-- Posted solid financial and operational results in first full quarter
        as an independent company

     -- Raised 2006 revenue and operating income guidance

     -- Matched record level of high-speed Internet subscriber additions

     -- Expects to surpass one million high-speed Internet subscribers in the
        fourth quarter

     Third Quarter Highlights

     -- Raised 2006 revenue and operating income guidance

     -- Added 84,000 net new high-speed Internet (HSI) subscribers, matching
        the highest quarterly total in company history

     -- Ended the quarter with 933,000 HSI subscribers, 46% more than a year
        ago, and increased year-end HSI subscriber expectations to more than
        one million

     -- Maintained positive year-over-year trends in business revenue

     -- Ended the first full quarter of EMBARQ(TM)-branded wireless sales with
        24,000 subscribers

     -- Introduced innovative EMBARQ(SM) Media Safe and EMBARQ(SM) Video
        Clicks enhancements for HSI subscribers

     -- Expanded the availability of EMBARQ(SM) Smart Connect, which enables
        handoffs between mobile and Wi-Fi networks

     -- Converted 1 millionth access line from circuit to packet switching
        technology

OVERLAND PARK, Kan., Oct. 25 /PRNewswire-FirstCall/ -- Embarq Corporation (NYSE: EQ) today announced its financial results for the third quarter of 2006, its first full quarter as an independent company. EMBARQ reported revenues of $1.61 billion, operating income of $366 million and diluted earnings per share of $1.06.

(Logo: http://www.newscom.com/cgi-bin/prnh/20060516/EMBARQLOGO )

Commenting on the quarter, Dan Hesse, EMBARQ Chairman and Chief Executive Officer, said, "Our results this quarter were ahead of our expectations in several areas, and as a result, we're raising our 2006 revenue and operating income guidance. At the same time, we continued to deliver on our promise of practical innovation, introducing EMBARQ(SM) Media Safe for our high-speed Internet customers, the first product of its kind in our industry to include 25GB of storage, and expanding the availability of EMBARQ(SM) Smart Connect, another product we were first in bringing to the market."

The company's reported results under generally accepted accounting principles (GAAP) for all periods prior to the spin-off do not reflect certain items related to the spin-off from Sprint Nextel that are included in its GAAP reporting subsequent to the spin-off. (These items are described in more detail in the section entitled "Financial Measures".) Accordingly, pre-spin GAAP results are not fully comparable to post-spin GAAP results. The 'as adjusted' basis of reporting reflects the current composition of the company's business for all periods and is provided to help investors evaluate trends in the company's operating performance. Reconciliations of these non-GAAP measures are provided in Schedules 4 and 5.

RESULTS OVERVIEW

Despite being impacted by separation-related expenses and competition in consumer markets, the company's third-quarter performance was solid overall. The company reported 24.7% year-over-year HSI revenue growth, driven by strong subscriber additions and average revenue per subscriber of almost $40 per month, while data and business markets revenues continued to grow at a solid rate. In addition, continued strong cash flows enabled the company to maintain its anticipated rate of debt reduction.

GAAP Results

EMBARQ reported consolidated revenues of $1.61 billion for the third quarter of 2006, a 0.2% increase compared to prior year results reported on a GAAP basis. Third-quarter operating income was $366 million, a 13.1% decline compared to prior year GAAP results. Diluted earnings per share was $1.06 in the third quarter.

As Adjusted Results

Compared to prior year as adjusted results, the company's third-quarter consolidated revenues of $1.61 billion represented a decline of 6.4%. A significant portion of this decline was attributable to the Logistics segment, in which revenue decreased 28.6% due primarily to the exit of certain unprofitable customer segments. Telecommunications segment revenues decreased just 3.8% year-over-year, as growth in HSI, data and wireless revenues partially offset a decline in voice revenue.

Due in part to $23 million of non-recurring separation-related expenses and $18 million in greater than anticipated long distance unit costs, the company's third quarter operating income of $366 million represented a 22.8% decline compared to prior year as adjusted results. In addition, third-quarter 2006 operating income was impacted by recurring separation- related expenses associated with the establishment of the company's corporate support functions and approximately $8 million of dilution associated with the company's new wireless business. Third-quarter diluted earnings per share was $1.06.

Subscriber Results

HSI net additions were 84,000 in the third quarter, matching the company's previous record for quarterly subscriber additions. At the end of the quarter, EMBARQ had 933,000 HSI subscribers, 46% more than a year ago.

Access lines declined 6.0% year-over-year to 6.998 million, due primarily to competition in consumer markets. Consumer access lines declined 7.9%, while business lines declined just 1.4%.

After its launch in mid-June, the third quarter was the first full quarter for the company's wireless business. Wireless net additions in the quarter were 19,000 and the company ended the quarter with 24,000 wireless subscribers.

Entertainment net additions were 15,000 in the third quarter and the company ended the quarter with 146,000 of its customers subscribing to entertainment services, more than twice the number of a year ago.

    SELECTED FINANCIAL DATA

                         3Q-06   3Q-05                 3Q-05 As
      Consolidated        GAAP    GAAP    Fav/(Unfav)  Adjusted  Fav/(Unfav)
          Voice          $1,101  $1,060   $41     3.9%  $1,189  ($88)   (7.4%)
          Data              180     164    16     9.8%     171     9     5.3%
          High-speed
           Internet         106      85    21    24.7%      85    21    24.7%
          Wireless            3       -     3      NMF       -     3      NMF
          Other services     64      85   (21)  (24.7%)     68    (4)   (5.9%)
        Service revenue   1,454   1,394    60     4.3%   1,513   (59)   (3.9%)
          EMBARQ
           Logistics        125     175   (50)  (28.6%)    175   (50)  (28.6%)
          Other product      27      34    (7)  (20.6%)     27     -     0.0%
        Product revenue     152     209   (57)  (27.3%)    202   (50)  (24.8%)
      Net Operating
       Revenues          $1,606  $1,603    $3     0.2%  $1,715 ($109)   (6.4%)

      Operating Expenses
        Cost of services    438     360   (78)  (21.7%)    421   (17)   (4.0%)
        Cost of products    145     189    44    23.3%     183    38    20.8%
        Selling,
         general and
         administrative     390     390     -     0.0%     371   (19)   (5.1%)
        Depreciation and
         amortization       267     243   (24)   (9.9%)    266    (1)   (0.4%)
      Total Operating
       Expenses           1,240   1,182   (58)   (4.9%)  1,241     1    (0.1%)

      Operating Income     $366    $421  ($55)  (13.1%)   $474 ($108)  (22.8%)
      Interest expense      116      19   (97)     NMF     128    12     9.4%
      Other expense
       (income), net         (5)     (1)    4      NMF      (2)    3      NMF
      Income Before
       Taxes               $255    $403 ($148)  (36.7%)   $348  ($93)  (26.7%)
      Income tax expense     95     161    66    41.0%     143    48    33.6%
      Net Income           $160    $242  ($82)  (33.9%)   $205  ($45)  (22.0%)


      Diluted Earnings
       Per Share          $1.06


                         3Q-06   3Q-05                 3Q-05 As
      Telecommunications  GAAP    GAAP    Fav/(Unfav)  Adjusted  Fav/(Unfav)
          Voice          $1,101  $1,060   $41     3.9%  $1,189  ($88)   (7.4%)
          Data              180     164    16     9.8%     171     9     5.3%
          High-speed
           Internet         106      85    21    24.7%      85    21    24.7%
          Wireless            3       -     3      NMF       -     3      NMF
          Other services     64      85   (21)  (24.7%)     68    (4)   (5.9%)
        Service revenue  $1,454  $1,394   $60     4.3%  $1,513  ($59)   (3.9%)
        Product revenue      27      34    (7)  (20.6%)     27     -     0.0%
      Net Operating
       Revenues          $1,481  $1,428   $53     3.7%  $1,540  ($59)   (3.8%)

      Operating Expenses
        Cost of services    436     359   (77)  (21.4%)    420   (16)   (3.8%)
        Cost of products     31      30    (1)   (3.3%)     24    (7)  (29.2%)
        Selling,
         general and
         administrative     379     371    (8)   (2.2%)    352   (27)   (7.7%)
        Depreciation and
         amortization       265     240   (25)  (10.4%)    263    (2)   (0.8%)
      Total Operating
       Expenses           1,111   1,000  (111)  (11.1%)  1,059   (52)   (4.9%)

      Operating Income     $370    $428  ($58)  (13.6%)   $481 ($111)  (23.1%)


                         3Q-06   3Q-05                 3Q-05 As
      Logistics           GAAP    GAAP    Fav/(Unfav)  Adjusted  Fav/(Unfav)
      Net Operating
       Revenues            $125    $175  ($50)  (28.6%)   $175  ($50)  (28.6%)

      Operating Expenses
        Cost of services &
         products           116     160    44    27.5%     160    44    27.5%
        Selling,
         general and
         administrative      11      19     8    42.1%      19     8    42.1%
        Depreciation and
         amortization         2       3     1    33.3%       3     1    33.3%
      Total Operating
       Expenses             129     182    53    29.1%     182    53    29.1%

      Operating Income      ($4)    ($7)   $3    42.9%     ($7)   $3    42.9%


    FINANCIAL OUTLOOK

    2006 GAAP Financial Outlook
    EMBARQ provided the following updates to its 2006 GAAP guidance:
     -- The company expects full-year revenues to be $6.25-$6.31 billion,
        compared to the previous range of $6.2 to $6.3 billion.
     -- Operating income is expected to be $1.45 to $1.48 billion, up from the
        previous range of $1.35 to $1.45 billion.


    2006 As Adjusted Financial Outlook
    EMBARQ provided the following updates to its 2006 as adjusted guidance:
     -- The company expects full-year revenues to be $6.45-$6.51 billion,
        compared to the previous range of $6.4 to $6.5 billion.
     -- Operating income is expected to be $1.55 to $1.58 billion, up from the
        previous range of $1.45 to $1.55 billion.
     -- Depreciation and amortization are expected to be approximately
        $1.06 billion, compared to the previous estimate of approximately
        $1.05 billion.

The table below reconciles the company'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'.

                                          LD Customer
                       GAAP                Transfers          As Adjusted
    Net
     Operating
     Revenues   $6.25 to $6.31 billion   $0.2 billion   $6.45 to $6.51 billion

    Operating
     Income     $1.45 to $1.48 billion   $0.1 billion   $1.55 to $1.58 billion

The company provided the following updates to its 2006 access line and HSI subscriber guidance:

     -- Access lines are expected to decline at a mid to upper 6% rate,
        compared to the previous range of 5.5% to 7.5%.
     -- HSI subscribers are expected to exceed one million, which would be an
        increase of approximately 44%, compared to the previous estimate of
        approximately 40%.

Due to HSI and ethernet sales growth in excess of earlier expectations, as well as non-recurring separation-related capital requirements, the company expects capital spending to be approximately $980 million in 2006, compared to the previous estimate of $960 million.

Financial Flexibility

EMBARQ announced a private letter ruling by the IRS that provides the company with the flexibility to pursue open market repurchases of its common stock without adversely affecting the tax-free nature of its spin-off from Sprint Nextel. The private letter ruling provides flexibility but does not reflect a change in the company's current financial strategy. The company's Board of Directors regularly evaluates the company's equity and dividend policies.

CONFERENCE CALL

Wednesday, October 25, 2006, EMBARQ will hold a conference call beginning at 4:30 PM 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 required to access the call is 7531926. Please plan to dial in at least five minutes before the scheduled start time. A simultaneous audio Webcast of the call and a downloadable presentation will be available at http://www.embarq.com/investors .

For those unable to participate live, a replay of the call will be available until November 8, 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 http://www.embarq.com/investors . The accompanying presentation will also be archived and available for download at this Website.

CAUTIONARY STATEMENT

This news release contains "forward-looking statements" within the meaning of the securities laws, including statements relating to the company's outlook or expectations for earnings, revenues, expenses, asset quality, customer growth or other future financial or business performance, strategies or expectations. The words "estimate," "plan," "project," "forecast," "expect," "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 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 the company's Registration Statement on Form 10, as amended, as filed with the Securities and Exchange Commission (SEC) and in the company'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.

SEGMENT REPORTING

Previously, the company's operations were divided into two operating segments, Local and Product Distribution. Following the spin-off and in connection with its first full quarter operating as an independent company, EMBARQ adopted as its operating segments Telecommunications and Logistics, and changed its presentation of the Logistics segment to align it with management's view of the business. The primary difference between the Logistics segment and the former Product Distribution segment is that only revenues derived from sales to third parties, along with the related direct and allocated costs of those revenues, are presented.

For comparative purposes results of the Logistics segment for prior periods have been recast to reflect the current composition of the segment.

FINANCIAL MEASURES

As Adjusted Basis of Reporting (for prior period comparisons)

For periods prior to and including May 17, 2006, the date of the company'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 the company'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 the company's historical operating performance to its performance subsequent to the spin-off, Schedule 4, provides an as adjusted view of the company'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.

Net Debt

Net Debt is consolidated debt, including current maturities, less cash and cash equivalents. This non-GAAP measure should be used in addition to, but not as a substitute for, the analysis provided in the statements of financial position and cash flows.

EMBARQ believes Net Debt provides useful information to investors, analysts and credit rating agencies about the capacity of the company to reduce the debt level and improve its capital structure.

    Reconciliation of Non-GAAP
     measure- Net Debt                     September 30,  June, 30
    (in millions)                               2006        2006      Change

    Current maturities                           $37          $2        $35
    Long-term debt                             6,506       6,746       (240)
    Less: Cash and equivalents                   (34)        (50)        16
      Net Debt                                $6,509      $6,698      $(189)


    ABOUT EMBARQ

EMBARQ (NYSE: EQ), headquartered in Overland Park, Kansas, offers a complete suite of common sense communications services. The company has approximately 20,000 employees and operates in 18 states. EMBARQ, which is expected to rank among the Fortune 500, is included in the S&P 500.

For consumers, EMBARQ offers an innovative portfolio of services that includes reliable local and long distance home phone service, high-speed Internet, wireless, and Dish Network satellite TV -- all on one monthly bill.

For businesses, EMBARQ has a comprehensive range of flexible and integrated services designed to help businesses of all sizes be more productive and communicate with their customers. This service portfolio includes integrated local voice and data services, long distance, Business Class DSL, wireless, enhanced data network services, voice and data communication equipment and managed network services.

EMBARQ believes that by focusing on the communities the company serves and by employing common sense and practical ingenuity, it is able to provide customers with a committed partner, dedicated customer service and innovative products for work and home. For more information, visit embarq.com.


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


                                           Quarter Ended   Nine Months Ended
    Schedule 1                             September 30,     September 30,
                                           2006     2005     2006     2005

    Net Operating Revenues
      Service revenues                     $1,454   $1,394   $4,250   $4,177
      Product revenues                        152      209      496      474
    Net operating revenues                  1,606    1,603    4,746    4,651

    Operating Expenses
      Cost of services                        438      360    1,183    1,060
      Cost of products                        145      189      454      426
      Selling, general and administrative     390      390    1,212    1,184
      Depreciation                            267      243      759      734
    Total Operating Expenses                1,240    1,182    3,608    3,404

    Operating Income                          366      421    1,138    1,247
    Interest expense                          116       19      203       63
    Other (income) expense, net                (5)      (1)     (13)      (5)
    Income Before Taxes                       255      403      948    1,189
    Income tax expense                         95      161      358      466
    Net Income                               $160     $242     $590     $723


    Basic Earnings Per Share (1)            $1.07             $3.96
    Basic weighted average shares (1)       149.2             149.1

    Diluted Earnings Per Share (1)          $1.06             $3.93
    Diluted weighted average shares (1)     150.5             150.1

    (1) Basic and diluted earnings per share and weighted average shares
        outstanding have been presented on a pro forma basis for the nine
        months ended September 2006.  Shares outstanding and dilution effects
        at the spin-off date of May 17, 2006 were assumed to be outstanding at
        January 1, 2006.


                               Embarq Corporation
                           Consolidated Balance Sheets
                                 ($ in millions)


    Schedule 2                                   September 30,   December 31,
                                                         2006          2005
                                                    (unaudited)
    Assets
      Cash and equivalents                                 $34          $103
      Accounts receivable, net                             678           660
      Inventories                                          188           174
      Prepaid expenses and other current assets            113           135
          Total current assets                           1,013         1,072

      Property, plant and equipment, net                 8,054         7,804
      Prepaid pension asset                                781           219
      Other non-current assets                              70           126
          Total non-current assets                       8,905         8,149

      Total assets                                      $9,918        $9,221

    Liabilities and stockholders' equity
      Current maturities                                   $37            $2
      Accounts payable                                     495           528
      Accrued payroll & benefits                           169           118
      Accrued taxes                                        181           104
      Deferred revenue                                     212           215
        Accrued interest                                   147            35
      Other current liabilities                            101            82
          Total current liabilities                      1,342         1,084

      Long-term debt                                     6,506         1,123
      Postretirement and other benefit obligations         803           793
      Deferred income taxes                              1,318         1,290
      Other non-current liabilities                        144            79
      Total non-current liabilities                      8,771         3,285

    Stockholders' equity
      Business equity                                        -         5,377
      Common stock                                           1             -
      Paid in capital                                     (414)            -
      Retained earnings                                    189             -
      Accumulated other comprehensive income (loss)         29          (525)
          Total stockholders' equity                      (195)        4,852

    Total liabilities and stockholders' equity          $9,918        $9,221



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

    Schedule 3                                             Nine Months Ended
                                                             September 30,
                                                           2006          2005

    Operating Activities
    Net income                                             $590          $723
    Depreciation and amortization                           759           734
    Deferred income taxes                                   (36)           36
    Provision for losses on accounts receivable              40            37
    Changes in assets and liabilities:
      Accounts receivable                                   (39)          (33)
      Inventories and other current assets                   53            21
      Accounts payable and other current liabilities        341             5
      Noncurrent assets and liabilities, net                (14)          (76)
    Other, net                                              (13)            3
      Net cash provided by operating activities           1,681         1,450

    Investing Activities
    Capital expenditures                                   (709)         (543)
    Proceeds from sales of assets                            38            13
      Net cash used by investing activities                (671)         (530)

    Financing Activities
    Borrowings under credit facility, net of
      repayments                                          1,695             -
    Payments on debt                                       (302)         (115)
    Net cash paid to Sprint Nextel associated with
      the spin off                                       (2,208)            -
    Dividends paid to stockholders                          (75)            -
    Dividends paid to Sprint Nextel                        (194)         (833)
    Other, net                                                5             -
      Net cash used by financing activities              (1,079)         (948)

    Change in cash and equivalents                          (69)          (28)

    Cash and equivalents at beginning of period             103           113

    Cash and equivalents at end of period                   $34           $85

    Supplemental Cash Flow Information
    Non-cash transactions with Sprint Nextel:
      Distribution of senior notes                      $(4,485)           $-
      Transfer of notes receivable                          460             -
      Transfer of property, plant and equipment, net        310             -
      Transfer of pension assets, net of
        post-retirement benefit obligations                 473             -
      Transfer of other assets and liabilities, net          73             -
    Deferred taxes related to assets and liabilities
      transferred                                           (48)            -
    Total non-cash activities associated with the
      spin off                                          $(3,217)           $-
    Net cash paid to Sprint Nextel associated with
      the spin-off                                       (2,208)            -
    Combined cash and non-cash activities associated
      with the spin off                                 $(5,425)           $-



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

    Schedule 4

    Quarter Ended                     LD             Shared
      September 30,                Customer          Assets /            As
      2006                   GAAP Transfers Pension Liabilities Other Adjusted
    Net Operating Revenues
      Voice                $1,101     $-       $-       $-        $-   $1,101
      Data                    180      -        -        -         -      180
      Internet (HSI)          106      -        -        -         -      106
      Wireless                  3      -        -        -         -        3
      Other                    64      -        -        -         -       64
    Service revenues        1,454      -        -        -         -    1,454
      EMBARQ Logistics        125      -        -        -         -      125
      Other                    27      -        -        -         -       27
    Product revenues          152      -        -        -         -      152
    Net operating
      revenues             $1,606     $-       $-       $-        $-   $1,606

    Operating Expenses
      Cost of services        438      -        -        -         -      438
      Cost of products        145      -        -        -         -      145
      Selling, general and
        administrative        390      -        -        -         -      390
      Depreciation and
        amortization          267      -        -        -         -      267
    Total Operating
      Expenses              1,240      -        -        -         -    1,240

    Operating Income         $366     $-       $-       $-        $-     $366

    Operating Unit Revenues
      Consumer               $668     $-       $-       $-        $-     $668
      Business                389      -        -        -         -      389
      Wholesale               424      -        -        -         -      424
    Telecommunications      1,481      -        -        -         -    1,481
    EMBARQ Logistics          125      -        -        -         -      125
    Net operating
      revenues             $1,606     $-       $-       $-        $-   $1,606

    Capital Expenditures     $260     $-       $-       $-        $-     $260


                             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
      Wireless                  -      -        -        -         -        -
      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


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

    Schedule 4

                                     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
      Wireless                  -      -        -         -        -        -
      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


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

    Schedule 4

                                    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
      Wireless                  -      -        -         -        -        -
      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


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

    Schedule 4

                                    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
      Wireless                  -      -        -         -        -        -
      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


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

    Schedule 4

                                    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
      Wireless                  -      -        -         -        -        -
      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


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

    Schedule 4
                                    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
      Wireless                  -      -        -         -        -        -
      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


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

    Schedule 4

                                    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
      Wireless                  -      -        -         -        -        -
      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


                         Telecommunications Segment
              Reconciliations of Non-GAAP Measures (unaudited)
                               ($ in millions)

    Schedule 5

                                     LD               Shared
    Quarter Ended                 Customer           Assets /          As
      September 30, 2006    GAAP Transfers Pension Liabilities Other Adjusted
    Net Operating Revenues
        Voice              $1,101     $-       $-        $-       $-   $1,101
        Data                  180      -        -         -        -      180
        Internet (HSI)        106      -        -         -        -      106
        Wireless                3      -        -         -        -        3
        Other                  64      -        -         -        -       64
      Service revenues      1,454      -        -         -        -    1,454
      Product revenues         27      -        -         -        -       27
    Net operating
      revenues             $1,481     $-       $-        $-       $-   $1,481

    Operating Expenses
      Cost of services        436      -        -         -        -      436
      Cost of products         31      -        -         -        -       31
      Selling, general and
        administrative        379      -        -         -        -      379
      Depreciation and
        amortization          265      -        -         -        -      265
    Total Operating
      Expenses              1,111      -        -         -        -    1,111

    Operating Income         $370     $-       $-        $-       $-     $370

    Operating Unit Revenues
      Consumer               $668     $-       $-        $-       $-     $668
      Business                389      -        -         -        -      389
      Wholesale               424      -        -         -        -      424
    Telecommunications      1,481     $-       $-        $-       $-    1,481

    Capital
      Expenditures           $260     $-       $-        $-       $-     $260


                          Telecommunications Segment
               Reconciliations of Non-GAAP Measures (unaudited)
                               ($ in millions)
    Schedule 5

                                     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
        Wireless                -      -        -        -         -        -
        Other                  68     (7)       -        -         -       61
      Service revenues      1,410     51        -        -         2    1,463
      Product revenues         31     (2)       -        -         -       29
    Net operating revenues $1,441    $49       $-       $-        $2   $1,492

    Operating Expenses
      Cost of services        368     23        -        -         -      391
      Cost of products         23     (1)       -        -         -       22
      Selling, general and
       administrative         390     13        -      (18)        -      385
      Depreciation and
       amortization           251      -        -       13         -      264
    Total Operating
     Expenses               1,032     35        -       (5)        -    1,062

    Operating Income         $409    $14       $-       $5        $2     $430

    Operating Unit Revenues
        Consumer             $641    $44       $-       $-        $-     $685
        Business              369      9        -        -         1      379
        Wholesale             431     (4)       -        -         1      428
      Telecommunications    1,441    $49       $-       $-        $2    1,492

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


                          Telecommunications Segment
               Reconciliations of Non-GAAP Measures (unaudited)
                               ($ in millions)
    Schedule 5

                                     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
        Wireless                -      -        -        -         -        -
        Other                  81    (15)       -        -         -       66
      Service revenues      1,386    105        -        -         3    1,494
      Product revenues         23     (3)       -        -         -       20
    Net operating revenues $1,409   $102       $-       $-        $3   $1,514

    Operating Expenses
      Cost of services        378     50        -        -         1      429
      Cost of products         23     (3)       -        -         -       20
      Selling, general and
       administrative         400     22        -      (34)        1      389
      Depreciation and
       amortization           235      -        -       25         -      260
    Total Operating
     Expenses               1,036     69        -       (9)        2    1,098

    Operating Income         $373    $33       $-       $9        $1     $416

    Operating Unit Revenues
        Consumer             $609    $92       $-       $-        $-     $701
        Business              354     19        -        -         1      374
        Wholesale             446     (9)       -        -         2      439
      Telecommunications    1,409   $102       $-       $-        $3    1,514

    Capital Expenditures     $183     $-       $-      $20        $-     $203



                          Telecommunications Segment
               Reconciliations of Non-GAAP Measures (unaudited)
                               ($ in millions)
    Schedule 5

                                     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
        Wireless                -      -        -        -         -        -
        Other                 334    (66)       -        -         -      268
      Service revenues      5,566    462        -        -        13    6,041
      Product revenues        125    (28)       -        -         -       97
    Net operating revenues $5,691   $434       $-       $-       $13   $6,138

    Operating Expenses
      Cost of services      1,415    239        -        -         5    1,659
      Cost of products        117    (24)       -        -         -       93
      Selling, general and
       administrative       1,519     85      (15)    (147)        3    1,445
      Depreciation and
       amortization           967      -        -       90         1    1,058
      Asset impairments        80      -        -        -         -       80
    Total Operating
     Expenses               4,098    300      (15)     (57)        9    4,335

    Operating Income       $1,593   $134      $15      $57        $4   $1,803

    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

    Capital Expenditures     $823     $-       $-      $66        $-     $889



                          Telecommunications Segment
               Reconciliations of Non-GAAP Measures (unaudited)
                               ($ in millions)
    Schedule 5

                                     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
        Wireless                -      -        -        -         -        -
        Other                  83    (16)       -        -         -       67
      Service revenues      1,389    114        -        -         4    1,507
      Product revenues         34     (7)       -        -         -       27
    Net operating revenues $1,423   $107       $-       $-        $4   $1,534

    Operating Expenses
      Cost of services        357     59        -        -         1      417
      Cost of products         36     (6)       -        -         -       30
      Selling, general and
       administrative         388     21       (3)     (37)        1      370
      Depreciation and
       amortization           242      -        -       22         1      265
      Asset impairments        80      -        -        -         -       80
    Total Operating
     Expenses               1,103     74       (3)     (15)        3    1,162

    Operating Income         $320    $33       $3      $15        $1     $372

    Operating Unit Revenues
        Consumer             $609    $98       $-       $-        $-     $707
        Business              362     17        -        -         2      381
        Wholesale             452     (8)       -        -         2      446
      Telecommunications    1,423   $107       $-       $-        $4    1,534

    Capital Expenditures     $284     $-       $-      $33        $-     $317



                          Telecommunications Segment
               Reconciliations of Non-GAAP Measures (unaudited)
                               ($ in millions)
    Schedule 5

                                     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
        Wireless                -      -        -        -         -        -
        Other                  85    (17)       -        -         -       68
      Service revenues      1,394    116        -        -         3    1,513
      Product revenues         34     (7)       -        -         -       27
    Net operating revenues $1,428   $109       $-       $-        $3   $1,540

    Operating Expenses
      Cost of services        359     60        -        -         1      420
      Cost of products         30     (6)       -        -         -       24
      Selling, general and
       administrative         371     21       (4)     (37)        1      352
      Depreciation and
       amortization           240      -        -       23         -      263
    Total Operating
     Expenses               1,000     75       (4)     (14)        2    1,059

    Operating Income         $428    $34       $4      $14        $1     $481

    Operating Unit Revenues
        Consumer             $602   $105       $-       $-        $-     $707
        Business              361     15        -        -         1      377
        Wholesale             465    (11)       -        -         2      456
      Telecommunications    1,428   $109       $-       $-        $3    1,540

    Capital Expenditures     $199     $-       $-      $13        $-     $212



                          Telecommunications Segment
               Reconciliations of Non-GAAP Measures (unaudited)
                               ($ in millions)
    Schedule 5

                                     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
        Wireless                -      -        -        -         -        -
        Other                  83    (16)       -        -         -       67
      Service revenues      1,384    116        -        -         4    1,504
      Product revenues         28     (7)       -        -         -       21
    Net operating revenues $1,412   $109       $-       $-        $4   $1,525

    Operating Expenses
      Cost of services        348     59        -        -         2      409
      Cost of products         23     (6)       -        -         -       17
      Selling, general and
       administrative         362     22       (4)     (37)        1      344
      Depreciation and
       amortization           243      -        -       23         -      266
    Total Operating
     Expenses                 976     75       (4)     (14)        3    1,036

    Operating Income         $436    $34       $4      $14        $1     $489

    Operating Unit Revenues
        Consumer             $602   $104       $-       $-        $-     $706
        Business              350     15        -        -         2      367
        Wholesale             460    (10)       -        -         2      452
      Telecommunications    1,412   $109       $-       $-        $4    1,525

    Capital Expenditures     $193     $-       $-       $9        $-     $202



                          Telecommunications Segment
               Reconciliations of Non-GAAP Measures (unaudited)
                               ($ in millions)
    Schedule 5

                                     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
        Wireless                -      -        -        -         -        -
        Other                  83    (17)       -        -         -       66
      Service revenues      1,399    116        -        -         2    1,517
      Product revenues         29     (7)       -        -         -       22
    Net operating revenues $1,428   $109       $-       $-        $2   $1,539

    Operating Expenses
      Cost of services        351     61        -        -         1      413
      Cost of products         28     (6)       -        -         -       22
      Selling, general and
       administrative         398     21       (4)     (36)        -      379
      Depreciation and
       amortization           242      -        -       22         -      264
    Total Operating
     Expenses               1,019     76       (4)     (14)        1    1,078

    Operating Income         $409    $33       $4      $14        $1     $461

    Operating Unit Revenues
        Consumer             $610   $105       $-       $-        $-     $715
        Business              351     13        -        -         1      365
        Wholesale             467     (9)       -        -         1      459
      Telecommunications    1,428   $109       $-       $-        $2    1,539

    Capital Expenditures     $147     $-       $-      $11        $-     $158



                               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 6
                                              3Q-06       2Q-06       1Q-06
    Service and Product Revenues
        Voice                                 $1,101      $1,123      $1,155
        Data                                     180         178         175
        Internet (HSI)                           106         101          98
        Wireless                                   3           -           -
        Other                                     64          61          66
      Service revenues                         1,454       1,463       1,494
        EMBARQ Logistics                         125         138         152
        Other                                     27          29          20
      Product revenues                           152         167         172
    Net operating revenues                    $1,606      $1,630      $1,666

    Operating Unit Revenues
        Consumer                                $668        $685        $701
        Business                                 389         379         374
        Wholesale                                424         428         439
      Telecommunications                       1,481       1,492       1,514
      EMBARQ Logistics                           125         138         152
    Net operating revenues                    $1,606      $1,630      $1,666

    Consumer Revenue per Household
      Consumer revenue                          $668        $685        $701
      Average households served                4,384       4,482       4,571
    Monthly revenue per average HH            $50.79      $50.94      $51.12

    Access Lines
      Consumer                                 4,731       4,835       4,970
      Business                                 2,069       2,074       2,079
      Wholesale                                  198         208         219
    Total                                      6,998       7,117       7,268

    Internet (HSI) Lines
      Consumer                                   763         690         625
      Business                                   135         127         121
      Wholesale                                   35          32          31
    Total                                        933         849         777

    Wireless Subscribers
      Consumer                                    21           4           -
      Business                                     3           1           -
    Total                                         24           5           -

    Entertainment Subscribers                    146         131         109


                                        2005   4Q-05   3Q-05   2Q-05   1Q-05
    Service and Product Revenues
        Voice                          $4,763  $1,172  $1,189  $1,191  $1,211
        Data                              684     175     171     170     168
        Internet (HSI)                    326      93      85      76      72
        Wireless                            -       -       -       -       -
        Other                             268      67      68      67      66
      Service revenues                  6,041   1,507   1,513   1,504   1,517
        EMBARQ Logistics                  563     180     175     109      99
        Other                              97      27      27      21      22
      Product revenues                    660     207     202     130     121
    Net operating revenues             $6,701  $1,714  $1,715  $1,634  $1,638

    Operating Unit Revenues
        Consumer                       $2,835    $707    $707    $706    $715
        Business                        1,490     381     377     367     365
        Wholesale                       1,813     446     456     452     459
      Telecommunications                6,138   1,534   1,540   1,525   1,539
      EMBARQ Logistics                    563     180     175     109      99
    Net operating revenues             $6,701  $1,714  $1,715  $1,634  $1,638

    Consumer Revenue per Household
      Consumer revenue                           $707    $707    $706    $715
      Average households served                 4,634   4,695   4,764   4,805
    Monthly revenue per average HH             $50.86  $50.20  $49.40  $49.60

    Access Lines
      Consumer                                  5,056   5,135   5,215   5,312
      Business                                  2,092   2,099   2,103   2,107
      Wholesale                                   211     214     222     230
    Total                                       7,359   7,448   7,540   7,649

    Internet (HSI) Lines
      Consumer                                    552     507     469     440
      Business                                    114     107      99      92
      Wholesale                                    27      24      22      19
    Total                                         693     638     590     551

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

    Entertainment Subscribers                      87      64      43      29



                                Embarq Corporation
                           Supplemental Cash Flow Data
                                 ($ in millions)

    Schedule 7                                               Quarter Ended
                                                           September 30, 2006
                                                               (unaudited)
    Operating Activities
    Net income                                                          $160
    Depreciation and amortization                                        267
    Deferred income taxes                                                  2
    Provision for losses on accounts receivable                           16
    Changes in assets and liabilities:
        Accounts receivable                                              (21)
        Inventories and other current assets                             (39)
        Accounts payable and other current liabilities                   143
        Noncurrent assets and liabilities, net                           (13)
    Other, net                                                           (15)
      Net cash provided by operating activities                          500

    Investing Activities
    Capital expenditures                                                (260)
    Proceeds from sales of assets                                         13
      Net cash used by investing activities                             (247)

    Financing Activities
    Borrowings under credit facility, net of repayments                   95
    Payments on debt                                                    (300)
    Dividends paid to stockholders                                       (75)
    Other, net                                                            11
      Net cash used by financing activities                             (269)

    Change in cash and equivalents                                       (16)
    Cash and equivalents at beginning of period                           50
    Cash and equivalents at end of period                                $34

SOURCE Embarq Corporation 

 

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