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Q4 2011 Earnings Call
February 15, 2012 5:00 pm ET
Tony Davis - Vice President of Investor Relations
Glen F. Post - Chief Executive Officer, President and Director
R. Stewart Ewing - Chief Financial Officer and Executive Vice President
James E. Ousley - Chief Executive Officer and Member of Business Development Committee
Karen A. Puckett - Chief Operating Officer and Executive Vice President
Michael McCormack - Nomura Securities Co. Ltd., Research Division
Batya Levi - UBS Investment Bank, Research Division
Frank G. Louthan - Raymond James & Associates, Inc., Research Division
Simon Flannery - Morgan Stanley, Research Division
Timothy K. Horan - Oppenheimer & Co. Inc., Research Division
Philip Cusick - JP Morgan Chase & Co, Research Division
Kevin Smithen - Macquarie Research
Thomas O. Seitz - Jefferies & Company, Inc., Research Division
Previous Statements by CTL
» CenturyLink's CEO Discusses Q3 2011 Results - Earnings Call Transcript
» CenturyLink's CEO Discusses Q2 2011 Results - Earnings Call Transcript
» CenturyLink's CEO Discusses Q1 2011 Results - Earnings Call Transcript
Thank you, Saeed. Good afternoon, everyone, and welcome to our call today to discuss CenturyLink's fourth quarter 2011 results released earlier this afternoon. The slide presentation we will be reviewing during the prepared remarks portion of today's call is available on our Investor Relations section of our corporate website at ir.centurylink.com. At the conclusion of our prepared remarks today, we will open the call for Q&A.
On Slide 2, you'll find our Safe Harbor language. We will be making certain forward-looking statements today, particularly as they pertain to guidance for 2012, the integration of Qwest and Savvis and other outlooks on our business. We ask that you review our disclosure found on this slide, as well as in our press release and in our SEC filings, which describe factors that could cause our actual results to differ materially from those projected by us in our forward-looking statements. We ask that you also note that our earnings release issued earlier this afternoon and the slide presentation and remarks made during this call contain certain non-GAAP financial measures. A reconciliation between the non-GAAP financial measures and the GAAP financial measures are available in our earnings release and on our website at www.centurylink.com.
Turning to Slide 3. Your host for today's call is Glen Post, Chief Executive Officer and President of CenturyLink. Joining Glen today will be Stewart Ewing, CenturyLink's Chief Financial Officer. And also available during the question-and-answer period of today's call will be Karen Puckett, CenturyLink's Chief Operating Officer and leader of our Regional Markets Group; Chris Ancell, who's President of our Business Markets Group; Bill Cheek, President of our Wholesale Markets Group; and Jim Ousley, CEO of our Savvis Group.
Our call today will be available for telephone replay through February 22, 2012, and accessible by webcast through March 8, 2012. Anyone listening to a taped or webcast replay or reading a written transcript of this call should note that all information presented is current only as of February 15, 2012, and should be considered valid only as of this date, regardless of the date heard or reviewed.
As we move to Slide 4, I'll now turn the call over to your host today, Glen Post. Glen?
Glen F. Post
Thank you, Tony. Good afternoon, everyone, and thank you for joining us today as we discuss CenturyLink's fourth quarter 2011 performance and share our strategic areas of focus heading into the months ahead. Our results were strong. During the fourth quarter, we continue to invest in key areas of growth, meet our integration objectives and build positive momentum in a number of areas across our business despite a challenging economy and a very competitive business environment.
Now turning to Slide 5. I want to highlight a number of accomplishments we achieved during 2011. First, we completed the acquisitions of Qwest and Savvis, adding strategic high-quality asset to CenturyLink, which further diversified our revenue mix, broadened our portfolio of assets that strengthen CenturyLink's position as a leading communications company. We've also added a global aspect to our business through these transactions.
Second, during the fourth quarter, we achieved operating revenues above the top end of our fourth quarter revenue guidance. And for full year 2011, we successfully lowered the rate of revenue decline to 3.8% from approximately 5.6% for pro forma full year 2010. We also successfully completed integration of Embarq and made solid progress with the integration of Qwest and Savvis while reaching our full operating expense synergy target for Embarq and exceeding our 2011 operating expense synergy target for Qwest.
From an operating metrics standpoint, the rate of access line loss in our business continue to decline in 2011, improving from 8% at year-end 2010 to 6.6% at the end of 2011.
Additionally, we experienced solid broadband subscriber growth of nearly 240,000 subscribers during 2011, a 4.5% decline -- I'm sorry, improvement. We completed over 1,500 fiber-to-the-tower builds during 2011 and enabled Ethernet services to more than 430,000 exchanges since April 1, 2011.
Lastly, we expanded our Prism TV product through 5 additional markets and now pass over 1 million homes. We ended 2011 with a penetration rate of about 7% of homes passed.
Moving to Slide 6. We entered 2012 excited about our business and the prospects for continued top line revenue improvement, as well as customer retention and growth. The chart on this slide illustrates we have slowed the rate of revenue decline on a pro forma basis from roughly 5.6% in 2010 to 3.8% in 2011. We expect to significantly reduce the rate of revenue decline in 2012. This continues our path toward revenue stability and eventual growth as we begin to see our strategic initiatives to have a greater impact on our revenue streams.