OVERLAND PARK, Kan., July 21 /PRNewswire-FirstCall/ -- Embarq Corporation (NYSE: EQ) announced that it will report second quarter financial results before the markets open on Thursday, July 27, 2006. Following its pre-market earnings release, EMBARQ will hold an open-access conference call beginning at 8:00 a.m. EDT.

 

    EMBARQ Conference Call Information
    Date: July 27
    Time: 8:00 a.m. EDT
    Call-in Number: (866) 245-2310 (U.S. and Canada) or (706) 679-0843
    (International)
Please plan to dial in five minutes before the scheduled start time.

 

The audio and accompanying presentation will be available via a simultaneous webcast at http://www.embarq.com/investors .

For those unable to participate live, a replay of the call will be available until August 27, 2006 by dialing (800) 642-1687 (toll free in the U.S.) or (706) 645-9291 (outside the U.S.) as well as at EMBARQ's Investor Relations website, http://www.embarq.com/investors . The accompanying presentation will also be archived at this website.

Historical Results

For periods prior to and including May 17, 2006, the date of EMBARQ's spin-off from Sprint Nextel, reported operating income reflects the combined performance of the specific legal entities that were spun off from Sprint Nextel in accordance with generally accepted accounting principles (GAAP). The reported information for these entities prior to and including the date of separation does not include certain items that will be reflected in EMBARQ's reported operating income for periods subsequent to May 17, 2006. These items primarily consist of the following:

     -- In-territory consumer and business long distance customers transferred
        to EMBARQ by Sprint Nextel, as well as certain in-territory equipment
        and professional service customers transferred to Sprint Nextel by
        EMBARQ; and

     -- Other assets and liabilities related to the ongoing operations of our
        business transferred to EMBARQ by Sprint Nextel.

In order to facilitate a comparison of EMBARQ's historical operating performance to performance subsequent to the spin-off, the attached tables provide an as adjusted view of EMBARQ's quarterly operating income for 2005 and the first quarter of 2006. Management uses this information and believes it is important to investors because it recasts historical information to reflect the current composition of our business and enables a more appropriate comparison with current information. The as adjusted financial information assumes the spin-off from Sprint Nextel had occurred on January 1, 2005 and includes the items described above. The as adjusted financial information is a non-GAAP measure and should be considered in addition to, but not as a substitute for, the information contained in our financial reporting.

About EMBARQ:

EMBARQ (NYSE: EQ) provides a complete suite of communications services to customers in its local service territories. EMBARQ, which is expected to rank among the Fortune 500, brings common-sense ideas, reliable service and a renewed commitment to the communities it serves. EMBARQ focuses on offering its customers practical, innovative products and competitive pricing. The company has approximately 20,000 employees and operates in 18 states offering local and long distance voice, data, high-speed Internet, wireless, and entertainment services. For more information, visit http://www.embarq.com .


                              Embarq Corporation
            As Adjusted Statements of Operating Income (unaudited)
                               ($ in millions)

                                                          Shared
                                            LD           Assets /
    Quarter Ended                        Customer  Pens- Liabili-       As
     March 31, 2005              GAAP   Transfers   ion   ties  Other Adjusted
    Net Operating Revenues
        Voice                   $1,082      $129     $-     $-    $-   $1,211
        Data                       234         4      -      -     2      240
        Other                       83       (17)     -      -     -       66
      Service revenues          $1,399      $116     $-     $-    $2   $1,517
      Product revenues             128        (7)     -      -     -      121
    Net Operating Revenues       1,527       109      -      -     2    1,638

    Operating Expenses
      Cost of services             351        61      -      -     1      413
      Cost of products             117        (6)     -      -     -      111
      Selling, general and
       administrative              415        21     (4)   (36)    -      396
      Depreciation and
       amortization                245         -      -     22     -      267
    Total Operating Expenses     1,128        76     (4)   (14)    1    1,187

    Operating Income              $399       $33     $4    $14    $1     $451


                                                          Shared
                                            LD           Assets /
    Quarter Ended                        Customer  Pens- Liabili-       As
     June 30, 2005               GAAP   Transfers   ion   ties  Other Adjusted
    Net Operating Revenues
        Voice                    $1,062      $128    $-     $-    $1   $1,191
        Data                        239         4     -      -     3      246
        Other                        83       (16)    -      -     -       67
      Service revenues           $1,384      $116    $-     $-    $4   $1,504
      Product revenues              137        (7)    -      -     -      130
    Net Operating Revenues        1,521       109     -      -     4    1,634

    Operating Expenses
      Cost of services              349        59     -      -     2      410
      Cost of products              120        (6)    -      -     -      114
      Selling, general and
       administrative               379        22    (4)   (37)    1      361
      Depreciation and
       amortization                 246         -     -     23     -      269
    Total Operating Expenses      1,094        75    (4)   (14)    3    1,154

    Operating Income               $427       $34    $4    $14    $1     $480



                                                          Shared
                                            LD           Assets /
    Quarter Ended                        Customer  Pens- Liabili-       As
     September 30, 2005          GAAP   Transfers   ion   ties  Other Adjusted
    Net Operating Revenues
        Voice                    $1,060      $129    $-     $-    $-   $1,189
        Data                        249         4     -      -     3      256
        Other                        85       (17)    -      -     -       68
      Service revenues           $1,394      $116    $-     $-    $3   $1,513
      Product revenues              209        (7)    -      -     -      202
    Net Operating Revenues        1,603       109     -      -     3    1,715

    Operating Expenses
      Cost of services              360        60     -      -     1      421
      Cost of products              189        (6)    -      -     -      183
      Selling, general and
       administrative               390        21    (4)   (37)    1      371
      Depreciation and
       amortization                 243         -     -     23     -      266
    Total Operating Expenses      1,182        75    (4)   (14)    2    1,241

    Operating Income               $421       $34    $4    $14    $1     $474



                                                          Shared
                                            LD           Assets /
    Quarter Ended                        Customer  Pens- Liabili-       As
     December 31, 2005           GAAP   Transfers   ion   ties  Other Adjusted
    Net Operating Revenues
        Voice                    $1,045      $126    $-     $-    $1   $1,172
        Data                        261         4     -      -     3      268
        Other                        83       (16)    -      -     -       67
      Service revenues           $1,389      $114    $-     $-    $4   $1,507
      Product revenues              214        (7)    -      -     -      207
    Net Operating Revenues        1,603       107     -      -     4    1,714

    Operating Expenses
      Cost of services              357        59     -      -     1      417
      Cost of products              206        (6)    -      -     -      200
      Selling, general and
       administrative               410        21    (3)   (37)    1      392
      Depreciation and
       amortization                 245         -     -     22     1      268
      Asset impairments              80         -     -      -     -       80
    Total Operating Expenses      1,298        74    (3)   (15)    3    1,357

    Operating Income               $305       $33    $3    $15    $1     $357



                                                          Shared
                                            LD           Assets /
                                         Customer  Pens- Liabili-       As
    Year Ended December 31, 2005  GAAP  Transfers   ion   ties  Other Adjusted
    Net Operating Revenues
        Voice                    $4,249      $512    $-     $-    $2    $4,763
        Data                        983        16     -      -    11     1,010
        Other                       334       (66)    -      -     -       268
      Service revenues           $5,566      $462    $-     $-   $13    $6,041
      Product revenues              688       (28)    -      -     -       660
    Net Operating Revenues        6,254       434     -      -    13     6,701

    Operating Expenses
      Cost of services            1,417       239     -      -     5     1,661
      Cost of products              632       (24)    -      -     -       608
      Selling, general and
       administrative             1,594        85   (15)  (147)    3     1,520
      Depreciation and
       amortization                 979         -     -     90     1     1,070
      Asset impairments              80         -     -      -     -        80
    Total Operating
     Expenses                     4,702       300   (15)   (57)    9     4,939

    Operating Income             $1,552      $134   $15    $57    $4    $1,762



                                                          Shared
                                            LD           Assets /
    Quarter Ended                        Customer  Pens- Liabili-       As
     March 31, 2006              GAAP   Transfers   ion   ties  Other Adjusted
    Net Operating Revenues
        Voice                    $1,038      $116    $-     $-    $1   $1,155
        Data                        267         4     -      -     2      273
        Other                        81       (15)    -      -     -       66
      Service revenues           $1,386      $105    $-     $-    $3   $1,494
      Product revenues              175        (3)    -      -     -      172
    Net Operating Revenues        1,561       102     -      -     3    1,666

    Operating Expenses
      Cost of services              378        50     -      -     1      429
      Cost of products              160        (3)    -      -     -      157
      Selling, general and
       administrative               419        22     -    (34)    1      408
      Depreciation and
       amortization                 238         -     -     25     -      263
    Total Operating Expenses      1,195        69     -     (9)    2    1,257

    Operating Income               $366       $33    $-     $9    $1     $409


    Note:  Certain prior year amounts have been reclassified to conform to the
    current period presentation. Historical and pro forma EMBARQ results as
    presented in EMBARQ's registration statements on Form 10 and Form S-1
    filed with the SEC were presented consistent with the Sprint Nextel
    presentation of its local division results. In the 2006 first quarter, we
    modified the classifications of revenues and operating expenses consistent
    with EMBARQ management's view of these activities. These reclassifications
    had no effect on total net operating revenues, total operating expenses or
    net income as previously reported.

SOURCE Embarq Corporation
07/21/2006
 

(EQ)