425

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported):   

April 22, 2010

CenturyTel, Inc.

(Exact Name of Registrant as Specified in Charter)

Louisiana	1-7784	72-0651161
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

100 CenturyLink Drive Monroe, Louisiana	71203
(Address of Principal Executive Offices)	(Zip Code)
Registrant’s telephone number, including area code		(318) 388-9000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

x Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

x Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01        Other Events

On April 22, 2010, CenturyTel, Inc. (“CenturyLink”) and Qwest Communications International Inc. (“Qwest”) issued a joint press release announcing the execution of an Agreement and Plan of Merger, dated as of April 21, 2010 (the “Merger Agreement”), among CenturyLink, Qwest and SB44 Acquisition Company (“Merger Subsidiary”). Subject to the terms and conditions set forth therein, Merger Subsidiary will merge with and into Qwest, with Qwest surviving as a wholly owned subsidiary of CenturyLink (the “Merger”). CenturyLink and Qwest also made a joint investor presentation principally concerning the Merger. A copy of the joint press release and the joint investor presentation is attached hereto as Exhibits 99.1 and 99.2, respectively. In addition, a transcript of the joint investors presentation is attached hereto as Exhibit 99.3.

            On April 22, 2010, CenturyLink distributed to its employees a letter regarding the execution of the Merger Agreement and the Merger and a separate document containing additional information about the Merger, each of which are attached hereto as Exhibit 99.4 and Exhibit 99.5, respectively.  CenturyLink and Qwest also posted additional materials on a website relating to the Merger, which are attached hereto as Exhibit 99.6.  In addition, CenturyLink made a presentation to its employees regarding the Merger, which is attached hereto as Exhibit 99.7.

            The exhibits attached hereto are incorporated herein by reference and each of the foregoing description of such materials is qualified in its entirety by reference to such materials.

The information required by Item 1.01, including a copy of the Merger Agreement will be filed in a separate Current Report on Form 8-K.

Item 9.01.       Financial Statements and Exhibits

(d)        Exhibits

Exhibit No.                 Document Designation

99.1                             Joint Press Release, dated April 22, 2010.

99.2                             Joint Investor Presentation Materials, dated April 22, 2010.

99.3                             Transcript of Joint Investor Presentation, dated April 22, 2010.

99.4                             Employee Letter, dated April 22, 2010.

99.5                             Summary Key Messages.

99.6                             Materials from website.

99.7                             Employee Presentation, dated April 22, 2010.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:  April 22, 2010                       

CENTURYTEL, INC.

By:  /s/ Neil A. Sweasy                                        

Name:   Neil A. Sweasy

Title:     Vice President and Controller

EXHIBIT INDEX

Exhibit

Number Description

99.1                             Joint Press Release, dated April 22, 2010.

99.2                             Joint Investor Presentation Materials, dated April 22, 2010.

99.3                             Transcript of Joint Investor Presentation, dated April 22, 2010.

99.4                             Employee Letter, dated April 22, 2010.

99.5                             Summary Key Messages.

99.6                             Materials from website.

99.7                             Employee Presentation, dated April 22, 2010.

EX-99.1

Exhibit 99.1

For Immediate Release: 04/22/2010

Contacts:

For CenturyLink Analysts and Investors           Tony Davis(318) 388-9525
tony.davis@CenturyLink.com Media Debra Peterson
(913) 323-4881 
debra.d.peterson@CenturyLink.com For Qwest Analysts and Investors           Kurt Fawkes
(303) 992-0029
kurt.fawkes@qwest.com Media Diane Reberger
(303) 992-1662
diane.reberger@qwest.com

CENTURYLINK AND QWEST AGREE TO MERGE

CenturyLink to Become National, Industry-Leading Communications Company with Pro Forma
2009 Revenues of $19.8 Billion

Combined Company to Have Extensive Broadband Capabilities with 173,000-mile Fiber Network

Compelling Choice for Consumer, Business and Wholesale Customers Offering Full Array of
Communications Services

 Transaction Expected to be Accretive to Free Cash Flow per Share, Excluding Integration Costs,
Immediately Following Close of the Transaction

MONROE, La. and DENVER, Co. – April 22, 2010 – CenturyLink (CenturyTel, Inc., NYSE: CTL) and Qwest Communications (NYSE: Q) announced today that their boards of directors have approved a definitive agreement under which CenturyLink will acquire Qwest in a tax-free, stock-for-stock transaction.  Under the terms of the agreement, Qwest shareholders will receive 0.1664 CenturyLink shares for each share of Qwest common stock they own at closing.  Upon closing of the transaction, CenturyLink shareholders are expected to own approximately 50.5 percent and Qwest shareholders are expected to own approximately 49.5 percent of the combined company. 

Based on the closing stock price of CenturyLink on April 21, 2010, the per share consideration to be received by Qwest shareholders would be equivalent to $6.02 of CenturyLink stock, which represents a premium to Qwest shareholders of approximately 15 percent over Qwest’s closing stock price on April 21, 2010.  Based on the closing stock price of CenturyLink on April 21, 2010, the transaction reflects an enterprise value of Qwest of approximately $22.4 billion, including the assumption of $11.8 billion of Qwest net debt outstanding as of December 31, 2009. 

The parties expect the transaction to be accretive to CenturyLink’s free cash flow per share, excluding integration costs, immediately following the close of the transaction.  Leveraging CenturyLink’s proven integration experience, the transaction is expected to generate annual operating and capital synergies of approximately $625 million when fully recognized over a three- to five-year period following the close of the transaction.

This combination will result in a company whose enterprise business will be a significant contributor to its growth which, along with the consumer business, will allow it to offer innovative broadband products and services over its advanced networks.  As of December 31, 2009, CenturyLink and Qwest served local markets in 37 states with approximately 5 million broadband customers, 17 million access lines, 1,415,000 video subscribers and 850,000 wireless consumers.

Glen F. Post III, CenturyLink’s chief executive officer and president, said, “We believe the combination of CenturyLink’s and Qwest’s employees, assets and service areas will provide us greater scale, scope and expertise and will provide significant benefits for shareholders, customers and our communities.  This combination will enhance our ability to deploy innovative IP products and high-bandwidth services to business customers, expand broadband availability and speed to consumers, and offer superior, differentiated video products.

“The combined company’s highly recognized national network will significantly expand our ability to deliver strategic and customized product and service solutions to our business, wholesale and government customers throughout the country.  In addition, we will still maintain the focus on our local markets through our effective regional operating model and targeted marketing strategies.  We believe shareholders will benefit through their investment in a company that has greater financial resources and flexibility, including a more diversified revenue base and an enhanced competitive position.”

Edward A. Mueller, Qwest’s chairman and chief executive officer, said, “Over the last several years, Qwest has been focused on generating sustainable free cash flow and strengthening the balance sheet, as well as creating innovative approaches to drive efficiency and perfect the customer experience.  We are pleased with the progress we have made and believe that the combined company will be well positioned to win in an increasingly competitive marketplace.

“This transaction is compelling for our shareholders, who will benefit from an immediate premium for their shares, an increase of approximately 50 percent in the annual dividend, and the opportunity to participate in the upside potential of the combined company through their ownership of CenturyLink stock.  We look forward to becoming part of a larger company with a strong financial profile, an industry-leading local and national network, and a shared commitment to customers, employees, communities and shareholders.  We also look forward to maintaining a key presence in Denver.”

Key Benefits of the Transaction

• Increased Capabilities: The combination creates a robust, national 173,000-mile fiber network.  With a more diverse mix of offerings, increased scale and stronger product portfolio, the company will be able to reach more customers with a broad range of solutions.

• Expanded and Enhanced Competitive Offerings: The company will have the national breadth and local depth to provide a compelling array of broadband products and services including high speed Internet, video entertainment, data hosting and managed services, as well as fiber to cell tower connectivity and other high bandwidth services.  In addition, Qwest Business serves 95 percent of Fortune 500 companies and is one of the three universal service providers for Networx, the largest communications services contract in the world.

• Financial Strength and Flexibility: For the 12 months ended December 31, 2009, the combined company would have had pro forma revenues of $19.8 billion, pro forma EBITDA of approximately $8.2 billion, and pro forma free cash flow of approximately $3.4 billion, excluding synergies.  The combined company’s pro forma net leverage would have been 2.2 times EBITDA for the 12 months ended December 31, 2009, including synergies on a full run-rate basis and excluding integration costs.  No new financing or refinancing is required as a result of this transaction.  The combined company’s sound capital structure and significant free cash flow generation are expected to support its ability to take advantage of opportunities that may arise, while continuing to invest in its business, reduce indebtedness and return substantial capital to shareholders.

• Significant Synergy Opportunities: The transaction is expected to generate annual operating cost synergies of approximately $575 million, which are expected to be fully realized three to five years following closing.  Key drivers of these synergies include reduction of corporate overhead, elimination of duplicate functions and systems, and increased operational efficiencies.The transaction also is expected to generate annual capital expenditure synergies of approximately $50 million within the first two years after close.  Based on current expectations, CenturyLink estimates that it will incur appr oximately $650 to $800 million of operating costs and approximately $150 to $200 million of one-time capital costs to achieve these operational synergies.

Dividend Policy

Each company plans to continue its current dividend policy until the close of the transaction.  Post closing, CenturyLink expects to continue its current dividend for shareholders of the combined company, subject to Board approval.  CenturyLink currently pays an annual dividend of $2.90 per share, which, on an as-converted basis, represents an approximately 50 percent dividend increase for Qwest shareholders.

Management, Board of Directors and Headquarters

The combined company’s senior leadership team is expected to be comprised of executives from both CenturyLink and Qwest, of which the following are being announced today.

• William A. Owens will be chairman of the board
• Glen F. Post, III will be chief executive officer and president
• R. Stewart Ewing, Jr. will be chief financial officer
• Karen A. Puckett will be chief operating officer
• Christopher K. Ancell will be president of business markets group

Following the close of the transaction, the board of directors of CenturyLink will add four members from the current Qwest board, including Edward A. Mueller, Qwest’s chairman and chief executive officer.

The corporate headquarters of the company will remain in Monroe, La.  The company also will maintain a key operational presence in Denver, including a regional headquarters, the Qwest Business Markets Group, as well as other functions to be determined.

Approvals and Timing

The transaction is subject to regulatory approvals, including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act as well as approvals from the Federal Communications Commission and certain state public service commissions, along with other customary closing conditions.  The transaction also is subject to the approval of CenturyLink and Qwest shareholders.  The companies anticipate closing this transaction in the first half of 2011.

Advisors

Barclays Capital, Evercore Partners, and J.P. Morgan Securities Inc. acted as financial advisors and Wachtell, Lipton, Rosen & Katz and Jones Walker Waechter Poitevent Carrere & Denegre L.L.P. acted as legal advisors to CenturyLink.  Lazard, Deutsche Bank, and Morgan Stanley & Co. Incorporated acted as financial advisors to Qwest while Skadden, Arps, Slate, Meagher & Flom LLP and Wilmer Cutler Pickering Hale & Dorr LLP acted as legal advisors.

Teleconference and Webcast

CenturyLink and Qwest will host a conference call with the financial community today, April 22, 2010, at 9:30 a.m. EDT / 8:30 a.m. CDT / 7:30 a.m. MDT to discuss this morning’s announcement.  The conference call will be webcast live over CenturyLink’s website at www.CenturyLink.com and over Qwest’s website at investor.qwest.com.  Interested parties also can join the call by dialing (866) 610-1072 (international: (973) 935-2840), and referencing code 69793352, 10 minutes prior to the start of the call.

A digital recording of the call will be available as promptly as practicable and ending May 5, 2010 at 12:00 a.m. EDT.  The replay can be accessed by dialing (800) 642-1687 (international: (706) 645-9291) and referencing code 69793352.  A replay of the call will also be available on the investor relations sections of both companies’ websites.

More information about the transaction is available on centurylinkqwestmerger.com.

About CenturyLink

CenturyLink is a leading provider of high-quality voice, broadband and video services over its advanced communications networks to consumers and businesses in 33 states.  CenturyLink, headquartered in Monroe, La., is an S&P 500 Company and is listed in the Fortune 500 list of America’s largest corporations.  For more information on CenturyLink, visit www.CenturyLink.com.

About Qwest

Customers coast-to-coast turn to Qwest's industry-leading national fiber-optic network and world-class customer service to meet their communications and entertainment needs.  For residential customers, Qwest offers a new generation of fiber-optic-fast Internet service, high-speed Internet solutions, as well as digital home phone, wireless service available through Verizon Wireless and DIRECTV services.   Qwest is also the choice of 95 percent of Fortune 500 companies, offering a full suite of network, data and voice services for small businesses, large businesses, government agencies and wholesale customers.  Additionally, Qwest participates in Networx, the largest communications services contract in the world, and is recognized as a leader in the network services market by leading technology industry analyst firms.

Forward Looking Statements

Except for the historical and factual information contained herein, the matters set forth in this release, including statements regarding the expected timing and benefits of the acquisition such as efficiencies, cost savings, enhanced revenues, growth potential, market profile and financial strength, and the competitive ability and position of the combined company, and other statements identified by words such as "estimates," "expects," "projects," "plans," and similar expressions are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, many of which are beyond our control.  Actual events and results may differ materially from those anticipated, estimated or projected if one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect. Factors that could affect actual results include but are not limited to: the ability of the parties to timely and successfully receive the required approvals of regulatory agencies and their respective shareholders; the possibility that the anticipated benefits from the acquisition cannot be fully realized or may take longer to realize than expected; the possibility that costs or difficulties related to the integration of Qwest’s operations into CenturyLink will be greater than expected; the ability of the combined company to retain and hire key personnel; the timing, success and overall effects of competition from a wide variety of competitive providers; the risks inherent in r apid technological change; the effects of ongoing changes in the regulation of the communications industry; the ability of the combined company to effectively adjust to changes in the communications industry and to successfully introduce new product or service offerings on a timely and cost-effective basis; any adverse developments in commercial disputes or legal proceedings; the ability of the combined company to utilize net operating losses in amounts projected; changes in our future cash requirements; and other risk factors and cautionary statements as detailed from time to time in each of CenturyLink’s and Qwest’s reports filed with the Securities and Exchange Commission (SEC).  There can be no assurance that the proposed acquisition will in fact be consummated.  You should be aware that new factors may emerge from time to time and it is not possible for us to identify all such factors nor can we predict the impact of each such factor on the acquisition or the combined company.  You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, CenturyLink and Qwest undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Additional Information

CenturyLink and Qwest plan to file a joint proxy statement/prospectus with the SEC. INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. You will be able to obtain the joint proxy statement/prospectus, as well as other filings containing information about CenturyLink and Qwest, free of charge, at the website maintained by the SEC at www.sec.gov. Copies of the joint proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained, free of charge, by directing a request to CenturyLink, 100 CenturyLink Drive, Monroe, Louisiana 71203, Attention: Corporate Secretary, or to Qwest, 1801 Califo rnia Street, Denver, Colorado 80202, Attention: Shareholder Relations, 51st Floor. The respective directors and executive officers of CenturyLink and Qwest and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding CenturyLink’s directors and executive officers is available in its proxy statement filed with the SEC by CenturyLink on April 7, 2010, and information regarding Qwest directors and executive officers is available in its proxy statement filed with the SEC by Qwest on March 17, 2010. These documents can be obtained free of charge from the sources indicated above. Other information regarding the interests of the participants in the proxy solicitation will be included in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available. This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicita tion of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

# # #

EX-99.2

EX-99.3

   ctlex993.htm - Generated by SEC Publisher for SEC Filing

EX-99.4

Exhibit 99.4

From: The Desk of Glen Post

Subject: CenturyLink announces acquisition of Qwest

Dear Colleagues,

I am very pleased to announce this morning that CenturyLink has reached an agreement to purchase Qwest through a tax free, stock-for-stock transaction, valued at $22.4 billion. Upon close, CenturyLink will be a national, industry-leading communications company. If the companies had been combined as of December 31, 2009, we would have had approximately 50,000 employees, 5 million broadband customers, 17 million access lines, 1.4 million video customers, pro forma revenues in excess of $19 billion and an enterprise value of approximately $40 billion. We expect the transaction to be complete in the first half of 2011, after approvals by shareholders and regulators.

The headquarters for the combined company will remain in Monroe. Bill Owens will remain chairman of the board, I will remain chief executive officer, Stewart Ewing will remain chief financial officer and Karen Puckett will remain chief operating officer. Chris Ancell, currently Qwest’s executive vice president of Business Markets Group, will lead the Business Markets Group and report to me. The remainder of the combined company’s leadership team will be announced as decisions are finalized. Following the close of the transaction, the board of directors of CenturyLink will add four members from the current Qwest board, including Edward A. Mueller, Qwest’s chairman and chief executive officer.

At noon Central time, I will host an audiocast and conference call for all CenturyLink employees. You will receive details on how to join that event in a separate e-mail.

CenturyLink will be an even more effective competitor as a result of this transaction, which will provide us greater scale, scope and expertise. This acquisition will also increase the diversity of our revenue, which will strengthen our company by making us less dependent on any one area of our business for revenue growth. In addition, the transaction is expected to generate synergies and efficiencies, primarily through the reduction of corporate overhead, elimination of duplicate functions and systems and increased operational efficiencies. All of these factors will better position our combined company to compete against cable and wireless substitution.

A key factor in both our past and future success is the ability of our team to take advantage of acquisition opportunities. The boards and senior management of both companies are confident that the combination of the assets and people of our two companies will create an even stronger company. This decision is a vote of confidence in CenturyLink’s long history of successfully acquiring and integrating strategic assets and in the capabilities of our employees.

In addition to the decision that our headquarters will remain in Monroe, we have decided to maintain a key operational presence in Denver, including a regional headquarters, the Qwest Business Markets Group and other functions to be determined. Other organizational and operational decisions will be made over the coming months and will continue after the transaction is complete. You should look for additional information in future updates.

This transaction will provide significant benefits for our shareholders, customers and communities, and I believe it will create new opportunities for many employees of both companies. During this period of approvals and integration, I ask that you continue to work in support of our five strategic focus areas (hyperlink). If you receive any media calls related to the transaction, please forward those calls to the appropriate person as outlined by our media policy (hyperlink). I thank all of you for your continued support and focus on providing our customers with great service and for working to ensure CenturyLink continues as a strong and successful company for years to come.

Glen

Forward Looking Statements
Except for the historical and factual information contained herein, the matters set forth in this release, including statements regarding the expected timing and benefits of the acquisition such as efficiencies, cost savings, enhanced revenues, growth potential, market profile and financial strength, and the competitive ability and position of the combined company, and other statements identified by words such as "estimates," "expects," "projects," "plans," and similar expressions are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, many of which are beyond our control.  Actual events and results may differ materially from those anticipated, estimated or projected if one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect. Facto rs that could affect actual results include but are not limited to: the ability of the parties to timely and successfully receive the required approvals of regulatory agencies and their respective shareholders; the possibility that the anticipated benefits from the acquisition cannot be fully realized or may take longer to realize than expected; the possibility that costs or difficulties related to the integration of Qwest’s operations into CenturyLink will be greater than expected; the ability of the combined company to retain and hire key personnel; the timing, success and overall effects of competition from a wide variety of competitive providers; the risks inherent in rapid technological change; the effects of ongoing changes in the regulation of the communications industry; the ability of the combined company to effectively adjust to changes in the communications industry and to successfully introduce new product or service offerings on a timely and cost-effective basis; any adverse developments i n commercial disputes or legal proceedings; the ability of the combined company to utilize net operating losses in amounts projected; changes in our future cash requirements; and other risk factors and cautionary statements as detailed from time to time in each of CenturyLink’s and Qwest’s reports filed with the Securities and Exchange Commission (SEC).  There can be no assurance that the proposed acquisition will in fact be consummated.  You should be aware that new factors may emerge from time to time and it is not possible for us to identify all such factors nor can we predict the impact of each such factor on the acquisition or the combined company.  You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, CenturyLink and Qwest undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Additional Information
CenturyLink and Qwest plan to file a joint proxy statement/prospectus with the SEC. INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. You will be able to obtain the joint proxy statement/prospectus, as well as other filings containing information about CenturyLink and Qwest, free of charge, at the website maintained by the SEC at www.sec.gov. Copies of the joint proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained, free of charge, by directing a request to CenturyLink, 100 CenturyLink Drive, Monroe, Louisiana 71203, Attention: Corporate Secretary, or to Qwest, 1801 California Street, Denver, Colorado 80202, Attention: Shareholder Relations, 51st Floor. The respective directors and executive officers of CenturyLink and Qwest and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding CenturyLink’s directors and executive officers is available in its proxy statement filed with the SEC by CenturyLink on April 7, 2010, and information regarding Qwest directors and executive officers is available in its proxy statement filed with the SEC by Qwest on March 17, 2010. These documents can be obtained free of charge from the sources indicated above. Other information regarding the interests of the participants in the proxy solicitation will be included in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available. This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

# # #

EX-99.5

Exhibit 99.5

CenturyLink and Qwest to Merge in a Tax-Free, Stock-for-Stock Transaction

Summary Key Messages

Upon completion of the transaction, CenturyLink will become a national, industry-leading communications company whose enterprise business will be a significant contributor to its growth which, along with the consumer business, will allow it to be able to offer innovative broadband products and services over advanced networks.

1. The combination creates a robust, national 173,000-mile fiber network.

2. The combined company will have the national breadth and local depth to provide a compelling array of broadband products and services including high speed Internet, video entertainment, data hosting and managed services, as well as fiber to cell tower connectivity and other high bandwidth services.

3. The combination, which would have had pro forma 2009 revenues of $19.8 billion, is expected to be immediately accretive to free cash flow per share (excluding integration costs) and will strengthen the sustainability of CenturyLink’s dividend while materially lowering the Company’s payout ratio. 

4. The transaction is expected to generate annual operational cost synergies of approximately $575 million, which are expected to be fully realized three to five years following closing.  The transaction also is expected to generate annual capital expenditure synergies of approximately $50 million, within the first two years after close.

5. The combination creates a strong employee base with similar customer-focused cultures, committed to providing quality service and being the broadband provider of choice to all customer segments.

Transaction Facts

·The acquisition of Qwest will be achieved through a tax free, stock-for-stock transaction, valued at $22.4 billion, including the assumption of $11.8 billion of Qwest net debt outstanding as of December 31, 2009.  Based on the closing stock price of CenturyLink on April 21, 2010, the consideration to be received by Qwest shareholders would be equivalent to $6.02 of CenturyLink stock.

·Qwest shareholders will benefit from an immediate premium for their shares, an increase of approximately 50 percent in the annual dividend, and the opportunity to participate in the upside potential of the combined company through their ownership of CenturyLink stock.

·The corporate headquarters of the company will remain in Monroe, La.  The company also will maintain a key operational presence in Denver, including a regional headquarters, the Qwest Business Markets Group, as well as other functions to be determined.

·The combined company’s senior leadership team is expected to be comprised of executives from both CenturyLink and Qwest, of which the following are being announced today.

oWilliam A. Owens will be non-executive chairman of the board

oGlen F. Post III will be chief executive officer and president

oR. Stewart Ewing Jr. will be chief financial officer

oKaren A. Puckett will be chief operating officer

oChristopher K. Ancell will be president of business markets group

·Following the close of the transaction, the board of directors of CenturyLink will add four members from the current Qwest board, including Edward A. Mueller, Qwest’s chairman and chief executive officer.

·Since 2000, CenturyLink has achieved the following:

oAcquisition of EMBARQ – 7.5 million access lines, 2.1 million BB, 450K video

oFive additional wireline acquisitions, totaling more than two million access lines

oFiber assets acquired in 2003 and 2005

·The transaction is subject to approval by both companies’ shareholders as well as regulatory approvals, including expiration or termination of the applicable waiting period under the Hart Scott Rodino Antitrust Improvements Act, as well as approvals from the Federal Communications Commission and certain state public service commissions, along with other customary closing conditions.

·We anticipate that the transaction will close in the first half of 2011.

Detailed Messages

1. The combination creates a robust, national, 173,000-mile fiber network.

·The combined company will provide innovative customer solutions across the nation:

• CenturyLink’s and Qwest’s fiber-optic networks span the United States from coast-to-coast.
• CenturyLink’s local-service network operates in 33 states.
• Qwest’s local-service network operates in 14 mostly Western states.
• The companies have complementary local exchange footprints in 10 states.
• CenturyLink will now provide voice and advanced telecom services in four additional states: Arizona, Utah, North Dakota and South Dakota.

·We will continue to deliver strategic and customized product solutions to business, wholesale, and government customers throughout the nation with Qwest’s significant national fiber-optic network and data centers and CenturyLink’s national core network.

·We will have approximately 173,000 route miles of fiber (126,000 is local/regional and 47,000 is national/core).

·Our combined local and national network assets will provide cost efficiencies and revenue opportunities.

·Our integrated fiber-optic network will be capable of delivering transport speeds of up to 40 Gbps.

-­The Qwest nationwide fiber-optic network is capable of delivering transport speeds of up to 40 Gbps and is expected to reach 100 Gbps in 2010.

-­The CenturyLink fiber-optic network is capable of delivering transport speeds of up to 40 Gbps.

2. The combined company will have the national breadth and local depth to provide a compelling array of broadband products and services including high speed Internet, video entertainment, data hosting and managed services, as well as fiber to cell tower connectivity and other high bandwidth services.

·CenturyLink will provide local, long-distance, data, high-speed internet, entertainment and wireless services across 37 states and increased scale across the country by combining CenturyLink’s and Qwest’s local and national networks.

·Due to increased scale, financial strength, diversity of revenue and stronger national network, the combined company will be better positioned to compete against cable companies and technology substitution within our local regions and against other national telecom carriers for Business customers (including government) and Wholesale customers.

3. The combination, which would have had pro forma 2009 revenues of $19.8 billion, is expected to be immediately accretive to free cash flow per share (excluding integration costs) and will strengthen the sustainability of CenturyLink’s dividend while materially lowering the Company’s payout ratio. 

·No new financing or refinancing is required as a result of this transaction.

·Both companies currently maintain a disciplined approach to financial goals and performance, and the combined company would expect to do so going forward.

·Post closing, CenturyLink expects to continue its current dividend for shareholders of the combined company, subject to Board approval.

·Payout ratio of the combined company’s free cash flow is expected to improve significantly from CenturyLink’s current level.

·We believe the combined company’s sound capital structure (strong balance sheet), and significant free cash flow generation will support its ability to take advantage of opportunities that may arise, while continuing to invest its business, reduce indebtedness over time and return substantial capital to shareholders.

4. The transaction is expected to generate annual operational cost synergies of approximately $575 million, which are expected to be fully realized three to five years following closing.  The transaction also is expected to generate annual capital expenditure synergies of approximately $50 million, within the first two years after close.

·Synergies will be achieved primarily through the reduction of corporate overhead, elimination of duplicate functions and systems and increased operational efficiencies.

·Based on anticipated full run-rate synergies and operating results for the 12 months ended December 31, 2009, the combined company would have had:

-­Pro forma revenue of $19.8 billion

­-Pro forma EBITDA of approximately $8.2 billion

­-Pro forma net leverage of 2.2X EBITDA, including full run rate synergies

­-Pro forma free cash flow of approximately $3.4 billion

·Based on current expectations, CenturyLink estimates that it will incur approximately $650 to $800 million of operating costs and approximately $150 to $200 million of one-time capital costs to achieve these operational synergies.

5. The combination creates a strong employee base with similar customer-focused cultures, committed to providing quality service and being the broadband provider of choice to all customer segments.

·Our region based, local operating model ensures the customer is at the center of everything we do, driving accountability for the relationship as close to the customer as possible. Our marketing approach also is targeted directly to the customer.

·As of December 31, 2009, the two companies combined had approximately 50,000 employees.

Forward Looking Statements

Except for the historical and factual information contained herein, the matters set forth in this communication, including statements regarding the expected timing and benefits of the acquisition such as efficiencies, cost savings, enhanced revenues, growth potential, market profile and financial strength, and the competitive ability and position of the combined company, and other statements identified by words such as "estimates," "expects," "projects," "plans," and similar expressions are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, many of which are beyond our control.  Actual events and results may differ materially from those anticipated, estimated or projected if one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect. Factors that could affect actual results include but are not limited to: the ability of the parties to timely and successfully receive the required approvals of regulatory agencies and their respective shareholders; the possibility that the anticipated benefits from the acquisition cannot be fully realized or may take longer to realize than expected; the possibility that costs or difficulties related to the integration of Qwest’s operations into CenturyLink will be greater than expected; the ability of the combined company to retain and hire key personnel; the timing, success and overall effects of competition from a wide variety of competitive providers; the risks inherent in rapid technological change; the effects of ongoing changes in the regulation of the communications industry; the ability of the combined company to effectively adjust to changes in the communications industry and to successfully introduce new product or service offerings on a timely a nd cost-effective basis; any adverse developments in commercial disputes or legal proceedings; the ability of the combined company to utilize net operating losses in amounts projected; changes in our future cash requirements; and other risk factors and cautionary statements as detailed from time to time in each of CenturyLink’s and Qwest’s reports filed with the Securities and Exchange Commission (SEC).  There can be no assurance that the proposed acquisition will in fact be consummated.  You should be aware that new factors may emerge from time to time and it is not possible for us to identify all such factors nor can we predict the impact of each such factor on the acquisition or the combined company.  You should not place undue reliance on these forward-looking statements, which speak only as of the date of this communication. Unless legally required, CenturyLink and Qwest undertake no obligation to update publicly any forward-looking statements, whether as a result of new informa tion, future events or otherwise.

Additional Information

CenturyLink and Qwest plan to file a joint proxy statement/prospectus with the SEC. INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. You will be able to obtain the joint proxy statement/prospectus, as well as other filings containing information about CenturyLink and Qwest, free of charge, at the website maintained by the SEC at www.sec.gov. Copies of the joint proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained, free of charge, by directing a request to CenturyLink, 100 CenturyLink Drive, Monroe, Louisiana 71203, Attention: Corporate Secretary, o r to Qwest, 1801 California Street, Denver, Colorado 80202, Attention: Shareholder Relations, 51st Floor. The respective directors and executive officers of CenturyLink and Qwest and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding CenturyLink’s directors and executive officers is available in its proxy statement filed with the SEC by CenturyLink on April 7, 2010, and information regarding Qwest directors and executive officers is available in its proxy statement filed with the SEC by Qwest on March 17, 2010. These documents can be obtained free of charge from the sources indicated above. Other information regarding the interests of the participants in the proxy solicitation will be included in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available. This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

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