CenturyTel Buys Embarq

MONROE, La., and OVERLAND PARK, Kan. -- CenturyTel, Inc. (NYSE: CTL) and Embarq Corporation (NYSE: EQ) announced today that their Boards of Directors have approved a definitive agreement under which CenturyTel will acquire EMBARQ in a tax free, stock-for-stock transaction creating one of the leading communications companies in the United States.

Under the terms of the agreement, EMBARQ shareholders will receive 1.37 CenturyTel shares for each share of EMBARQ common stock they own. Based on the closing stock price for CenturyTel on October 24, 2008, this consideration would be equivalent to $40.42 of CenturyTel stock for each EMBARQ share, representing a premium to EMBARQ shareholders of approximately 36% over EMBARQ's closing stock price on October 24, 2008 and 11% over EMBARQ's average closing stock price during the past thirty calendar days. The transaction reflects an enterprise value of approximately $11.6 billion, including the assumption of $5.8 billion of EMBARQ's debt. Upon closing of the transaction, EMBARQ shareholders are expected to own approximately 66% and CenturyTel shareholders are expected to own approximately 34% of the combined company. The parties expect the transaction to be accretive to CenturyTel's free cash flow per share in 2010, the first full year following the expected closing.

This transaction combines two leading communications companies with customer-focused, industry-leading capabilities. The two companies have a combined operating presence in 33 states with approximately eight million access lines and two million broadband customers. The combined company is expected to have pro forma revenue in excess of $8.8 billion, pro forma EBITDA of approximately $4.2 billion, pro forma leverage of 2.1 times EBITDA and pro forma free cash flow of approximately $1.8 billion, based on anticipated full run-rate synergies and operating results for the twelve months ended September 30, 2008.

Glen F. Post III, CenturyTel's Chairman and Chief Executive Officer, said, "This transaction is a significant win for the shareholders of CenturyTel and EMBARQ, as well as our respective employees, customers and the communities we serve. EMBARQ has invested in building a base of high-quality assets positioned to create long-term value. We expect that bringing EMBARQ and CenturyTel together will accelerate both companies' strategic plans, diversify our revenues and provide us with the expanded networks, expertise and financial resources to build long-term value for shareholders. I am confident that the talent and dedication of CenturyTel and EMBARQ employees will enable us to quickly realize the significant potential inherent in this combination.

"In addition to bringing together the complementary assets, geographic coverage and outstanding employees of both companies, this combination unites two very similar corporate cultures that share a strong commitment to their customers, employees and communities. I look forward to working with the combined CenturyTel and EMBARQ team to continue providing outstanding service and enhanced offerings to our customers while delivering strong returns to all our shareholders."

CenturyLink Inc. (NYSE: CTL)