1350031--3/9/2007--Embarq

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Risk Factors Relating to our Business We face widespread competition that may reduce our market share and harm our financial performance. We face increased competition from companies offering integrated communication services. New technologies may be developed that could displace our service offerings. Our industry is highly regulated and continues to undergo various regulatory and legislative changes, which could adversely affect our prospects and results of operations. Due to competitive, technological and regulatory changes, we cannot assure you that our core business will grow, and it could decline, which could have an adverse effect on our business and future prospects. The need to raise additional capital may adversely affect holders of our common stock by increasing our leverage and reducing our credit ratings. A significant portion of our workforce is unionized, and if we are unable to reach new agreements before our current labor contracts expire, our unionized workers could engage in strikes or other labor actions that could materially disrupt our ability to provide services to our customers. We face hurricane and other natural disaster risks, which can disrupt our operations and cause us to incur substantial additional capital costs. We have substantial indebtedness, which could restrict our ability to pay dividends and have a negative impact on our financing options and liquidity. Our financing arrangements subject us to various restrictions that could limit our operating flexibility. We may not have access to capital on acceptable terms, and if we are not able to obtain sufficient financing, we may be unable to maintain or grow our business. Risk Factors Relating to Ownership of our Common Stock The market price and trading volume of our common stock may be volatile. Anti-takeover provisions of our certificate of incorporation and bylaws, the terms of our spin-off from Sprint Nextel and certain provisions of Delaware law could delay or prevent a change of control that you may favor. Risk Relating to the Spin-off from Sprint Nextel Our future financial performance may be worse than the performance reflected in our historical financial information. We may experience increased costs or decreased operational efficiencies as a result of our need to replace corporate functions previously provided by Sprint Nextel. Our profitability may be adversely affected when revenues for certain support functions that we provide to Sprint Nextel on a transitional basis following the spin-off cease. Our spin-off from Sprint Nextel could adversely affect our business and profitability due to our loss of Sprint Nextel s strong brand, reputation, capital base and purchasing power. We could incur a significant liability if the distribution of Embarq common stock in the spin-off is determined to be a taxable transaction. If the distribution does not qualify as a tax-free transaction, tax could be imposed on Sprint Nextel and we may be required to indemnify Sprint Nextel for such tax. We agreed to certain restrictions to preserve the tax-free treatment of our spin-off from Sprint Nextel, which may reduce our strategic and operating flexibility. The agreements that we entered into with Sprint Nextel may involve, or may appear to involve, conflicts of interest. Some of the agreements we entered into with Sprint Nextel contain early termination provisions that, if exercised by Sprint Nextel, could be materially detrimental to our ability to operate our business. We do not benefit from the economics of ownership associated with the network infrastructure to support our long distance, wireless and other entertainment offerings. Additionally, we do not own or have a license to all technology that may be necessary to expand our product offerings. Both of these could adversely affect our business and profitability. Restrictions in the patent agreement entered into with Sprint Nextel could adversely affect our ability to grow through acquisitions, be acquired or make divestitures.

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1350031--3/9/2007--Embarq_CORP