CenturyLink Reports Third Quarter 2013 Results

                CenturyLink Reports Third Quarter 2013 Results

Achieved operating revenues of $4.52 billion, including core revenues[1] of
$4.10 billion

Generated operating cash flow[2] of $1.81 billion, excluding special items

Generated free cash flow[2] of $761 million, excluding special items and
integration-related capital expenditures

Achieved Adjusted Net Income[2] of $375 million and Adjusted Diluted EPS[2] of
$0.63, excluding special items

Reported GAAP net loss of $1.05 billion and loss per share of $1.76 driven by
accrual for proposed KPNQwest litigation settlement of $142 million after-tax
and non-cash goodwill impairment of $1.1 billion

Added 33,000 broadband and nearly 17,000 Prism™ TV customers during third
quarter

Repurchased 38 million shares, or 6.1% of December 31, 2012 outstanding
shares, for approximately $1.3 billion from program inception in February 2013
through November 5, 2013

PR Newswire

MONROE, La., Nov. 6, 2013

MONROE, La., Nov. 6, 2013 /PRNewswire/ --CenturyLink, Inc. (NYSE: CTL) today
reported solid operating revenues, operating cash flow and free cash flow for
third quarter 2013.

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

"CenturyLink achieved solid financial and subscriber results for the third
quarter," said Glen F. Post III, chief executive officer and president.

"Overall, we continue to perform well with particular strength in our Business
segment where sustained demand for high-bandwidth services and solid sales
momentum continue to drive strong results.

"Despite this overall solid operating performance in the third quarter, there
was a special item which significantly impacted our financial results for the
quarter. We were required, under GAAP, to recognize a non-cash $1.1 billion
impairment to the goodwill assigned to our Data Hosting segment. While we
continue to be optimistic and encouraged about the future growth potential and
value of our Data Hosting business, we are not currently achieving the
forecasted growth and cash flows we originally projected.As part of our
accounting valuation process, past performance was a factor in the development
of growth projections for our Data Hosting business in future periods.

"We are taking steps to drive revenue growth and margins to be more in line
with industry trends going forward and we expect to achieve significant
improvement in our Data Hosting results in the months and years ahead," Post
concluded.

Third Quarter Highlights

  oAchieved Core revenues of $4.1 billion in third quarter, a year-over-year
    decline of 1.0% compared with a 1.8% year-over-year decline for third
    quarter 2012.
  oGenerated free cash flow of $761 million, excluding special items and
    integration-related capital expenditures.
  oGenerated solid growth in strategic revenue from high-bandwidth data
    services.
  oContinued growing momentum in cross-sell initiatives for data hosting.
  oAdded 33,000 high-speed Internet subscribers during third quarter, ending
    the period with more than 5.94 million subscribers in service.
  oEnded the quarter with 149,000 CenturyLink^® Prism^TM TV subscribers, an
    increase of approximately 17,000 subscribers in third quarter 2013.
  oPurchased and retired 11.3 million shares for $385 million during third
    quarter 2013.

Goodwill Impairment
Our annual measurement date for testing potential goodwill impairment is
September 30. As a result of our testing, the Company determined the goodwill
for its Data Hosting segment was impaired primarily due to a lower forecast of
future growth rates. Although our analysis is not complete, the Company
estimated and recorded a non-cash, non-tax deductible goodwill impairment
charge of $1.1 billion during third quarter 2013. This analysis is expected to
be completed prior to reporting financial results for fourth quarter 2013, and
we will adjust the estimate at that time.

KPNQwest Litigation Update
Following confidential mediation discussions, Qwest, KPN, and the trustees in
the Dutch bankruptcy proceeding for KPNQwest reached a tentative oral
agreement in October 2013 on the principal financial terms of a potential
settlement of their €4.2 billion dispute.The tentative settlement is subject
to several conditions, including the negotiation and execution of a definitive
settlement agreement acceptable to the plaintiffs and various other defendants
and the approval of the Dutch bankruptcy court.

CenturyLink has accrued a liability in third quarter 2013 in the pre-tax
amount of €172 million (or $233 million as reflected in its accompanying
consolidated financial schedules based on the exchange rate on September 30,
2013), which equals Qwest's proposed contribution under the terms of the
tentative settlement. In the event that the settlement is not finalized, the
Company will continue to vigorously defend against the matter.

Consolidated Third Quarter Financial Results

Operating revenues for third quarter 2013 were $4.52 billion compared to $4.57
billion in third quarter 2012. 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 increased business customer demand for high-bandwidth data
services and growth in high-speed Internet and CenturyLink^® Prism^TM TV
subscribers.

Operating expenses, excluding special items, of $3.85 billion decreased
slightly from $3.86 billion in third quarter 2012. The year-over-year decrease
in personnel-related costs and depreciation and amortization expenses were
partially offset by higher professional fees and non-employee costs.

Operating cash flow (as defined in our attached supplemental schedules),
excluding special items, decreased to $1.81 billion from $1.90 billion in
third quarter 2012. This decrease was primarily the result of lower legacy
revenues described above. For third quarter 2013, CenturyLink achieved an
operating cash flow margin, excluding special items, of 40.0% versus 41.5% in
third quarter 2012.

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 intangible
assets related to the Embarq, Qwest and Savvis acquisitions, and the non-cash
after-tax impact to interest expense of the assignment of fair value to the
outstanding debt assumed in connection with those acquisitions.

Excluding the items outlined above, CenturyLink's Adjusted Net Income for
third quarter 2013 was $375 million compared to Adjusted Net Income of $413
million in third quarter 2012. Third quarter 2013 Adjusted Diluted EPS was
$0.63 compared to Adjusted Diluted EPS of $0.66 in the year-ago period. See
the attached schedules for additional information.

GAAP Results – Third Quarter

Under generally accepted accounting principles (GAAP), net loss for third
quarter 2013 was $1.05 billion compared to $270 million net income for third
quarter 2012, and loss per share for third quarter 2013 was $1.76 compared to
$0.43 diluted earnings per share for third quarter 2012. Third quarter 2013
net loss and loss per share reflect a non-cash goodwill impairment charge and
the after-tax impact of an accrued liability related to the proposed
settlement of our KPNQwest litigation, severance, integration and retention
costs associated with the Qwest acquisition, severance associated with expense
reduction initiatives and the impairment of an office building the company is
selling, which aggregated to a $1.26 billion charge ($2.11 per share) for the
quarter.

Third quarter 2012 net income and diluted earnings per share reflect a
favorable out-of-period adjustment to depreciation expense related to the fair
value previously assigned to Embarq plant assets, an income tax benefit from
the reversal of a valuation allowance and a gain on the sale of a
non-operating investment, which were partially offset by severance,
integration and retention costs associated with the Embarq, Qwest and Savvis
acquisitions and severance associated with recent expense reduction
initiatives, which netted to an after-tax gain of $33 million ($0.05 per
share) for the quarter.

Segment Third Quarter Financial Results

Consumer
The Consumer segment realized continued strategic revenue growth driven by
increased high-speed Internet and CenturyLink^® Prism^TM TV subscribers, along
with price increases for selected services.

  oStrategic revenues were $644 million in the quarter, a 6.8% increase over
    third quarter 2012.
  oGenerated $1.50 billion in total revenues, a decrease of 2.1% from third
    quarter 2012, reflecting the continued decline in legacy services tempered
    by increased Access Recovery Charges, in accordance with the CAF Order[3].
  oAdded a record 17,000 CenturyLink^® Prism^TM TV customers during third
    quarter 2013, growing total customers 13% from the prior quarter.

Business
The Business segment achieved sequential recurring revenue growth driven by
continued demand for high-bandwidth data services and solid sales momentum.

  oStrategic revenues were $640 million in the quarter, a 6.3% increase over
    third quarter 2012, driven by strength in high-bandwidth offerings such as
    MPLS[4] and Ethernet services. Excluding the impact of low bandwidth
    services, the adjusted growth rate was approximately 9%.
  oGenerated $1.54 billion in total revenues, flat from third quarter 2012,
    as growth in high-bandwidth offerings offset lower legacy services and
    data integration revenues.
  oContinued strong sales momentum in third quarter.

Wholesale
The Wholesale segment ended the quarter with nearly 18,000 fiber-connected
towers and remains well positioned to benefit from the continued growth in
wireless data bandwidth consumption.

  oStrategic revenues of $563 million in the quarter decreased $6 million
    compared to third quarter 2012, as declines in copper-based revenue were
    partially offset by increases in wireless carrier bandwidth demand and
    Ethernet sales.
  oGenerated $878 million in total revenues, a decrease of 3.5% from third
    quarter 2012, reflecting the continued decline in legacy revenues,
    primarily driven by lower long distance and switched access minutes of use
    and access rate reductions, in accordance with the CAF Order[3].
  oCompleted 1,200 fiber builds in third quarter 2013; we expect to complete
    3,500 to 4,000 fiber builds in full-year 2013, lower than the previous
    estimate due primarily to construction delays by wireless carriers.

Data Hosting
The Data Hosting segment grew managed hosting (including cloud) and colocation
services revenue year-over-year as cross-selling initiatives continue to
strengthen sales opportunities.

  oOperating revenues were $342 million in the quarter, a 4.6% increase from
    third quarter 2012.
  oColocation revenues were $146 million, a 1.4% increase from third quarter
    2012, and managed hosting revenues were $129 million, representing a 15%
    increase over the same period a year ago. Managed hosting revenues include
    $14 million of revenues contributed by the Ciber global IT outsourcing, or
    ITO, assets acquired October 15, 2012.
  oAnnounced expanded VMware partnership allowing Savvis and VMware to offer
    enterprise services on VMWare's hybrid cloud – powered by Savvis
    collocation services.

Guidance – Fourth Quarter 2013

Guidance for fourth quarter 2013 is outlined in the table below. The full-year
2013 guidance provided on August 7, 2013 remains unchanged.

Fourth quarter expenses are expected to increase from third quarter 2013
primarily due to higher data integration costs related to an anticipated
increase in customer premise equipment sales.

Fourth Quarter 2013 (excl. special items)
Operating Revenues   $4.50 to $4.55 billion
Core Revenues        $4.07 to $4.12 billion
Operating Cash Flow  $1.75 to $1.80 billion
Adjusted Diluted EPS $0.55 to $0.60

All 2013 guidance figures and 2013 outlook statements included in this release
(i) speak as of November 6, 2013 only, (ii) include the impact of the Ciber
ITO assets acquired on October 15, 2012, (iii) exclude the impact of any share
repurchases made after September 30, 2013 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 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.

Union Contract Update

In late October 2013, members of the Communications Workers of America
District 7 and the International Brotherhood of Electrical Workers Local 206
approved a new collective bargaining agreement covering 12,000 of the
Company's employees effective through October 7, 2017.

Investor Call

As previously announced, CenturyLink's management will host a conference call
at 4:00 p.m. Central Time today, November 6, 2013. Interested parties can
access the call by dialing 866-238-1422. The call will be accessible for
replay through November 13, 2013, by dialing 888-266-2081 and entering the
access code 1623858. Investors can also listen to CenturyLink's earnings
conference call and webcast replay by accessing the Investor Relations portion
of the Company's Web site at www.centurylink.com through November 27, 2013.

Reconciliation to GAAP

This release includes certain non-GAAP financial measures, including but not
limited to operating cash flow, free cash flow, core revenues and adjustments
to GAAP measures to exclude the effect of special items. 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 above 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® PrismTM 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, projected,
expressed or implied 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 the
outcome of regulatory or judicial proceedings relating to intercarrier
compensation, access charges, universal service, broadband deployment and net
neutrality); 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 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, including our ability to effectively respond to increased demand
for high-speed broadband 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 or regulatory proceedings involving us; our
ability to pay common share dividends in accordance with past practices, 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
other of our filings with 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 of our Form 10-Q for
the quarter ended June 30, 2013, 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 report. We undertake no obligation to update any of our
forward-looking statements for any reason.

^1Core revenues defined as Strategic revenues plus Legacy revenues (excludes
Data Integration and Other revenues), as described further in the attached
schedules.

^2See attachments for non-GAAP reconciliations.

^3Federal Communications Commission's Connect America and Intercarrier
Compensation Reform Order (the CAF Order) adopted on October 27, 2011

^4Multiprotocol Label Switching





CenturyLink, Inc.
CONSOLIDATED STATEMENTS OF (LOSS) INCOME
THREE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
(UNAUDITED)
(Dollars in millions, except per share amounts; shares in thousands)
                   Three months ended September 30,       Three months ended September 30,
                   2013                                   2012
                                             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     $ 2,189                     2,189         2,101                     2,101         4.2%          4.2%
 Legacy          1,915                     1,915         2,045                     2,045         (6.4%)        (6.4%)
 Data             163                       163           168                       168           (3.0%)        (3.0%)
 integration
 Other           248                       248           257                       257           (3.5%)        (3.5%)
                   4,515       -             4,515         4,571       -             4,571         (1.2%)        (1.2%)
OPERATING
EXPENSES
 Cost of
 services and      1,918       3         (1) 1,915         1,943       4         (4) 1,939         (1.3%)        (1.2%)
 products
 Selling,
 general and       1,047       252       (1) 795           748         15        (4) 733           40.0%         8.5%
 administrative
 Depreciation
 and               1,135                     1,135         1,144       (45)      (5) 1,189         (0.8%)        (4.5%)
 amortization
 Impairment of    1,100       1,100     (2) -             -                         -             0.00%         0.00%
 goodwill
                   5,200       1,355         3,845         3,835       (26)          3,861         35.6%         (0.4%)
OPERATING         (685)       (1,355)       670           736         26            710           (193.1%)      (5.6%)
(LOSS) INCOME
OTHER INCOME
(EXPENSE)
 Interest         (329)                     (329)         (326)                     (326)         0.9%          0.9%
 expense
 Other income     9           -             9             12          6         (6) 6             (25.0%)       50.0%
 (expense)
 Income tax       (40)        99        (3) (139)         (152)       1         (7) (153)         (73.7%)       (9.2%)
 expense
NET (LOSS)      $ (1,045)     (1,256)       211           270         33            237           (487.0%)      (11.0%)
INCOME
BASIC (LOSS)
EARNINGS PER     $ (1.76)      (2.11)        0.35          0.43        0.05          0.38          (509.3%)      (7.9%)
SHARE
DILUTED (LOSS)
EARNINGS PER     $ (1.76)      (2.11)        0.35          0.43        0.05          0.38          (509.3%)      (7.9%)
SHARE
AVERAGE SHARES
OUTSTANDING
 Basic           594,587                   594,587       621,148                   621,148       (4.3%)        (4.3%)
 Diluted         594,587                   595,747       623,296                   623,296       (4.6%)        (4.4%)
DIVIDENDS PER    $ 0.540                     0.540         0.725                     0.725         (25.5%)       (25.5%)
COMMON SHARE

SPECIAL ITEMS
      Includes a litigation reserve ($233 million), severance costs associated
(1)  with recent headcount reductions ($3 million), integration, severance
-    and retention costs associated with our acquisition of Qwest ($9
      million),integration, severance and retention costs associated with
      our acquisition of Savvis ($1 million) and an impairment of an office
      building ($9 million).
(2)  Non-cash, non-tax deductible goodwill impairment charge of ($1.1
-    billion).
(3)  Income tax expense of Item (1).
-
      Includes severance costs associated with reduction in force initiatives
      ($2 million), integration, severance and retention costs associated with
(4)  our acquisition of Qwest ($16 million)and integration, severance, and
-    retention costs associated with our acquisition of Savvis ($4 million);
      partially offset with a $3 million credit related to tax incentives for
      the Embarq integration.
(5)  Out-of-period depreciation adjustment ($45 million) to correct an
-    overstatement of depreciation in prior quarters.
(6)  Gain on the sale of a non-operating investment ($6 million).
-
(7)  Income tax expense of Items (3) through (5) ($12 million), partially
-    offset by the benefit from the reversal of a valuation allowance $11
      million.





CenturyLink, Inc.
CONSOLIDATED STATEMENTS OF (LOSS) INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
(UNAUDITED)
(Dollars in millions, except per share amounts; shares in thousands)
                   Nine months ended September 30, 2013  Nine months ended September 30, 2012
                                             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     $ 6,495                     6,495         6,237                     6,237         4.1%          4.1%
 Legacy          5,834                     5,834         6,284                     6,284         (7.2%)        (7.2%)
 Data             470                       470           483                       483           (2.7%)        (2.7%)
 integration
 Other           754                       754           789                       789           (4.4%)        (4.4%)
                   13,553      -             13,553        13,793      -             13,793        (1.7%)        (1.7%)
OPERATING
EXPENSES
 Cost of
 services and      5,587       9         (1) 5,578         5,732       25        (5) 5,707         (2.5%)        (2.3%)
 products
 Selling,
 general and       2,679       300       (1) 2,379         2,454       111       (5) 2,343         9.2%          1.5%
 administrative
 Depreciation
 and               3,375                     3,375         3,560       (30)      (6) 3,590         (5.2%)        (6.0%)
 amortization
 Impairment of    1,100       1,100     (2) -             -                         -             0.00%         0.00%
 goodwill
                   12,741      1,409         11,332        11,746      106           11,640        8.5%          (2.6%)
OPERATING         812         (1,409)       2,221         2,047       (106)         2,153         (60.3%)       3.2%
INCOME
OTHER INCOME
(EXPENSE)
 Interest         (970)                     (970)         (1,004)                   (1,004)       (3.4%)        (3.4%)
 expense
 Other income     52          37        (3) 15            (167)       (183)     (7) 16            (131.1%)      (6.3%)
 (expense)
 Income tax       (372)       131       (4) (503)         (332)       126       (8) (458)         12.0%         9.8%
 expense
NET (LOSS)      $ (478)       (1,241)       763           544         (163)         707           (187.9%)      7.9%
INCOME
BASIC (LOSS)
EARNINGS PER     $ (0.79)      (2.05)        1.26          0.88        (0.26)        1.14          (189.8%)      10.5%
SHARE
DILUTED (LOSS)
EARNINGS PER     $ (0.79)      (2.05)        1.26          0.87        (0.26)        1.13          (190.8%)      11.5%
SHARE
AVERAGE SHARES
OUTSTANDING
 Basic           606,104                   606,104       619,748                   619,748       (2.2%)        (2.2%)
 Diluted         606,104                   607,474       621,828                   621,828       (2.5%)        (2.3%)
DIVIDENDS PER    $ 1.620                     1.620         2.175                     2.175         (25.5%)       (25.5%)
COMMON SHARE



SPECIAL ITEMS
          Includes a litigation reserve ($233 million), severance costs
(1) -   associated with recent headcount reductions ($14 million),
          integration, severance and retention costs associated with our
          acquisition of Qwest ($27 million),integration, severance and
          retention costs associated with our acquisition of Savvis ($8
          million), an accounting adjustment ($18 million) and an impairment
          of an office building ($9 million).
(2) -   Non-cash, non-tax deductible goodwill impairment charge of ($1.1
          billion).
(3) -   Gain on the sale of a non-operating investment ($32 million) and
          settlements of other non-operating issues ($5 million).
(4) -  Income tax expense of Items (1) and (2) and a favorable federal
          income tax settlement ($33 million).
          Includes severance costs associated with reduction in force
(5) -   initiatives ($68 million), integration, severance and retention
          costs associated with our acquisition of Qwest ($62 million)and
          integration, severance, and retention costs associated with our
          acquisition of Savvis ($9 million); partially offset with a $3
          million credit related to tax incentives for the Embarq integration.
(6) -   Out-of-period depreciation adjustment ($30 million) to correct an
          overstatement of depreciation in prior quarters.
          Net loss associated with early retirement of debt ($194 million),
(7) -   partially offset by a gain on the sale of a non-operating investment
          $11 million.
(8) -   Income tax benefit of Items (4) through (6), partially offset by the
          benefit from the reversal of a valuation allowance ($11 million).



CenturyLink, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2013 AND DECEMBER 31, 2012
(UNAUDITED)
(Dollars in millions)
                                             September 30,  December 31,
                                             2013           2012
    ASSETS
CURRENT ASSETS
    Cash and cash equivalents              $ 266            211
    Other current assets                     3,546          3,402
     Total current assets                  3,812          3,613
NET PROPERTY, PLANT AND EQUIPMENT
    Property, plant and equipment            33,724         31,933
    Accumulated depreciation                 (15,059)       (13,024)
     Net property, plant and equipment     18,665         18,909
GOODWILL AND OTHER ASSETS
    Goodwill                                 20,637         21,732
    Other, net                               8,870          9,766
     Total goodwill and other assets      29,507         31,498
TOTAL ASSETS                               $ 51,984         54,020
    LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
    Current maturities of long-term debt   $ 191            1,205
    Other current liabilities                3,787          3,390
     Total current liabilities            3,978          4,595
LONG-TERM DEBT                               20,391         19,400
DEFERRED CREDITS AND OTHER LIABILITIES       10,901         10,736
STOCKHOLDERS' EQUITY                         16,714         19,289
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 51,984         54,020





CenturyLink, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
(UNAUDITED)
(Dollars in millions)
                                              Nine months       Nine months
                                              ended           ended
                                              September 30,    September 30,
                                              2013             2012
OPERATING ACTIVITIES
  Net (loss) income                       $ (478)             544
  Adjustments to reconcile net (loss)
  income to net
    cash provided by operating
    activities:
     Depreciation and amortization          3,375             3,560
     Impairment of goodwill                 1,100             -
     Deferred income taxes                  349               260
     Provision for uncollectible             111               144
     accounts
     Gain on sale of intangible assets      (32)              -
     Net loss on early retirement of         -                 194
     debt
     Changes in current assets and current   228               111
     liabilities, net
     Retirement benefits                    (288)             (179)
     Changes in other noncurrent assets      61                91
     and liabilities
     Other, net                             (18)              (39)
                    Net cash provided by     4,408             4,686
                    operating activities
INVESTING ACTIVITIES
  Payments for property, plant and equipment (2,211)           (2,024)
  and capitalized software
  Proceeds from sale of intangible           75                133
  assets
  Other, net                                19                28
                    Net cash used in         (2,117)           (1,863)
                    investing activities
FINANCING ACTIVITIES
  Net proceeds from issuance of long-term    1,740             3,363
  debt
  Payments of long-term debt                (1,169)           (4,529)
  Early retirement of debt costs            -                 (324)
  Net borrowings (payments) on credit        (620)             3
  facility
  Dividends paid                            (986)             (1,357)
  Net proceeds from issuance of common       54                91
  stock
  Repurchase of common stock                (1,252)           (20)
  Other, net                                (3)               14
                    Net cash used in         (2,236)           (2,759)
                    financing activities
Effect of exchange rate changes on cash      -                 2
and cash equivalents
Net increase in cash and cash                55                66
equivalents
Cash and cash equivalents at beginning of    211               128
period
Cash and cash equivalents at end of        $ 266               194
period







CenturyLink, Inc.
SELECTED SEGMENT FINANCIAL INFORMATION
THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
(UNAUDITED)
(Dollars in millions)
                               Three months ended       Nine months ended
                               September 30,            September 30,
                               2013          2012       2013         2012
Total segment revenues     $   4,267         4,314      12,799       13,004
Total segment expenses         2,105         2,071      6,112        6,154
Total segment income       $   2,162         2,243      6,687        6,850
Total segment income margin
(segment income
 divided by segment          50.7%         52.0%      52.2%        52.7%
revenues)
Consumer
Revenues
    Strategic services     $   644           603        1,892        1,781
    Legacy services            858           933        2,612        2,854
    Data integration           1             -          4            5
                           $   1,503         1,536      4,508        4,640
Expenses
    Direct                 $   456           458        1,304        1,347
    Allocated                  124           127        353          373
                           $   580           585        1,657        1,720
Segment income             $   923           951        2,851        2,920
Segment income margin          61.4%         61.9%      63.2%        62.9%
Business
Revenues
    Strategic services     $   640           602        1,872        1,770
    Legacy services            742           771        2,235        2,338
    Data integration           162           168        466          478
                           $   1,544         1,541      4,573        4,586
Expenses
    Direct                 $   842           818        2,449        2,446
    Allocated                  116           118        327          343
                           $   958           936        2,776        2,789
Segment income             $   586           605        1,797        1,797
Segment income margin          38.0%         39.3%      39.3%        39.2%
Wholesale
Revenues
    Strategic services     $   563           569        1,708        1,726
    Legacy services            315           341        987          1,092
                           $   878           910        2,695        2,818
Expenses
    Direct                 $   46            38         125          131
    Allocated                  247           266        743          798
                           $   293           304        868          929
Segment income             $   585           606        1,827        1,889
Segment income margin          66.6%         66.6%      67.8%        67.0%
Data Hosting
Revenues
    Strategic services     $   342           327        1,023        960
                           $   342           327        1,023        960
Expenses
    Direct                 $   275           248        815          721
    Allocated                  (1)           (2)        (4)          (5)
                           $   274           246        811          716
Segment income             $   68            81         212          244
Segment income margin          19.9%         24.8%      20.7%        25.4%

During the first quarter of 2013, we reorganized our operating segments in
order to strengthen our focus on the business market while continuing our
commitment to our wholesale, hosting and consumer customers. We also revised
our methodology for how we allocate our expenses to our segments to better
align segment expenses with related revenues. We have restated prior periods
to reflect the reorganization and the change in our allocation methodology.



CenturyLink, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
(Dollars in millions)
                Three months ended September 30,   Three months ended September 30,
                2013                                2012
                                        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
 (loss)       $ (685)      (1,355)  (1) 670         736        26       (3) 710
 income
 Add:
 Depreciation   1,135      -            1,135       1,144      (45)     (4) 1,189
 and
 amortization
 Add:
 Impairment     1,100      1,100    (2) -           -                       -
 of Goodwill
 Operating   $ 1,550      (255)        1,805       1,880      (19)         1,899
 cash flow
 Revenues   $ 4,515      -            4,515       4,571      -            4,571
 Operating
 (loss)
 income
 margin
 (operating     (15.2%)                 14.8%       16.1%                   15.5%
 (loss)
 income
 divided by
 revenues)
 Operating
 cash flow
 margin
 (operating     34.3%                   40.0%       41.1%                   41.5%
 cash flow
 divided by
 revenues)
Free cash
flow
 Operating                         $   1,805                               1,899
 cash flow
 Less: Cash
 (paid)                                 1                                   (28)
 refunded for
 income taxes
 Less: Cash
 paid for
 interest,                              (268)                               (268)
 net of
 amounts
 capitalized
 Less:
 Capital                                (786)                               (704)
 expenditures
 (5)
 Add: Other                           9                                   6
 income
 Free cash                         $   761                                 905
 flow (6)

SPECIAL ITEMS
     Includes a non-cash, non-tax deductible goodwill impairment charge ($1.1
     billion), a litigation reserve ($233 million), severance costs associated
(1) with recent headcount reductions ($3 million), integration,severance
-   and retention costs associated with our acquisition of Qwest ($9
     million), integration, severance, retention costs associated with our
     acquisition of Savvis ($1 million) and an impairment of an
     officebuilding ($9 million).
(2) Non-cash, non-tax deductible goodwill impairment charge of ($1.1
-   billion).
(3) Includes severance costs associated with reduction in force initiatives
-   ($2 million), integration, severance and retention costs associated with
     our acquisition of Qwest ($16 million) and integration, severance and
     retention costs associated with our acquisition of Savvis ($4 million);
     partially offset with a $45 million out-of-period depreciation adjustment
     and a $3 million credit related to tax incentives for the Embarq
     integration.
(4) Out-of-period depreciation adjustment ($45 million) to correct an
-   overstatement of depreciation in prior quarters.
(5) Excludes $15 million in third quarter 2013 and $15 million in third
-   quarter 2012 of capital expenditures related to the integration of
     Embarq, Qwest and Savvis.
(6) Excludes special items identified in items (1) to (3) and the impact of
-   pension contributions of $32 million for third quarter 2012.





CenturyLink, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
(Dollars in millions)
                Nine months ended September 30,    Nine months ended September 30,
                2013                                2012
                                        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   $ 812        (1,409)  (1) 2,221       2,047      (106)    (3) 2,153
 income
 Add:
 Depreciation   3,375      -            3,375       3,560      (30)     (4) 3,590
 and
 amortization
 Add:
 Impairment     1,100      1,100    (2) -           -                       -
 of Goodwill
 Operating   $ 5,287      (309)        5,596       5,607      (136)        5,743
 cash flow
 Revenues   $ 13,553     -            13,553      13,793     -            13,793
 Operating
 income
 margin
 (operating     6.0%                    16.4%       14.8%                   15.6%
 income
 divided by
 revenues)
 Operating
 cash flow
 margin
 (operating     39.0%                   41.3%       40.7%                   41.6%
 cash flow
 divided by
 revenues)
Free cash
flow
 Operating                         $   5,596                               5,743
 cash flow
 Less: Cash
 paid for                               (45)                                (59)
 income taxes
 Less: Cash
 paid for
 interest,                              (915)                               (997)
 net of
 amounts
 capitalized
 Less:
 Capital                                (2,181)                             (1,981)
 expenditures
 (5)
 Add: Other                           15                                  16
 income
 Free cash                         $   2,470                               2,722
 flow (6)

SPECIAL ITEMS
      Includes a non-cash, non-tax deductible goodwill impairment charge
      ($1.1 billion), a litigation reserve ($233 million), severance costs
      associated with recent headcount reductions ($14 million),
(1)  integration,severance and retention costs associated with our
-    acquisition of Qwest ($27 million), integration, severance and retention
      costs associated with our acquisition of Savvis ($8 million), an
      accounting adjustment($18 million) and an impairment of an office
      building ($9 million).
(2)  Non-cash, non-tax deductible goodwill impairment charge of ($1.1
-    billion).
      Includes severance costs associated with reduction in force initiatives
      ($68 million), integration, severance and retention costs associated
(3)  with our acquisition of Qwest ($62 million) and integration, severance
-    andretention costs associated with our acquisition of Savvis ($9
      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.
(4)  Out-of-period depreciation adjustment ($30 million) to correct an
-    overstatement of depreciation in prior quarters.
(5)  Excludes $30 million for the nine months ended September 30, 2013 and
-    $43 million for the nine months ended September 30, 2012 of capital
      expenditures related to the integration of Embarq, Qwest and Savvis.
      Excludes special items identified in items (1) to (3) and does not
(6)  reflect the impact of pension contributions of $147 million for the nine
-    months ended September 30, 2013 and $32 million for the nine
      monthsended September 30, 2012.



                       CenturyLink, Inc.
                       OPERATING METRICS
                       (UNAUDITED)
                       (In thousands)
                       As of                As of          As of
                       September 30, 2013   June 30, 2013  September 30,
                                                           2012*
Broadband subscribers  5,942                5,909          5,810
Access lines           13,150               13,331         13,950

* The prior period numbers have been adjusted to include the operational
metrics of our wholly owned subsidiary, El Paso County Telephone Company,
which had been previously excluded. The increase (in thousands) related to
broadband subscribers and access lines attributable to El Paso County
Telephone Company's inclusion is approximately 3 and 4, respectively for each
of the prior periods shown.







CenturyLink, Inc.
SUPPLEMENTAL NON-GAAP INFORMATION - ADJUSTED DILUTED EPS
THREE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012 AND NINE MONTHS ENDED
SEPTEMBER 30, 2013 AND 2012
(UNAUDITED)
(Dollars in millions, except per share amounts)
                             Three months ended      Nine months ended
                             September   September   September 30,  September
                             30, 2013    30, 2012    2013           30, 2012
                             (excluding  (excluding  (excluding   (excluding
                             special     special     special       special
                             items)      items)      items)        items)
Net income *               $ 211         237         763            707
Add back:
 Amortization of
customer base
intangibles:
            Qwest            226         241         690            729
            Embarq           29          34          97             112
            Savvis           15          15          45             44
 Amortization of
trademark intangibles:
            Qwest            9           15          32             49
            Savvis           2           2           6              7
 Amortization of fair
value adjustment of
long-term debt:
            Embarq           1           1           3              3
            Qwest            (14)        (20)        (48)           (68)
 Subtotal             268         288         825            876
 Tax effect of above       (104)       (112)       (321)          (335)
items
Net adjustment, after      $ 164         176         504            541
taxes
Net income, as adjusted    $ 375         413         1,267          1,248
for above items
Weighted average diluted     595.7       623.3       607.5          621.8
shares outstanding
Diluted EPS (excluding     $ 0.35        0.38        1.26           1.14
special items)
Adjusted diluted EPS as
adjusted for the
above-listed purchase
 accounting intangible
and interest amortizations
(excluding
 special items)          $ 0.63        0.66        2.09           2.01

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 our 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 schedules for a summary description of the impact of excluded
special items.



SOURCE CenturyLink, Inc.

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