MONROE, LA. -- CenturyLink, Inc. (NYSE: CTL) today reported results for second quarter 2016.

"CenturyLink delivered solid second quarter financial results with total operating revenues and core revenues in line with our guidance, and operating cash flow and adjusted diluted earnings per share that exceeded our previous guidance," said Glen F. Post III, chief executive officer and president. "Our new sales and marketing leadership team continues to refine our sales channels and associated go-to-market strategies for the Business market, and continues to pivot toward higher-value bundled solutions for the Consumer market. While second quarter Consumer subscriber metrics were softer than anticipated, we expect to see an improvement in unit trends in the second half of the year.

"We also are continuing to invest with a 'network first' focus on delivering higher broadband speeds and in the transformation and virtualization of our network infrastructure through the deployment of NFV4 and SDN5 technologies. We ended the quarter with more than 8.4 million addressable households and businesses with 40 Mbps or higher speeds, including 1.2 million GPON-enabled addressable units. We expect to reach 11 million 40 Mbps or higher, including 2 million GPON-enabled addressable households and businesses by year-end 2017," concluded Post.

Consolidated Financial Results
Operating revenues for second quarter 2016 were $4.40 billion compared to $4.42 billion in second quarter 2015. Declines in legacy1,6 and data integration revenues were partially offset by higher strategic revenues1,6, and increased high-cost support revenues related to Connect America Fund Phase 2 (CAF Phase 2) in second quarter 2016.

Operating expenses decreased to $3.75 billion from $3.87 billion in second quarter 2015. Excluding special items, operating expenses decreased to $3.73 billion from $3.84 billion in second quarter 2015. The year-over-year decrease in operating expenses was primarily driven by lower depreciation and amortization expenses and employee-related costs.

Operating income increased to $650 million from $549 million in second quarter 2015 due to lower operating expenses this quarter compared to the same year-ago period.

Operating cash flow (as defined in our attached supplemental schedules), excluding special items, increased to $1.65 billion from $1.62 billion in second quarter 2015. For second quarter 2016, CenturyLink achieved an operating cash flow margin, excluding special items, of 37.5% versus 36.8% in second quarter 2015.

Net income and diluted earnings per share (EPS) were $196 million and $0.36, respectively, for second quarter 2016, compared to $143 million and $0.26, respectively, for second quarter 2015. The increase in diluted EPS was due to higher net income and the impact of the lower number of shares outstanding due to share repurchases in 2015.

Adjusted net income and adjusted diluted EPS (as reflected in our attached supplemental schedule) exclude the after-tax impact of special items, the non-cash after-tax impact of the amortization of certain intangible assets related to major acquisitions since mid-2009, and the non-cash after-tax impact to interest expense relating to the assignment of fair value to the outstanding debt assumed in connection with those acquisitions. Excluding these items, CenturyLink's adjusted net income for second quarter 2016 was $342 million compared to adjusted net income of $308 million in second quarter 2015. Second quarter 2016 adjusted diluted EPS was $0.63 compared to $0.55 in the year-ago period due to higher adjusted net income and the impact of the lower number of shares outstanding due to share repurchases in 2015.

The accompanying financial schedules provide additional details regarding the company's special items and reconciliations of non-GAAP financial measures for the three months and six months ended June 30, 2016 and 2015.

CenturyLink Inc. (NYSE: CTL)