CenturyLink 2011 Annual Report Download - page 9

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www.centurylink.com
GROWING
•฀ We฀achieved฀double-digit฀revenue฀
growth in managed hosting and cloud
computing services.
•฀ Data฀center฀expansions฀and฀openings฀brought฀
sellable space to 1.3 million square feet at
year-end.
•฀ Savvis฀was฀recognized฀by฀Gartner,฀Inc.฀as฀a฀
leader in both the Magic Quadrant for Public
Cloud Infrastructure as a Service and the
Magic Quadrant for Managed Hosting.
We are optimistic about the growth prospects we see in the years ahead. With our suite of
broadband products and strong asset mix, combined with implementation of systems and
processes that make it easier for our employees to serve our customers, improve the customer
experience and operate more productively and efficiently, we are gaining momentum across
our markets.
Evaluating regulatory reforms
In 2011, the Federal Communications Commission (FCC) announced comprehensive reforms
of the Universal Service Fund (USF) and Intercarrier Compensation (ICC) system that are
designed to promote broadband build-out in rural areas. We welcome the FCC focus on
expanding high-speed Internet service to the 18 million Americans currently without access to
a robust wireline broadband connection. The direction of the FCC reforms aligns well with our
commitment to serving rural areas, our history of steady investment in broadband infrastructure
and our strategic focus on being the broadband provider of choice in the areas we serve. As
specific rules are written under the new reforms, we will continue to evaluate the implications
for our business, including the economics of bringing broadband services to rural areas identified
with the new Connect America Fund.
Maintaining financial strength
Even as we transformed CenturyLink with new capabilities and assets, we maintained our strong
financial position. We generated solid free cash flow in 2011 and ended the year with a long-term
debt to equity ratio of 1.0. We expect to repay approximately $1.5 billion to $2 billion in gross
debt on a pro forma basis over the two-year period ending December 31, 2012. Our solid cash
flows and stable balance sheet give us the flexibility to invest in our business, capitalize on
opportunities for growth and provide significant quarterly cash dividends to our shareholders.
This financial strength has allowed us to deliver shareholder returns that are among the best in
the telecommunications industry. Our 10-year total return is 60.16 percent, and our 15-year total
return is 295.17 percent.
Looking forward
We operate in an exciting industry – an industry that keeps people informed, entertained and
moving forward. At CenturyLink, our products and services improve lives. We work hard every
day to help families stay connected, businesses operate efficiently and governments serve their
citizens. The benefits of our communications, entertainment and data hosting services are more
significant and more widespread than ever before. Our goal is to provide to our customers the
products and services they need to communicate better, explore further and achieve what is
important to them, whether that customer is the chief information officer of a Fortune 500
company operating in complex global networks or a grade-school student researching a school
project on a home computer.
As a leading global telecommunications service provider, we believe the future holds great
potential for CenturyLink. We are focused on achieving that potential – both near term and
long term – for the benefit of our customers and shareholders. We thank you for the trust and
confidence you have shown in our company, and we will work hard in the months and years
ahead to earn your continued support.
Glen F. Post, III
Chief Executive Officer and President