MONROE, La., Aug. 6 /PRNewswire-FirstCall/ -- CenturyLink (CenturyTel, Inc.) (NYSE: CTL) announces operating results for second quarter 2009. In connection with the July 1, 2009 merger with Embarq CorporationCenturyTelbegan operating under the tradename CenturyLink. Unless otherwise noted herein, the second quarter results discussed in this news release relate solely to legacy CenturyTel, Inc.

    --  Operating revenues, excluding nonrecurring items, decreased 3.4% to
        $634.5 million compared to $657.1 million in second quarter 2008.
        Reported under GAAP, operating revenues decreased 3.6%.
    --  Operating cash flow (as defined in the attached financial schedules),
        excluding nonrecurring items, was $303.6 million compared to $318.3         million in second quarter 2008.
    --  Net income, excluding nonrecurring items, was $83.3 million compared
        to $91.2 million in second quarter 2008. Reported under GAAP, net
        income declined to $69.0 million from $92.2 million in second quarter
        2008, primarily due to $22.5 million of EMBARQ integration costs
        incurred in second quarter 2009.
    --  Diluted earnings per share, excluding nonrecurring items, was $.83
        compared to $.87 in second quarter 2008, while GAAP diluted earnings
        per share was $.68 in second quarter 2009 compared to $.88 in second
        quarter 2008.

    --  Free cash flow (as defined in the attached financial schedules),
        excluding nonrecurring items and $13.5 million of acquisition related
        capital expenditures, was $140.1 million compared to $162.5 million in
        second quarter 2008.


    Second Quarter Highlights
     (Excluding nonrecurring items
      reflected in the attached
      financial schedules)
    (In thousands, except per share    Quarter Ended  Quarter Ended  % Change
     amounts and subscriber data)         6/30/09        6/30/08

    Operating Revenues                    $634,469       $657,073      (3.4)%
    Operating Cash Flow (1)               $303,593       $318,266      (4.6)%
    Net Income (2)                         $83,299        $91,162      (8.6)%
    Diluted Earnings Per Share                $.83           $.87      (4.6)%
    Average Diluted Shares Outstanding      99,450        103,999      (4.4)%
    Capital Expenditures                   $85,305(3)     $59,659      43.0%
                                           -------        -------      ----

    Access Lines                         1,933,000      2,077,000      (6.9)%
    High-Speed Internet Customers          681,000        607,000      12.2%
                                           -------        -------      ----

    (1)  Operating Cash Flow is a non-GAAP financial measure. A
         reconciliation of this item to comparable GAAP measures is included
         in the attached financial schedules.
    (2)  All references to net income contained in this release represent net
         income attributable to CenturyTel, Inc.
    (3)  Includes $13.5 million of capital expenditures related to the EMBARQ
         integration.

"Our employees did an excellent job of remaining focused on serving our customers while working to complete the EMBARQ acquisition and plan for a successful integration,"  Glen F. Post, III , chief executive officer and president, said. "We will continue to focus on increasing our long-term cash flows by driving operating efficiencies and providing compelling product and service bundles to our customers."

Operating revenues, excluding nonrecurring items, decreased 3.4% to $634.5 million in second quarter 2009 compared to $657.1 million in second quarter 2008. Revenue increases of approximately $17 million were driven primarily by growth in high-speed Internet customers and higher fiber transport revenues. These increases were more than offset by revenue declines of approximately $39 million primarily attributable to lower access revenues, lower universal service fund receipts and access line losses.

Operating expenses, excluding nonrecurring items, decreased 2.2% to $459.4 million from $469.8 million in second quarter 2008, primarily due to lower access expense, marketing costs and depreciation expense that more than offset increased operating costs associated with growth in high-speed Internet customers.

"We continue to experience good demand from our business customers for high bandwidth transport and Ethernet services in spite of the challenging economy," Post said. "Additionally, the demand for broadband services from our residential and small business customers remained solid as we added more than 16,000 high-speed Internet customers during the quarter and our consumer penetration reached 44%."

Operating cash flow, excluding nonrecurring items, for second quarter 2009 decreased 4.6% to $303.6 million from $318.3 million in second quarter 2008. CenturyLink achieved an operating cash flow margin, excluding nonrecurring items, of 47.8% during the quarter versus 48.4% in second quarter 2008.

Net income, excluding nonrecurring items, was $83.3 million, an 8.6% decrease from $91.2 million in second quarter 2008. Diluted earnings per share, excluding nonrecurring items, declined 4.6% to $.83 in second quarter 2009 compared to $.87 in second quarter 2008, primarily due to lower operating income, which was partially offset by lower interest expense and the 4.4% reduction in diluted shares outstanding as a result of share repurchases in 2008.

For the first six months of 2009, operating revenues, excluding nonrecurring items, were $1.270 billion compared to $1.306 billion during the same period in 2008, a 2.7% decrease. Operating cash flow, excluding nonrecurring items, was $609.1 million for the first six months of 2009, a 4.4% decrease from the $637.4 million during the same period a year ago. Net income, excluding nonrecurring items, decreased 6.8% to $165.2 million from $177.3 million in 2009, while diluted earnings per share, excluding nonrecurring items, decreased 1.8% to $1.64 from $1.67 in 2008.

Under generally accepted accounting principles (GAAP), net income for second quarter 2009 was $69.0 million compared to $92.2 million for second quarter 2008. Diluted earnings per share was $.68 in second quarter 2009 compared to $.88 in second quarter 2008. Second quarter 2009 results include after-tax charges of $16.3 million related to the EMBARQ integration and a legal settlement which were partially offset by a $2.0 million after-tax favorable impact due to the resolution of transaction tax audit issues. Second quarter 2008 results include a net $1.3 million after-tax charge related to the freeze of our supplemental executive pension plan and a net $2.3 millionbenefit primarily related to the resolution of certain income tax audit issues.

For the first six months of 2009, under GAAP, the Company reported net income of $136.2 million, or $1.35 per diluted share, compared to net income of $180.9 million, or $1.70 per diluted share, for the six months ended June 30, 2008. See the accompanying financial schedules for detail of the Company's nonrecurring items for the years 2009 and 2008.

"The completion of the EMBARQ transaction positions CenturyLink as a premier communications provider that is financially stronger, more competitive and a leading broadband provider in our markets across 33 states," Post said. "This merger brings together complementary assets, increased geographic coverage and outstanding employees capable of delivering a broader range of products and services to our customers."

Outlook. For third quarter 2009, CenturyLink expects total operating revenues of $1.85 to $1.89 billion and diluted earnings per share of $.78 to $.82. This increase in revenues compared to second quarter 2009 guidance is primarily due to the EMBARQ acquisition which closed July 1, 2009. For the full year 2009, the Company continues to expect diluted earnings per share to be in the range of $3.20 to $3.30. CenturyLink expects capital expenditures to be $525 to $575 million for the last six months of 2009, which includes capital expenditures for the EMBARQ properties, but excludes one-time capital expenditures associated with the EMBARQ integration. These outlook figures exclude the effects of all nonrecurring items including any future mergers, acquisitions, divestitures, or other similar business transactions. These outlook figures for third quarter also exclude nonrecurring items relating to the EMBARQ merger, including approximately $135 million of transaction and integration costs, based on current plans and available information.

The Company's elective filing in September 2008 to operate a majority of its properties under price cap regulation at the interstate level was granted by the Federal Communications Commission and became effective July 1, 2009. As a result, on July 1, 2009, the Company discontinued accounting for certain regulated operating entities under Statement of Financial Accounting Standards No. 71 ("SFAS 71"). Upon the discontinuance of SFAS 71, we expect operating revenues and expenses to decrease approximately $60 to $70 million, during each of the next two quarters, primarily due to the elimination of inter-company transactions.

Additionally, as a result of the discontinuance of SFAS 71 and purchase accounting adjustments related to the EMBARQ merger, we expect, based on current estimates and information, quarterly results for each of the next two quarters to be negatively impacted by:

    --  Increased depreciation and amortization expense related to
        amortization of the portion of the purchase price allocated to
        EMBARQ's customer base, which will be partially offset by lower
        depreciation associated with  the discontinuance of SFAS 71, the net
        effect of which is approximately $20 to $24 million and

    --  Higher retiree benefit and pension related expense recognition of
        approximately $12 to $14 million.

These above amounts are subject to change upon finalization of the impact of discontinuing SFAS 71 and the purchase price allocation process. Additional information about the expected impact of the discontinuance of SFAS 71 and the EMBARQ acquisition on our business, future operating results and financial position will be contained in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, which we expect to file with the Securities and Exchange Commission on August 7, 2009.

EMBARQ Results. The acquisition of Embarq Corporation was effective July 1, 2009. To assist the investment community in tracking EMBARQ's financial and operating trends, the Company is providing, separate fromCenturyTel's reported results, selected second quarter 2009 EMBARQ consolidated financial and subscriber information.

For second quarter 2009, EMBARQ's operating revenues were $1.325 billion, a 7.9% decline from $1.439 billion in second quarter 2008, and its operating cash flow was $664 million, in line with the $670 million in second quarter 2008. EMBARQ's operating cash flow margin for second quarter 2009 was 50.1%, a 7.5% increase over the 46.6% operating cash flow margin in second quarter 2008. EMBARQ experienced more than a $30 million decrease in total operating expenses in second quarter 2009 compared to first quarter 2009, primarily due to approximately $15 million of favorable one-time items, along with lower bad debt and marketing expenses. Operating expenses inEMBARQ markets are expected to return to more normal run rate levels in the third quarter.

Operating income for second quarter 2009 was $420 million, in line with the $424 million for the same period in 2008. Operating income margin was 31.7% for second quarter 2009 versus 29.5% in the year earlier quarter.EMBARQ generated income from continuing operations of $204 million in the second quarter, in line with the $202 million for second quarter 2008.

EMBARQ added approximately 12,200 high-speed Internet subscribers during second quarter 2009 and served approximately 1.465 million high-speed Internet subscribers as of June 30, 2009EMBARQ ended the quarter with approximately 5.389 million access lines in service, experiencing access line losses of 163,000 lines during the second quarter.

EMBARQ invested approximately $147 million in capital investments during second quarter 2009 and generated free cash flow (defined as income from continuing operations plus depreciation and amortization less capital expenditures) of more than $300 million for the quarter.

These results are included in a supplemental schedule attached hereto and are also available on the Company's investor relations Web site at ir.centurytel.com.

Integration Update. CenturyLink now expects to realize approximately $475 million in synergies versus the $400 million originally anticipated. The Company continues to expect to complete conversion of EMBARQ's enterprise resource management systems and the initial billing conversion in fourth quarter 2009. The Company's current estimate of post-closing integration costs is approximately $370 million.

Reconciliation to GAAP. This release includes certain non-GAAP financial measures, including but not limited to operating cash flow, free cash flow, operating income and cash flow margins, and adjustments to GAAP measures to exclude the effect of nonrecurring 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 below will be available in the Investor Relations portion of the Company's Web site at www.centurytel.com. Investors are urged to consider these non-GAAP measures in addition to, and not in substitution for, measures prepared in accordance with GAAP.

Investor Call. As previously announced, CenturyLink's management will host a conference call at 10:30 a.m. Central Time today. Interested parties can access the call by dialing 866.259.6033. The call will be accessible for replay through August 12, 2009, by calling 888.266.2081 and entering the conference ID number 1377919. 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.centurytel.com through August 26, 2009.

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 results or performance by CenturyLink 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 impact actual results of CenturyLink 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 Federal Communication Commission's proposed rules regarding inter-carrier compensation and the Universal Service Fund described in our recent SEC reports); our ability to effectively adjust to changes in the communications industry; changes in our allocation of the EMBARQ purchase price after the date hereof; our ability to successfully integrate EMBARQ into our operations, including the possibility that the anticipated benefits from the EMBARQ merger cannot be fully realized in a timely manner or at all, or that integrating EMBARQ's operations into ours will be more difficult, disruptive or costly than anticipated; 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; our ability to pay a $2.80 per common share dividend annually, which may be affected by changes in our cash requirements, capital spending plans, cash flows or financial position; unanticipated increases in our capital expenditures; our ability to successfully negotiate collective bargaining agreements on reasonable terms without work stoppages; the effects of adverse weather; other risks referenced from time to time in 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 or administrative costs, in general market, labor or economic conditions, or in legislation, regulation or public policy. These and other uncertainties related to the business and our plans are described in greater detail in Item 1A to our Form 10-K for the year ended December 31, 2008, 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 hereof. We undertake no obligation to update any of our forward-looking statements for any reason, whether as a result of new information, future events or otherwise.

CenturyLink is a leading provider of high-quality voice, broadband and video services over its advanced communications networks to consumers and businesses in 33 states. CenturyLink, headquartered in Monroe, La., is anS&P 500 Company and expects to be listed in the Fortune 500 list of America's largest corporations. For more information on CenturyLink, visit www.centurylink.com.

                                                 FOR MORE INFORMATION CONTACT:
                                                 Tony Davis 318.388.9525
                                                 tony.davis@centurytel.com

                               CenturyTel, Inc.
                      CONSOLIDATED STATEMENTS OF INCOME
                  THREE MONTHS ENDED JUNE 30, 2009 AND 2008
                                 (UNAUDITED)

                                Three months ended June 30, 2009
                              ------------------------------------
                                                             As adjusted
                                             Less             excluding
      In thousands,                          non-                non-
       except per share      As           recurring           recurring
       amounts            reported          items               items
                        ------------      ---------           ---------

      OPERATING REVENUES
        Voice               $207,603                             207,603
        Network access       190,366                             190,366
        Data                 142,923                             142,923
        Fiber transport
         and CLEC             41,764                              41,764
        Other                 51,813                              51,813
                              ------            ---               ------
                             634,469              -              634,469
                             -------            ---              -------

      OPERATING EXPENSES
        Cost of services
         and products        235,732                             235,732
        Selling, general
         and administrative  120,742         25,598(1)            95,144
        Depreciation and
         amortization        128,552                             128,552
                             -------         ------              -------
                             485,026         25,598              459,428
                             -------         ------              -------

      OPERATING
       INCOME                149,443        (25,598)             175,041

      OTHER INCOME (EXPENSE)
        Interest
         expense             (44,937)         1,700(2)           (46,637)
        Other income
         (expense)             7,635          1,600(2)             6,035
        Income tax
         expense             (42,813)         8,029(3)           (50,842)

                              ------        -------               ------
      NET INCOME              69,328        (14,269)              83,597
      Less: Net income
       attributable to
       noncontrolling
       interests                (298)                               (298)
                                ----        -------                 ----
      NET INCOME
       ATTRIBUTABLE TO
       CENTURYTEL,
       INC.                  $69,030        (14,269)              83,299
                             =======        =======               ======

      BASIC EARNINGS PER
       SHARE                   $0.68          (0.14)                0.83
      DILUTED EARNINGS
       PER SHARE               $0.68          (0.14)                0.83

      AVERAGE SHARES
       OUTSTANDING
        Basic                 99,414                              99,414
        Diluted               99,450                              99,450

    DIVIDENDS PER
     COMMON SHARE            $0.7000                              0.7000




                                Three months ended June 30, 2008
                              ------------------------------------
                                                              As adjusted
                                               Less             excluding
      In thousands,                            non-                non-
       except per share         As          recurring           recurring
       amounts              reported          items               items
                          ------------      ---------           ---------

      OPERATING REVENUES
        Voice                219,901                             219,901
        Network access       207,904          1,012(4)           206,892
        Data                 131,060             21(4)           131,039
        Fiber transport
         and CLEC             43,166                              43,166
        Other                 56,075                              56,075
                              ------          -----               ------
                             658,106          1,033              657,073
                             -------          -----              -------

      OPERATING EXPENSES
        Cost of services
         and products        239,626                             239,626
        Selling, general
         and administrative  106,836          7,655(4)            99,181
        Depreciation and
         amortization        130,954                             130,954
                             -------          -----              -------
                             477,416          7,655              469,761
                             -------          -----              -------

      OPERATING
       INCOME                180,690         (6,622)             187,312

      OTHER INCOME (EXPENSE)
        Interest
         expense             (49,166)                            (49,166)
        Other income
         (expense)            13,204          5,425(5)             7,779
        Income tax
         expense             (52,264)         2,202(6)           (54,466)

                              ------          -----               ------
      NET INCOME              92,464          1,005               91,459
      Less: Net income
       attributable to
       noncontrolling
       interests                (297)                               (297)
                                ----          -----                 ----
      NET INCOME
       ATTRIBUTABLE TO
       CENTURYTEL,
       INC.                   92,167          1,005               91,162
                              ======          =====               ======

      BASIC EARNINGS PER
       SHARE                    0.88           0.01                 0.87
      DILUTED EARNINGS
       PER SHARE                0.88           0.01                 0.87

      AVERAGE SHARES
       OUTSTANDING
        Basic                103,644                             103,644
        Diluted              103,999                             103,999

    DIVIDENDS PER
     COMMON SHARE             0.0675                              0.0675



                                                               Increase
                                                              (decrease)
                                            Increase          excluding
      In thousands, except per share        (decrease)       nonrecurring
       amounts                             as reported           items
                                         ---------------       ---------

      OPERATING REVENUES
        Voice                                   (5.6%)             (5.6%)
        Network access                          (8.4%)             (8.0%)
        Data                                     9.1%               9.1%
        Fiber transport and CLEC                (3.2%)             (3.2%)
        Other                                   (7.6%)             (7.6%)
                                                (3.6%)             (3.4%)

      OPERATING EXPENSES
        Cost of services and products           (1.6%)             (1.6%)
        Selling, general and
         administrative                         13.0%              (4.1%)
        Depreciation and amortization           (1.8%)             (1.8%)
                                                 1.6%              (2.2%)

      OPERATING INCOME                         (17.3%)             (6.6%)

      OTHER INCOME (EXPENSE)
        Interest expense                        (8.6%)             (5.1%)
        Other income (expense)                 (42.2%)            (22.4%)
        Income tax expense                     (18.1%)             (6.7%)

      NET INCOME                               (25.0%)             (8.6%)
      Less: Net income attributable to
       noncontrolling interests                  0.3%               0.3%
      NET INCOME ATTRIBUTABLE TO
       CENTURYTEL, INC.                        (25.1%)             (8.6%)

      BASIC EARNINGS PER SHARE                 (22.7%)             (4.6%)
      DILUTED EARNINGS PER SHARE               (22.7%)             (4.6%)

      AVERAGE SHARES OUTSTANDING
        Basic                                   (4.1%)             (4.1%)
        Diluted                                 (4.4%)             (4.4%)

    DIVIDENDS PER COMMON SHARE                 937.0%             937.0%

     NONRECURRING ITEMS
       (1) - Includes integration costs associated with the acquisition of
             EMBARQ ($22.5 million) and costs associated with a legal
             settlement ($3.1 million).
       (2) - Favorable resolution of transaction tax audit issues related to
             our wireless operations sold in 2002.
       (3) - Tax effect of items (1) and (2).
       (4) - Curtailment loss related to Supplemental Executive Retirement
             Plan, including revenue impact.
       (5) - Gain upon liquidation of Supplemental Executive Retirement Plan
             trust assets ($4.5 million) and interest income recorded upon the
             resolution of certain income tax audit issues ($919,000).
       (6) - Includes $448,000 net income tax benefit related to items (4)
             and (5) and $1.8 million income tax benefit recorded upon
             resolution of certain income tax audit issues.

                                 CenturyTel, Inc.
                        CONSOLIDATED STATEMENTS OF INCOME
                     SIX MONTHS ENDED JUNE 30, 2009 AND 2008
                                   (UNAUDITED)

                                     Six months ended June 30, 2009
                                   ----------------------------------
                                                                  As adjusted
                                                 Less               excluding
                                                  non-                non-
      In thousands, except       As            recurring           recurring
       per share amounts      reported           items               items
                            ------------        ---------           ---------

      OPERATING REVENUES
        Voice                   $417,521                             417,521
        Network access           383,210          1,028(1)           382,182
        Data                     282,860                             282,860
        Fiber transport and
         CLEC                     83,262                              83,262
        Other                    104,001                             104,001
                                 -------          -----              -------
                               1,270,854          1,028            1,269,826
                               ---------          -----            ---------

      OPERATING EXPENSES
        Cost of services and
         products                470,363                             470,363
        Selling, general and
         administrative          230,587         40,238(2)           190,349
        Depreciation and
         amortization            256,124                             256,124
                                 -------         ------              -------
                                 957,074         40,238              916,836
                                 -------         ------              -------

      OPERATING INCOME           313,780        (39,210)             352,990

      OTHER INCOME (EXPENSE)
        Interest expense         (96,969)         1,700(3)           (98,669)
        Other income
         (expense)                 5,817         (6,400)(4)           12,217
        Income tax
         expense                 (85,920)        14,897(5)          (100,817)
                                 -------        -------              -------
      NET INCOME                 136,708        (29,013)             165,721
      Less: Net income
       attributable to
       noncontrolling
       interests                    (524)                               (524)
                                    ----        -------                 ----
      NET INCOME
       ATTRIBUTABLE TO
       CENTURYTEL, INC.         $136,184        (29,013)             165,197
                                ========        =======              =======

      BASIC EARNINGS PER
       SHARE                       $1.35          (0.29)                1.64
      DILUTED EARNINGS PER
       SHARE                       $1.35          (0.29)                1.64

      AVERAGE SHARES OUTSTANDING
        Basic                     99,270                              99,270
        Diluted                   99,297                              99,297

    DIVIDENDS PER COMMON
     SHARE                       $1.4000                              1.4000




                                     Six months ended June 30, 2008
                                   ----------------------------------
                                                                 As adjusted
                                                  Less             excluding
                                                  non-                non-
      In thousands, except       As            recurring           recurring
       per share amounts      reported           items               items
                            ------------       ---------           ---------

      OPERATING REVENUES
        Voice                    440,381                             440,381
        Network access           416,602          1,012(6)           415,590
        Data                     257,832             21(6)           257,811
        Fiber transport and
         CLEC                     82,799                              82,799
        Other                    109,106                             109,106
                                 -------          -----              -------
                               1,306,720          1,033            1,305,687
                               ---------          -----            ---------

      OPERATING EXPENSES
        Cost of services and
         products                477,438                             477,438
        Selling, general and
         administrative          198,461          7,655(6)           190,806
        Depreciation and
         amortization            266,638                             266,638
                                 -------          -----              -------
                                 942,537          7,655              934,882
                                 -------          -----              -------

      OPERATING INCOME           364,183         (6,622)             370,805

      OTHER INCOME (EXPENSE)
        Interest expense         (99,288)                            (99,288)
        Other income
         (expense)                21,867          9,561(7)            12,306
        Income tax
         expense                (105,292)           655(8)          (105,947)

                                 -------          -----              -------
      NET INCOME                 181,470          3,594              177,876
      Less: Net income
       attributable to
       noncontrolling
       interests                    (543)                               (543)
                                    ----          -----                 ----
      NET INCOME
       ATTRIBUTABLE TO
       CENTURYTEL, INC.          180,927          3,594              177,333
                                 =======          =====              =======

      BASIC EARNINGS PER
       SHARE                        1.71           0.03                 1.67
      DILUTED EARNINGS PER
       SHARE                        1.70           0.03                 1.67

      AVERAGE SHARES OUTSTANDING
        Basic                    104,893                             104,893
        Diluted                  105,337                             105,337

    DIVIDENDS PER COMMON
     SHARE                         0.135                               0.135





                                                                  Increase
                                                                 (decrease)
                                             Increase            excluding
      In thousands, except per share          (decrease)         nonrecurring
       amounts                              as reported           items
                                          ---------------       ---------

      OPERATING REVENUES
        Voice                                    (5.2%)             (5.2%)
        Network access                           (8.0%)             (8.0%)
        Data                                      9.7%               9.7%
        Fiber transport and CLEC                  0.6%               0.6%
        Other                                    (4.7%)             (4.7%)
                                                 (2.7%)             (2.7%)

      OPERATING EXPENSES
        Cost of services and
         products                                (1.5%)             (1.5%)
        Selling, general and
         administrative                          16.2%              (0.2%)
        Depreciation and
         amortization                            (3.9%)             (3.9%)
                                                  1.5%              (1.9%)

      OPERATING INCOME                          (13.8%)             (4.8%)

      OTHER INCOME (EXPENSE)
        Interest expense                         (2.3%)             (0.6%)
        Other income (expense)                  (73.4%)             (0.7%)
        Income tax expense                      (18.4%)             (4.8%)

      NET INCOME                                (24.7%)             (6.8%)
      Less: Net income attributable to
       noncontrolling interests                  (3.5%)             (3.5%)
      NET INCOME ATTRIBUTABLE TO
       CENTURYTEL, INC.                         (24.7%)             (6.8%)

      BASIC EARNINGS PER SHARE                  (21.1%)             (1.8%)
      DILUTED EARNINGS PER SHARE                (20.6%)             (1.8%)

      AVERAGE SHARES OUTSTANDING
        Basic                                    (5.4%)             (5.4%)
        Diluted                                  (5.7%)             (5.7%)

    DIVIDENDS PER COMMON SHARE                  937.0%             937.0%

     NONRECURRING ITEMS
       (1) - Revenue impact of settlement loss related to Supplemental
             Executive Retirement Plan.
       (2) - Includes integration costs associated with the acquisition of
             EMBARQ ($29.4 million), settlement loss related to Supplemental
             Executive Retirement Plan ($7.7 million) and costs associated
             with a legal settlement ($3.1 million).
       (3) - Favorable resolution of transaction tax audit issues related
             to our wireless operation sold in 2002.
       (4) - Includes costs associated with terminating our $800 million
             bridge credit facility related to the EMBARQ acquisition ($8.0
             million) net of favorable resolution of transaction tax audit
             issues ($1.6 million).
       (5) - Includes $5.8 million income tax benefit caused by a
             reduction to our deferred tax asset valuation allowance and $15.8
             million income tax benefit related to items (1) through (4); net
             of $6.7 million income tax expense due to the nondeductible
             portion of settlement payments related to the Supplemental
             Executive Retirement Plan.
       (6) - Curtailment loss related to Supplemental Executive Retirement
             Plan, including revenue impact.
       (7) - Gain on the sale of a nonoperating investment ($4.1 million),
             gain upon liquidation of Supplemental Executive Retirement Plan
             trust assets ($4.5 million), and interest income recorded upon
             the resolution of certain income tax audit issues ($919,000).
       (8) - Includes $1.1 million net income tax expense related to items
             (6) and (7) and $1.8 million income tax benefit recorded upon
             resolution of certain income tax audit issues.

                              CenturyTel, Inc.
                         CONSOLIDATED BALANCE SHEETS
                     JUNE 30, 2009 AND DECEMBER 31, 2008
                                 (UNAUDITED)

                                                June 30,   December 31,
                                                   2009          2008
                                                   ----          ----
                                                   (in thousands)
                      ASSETS
    CURRENT ASSETS
      Cash and cash equivalents                 $59,144       243,327
      Other current assets                      261,159       312,080
                                                -------       -------
         Total current assets                   320,303       555,407
                                                -------       -------

    NET PROPERTY, PLANT AND EQUIPMENT
      Property, plant and equipment           8,974,039     8,868,451
      Accumulated depreciation               (6,187,829)   (5,972,559)
                                             ----------    ----------
         Net property, plant and equipment    2,786,210     2,895,892
                                              ---------     ---------

    GOODWILL AND OTHER ASSETS
      Goodwill                                4,015,674     4,015,674
      Other                                     764,513       787,222
                                                -------       -------
          Total goodwill and other assets     4,780,187     4,802,896
                                              ---------     ---------


    TOTAL ASSETS                             $7,886,700     8,254,195
                                             ==========     =========


              LIABILITIES AND EQUITY
    CURRENT LIABILITIES
      Current maturities of long-term debt      $19,924        20,407
      Other current liabilities                 427,493       437,983
                                                -------       -------
          Total current liabilities             447,417       458,390

    LONG-TERM DEBT                            2,899,936     3,294,119
    DEFERRED CREDITS AND OTHER LIABILITIES    1,353,025     1,333,878
    STOCKHOLDERS' EQUITY                      3,186,322     3,167,808
                                              ---------     ---------

    TOTAL LIABILITIES AND EQUITY             $7,886,700     8,254,195
                                             ==========     =========



                                 CenturyTel, Inc.
                  RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
                                   (UNAUDITED)


                                Three months ended June 30, 2009
                              ------------------------------------
                                                              As adjusted
                                              Less             excluding
                                              non-                non-
      In thousands           As            recurring           recurring
                          reported           items               items
                        ------------       ---------           ---------
      Operating cash flow and
       cash flow margin
        Operating
         income             $149,443        (25,598)(1)          175,041
        Add:
         Depreciation and
         amortization        128,552                             128,552
                             -------        -------              -------
        Operating cash
         flow               $277,995        (25,598)             303,593
                            ========        =======              =======

        Revenues            $634,469                             634,469
                            ========                             =======

        Operating income
         margin
         (operating
         income divided
         by revenues)           23.6%                               27.6%
                                ====                                ====

        Operating cash
         flow margin
         (operating cash
         flow divided by
         revenues)              43.8%                               47.8%
                                ====                                ====


      Free cash flow (prior
       to debt service
       requirements and
       dividends)
        Net income           $69,030        (14,269)(2)           83,299
        Add:
         Depreciation and
         amortization        128,552                             128,552
        Less:  Capital
         expenditures        (85,305)                            (85,305)(5)
                             -------        -------              -------
        Free cash
         flow               $112,277        (14,269)             126,546
                            ========        =======              =======

        Free cash
         flow               $112,277
        Gain on
         liquidation of
         marketable
         securities                -
        Deferred income
         taxes                 8,582
        Changes in
         current assets
         and current
         liabilities          30,591
        Decrease in
         other noncurrent
         assets                2,848
        Decrease in
         other noncurrent
         liabilities          (2,044)
        Retirement
         benefits              8,960
        Excess tax
         benefits from
         share-based
         compensation           (418)
        Other, net             5,937
        Add:  Capital
         expenditures         85,305
                              ------
        Net cash
         provided by
         operating
         activities         $252,038
                            ========





                                Three months ended June 30, 2008
                              ------------------------------------
                                                           As adjusted
                                           Less             excluding
                                           non-                non-
      In thousands           As         recurring           recurring
                          reported        items               items
                        ------------    ---------           ---------
      Operating cash flow
       and cash flow margin
        Operating
         income              180,690         (6,622)(3)          187,312
        Add:
         Depreciation and
         amortization        130,954                             130,954
                             -------         ------              -------
        Operating cash
         flow                311,644         (6,622)             318,266
                             =======         ======              =======

        Revenues             658,106          1,033(3)           657,073
                             =======          =====              =======

        Operating income
         margin
         (operating
         income divided
         by revenues)           27.5%                               28.5%
                                ====                                ====

        Operating cash
         flow margin
         (operating cash
         flow divided by
         revenues)              47.4%                               48.4%
                                ====                                ====


      Free cash flow (prior
       to debt service
       requirements and
       dividends)
        Net income            92,167          1,005(4)            91,162
        Add:
         Depreciation and
         amortization        130,954                             130,954
        Less:  Capital
         expenditures        (59,659)                            (59,659)
                             -------          -----              -------
        Free cash
         flow                163,462          1,005              162,457
                             =======          =====              =======

        Free cash
         flow                163,462
        Gain on
         liquidation of
         marketable
         securities           (4,505)
        Deferred income
         taxes                 5,068
        Changes in
         current assets
         and current
         liabilities         (44,749)
        Decrease in
         other noncurrent
         assets                3,043
        Decrease in
         other noncurrent
         liabilities          (2,689)
        Retirement
         benefits             12,728
        Excess tax
         benefits from
         share-based
         compensation            (55)
        Other, net             4,815
        Add:  Capital
         expenditures         59,659
                              ------
        Net cash
         provided by
         operating
         activities          196,777
                             =======


     NONRECURRING ITEMS
       (1) - Includes integration costs associated with the acquisition of
             EMBARQ ($22.5 million) and costs associated with a legal
             settlement ($3.1 million).
       (2) - Includes after-tax impact of integration costs associated with
             the acquisition of EMBARQ ($14.4 million) and the after-tax
             impact of a legal settlement ($1.9 million),  net of after-tax
             favorable impact due to the resolution of transaction tax audit
             issues related to our wireless operations sold in 2002 ($2.0
             million).
       (3) - Curtailment loss related to Supplemental Executive Retirement
             Plan, including revenue impact.
       (4) - Includes after-tax impact of gain upon liquidation of
             Supplemental Executive Retirement Plan trust assets ($2.8
             million) and net benefit due to the resolution of certain income
             tax audit issues ($2.3 million), net of the after-tax impact of
             Item (3) ($4.1 million).
       (5) - Includes $13.5 million of capital expenditures related to the
             integration of EMBARQ.  Excluding these costs, free cash flow
             was $140.1 million for the three months ended June 30, 2009.



                                  CenturyTel, Inc.
                    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
                                     (UNAUDITED)


                                    Six months ended June 30, 2009
                                  ----------------------------------
                                                                As adjusted
                                               Less              excluding
                                               non-                non-
      In thousands               As          recurring           recurring
                              reported         items               items
                            ------------     ---------           ---------
      Operating cash flow and
       cash flow margin
        Operating income       $313,780        (39,210)(1)         352,990
        Add:  Depreciation
         and amortization       256,124                            256,124
                                -------        -------             -------
        Operating cash
         flow                  $569,904        (39,210)            609,114
                               ========        =======             =======

        Revenues             $1,270,854          1,028(2)        1,269,826
                             ==========          =====           =========

        Operating income
         margin (operating
         income divided by
         revenues)                 24.7%                              27.8%
                                   ====                               ====

        Operating cash flow
         margin (operating
         cash flow divided
         by revenues)              44.8%                              48.0%
                                   ====                               ====


      Free cash flow (prior
       to debt service
       requirements and
       dividends)
        Net income             $136,184        (29,013)(3)         165,197
        Add:  Depreciation
         and amortization       256,124                            256,124
        Less:  Capital
         expenditures          (130,801)                          (130,801)(6)
                               --------        -------            --------
        Free cash flow         $261,507        (29,013)            290,520
                               ========        =======             =======

        Free cash flow         $261,507
        Gain on asset
         dispositions and
         liquidation of
         marketable
         securities                   -
        Deferred income
         taxes                   25,831
        Changes in current
         assets and current
         liabilities             63,622
        Decrease in other
         noncurrent
         assets                   2,542
        Decrease in other
         noncurrent
         liabilities             (4,823)
        Retirement
         benefits               (14,537)
        Excess tax benefits
         from share-based
         compensation              (753)
        Other, net               18,015
        Add:  Capital
         expenditures           130,801
                                -------
        Net cash provided
         by operating
         activities            $482,205
                               ========





                                   Six months ended June 30, 2008
                                 ----------------------------------
                                                             As adjusted
                                             Less             excluding
                                             non-                non-
      In thousands             As         recurring           recurring
                            reported        items               items
                          ------------    ---------           ---------
      Operating cash flow
       and cash flow
       margin
        Operating
         income                364,183         (6,622)(4)          370,805
        Add:  Depreciation
         and amortization      266,638                             266,638
                               -------         ------              -------
        Operating cash
         flow                  630,821         (6,622)             637,443
                               =======         ======              =======

        Revenues             1,306,720          1,033(4)         1,305,687
                             =========          =====            =========

        Operating income
         margin (operating
         income divided by
         revenues)                27.9%                               28.4%
                                  ====                                ====

        Operating cash
         flow margin
         (operating cash
         flow divided by
         revenues)                48.3%                               48.8%
                                  ====                                ====


      Free cash flow (prior
       to debt service
       requirements
       and dividends)
        Net income             180,927          3,594(5)           177,333
        Add:  Depreciation
         and
         amortization          266,638                             266,638
        Less:  Capital
         expenditures         (114,398)                           (114,398)
                              --------          -----             --------
        Free cash flow         333,167          3,594              329,573
                               =======          =====              =======

        Free cash flow         333,167
        Gain on asset
         dispositions and
         liquidation of
         marketable
         securities             (8,641)
        Deferred income
         taxes                  13,425
        Changes in current
         assets and current
         liabilities           (57,026)
        Decrease in other
         noncurrent
         assets                  2,254
        Decrease in other
         noncurrent
         liabilities            (5,479)
        Retirement
         benefits               18,202
        Excess tax
         benefits from
         share-based
         compensation              (74)
        Other, net              16,761
        Add:  Capital
         expenditures          114,398
                               -------
        Net cash provided
         by operating
         activities            426,987
                               =======



     NONRECURRING ITEMS
       (1) - Includes (i) integration costs associated with the acquisition
             of EMBARQ ($29.4 million); (ii) settlement loss related to
             Supplemental Executive Retirement Plan, including revenue impact
             ($6.7 million); and (iii) costs associated with a legal
             settlement ($3.1 million).
       (2) - Revenue impact of settlement loss related to Supplemental
             Executive Retirement Plan.
       (3) - Includes (i) $19.1 million after-tax impact of integration costs
             associated with the acquisition of EMBARQ; (ii) $6.7 million
             income tax expense due to the nondeductible portion of
             settlement payments related to the Supplemental Executive
             Retirement Plan; (iii) $5.0 million after-tax charge associated
             with terminating our $800 million bridge credit facility related
             to the EMBARQ acquisition; (iv) $4.1 million after-tax impact of
             settlement loss related to Supplemental Executive Retirement
             Plan, including revenue impact; and (v) after-tax impact of a
             legal settlement ($1.9 million).  These unfavorable items were
             partially offset by $5.8 million income tax benefit caused by a
             reduction to our deferred tax asset valuation allowance and $2.0
             million after-tax favorable impact due to the resolution of
             transaction tax audit issues related to our wireless operations
             sold in 2002.
       (4) - Curtailment loss related to Supplemental Executive Retirement
             Plan, including revenue impact.
       (5) - Includes (i) after-tax impact of gain upon liquidation of
             Supplemental Executive Retirement Plan trust assets ($2.8
             million); (ii) after-tax impact of gain on sale of nonoperating
             investment ($2.6 million); and (iii) net benefit due to the
             resolution of certain income tax audit issues ($2.3 million),
             all partially offset by the after-tax impact of Item (4) ($4.1
             million).
       (6) - Includes $19.9 million of capital expenditures related to the
             integration of EMBARQ.  Excluding these costs, free cash flow
             was $310.4 million for the six months ended June 30, 2009.



                               Embarq Corporation
                     SELECTED FINANCIAL AND SUBSCRIBER DATA
                                   (UNAUDITED)

                                                Three months   Three months
                                                   ended          ended
                                               June 30, 2009  June 30, 2008
                                                              -------------
                                                   (Dollars in millions)

    OPERATING REVENUES                                $1,325          1,439
                                                      ------          -----

    OPERATING EXPENSES
      Cost of services and products                      358            414
      Selling, general and administrative                303            355
      Depreciation                                       244            246
                                                         ---            ---
                                                         905          1,015
                                                         ---          -----

    OPERATING INCOME                                     420            424

    OTHER INCOME (EXPENSE)
      Interest expense                                   (90)          (101)
      Other income (expense)                              (1)             1
      Income tax expense                                (125)          (122)
                                                        ----           ----

    INCOME FROM CONTINUING OPERATIONS                   $204            202
                                                        ====            ===


    Operating cash flow (operating income
     plus depreciation)                                 $664            670
    Free cash flow (income from continuing
     operations plus depreciation minus
     capital expenditures)                              $301            267
    Operating cash flow margin (operating
     cash flow divided by revenues)                     50.1%          46.6%
    Operating income margin (operating income
     divided by revenues)                               31.7%          29.5%

    CAPITAL EXPENDITURES                                $147            181
    LONG-TERM DEBT (as of June 30, 2009)              $5,056

    SUBSCRIBER DATA (as of June 30, 2009 and 2008)
      Access lines (in thousands)                      5,389          6,022
      High-speed Internet lines (in thousands)         1,465          1,364


 

SOURCE CenturyLink