OVERLAND PARK, Kan., Feb 12, 2009 /PRNewswire-FirstCall via COMTEX/ -- EMBARQ (NYSE: EQ) today reported fourth quarter and full-year 2008 results, highlighted by record cash flow before dividends. Although the company reported lower revenue, the decline was more than offset by expense improvements and capital efficiency.

For the fourth quarter, the company reported total revenue of $1.48 billion, operating income of $418 million, diluted earnings per share of $1.34 and cash flow before dividends of $295 million. For the full-year, the company reported total revenue of $6.12 billion, operating income of $1.63 billion, diluted earnings per share of $5.22 and cash flow before dividends of nearly $1.1 billion.

"The strength of our cash flow results, particularly given the economic environment, illustrates the durability of our business model and the focus of the EMBARQ team," said Tom Gerke, EMBARQ Chief Executive Officer. "Maintaining this focus will remain a high priority as we work toward our goal of closing our merger with CenturyTel in the second quarter."

    Highlights
   -- Full-year 2008 cash flow before dividends of nearly $1.1 billion
      represented an increase of 19.1% over the prior year and exceeded the
      company's outlook for the year.
   -- Data revenue grew at a 4.7% year-over-year rate for both the fourth
      quarter and full year, exceeding $800 million for the full year.
   -- High-speed Internet revenue increased 10.2% in the fourth quarter and
      12.3% for the full year, totaling $549 million in 2008.
   -- On Jan. 29, 2009, the company announced the sale of its distribution and
      supply chain subsidiary, Embarq Logistics, Inc., to KGP
      Telecommunications, Inc.
   -- Following the successful launch of its RescueIT(SM) computer support
      service for residential customers, the company recently announced the
      availability of RescueIT(SM) for EMBARQ(R) Business High-Speed Internet
      subscribers.


Financial Results

EMBARQ reported consolidated operating revenue of $1.48 billion for the fourth quarter, a 6.2% decrease from the prior-year period. For the full year, total revenue was $6.12 billion, a decline of 3.8% compared to the prior year period.

Revenue in the company's Logistics segment declined 17.7% year-over-year to $93 million in the fourth quarter. For the year, Logistics segment revenue declined 6.7% to $435 million.

Fourth quarter Telecommunications segment revenue was $1.39 billion, a decline of 5.3% compared to the prior year period. For the year, Telecommunications revenue was $5.69 billion, a decrease of 3.6% compared to the prior year.

Consolidated operating income was $418 million in the quarter, an increase of 13.0% from the prior year period. Full-year 2008 operating income was $1.63 billion, an increase of 8.6% compared to 2007.

Operating income in the current and prior year periods included the following unusual or non-recurring items affecting comparability:

                                    2008                      2007
    Increase (Decrease)         4Q         Total          4Q         Total
    (in millions)

    Workforce reduction        ($5)        ($76)        ($31)        ($80)
    Spin-off related expenses   $0           $0          ($5)        ($26)
    Gain from sale of
     real estate                $0           $9           $0           $0



    In addition, unusual or non-recurring items caused income tax expense to
differ from what would be expected based on the company's normal effective tax
rate of approximately 37.5%:

                                    2008                       2007
    Increase (Decrease)         4Q         Total          4Q         Total
    (in millions)
    Income tax items           ($8)         ($1)         $23          $12


EMBARQ reported diluted earnings per share of $1.34 for the fourth quarter and $5.22 for the full year, which represented increases of 8.9% and 17.6%, respectively, relative to the prior year periods.

Capital Expenditures and Cash Flow

Net capital expenditures were $149 million in the quarter and $675 million for the year, compared to $260 million and $819 million in the respective year ago periods.

Cash flow before dividends totaled $295 million in the fourth quarter and nearly $1.1 billion for the full-year. This compares to $193 million in the year ago quarter and $921 million in the prior year.

During the fourth quarter, EMBARQ paid a dividend of $0.6875 per share.

The company reduced its net debt by $119 million during the quarter and $171 million for the year, ending the year with net debt of $5.64 billion.

Subscriber Results

The company ended the year with 5.7 million access lines, 9.8% less than at the end of 2007. In the fourth quarter, absolute line losses totaled 157,000 compared to an absolute loss of 91,000 during the fourth quarter of 2007.

The company added 24,000 high-speed Internet subscribers during the quarter, bringing its subscriber base to 1.41 million at the end of the year, a 10.6% increase from year end 2007.

Video net additions were 13,000 during the quarter, and the company ended the period with 297,000 of its customers subscribing to video services. This is an increase of 48.5% from the prior year end.

Outlook

In light of its pending merger with CenturyTel, the company's outlook for 2009 covers only the first half of the year:

   -- Telecom segment revenue is expected to be between $2.68 and $2.72
      billion.
   -- Net capital expenditures are expected to be less than $300 million.
   -- Cash flow before dividends is expected to be between $560 million and
      $580 million.


Conference Call

Today EMBARQ will hold a conference call beginning at 4:30 p.m. EST. Dial- in numbers for the conference call are (866) 245-2310 (U.S. and Canada) and (816) 650-2838 (International). The code required to access the call is 78310184. 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.

Cautionary Statement

This news release contains certain "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "anticipate", "may", "can", "believe", "expect", "project", "intend", "likely", similar expressions and any other statements that predict or indicate future events or trends or that are not statements of historical facts. These forward-looking statements are subject to numerous risks and uncertainties. There are various important factors that could cause actual outcomes and results to differ materially from those in any such forward-looking statements. These factors include, but are not limited to, the following: failure to obtain, delays in obtaining or adverse conditions contained in any required regulatory approvals; failure to consummate or delay in consummating the merger for other reasons; changes in laws or regulations; and changes in general economic conditions. Embarq and CenturyTel undertake no obligation (and expressly disclaim any such obligation) to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. For additional information concerning factors that could cause actual results to materially differ from those projected herein, please refer to Embarq's and CenturyTel's most recent Form 10-K, 10-Q and 8-K reports.

         Selected Financial Data (Unaudited) - Current Period Results
                            Compared to Prior Year

    Logistics                 4Q-08        4Q-07           Fav/(Unfav)
    Net Operating Revenues      93          113          (20)      -17.7%

    Operating Expenses
      Cost of services &
       products                 86          104           18        17.3%
      Selling, general and
       administrative           13            9           (4)      -44.4%
      Depreciation               0            1            1       100.0%
    Total Operating Expenses    99          114           15        13.2%

    Operating Income           ($6)         ($1)         ($5)        n/a



    Telecom                   4Q-08       4Q-07            Fav/(Unfav)
    Net Operating Revenues
        Voice                 $937       $1,032         ($95)       -9.2%
        Data                   202          193            9         4.7%
        High-speed Internet    141          128           13        10.2%
        Wireless                12           16           (4)      -25.0%
        Other services          60           59            1         1.7%
      Service revenues       1,352        1,428          (76)       -5.3%
      Product revenues          34           36           (2)       -5.6%
    Total Net Operating
     Revenues                1,386        1,464          (78)       -5.3%

    Operating Expenses
      Cost of services         341          397           56        14.1%
      Cost of products          27           39           12        30.8%
      Selling, general and
       administrative          341          395           54        13.7%
      Depreciation             253          262            9         3.4%
    Total Operating Expenses   962        1,093          131        12.0%

    Operating Income          $424         $371          $53        14.3%




    Consolidated              4Q-08       4Q-07            Fav/(Unfav)
    Net Operating Revenues
        Voice                 $937       $1,032         ($95)       -9.2%
        Data                   202          193            9         4.7%
        High-speed Internet    141          128           13        10.2%
        Wireless                12           16           (4)      -25.0%
        Other services          60           59            1         1.7%
      Service revenues       1,352        1,428          (76)       -5.3%
        EMBARQ Logistics        93          113          (20)      -17.7%
        Other product           34           36           (2)       -5.6%
      Product revenues         127          149          (22)      -14.8%
    Total Net Operating
     Revenues                1,479        1,577          (98)       -6.2%

    Operating Expenses
      Cost of services         342          399           57        14.3%
      Cost of products         112          141           29        20.6%
      Selling, general
       and administrative      354          404           50        12.4%
      Depreciation             253          263           10         3.8%
    Total Operating Expenses 1,061        1,207          146        12.1%

    Operating Income          $418         $370          $48        13.0%
    Interest expense           100          104            4         3.8%
    Other expense (income),
     net                        (1)          (1)           0         n/a
    Income Before Taxes       $319         $267          $52        19.5%
    Income tax expense         128           77          (51)      -66.2%
    Net Income                $191         $190           $1         0.5%

    Diluted Earnings Per
     Share                   $1.34        $1.23        $0.11         8.9%



         Selected Financial Data (Unaudited) - Current Period Results
                           Compared to Prior Quarter

    Logistics                 4Q-08        3Q-08           Fav/(Unfav)
    Net Operating Revenues      93          117          (24)      -20.5%

    Operating Expenses
      Cost of services
       & products               86          106           20        18.9%
      Selling, general and
       administrative           13           12           (1)       -8.3%
      Depreciation               0            1            1       100.0%
    Total Operating Expenses    99          119           20        16.8%

    Operating Income           ($6)         ($2)         ($4)        n/a



    Telecom                   4Q-08       3Q-08            Fav/(Unfav)
    Net Operating Revenues
        Voice                 $937         $960         ($23)       -2.4%
        Data                   202          202            0         n/a
        High-speed Internet    141          138            3         2.2%
        Wireless                12           13           (1)       -7.7%
        Other services          60           64           (4)       -6.3%
      Service revenues       1,352        1,377          (25)       -1.8%
      Product revenues          34           31            3         9.7%
    Total Net Operating
     Revenues                1,386        1,408          (22)       -1.6%

    Operating Expenses
      Cost of services         341          422           81        19.2%
      Cost of products          27           30            3        10.0%
      Selling, general and
       administrative          341          350            9         2.6%
      Depreciation             253          251           (2)       -0.8%
    Total Operating Expenses   962        1,053           91         8.6%

    Operating Income          $424         $355          $69        19.4%


    Consolidated             4Q-08        3Q-08            Fav/(Unfav)
    Net Operating Revenues
        Voice                 $937         $960         ($23)       -2.4%
        Data                   202          202            0          n/a
        High-speed Internet    141          138            3         2.2%
        Wireless                12           13           (1)       -7.7%
        Other services          60           64           (4)       -6.3%
      Service revenues       1,352        1,377          (25)       -1.8%
        EMBARQ Logistics        93          117          (24)      -20.5%
        Other product           34           31            3         9.7%
      Product revenues         127          148          (21)      -14.2%
    Total Net Operating
     Revenues                1,479        1,525          (46)       -3.0%

    Operating Expenses
      Cost of services         342          421           79        18.8%
      Cost of products         112          137           25        18.2%
      Selling, general
       and administrative      354          362            8         2.2%
      Depreciation             253          252           (1)       -0.4%
    Total Operating Expenses 1,061        1,172          111         9.5%

    Operating Income          $418         $353          $65        18.4%
    Interest expense           100          101            1         1.0%
    Other expense (income),
     net                        (1)          (1)           0         n/a
    Income Before Taxes       $319         $253          $66        26.1%
    Income tax expense         128           93          (35)      -37.6%
    Net Income                $191         $160          $31        19.4%

    Diluted Earnings Per
     Share                   $1.34        $1.11        $0.23        20.7%



Non-GAAP Definitions & Reconciliations

The following non-GAAP (generally accepted accounting principles) measures should be used in addition to, but not as a substitute for, the information provided in EMBARQ's consolidated financial statements.

Net Debt

Net debt is consolidated debt, including current maturities, less cash and equivalents. EMBARQ believes that net debt provides useful information about its capital structure.

    Reconciliation - Net Debt          4Q08            3Q08          4Q07

    Current maturities                   $2              $2           $99
    Long-term debt                    5,743           5,838         5,779
    Less: Cash and equivalents         (107)            (83)          (69)
    Net Debt                         $5,638          $5,757        $5,809


Net Capital Expenditures

Net capital expenditures are capital expenditures less proceeds from construction reimbursements. EMBARQ believes that net capital expenditures provides useful information about the capital requirements of its operations.

    Reconciliation - Net Capital
     Expenditures                      4Q08            3Q08          4Q07

    Capital expenditures                154             172           263
    Less: Proceeds from construction
     reimbursements                      (5)             (2)           (3)
    Net Capital Expenditures           $149            $170          $260


    Reconciliation - Net Capital
     Expenditures                    Year Ended December 31,
                                       2008            2007
    Capital expenditures                686             829
    Less: Proceeds from construction
     reimbursements                     (11)            (10)
    Net Capital Expenditures           $675            $819


Cash Flow Before Dividends

Cash flow before dividends is net cash provided by operating activities, excluding the effects of changes in assets and liabilities and other non-cash items, less net capital expenditures. EMBARQ believes that cash flow before dividends provides useful information about its capacity to return value to shareholders and reduce debt.

    Reconciliation - Cash Flow
     before Dividends                  4Q08            3Q08          4Q07

    Net cash provided by
     operating activities              $375            $530          $397
    Add: Changes in assets and
     liabilities, net of other
     non-cash items                      69            (118)           56
    Net Income excluding depreciation   444             412           453
    Less: Net Capital expenditures     (149)           (170)         (260)
    Cash Flow before Dividends         $295            $242          $193


    Reconciliation - Cash Flow
     before Dividends               Year Ended December 31,
                                      2008            2007

    Net cash provided by
     operating activities            $1,748          $1,624
    Add: Changes in assets
     and liabilities, net
     of other non-cash items             24             116
    Net Income excluding
     depreciation                     1,772           1,740
    Less: Net Capital expenditures     (675)           (819)
    Cash Flow before Dividends       $1,097            $921


Because Embarq cannot accurately predict the level of cash flow from operating activities and proceeds from construction reimbursements, Embarq does not provide reconciliations to GAAP of its forward looking measures of cash flow before dividends and net capital expenditures.

Other Financial Measures

Average Revenue per Household is calculated by dividing consumer revenues by average primary consumer access lines. While this measure is not defined under accounting principles generally accepted in the United States, the measure uses a GAAP measure as the basis for the calculation. EMBARQ believes Average Revenue per Household provides useful information concerning the success of its bundling initiatives and performance in attracting and retaining high value customers.

HSI Average Revenue per Subscriber is calculated by dividing high-speed Internet revenues by average high-speed Internet subscribers. While this measure is not defined under accounting principles generally accepted in the United States, the measure uses a GAAP measure as the basis for the calculation. EMBARQ believes HSI Average Revenue per Subscriber provides useful information concerning the appeal of its high-speed Internet pricing plans and performance in attracting and retaining high value customers.

About EMBARQ

Embarq Corporation (NYSE: EQ), headquartered in Overland Park, Kansas, offers a complete suite of communications services. EMBARQ has operations in 18 states and is in the Fortune 500(R) list of America's largest corporations.

For consumers, EMBARQ offers an innovative portfolio of services that includes reliable local and long distance home phone service, high-speed Internet, wireless, and satellite TV from DISH Network(R) -- 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 local voice and data services, long distance, Business Class High Speed Internet, wireless, satellite TV from DIRECTV(R), enhanced data network services, voice and data communication equipment and managed network services.

    For more information, visit embarq.com.



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

                         Quarter Ended December 31,  Year Ended December 31,
                             2008          2007         2008         2007
                         (unaudited)   (unaudited)  (unaudited)
    Net Operating Revenues
      Service revenues      $1,352       $1,428       $5,569       $5,786
      Product revenues         127          149          555          579
    Total net operating
     revenue                 1,479        1,577        6,124        6,365

    Operating Expenses
      Cost of services         342          399        1,534        1,637
      Cost of products         112          141          519          559
      Selling, general and
       administrative          354          404        1,435        1,608
      Depreciation             253          263        1,003        1,057
    Total Operating Expenses 1,061        1,207        4,491        4,861

    Operating Income           418          370        1,633        1,504
    Interest expense           100          104          405          432
    Other (income) expense,
     net                        (1)          (1)          (4)          (3)
    Income Before Income
     Taxes                     319          267        1,232        1,075
    Income tax expense         128           77          463          392
    Net Income                $191         $190         $769         $683

    Basic Earnings Per
     Share                   $1.34        $1.24        $5.27        $4.50
    Basic weighted average
     shares                  142.2        153.0        146.0        151.9

    Diluted Earnings Per
     Share                   $1.34        $1.23        $5.22        $4.44
    Diluted weighted average
     shares                  143.0        154.9        147.4        153.9



                                Embarq Corporation
                      Condensed Consolidated Balance Sheets
                                 ($ in millions)

                                                    December 31, December 31,
                                                        2008           2007
                                                     (unaudited)
    Assets
      Cash and equivalents                              $107            $69
      Accounts receivable, net                           520            618
      Inventories, net                                    93            138
      Prepaid expenses and other current assets          170            161
        Total current assets                             890            986

      Net property, plant and equipment                7,411          7,748
      Prepaid pension asset                                -            108
      Other noncurrent assets                             70             59
        Total noncurrent assets                        7,481          7,915

    Total assets                                      $8,371         $8,901

    Liabilities and stockholders' equity
      Current maturities of long-term debt                $2            $99
      Accounts payable                                   308            388
      Payroll and employee benefits                      222            278
      Accrued income taxes                                 -             27
      Accrued operating taxes                             78             97
      Deferred revenue                                   184            202
      Accrued interest                                    58             56
      Other current liabilities                           44             51
        Total current liabilities                        896          1,198

      Long-term debt                                   5,743          5,779
      Benefit plan obligations                         1,341            320
      Deferred income taxes                              793          1,130
      Other noncurrent liabilities                       206            210
        Total noncurrent liabilities                   8,083          7,439

    Stockholders' equity
      Common stock                                         2              2
      Paid-in capital                                   (193)          (231)
      Retained earnings                                  986            623
      Accumulated other comprehensive income (loss)     (903)          (130)
      Treasury stock, at cost                           (500)             -
        Total stockholders' equity                      (608)           264

    Total liabilities and stockholders' equity        $8,371         $8,901



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

                                                      Year Ended December 31,
                                                        2008          2007
                                                     (unaudited)
    Operating Activities
    Net income                                          $769           $683
    Adjustments to reconcile net income to
     net cash provided by operating activities:
      Depreciation                                     1,003          1,057
      Deferred and noncurrent income taxes                98            (43)
      Provision for losses on accounts receivable        103             94
      Stock-based compensation expense                    47             50
      Net losses (gains) on sales of assets               (9)            (7)
      Other, net                                          53             45
      Changes in assets and liabilities:
        Accounts receivable                               (5)           (75)
        Inventories and other current assets               1             (4)
        Accounts payable and other current
         liabilities                                    (183)           (98)
        Noncurrent assets and liabilities, net          (129)           (78)
    Net cash provided by operating activities          1,748          1,624

    Investing Activities
      Net capital expenditures                          (675)          (819)
      Proceeds from sales of assets                       11             25
    Net cash used by investing activities               (664)          (794)

    Financing Activities
      Changes in debt, net                              (134)          (577)
      Dividends paid to stockholders                    (404)          (367)
      Repurchase of common stock                        (500)            (2)
      Proceeds from common stock issued                   14            116
      Other, net                                         (22)            16
    Net cash used by financing activities             (1,046)          (814)

    Change in Cash and Equivalents                        38             16

    Cash and Equivalents at Beginning of Period           69             53

    Cash and Equivalents at End of Period               $107            $69



                              Embarq Corporation
                             Operating Statistics
          (Revenues in millions; lines and subscribers in thousands)

                        2008(1)     4Q-08(1)   3Q-08(1)   2Q-08(1)  1Q-08(1)
    Service and Product
     Revenues
        Voice           $3,915       $937       $960       $994     $1,024
        Data               801        202        202        199        198
        High-speed
         Internet          549        141        138        137        133
        Wireless            58         12         13         17         16
        Other              246         60         64         60         62
      Service revenues   5,569      1,352      1,377      1,407      1,433
        Logistics          435         93        117        110        115
        Other              120         34         31         32         23
      Product revenues     555        127        148        142        138
    Net operating
     revenues           $6,124     $1,479     $1,525     $1,549     $1,571

    Operating Unit
     Revenues
        Consumer        $2,518       $602       $619       $641       $656
        Business         1,530        381        382        386        381
        Wholesale        1,641        403        407        412        419
      Telecommunications
       segment           5,689      1,386      1,408      1,439      1,456
      Logistics segment    435         93        117        110        115
    Net operating
     revenues           $6,124     $1,479     $1,525     $1,549     $1,571

    Access Lines
      Consumer                      3,778      3,894      4,029      4,172
      Business                      1,779      1,815      1,841      1,861
      Wholesale                       139        144        152        159
    Total                           5,696      5,853      6,022      6,192

    Average Revenue
     per Household(HH)
      Consumer revenue               $602       $619       $641       $656
      Average households            3,591      3,698      3,821      3,926
    Monthly revenue per
     average HH                    $55.88     $55.80     $55.92     $55.70

    High-speed Internet
     Lines
      Consumer                      1,200      1,177      1,155      1,132
      Business                        172        172        170        167
      Wholesale                        40         39         39         41
    Total                           1,412      1,388      1,364      1,340

    HSI Average Revenue
     per Subscriber
      High-speed
       Internet revenue              $141       $138       $137       $133
      Average HSI
       subscribers                  1,400      1,376      1,352      1,309
    Monthly revenue per
     average subscriber            $33.57     $33.43     $33.78     $33.87

    Wireless
     Subscribers
      Consumer                         71         83         97        101
      Business                          7          9         10         11
    Total                              78         92        107        112

    Entertainment
     Subscribers                      297        284        239        217



                          2007    4Q-07(1)  3Q-07(1)  2Q-07(1)   1Q-07(1)
    Service and Product
     Revenues
        Voice           $4,238    $1,032     $1,051    $1,071     $1,084
        Data               765       193        195       188        189
        High-speed
         Internet          489       128        124       121        116
        Wireless            51        16         15        11          9
        Other              243        59         61        63         60
      Service revenues   5,786     1,428      1,446     1,454      1,458
        Logistics          466       113        121       123        109
        Other              113        36         27        28         22
      Product revenues     579       149        148       151        131
    Net operating
     revenues           $6,365    $1,577     $1,594    $1,605     $1,589

    Operating Unit
     Revenues
        Consumer        $2,655      $652       $658      $669       $676
        Business         1,544       389        388       384        383
        Wholesale        1,700       423        427       429        421
      Telecommunications
       segment           5,899     1,464      1,473     1,482      1,480
      Logistics segment    466       113        121       123        109
    Net operating
     revenues           $6,365    $1,577     $1,594    $1,605     $1,589

    Access Lines
      Consumer                     4,272      4,345     4,461      4,588
      Business                     1,876      1,887     1,896      1,909
      Wholesale                      164        171       176        184
    Total                          6,312      6,403     6,533      6,681

    Average Revenue
     per Household(HH)
      Consumer revenue              $652       $658      $669       $676
      Average households           3,997      4,076     4,180      4,261
    Monthly revenue per
     average HH                   $54.37     $53.81    $53.35     $52.88

    High-speed Internet
     Lines
      Consumer                     1,074      1,017       963        916
      Business                       164        160       154        149
      Wholesale                       39         39        39         39
    Total                          1,277      1,216     1,156      1,104

    HSI Average Revenue
     per Subscriber
      High-speed
       Internet revenue             $128       $124      $121       $116
      Average HSI
       subscribers                 1,247      1,186     1,130      1,061
    Monthly revenue per
     average subscriber           $34.22     $34.85    $35.69     $36.44

    Wireless
     Subscribers
      Consumer                       101         98        81         65
      Business                        11         10         8          6
    Total                            112        108        89         71

    Entertainment
     Subscribers                     200        190       178        170

    (1) unaudited


                                Embarq Corporation
                           Supplemental Cash Flow Data
                                 ($ in millions)
                                   (unaudited)

                                                               Quarter Ended
                                                             December 31, 2008
    Operating Activities
    Net income                                                     $191
    Adjustments to reconcile net income to net cash
     provided by operating activities:
      Depreciation                                                  253
      Deferred and noncurrent income taxes                           83
      Provision for losses on accounts receivable                    26
      Stock-based compensation expense                               12
      Net losses (gains) on sales of assets                           -
      Other, net                                                     13
      Changes in assets and liabilities:
        Accounts receivable                                          (2)
        Inventories and other current assets                         14
        Accounts payable and other current liabilities             (165)
        Noncurrent assets and liabilities, net                      (50)
    Net cash provided by operating activities                       375

    Investing Activities
      Net capital expenditures                                     (149)
      Proceeds from sales of assets                                   1
    Net cash used by investing activities                          (148)

    Financing Activities
      Changes in debt, net                                          (95)
      Dividends paid to stockholders                                (98)
      Repurchase of common stock                                      -
      Proceeds from common stock issued                               1
      Other, net                                                    (11)
    Net cash used by financing activities                          (203)

    Change in Cash and Equivalents                                   24

    Cash and Equivalents at Beginning of Period                      83

    Cash and Equivalents at End of Period                          $107

SOURCE Embarq Corporation

http://www.embarq.com