Qwest Communications International Inc
Qwest Communications International — Merger or Acquisition (July 2010)
26 slides from Qwest Communications International's merger presentation, Jul 22, 2010
Slide 1: Qwest Overview and the CenturyLink Transaction
Me aS CenturyLink- Qwest Me Qwest Overview and the CenturyLink Transaction
Slide 2: Qwest/U S WEST History
Qwest/U S WEST History Those 3 Qwest merges with long- subsidiaries were distance carrier LCI US WEST was consolidated into International ($4.4 billion). eu created as a Regional US WEST Acquires EUnet, a leading geile Dex Bell Operating Communications — European business directory Company (RBOC) th
Slide 3: Qwest Executive Leadership Team
Chris Ancell EVP -BMG Stephanie Comfort EVP —Corp. Strategy Roland Thornton EVP — Wholesale Bob Tregemba EVP — Network Teresa Taylor = EVP and $ coo 4 Girish Dan Yost Varma EVP — Mass SVP - CIO Markets Internal Use Only 6/16/2010 Page 5 Ed Mueller Chairman and CEO Joe Euteneuer EVP and CFO Stefan St
Slide 4: Perfecting the Customer Experience
Slide 5: Qwest SPEED Strategies for Growth
Qwest SPEED Strategies for Growth Simple, Integrated Solutions Deliver simplified integrated solutions driven by customer insights | Partnerships | vy Deepen current partnerships, improve integration, and forge new ones Expand Broadband 4. Increase all broadband capabilities to customers at home, at
Slide 6: Qwest Values
TEAM G Rig, oy, » Values ETHICAL & HONEST CNC ATOR <) LO INCLUSIVE & EMBRACING OF DIVERSITY RESPECTFUL ( Internal Use Only CenturyLink” 6/16/2010 Page8 “At Qwest, success is defined by more than what we do, but also by howwe do it. To address the how, Qwest’s values provide the framework to guide ev
Slide 7: Qwest's Organizational Structure
Qwest’s Organizational Structure * Qwest has: — three Business Units — and two Operational Units Business Mass Wholesale Markets Markets Markets + About 2/3" of Qwest total revenue comes from business customers — Including Enterprise Businesses, Wholesalers and Small Businesses + About 1/3" of Qwest
Slide 8: About Qwest - Overview
About Qwest - Overview + Asa leading communications provider, Qwest serves: — Residential and small business customers within 14 states: . Local voice services through 5.5 million residential and 1.2 million small business access lines . High-speed Internet access to 2.9 million broadband subscriber
Slide 9: Products and Services
Products and Services Strategic: Private Line, Qwest IQ Networking, Hosting, DIA, VoIP Legacy: Long Distance, Local, Access Data Integration: CPE Sales Channels Mid-Markets Key Major Global Federal State/local government/education BMG Revenue Mix Mid-Size Government Enterprise Trends Impacts of econ
Slide 10: 2009 Business Markets Performance
2009 Business Markets Performance BMG Revenue ($M) + BMG strategic revenues S290 increased nearly 13% in 2009 52500 — and are approaching half of s2900 BMG revenues 500 sf + BMG has outperformed peers 2007 2008 2008 , Mrepeteunue Mlegaevne in last 2 years, gaining market share ats BMG Total Margin %
Slide 11: Products and Services
° . . Products and Services Strategic: High-Speed Internet, DirecTV, Verizon Wireless Legacy: Long Distance, Local Voice Services Consumer Competitors Comcast Cox Wireless Small Bus. Competitors Comcast Cox Granite Integra Trends Access line losses to wireless competition and the economy — Retention
Slide 12: 2009 Mass Markets Performance
2009 Mass Markets Performance FTTN Penetration + FTTN homes passed approximately 3.8 M 400 as of 1Q 2010 ts + FTTN penetration increased from 7% in ae 2008 to 11.5% in 2009 1500 + Increased Consumer ARPU 5% year/year ta + Bundle Penetration was 64% in 2008 and 00? 008 008 increased to 66% in 2009 Ee
Slide 13: Products and Services
Products and Services ¢ Strategic: Private Line, DIA, Fiber-to-the-Cell + Legacy: Long Distance, Local Voice Services Primary Competitors * AT&T Verizon ¢ Sprint + Level 3 Trends ¢ Improving revenue mix - Accelerated peer grooming + — Industry consolidation
Slide 14: 2009 Wholesale Markets Performance
2009 Wholesale Markets Performance _— WMG Revenue 20% « Results reflect an improved ae strategic product mix om * Fiber to the Cell Sites provides an “ avenue for strategic revenue — 2008 2009 growth while protecting existing Strategic Revenue "Legacy Revenue ere) pper WMG Total Margin « Long distan
Slide 15: Investing in solutions to enhance customer experiences
Investing in solutions to enhance customer experiences and deliver strong economic benefits Business Markets + Managed services agreement with IBM + Expanding metro fiber presence + Web-based network management tools Mass Markets * Continued build-out of FTTN network + Launched 40 Mbps broadband (wi
Slide 16: Qwest Network Operations
Qwest Network Operations + ~15,000 employees « Next-generation backbone spans 173,000 route miles + National Network is capable of 10—40 Gbps transport; building for 100 Gbps * 17 Cyber Centers Internal Use Only 6/16/2010 Page 18
Slide 17: Network Strategy Summary
Network Strategy Summary + Expand and optimize broadband/IP delivery * Continue to improve productivity and expense management « Align technology/resources with current demand, future requirements * Continue efficient, disciplined investment + Leverage all customer interactions to perfect the custom
Slide 18: IT is a Key Driver for Delivering Products, Services and Efficiencies
“IT is a Key Driver for Delivering Products, Services and Efficiencies Blended Hourly Development Rate + Using virtualization technologies and private cloud computing en + Eliminated 50% of our servers over the last 5 years + Reduced the number of mainframes from 22 to 4 - Decreased the number of in
Slide 19: 2009 Achievements Set the Stage for Continuing Success
2009 Achievements Set the Stage for Continuing Success * Achieved solid operating performance across all three business units and the operations teams — Margins expanded in all Business Units — Strong demand for broadband strategic products = 37% full year growth in enterprise IP services = Higher t
Slide 20: Adjusted Free Cash Flow and Adjusted EBITDA Margin
Adjusted Free Cash Flow ($M) * Adjusted EBITDA Margin ($M) 1 40% $2,000 35% $1,500 aon 7 a al $1,000 20% + - - 20072008 2009 10,2008 1Q2009 1Q.2010 Guidance Range Adj. EBITDA Margin ¢ In 2009, achieved highest free cash flow and adjusted EBITDA margin since the Qwest/U S WEST merger in 2000 — Margin
Slide 21: Steady Progress in Reducing Leverage
Steady Progress in Reducing Leverage Net Debt ($B)? $14.0 $13.5 $13.0 $12.5 $12.0 $11.5 $11.0 || $10.5 + r T T 1 1Q 2007 1Q 2008 192009 1Q2010 * Continued to strengthen balance sheet and improve leverage ratio * Recent actions include calling $525 million in Feb. and tendering $960 million in March
Slide 22: Appointments effective when the merger closes
These appointments are effective when the merger closes, reporting to Glen Post. karen Puckett ‘Stewart Ewing Ghris Ancel Bl Cheek ‘Stephanie Comfort ‘and EVP, Chief Financial Offcer _—~Prasident Business President Wholesale EVP Corporate Strategy Chief Operating Officer and Assistant Secretary Mark
Slide 23: Merger Synergies/Benefits
Merger Synergies/Benefits Serve residential; small, medium and large business; wholesale and enterprise customer segments including approximately: + 5.2 million broadband customers + 17.3 million access lines + 1.4 million video subscribers + across 37 states ceo Dasa an me Pro Forma 2009 revenues o
Slide 24: What Makes Our Companies Better Together?
What Makes Our Companies Better Together? « A $40 Billion company with scale, scope and flexibility to pursue strategies to drive shareholder value and improve the customer experience —IPTV / video -IXC/ CLEC consolidation —Enterprise opportunities —Managed services + Strong pro forma balance sheet
Slide 25: Operating as separate companies until closing
* Please keep in mind that until the CenturyLink-Qwest transaction closes, we will remain separate and independent companies and must continue to operate as such. « We need to be especially careful that we fully comply with antitrust laws, which means that while we will be planning for post-closing
Slide 26: Appendix: Qwest Non-GAAP Reconciliations
i ee eee AA a CenturyLink= Qwest. APPENDIX Qwest Non-GAAP Reconciliations
Qwest Communications International — Merger or Acquisition (July 2010) on 6ix