CenturyLink Reports Fourth Quarter And Full-Year 2012 Earnings

        CenturyLink Reports Fourth Quarter And Full-Year 2012 Earnings

Achieved fourth quarter operating revenues of $4.58 billion and full-year
operating revenues of $18.4 billion, in line with guidance

Improved year-over-year rate of revenue decline to 1.5% in fourth quarter 2012
compared to 3.2% year-over-year decline in fourth quarter 2011

Realized strong growth in high-speed Internet subscribers of more than 41,000
during fourth quarter 2012

Achieved Adjusted Diluted EPS1 of $0.67 compared to $0.55 in fourth quarter
2011

Generated Free Cash Flow(1) of $610 million, excluding special items

PR Newswire

MONROE, La., Feb. 13, 2013

MONROE, La., Feb. 13, 2013 /PRNewswire/ --CenturyLink, Inc. (NYSE: CTL) today
reported solid operating revenues, operating cash flow and free cash flow for
fourth quarter and full-year 2012.

(Logo: http://photos.prnewswire.com/prnh/20090602/DA26511LOGO)

"We are pleased with our fourth quarter and full-year results, which reflect
the continued execution of our strategy to focus on investing in our key
growth drivers to further stabilize our top-line revenue while aligning our
operating costs with revenue and growth opportunities. Our investments in
broadband, Prism^TM TV, fiber-to-the-tower and data hosting continue to
provide a broad base of organic revenue growth opportunities and helped drive
pro forma full-year operating revenue improvement to a 1.7% decline in 2012
compared to a 3.8% decline a year ago," said Glen F. Post, III, chief
executive officer and president.

"We realized solid strategic data and hosting revenue growth during 2012
driven by strong demand from our business customers for high bandwidth data
services, colocation and managed services, including cloud. The December
commercial launch of our new savvisdirect product, which meets the increasing
demand for a simplified approach to cloud computing, reflects the combined
strength of our strategic asset portfolio and employee innovation.

"We remain focused on delivering innovative communications and hosted IT
solutions that meet the needs of customers, and we continue to expect further
improvement in our top-line revenue trend this year and to reach revenue
stabilization in 2014," Post concluded.

Fourth Quarter Highlights

  oImproved year-over-year revenue trend to a 1.5% rate of decline compared
    to a 3.2% decline in fourth quarter 2011.
  oAchieved free cash flow of $610 million, excluding special items and
    integration-related capital expenditures.
  oEnded fourth quarter 2012 with approximately 5.85 million high-speed
    Internet subscribers^2; adding more than 41,000 customers in the fourth
    quarter.
  oImproved access line loss trend during fourth quarter 2012 to a 5.7%
    annual decline compared to a 6.6% annual decline in fourth quarter 2011.
  oAdded more than 10,000 CenturyLink^® Prism^TM TV subscribers in fourth
    quarter 2012, ending the quarter with nearly 115,000 subscribers in
    service.
  oGenerated sequential recurring revenue growth in our Enterprise Markets –
    Network segment.
  oOpened a new data center^3 in Frankfurt, Germany, bringing total data
    centers to 54 throughout North America, Europe and Asia, with total
    sellable floor space of approximately 1.4 million square feet.

Consolidated Fourth Quarter Financial Results

Operating revenues for fourth quarter 2012 were $4.58 billion compared to
$4.65 billion in fourth quarter 2011. This decrease was driven by lower legacy
services revenues primarily due to the impact of access line losses and lower
access revenues, partially offset by increases in strategic revenues resulting
primarily from strong business customer demand for high-bandwidth data
services, colocation and managed hosting services and growth in high-speed
Internet and CenturyLink^® Prism^TM TV subscribers.

Operating expenses, excluding special items, decreased to $3.89 billion from
$4.06 billion in fourth quarter 2011. The year-over-year decrease was
primarily due to lower personnel-related costs, professional fees and
depreciation and amortization expense, which were partially offset by higher
colocation and managed hosting expense and network costs.

Operating cash flow (as defined in our attached supplemental schedules),
excluding special items, increased to $1.91 billion from $1.85 billion in
fourth quarter 2011. This increase was primarily the result of lower
personnel-related costs and professional fees being partially offset by the
impact of the decline in legacy revenues. For fourth quarter 2012, CenturyLink
achieved an operating cash flow margin, excluding special items, of 41.7%
versus 39.7% in fourth quarter 2011.

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

Adjusted Net Income and Adjusted Diluted EPS exclude the after-tax impact of
special items, the non-cash after-tax impact of the amortization of
intangibles, and the non-cash after-tax impact to interest expense of the
assignment of fair value to debt outstanding related to our Embarq, Qwest and
Savvis acquisitions.

Excluding the items outlined above, CenturyLink's Adjusted Net Income for
fourth quarter 2012 was $415 million compared to Adjusted Net Income of $343
million in fourth quarter 2011. Fourth quarter 2012 Adjusted Diluted EPS was
$0.67 compared to Adjusted Diluted EPS of $0.55 in the year-ago period. See
the attached schedules for additional information.

Full-Year Results

For the full-year 2012, operating revenues increased to $18.4 billion from
$15.4 billion for 2011. Operating cash flow, excluding special items, was $7.7
billion for 2012 compared to $6.5 billion in 2011. Net income, excluding
special items, was $947 million in 2012 compared to $867 million in 2011. Full
year 2012 earnings per share, excluding special items, was $1.52 compared to
$1.62 for the prior year. The decrease in 2012 earnings per share compared to
2011 is due to a higher average share count in 2012. Full-year 2011 results
include Qwest and Savvis operations from the April 1, 2011 and July 15, 2011
transaction closing dates, respectively.

Full-year 2012 operating revenues of $18.4 billion declined 1.7% from
operating revenues of $18.7 billion for pro forma full-year 2011^4. Operating
cash flow, excluding special items, was $7.7 billion for 2012 compared to $7.8
billion in pro forma 2011. Adjusted Net Income, excluding special items, was
$1.66 billion in 2012 compared to $1.63 billion in pro forma 2011. Adjusted
Diluted EPS, excluding special items, was $2.67 in 2012 compared to $2.64 for
pro forma 2011. The decline in operating revenues and operating cash flow was
driven by growth in lower-margin strategic revenues being more than offset by
a reduction in higher-margin legacy voice and access revenues.

GAAP Results – Fourth Quarter and Full-Year

Under generally accepted accounting principles (GAAP), net income for fourth
quarter 2012 was $233 million compared to $109 million for fourth quarter
2011, and diluted earnings per share for fourth quarter 2012 was $0.37
compared to $0.18 for fourth quarter 2011. Fourth quarter 2012 net income and
diluted earnings per share reflect after-tax integration, severance, and
retention costs associated with the Qwest and Savvis acquisitions and costs
associated with reduction in force initiatives partially offset by a gain on
the sale of non-operating investments and the early retirement of debt, which
aggregated $7 million ($0.01 per share). 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).

Net income under GAAP for full-year 2012 was $777 million compared to $573
million for full-year 2011, and diluted earnings per share for full-year 2012
was $1.25 compared to $1.07 for full-year 2011. For details regarding the
Company's special items for the three and twelve months ended December 31,
2012 and 2011, please see the accompanying financial schedules.

Segment Results / Highlights

Regional Markets

The Regional Markets segment realized continued strategic revenue growth
driven by increased high-speed Internet and CenturyLink^® Prism^TM TV
subscribers and higher revenue from strategic business data services.

  oStrategic revenues were $914 million in the quarter, a 3.6% increase over
    fourth quarter 2011.
  oGenerated $2.45 billion in total revenues, a decrease of 3.9% from fourth
    quarter 2011, reflecting the continued decline in legacy services tempered
    by the impact of Access Recovery Charges implemented effective July 1,
    2012 in accordance with the CAF Order^5.
  oAdded more than 10,000 CenturyLink^® Prism^TM TV subscribers during fourth
    quarter with more than 90% attachment rate of broadband services.

Wholesale Markets

The Wholesale Markets segment completed approximately 1,175 fiber-to-the-tower
builds during the fourth quarter, ending the year with more than 14,700
fiber-connected towers.

  oStrategic revenues of $572 million in the quarter increased slightly
    compared to fourth quarter 2011, as wireless carrier bandwidth expansion
    and higher Ethernet sales offset declines in copper-based revenue.
  oGenerated $908 million in total revenues, a decrease of 5.5% from fourth
    quarter 2011, reflecting the continued decline in legacy revenues
    primarily driven by the implementation of access rate reductions effective
    July 1, 2012 in accordance with the CAF Order^5 and lower long distance
    and switched access minutes of use.
  oCompleted more than 4,500 fiber builds in 2012 and expect to complete
    4,000 to 5,000 fiber builds in 2013.

Enterprise Markets – Network

The Enterprise Markets – Network segment achieved solid growth in recurring
revenue sales in the fourth quarter and continues to experience solid sales
momentum from enterprise and government customers.

  oStrategic revenues were $346 million in the quarter, a 7.8% increase over
    fourth quarter 2011, driven by strength in high-bandwidth offerings such
    as MPLS^6 and Ethernet services. Excluding the impact of private line
    services, the adjusted growth rate was nearly 13%.
  oGenerated $671 million in total revenues, an increase of 5.7% from fourth
    quarter 2011, reflecting growth in high-bandwidth offerings and data
    integration revenues.
  oAchieved recurring revenue growth of 4.5% year-over-year and the fourth
    straight sequential quarter of recurring revenue growth.

Enterprise Markets – Data Hosting

The Enterprise Markets – Data Hosting segment (primarily Savvis operations)
grew managed hosting (including cloud) and colocation services revenue, with
strength in core managed hosting products and in the financial and consumer
brands verticals.

  oOperating revenues were $292 million in the quarter, a 12.7% increase from
    fourth quarter 2011. Colocation revenues were $114 million, a 9.6%
    increase from fourth quarter 2011, and managed hosting revenues were $120
    million, representing a 21.2% increase over the same period a year ago.
    Managed hosting revenues include approximately $13 million of revenues
    contributed by the Ciber global IT outsourcing, or ITO, assets acquired
    October 15, 2012.
  oContinued to expand global geographic reach in key markets with opening of
    new data center in Frankfurt, Germany.
  oAchieved strong bookings in fourth quarter –the highest quarterly bookings
    level in four years.
  oLaunched savvisdirect^7, expanding CenturyLink's portfolio of cloud
    services to businesses of all sizes and announced the limited release of
    Savvis Symphony Cloud Storage and the availability of Savvis Symphony
    Database in Europe.

Integration Update

During fourth quarter 2012, CenturyLink incurred pre-tax integration,
severance and retention costs of $14 million ($9 million after-tax) related to
the Qwest and Savvis acquisitions.

CenturyLink ended 2012 with an annualized operating expense synergy run rate
of approximately $480 million from the Qwest acquisition. Based on current
expectations, CenturyLink anticipates exiting 2013 with approximately $600
million in annual run-rate synergies related to the Qwest acquisition.

Changes in Capital Allocation Strategy

We have announced today certain capital allocation initiatives. Please see
separate press release for further detail.

Guidance – First Quarter 2013 and Full-Year 2013

The Company expects first quarter 2013 revenue and operating cash flow to
decrease compared to fourth quarter 2012 primarily due to the decline in
legacy and data integration revenues. The Company also anticipates a decline
in depreciation and amortization expense in the first quarter of 2013 driven
primarily by the impact of the annual review and update of depreciation and
amortization rates. This anticipated lower level of depreciation and
amortization expense is expected to more than offset the decrease in operating
cash flow and result in an increase in Adjusted Diluted EPS in first quarter
2013 compared to fourth quarter 2012.

CenturyLink anticipates full-year 2013 operating cash flow and free cash flow
to decline from full-year 2012 primarily driven by the impact of the decline
in legacy revenues, along with a lower level of incremental synergies in 2013
compared to the level of incremental synergies achieved in 2012. The Company
also anticipates a decline in depreciation and amortization expense for
full-year 2013 compared to full-year 2012.



First Quarter 2013
Operating Revenue                          $4.46 to $4.51 billion
Operating Cash Flow (excl special items)   $1.83 to $1.88 billion
Adjusted Diluted EPS (excl special items)  $0.67 to $0.72
Full-Year 2013
Operating Revenue                          $18.1 to $18.3 billion
Annual percent change in Operating Revenue -0.5% to -1.5%
Operating Cash Flow (excl special item(s)  $7.3 to $7.5 billion
Adjusted Diluted EPS (excl special items)  $2.50 to $2.70
Capital Expenditures^8                     $2.8 to $3.0 billion
Free Cash Flow (excl special items)        $3.0 to $3.2 billion

All 2013 guidance figures and 2013 outlook statements included in this release
(i) speak as of February 13, 2013 only, (ii) include the impact of the Ciber
ITO assets acquired on October 15, 2012, (iii) exclude the potential impact of
our stock buyback program separately announced today and (iv) exclude the
effects of special items, future changes in regulation or accounting rules,
integration expenses associated with the Qwest and Savvis acquisitions, any
changes in operating or capital plans, the impact of litigation expenses or
other unforeseen events or circumstances that impact our financial
performance, and any future mergers, acquisitions, divestitures or other
similar business transactions. See "Forward Looking Statements" below. For
additional information on how we define certain of the terms used above, see
the attached schedules.

Investor Call

As previously announced, CenturyLink's management will host a conference call
at 4:00 p.m. Central Time today, February 13, 2013. Interested parties can
access the call by dialing 866-847-7859. The call will be accessible for
replay through February 20, 2013, by calling 888-266-2081 and entering the
access code 1601920. 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 6, 2013.

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.

About CenturyLink

CenturyLink is the third largest telecommunications company in the United
States and is recognized as a leader in the network services market by
technology industry analyst firms. The Company is a global leader in cloud
infrastructure and hosted IT solutions for enterprise customers. CenturyLink
provides data, voice and managed services in local, national and select
international markets through its high-quality advanced fiber optic network
and multiple data centers for businesses and consumers. The company also
offers advanced entertainment services under the CenturyLink^TM Prism^TM TV
and DIRECTV brands. 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 successfully
negotiate collective bargaining agreements on reasonable terms without work
stoppages; 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; our ability to successfully integrate recently
acquired operations into our incumbent operations, including the possibility
that the anticipated benefits from our recent 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; 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
common share dividends in amounts previously indicated, 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; 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 and our recent acquisitions are described in greater
detail in Item 1A to our Form 10-Q for the quarter ended September 30, 2012,
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.
  Effective second quarter 2012, CenturyLink modified its high-speed Internet
2 reporting to include consumer, business and wholesale subscribers instead of
  only consumer and small business subscribers.
3 We define a "data center" as any facility where we market, sell and deliver
  either colocation services or multi-tenant managed services, or both.
4 The pro forma figures assume we acquired Qwest and Savvis as of January 1,
  2010, as explained further in the attached schedules.
5 Federal Communications Commission's Connect America and Intercarrier
  Compensation Reform Order (the CAF Order) adopted on October 27, 2011
6 Multiprotocol Label Switching
  savvisdirect is CenturyLink's highly scalable and easy-to-use cloud services
7 platform designed for business of all sizes that is immediately accessible
  to business users, IT administrators and developers through an intuitive,
  user-friendly Web portal
8 Excludes approximately $70 million of integration-related capital
  expenditures





CenturyLink, Inc.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED DECEMBER 31, 2012 AND 2011
(UNAUDITED)
(Dollars in millions, except per share amounts; shares in thousands)
                   Three months ended December 31, 2012  Three months ended December 31, 2011
                                             As                                     As                         Increase
                                             adjusted                               adjusted
                                             excluding                             excluding                 (decrease)
                               Less        special                 Less        special     Increase    excluding
                   As        special     items       As        special     items       (decrease)  special
                   reported  items       (Non-GAAP)  reported  items       (Non-GAAP)  as           items
                                                                                                   reported
OPERATING
REVENUES
 Strategic     $ 2,124                     2,124         2,033                     2,033         4.5%          4.5%
 Legacy          2,003                     2,003         2,178                     2,178         (8.0%)        (8.0%)
 Data             189                       189           188                       188           0.5%          0.5%
 integration
 Other           267                       267           254                       254           5.1%          5.1%
                   4,583       -             4,583         4,653       -             4,653         (1.5%)        (1.5%)
OPERATING
EXPENSES
 Cost of
 services and      1,907       9         (1) 1,898         1,968       10        (4) 1,958         (3.1%)        (3.1%)
 products
 Selling,
 general and       790         18        (1) 772           900         51        (4) 849           (12.2%)       (9.1%)
 administrative
 Depreciation
 and               1,220                     1,220         1,252                     1,252         (2.6%)        (2.6%)
 amortization
                   3,917       27            3,890         4,120       61            4,059         (4.9%)        (4.2%)
OPERATING         666         (27)          693           533         (61)          594           25.0%         16.7%
INCOME
OTHER INCOME
(EXPENSE)
 Interest         (315)                     (315)         (340)                     (340)         (7.4%)        (7.4%)
 expense
 Other income     23          18        (2) 5             (1)         (6)       (5) 5             (2400.0%)     0.0%
 (expense)
 Income tax       (141)       2         (3) (143)         (83)        25        (6) (108)         69.9%         32.4%
 expense
NET INCOME     $ 233         (7)           240           109         (42)          151           113.8%        58.9%
BASIC EARNINGS  $ 0.37        (0.01)        0.39          0.18        (0.07)        0.24          105.6%        62.5%
PER SHARE
DILUTED
EARNINGS PER     $ 0.37        (0.01)        0.38          0.18        (0.07)        0.24          105.6%        58.3%
SHARE
AVERAGE SHARES
OUTSTANDING
 Basic           621,578                   621,578       616,575                   616,575       0.8%          0.8%
 Diluted         623,654                   623,654       618,510                   618,510       0.8%          0.8%
DIVIDENDS PER    $ 0.725                     0.725         0.725                     0.725         -             -
COMMON SHARE

SPECIAL ITEMS
        Includes severance costs associated with recent reduction in force
        initiatives ($13 million), integration, severance and retention costs
(1) - associated with our acquisition of Qwest ($9 million)and integration,
        severance, and retention costs associated with our acquisition of
        Savvis ($5 million).
(2) - Gain on the sale of non-operating investments ($3 million) and early
        retirement of debt ($15 million).
(3)    Income tax benefit of Items (1) and (2) and effect of rate adjustment
-     on first three quarters of year.
        Includes integration, severance, and retention costs associated with
        our acquisition of Qwest, along with restructuring charges ($55
(4) - million); integration and severance costs associated with
        ouracquisition of Embarq ($2 million); and transaction and other
        costs associated with our acquisition of Savvis ($4 million).
(5) - Cost associated with early retirement of Qwest debt.
(6) - Income tax benefit of Items (4) and (5).



CenturyLink, Inc.
CONSOLIDATED STATEMENTS OF INCOME
TWELVE MONTHS ENDED DECEMBER 31, 2012 AND 2011
(UNAUDITED)
(Dollars in millions, except per share amounts; shares in thousands)
                   Twelve months ended December 31,       Twelve months ended December 31,
                   2012                                   2011
                                             As                                     As                         Increase
                                             adjusted                               adjusted
                                             excluding                             excluding                 (decrease)
                               Less        special                 Less        special     Increase    excluding
                   As        special     items       As        special     items       (decrease)  special
                   reported  items       (Non-GAAP)  reported  items       (Non-GAAP)  as           items
                                                                                                   reported
OPERATING
REVENUES
 Strategic     $ 8,361                     8,361         6,262                     6,262         33.5%         33.5%
 Legacy          8,287                     8,287         7,672                     7,672         8.0%          8.0%
 Data             672                       672           537                       537           25.1%         25.1%
 integration
 Other           1,056                     1,056         880                       880           20.0%         20.0%
                   18,376      -             18,376        15,351      -             15,351        19.7%         19.7%
OPERATING
EXPENSES
 Cost of
 services and      7,639       34        (1) 7,605         6,325       70        (5) 6,255         20.8%         21.6%
 products
 Selling,
 general and       3,244       129       (1) 3,115         2,975       395       (5) 2,580         9.0%          20.7%
 administrative
 Depreciation
 and               4,780       (30)      (2) 4,810         4,026                     4,026         18.7%         19.5%
 amortization
                   15,663      133           15,530        13,326      465           12,861        17.5%         20.8%
OPERATING         2,713       (133)         2,846         2,025       (465)         2,490         34.0%         14.3%
INCOME
OTHER INCOME
(EXPENSE)
 Interest         (1,319)                   (1,319)       (1,072)     5         (6) (1,077)       23.0%         22.5%
 expense
 Other income     (144)       (165)     (3) 21            (5)         (22)      (7) 17            2780.0%       23.5%
 (expense)
 Income tax       (473)       128       (4) (601)         (375)       188       (8) (563)         26.1%         6.7%
 expense
NET INCOME     $ 777         (170)         947           573         (294)         867           35.6%         9.2%
BASIC EARNINGS  $ 1.25        (0.27)        1.52          1.07        (0.55)        1.62          16.8%         (6.2%)
PER SHARE
DILUTED
EARNINGS PER     $ 1.25        (0.27)        1.52          1.07        (0.55)        1.62          16.8%         (6.2%)
SHARE
AVERAGE SHARES
OUTSTANDING
 Basic           620,205                   620,205       532,780                   532,780       16.4%         16.4%
 Diluted         622,285                   622,285       534,121                   534,121       16.5%         16.5%
DIVIDENDS PER    $ 2.90                      2.90          2.90                      2.90          -             -
COMMON SHARE

SPECIAL ITEMS
     Includes severance costs associated with recent reduction in force
     initiatives ($81 million), integration, severance, and retention costs
(1) associated with our acquisition of Qwest ($71 million) and integration,
-   severance, and retentioncosts associated with our acquisition of Savvis
     ($14 million); partially offset with a $3 million credit related to tax
     incentives for the Embarq integration.
(2) Out-of-period depreciation adjustment ($30 million) to correct an
-   overstatement of depreciation.
(3) Net loss associated with early retirement of debt ($179 million),
-   partially offset by gains on the sales of non-operating investments $14
     million.
(4) Income tax benefit of Items (1) through (3) and benefit from the reversal
-   of a valuation allowance ($14 million).
     Includes integration, severance, and retention costs associated with our
     acquisition of Qwest, along with restructuring charges ($371 million);
(5) integration and severance costs associated with ouracquisition 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 million.
(6) Reflects the interest component of a favorable settlement of an operating
-   tax issue.
(7) Expense associated with terminating a bridge credit facility related to
-   the Savvis acquisition ($16 million) and costs associated with early
     retirement of Qwest debt ($6 million).
(8) Income tax benefit of Items (5) through (7) and a benefit from the
-   reduction of a valuation allowance ($14 million).



CenturyLink, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2012 AND 2011
(UNAUDITED)
(Dollars in millions)
                                             December 31,  December 31,
                                             2012           2011
    ASSETS
CURRENT ASSETS
    Cash and cash equivalents              $ 211            128
    Other current assets                     3,396          3,389
     Total current assets                  3,607          3,517
NET PROPERTY, PLANT AND EQUIPMENT
    Property, plant and equipment            32,086         29,585
    Accumulated depreciation                 (13,054)       (10,141)
     Net property, plant and equipment     19,032         19,444
GOODWILL AND OTHER ASSETS
    Goodwill                                 21,691         21,691
    Other, net                               9,642          11,351
     Total goodwill and other assets      31,333         33,042
TOTAL ASSETS                               $ 53,972         56,003
    LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
    Current maturities of long-term debt   $ 1,205          480
    Other current liabilities                3,390          3,544
     Total current liabilities            4,595          4,024
LONG-TERM DEBT                               19,400         21,356
DEFERRED CREDITS AND OTHER LIABILITIES       10,688         9,796
STOCKHOLDERS' EQUITY                         19,289         20,827
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 53,972         56,003



CenturyLink, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
TWELVE MONTHS ENDED DECEMBER 31, 2012 AND 2011
(UNAUDITED)
(Dollars in millions)
                                                  Twelve Months  Twelve Months
                                                  Ended        Ended
                                                  December 31,  December 31,
                                                  2012          2011
OPERATING ACTIVITIES
 Net income                                   $ 777            573
 Adjustments to reconcile net income to
 netcash provided by operating activities:
         Depreciation and amortization          4,780          4,026
         Deferred income taxes                  394            395
         Provision for uncollectible accounts   187            153
         Net loss on early retirement of debt   179            8
         Changes in current assets and current   (225)          (205)
         liabilities, net
         Retirement benefits                    (169)          (688)
         Changes in other noncurrent assets      162            (6)
         and liabilities
         Other, net                             (20)           (55)
                  Net cash provided by           6,065          4,201
                  operating activities
INVESTING ACTIVITIES
 Payments for property, plant and equipment      (2,919)        (2,411)
 and capitalized software
 Cash paid for Savvis acquisition, net of $94    -              (1,671)
 cash acquired
 Cash acquired in Qwest acquisition, net of $5   -              419
 cash paid
 Proceeds from sale of property and intangible   191            -
 assets
 Other, net                                     38             16
                  Net cash used in investing     (2,690)        (3,647)
                  activities
FINANCING ACTIVITIES
 Net proceeds from issuance of long-term debt   3,362          4,102
 Payments of long-term debt                     (5,118)        (2,984)
 Early retirement of debt costs                 (346)          (114)
 Net borrowings (payments) on credit facility   543            (88)
 Dividends paid                                 (1,811)        (1,556)
 Net proceeds from issuance of common stock     110            103
 Repurchase of common stock                     (37)           (31)
 Other, net                                     2              (9)
                  Net cash used in financing     (3,295)        (577)
                  activities
Effect of exchange rate changes on cash and      3              (22)
cash equivalents
Net increase (decrease) in cash and cash         83             (45)
equivalents
Cash and cash equivalents at beginning of        128            173
period
Cash and cash equivalents at end of period    $ 211            128



CenturyLink, Inc.
SELECTED SEGMENT FINANCIAL INFORMATION
THREE MONTHS AND TWELVE MONTHS ENDED DECEMBER 31, 2012 AND 2011
(UNAUDITED)
(Dollars in millions)
                                                                     Pro forma
                                                                     (*)
                                                                     Twelve
                                                                     months
                                                                     ended
                               Three months     Twelve months ended  December
                               ended December   December 31,        31, 2011
                               31,
                               2012     2011    2012        2011
Total segment revenues       $ 4,316    4,399   17,320      14,471   17,690
Total segment expenses         2,055    2,085   8,094       6,513    8,167
Total segment income         $ 2,261    2,314   9,226       7,958    9,523
Total segment income margin
(segment income divided by     52.4%    52.6%   53.3%       55.0%    53.8%
segment revenues)
Regional Markets Segment
Revenues
   Strategic services        $ 914      882     3,607       2,890    3,417
   Legacy services             1,455    1,575   5,996       5,593    6,468
   Data integration            76       87      273         260      296
                             $ 2,445    2,544   9,876       8,743    10,181
Expenses
   Direct                    $ 994      1,014   3,939       3,469    4,010
   Allocated                   66       67      279         204      261
                             $ 1,060    1,081   4,218       3,673    4,271
Segment income               $ 1,385    1,463   5,658       5,070    5,910
Segment income margin          56.6%    57.5%   57.3%       58.0%    58.0%
Wholesale Markets Segment
Revenues
   Strategic services        $ 572      571     2,296       1,915    2,266
   Legacy services             335      389     1,424       1,389    1,663
   Data integration            1        1       1           1        1
                             $ 908      961     3,721       3,305    3,930
Expenses
   Direct                    $ 38       52      169         174      186
   Allocated                   233      261     948         847      1,032
                             $ 271      313     1,117       1,021    1,218
Segment income               $ 637      648     2,604       2,284    2,712
Segment income margin          70.2%    67.4%   70.0%       69.1%    69.0%
Enterprise Markets - Network
Segment
Revenues
   Strategic services        $ 346      321     1,344       967      1,289
   Legacy services             213      214     867         690      897
   Data integration            112      100     398         276      361
                             $ 671      635     2,609       1,933    2,547
Expenses
   Direct                    $ 209      199     781         568      738
   Allocated                   280      290     1,110       882      1,166
                             $ 489      489     1,891       1,450    1,904
Segment income               $ 182      146     718         483      643
Segment income margin          27.1%    23.0%   27.5%       25.0%    25.2%
Enterprise Markets - Data
Hosting Segment
Revenues
   Strategic services        $ 292      259     1,114       490      1,032
                             $ 292      259     1,114       490      1,032
Expenses
   Direct                    $ 253      220     940         415      848
   Allocated                   (18)     (18)    (72)        (46)     (74)
                             $ 235      202     868         369      774
Segment income               $ 57       57      246         121      258
Segment income margin          19.5%    22.0%   22.1%       24.7%    25.0%

During the second quarter of 2012, we restructured our four operating segments
to more effectively leverage the strategic assets from our recent acquisitions
of Embarq, Qwest and Savvis. We also revised our methodology for how we
allocate our expenses to our segments to better align segment expenses with
related revenues. In addition, we now allocate certain expenses from our
enterprise markets-data hosting segment to our other three segments. We have
restated prior periods to reflect these changes in our methodology.
*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 the
elimination of intercompany billings and the elimination of certain deferred
revenues and costs. The above pro forma 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.



CenturyLink, Inc.
ADJUSTED AND PRO FORMA STATEMENTS OF INCOME - NON-GAAP
TWELVE MONTHS ENDED DECEMBER 31, 2012 AND PRO FORMA TWELVE MONTHS
ENDED DECEMBER 31, 2011
(UNAUDITED)
(Dollars in millions, except per share amounts, shares in thousands)
                                                          Pro forma*
                                       Twelve months      Twelve months
                                       ended              ended
                                       December 31,       December 31,
                                       2012               2011
                                       (excluding         (excluding
                                       special            special
                                       items)(1)          items)(1)
OPERATING REVENUES
         Strategic services        $  8,361              7,995
         Legacy services              8,287              9,037
         Data integration             672                658
         Other                        1,056              1,002
                                       18,376             18,692
OPERATING EXPENSES
         Cash expenses                10,720         (A) 10,910        (B)
         Depreciation and             4,810              4,953
         amortization
                                       15,530             15,863
OPERATING INCOME                      2,846              2,829
OTHER INCOME (EXPENSE)
         Interest expense             (1,319)            (1,331)       (C)
         Other income (expense)       21             (D) 22            (E)
         Income tax expense           (601)          (F) (613)         (F)
NET INCOME                         $  947                907
DILUTED EARNINGS PER SHARE         $  1.52               1.46
WEIGHTED AVERAGE DILUTED SHARES       622,285            615,800
OUTSTANDING
OPERATING CASH FLOW
         Operating income          $  2,846              2,829
         Add: Depreciation and       4,810              4,953
         amortization
         Operating cash flow      $  7,656              7,782



    *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 amortization of the fair
    value assigned to intangible assets (primarily customer relationship);
    (iii) adjustments to depreciation to reflect the fair value assigned to
    property, plant and equipment; (iv) adjustments to interest expense to
    reflect acquisition date financing and (v) the related income tax
    effects. The above pro forma 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.
(1)      Summary description of special items for 2012 and 2011 excluded from
         above schedule:
         Excludes severance costs associated with recent reduction in force
         initiatives ($81 million), integration, severance, and retention
    (A)  costs associated with our acquisition of Qwest ($71 million) and
         integration, severance and retention costs associated with our
         acquisition of Savvis ($14 million); partially offset with a $3
         million credit related to tax incentives for the Embarq acquisition.
         Excludes integration and severance costs associated with the Qwest
    (B)  and Embarq acquisitions incurred by CenturyLink; realignment,
         severance and merger related costs incurred by Qwest; and merger
         related costs incurred by Savvis ($482 million).
    (C)  Excludes the interest component of a favorable settlement of an
         operating tax issue ($5 million).
         Excludes net loss associated with early retirement of debt ($179
    (D)  million); partially offset by gains on the sales of non-operating
         investments $14 million.
         Excludes expense associated with terminating a bridge credit facility
    (E)  related to the Savvis acquisition ($16 million) and costs associated
         with early retirement of Qwest debt ($6 million).
         Excludes tax effect of above items (A) to (E) and a benefit from the
    (F)  reduction of a valuation allowance ($14 million) in 2012 and ($14
         million) in 2011.



CenturyLink, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
(Dollars in millions)
                Three months ended December 31,    Three months ended December 31,
                2012                                2011
                                        As                                 As
                                        adjusted                            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   $ 666        (27)     (1) 693         533        (61)     (2) 594
 income
 Add:
 Depreciation   1,220      -            1,220       1,252      -            1,252
 and
 amortization
 Operating   $ 1,886      (27)         1,913       1,785      (61)         1,846
 cash flow
 Revenues   $ 4,583      -            4,583       4,653      -            4,653
 Operating
 income
 margin
 (operating     14.5%                   15.1%       11.5%                   12.8%
 income
 divided by
 revenues)
 Operating
 cash flow
 margin
 (operating     41.2%                   41.7%       38.4%                   39.7%
 cash flow
 divided by
 revenues)
Free cash
flow
 Operating                         $   1,913                               1,846
 cash flow
 Less: Cash
 (paid)                                 (23)                                25
 refunded for
 income taxes
 Less: Cash
 paid for
 interest,                              (408)                               (465)
 net of
 amounts
 capitalized
 Less:
 Capital                                (877)                               (896)
 expenditures
 (3)
 Other
 income                                 5                                   5
 (expense)
 Free cash                             610                                 515
 flow (4)

SPECIAL ITEMS
       Includes severance costs associated with recent reduction in force
       initiatives ($13 million), integration, severance, and retention costs
(1) - associated with our acquisition of Qwest ($9 million) andintegration,
       severance and retention costs associated with our acquisition of Savvis
       ($5 million).
       Includes integration, severance, and retention costs associated with
       our acquisition of Qwest, along with restructuring charges ($55
(2) - million); integration and severance costs associated with
       ouracquisition of Embarq ($2 million); transaction and other costs
       associated with our acquisition of Savvis ($4 million).
       Excludes $18 million in fourth quarter 2012 and $4 million in fourth
(3) - quarter 2011 of capital expenditures related to the integration of
       Embarq, Qwest and Savvis.
(4) - Excludes special items identified in items (1) and (2) and the impact
       of pension contributions of $487 million for fourth quarter 2011.





CenturyLink, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
(Dollars in millions)
                Twelve months ended December 31,   Twelve months ended December 31,
                2012                                2011
                                        As                                 As
                                        adjusted                            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   $ 2,713      (133)    (1) 2,846       2,025      (465)    (3) 2,490
 income
 Add:
 Depreciation   4,780      (30)     (2) 4,810       4,026      -            4,026
 and
 amortization
 Operating   $ 7,493      (163)        7,656       6,051      (465)        6,516
 cash flow
 Revenues   $ 18,376     -            18,376      15,351     -            15,351
 Operating
 income
 margin
 (operating     14.8%                   15.5%       13.2%                   16.2%
 income
 divided by
 revenues)
 Operating
 cash flow
 margin
 (operating     40.8%                   41.7%       39.4%                   42.4%
 cash flow
 divided by
 revenues)
Free cash
flow
 Operating                         $   7,656                               6,516
 cash flow
 Less: Cash
 (paid)                                 (82)                                118
 refunded for
 income taxes
 Less: Cash
 paid for
 interest,                              (1,405)                             (1,225)
 net of
 amounts
 capitalized
 Less:
 Capital                                (2,858)                             (2,381)
 expenditures
 (4)
 Other
 income                                 21                                  17
 (expense)
 Free cash                             3,332                               3,045
 flow (5)

SPECIAL ITEMS
       Includes severance costs associated with recent reduction in force
       initiatives ($81 million), integration, severance, and retention costs
       associated with our acquisition of Qwest ($71 million) and integration,
(1) - severance andretention costs associated with our acquisition of Savvis
       ($14 million); partially offset with a $30 million out-of-period
       depreciation adjustment and a $3 million credit related to tax
       incentives for the Embarq integration.
(2) - Out-of-period depreciation adjustment ($30 million) to correct an
       overstatement of depreciation.
       Includes integration, severance, and retention costs associated with
       our acquisition of Qwest, along with restructuring charges ($371
(3) - million); integration and severance costs associated with
       ouracquisition of Embarq ($81 million); transaction and other costs
       associated with our acquisition of Savvis ($26 million); net of a
       favorable settlement of an operating tax issue $13 million.
       Excludes $61 million for the twelve months ended December 31, 2012 and
(4) - $30 million for the twelve months ended December 31, 2011 of capital
       expenditures related to the integration of Embarq, Qwest and Savvis.
       Excludes (i) special items identified in items (1) to (3) and (ii) the
(5) - impact of pension contributions of $32 million for the twelve months
       ended December 31, 2012 and $587 million for the twelve months ended
       December 31, 2011.







CenturyLink, Inc.
OPERATING METRICS
(UNAUDITED)
(In thousands)
                       As of              As of               As of
                       December 31, 2012  September 30, 2012  December 31,
                                                              2011
Broadband subscribers  5,848              5,807               5,652
Access lines           13,748             13,946              14,584



CenturyLink, Inc.
SUPPLEMENTAL NON-GAAP INFORMATION - ADJUSTED DILUTED EPS
THREE MONTHS ENDED DECEMBER 31, 2012, SEPTEMBER 30, 2012 AND DECEMBER 31,
2011
(UNAUDITED)
(Dollars in millions, except per share amounts)
                                       Three months Three months  Three months
                                       ended        ended         ended
                                       December 31, September 30, December 31,
                                       2012         2012          2011
                                       (excluding   (excluding    (excluding
                                       special      special       special
                                       items)       items)        items)
Net income *                         $ 240          237           151
Add back:
 Amortization of customer base
intangibles:
                Qwest                  237          241           253
                Embarq                 34           34            39
                Savvis                 15           15            20
 Amortization of trademark
intangibles:
                Qwest                  14           15            19
                Savvis                 2            2             2
 Amortization of fair value
adjustment of long-term debt:
                Embarq                 1            1             -
                Qwest                  (18)         (20)          (31)
 Subtotal                       285          288           302
 Tax effect of above items          (110)        (112)         (110)
Net adjustment, after taxes            175          176           192
Net income, as adjusted for above    $ 415          413           343
items
Weighted average diluted shares        623.7        623.3         618.5
outstanding
Diluted EPS (excluding special       $ 0.38         0.38          0.24
items)
Adjusted diluted EPS as adjusted for
the above-listed purchaseaccounting
intangible and interest              $ 0.67         0.66          0.55
amortizations (excluding special
items)

The above schedule presents adjusted net income and adjusted earnings per
share (both excluding special items) by adding back to net income and earnings
per share certain non-cash expense items that arise as a result of the
application of business combination accounting rules to recent acquisitions.
Such presentation is not in accordance with generally accepted accounting
principles but management believes the presentation is useful to analysts and
investors to understand the impacts of growing our business through
acquisitions.
*See preceding schedule for a summary description of special items.



CenturyLink, Inc.
SUPPLEMENTAL NON-GAAP INFORMATION - ADJUSTED DILUTED EPS
TWELVE MONTHS ENDED DECEMBER 31 AND DECEMBER 31, 2011
(UNAUDITED)
(Dollars in millions, except per share amounts)
                                                                Pro Forma*
                                                 Twelve months  Twelve months
                                                 ended          ended
                                                 December 31,   December 31,
                                                 2012           2011
                                                 (excluding     (excluding
                                                 special items) special items)
Net income **                                  $ 947            907
Add back:
 Amortization of customer base intangibles:
                     Qwest                       966            1,016
                     Embarq                      146            166
                     Savvis                      59             80
 Amortization of trademark intangibles:
                     Qwest                       63             76
                     Savvis                      9              8
 Amortization of fair value adjustment of
long-term debt:
                     Embarq                      4              3
                     Qwest                       (86)           (198)
 Subtotal                                 1,161          1,151
 Tax effect of above items                    (445)          (426)
Net adjustment, after taxes                      716            725
Net income, as adjusted for above items        $ 1,663          1,632
Weighted average diluted shares outstanding     622.3          615.8
Diluted EPS (excluding special items)          $ 1.52           1.46
Adjusted diluted EPS as adjusted for the
above-listed purchaseaccounting intangible    $ 2.67           2.64
and interest amortizations (excluding special
items)

The above schedule presents adjusted net income and adjusted earnings per
share (both excluding special items) by adding back to net income and earnings
per share certain non-cash expense items that arise as a result of the
application of business combination accounting rules to recent acquisitions.
Such presentation is not in accordance with generally accepted accounting
principles but management believes the presentation is useful to analysts and
investors to understand the impacts of growing our business through
acquisitions.
*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 amortization of the fair value assigned
to intangible assets (primarily customer relationship); (iii) adjustments to
depreciation to reflect the fair value assigned to property, plant and
equipment; (iv) adjustments to interest expense to reflect acquisition date
financing and (v) the related income tax effects. The above pro forma
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.
**See preceding schedule for a summary description of special items.



CenturyLink, Inc.
SUPPLEMENTAL SELECT SAVVIS REVENUE INFORMATION
THREE MONTHS ENDED DECEMBER 31, 2012, SEPTEMBER 30, 2012 AND DECEMBER 31,
2011
(UNAUDITED)
(Dollars in millions)
                        Three months      Three months        Three months
                        ended             ended               ended
                        December 31,      September 30,       December 31,
                        2012              2012                2011
Colocation revenue    $ 113               110                 99
Managed hosting         121               108                 98
revenue



SOURCE CenturyLink, Inc.

Website: http://www.centurytel.com
Contact: Kristina Waugh, 318.340.5627, kristina.r.waugh@centurylink.com
 
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