CenturyLink Reports Fourth Quarter 2011 Earnings; Anticipates Continued Revenue Trend Improvement in 2012

CenturyLink Reports Fourth Quarter 2011 Earnings; Anticipates Continued Revenue Trend Improvement in 2012

Achieved operating revenues of $4.653 billion, exceeding guidance; Strategic Revenue growth of 4.7% percent year-over-year

Improved fourth quarter and full year 2011 rate of revenue decline to 3.2% and 3.8%, respectively, compared to an estimated 3.8% and 5.6% in pro forma fourth quarter and full year 2010

Generated Free Cash Flow(1) of $515 million, excluding special items

Certain non-cash employee benefit plan expenses negatively impacted Adjusted Diluted EPS(1) by $0.03; Excluding these items, Adjusted Diluted EPS was $0.58 in fourth quarter 2011

Realized strong growth in high-speed Internet and Prism(TM) TV subscribers and continued improvement in line loss trend during fourth quarter

Completed Embarq integration and achieved targeted annual operating expense synergies of $375 million within planned time frame; Hitting key milestones and synergy targets in integrations of Qwest and Savvis

Anticipate continued improvement in revenue trend with revenue decline of 1.5% to 2.5% expected in 2012

MONROE, La., Feb. 15, 2012 /PRNewswire/ --CenturyLink, Inc. (NYSE: CTL) today reported strong operating revenues, solid free cash flow generation and improved customer results forfourth quarter 2011 and full year 2011.

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"CenturyLink delivered solid financial results in the fourth quarter and exited 2011 with a strategic, diversified portfolio of assets," Glen F. Post, III, chief executive officer and president, said. "The Company generated strong revenues for the quarter, driven by continued growth in strategic revenues and a slower decline in legacy revenues. In addition, we completed our integration of Embarq and continue to hit our key targets in the integrations of Qwest and Savvis. We achieved very strong growth in our high-speed Internet subscriber base during the fourth quarter, with over 70,000 net additions. We also completed more than 1,250 fiber builds in the quarter as part of our fiber-to-the-tower expansion initiative, supporting the continued growth in wireless data and Ethernet demand.

"We believe CenturyLink's strategy is working, and our competitive position is continuing to strengthen. Our local operating model and "go-to-market" strategies are driving improved operating results in legacy Qwest markets. We remain focused on leveraging the cross-selling opportunities for network and managed hosting services in our business segments. In addition, our Savvis fourth quarter bookings were the highest of any quarter in 2011, with significant new customer wins and renewals.

"As we enter 2012, we continue to make investments in key growth areas while maintaining a high-quality balance sheet, a significant quarterly cash dividend and healthy free cash flow. I am pleased with our performance over the past year and I am confident in CenturyLink's ability to drive long-term shareholder value as we successfully execute our business plans and further enhance our position as a communications industry leader," Post concluded.

Fourth Quarter Highlights

CenturyLink continues to successfully respond to a challenging economic environment and an increasingly competitive industry. Among the quarter's highlights:

-- Improved year-over-year top-line revenue trend to a rate of decline of
3.2% in fourth quarter 2011, compared to an estimated decline of 3.8% in
pro forma fourth quarter 2010.
-- Generated operating revenues of $4.653 billion on a consolidated basis,
compared to pro forma operating revenues of $4.807 billion in fourth
quarter 2010.
-- Incurred operating expenses of $4.059 billion in fourth quarter 2011, a
1% increase from pro forma $4.016 billion in fourth quarter 2010,
primarily driven by higher costs associated with growth initiatives.
-- Achieved strong free cash flow generation of $515 million, excluding
special items of $61 million.
-- Continued to drive improved access line loss trend and higher broadband
subscriber growth as a result of CenturyLink's effective local operating
model and "go-to-market" strategies.
-- Reduced access line loss by more than 30% compared to pro forma fourth
quarter 2010 and more than 14% sequentially.
-- Grew high-speed Internet customer base to 5.55 million subscribers at
the end of 2011, representing 4.5% annual growth over pro forma year end
2010.
-- Expanded Prism(TM) TV subscribers by 30% in fourth quarter 2011 from
third quarter 2011 and increased penetration of available homes to
nearly 7% from 5% in third quarter 2011.

Consolidated Fourth Quarter Financial Results

Operating revenues for fourth quarter 2011 were $4.653 billion compared to $1.722 billion in fourth quarter 2010. This increase was primarily due to $2.730 billion and $260 million of revenue contributions from the Qwest acquisition completed April 1, 2011 and the Savvis acquisition completed July 15, 2011, respectively. Increases in strategic revenues, primarily driven by demand for data transport capacity from wireless providers, data services demand from business customers and growth in high-speed Internet and Prism(TM) TV subscribers, were more than offset by declines in legacy services revenues primarily due to the impact of access line losses and lower access revenues.

Fourth quarter 2011 operating revenues compared to fourth quarter 2010 pro forma operating revenues(2) declined 3.2% from $4.807 billion a year ago to $4.653 billion this quarter, due to the decline in legacy revenues, more than offsetting the increase in strategic revenues as discussed above. Excluding data integration revenues, operating revenues declined 3.0% year-over-year.

Operating expenses, excluding special items, increased to $4.059 billion from $1.223 billion in fourth quarter 2010, primarily due to $2.612 billion and $285 million of operating costs associated with the Qwest and Savvis acquisitions, respectively. Operating expenses for fourth quarter 2011 also included additional non-cash employee benefit costs driven by a reduction in the discount rate and other actuarial assumptions, as well as higher than anticipated network expenses and customer premise equipment costs. The Company expects employee benefit costs and network expenses to decline in first quarter 2012 compared to fourth quarter 2011.

Operating expenses, excluding special items, increased to $4.059 billion in fourth quarter 2011 from pro forma fourth quarter 2010 operating expenses of $4.016 billion. This 1% increase was primarily driven by costs associated with the launch of Prism(TM) TV in additional markets in the first half of 2011, investment in other key growth areas including Savvis, and higher depreciation and amortization expense that more than offset lower personnel costs and facility costs.

Operating cash flow (as defined in our supplemental schedules), excluding special items, increased 113.7% to $1.846 billion from $864 million in fourth quarter 2010, primarily due to the Qwest acquisition. For fourth quarter 2011, CenturyLink achieved an operating cash flow margin, excluding special items, of 39.7% versus 50.2% in fourth quarter 2010, reflecting the impact that lower margins of Qwest and Savvis had on CenturyLink's consolidated operating cash flow margin.

Fourth quarter 2011 operating cash flow of $1.846 billion, excluding special items, declined 8.9% from fourth quarter 2010 pro forma operating cash flow of $2.026 billion, primarily due to the decline in legacy revenues and higher expenses as discussed above.

Adjusted Net Income and Adjusted Diluted Earnings Per Share (Adjusted Diluted EPS)

Adjusted Net Income and Adjusted Diluted EPS exclude special items, the non-cash impact of the amortization of intangibles, the non-cash impact to interest expense of the assignment of fair value to debt outstanding related to the Embarq, Qwest and Savvis transactions, and the non-cash impact of the acquisition related adjustments and special items to our effective book income tax rate.

Excluding the items outlined above, CenturyLink's Adjusted Net Income for fourth quarter 2011 was $343 million compared to pro forma Adjusted Net Income of $455 million in fourth quarter 2010. Fourth quarter 2011 Adjusted Diluted EPS was $0.55 compared to pro forma Adjusted Diluted EPS of $0.75 in the year-ago period. The decrease in both measures was primarily driven by higher operating costs and the anticipated decline in legacy voice and access revenues associated with access line losses and lower minutes of use, which more than offset the increase in strategic revenues.

Excluding the impact of the additional non-cash employee benefit plan costs discussed earlier, Adjusted Diluted EPS was $0.58 for fourth quarter 2011.

Full Year Results

For the year 2011, operating revenues more than doubled to $15.4 billion from $7.0 billion for the same period in 2010. Operating cash flow, excluding special items, was $6.5 billion for 2011 compared to $3.6 billion in 2010. Net income, excluding special items, was $867 million in 2011 compared to $1.03 billion in 2010. Full year 2011 earnings per share, excluding special items, was $1.62 compared to $3.39 for the prior year. The decrease in 2011 compared to 2010 is primarily due to the negative impact of the non-cash items resulting from the business combination accounting rules associated with the Qwest and Savvis acquisitions, which are not included in the results for 2010.

Pro forma full year 2011 operating revenues of $18.7 billion declined 3.8% from operating revenues of $19.4 billion for pro forma full year 2010. Operating cash flow, excluding special items, was $7.8 billion for pro forma 2011 compared to $8.3 billion in pro forma 2010. Adjusted Net Income, excluding special items, was $1.63 billion in pro forma 2011 compared to $1.85 billion in pro forma 2010. Adjusted Diluted EPS, excluding special items, was $2.64 in pro forma 2011 compared to $3.04 for pro forma 2010. The decline in the above measures was driven by a reduction in legacy voice and access revenue, which more than offset growth in strategic revenues.

GAAP Results - Fourth Quarter and Full Year

Under generally accepted accounting principles (GAAP), net income for fourth quarter 2011 was $109 million compared to $225 million for fourth quarter 2010, and diluted earnings per share for fourth quarter 2011 was $0.18 compared to $0.74 for fourth quarter 2010. Fourth quarter 2011 net income and diluted earnings per share reflect after-tax integration, severance, and retention costs associated with the Embarq, Qwest and Savvis acquisitions and costs associated with the early retirement of Qwest Corporation debt, which aggregated $42 million ($0.07 per share). Fourth quarter 2010 net income and diluted earnings per share reflect after-tax integration, severance and transaction costs associated with the Embarq and Qwest acquisitions, an expense reduction associated with freezing certain benefits related to our pension plans and a net tax benefit due to state net operating loss carryforwards and other tax adjustments, which aggregated $6 million ($0.02 per share).

Net income under GAAP for full-year 2011 was $573 million compared to $948 million for full-year 2010, and diluted earnings per share for full-year 2011 was $1.07 compared to $3.13 for full-year 2010. For details regarding the Company's special items for the three and twelve months ended December 31, 2011 and 2010, please see the accompanying financial schedules.

Segment Results / Highlights

Regional Markets Group (RMG)

RMG continued to implement "go-to-market" strategies in the fourth quarter to improve our competitive position resulting in an improved line loss trend and an increased number of broadband subscribers. This segment delivered strong operating results, increased business strategic data sales and positive subscriber trends in the fourth quarter.

-- Strategic revenues for RMG were $761 million in the quarter, a 5.8%
increase over pro forma fourth quarter 2010.
-- Generated $2.2 billion in total revenues, a decrease of 3.9% from pro
forma fourth quarter 2010, reflecting the continued decline in legacy
services.
-- Achieved significant high-speed Internet subscriber growth with a net
increase of over 70,000 new customers compared to 57,000 in the previous
quarter and 44,000 on a pro forma basis in the same period a year ago.
-- Increased Prism(TM)TV subscribers by 16,000 with a broadband attachment
rate of more than 90%. Of the new subscribers, nearly 50% are new
CenturyLink customers.

Business Markets Group (BMG)

BMG leveraged a strong sales funnel exiting third quarter 2011, capitalized on new business opportunities and experienced increased success in its cross-sales of Savvis managed hosting and cloud services portfolio to achieve continued sales growth despite expected seasonal pressures.

-- Strategic revenues for BMG were $446 million in the quarter, a 2.8%
increase over pro forma fourth quarter 2010 driven by strong Ethernet,
Wavelength and MPLS sales. Normalized to exclude low-speed private line
services, the adjusted growth rate is 7.8%.
-- Generated $947 million in total revenues, a decrease of 3.3% from pro
forma fourth quarter 2010, reflecting declines in legacy services
revenues and data integration revenues, which more than offset growth in
CenturyLink's high-bandwidth broadband offerings. Excluding data
integration revenues, BMG's fourth quarter year-over-year revenue
decline was 1.2%.
-- Continued realignment of sales force to address the growing
opportunities in strategic services products such as MPLS(3) and
Ethernet services led to strong sales funnel exiting 2011.

Wholesale Markets Group (WMG)

WMG continued to generate strong strategic revenue growth in the fourth quarter driven by customer demand for both copper and fiber-based connections for data transport services. WMG secured additional Fiber-to-the-tower (FTTT) contracts during the fourth quarter that bolster FTTT revenue growth opportunities in 2012 and beyond.

-- Strategic revenues for WMG were $564 million in the quarter, a 5.4%
increase over pro forma fourth quarter 2010, driven by wireless carrier
bandwidth expansion and Ethernet sales.
-- Generated $955 million in total revenues, a decrease of 4.0% from pro
forma fourth quarter 2010, reflecting the continued decline in legacy
services primarily driven by lower switched access minutes of use
associated with access line loss and displacement by alternative forms
of communication such as email, social media and texting.
-- Completed more than 1,250 fiber builds during the fourth quarter as part
of the FTTT build-out initiative, ending the year with a total of nearly
10,200 FTTT builds completed since inception of this program.

Savvis

Savvis grew total revenues year-over-year driven by strength in managed hosting, including cloud services, slowing colocation revenue growth and declining network revenue. While colocation revenue growth slowed in 2011 as the Company approached data center capacity, CenturyLink has begun 2012 data center expansions to increase capacity and drive revenue growth in colocation as well as managed hosting and cloud services.

-- Savvis operating revenues were $260 million in the quarter, a 3.6%
increase from pro forma fourth quarter 2010. Savvis hosting revenues
were $197 million, a 7% increase from pro forma fourth quarter 2010,
with managed hosting revenue of $98 million, an 11.8% increase from pro
forma fourth quarter 2010.
-- Pro forma full year 2011 Savvis operating revenues were $1.039 billion,
a 12.6% increase from pro forma full year 2010. Total pro forma hosting
revenues were $780 million, a 17.3% increase from pro forma 2010, with
pro forma managed hosting revenue of $383 million, a 23.7% increase from
pro forma 2010.
-- Achieved highest quarterly bookings level since first quarter 2008, with
bookings growth of 23% compared to third quarter 2011 driven by record
bookings in Europe and notable wins in the financial and government
verticals.
-- Continued to expand data center footprint, opening one center and adding
space in centers in two other cities in the fourth quarter, with further
expansion planned during 2012. At year-end 2011, we had 49 data centers
in North America, Europe and Asia, with total data center raised floor
space of 2 million square feet and sellable space of 1.3 million square
feet.

Integration Update: Embarq Completed; Qwest and Savvis Integrations on Track

During fourth quarter 2011, CenturyLink incurred pre-tax transaction, integration, severance and retention costs of $61 million related to the Embarq, Qwest and Savvis acquisitions.

The Embarq integration was fully completed in the fourth quarter of 2011. CenturyLink achieved its targeted $375 million in annual run rate operating expense synergies within the anticipated timeframe.

CenturyLink ended fourth quarter 2011 with an annualized operating expense synergy run rate of approximately $235 million from the Qwest acquisition, as the Company realized synergies earlier than originally anticipated. In addition, the Qwest financial and HR systems conversions were successfully completed by year-end 2011.

Guidance - Full Year 2012 and First Quarter 2012

Full Year 2012
--------------
Operating Revenue $18.2 billion to $18.4 billion
Revenue decline from pro forma FY11 1.5% to 2.5%
Operating Cash Flow (excl special
items) $7.4 billion to $7.6 billion
Adjusted Diluted EPS (excl special
items) $2.25 - $2.45
Capital Expenditures(4) $2.6 billion to $2.8 billion
Free Cash Flow (excl special items)(4) $3.2 billion to $3.4 billion

First Quarter 2012
------------------
Operating Revenue $4.58 billion to $4.64 billion
Operating Cash Flow (excl special
items) $1.84 billion to $1.90 billion
Adjusted Diluted EPS (excl special
items) $0.57 - $0.63
---------------------------------- -------------

All 2012 outlook figures included in this release exclude the effects of special items, future changes in regulation, integration expenses associated with the Qwest and Savvis acquisitions, any changes in operating or capital plans and any future mergers, acquisitions, divestitures, buybacks or other similar business transactions. In addition, all outlook and pro forma figures are based on acquisition-related fair value estimates that remain subject to finalization. All assets and liabilities of Qwest and Savvis have been assigned a fair value pursuant to business combination accounting rules. The related income statement impact of these items was significant to our operating results for the second, third and fourth quarters of 2011, and will have a significant impact on our results for 2012, which may be significantly different than what we have currently included in our outlook information for first quarter and full year 2012. Such fair value assignments for Qwest and Savvis have not been finalized and are subject to further adjustment before becoming final. The pro forma figures include adjustments described in the attached supplemental schedule that sets forth unaudited pro forma financial information regarding the Qwest and Savvis acquisitions, except that the figures above assume a January 1, 2011 closing date. The pro forma information above (i) has not been prepared in accordance with generally accepted accounting principles or the rules and regulations of the U.S. Securities and Exchange Commission, (ii) is for illustrative purposes only, and (iii) is not necessarily indicative of the combined operating results that would have occurred if the Qwest and Savvis mergers had been consummated as of January 1, 2011.

Investor Call

As previously announced, CenturyLink's management will host a conference call at 4:00 p.m. Central Time today, February 15, 2012. Interested parties can access the call by dialing 866.238.0637. The call will be accessible for replay through February 22, 2012, by calling 888.266.2081 and entering the conference ID number 1564408. Investors can also listen to CenturyLink's earnings conference call and replay by accessing the Investor Relations portion of the Company's Web site at www.centurylink.com through March 8, 2012.

Reconciliation to GAAP

This release includes certain non-GAAP financial measures, including but not limited to operating cash flow, free cash flow, adjustments to GAAP measures to exclude the effect of special items and certain pro forma combined operating results. In addition to providing key metrics for management to evaluate the Company's performance, we believe these measurements assist investors 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 schedules. Reconciliation of additional non-GAAP financial measures that may be discussed during the earnings call described below will be available in the Investor Relations portion of the Company's Web site at www.centurylink.com. Investors are urged to consider these non-GAAP measures in addition to, and not in substitution for, measures prepared in accordance with GAAP.

CenturyLink is the third largest telecommunications company in the United States. The company provides broadband, voice, wireless and managed services to consumers and businesses across the country. It also offers advanced entertainment services under the CenturyLink(TM) Prism(TM) TV and DIRECTV brands. In addition, the company provides data, voice and managed services to enterprise, government and wholesale customers in local, national and select international markets through its high-quality advanced fiber optic network and multiple data centers. CenturyLink is recognized as a leader in the network services market by key technology industry analyst firms, and is a global leader in cloud infrastructure and hosted IT solutions for enterprises through Savvis, a CenturyLink company. CenturyLink's customers range from Fortune 500 companies in some of the country's largest cities to families living in rural America. Headquartered in Monroe, La., CenturyLink is an S&P 500 company and is included among the Fortune 500 list of America's largest corporations. For more information, visit www.centurylink.com.

Forward Looking Statements

Certain non-historical statements made in this release and future oral or written statements or press releases by us or our management are intended to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations only, and are subject to a number of risks, uncertainties and assumptions, many of which are beyond our control. 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 (including recent reforms and changes by the Federal Communications Commission regarding intercarrier compensation and the Universal Service Fund, among other things); our ability to effectively adjust to changes in the communications industry and changes in the composition of our markets and product mix caused by our recent acquisitions of Savvis, Qwest and Embarq; our ability to successfully integrate the operations of Savvis and Qwest into our operations, including the possibility that the anticipated benefits from these acquisitions cannot be fully realized in a timely manner or at all, or that integrating the acquired operations will be more difficult, disruptive or costly than anticipated; our ability to use the net operating loss carryovers of Qwest in projected amounts; the effects of changes in our assignment of the Savvis or Qwest purchase price to identifiable assets or liabilities after the date hereof; our ability to effectively manage our expansion opportunities, including retaining and hiring key personnel; possible changes in the demand for, or pricing of, our products and services; our ability to successfully introduce new product or service offerings on a timely and cost-effective basis; our continued access to credit markets on favorable terms; our ability to collect our receivables from financially troubled communications companies; any adverse developments in legal proceedings involving us; our ability to pay a $2.90 per common share dividend annually, which may be affected by changes in our cash requirements, capital spending plans, cash flows or financial position; unanticipated increases or other changes in our future cash requirements, whether caused by unanticipated increases in capital expenditures, increases in pension funding requirements or otherwise; our ability to successfully negotiate collective bargaining agreements on reasonable terms without work stoppages; the effects of adverse weather; other risks referenced from time to time in our 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, pension or administrative costs, in general market, labor or economic conditions, or in legislation, regulation or public policy. These and other uncertainties related to our business, our July 2011 acquisition of Savvis, our April 2011 acquisition of Qwest and our July 2009 acquisition of Embarq are described in greater detail in Item 1A to our Form 10-K for the year ended December 31, 2010, as updated and supplemented by our subsequent SEC reports. You should be aware that new factors may emerge from time to time and it is not possible for us to identify all such factors nor can we 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. We undertake no obligation to update any of our forward-looking statements for any reason.

(1) See attachments for non-GAAP reconciliations.

See the attached pro forma statements of income for
more information about our pro forma results discussed
(2) in this release.

(3) Defined as Multiprotocol Label Switching (MPLS)

Excludes approximately $100 million of integration
(4) related capital expenditures

CenturyLink, Inc.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED DECEMBER, 2011 AND 2010
(UNAUDITED)
(Dollars in millions, except per share amounts; shares in thousands)

Three months ended December 31, Three months ended December 31,
2011 2010
Increase
As As
adjusted adjusted (decrease)
Less excluding Less excluding Increase excluding
As special special As special special (decrease) special
as
reported items items reported items items reported items

OPERATING REVENUES
Strategic services $2,031 2,031 525 525 286.9% 286.9%
Legacy services 2,180 2,180 1,023 1,023 113.1% 113.1%
Data integration 188 188 36 36 422.2% 422.2%
Other 254 254 138 138 84.1% 84.1%
4,653 - 4,653 1,722 - 1,722 170.2% 170.2%

OPERATING EXPENSES
Cost of services and products 1,968 10 (1) 1,958 632 9 (4) 623 211.4% 214.3%
Selling, general and
administrative 900 51 (1) 849 239 4 (4) 235 276.6% 261.3%
Depreciation and amortization 1,252 1,252 365 365 243.0% 243.0%
4,120 61 4,059 1,236 13 1,223 233.3% 231.9%

OPERATING INCOME 533 (61) 594 486 (13) 499 9.7% 19.0%

OTHER INCOME (EXPENSE)
Interest expense (340) (340) (128) (128) 165.6% 165.6%
Other income (expense) (1) (6) (2) 5 1 1 (200.0%) 400.0%
Income tax expense (83) 25 (3) (108) (134) 7 (5) (141) (38.1%) (23.4%)

NET INCOME $109 (42) 151 225 (6) 231 (51.6%) (34.6%)

BASIC EARNINGS PER SHARE $0.18 (0.07) 0.24 0.74 (0.02) 0.76 (75.6%) (68.4%)
DILUTED EARNINGS PER SHARE $0.18 (0.07) 0.24 0.74 (0.02) 0.76 (75.6%) (68.3%)

AVERAGE SHARES OUTSTANDING
Basic 616,575 616,575 302,301 302,301 104.0% 104.0%
Diluted 618,510 618,510 303,201 303,201 104.0% 104.0%

DIVIDENDS PER COMMON SHARE $0.725 0.725 0.725 0.725 0.0% 0.0%

SPECIAL ITEMS
Includes integration, severance, and retention costs
associated with our acquisition of Qwest, along with
restructuring charges ($55 million); integration and
severance costs associated with our acquisition of
Embarq ($2 million); and transaction and other costs
associated with our acquisition of Savvis ($4
(1) - million).
(2) - Cost associated with early retirement of Qwest debt.
(3) - Income tax benefit of Items (1) and (2).
Includes integration and severance related costs
associated with our acquisition of Embarq ($27
million) and transaction and other costs associated
with our acquisition of Qwest ($7 million). These
increases were partially offset by a $21 million
curtailment gain associated with freezing certain
future benefit accruals related to our defined benefit
(4) - pension plans.
Income tax benefit of Item (4) and a net $4 million
income tax benefit due to an increase in the net
deferred tax asset related to state net operating loss
(5) - carryforwards and other tax adjustments.

CenturyLink, Inc.
CONSOLIDATED STATEMENTS OF INCOME
TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
(UNAUDITED)
(Dollars in millions, except per share amounts; shares in thousands)

Twelve months ended December 31, Twelve months ended December
2011 31, 2010
Increase
As As
adjusted adjusted (decrease)
Less excluding Less excluding Increase excluding
As special special As special special (decrease) special
as
reported items items reported items items reported items

OPERATING REVENUES
Strategic services $6,254 6,254 2,049 2,049 205.2% 205.2%
Legacy services 7,680 7,680 4,288 4,288 79.1% 79.1%
Data integration 537 537 158 158 239.9% 239.9%
Other 880 880 547 547 60.9% 60.9%
15,351 - 15,351 7,042 - 7,042 118.0% 118.0%

OPERATING EXPENSES
Cost of services and products 6,325 70 (1) 6,255 2,544 44 (5) 2,500 148.6% 150.2%
Selling, general and
administrative 2,975 395 (1) 2,580 1,004 79 (5) 925 196.3% 178.9%
Depreciation and amortization 4,026 4,026 1,434 1,434 180.8% 180.8%
13,326 465 12,861 4,982 123 4,859 167.5% 164.7%

OPERATING INCOME 2,025 (465) 2,490 2,060 (123) 2,183 (1.7%) 14.1%

OTHER INCOME (EXPENSE)
Interest expense (1,072) 5 (2) (1,077) (544) (544) 97.1% 98.0%
Other income (expense) (5) (22) (3) 17 15 15 (133.3%) 13.3%
Income tax expense (375) 188 (4) (563) (583) 43 (6) (626) (35.7%) (10.1%)

NET INCOME $573 (294) 867 948 (80) 1,028 (39.6%) (15.7%)

BASIC EARNINGS PER SHARE $1.07 (0.55) 1.62 3.13 (0.26) 3.40 (65.8%) (52.3%)
DILUTED EARNINGS PER SHARE $1.07 (0.55) 1.62 3.13 (0.26) 3.39 (65.8%) (52.2%)

AVERAGE SHARES OUTSTANDING
Basic 532,780 532,780 300,619 300,619 77.2% 77.2%
Diluted 534,121 534,121 301,297 301,297 77.3% 77.3%

DIVIDENDS PER COMMON SHARE $2.90 2.90 2.80 2.80 3.6% 3.6%

SPECIAL ITEMS
Includes integration, severance, and retention costs
associated with our acquisition of Qwest, along with
restructuring charges ($371 million); integration and
severance costs associated with our acquisition of Embarq
($81 million); and transaction and other costs associated
with our acquisition of Savvis ($26 million); net of a
favorable settlement of an operating tax issue ($13
(1) - million).
Reflects the interest component of a favorable settlement of
(2) - an operating tax issue.
Expense associated with terminating a bridge credit facility
related to the Savvis acquisition ($16 million) and costs
(3) - associated with early retirement of Qwest debt ($6 million).
Income tax benefit of Items (1) through (3) and a benefit
from the reduction of an NOL valuation allowance ($14
(4) - million).
Includes integration costs associated with our acquisition of
Embarq ($92 million); severance and related costs due to
workforce reductions ($30 million) and transaction and other
costs associated with our acquisition of Qwest ($22
million). Such increases were partially offset by a $21
million curtailment gain associated with freezing certain
future benefit accruals related to our defined benefit
(5) - pension plans.
Includes income tax benefit of Item (5) and a net $4 million
income tax benefit due to an increase in the net deferred
tax asset related to state net operating loss carryforwards
and other tax adjustments. Such amounts were partially
offset by a $4 million one-time charge to income tax
expense as a result of a change in the tax treatment of
(6) - Medicare subsidy receipts.

CenturyLink, Inc.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2011 AND DECEMBER 31, 2010
(UNAUDITED)
(In millions)

December 31, December 31,
2011 2010
---- ----

ASSETS
CURRENT ASSETS
Cash and cash equivalents $128 173
Other current assets 3,395 970
Total current assets 3,523 1,143
----- -----

NET PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment 29,577 16,329
Accumulated depreciation (10,141) (7,575)
Net property, plant and equipment 19,436 8,754
------ -----

GOODWILL AND OTHER ASSETS
Goodwill 21,724 10,261
Other 11,456 1,880
Total goodwill and other assets 33,180 12,141
------ ------

TOTAL ASSETS $56,139 22,038

LIABILITIES AND EQUITY
CURRENT LIABILITIES
Current maturities of long-term
debt $480 12
Other current liabilities 3,539 999
Total current liabilities 4,019 1,011

LONG-TERM DEBT 21,356 7,316
DEFERRED CREDITS AND OTHER LIABILITIES 9,937 4,064
STOCKHOLDERS' EQUITY 20,827 9,647
------ -----

TOTAL LIABILITIES AND EQUITY $56,139 22,038

CenturyLink, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
(UNAUDITED)
(In millions)

Twelve Months Twelve Months
Ended Ended
December 31, December 31,
2011 2010
------------ ------------

OPERATING ACTIVITIES
Net income $573 948
Adjustments to reconcile net
income to net
cash provided by operating
activities:
Depreciation and amortization 4,026 1,434
Deferred income taxes 395 132
Provision for uncollectible
accounts 153 91
Changes in current assets and
current liabilities, net (205) (303)
Retirement benefits (688) (271)
Changes in other noncurrent
assets and liabilities (6) (13)
Other, net (47) 27
--- ---
Net cash provided by operating
activities 4,201 2,045
----- -----

INVESTING ACTIVITIES
Payments for property, plant and
equipment and capitalized
software (2,411) (864)
Acquisition of Savvis, net of $61
cash acquired (1,671) -
Cash acquired in Qwest
acquisition, net of $5 cash paid 419 -
Other, net 16 5
--- ---
Net cash used in investing
activities (3,647) (859)
------ ----

FINANCING ACTIVITIES
Payments of long-term debt (2,984) (500)
Net proceeds from issuance of
long-term debt 4,102 -
Net (payments) borrowings on
credit facility (88) 74
Proceeds from issuance of common
stock 103 130
Repurchase of common stock (31) (17)
Cash dividends (1,556) (878)
Other, net (123) 16
---- ---
Net cash used in financing
activities (577) (1,175)
---- ------

Effect of exchange rate changes
on cash and cash equivalents (22) -
--- ---

Net increase (decrease) in cash
and cash equivalents (45) 11
Cash and cash equivalents at
beginning of period 173 162
--- ---

Cash and cash equivalents at
end of period $128 173

CenturyLink, Inc.
SELECTED SEGMENT FINANCIAL INFORMATION
THREE MONTHS AND TWELVE MONTHS ENDED DECEMBER 31, 2011
AND 2010
(UNAUDITED)
(Dollars in millions)

Three months ended Twelve months ended
December 31, December 31,
------------------- --------------------
2011 2010 2011 2010
---- ---- ---- ----
Total
segment
revenues $4,399 1,584 14,471 6,495
Total
segment
expenses 2,087 597 6,535 2,403
Total
segment
income $2,312 987 7,936 4,092

Total
segment
income
margin
(segment
income
divided
by
segment
revenues) 52.6% 62.3% 54.8% 63.0%
==== ==== ==== ====

Regional
Markets
Segment
--------
Revenues
Strategic
services $761 309 2,532 1,212
Legacy
services 1,440 796 5,171 3,289
Data
integration 36 32 129 139
$2,237 1,137 7,832 4,640

Expenses
Direct $932 463 3,252 1,818
Allocated 59 (16) 146 (35)
$991 447 3,398 1,783

Segment
income $1,246 690 4,434 2,857

Segment
income
margin 55.7% 60.7% 56.6% 61.6%
==== ==== ==== ====

Business
Markets
Segment
--------
Revenues
Strategic
services $446 14 1,341 57
Legacy
services 350 47 1,113 190
Data
integration 151 4 407 19
$947 65 2,861 266

Expenses
Direct $275 2 764 6
Allocated 312 28 972 114
$587 30 1,736 120

Segment
income $360 35 1,125 146

Segment
income
margin 38.0% 53.8% 39.3% 54.9%
==== ==== ==== ====

Wholesale
Markets
Segment
---------
Revenues
Strategic
services $564 202 1,898 780
Legacy
services 390 180 1,396 809
Data
integration 1 - 1 -
$955 382 3,295 1,589

Expenses
Direct $52 30 174 139
Allocated 249 90 847 361
$301 120 1,021 500

Segment
income $654 262 2,274 1,089

Segment
income
margin 68.5% 68.6% 69.0% 68.5%
==== ==== ==== ====

Savvis
Operations
Segment
----------
Revenues $260 - 483 -

Expenses
-
direct $208 - 380 -

Segment
income $52 - 103 -

Segment
income
margin 20.0% - 21.3% -
==== === ==== ===

CenturyLink, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
(Dollars in millions)

Three months ended December 31, Three months ended December 31,
2011 2010
-------------------------------- --------------------------------
As adjusted As adjusted
Less excluding Less excluding
As special special As special special
reported items items reported items items
-------- ----- ----- -------- ----- -----
Operating cash flow and cash flow margin
Operating income $533 (61) (1) 594 486 (13) (2) 499
Add: Depreciation and amortization 1,252 - 1,252 365 - 365
Operating cash flow $1,785 (61) 1,846 851 (13) 864

Revenues $4,653 - 4,653 1,722 - 1,722

Operating income margin (operating income
divided by revenues) 11.5% 12.8% 28.2% 29.0%
==== ==== ==== ====

Operating cash flow margin (operating cash
flow divided by revenues) 38.4% 39.7% 49.4% 50.2%
==== ==== ==== ====

Free cash flow
Operating cash flow $1,846 $864
Less: Cash paid for income taxes, net of
refunds 25 (34)
Less: Cash paid for interest, net of amounts
capitalized (465) (204)
Less: Capital expenditures (3) (896) (255)
Other income (expense) 5 1
Free cash flow (4) 515 372
=== ===

Includes integration, severance, and retention costs associated
with our acquisition of Qwest, along with restructuring charges
($55 million); integration and severance costs associated with
our acquisition of Embarq ($2 million); and transaction and
other costs associated with our acquisition of Savvis ($4
(1) - million).
Includes integration and severance related costs associated with
our acquisition of Embarq ($27 million) and transaction and
other costs associated with our acquisition of Qwest ($7
million). These increases were partially offset by a $21 million
curtailment gain associated with freezing certain future benefit
(2) - accruals related to our defined benefit pension plans.
Excludes $4 million in fourth quarter 2011 and $9 million in
fourth quarter 2010 of capital expenditures related to the
(3) - integration of Embarq and Qwest.
Excludes special items and does not reflect the impact of pension
contributions of $487 million for the three months ended
(4) - December 31, 2011.

CenturyLink, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
(Dollars in millions)

Twelve months ended December 31, Twelve months ended December 31,
2011 2010
--------------------------------- ---------------------------------
As adjusted As adjusted
Less excluding Less excluding
As special special As special special
reported items items reported items items
-------- ----- ----- -------- ----- -----
Operating cash flow and cash flow margin
Operating income $2,025 (465) (1) 2,490 2,060 (123) (2) 2,183
Add: Depreciation and amortization 4,026 - 4,026 1,434 - 1,434
Operating cash flow $6,051 (465) 6,516 3,494 (123) 3,617

Revenues $15,351 - 15,351 7,042 - 7,042

Operating income margin (operating income
divided by revenues) 13.2% 16.2% 29.3% 31.0%
==== ==== ==== ====

Operating cash flow margin (operating cash
flow divided by revenues) 39.4% 42.4% 49.6% 51.4%
==== ==== ==== ====

Free cash flow
Operating cash flow $6,516 $3,617
Less: Cash paid for income taxes, net of
refunds 118 (432)
Less: Cash paid for interest, net of amounts
capitalized (1,225) (548)
Less: Capital expenditures (3) (2,381) (835)
Other income (expense) 17 15
Free cash flow (4) 3,045 1,817
===== =====

Includes integration, severance, and retention costs
associated with our acquisition of Qwest, along with
restructuring charges ($371 million); integration and
severance costs associated with our acquisition of Embarq
($81 million); and transaction and other costs associated
with our acquisition of Savvis ($26 million); net of a
favorable settlement of an operating tax issue ($13
(1) - million).
Includes integration costs associated with our acquisition
of Embarq ($92 million); severance and related costs due
to workforce reductions ($30 million) and transaction and
other costs associated with our acquisition of Qwest ($22
million). Such increases were partially offset by a $21
million curtailment gain associated with freezing certain
future benefit accruals related to our defined benefit
(2) - pension plans.
Excludes $30 million in 2011 and $29 million in 2010 of
capital expenditures related to the integration of Embarq
(3) - and Qwest.
Excludes special items and does not reflect the impact of
pension contributions of $587 million and $300 million for
the twelve months ended December 31, 2011 and 2010,
(4) - respectively.

CenturyLink, Inc.
SUPPLEMENTAL PRO FORMA INFORMATION - ADJUSTED DILUTED EPS
2010 AND 2011
(UNAUDITED)
(In millions, except per share amounts)

Pro Forma* Pro Forma* Pro Forma* Pro Forma* Pro Forma* Pro Forma* Pro Forma* Pro Forma* Pro Forma*
Three Three Three Three
months months Three months Three months Twelve months months months Three months Three months Twelve months
ended ended ended ended ended ended ended ended ended ended
March 31, June 30, September 30, December 31, December 31, March 31, June 30, September 30, December 31, December 31,
2010 2010 2010 2010 2010 2011 2011 2011 2011 2011
(excluding (excluding (excluding (excluding (excluding (excluding (excluding (excluding (excluding (excluding
special special special special
items) items) special items) special items) special items) items) items) special items) special items) special items)

Net income $331 284 282 285 1,182 306 246 204 151 907
--- --- --- --- --- --- --- --- ---

Addback:
Amortization of customer
base intangibles:
Qwest 260 257 253 249 1,019 246 260 257 253 1,016
Embarq 49 48 44 44 185 44 44 39 39 166
Savvis 20 20 20 20 80 20 20 20 20 80

Amortization of
trademark intangibles:
Qwest 21 20 19 18 78 16 21 20 19 76
Savvis 2 2 2 2 8 2 2 2 2 8

Amortization of fair
value adjustment of
long-term debt:
Embarq 1 - 1 1 3 1 1 1 - 3
Qwest (81) (78) (75) (60) (294) (44) (67) (56) (31) (198)

Subtotal 272 269 264 274 1,079 285 281 283 302 1,151
Tax effect ** (103) (102) (100) (104) (410) (107) (99) (110) (110) (426)
Net adjustment, after
taxes 169 167 164 170 669 178 182 173 192 725
--- --- --- --- --- --- --- --- --- ---

Net income, as
adjusted for above
items $500 451 446 455 1,851 484 428 377 343 1,632

Weighted average diluted
shares outstanding 602.9 607.4 602.4 605.9 604.65 614.1 614.5 616.6 618.5 615.8

Diluted EPS
(excluding special
items) $0.55 0.47 0.47 0.47 1.94 0.50 0.40 0.33 0.24 1.46

Adjusted diluted EPS as
adjusted for purchase
accounting
intangible and interest
amortizations
(excluding
special items) $0.82 0.74 0.74 0.75 3.04 0.78 0.69 0.61 0.55 2.64

*The pro forma information presented above reflects the operations of
CenturyLink, Qwest and Savvis assuming their respective results of
operations had been combined as of January 1, 2010. Pro forma
adjustments include (i) the elimination of intercompany billings and
the elimination of certain deferred revenues and costs; (ii) the
elimination of certain components of pension and postretirement
benefit costs; (iii) the amortization of the fair value
preliminarily assigned to intangible assets (primarily customer
relationship and software); (iv) adjustments to depreciation to
reflect the fair value preliminarily assigned to property, plant and
equipment; (v) adjustments to interest expense to reflect valuing
debt at fair value; and (vi) the related income tax effects. The
above proforma information (i) has not been prepared in accordance
with generally accepted accounting principles or the rules and
regulations of the U.S. Securities and Exchange Commission, (ii) is
for illustrative purposes only, and (iii) is not necessarily
indicative of the combined operating results that would have
occurred if the Qwest and Savvis mergers had been consummated as of
January 1, 2010.

** Includes income tax effect of above items and impact to the pro
forma consolidated effective income tax rate due to the exclusion of
special items and the items above.

CenturyLink, Inc.
PRO FORMA STATEMENTS OF INCOME
PRO FORMA THREE MONTHS ENDED DECEMBER 31, 2011, THREE MONTHS ENDED SEPTEMBER 30, 2011
AND DECEMBER 31, 2010
(UNAUDITED)
(Dollars in millions, except per share amounts, shares in thousands)

Pro forma* Pro forma*
Three months Three months Three months
ended ended ended
December 31, September 30, December 31,
2011 2011 2010
(excluding (excluding (excluding
special special special
items) items) items)
-------- -------- --------

OPERATING REVENUES
Strategic services $2,031 1,994 1,939
Legacy services 2,180 2,227 2,408
Data integration 188 166 206
Other 254 246 254
4,653 4,633 4,807
----- ----- -----

OPERATING EXPENSES
Cash expenses 2,807 2,739 (A) 2,781 (B)
Depreciation and amortization 1,252 1,240 1,235
4,059 3,979 4,016
----- ----- -----

OPERATING INCOME 594 654 791

OTHER INCOME (EXPENSE)
Interest expense (340) (327) (345)
Other income (expense) 5 7 - (C)
Income tax expense (108) (130) (D) (161) (D)

NET INCOME $151 204 285

DILUTED EARNINGS PER SHARE $0.24 0.33 0.47

WEIGHTED AVERAGE DILUTED SHARES
OUTSTANDING 618,510 616,560 605,898

OPERATING CASH FLOW
Operating income $594 654 791
Add: Depreciation and amortization 1,252 1,240 1,235
Operating cash flow $1,846 1,894 2,026

Pro forma**
As of As of as of
December 31, September 30, December 31,
OPERATING METRICS 2011 2011 2010
------------- -------------- -------------
Broadband subscribers 5,554 5,484 5,316
Access lines 14,584 14,803 15,613

*The pro forma information presented above reflects the operations
of CenturyLink, Qwest and Savvis assuming their respective
results of operations had been combined as of January 1, 2010.
Pro forma adjustments include (i) the elimination of intercompany
billings and the elimination of certain deferred revenues and
costs; (ii) the elimination of certain components of pension and
postretirement benefit costs; (iii) the amortization of the fair
value preliminarily assigned to intangible assets (primarily
customer relationship and software); (iv) adjustments to
depreciation to reflect the fair value preliminarily assigned to
property, plant and equipment; (v) adjustments to interest
expense to reflect valuing debt at fair value; and (vi) the
related income tax effects. The above proforma information (i)
has not been prepared in accordance with generally accepted
accounting principles or the rules and regulations of the U.S.
Securities and Exchange Commission, (ii) is for illustrative
purposes only, and (iii) is not necessarily indicative of the
combined operating results that would have occurred if the Qwest
and Savvis mergers had been consummated as of January 1, 2010.

**The pro forma operating metrics presented above reflects the
broadband subscribers and access lines of CenturyLink and Qwest
as though the companies had been combined as of January 1, 2010
after conforming the definitions of broadband subscribers and
access lines between the two companies.

Summary description of special items for Third Quarter 2011 and
Fourth Quarter 2010 excluded from above schedule:
Integration and severance costs associated with the Qwest and Embarq
(A) acquisitions incurred by CenturyLink; realignment,
severance and merger related costs incurred by Qwest; and merger
related costs incurred by Savvis ($109 million).
Integration, transaction and severance costs associated with the
Qwest and Embarq acquisitions and curtailment gain incurred by
CenturyLink; realignment, severance and merger related costs;
accelerated recognition of share based compensation expense; and a
legal reserve incurred by Qwest; and acquisition costs incurred by
(B) Savvis ($132 million).
Loss on embedded option in convertible debt incurred by Qwest ($267
(C) million).
Tax effect of above items and other tax adjustments ($39 million for
(D) third quarter 2011 and $35 million for fourth quarter 2010).

CenturyLink, Inc.
PRO FORMA STATEMENTS OF INCOME
PRO FORMA TWELVE MONTHS ENDED DECEMBER 31, 2011 AND
DECEMBER 31, 2010
(UNAUDITED)
(Dollars in millions, except per share amounts, shares in
thousands)

Pro forma* Pro forma*
Twelve months Twelve months
ended ended
December 31, December 31,
2011 2010
(excluding (excluding
special special
items) items)
-------- --------

OPERATING REVENUES
Strategic services $7,995 7,543
Legacy services 9,037 10,070
Data integration 658 765
Other 1,002 1,053
18,692 19,431
------ ------

OPERATING EXPENSES
Cash expenses 10,910 (A) 11,167 (B)
Depreciation and
amortization 4,953 4,918
15,863 16,085
------ ------

OPERATING INCOME 2,829 3,346

OTHER INCOME (EXPENSE)
Interest expense (1,331) (C) (1,431)
Other income (expense) 22 (D) 11 (E)
Income tax expense (613) (F) (743) (F)

NET INCOME $907 1,183

DILUTED EARNINGS PER
SHARE $1.46 1.94

WEIGHTED AVERAGE DILUTED
SHARES OUTSTANDING 615,800 604,650

OPERATING CASH FLOW
Operating income $2,829 3,346
Add: Depreciation and
amortization 4,953 4,918
Operating cash flow $7,782 8,264

Pro forma**
As of as of
December 31, December 31,
OPERATING METRICS 2011 2010
------------- -------------
Broadband subscribers 5,554 5,316
Access lines 14,584 15,613

*The pro forma information presented above reflects the
operations of CenturyLink, Qwest and Savvis assuming
their respective results of operations had been
combined as of January 1, 2010. Pro forma adjustments
include (i) the elimination of intercompany billings
and the elimination of certain deferred revenues and
costs; (ii) the elimination of certain components of
pension and postretirement benefit costs; (iii) the
amortization of the fair value preliminarily assigned
to intangible assets (primarily customer relationship
and software); (iv) adjustments to depreciation to
reflect the fair value preliminarily assigned to
property, plant and equipment; (v) adjustments to
interest expense to reflect valuing debt at fair value;
and (vi) the related income tax effects. The above
proforma information (i) has not been prepared in
accordance with generally accepted accounting
principles, (ii) is for illustrative purposes only, and
(iii) is not necessarily indicative of the combined
operating results that would have occurred if the Qwest
and Savvis mergers had been consummated as of January
1, 2010.

**The pro forma operating metrics presented above
reflects the broadband subscribers and access lines of
CenturyLink and Qwest as though the companies had been
combined as of January 1, 2010 after conforming the
definitions of broadband subscribers and access lines
between the two companies.

Summary description of special items for 2011 and 2010
excluded from above schedule:
Includes integration and severance costs
associated with the Qwest and Embarq acquisitions
incurred by CenturyLink; realignment, severance
and merger related costs incurred by Qwest; and
merger related costs incurred by Savvis ($482
(A) million).
Includes integration, transaction and severance
costs associated with the Qwest and Embarq
acquisitions and curtailment gain incurred by
CenturyLink; realignment, severance and merger
related costs; accelerated recognition of share
based compensation expense; prior period
assessment of USF fees; and a legal reserve
incurred by Qwest; and acquisition costs incurred
(B) by Savvis ($362 million).
Includes the interest component of a favorable
settlement of an operating tax issue ($5
(C) million).
Includes expense associated with terminating a
bridge credit facility related to the Savvis
acquisition ($16 million) and costs associated
(D) with early retirement of Qwest debt ($6 million).
Loss on embedded option in convertible debt
(E) incurred by Qwest ($520 million).
Tax effect of above items and other tax
adjustments ($193 million for 2011 and $8
(F) million for 2010).

CenturyLink, Inc.
SUPPLEMENTAL PRO FORMA SEGMENT DATA
THREE MONTHS ENDED DECEMBER 31, 2011 AND PRO FORMA THREE MONTHS ENDED SEPTEMBER 30,
2011 AND DECEMBER 31, 2010
ASSUMING CENTURYLINK'S ACQUISITIONS OF QWEST AND SAVVIS OCCURRED JANUARY 1, 2010
(UNAUDITED)
(Dollars in millions)

Pro forma* Pro forma*
Three months Three months Three months
ended ended ended
December 31, 2011 September 30, 2011 December 31, 2010
----------------- ------------------- -----------------
Total segment
revenues $4,399 4,387 4,553
Total segment
expenses 2,087 2,070 2,083
Total segment
income $2,312 2,317 2,470

Total segment
income margin
(segment income
divided by
segment
revenues) 52.6% 52.8% 54.2%
==== ==== ====

Regional Markets
Segment
----------------
Revenues
Strategic
services $761 725 719
Legacy services 1,440 1,464 1,576
Data integration 36 32 33
2,237 2,221 2,328
----- ----- -----
Expenses
Direct 932 952 951
Allocated 59 53 68
991 1,005 1,019
--- ----- -----

Segment income $1,246 1,216 1,309

Segment income
margin 55.7% 54.8% 56.2%
==== ==== ====

Business Markets
Segment
----------------
Revenues
Strategic
services $446 441 434
Legacy services 350 352 372
Data integration 151 134 173
947 927 979
--- --- ---
Expenses
Direct 275 252 258
Allocated 312 318 319
587 570 577
--- --- ---

Segment income $360 357 402

Segment income
margin 38.0% 38.5% 41.1%
==== ==== ====

Wholesale Markets
Segment
-----------------
Revenues
Strategic
services $564 568 535
Legacy services 390 411 460
Data integration 1 - -
955 979 995
--- --- ---
Expenses
Direct 52 44 45
Allocated 249 251 249
301 295 294
--- --- ---

Segment income $654 684 701

Segment income
margin 68.5% 69.9% 70.5%
==== ==== ====

Savvis Operations
Segment
-----------------
Revenues
Savvis
Operations $260 260 251
260 260 251
--- --- ---
Expenses
Direct 208 200 193
Allocated - - -
208 200 193
--- --- ---

Segment income $52 60 58

Segment income
margin 20.0% 23.1% 23.1%
==== ==== ====

* For additional information regarding this pro forma information,
including related pro forma adjustments, please see the preceding
supplemental schedule.

SOURCE CenturyLink, Inc.

Photo:http://photos.prnewswire.com/prnh/20090602/DA26511LOGO
http://photoarchive.ap.org/
CenturyLink, Inc.

CONTACT: Kristina Waugh of CenturyLink, Inc., +1-318-340-5627, kristina.r.waugh@centurylink.com

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

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Profile: intent