CenturyLink reported Q4 2010 revenues of $1.72 billion compared to $1.84 billion in fourth quarter 2009. This anticipated revenue decline was primarily due to the impact of access line losses and lower access revenues, including the anticipated impact of lower universal service fund receipts and wireless and long distance traffic migration. These decreases more than offset revenue increases driven by growth in high-speed Internet customers, data services demand from business customers and data transport demand from wireless providers.
- Added nearly 29,000 high-speed Internet customers during the quarter and ended 2010 with 2,394,000 high-speed Internet customers.
- Reduced access line losses by 12% compared to third quarter 2010 and 15.8% compared to fourth quarter 2009.
- Generated free cash flow (as defined in the attached financial schedules) of $342 million in fourth quarter 2010, excluding nonrecurring items of $7.1 million and $9.1 million of acquisition related capital expenditures.
- Achieved approximately $85 million in synergies from the Embarq acquisition during fourth quarter 2010 and ended 2010 with estimated annual run rate synergies of more than $340 million.
For full year 2011, CenturyLink expects operating revenues (excluding the effects of the pending Qwest transaction and any nonrecurring items that may occur ) to be 4% to 5% lower than 2010 operating revenues, as compared to the 6.5% decline in 2010 operating revenues compared to pro forma 2009 operating revenues. In addition, due to (i) anticipated revenue growth associated with the expansion of CenturyLink’s Prism TV service, (ii) the revenue impact of the expected continued improvement in the rate of access line loss and (iii) the effects of additional fiber investment, the Company expects its year-over-year rate of revenue decline (excluding the pending Qwest transaction and any nonrecurring items that may occur) to be 2% to 3% by fourth quarter 2011.
The Company currently expects 2011 capital expenditures, excluding any capital related to the integration of the pending Qwest transaction, to be approximately $1 billion, or 16% higher than 2010 capital expenditures of $864 million. This increase is primarily due to the Company’s planned incremental fiber to the tower investment for 2011.
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