CenturyLink 2010 Annual Report Download - page 5

Embarqintegration:Progressingto completion
In 2010 we continued our integrationefforts related to the Embarq acquisition, whichclosed
July 1, 2009, and we are close to completion. We successfully implementedCenturyLink’s
provenlocaloperating modelin larger urban markets, includingLas Vegas, Nevada and
Orlando, Florida.Our operating modeldrives decisionmaking closer to the customer and
generatesstrategies tailored to eachmarket’sdemand profile and competitive landscape.
We experienced improved access line retention and increased broadband penetration in
legacyEmbarq markets followingthe transition to our localoperating model.
We have successfully completed the conversion of approximately 75 percentof legacy
Embarqcustomers to CenturyLink’scustomer care billing systems, andwe expect to
complete the remainingEmbarqcustomer records conversion in the third quarter of
2011. Overall, ourintegration activities areprogressingaccording to planand we are on
track to exceed the targeted $375 million in annualoperating expense synergiesfrom
the Embarqacquisition.
Thepositivemarket and operationaltrends we experienced in 2010were largely due
to execution by our employees. Their focus on serving our customers and controlling
expenses helped drive our marketplace successand solidfinancialperformance. We
generated$3.6 billion in operating cash flow in 2010, excluding nonrecurring items, com-
pared with $2.5 billion in 2009, which included sixmonths of Embarq financialresults.
Qwest acquisition
CenturyLink has a long history of combining successfulmarketplace execution with growth
through acquisition, through which we have been able to accelerateour developmentof
products andservicesand produce strong operating results. Theacquisition of Qwest
offersthe greatest scale andscope advantages of any transaction in CenturyLink history.
With the closeof the Qwest transaction, CenturyLink has a numberof opportunities and
advantages, including:
•An extensivefiber network covering190,000 routemiles that providesnationaland
local reach andpositions CenturyLinkas an industry-leadingcommunications provider,
•A large customer base – approximately 5.3million broadband customers, 1.6million
video customers and 15 million access lines – that enhances ourability to competitively
develop and deploy high-bandwidthproductsand servicesacross our advanced
broadband-enabled network,
•An enterprise business focusthat offersgrowth potential from customer demandfor
high-bandwidth data services, as wellas the potentialto providecustomized solutions
such as datahosting,managed servicesand cloud computing to business, wholesale
andgovernment customers, and
•A proven ability to successfully serveresidentialcustomers and small- to medium-size
businesses,whichcouldtranslate into marketsharegains in legacyQwest markets
over time.
92%
Approximately 92 percent of our access
lines are enabled to provide a speed of at
least 1. 5 Mbps.
10 MBPS
Of the lines that are broadband enabled,
65 percent are capable of speeds up
to 10 Mbps.
Business Solutions
With our national fiber network, we
have the ability to provide seamless
national service offerings that include
voice, Ethernet, MPLS and IP-based
applications to business customers.
to
COAST
COAST
+ Wireless
In early 2011,
we announced
an agreement with
Verizon Wireless
that will enable
CenturyLink to offer
Verizon Wireless
equipmentand servicesto residential
andsmallbusiness customers, further
expandingthe portfolio of communica-
tions products andserviceswe offer.
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