OVERLAND PARK, Kan., July 29 /PRNewswire-FirstCall/ -- EMBARQ (NYSE: EQ) today announced results for the second quarter of 2008, highlighted by year-over-year improvement in income and cash flow. The company reported second quarter revenue of $1.55 billion, operating income of $428 million, diluted earnings per share of $1.38 and cash flow before dividends of $274 million.

"Despite pressure on the top line, improved efficiency again enabled us to deliver solid bottom-line results," said Tom Gerke, EMBARQ Chief Executive Officer. "In addition, the economic environment continues to have a net positive impact on cash flow as the slowdown in new home construction reduces our capital expenditures. As a result, we have increased our 2008 cash flow outlook to more than $1 billion. We are also taking steps to maintain a strong cash flow profile over the long term."

    Second Quarter Highlights
    -- Operating income increased 7.0% year-over-year to $428 million in the
       second quarter.
    -- Diluted earnings per share increased 20.0% year-over-year to $1.38 in
       the second quarter, matching the first quarter of 2008 when the company
       reported the highest EPS level since spin-off.
    -- Second quarter cash flow before dividends was $274 million, bringing
       the year-to-date total to $560 million, an increase of 11.1% compared
       to the first half of 2007.
    -- As of July 25th, the company had repurchased approximately
       11.33 million shares for a total of $479 million, which represents 96%
       of its current $500 million share repurchase authorization.
    -- Second quarter high-speed Internet and data revenues grew 13.2% and
       5.9%, respectively, on a year-over-year basis.
    -- Second quarter average revenue per household increased 4.8% over the
       prior year period.
    -- Video subscribers increased by 22,000 during the period, the highest
       level of additions in two years.
    -- EMBARQ(TM) Business recently announced EMBARQ Smart IP Enterprise(SM),
       which delivers an EMBARQ-hosted communications system with dedicated
       Internet access, local and long distance voice service, and IP-enabled
       calling features.
    -- EMBARQ(TM) Business also introduced IPsmartSuite, which utilizes an IP
       phone based touch screen for applications that facilitate process
       automation in small to mid-sized businesses in several industries,
       including the healthcare, legal and retail fields.


    Financial Results

EMBARQ reported consolidated operating revenue of $1.55 billion for the second quarter, a decline of 3.5% from the prior year period. Revenue in the company's Logistics segment declined 10.6% year-over-year to $110 million.

Revenue in the Telecommunications segment declined 2.9% from the prior year period to $1.44 billion. The decline in Telecommunications revenue was driven by a 7.8% decline in access lines, leading to a 7.2% decline in voice revenue, which was partially offset by high-speed Internet revenue growth of 13.2% and 5.9% growth in data revenue.

Consolidated operating income increased 7.0% year-over-year to $428 million in the second quarter as a result of improved operating efficiency, lower wireless dilution, the absence of spin-off expenses and lower depreciation expense. In current and prior periods, operating income was impacted by the following items:

               Increase (Decrease)        2Q-08     1Q-08      2Q-07
                (in millions)

               Spin-off related expenses   $0         $0        ($8)

               Net wireless dilution      ($3)      ($14)      ($20)

               Gain from sale of real
                estate                     $9         $0         $0

Diluted earnings per share increased 20.0% over the prior year period to $1.38 for the quarter, which also reflects the after tax impact of the items above.

Capital Expenditures and Cash Flow

EMBARQ reported net capital expenditures during the period of $179 million. In the year ago period net capital expenditures were $186 million.

Cash flow before dividends increased 7.9% over the prior year period to $274 million. Year-to-date cash flow before dividends totaled $560 million, compared to $504 million in the first half of 2007.

The company paid a dividend of $0.6875 per share in the quarter.

The company repurchased approximately 6.22 million shares during the second quarter at a cost of $265 million. Including repurchases of 3.35 million shares in the first quarter and 1.76 million shares in the first few weeks of the third quarter, the company has repurchased a total of 11.33 million shares through July 25th. The total cost of these shares was approximately $479 million, an average of $42.31 per share.

Subscriber Results

The company ended the period with 6.02 million access lines, which represents a sequential decline of 170,000 lines. Meanwhile, the year-over-year rate of access line loss increased to 7.8% in the second quarter.

EMBARQ added 24,000 high-speed Internet subscribers during the period, bringing its subscriber base to over 1.36 million -- an increase of 18% over the prior year period.

Video net additions increased by 22,000 during the quarter, and the company ended the quarter with 239,000 of its customers subscribing to video services.

2008 Outlook

The company revised its outlook for 2008, which was previously provided on April 29th, 2008. Current expectations for the year are as follows:

    -- Absolute access line losses over the remainder of 2008 are expected to
       be closer to prior year levels than in the first quarter, unchanged
       from the company's previous expectation.
    -- The range for telecommunications revenue is $5.72 to $5.80 billion,
       unchanged from the previous range.
    -- Wireless dilution is expected to be approximately $20 million,
       unchanged from the previous outlook.
    -- Net capital spending is expected to be less than $740 million, which is
       an improvement from the previous outlook of approximately $780 million.
    -- Cash flow before dividends is expected to be between $1.00 and
       $1.04 billion, an increase of $40 million from the previous range of
       $0.96 to $1.00 billion.


    Conference Call

Today EMBARQ will hold a conference call beginning at 4:30 p.m. EDT. 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 50031705. 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 August 12, 2008 by dialing (800) 642-1687 (U.S. and Canada) or (706) 645-9291 (International) 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 EMBARQ's outlook or expectations for earnings, revenues, expenses, depreciation and amortization, asset quality, access line declines, cash flow measures, customer growth, wireless dilution, or other future financial or business performance, strategies or expectations. The words "estimate," "plan," "project," "forecast," "expect," "intend," "anticipate," "believe," "seek," "target," "guidance," "outlook" 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 but are not limited to: the effects of vigorous competition in the markets in which we operate, including access line loss to cable operators and wireless providers; the impact of new, emerging and competing technologies on our business; the effect of changes in the legal and regulatory environment and the impact of compliance with regulatory mandates; potential fluctuations in our financial performance, including revenues, capital expenditures and operating expenses; the impact of any adverse change in the ratings assigned to our debt by ratings agencies on the cost of financing or the ability to raise additional financing if needed; the effects of mergers, consolidations or other unexpected developments in the industries relevant to our operations; the failure to realize expected improvement in operating efficiencies; the costs and business risks with the development of new products and services; the uncertainties related to our investments in networks, systems and other businesses; the uncertainties related to the implementation of our business strategies; the inability of third parties to perform to our requirements under agreements related to our business operations; our ownership of or ability to license technology that may be necessary to expand our business offerings; restrictions in our patent agreement with Sprint Nextel; unexpected adverse results of legal proceedings involving our company; the impact of equipment failure or other breaches of network or information technology security; potential work stoppages; a determination by the IRS that the spin-off from Sprint Nextel should be treated as a taxable transaction; the volatility in the equity market; the effects of changes in both general and local economic conditions on the markets we serve, which can impact demand for our products and services; customer purchasing decisions; collectability of revenue; and, required levels of capital expenditures related to new construction of residences and businesses; the possible impact of adverse changes in political or other external factors over which we have no control, including hurricanes and other severe weather; and other risks referenced in our Annual Report on Form 10-K, including in Part I, Item 1A, "Risk Factors", and from time to time in other filings of ours 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 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.

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

                  ($ in millions, except per share amounts)


       Consolidated                         2Q-08    2Q-07     Fav/(Unfav)
       Net Operating Revenues
           Voice                             $994   $1,071    ($77)   -7.2%
           Data                               199      188      11     5.9%
           High-speed Internet                137      121      16    13.2%
           Wireless                            17       11       6    54.5%
           Other services                      60       63      (3)   -4.8%
         Service revenues                   1,407    1,454     (47)   -3.2%
           EMBARQ Logistics                   110      123     (13)  -10.6%
           Other product                       32       28       4    14.3%
         Product revenues                     142      151      (9)   -6.0%
       Total Net Operating Revenues         1,549    1,605     (56)   -3.5%

       Operating Expenses
         Cost of services                     381      404      23     5.7%
         Cost of products                     132      142      10     7.0%
         Selling, general and
          administrative                      361      395      34     8.6%
         Depreciation                         247      264      17     6.4%
       Total Operating Expenses             1,121    1,205      84     7.0%

       Operating Income                      $428     $400     $28     7.0%
       Interest expense                       100      111      11     9.9%
       Other expense (income), net             (1)       0       1      n/a
       Income Before Taxes                   $329     $289     $40    13.8%
       Income tax expense                     123      113     (10)   -8.8%
       Net Income                            $206     $176     $30    17.0%


       Diluted Earnings Per Share           $1.38    $1.15   $0.23    20.0%



       Telecom                              2Q-08    2Q-07     Fav/(Unfav)
       Net Operating Revenues
           Voice                             $994   $1,071   ($77)    -7.2%
           Data                               199      188     11      5.9%
           High-speed Internet                137      121     16     13.2%
           Wireless                            17       11      6     54.5%
           Other services                      60       63     (3)    -4.8%
         Service revenues                   1,407    1,454    (47)    -3.2%
         Product revenues                      32       28      4     14.3%
       Total Net Operating Revenues         1,439    1,482    (43)    -2.9%

       Operating Expenses
         Cost of services                     381      404     23      5.7%
         Cost of products                      33       33      0      0.0%
         Selling, general and
          administrative                      355      387     32      8.3%
         Depreciation                         246      262     16      6.1%
       Total Operating Expenses             1,015    1,086     71      6.5%

       Operating Income                      $424     $396    $28      7.1%



       Logistics                            2Q-08   2Q-07      Fav/(Unfav)
       Net Operating Revenues                110     123     (13)    -10.6%

       Operating Expenses
         Cost of services & products          99     109      10       9.2%
         Selling, general and
          administrative                       6       8       2      25.0%
         Depreciation                          1       2       1      50.0%
       Total Operating Expenses              106     119      13      10.9%

       Operating Income                       $4      $4      $0       0.0%


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

                      ($ in millions, except per share amounts)


       Consolidated                          2Q-08    1Q-08      Fav/(Unfav)
       Net Operating Revenues
           Voice                             $994    $1,024     ($30)   -2.9%
           Data                               199       198        1     0.5%
           High-speed Internet                137       133        4     3.0%
           Wireless                            17        16        1     6.3%
           Other services                      60        62       (2)   -3.2%
         Service revenues                   1,407     1,433      (26)   -1.8%
           EMBARQ Logistics                   110       115       (5)   -4.3%
           Other product                       32        23        9    39.1%
         Product revenues                     142       138        4     2.9%
       Total Net Operating Revenues         1,549     1,571      (22)   -1.4%

       Operating Expenses
         Cost of services                     381       390        9     2.3%
         Cost of products                     132       138        6     4.3%
         Selling, general and
          administrative                      361       358       (3)   -0.8%
         Depreciation                         247       251        4     1.6%
       Total Operating Expenses             1,121     1,137       16     1.4%

       Operating Income                      $428      $434      ($6)   -1.4%
       Interest expense                       100       104        4     3.8%
       Other expense (income), net             (1)       (1)       0     0.0%
       Income Before Taxes                   $329      $331      ($2)   -0.6%
       Income tax expense                     123       119       (4)   -3.4%
       Net Income                            $206      $212      ($6)   -2.8%


       Diluted Earnings Per Share           $1.38     $1.38    $0.00     0.0%



       Telecom                              2Q-08    1Q-08     Fav/(Unfav)
       Net Operating Revenues
           Voice                             $994   $1,024   ($30)    -2.9%
           Data                               199      198      1      0.5%
           High-speed Internet                137      133      4      3.0%
           Wireless                            17       16      1      6.3%
           Other services                      60       62     (2)    -3.2%
         Service revenues                   1,407    1,433    (26)    -1.8%
         Product revenues                      32       23      9     39.1%
       Total Net Operating Revenues         1,439    1,456    (17)    -1.2%

       Operating Expenses
         Cost of services                     381      389      8      2.1%
         Cost of products                      33       33      0      0.0%
         Selling, general and
          administrative                      355      348     (7)    -2.0%
         Depreciation                         246      250      4      1.6%
       Total Operating Expenses             1,015    1,020      5      0.5%

       Operating Income                      $424     $436   ($12)    -2.8%



       Logistics                            2Q-08   1Q-08     Fav/(Unfav)
       Net Operating Revenues                110     115     (5)     -4.3%

       Operating Expenses
         Cost of services & products          99     106      7       6.6%
         Selling, general and
          administrative                       6      10      4      40.0%
         Depreciation                          1       1      0       0.0%
       Total Operating Expenses              106     117     11       9.4%

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



    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            2Q08        1Q08        2Q07

       Current maturities                    $82         $99         $54
       Long-term debt                      5,888       5,575       6,069
       Less: Cash and equivalents            (50)        (52)        (14)
       Net Debt                           $5,920      $5,622      $6,109


    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                         2Q08        1Q08        2Q07

      Capital expenditures                   181         179         188
      Less: Proceeds from construction
       reimbursements                         (2)         (2)         (2)
      Net Capital Expenditures              $179        $177        $186


    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 of Non-GAAP measure -
      Cash Flow before Dividends            2Q08        1Q08        2Q07

      Net cash provided by operating
       activities                           $250        $593        $225
      Add: Changes in assets and
       liabilities, net of other non-cash
       items                                 203        (130)        215
      Net Income excluding depreciation      453         463         440
      Less: Net Capital expenditures        (179)       (177)       (186)
      Cash Flow before Dividends            $274        $286        $254

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, Kan., offers a complete suite of communications services. The company has approximately 18,000 employees and operates in 18 states. EMBARQ is included in the S&P 500 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)
                                 (unaudited)

                             Quarter Ended June 30,  Six Months Ended June 30,
                                    2008      2007             2008      2007

    Net Operating Revenues
      Service revenues             $1,407   $1,454           $2,840   $2,912
      Product revenues                142      151              280      282
    Total net operating revenue     1,549    1,605            3,120    3,194

    Operating Expenses
      Cost of services                381      404              771      821
      Cost of products                132      142              270      269
      Selling, general and
       administrative                 361      395              719      799
      Depreciation                    247      264              498      534
    Total Operating Expenses        1,121    1,205            2,258    2,423

    Operating Income                  428      400              862      771
    Interest expense                  100      111              204      220
    Other (income) expense, net        (1)       -               (2)       -
    Income Before Income Taxes        329      289              660      551
    Income tax expense                123      113              242      215
    Net Income                       $206     $176             $418     $336


    Basic Earnings Per Share        $1.40    $1.16            $2.79    $2.23
    Basic weighted average shares   146.8    151.8            149.7    151.0

    Diluted Earnings Per Share      $1.38    $1.15            $2.76    $2.20
    Diluted weighted average
     shares                         148.8    153.6            151.4    153.0



                              Embarq Corporation
                    Condensed Consolidated Balance Sheets
                               ($ in millions)

                                              June 30,        December 31,
                                                2008              2007
                                             (unaudited)

    Assets
      Cash and equivalents                       $50               $69
      Accounts receivable, net                   581               616
      Inventories, net                           119               138
      Prepaid expenses and other current
       assets                                    165               163
          Total current assets                   915               986

      Net property, plant and equipment        7,589             7,748
      Prepaid pension asset                      130               108
      Other noncurrent assets                     72                59
          Total noncurrent assets              7,791             7,915

      Total assets                            $8,706            $8,901

    Liabilities and stockholders' equity
      Current maturities of long-term debt       $82               $99
      Accounts payable                           337               387
      Payroll and employee benefits              146               208
      Accrued income taxes                        68                27
      Accrued operating taxes                    105                97
      Deferred revenue                           189               202
      Accrued interest                            59                56
      Other current liabilities                   94               122
          Total current liabilities            1,080             1,198

      Long-term debt                           5,888             5,779
      Benefit plan obligations                   318               320
      Deferred income taxes                    1,114             1,130
      Other noncurrent liabilities               217               210
        Total noncurrent liabilities           7,537             7,439

    Stockholders' equity
      Common stock                                 2                 2
      Paid-in capital                           (214)             (231)
      Retained earnings                          832               623
      Accumulated other comprehensive income
       (loss)                                   (130)             (130)
      Treasury stock, at cost                   (401)                -
        Total stockholders' equity                89               264

      Total liabilities and stockholders'
       equity                                 $8,706            $8,901



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

                                                  Six Months Ended June 30,
                                                    2008             2007

    Operating Activities

    Net income                                      $418              $336
    Adjustments to reconcile net income to net
     cash provided by operating activities:
      Depreciation                                   498               534
      Deferred and noncurrent income taxes           (21)              (52)
      Provision for losses on accounts
       receivable                                     49                37
      Stock-based compensation expense                22                30
      Net losses (gains) on sales of assets           (9)               (7)
      Other, net                                      26                22
      Changes in assets and liabilities:
           Accounts receivable                       (14)              (26)
           Inventories and other current assets       (4)              (30)
           Accounts payable and other current
            liabilities                              (98)             (146)
           Noncurrent assets and liabilities, net    (24)                7
      Net cash provided by operating activities      843               705

    Investing Activities
      Net capital expenditures                      (356)             (366)
      Proceeds from sales of assets                    2                18
    Net cash used by investing activities           (354)             (348)

    Financing Activities
      Changes in debt, net                            91              (332)
      Dividends paid to stockholders                (208)             (174)
      Repurchase of common stock                    (390)               (2)
      Common stock issued                             10                98
      Other, net                                     (11)               14
    Net cash used by financing activities           (508)             (396)

    Change in Cash and Equivalents                   (19)              (39)

    Cash and Equivalents at Beginning of
     Period                                           69                53

    Cash and Equivalents at End of Period            $50               $14



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

                                            2Q-08    1Q-08    2007     4Q-07
    Service and Product Revenues
        Voice                                $994   $1,024   $4,238   $1,032
        Data                                  199      198      765      193
        High-speed Internet                   137      133      489      128
        Wireless                               17       16       51       16
        Other                                  60       62      243       59
      Service revenues                      1,407    1,433    5,786    1,428
        Logistics                             110      115      466      113
        Other                                  32       23      113       36
      Product revenues                        142      138      579      149
    Net operating revenues                 $1,549   $1,571   $6,365   $1,577

    Operating Unit Revenues
        Consumer                             $641     $656   $2,655     $652
        Business                              386      381    1,544      389
        Wholesale                             412      419    1,700      423
      Telecommunications segment            1,439    1,456    5,899    1,464
      Logistics segment                       110      115      466      113
    Net operating revenues                 $1,549   $1,571   $6,365   $1,577

    Access Lines
      Consumer                              4,029    4,172             4,272
      Business                              1,841    1,861             1,876
      Wholesale                               152      159               164
    Total                                   6,022    6,192             6,312

    Average Revenue per Household (HH)
      Consumer revenue                       $641     $656              $652
      Average households                    3,821    3,926             3,997
    Monthly revenue per average HH         $55.92   $55.70            $54.37

    High-speed Internet Lines
      Consumer                              1,155    1,132             1,074
      Business                                170      167               164
      Wholesale                                39       41                39
    Total                                   1,364    1,340             1,277

    HSI Average Revenue per Subscriber
      High-speed Internet revenue            $137     $133              $128
      Average HSI subscribers              $1,352   $1,309             1,247
    Monthly revenue per average
     subscriber                            $33.78   $33.87            $34.22

    Wireless Subscribers
      Consumer                                 97      101               101
      Business                                 10       11                11
    Total                                     107      112               112

    Entertainment Subscribers                 239      217               200



                                            3Q-07       2Q-07       1Q-07
    Service and Product Revenues
        Voice                              $1,051      $1,071      $1,084
        Data                                  195         188         189
        High-speed Internet                   124         121         116
        Wireless                               15          11           9
        Other                                  61          63          60
      Service revenues                      1,446       1,454       1,458
        Logistics                             121         123         109
        Other                                  27          28          22
      Product revenues                        148         151         131
    Net operating revenues                 $1,594      $1,605      $1,589

    Operating Unit Revenues
        Consumer                             $658        $669        $676
        Business                              388         384         383
        Wholesale                             427         429         421
      Telecommunications segment            1,473       1,482       1,480
      Logistics segment                       121         123         109
    Net operating revenues                 $1,594      $1,605      $1,589

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

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

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

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

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

    Entertainment Subscribers                 190         178         170



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

                                                              Quarter Ended
                                                              June 30, 2008

    Operating Activities
    Net income                                                     $206
    Adjustments to reconcile net income to net cash
     provided by operating activities:
      Depreciation                                                  247
      Deferred and noncurrent income taxes                           (1)
      Provision for losses on accounts receivable                    28
      Stock-based compensation expense                               13
      Net losses (gains) on sales of assets                          (9)
      Other, net                                                     15
      Changes in assets and liabilities:
           Accounts receivable                                      (30)
           Inventories and other current assets                      11
           Accounts payable and other current
            liabilities                                            (231)
           Noncurrent assets and liabilities, net                     1
    Net cash provided by operating activities                       250

    Investing Activities
      Net capital expenditures                                     (179)
    Net cash used by investing activities                          (179)

    Financing Activities
      Changes in debt, net                                          296
      Dividends paid to stockholders                               (101)
      Repurchase of common stock                                   (275)
      Common stock issued                                             6
      Other, net                                                      1
    Net cash used by financing activities                           (73)

    Change in Cash and Equivalents                                   (2)

    Cash and Equivalents at Beginning of Period                      52

    Cash and Equivalents at End of Period                           $50

SOURCE EMBARQ 


 

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