CenturyLink 2009 Annual Report Download - page 6

2009, up nearly 9 percent over the combined company
total at year-end 2008.
We expect to deploy advanced services through an
innovative product development plan that builds on the
scale and scope of our fiber network. For example, we
recently launched Internet Protocol Television (IPTV)
service in Jefferson City, Missouri, using the same
video head-end that we use to provide IPTV service
to Columbia, Missouri. Our past investments in high-
quality network infrastructure are enabling us to expand
our IPTV service to several additional markets in the
near term without incurring a substantial increase in
capital expenditures.
We also offer a full suite of business and enterprise
services over our networks. Our advanced business
services include nationwide Ethernet, which enables
our enterprise customers to quickly and securely share
information between multiple internal locations or with
customers and suppliers around the country. Similarly,
our Multiprotocol Label Switching (MPLS) service, which
provides traffic management capabilities across multiple
network protocols, helps business customers minimize
bottlenecks, speed up traffic flows and more effectively
manage their networks. Our comprehensive managed
services enable customers to concentrate on their
business priorities and leave their network operations
to CenturyLink. With our expanded fiber network, we
can now serve many of our large enterprise customers
entirely on our network, giving us greater control over
costs, service delivery and customer experience.
Operating Model Creates Efficiencies
and Clear Customer Focus
Upon completion of the Embarq acquisition, we
implemented our regional operating model across
CenturyLink’s operations, which now includes five
regions and 22 market clusters across our 33 states.
This local model creates a clear market focus and
drives sales and service decision-making closer to the
customer. With our locally focused market approach
and integrated billing and customer care systems, we
can successfully implement proactive and competitive
direct-response marketing on a market-by-market basis.
In addition to local market support, we provide national
account service to our large enterprise and wholesale
customers. Our focus here is also on putting the cus-
tomer at the center of all we do. In 2009, CenturyLink’s
Wholesale Operations was recognized by ATLANTIC-
ACM, a leading telecommunications research consul-
tancy and benchmarking firm, as best-in-class based on
customer feedback about our sales representatives,
customer service, provisioning and billing.
In Support of Thoughtful Regulatory Reform
We support efforts to develop a national broadband
plan and modernize regulations governing the Universal
Service Fund and intercarrier compensation. These regu-
latory efforts should thoughtfully promote affordable
broadband connectivity to as many people as possible,
taking into account the unique challenges of serving rural
and mid-size communities and respecting the fundamen-
tal principle that reform should include fair compensation
for the use of others’ networks. Advanced networks like
ours are the product of years of capital investment and
technology deployment, and require ongoing investment
to continually improve and meet growing demand. We
believe the underlying value of network assets should
play a central role in determining the appropriate path for
regulatory reform. We look forward to a constructive res-
olution to many of these regulatory issues in the future.
Financial Strength Provides Strategic Flexibility
CenturyLink’s financial strength is reflected in our stable
and predictable cash flows. Our free cash flow per share
has grown significantly over the past six years due to
our vigilance in aligning our cost structure to changing
market conditions. Our dividend payout provides one of
the highest yields in the S&P 500, yet CenturyLink has
one of the lowest payout ratios among our industry
Our Financial
Position:
Strong, Flexible
Our net cash provided by
operating activities in 2009
was $1.574 billion (which
includes six months of oper-
ations from our Embarq
properties), representing
a five-year compounded
annual growth rate of
10.3 percent.
Our Board of Directors
approved a 3.6 percent divi-
dend increase in February
2010, raising our dividend
to $2.90 per share.
Our leadership team has
spent a combined total
of 200 years in the
communications industry,
many of which involved
making acquisitions and
managing integrations.
CenturyLink is financially strong and one of the few
companies in the communications industry with an
investment-grade credit rating.
INVESTMENT-GRADE $2.90 200
4
“We expect to deploy advanced services through an innovative
product development plan that builds on the scale and scope of
our fiber network.”
Stronger Connected
CASH FLOW PER
SHARE YEARS