- Launched next generation local communications company

     - Introduced practical, innovative EMBARQ(TM)-branded wireless offers and
       integrated services

     - Posted very strong high-speed Internet results

     - Maintaining 2006 financial outlook

     Second Quarter Highlights

     - After successfully completing its separation, Embarq began trading on
       the New York Stock Exchange on May 18th.  Embarq is a member of the S&P
       500 and trades under the ticker symbol EQ.

     - The EMBARQ(TM) brand was officially launched on June 5th with an
       aggressive marketing and advertising campaign and innovative new
       products and offers for both consumer and business customers.

     - The company introduced a full suite of EMBARQ(TM)-branded wireless
       services, including EMBARQ(TM) One Voicemail for consumers and
       EMBARQ(TM) Smart Connect for business customers.

     - Embarq again posted very strong high-speed Internet (HSI) results,
       adding 72,000 lines to end the quarter with 44% more HSI lines in
       service than the end of the second quarter of 2005.

     - Data and high-speed Internet (HSI) revenues continued to grow at a
       double-digit rate.  Combined data and HSI revenues grew just over 15%
       on a GAAP basis and more than 13% on an as adjusted basis.

     - Embarq reaffirmed its financial and operating guidance for 2006.

OVERLAND PARK, Kan., July 27 /PRNewswire-FirstCall/ -- Embarq Corporation (NYSE: EQ) today announced its financial results for the second quarter of 2006, its first earnings announcement as an independent company. Following its separation on May 18th, the company launched the EMBARQ(TM) brand to the public on June 5th with an aggressive marketing and advertising campaign. As part of the launch, the company also introduced practical, innovative new products and offers for consumer and business customers, including a full suite of EMBARQ(TM)-branded wireless services that emphasize bundling wireline with wireless.

Commenting on the quarter, Dan Hesse, Embarq Chairman and Chief Executive Officer, said, "We launched our new company this quarter, and I was pleased we were able to deliver solid results while also completing a complex separation. Although they were in the market for only a few weeks, not long enough to have a significant impact on our second quarter results, the products we added to our portfolio in June -- particularly our converged wireless and wireline solutions -- will be important to our future."

Embarq reported its second quarter financial results in accordance with generally accepted accounting principles (GAAP) as well as on an 'as adjusted' basis. The company's GAAP reporting for all periods prior to May 18th does not reflect certain items related to its spin-off that are included in its GAAP reporting subsequent to May 18th. (These items are described in more detail in the section entitled 'Financial Measures' on page 6.) Accordingly, pre-May 18th GAAP results are not fully comparable to post-May 18th GAAP results. The as adjusted basis of reporting, however, reflects the current composition of Embarq's business for all periods. Thus, the as adjusted basis of reporting is provided to help investors evaluate trends in Embarq's operating performance. Reconciliations of non-GAAP measures are provided in Schedule 4 on pages 11-14.

    RESULTS OVERVIEW

GAAP Results

For the second quarter of 2006, Embarq reported net operating revenues of $1.58 billion, an increase of 3.8% compared to the second quarter of 2005. Second quarter operating income declined 4.9% on a year-over-year basis to $406 million.

As Adjusted Results

On an as adjusted basis, Embarq reported net operating revenues of $1.63 billion for the second quarter of 2006, a slight decline compared to the second quarter of 2005. Although as adjusted voice revenues declined more than 5% year-over-year, the decline was almost completely offset by solid, 4.7% growth in as adjusted data revenue and nearly 33% growth in as adjusted high-speed Internet revenue as well as 26.6% as adjusted revenue growth in EMBARQ(TM) Logistics.

Due primarily to $53 million in separation-related expenses Embarq incurred in the second quarter of 2006, as adjusted operating income declined $53 million or 11% on a year-over-year basis to $427 million. The separation- related expenses are non-recurring in nature and include items such as information technology systems, re-branding and employee retention costs.

High-Speed Internet and Access Lines

High-speed Internet (HSI) line growth continued at a very strong rate in the second quarter. In what has historically been a seasonally low quarter for HSI additions, Embarq added 72,000 new lines to end the quarter with 849,000 HSI lines in service.

Access lines declined 5.6% year-over-year to 7.12 million, driven by increasing competition in the company's consumer operating unit. While consumer access lines declined 7.3%, business lines declined just 1.4%, reflecting a much more moderate competitive environment for the company's business operating unit.

Capital Structure

As part of its spin-off, Embarq executed an offering of 7, 10 and 30-year senior notes totaling approximately $4.5 billion. The company also established a 5-year, $3.1 billion credit facility, consisting of a $1.6 billion term loan and a $1.5 billion revolving line of credit. At the time of the spin-off, the company had $500 million drawn on the line of credit and $1 billion of unused capacity. At June 30, 2006, debt, net of cash, was $6.7 billion.

As reflected in the supplemental cash flow information presented in schedule 3, the spin-off resulted in a stockholders equity deficit on a GAAP basis at the date of the spin-off. This arose from the distribution of cash and debt securities to Sprint Nextel at the time of the spin-off. Since that date, net income has reduced this amount to approximately $800 million as of June 30, 2006.

2006 GAAP Financial Outlook

Embarq also continues to expect its GAAP results to fall within its previously provided ranges. Full-year revenues are expected to be $6.2 to $6.3 billion, while operating income is expected to be $1.35 to $1.45 billion. This operating income range includes $125 million of non-recurring separation- related expenses, $80 million of which has been incurred in the first half of the year. It also includes dilution related to the start-up of the company's wireless operation, which is expected to be approximately $40 million.

2006 As Adjusted Financial Outlook

Embarq is reaffirming the guidance it had previously provided on May 4th. The company continues to expect as adjusted full-year revenues to be in the range of $6.4 to $6.5 billion and as adjusted operating income is expected to be $1.45 to $1.55 billion. This operating income range includes $125 million of non-recurring separation-related expenses, $80 million of which has been incurred in the first half of the year. It also includes dilution related to the start-up of the company's wireless operation, which is expected to be approximately $40 million. Capital expenditures on an as adjusted basis are expected to be approximately $960 million, including approximately $80 million of separation-related capital. High-speed Internet lines in service are expected to increase by approximately 40% year-over-year, while access lines are expected to decline 5.5% to 7.5% on a year-over-year basis.

The table below reconciles Embarq's 2006 GAAP Outlook to its 2006 As Adjusted Outlook. These reconciling items and the as adjusted basis of reporting are discussed in more detail in the section entitled 'Financial Measures' on page 6.

                                                     LD
                                                  Customer
                                   GAAP           Transfers    As Adjusted

    Net Operating Revenues  $6.2 to $6.3 billion    0.2        $6.4 to $6.5
                                                                  billion

    Operating Income      $1.35 to $1.45 billion*   0.1        $1.45 to $1.55
                                                                  billion*

    * Includes $125 million of non-recurring separation charges

    CONFERENCE CALL

On Thursday, July 27, 2006, following its pre-market earnings release, Embarq will hold an open-access conference call beginning at 8:00 AM EDT. Dial-in numbers for the conference call are (866) 245-2310 (in the U.S. and Canada) and (706) 679-0843 (outside the U.S. and Canada). The code to access the call is 2770410. The audio will also be available via a simultaneous webcast at http://www.embarq.com/investors along with a downloadable presentation.

    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. and Canada) or (706) 645-9291 (outside the U.S. and Canada) as well as at
Embarq's investor relations website, http://www.embarq.com/investors.  The
accompanying presentation will also be archived and available for download at
this website.


                                         GAAP
                           Selected Unaudited Financial Data
                          ($ in millions, lines in thousands)

                                      2Q-06     2Q-05      Fav/(Unfav)

      Voice                          $1,067    $1,062      $5     0.5%
      Data                              174       163      11     6.7%
      High-speed Internet               101        76      25    32.9%
      Other                              68        83     (15)  (18.1%)
     Service revenues                 1,410     1,384      26     1.9%
      EMBARQ Logistics                  138       109      29    26.6%
      Other                              31        28       3    10.7%
     Product revenues                   169       137      32    23.4%
    Net operating revenues            1,579     1,521      58     3.8%

     Cost of services                   367       349     (18)   (5.2%)
     Cost of products                   149       120     (29)  (24.2%)
     Selling, general & admin           403       379     (24)   (6.3%)
     Depreciation                       254       246      (8)   (3.3%)
    Operating expenses                1,173     1,094     (79)   (7.2%)

    Operating income                   $406      $427    $(21)   (4.9%)

    Capital expenditures               $265      $194    $(71)  (36.6%)


                                    As Adjusted
                         Selected Unaudited Financial Data
                        ($ in millions, lines in thousands)

                                      2Q-06    2Q-05       Fav/(Unfav)

      Voice                          $1,123    $1,191    $(68)   (5.7%)
      Data                              178       170       8     4.7%
      High-speed Internet               101        76      25    32.9%
      Other                              61        67      (6)   (9.0%)
     Service revenues                 1,463     1,504     (41)   (2.7%)
      EMBARQ Logistics                  138       109      29    26.6%
      Other                              29        21       8    38.1%
     Product revenues                   167       130      37    28.5%
    Net operating revenues            1,630     1,634      (4)   (0.2%)

     Cost of services                   390       410      20     4.9%
     Cost of products                   148       114     (34)  (29.8%)
     Selling, general & admin           398       361     (37)  (10.2%)
     Depreciation                       267       269       2     0.7%
    Operating expenses                1,203     1,154     (49)   (4.2%)

    Operating income                   $427      $480    $(53)  (11.0%)

    Capital expenditures               $312      $203   $(109)  (53.7%)

    Access lines                      7,117     7,540    (423)   (5.6%)

    High-speed Internet lines           849       590     259    43.9%


    CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

This news release contains "forward-looking statements" within the meaning of the securities laws, including statements relating to Embarq's outlook or expectations for earnings, revenues, expenses, asset quality or other future financial or business performance, strategies or expectations. The words "estimate," "plan," "project," "forecast," "intend," "anticipate," "believe," "seek," "target" and similar expressions are intended to identify forward- looking statements. These statements reflect management's judgment based on currently available information and involve a number of risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. With respect to these forward-looking statements, management has made assumptions regarding, among other things, customer and network usage, customer growth and retention, pricing, operating costs, technology and the economic and regulatory environment. Future performance cannot be ensured. Actual results may differ materially from those in the forward-looking statements. Some factors that could cause actual results to differ include: economic, competitive, regulatory, technological, capital market and other factors, and the risks that are described in the sections entitled "Risk Factors" and "Cautionary Statement Regarding Forward- Looking Statements" contained in Embarq's Registration Statement on Form 10, as amended, as filed with the Securities and Exchange Commission (SEC) and in Embarq's other filings with the SEC.

Forward-looking statements speak only as of the date they were made, and Embarq undertakes no obligation to update or revise any forward-looking statements in light of new information or future events. You should not place undue reliance on any forward-looking statements, which speak only as of the date of this press release. Embarq is not obligated to publicly update or release any revisions to these forward-looking statements to reflect any events or circumstances after the date of this news release.

FINANCIAL MEASURES

As Adjusted Basis of Reporting

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 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 ongoing business operations
       transferred to Embarq by Sprint Nextel.

In order to facilitate a comparison of Embarq's historical operating performance to its performance subsequent to the spin-off, Schedule 4 on pages 11-14 provides an as adjusted view of Embarq's quarterly operating income for 2005 and the first half of 2006, including reconciliations to GAAP. 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 are non-GAAP measures and should be considered in addition to, but not as a substitute for, the information contained in our financial reporting.

    LAUNCH ACTIVITIES

BRAND and ADVERTISING

On June 5th, Embarq launched a new brand and advertising campaign that highlighted the company's common sense approach to business. With their focus on practical ingenuity the spots speak to:

    -- Innovation
    -- Reliability - Dependability
    -- Common Sense

    WIRELESS MVNO LAUNCH

Embarq has an MVNO Agreement with Sprint Nextel Corporation that allows Embarq to offer its own branded wireless voice and data services. For $60 a month customers can choose a plan that includes:

    -- Unlimited local calling plus 200 anytime wireless minutes
    -- One voicemail for home and wireless messages
    -- 150 bonus anytime wireless minutes
    -- Unlimited calling between the Embarq home phone and wireless phone

Embarq is one of the first communications carriers to have operationally integrated wireline and wireless products. Whether it is integrated voicemail or EMBARQ Smart Connect, when you are in the home, office or on the road, Embarq provides outstanding coverage, reliability and clarity.

RETAIL STORE MAKEOVER

Re-branding is complete in all of the 33 stores Embarq operates. During 2006 the company expects to increase that number to between 55 and 60 stores. In addition to consumer offerings like HSI, wireless handsets, and DISH Network satellite TV, a key feature is:

-- A store-within-a-store focused on business customers small and large.

EMBARQ Logistics

Embarq has changed the name of Sprint North Supply to EMBARQ Logistics, highlighting the business unit's new strategy and focus. This distribution and supply chain organization is a market-leading distributor that works with a wide variety of manufacturers to sell their communications products to other carriers.

NEW PRODUCTS and OFFERS

Integrated Voicemail -- This common sense solution allows wireless and home phone customers to:

    -- Retrieve all their voicemail messages -- from their wireless or
       wireline phone - from one mailbox.
    -- Receive automatic voicemail notification.

EMBARQ(TM) Smart Connect -- With Smart Connect calls move seamlessly from an Embarq wireless phone to any wired phone with the push of a button, allowing businesses to be more accessible to their customers and colleagues. It also helps manage wireless costs. Service is not currently available in all markets.

EMBARQ(TM) BizPak -- EMBARQ BizPak is a HSI value added service designed to build Web presence for small business customers. The service provides Web hosting, e-commerce functionality, multiple vanity e-mails, 24/7 live customer care via phone or e-mail and online sales tracking for improved customer responsiveness.

About Embarq

Embarq Corporation (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
                Consolidated Statements of Operations (unaudited)
                    ($ in millions, except per share amounts)


                                            Quarter Ended   Six Months Ended
    Schedule 1                                 June 30,          June 30,
                                           2006     2005     2006     2005
    Net Operating Revenues
     Service revenues                     $1,410   $1,384   $2,796   $2,783
     Product revenues                        169      137      344      265
    Net Operating Revenues                 1,579    1,521    3,140    3,048

    Operating Expenses
     Cost of services                        367      349      745      700
     Cost of products                        149      120      309      237
     Selling, general and administrative     403      379      822      794
     Depreciation and amortization           254      246      492      491
    Total Operating Expenses               1,173    1,094    2,368    2,222

    Operating Income                         406      427      772      826
    Interest expense                         (68)     (22)     (87)     (44)
    Other income (expense), net                3        2        8        4
    Income Before Taxes                      341      407      693      786
    Income tax expense                      (125)    (158)    (263)    (305)
    Net Income                              $216     $249     $430     $481


    Pro forma Basic Earnings Per Share     $1.45             $2.88
    Pro forma Basic weighted average
     shares                                149.1             149.1

    Pro forma Diluted Earnings Per Share   $1.44             $2.87
    Pro forma Diluted weighted average
     shares                                150.0             149.9



                               Embarq Corporation
                           Consolidated Balance Sheets
                                 ($ in millions)

    Schedule 2                                  June 30,        December 31,
                                                  2006              2005
                                                (unaudited)
    Assets
     Cash and equivalents                          $25              $103
     Accounts receivable, net                      699               660
     Inventories                                   176               174
     Prepaid expenses and other current assets      86               135
        Total current assets                       986             1,072

     Property, plant and equipment, net          8,047             7,804
     Prepaid pension asset                           -               219
     Other non-current assets                      146               126
        Total non-current assets                 8,193             8,149

    Total assets                                $9,179            $9,221

    Liabilities and stockholders' equity
     Current maturities                             $2                $2
     Accounts payable                              436               528
     Accrued payroll & benefits                    153               118
     Accrued taxes                                 193               104
     Deferred revenue                              213               215
     Other current liabilities                     174               117
        Total current liabilities                1,171             1,084

     Long-term debt                              6,746             1,123
     Postretirement and other benefit
      obligations                                  894               793
     Deferred income taxes                       1,008             1,290
     Other non-current liabilities                 143                79
        Total non-current liabilities            8,791             3,285

    Stockholders' equity
     Business equity                                 -             5,377
     Common stock                                    1                 -
     Paid in capital                              (465)                -
     Retained earnings                             104                 -
     Accumulated other comprehensive loss         (423)             (525)
        Total stockholders' equity                (783)            4,852

    Total liabilities and stockholders' equity  $9,179            $9,221



                               Embarq Corporation
                Consolidated Statements of Cash Flows (unaudited)
                                 ($ in millions)


    Schedule 3                                   Six Months Ended June 30,
                                                  2006              2005

    Operating Activities
    Net income                                    $430             $481
    Depreciation and amortization                  492              491
    Deferred income taxes                          (38)               9
    Changes in assets and liabilities:
     Accounts receivable                           (43)              12
     Inventories and other current assets           92               32
     Accounts payable and other
      current liabilities                          198               33
     Noncurrent assets and liabilities, net         (1)             (75)
    Other, net                                      26               24
     Net cash provided by operating activities   1,156            1,007

    Investing Activities
    Capital expenditures                          (449)            (342)
    Proceeds from sales of assets                   25               10
     Net cash used by investing activities        (424)            (332)

    Financing Activities
    Issuance of debt                             2,100                -
    Payments on debt                              (502)             (37)
    Net cash paid to Sprint Nextel
     associated with the spin off               (2,208)               -
    Dividends paid to Sprint Nextel               (194)            (543)
    Other, net                                      (6)               -
     Net cash used by financing activities        (810)            (580)

    Change in cash and equivalents                 (78)              95

    Cash and equivalents at beginning of period   $103             $113

    Cash and equivalents at end of period          $25             $208

    Supplemental Cash Flow Information
    Non-cash activities associated with
     the spin off:
     Issuance of senior notes                  $(4,485)              $-
     Elimination of notes payable to
      Sprint Nextel                                460                -
     Transfer of certain property,
      plant & equipment                            310                -
     Transfer of certain postretirement &
      other benefit obligations                   (314)               -
     Transfer of certain deferred tax assets       254                -
     Transfer of certain other assets
      & liabilities, net                            71                -
      Total non-cash activities associated with
       the spin off                            $(3,704)              $-
      Combined cash and non-cash activities
       associated with the spin off            $(5,912)              $-



                             Embarq Corporation
              Reconciliations of Non-GAAP Measures (unaudited)
                               ($ in millions)

    Schedule 4
                                    LD               Shared
    Quarter Ended                Customer            Assets /           As
     June 30, 2006         GAAP  Transfers Pension Liabilities Other Adjusted

    Net Operating
     Revenues
      Voice               $1,067   $56        $-        $-       $-   $1,123
      Data                   174     2         -         -        2      178
      Internet (HSI)         101     -         -         -        -      101
      Other                   68    (7)        -         -        -       61
     Service revenues      1,410    51         -         -        2    1,463
      EMBARQ Logistics       138     -         -         -        -      138
      Other                   31    (2)        -         -        -       29
     Product revenues        169    (2)        -         -        -      167
    Net operating
     revenues             $1,579   $49        $-        $-       $2   $1,630

    Operating Expenses
     Cost of services        367    23         -         -        -      390
     Cost of products        149    (1)        -         -        -      148
     Selling, general and
      administrative         403    13         -       (18)       -      398
     Depreciation and
      amortization           254     -         -        13        -      267
    Total Operating
     Expenses              1,173    35         -        (5)       -    1,203

    Operating Income        $406   $14        $-        $5       $2     $427

    Operating Unit Revenues
      Consumer              $641   $44        $-        $-       $-     $685
      Business               369     9         -         -        1      379
      Wholesale              431    (4)        -         -        1      428
     Telecommunications    1,441    49         -         -        2    1,492
     EMBARQ Logistics        138     -         -         -        -      138
    Net operating
     revenues             $1,579   $49        $-        $-       $2   $1,630

    Capital
     Expenditures           $265    $-        $-       $47       $-     $312


                                   LD                Shared
    Quarter Ended                Customer            Assets /           As
     March 31, 2006        GAAP Transfers Pension Liabilities Other Adjusted

    Net Operating
     Revenues
      Voice               $1,038  $116        $-        $-       $1   $1,155
      Data                   169     4         -         -        2      175
      Internet (HSI)          98     -         -         -        -       98
      Other                   81   (15)        -         -        -       66
     Service revenues      1,386   105         -         -        3    1,494
      EMBARQ Logistics       152     -         -         -        -      152
      Other                   23    (3)        -         -        -       20
     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

    Operating Unit Revenues
      Consumer              $609   $92        $-        $-       $-     $701
      Business               354    19         -         -        1      374
      Wholesale              446    (9)        -         -        2      439
     Telecommunications    1,409   102         -         -        3    1,514
     EMBARQ Logistics        152     -         -         -        -      152
    Net operating
     revenues             $1,561  $102        $-        $-       $3   $1,666

    Capital Expenditures    $184    $-        $-       $20       $-     $204



                                   LD                Shared
    Year Ended                   Customer            Assets /           As
     December 31, 2005     GAAP  Transfers Pension Liabilities Other Adjusted

    Net Operating
     Revenues
      Voice               $4,249  $512        $-        $-       $2   $4,763
      Data                   657    16         -         -       11      684
      Internet (HSI)         326     -         -         -        -      326
      Other                  334   (66)        -         -        -      268
    Service revenues       5,566   462         -         -       13    6,041
      EMBARQ Logistics       563     -         -         -        -      563
      Other                  125   (28)        -         -        -       97
     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

    Operating Unit
     Revenues
      Consumer            $2,423  $412        $-        $-       $-   $2,835
      Business             1,424    60         -         -        6    1,490
      Wholesale            1,844   (38)        -         -        7    1,813
     Telecommunications    5,691   434         -         -       13    6,138
     EMBARQ Logistics        563     -         -         -        -      563
    Net operating
     revenues             $6,254  $434        $-        $-      $13   $6,701

    Capital Expenditures    $828    $-        $-       $66       $-     $894


                                   LD                Shared
    Quarter Ended                Customer            Assets /           As
     December 31, 2005     GAAP  Transfers Pension Liabilities Other Adjusted

    Net Operating
     Revenues
      Voice               $1,045  $126        $-        $-       $1   $1,172
      Data                   168     4         -         -        3      175
      Internet (HSI)          93     -         -         -        -       93
      Other                   83   (16)        -         -        -       67
     Service revenues      1,389   114         -         -        4    1,507
      EMBARQ Logistics       180     -         -         -        -      180
      Other                   34    (7)        -         -        -       27
     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

    Operating Unit Revenues
      Consumer              $609   $98        $-        $-       $-     $707
      Business               362    17         -         -        2      381
      Wholesale              452    (8)        -         -        2      446
     Telecommunications    1,423   107         -         -        4    1,534
     EMBARQ Logistics        180     -         -         -        -      180
    Net operating
     revenues             $1,603  $107        $-        $-       $4   $1,714

    Capital Expenditures    $285    $-        $-       $33       $-     $318


                                   LD                Shared
    Quarter Ended                Customer            Assets /           As
     September 30, 2005    GAAP  Transfers Pension Liabilities Other Adjusted

    Net Operating
     Revenues
      Voice               $1,060  $129        $-        $-       $-   $1,189
      Data                   164     4         -         -        3      171
      Internet (HSI)          85     -         -         -        -       85
      Other                   85   (17)        -         -        -       68
     Service revenues      1,394   116         -         -        3    1,513
      EMBARQ Logistics       175     -         -         -        -      175
      Other                   34    (7)        -         -        -       27
     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

    Operating Unit Revenues
      Consumer              $602  $105        $-        $-       $-     $707
      Business               361    15         -         -        1      377
      Wholesale              465   (11)        -         -        2      456
     Telecommunications    1,428   109         -         -        3    1,540
     EMBARQ Logistics        175     -         -         -        -      175
    Net operating
     revenues             $1,603  $109        $-        $-       $3   $1,715

    Capital Expenditures    $201    $-        $-       $13       $-     $214


                                   LD                Shared
    Quarter Ended                Customer            Assets /           As
     June 30, 2005         GAAP  Transfers Pension Liabilities Other Adjusted

    Net Operating
     Revenues
      Voice               $1,062  $128        $-        $-       $1   $1,191
      Data                   163     4         -         -        3      170
      Internet (HSI)          76     -         -         -        -       76
      Other                   83   (16)        -         -        -       67
     Service revenues      1,384   116         -         -        4    1,504
      EMBARQ Logistics       109     -         -         -        -      109
      Other                   28    (7)        -         -        -       21
     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

    Operating Unit Revenues
      Consumer              $602  $104        $-        $-       $-     $706
      Business               350    15         -         -        2      367
      Wholesale              460   (10)        -         -        2      452
     Telecommunications    1,412   109         -         -        4    1,525
     EMBARQ Logistics        109     -         -         -        -      109
    Net operating
     revenues             $1,521  $109        $-        $-       $4   $1,634

    Capital Expenditures    $194    $-        $-        $9       $-     $203



                                   LD                Shared
    Quarter Ended                Customer            Assets /           As
     March 31, 2005        GAAP  Transfers Pension Liabilities Other Adjusted

    Net Operating
     Revenues
      Voice               $1,082  $129        $-        $-       $-   $1,211
      Data                   162     4         -         -        2      168
      Internet (HSI)          72     -         -         -        -       72
      Other                   83   (17)        -         -        -       66
     Service revenues      1,399   116         -         -        2    1,517
      EMBARQ Logistics        99     -         -         -        -       99
      Other                   29    (7)        -         -        -       22
     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

    Operating Unit Revenues
      Consumer              $610  $105        $-        $-       $-     $715
      Business               351    13         -         -        1      365
      Wholesale              467    (9)        -         -        1      459
     Telecommunications    1,428   109         -         -        2    1,539
     EMBARQ Logistics         99     -         -         -        -       99
    Net operating
     revenues             $1,527  $109        $-        $-       $2   $1,638

    Capital Expenditures    $148    $-        $-       $11       $-     $159



                                Embarq Corporation
                 Operating Statistics - As Adjusted* (unaudited)
            (Revenues in millions; lines and subscribers in thousands)
        (* Note: As adjusted is a non-GAAP measure.  See Schedule 4 for a
                             reconciliation to GAAP.)

    Schedule 5
                                       2Q-06    1Q-06    2005     4Q-05
    Service and Product Revenues
      Voice                           $1,123   $1,155   $4,763   $1,172
      Data                               178      175      684      175
      Internet (HSI)                     101       98      326       93
      Other                               61       66      268       67
     Service revenues                  1,463    1,494    6,041    1,507
      EMBARQ Logistics                   138      152      563      180
      Other                               29       19       97       27
     Product revenues                    167      171      660      207
    Net operating revenues            $1,630   $1,665   $6,701   $1,714

    Operating Unit Revenues
      Consumer                          $685     $701   $2,835     $707
      Business                           379      374    1,490      381
      Wholesale                          428      439    1,813      446
     Telecommunications                1,492    1,514    6,138    1,534
     EMBARQ Logistics                    138      152      563      180
    Net operating revenues            $1,630   $1,666   $6,701   $1,714

    Consumer Revenue per Household
      Consumer revenue                  $685     $701              $707
      Average households served        4,482    4,571             4,634
    Monthly revenue per average HH    $50.94   $51.12            $50.86

    Access Lines
      Consumer                         4,835    4,970             5,056
      Business                         2,074    2,079             2,092
      Wholesale                          208      219               211
    Total                              7,117    7,268             7,359

    Internet (HSI) Lines
      Consumer                           690      625               552
      Business                           127      121               114
      Wholesale                           32       31                27
    Total                                849      777               693

    Wireless Subscribers
      Consumer                             4        -                 -
      Business                             1        -                 -
    Total                                  5        -                 -

    Entertainment Subscribers            131      109                87


                                       3Q-05       2Q-05       1Q-05
    Service and Product Revenues
      Voice                           $1,189      $1,191      $1,211
      Data                               171         170         168
      Internet (HSI)                      85          76          72
      Other                               68          67          66
     Service revenues                  1,513       1,504       1,517
     EMBARQ Logistics                    175         109          99
      Other                               27          21          22
     Product revenues                    202         130         121
    Net operating revenues            $1,715      $1,634      $1,638

    Operating Unit Revenues
      Consumer                          $707        $706        $715
      Business                           377         367         365
      Wholesale                          456         452         459
     Telecommunications                1,540       1,525       1,539
     EMBARQ Logistics                    175         109          99
    Net operating revenues            $1,715      $1,634      $1,638

    Consumer Revenue per Household
      Consumer revenue                  $707        $706        $715
      Average households served        4,695       4,764       4,805
    Monthly revenue per average HH    $50.20      $49.40      $49.60

    Access Lines
      Consumer                         5,135       5,215       5,312
      Business                         2,099       2,103       2,107
      Wholesale                          214         222         230
    Total                              7,448       7,540       7,649

    Internet (HSI) Lines
      Consumer                           507         469         440
      Business                           107          99          92
      Wholesale                           24          22          19
    Total                                638         590         551

    Wireless Subscribers
      Consumer                             -           -           -
      Business                             -           -           -
    Total                                  -           -           -

    Entertainment Subscribers             64          43          29

SOURCE Embarq Corporation
07/27/2006
 

(EQ)