- High-speed Internet customers increased by more than 30,000 in first quarter 2008, resulting in more than 586,000 high-speed Internet customers in service at the end of the quarter, or nearly 28% of total access lines.

    First Quarter Highlights
    (Excluding nonrecurring items    Quarter Ended Quarter Ended    % Change
     reflected in the attached          3/31/08       3/31/07
     financial schedules)
    (In thousands, except per share
     amounts and subscriber data)

    Operating Revenues                  $648,614      $600,855         7.9%
    Operating Cash Flow (1)             $319,177      $295,867         7.9%
    Net Income                           $86,171       $77,870        10.7%
    Diluted Earnings Per Share              $.81          $.68        19.1%
    Average Diluted Shares Outstanding   106,997       116,308        (8.0)%
    Capital Expenditures                 $54,739       $48,880        12.0%

    Access Lines (2)                   2,108,000     2,070,000         1.8%
    High-Speed Internet Customers (2)    586,000       413,000        41.9%

    (1)  Operating Cash Flow is a non-GAAP financial measure. A reconciliation
         of this item to comparable GAAP measures is included in the attached
         financial schedules.
    (2)  Quarter ended 3/31/2008 access lines and high-speed Internet
         customers include the effects of our April 2007 Madison River
         acquisition. Excluding the effects of this acquisition, access lines
         decreased 5.8% and high-speed Internet customers increased 27.8%.


"CenturyTel's first quarter net income and earnings per share grew nearly 11% and more than 19% year-over-year, respectively," Glen F. Post, III, chairman and chief executive officer, said. "We are pleased with the integration and performance of the Madison River properties acquired last year, our broadband customer growth, and our ability to continue to repurchase CenturyTel stock, all of which contributed to the first quarter earnings per share growth."

Operating revenues increased 7.9% to $648.6 million in first quarter 2008 from $600.9 million in first quarter 2007. Revenue increases during the quarter of approximately $71 million resulted primarily from nearly $48 million in revenue contribution from the Madison River properties acquired in second quarter 2007, along with growth in high-speed Internet customers and long distance revenues. These increases were partially offset by revenue declines of approximately $23 million, primarily attributable to access line declines and lower access revenues.

Operating expenses for first quarter 2008 were $465.1 million compared to $432.8 million in first quarter 2007. This increase was principally due to expenses associated with the Madison River properties, growth in high-speed Internet customers and increased marketing expenses, which were partially offset by lower depreciation expense associated with fully depreciated assets and lower bad debt expense and personnel costs.

Operating cash flow increased 7.9% to $319.2 million in first quarter 2008 from $295.9 million in first quarter 2007. CenturyTel achieved an operating cash flow margin of 49.2% during the quarter, the same as in first quarter 2007.

"CenturyTel generated strong free cash flow of more than $167 million during the quarter," said Post. "We also returned more than $100 million to shareholders through the repurchase of 2.5 million shares for approximately $94 million, along with more than $7 million in cash dividends. Our solid balance sheet and strong cash flows afford us the flexibility to continue to invest in our networks, acquire valuable 700 MHz spectrum and remain committed to completing our current $750 million share repurchase program."

Net income, excluding nonrecurring items, grew 10.7% to $86.2 million in first quarter 2008 from $77.9 million in first quarter 2007. Diluted earnings per share, excluding nonrecurring items, increased 19.1% to $.81 in first quarter 2008 from $.68 in first quarter 2007. First quarter 2008 diluted earnings per share was favorably impacted by the increase in net income and 8.0% fewer average diluted shares outstanding due to share repurchases during the twelve months ended March 31, 2008.

Under generally accepted accounting principles (GAAP), the Company reported net income of $88.8 million and diluted earnings per share of $.83, in first quarter 2008 compared to $77.9 million and $.68, respectively, in first quarter 2007. Net income and diluted earnings per share in first quarter 2008 include a $2.6 million net after-tax gain on the sale of a non-operating investment during the quarter.

For second quarter 2008, CenturyTel expects total revenues of $647 to $657 million and diluted earnings per share of $.78 to $.82. An expected slight increase in revenues, driven primarily by revenue settlements, is anticipated to be offset primarily by annual wage adjustments effective in the second quarter, higher marketing expenses and the seasonal impact of outside plant maintenance activities.

For the full year 2008, diluted earnings per share is expected to be in the range of $3.05 to $3.20 versus the previous guidance of $2.90 to $3.00, primarily due to first quarter results exceeding expectations, share repurchases completed through April 30, 2008, and the expectation that expenses for the remainder of 2008 will be lower than originally anticipated when 2008 guidance was provided earlier this year.

These outlook figures for the second quarter and full year 2008 exclude nonrecurring items, any share repurchases made after April 30, 2008, and any future mergers, acquisitions, divestitures or other similar business transactions.

Reconciliation to GAAP. This release includes certain non-GAAP financial measures, including but not limited to operating cash flow, free cash flow and adjustments to GAAP measures to exclude the effect of nonrecurring items. In addition to providing key metrics for management to evaluate the Company's performance, we believe these measurements assist readers in their understanding of period-to-period operating performance and in identifying historical and prospective trends. Reconciliations of non-GAAP financial measures to the most comparable GAAP measures are included in the attached financial statements. Reconciliation of additional non-GAAP financial measures that may be discussed during the earnings call described below will be available on the Company's Web site at http://www.centurytel.com. Investors are urged to consider these non-GAAP measures in addition to, and not in substitution for, measures prepared in accordance with GAAP.

Investor Call. As previously announced, CenturyTel's management will host a conference call at 10:30 a.m. Central Time today. Interested parties can access the call by dialing 866.837.9789. The call will be accessible for replay through May 7, 2008, by calling 888.266.2081 and entering the conference ID number 1222754. Investors can also listen to CenturyTel's earnings conference call and replay by accessing the Investor Relations portion of the Company's Web site at http://www.centurytel.com through May 21, 2008.

In addition to historical information, this release includes certain 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 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 timing, success and overall effects of competition from a wide variety of competitive providers; the risks inherent in rapid technological change; the effects of ongoing changes in the regulation of the communications industry; the Company's ability to effectively adjust to changes in the communications industry; the Company's ability to effectively manage its expansion opportunities, including successfully integrating newly-acquired properties into the Company's operations and retaining and hiring key personnel; possible changes in the demand for, or pricing of, the Company's products and services; the Company's continued access to credit markets on favorable terms; the Company's ability to successfully introduce new product or service offerings on a timely and cost-effective basis; the Company's ability to collect its receivables from financially troubled communications companies; the Company's ability to successfully negotiate collective bargaining agreements on reasonable terms without work stoppages; the effect of adverse weather; other risks referenced from time to time in the Company's filings with the Securities and Exchange Commission (the "SEC"); and the effects of more general factors such as changes in interest rates, in tax rates, in accounting policies or practices, in operating, medical or administrative costs, in general market, labor 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, 2007, as updated by the Company's subsequent SEC reports. You should be aware that new factors may emerge from time to time and it is not possible for management to identify all such factors, nor can it predict the impact of each such factor on the business or the extent to which any one or more factors may cause actual results to differ from those reflected in any forward-looking statements. You are further cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The information contained in this release is as of May 1, 2008. The Company undertakes no obligation to update any of its forward-looking statements for any reason.

CenturyTel (NYSE: CTL) is a leading provider of communications, high-speed Internet and entertainment services in small-to-mid-size cities through our broadband and fiber transport networks. Included in the S&P 500 Index, CenturyTel delivers advanced communications with a personal touch to customers in 25 states. Visit us at http://www.centurytel.com.


                               CenturyTel, Inc.
                      CONSOLIDATED STATEMENTS OF INCOME
                  THREE MONTHS ENDED MARCH 31, 2008 AND 2007
                                 (UNAUDITED)

                                          Three months ended March 31, 2008

                                                       Less      As adjusted
                                                       non-       excluding
     In thousands, except per share           As     recurring   nonrecurring
      amounts                              reported    items        items

    OPERATING REVENUES
       Voice                               $220,480                 220,480
       Network access                       208,698                 208,698
       Data                                 126,772                 126,772
       Fiber transport and CLEC              39,633                  39,633
       Other                                 53,031                  53,031
                                            648,614      -          648,614

    OPERATING EXPENSES
       Cost of services and products        237,812                 237,812
       Selling, general and administrative   91,625                  91,625
       Depreciation and amortization        135,684                 135,684
                                            465,121      -          465,121

    OPERATING INCOME                        183,493      -          183,493

    OTHER INCOME (EXPENSE)
       Interest expense                     (50,122)                (50,122)
       Other income (expense)                 8,417     4,136 (1)     4,281
       Income tax expense                   (53,028)   (1,547)(2)   (51,481)

    NET INCOME                              $88,760     2,589        86,171

    BASIC EARNINGS PER SHARE                  $0.84      0.02          0.81
    DILUTED EARNINGS PER SHARE                $0.83      0.02          0.81

    AVERAGE SHARES OUTSTANDING
       Basic                                106,142                 106,142
       Diluted                              106,997                 106,997

    DIVIDENDS PER COMMON SHARE              $0.0675                  0.0675



                                           Three months ended March 31, 2007

                                                                      As
                                                       Less        adjusted
                                                       non-        excluding
     In thousands, except per share           As     recurring    nonrecurring
      amounts                              reported    items         items

    OPERATING REVENUES
       Voice                                211,896                 211,896
       Network access                       211,399                 211,399
       Data                                  95,864                  95,864
       Fiber transport and CLEC              38,326                  38,326
       Other                                 43,370                  43,370
                                            600,855      -          600,855

    OPERATING EXPENSES
       Cost of services and products        213,531                 213,531
       Selling, general and administrative   91,457                  91,457
       Depreciation and amortization        127,784                 127,784
                                            432,772      -          432,772

    OPERATING INCOME                        168,083      -          168,083

    OTHER INCOME (EXPENSE)
       Interest expense                     (46,961)                (46,961)
       Other income (expense)                 5,290                   5,290
       Income tax expense                   (48,542)                (48,542)

    NET INCOME                               77,870      -           77,870

    BASIC EARNINGS PER SHARE                   0.70      -             0.70
    DILUTED EARNINGS PER SHARE                 0.68      -             0.68

    AVERAGE SHARES OUTSTANDING
       Basic                                111,031                 111,031
       Diluted                              116,308                 116,308

    DIVIDENDS PER COMMON SHARE                0.065                   0.065




                                                                   Increase
                                                                  (decrease)
                                                  Increase         excluding
     In thousands, except per share              (decrease)       nonrecurring
      amounts                                    as reported         items

    OPERATING REVENUES
        Voice                                        4.1%             4.1%
        Network access                              (1.3%)           (1.3%)
        Data                                        32.2%            32.2%
        Fiber transport and CLEC                     3.4%             3.4%
        Other                                       22.3%            22.3%
                                                     7.9%             7.9%

    OPERATING EXPENSES
        Cost of services and products               11.4%            11.4%
        Selling, general and
         administrative                              0.2%             0.2%
        Depreciation and amortization                6.2%             6.2%
                                                     7.5%             7.5%

    OPERATING INCOME                                 9.2%             9.2%

    OTHER INCOME (EXPENSE)
        Interest expense                             6.7%             6.7%
        Other income (expense)                      59.1%           (19.1%)
        Income tax expense                           9.2%             6.1%

    NET INCOME                                      14.0%            10.7%

    BASIC EARNINGS PER SHARE                        20.0%            15.7%
    DILUTED EARNINGS PER SHARE                      22.1%            19.1%

    AVERAGE SHARES OUTSTANDING
        Basic                                       (4.4%)           (4.4%)
        Diluted                                     (8.0%)           (8.0%)

    DIVIDENDS PER COMMON SHARE                       3.8%             3.8%

      NONRECURRING ITEMS
        (1) -  Gain on the sale of a nonoperating investment.
        (2) -  Tax effect of item (1).



                               CenturyTel, Inc.
                         CONSOLIDATED BALANCE SHEETS
                     MARCH 31, 2008 AND DECEMBER 31, 2007
                                 (UNAUDITED)

                                                 March 31,        December 31,
                                                   2008               2007
                                                       (in thousands)
                     ASSETS
    CURRENT ASSETS
        Cash and cash equivalents                 $37,539             34,402
        Other current assets                      254,698            257,997
           Total current assets                   292,237            292,399

    NET PROPERTY, PLANT AND EQUIPMENT
        Property, plant and equipment           8,706,712          8,666,106
        Accumulated depreciation               (5,673,578)        (5,557,730)
           Net property, plant and
            equipment                           3,033,134          3,108,376

    GOODWILL AND OTHER ASSETS
        Goodwill                                4,010,916          4,010,916
        Other                                     781,840            772,862
            Total goodwill and other assets     4,792,756          4,783,778


    TOTAL ASSETS                               $8,118,127          8,184,553


             LIABILITIES AND EQUITY
    CURRENT LIABILITIES
        Short-term debt and current
         maturities of long-term debt             $85,444            279,898
        Other current liabilities                 440,589            456,637
            Total current liabilities             526,033            736,535

    LONG-TERM DEBT                              2,881,310          2,734,357
    DEFERRED CREDITS AND OTHER LIABILITIES      1,310,800          1,304,456
    STOCKHOLDERS' EQUITY                        3,399,984          3,409,205

    TOTAL LIABILITIES AND EQUITY               $8,118,127          8,184,553



                               CenturyTel, Inc.
                RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
                                 (UNAUDITED)

                                        Three months ended March 31, 2008
                                                                 As adjusted
                                                     Less         excluding
    In thousands                         As      nonrecurring   nonrecurring
                                      reported       items          items
    Operating cash flow
     and cash flow margin
      Operating income                $183,493            -         183,493
      Add:  Depreciation
       and amortization                135,684                      135,684
      Operating cash flow             $319,177            -         319,177

      Revenues                        $648,614            -         648,614

      Operating income margin
       (operating income divided
       by revenues)                      28.3%                        28.3%

      Operating cash flow
       margin (operating cash
       flow divided by revenues)         49.2%                        49.2%


    Free cash flow (prior to debt
     service requirements and
     dividends)
      Net income                       $88,760        2,589 (1)      86,171
      Add:  Depreciation
       and amortization                135,684            -         135,684
      Less:  Capital expenditures      (54,739)           -         (54,739)
      Free cash flow                  $169,705        2,589         167,116

      Free cash flow                  $169,705
      Gain on asset disposition         (4,135)
      Deferred income taxes              8,357
      Changes in current assets
       and current liabilities         (12,277)
      (Increase) decrease in other
        noncurrent assets                 (789)
      Decrease in other
       noncurrent liabilities           (2,790)
      Retirement benefits                5,474
      Excess tax benefits from
       share-based compensation            136
      Other, net                        11,790
      Add:  Capital expenditures        54,739
      Net cash provided by
       operating activities           $230,210



                                        Three months ended March 31, 2007
                                                                 As adjusted
                                                     Less           excluding
    In thousands                         As      nonrecurring    nonrecurring
                                      reported      items            items
    Operating cash flow and cash
     flow margin
      Operating income                 168,083            -         168,083
      Add:  Depreciation and
       amortization                    127,784                      127,784
      Operating cash flow              295,867            -         295,867

      Revenues                         600,855            -         600,855

      Operating income margin
       (operating income divided
       by revenues)                      28.0%                        28.0%

      Operating cash flow margin
       (operating cash flow divided
       by revenues)                      49.2%                        49.2%


    Free cash flow (prior to debt
     service requirements and
     dividends)
      Net income                        77,870            -          77,870
      Add:  Depreciation and
      amortization                     127,784            -         127,784
      Less:  Capital expenditures      (48,880)           -         (48,880)
      Free cash flow                   156,774            -         156,774

      Free cash flow                   156,774
      Gain on asset disposition              -
      Deferred income taxes             13,371
      Changes in current assets
       and current liabilities          33,892
      (Increase) decrease in other
       noncurrent assets                 1,032
      Decrease in other
       noncurrent liabilities            (401)
      Retirement benefits                5,636
      Excess tax benefits from
       share-based compensation         (3,032)
      Other, net                         2,558
      Add:  Capital expenditures        48,880
      Net cash provided by
       operating activities            258,710

    NONRECURRING ITEMS
      (1) -  Gain on the sale of a nonoperating investment, net of tax.

     FOR MORE INFORMATION CONTACT:
     Tony Davis 318.388.9525
     tony.davis@centurytel.com

SOURCE CenturyTel, Inc.
 

Web site: http://www.centurytel.com