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Embarq integration: Progressing to completion In 2010 we continued our integration efforts related to the Embarq acquisition, which closed July 1, 2009, and we are close to completion. We successfully implemented CenturyLink's proven local operating model in larger urban markets, including Las Vegas, Nevada and Orlando, Florida. Our operating model drives decision making closer to the customer and generates strategies tailored to each market's demand profile and competitive landscape. We experienced improved access line retention and increased broadband penetration in legacy Embarq markets following the transition to our local operating model. We have successfully completed the conversion of approximately 75 percent of legacy Embarq customers to CenturyLink's customer care billing systems, and we expect to complete the remaining Embarq customer records conversion in the third quarter of 2011. Overall, our integration activities are progressing according to plan and we are on track to exceed the targeted $375 million in annual operating expense synergies from the Embarq acquisition. The positive market and operational trends we experienced in 2010 were largely due to execution by our employees. Their focus on serving our customers and controlling expenses helped drive our marketplace success and solid financial performance. We generated $3.6 billion in operating cash flow in 2010, excluding nonrecurring items, com- pared with $2.5 billion in 2009, which included six months of Embarq financial results. Qwest acquisition CenturyLink has a long history of combining successful marketplace execution with growth through acquisition, through which we have been able to accelerate our development of products and services and produce strong operating results. The acquisition of Qwest offers the greatest scale and scope advantages of any transaction in CenturyLink history. With the close of the Qwest transaction, CenturyLink has a number of opportunities and advantages, including: • An extensive fiber network covering 190,000 route miles that provides national and local reach and positions CenturyLink as an industry - leading communications provider, • A large customer base — approximately 5.3 million broadband customers, 1.6 million video customers and 15 million access lines — that enhances our ability to competitively develop and deploy high- bandwidth products and services across our advanced broadband - enabled network, • An enterprise business focus that offers growth potential from customer demand for high- bandwidth data services, as well as the potential to provide customized solutions such as data hosting, managed services and cloud computing to business, wholesale and government customers, and • A proven ability to successfully serve residential customers and small- to medium -size businesses, which could translate into market share gains in legacy Qwest markets over time. 92 °/a Approximately 92 percent of our access lines are enabled to provide a speed of at least 1.5 Mbps. Of the lines that are broadband enabled, 65 percent are capable of speeds up to 10 Mbps. Business Solutions With our national fiber network, we have the ability to provide seamless national service offerings that include voice, Ethernet, MPLS and IP -based applications to business customers. 1- Wireless In early 2011, we announced an agreement with Verizon Wireless that will enable CenturyLink to offer MORMIN Verizon Wireless equipment and services to residential and small business customers, further expanding the portfolio of communica- tions products and services we offer.