0001037949
2009-04-01
2009-06-30
0001037949
2008-04-01
2008-06-30
0001037949
2009-01-01
2009-06-30
0001037949
2008-01-01
2008-06-30
0001037949
2009-06-30
0001037949
2008-12-31
0001037949
2008-01-01
2008-12-31
0001037949
2007-12-31
0001037949
2008-06-30
0001037949
2009-07-27
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
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217000000
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180000000
418000000
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0.12
0.10
0.24
0.19
0.12
0.10
0.24
0.19
1707928000
1742294000
1705016000
1752743000
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD>
<META http-equiv=Content-Type content="text/html; charset=utf-8">
<META content="MSHTML 6.00.2900.3492" name=GENERATOR></HEAD>
<BODY>
<P style="FONT-FAMILY: times"><FONT size=2><B>Note 1: Basis of Presentation
</B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The condensed
consolidated balance sheet as of December 31, 2008, which was derived from
audited financial statements, and the unaudited interim condensed consolidated
financial statements as of and for the three and six months ended June 30,
2009 have been prepared in accordance with the instructions for Form 10-Q.
In compliance with those instructions, certain information and footnote
disclosures normally included in consolidated financial statements prepared in
accordance with U.S. generally accepted accounting principles have been
condensed or omitted. We believe that the disclosures made are adequate such
that the information presented is not misleading. We have evaluated subsequent
events through July 29, 2009, the date these financial statements were
issued. We have reclassified certain prior year revenue and expense amounts
presented in our Quarterly Report on Form 10-Q for the three and six months
ended June 30, 2008 to conform to the current period presentation and to
the presentation of the full year 2008 results of operations included in our
Annual Report on Form 10-K for the year ended December 31, 2008.
</FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> In the opinion of
management, these statements include all normal recurring adjustments necessary
to fairly present our condensed consolidated results of operations, financial
position and cash flows as of June 30, 2009 and for all periods presented.
These condensed consolidated financial statements should be read in conjunction
with the audited consolidated financial statements and the notes thereto
included in our Annual Report on Form 10-K for the year ended
December 31, 2008. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The condensed
consolidated results of operations for the three and six months ended
June 30, 2009 and the condensed consolidated statement of cash flows for
the six months ended June 30, 2009 are not necessarily indicative of the
results or cash flows expected for the full year. </FONT></P>
<P style="FONT-FAMILY: times"><FONT size=2><B><I>Use of Estimates
</I></B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> Our condensed
consolidated financial statements are prepared in accordance with U.S. generally
accepted accounting principles. These accounting principles require us to make
certain estimates, judgments and assumptions. We believe that the estimates,
judgments and assumptions we made when accounting for items and matters such as,
but not limited to, investments, long-term contracts, customer retention
patterns, allowance for doubtful accounts, depreciation, amortization, asset
valuations, internal labor capitalization rates, recoverability of assets
(including deferred tax assets), impairment assessments, pension,
post-retirement and other post-employment benefits, taxes, reserves and other
provisions and contingencies are reasonable, based on information available at
the time they were made. These estimates, judgments and assumptions can affect
the reported amounts of assets, liabilities and components of equity as of the
dates of the condensed consolidated balance sheets, as well as the reported
amounts of revenue, expenses and components of cash flows during the periods
presented in our condensed consolidated statements of operations and our
condensed consolidated statements of cash flows. We also make estimates in our
assessments of potential losses in relation to threatened or pending tax and
legal matters. See Note 9—Tax Matters and Note 12—Commitments and
Contingencies for additional information. </FONT></P>
<P style="FONT-FAMILY: times"><FONT size=2><!-- SEQ.=1,FOLIO='4',FILE='DISK104:[09ZCF1.09ZCF73701]DG73701A.;20',USER='DHOLBRO',CD='28-JUL-2009;22:59' --><A
name=page_xxx73701_1_5></A></FONT></P>
<UL>
<LI><FONT size=2>For matters not related to income taxes, if a loss is
considered probable and the amount can be reasonably estimated, we recognize
an expense for the estimated loss. If we have the potential to recover a
portion of the estimated loss from a third party, we make a separate
assessment of recoverability and reduce the estimated loss if recovery is also
deemed probable. </FONT><FONT size=2><BR></FONT>
<LI><FONT size=2>For matters related to income taxes, the impact of an
uncertain tax position that is more likely than not of being sustained upon
audit by the relevant taxing authority must be recognized at the largest
amount that is more likely than not to be sustained. No benefit from an
uncertain tax position will be recognized if the position has less than a 50%
likelihood of being sustained. Also, interest expense is recognized on the
full amount of uncertain tax positions recorded. </FONT></LI></UL>
<P style="FONT-FAMILY: times"><FONT
size=2> For all of these and
other matters, actual results could differ from our estimates. </FONT></P>
<P style="FONT-FAMILY: times"><FONT size=2><B><I>Universal Service Funds (USF),
Gross Receipts Taxes and Other Surcharges </I></B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> Our revenue and general,
administrative and other operating expenses included taxes and surcharges
accounted for on a gross basis of $88 million and $170 million for the
three and six months ended June 30, 2009, respectively, and
$100 million and $193 million for the three and six months ended
June 30, 2008, respectively. </FONT></P>
<P style="FONT-FAMILY: times"><FONT size=2><B><I>Depreciation and Amortization
</I></B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> Property, plant and
equipment is shown net of accumulated depreciation on our condensed consolidated
balance sheets. Accumulated depreciation was $34.013 billion and
$33.725 billion as of June 30, 2009 and December 31, 2008,
respectively. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> Capitalized software is
shown net of accumulated amortization on our condensed consolidated balance
sheets. Accumulated amortization was $1.567 billion and $1.497 billion
as of June 30, 2009 and December 31, 2008, respectively. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> Effective January 1,
2009, we changed our estimates of the average remaining lives of certain copper
cable and telecommunications equipment assets. These changes resulted in
additional depreciation expense of approximately $10 million and
$19 million for the three and six months ended June 30, 2009,
respectively, compared to the three and six months ended June 30, 2008, and
will result in additional depreciation expense of approximately $38 million
for the full year ending December 31, 2009 compared to the year ended
December 31, 2008. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> We made a decision in
June 2008 to discontinue certain product offerings and as a result we changed
our estimates of the remaining economic lives of certain assets used in
providing those services, which resulted in the acceleration of depreciation of
those assets. This change also resulted in additional depreciation expense of
approximately $10 million for the three months ended June 30, 2009
compared to the three months ended June 30, 2008. For the six months ended
June 30, 2009, this change resulted in additional depreciation expense of
approximately $19 million when compared to the six months ended
June 30, 2008. We began accelerating depreciation on these assets during
the third quarter of 2008. The assets will be fully depreciated as of
December 31, 2009; therefore, we do not <!-- SEQ.=2,FOLIO='5',FILE='DISK104:[09ZCF1.09ZCF73701]DG73701A.;20',USER='DHOLBRO',CD='28-JUL-2009;22:59' --><A
name=page_xxx73701_1_6></A>anticipate recording any significant incremental
depreciation expense associated with this change after June 30, 2009.
</FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The additional
depreciation for both of the changes described above, net of deferred taxes,
reduced net income by approximately $12 million, or less than $0.01 per
basic and diluted common share for the three months ended June 30, 2009,
and $24 million, or approximately $0.01 per basic and diluted common share
for the six months ended June 30, 2009. The additional depreciation will
reduce net income by approximately $35 million, or approximately $0.02 per
basic and diluted common share, for the full year ending December 31, 2009.
</FONT></P>
<P style="FONT-FAMILY: times"><FONT size=2><B><I>Recently Adopted Accounting
Pronouncements </I></B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> Effective January 1,
2009, we adopted Financial Accounting Standards Board ("FASB") Staff Position
("FSP") APB 14-1, "Accounting for Convertible Debt Instruments That May Be
Settled in Cash upon Conversion (Including Partial Cash Settlement)" ("FSP
APB 14-1") (FASB Accounting Standards Codification—"ASC"—ASC 470-20). This
FSP requires issuers of convertible debt that may be settled fully or partially
in cash upon conversion to account separately for the liability and equity
components of the convertible debt. The liability component is measured so that
the effective interest expense associated with the convertible debt reflects our
borrowing rate at the date of issuance for similar debt instruments without the
conversion feature. This FSP applies to our 3.50% Convertible Senior Notes due
2025 (the "3.50% Convertible Senior Notes"). We applied this FSP retrospectively
to all periods presented in our condensed consolidated financial statements. For
additional information related to this FSP, see Note 5—Borrowings.
</FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The following is a
summary of the effects of the adoption of this FSP on our condensed consolidated
statements of operations for the three and six months ended June 30, 2008:
</FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=203></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=71></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=62></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Three Months Ended<BR>June 30,
2008 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Six Months Ended<BR>June 30,
2008 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Impact of<BR>adoption
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Impact of<BR>adoption
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=5><FONT
size=1><B>(Dollars in millions<BR>except per share
amounts)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Interest expense on long-term borrowings and
capital leases—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>13</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>24</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Net income</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>(8</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2><BR>)</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>(15</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2><BR>)</FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Earnings per common share:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Basic</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(0.01</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(0.01</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Diluted</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(0.01</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(0.01</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT
size=2>)</FONT></TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE -->
<P style="FONT-FAMILY: times"><FONT size=2><!-- SEQ.=3,FOLIO='6',FILE='DISK104:[09ZCF1.09ZCF73701]DG73701A.;20',USER='DHOLBRO',CD='28-JUL-2009;22:59' --><A
name=page_xxx73701_1_7></A></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The following is a
summary of the effects of the adoption of this FSP on our condensed consolidated
statements of operations for the three and six months ended June 30, 2009:
</FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=203></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=71></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=62></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Three Months Ended<BR>June 30,
2009 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Six Months Ended<BR>June 30,
2009 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Impact of<BR>adoption
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Impact of<BR>adoption
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=5><FONT
size=1><B>(Dollars in millions<BR>except per share
amounts)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Interest expense on long-term borrowings and
capital leases—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>13</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>24</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Net income</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>(8</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2><BR>)</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>(15</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2><BR>)</FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Earnings per common share:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Basic</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(0.01</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(0.01</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Diluted</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(0.01</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(0.01</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT
size=2>)</FONT></TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE -->
<P style="FONT-FAMILY: times"><FONT
size=2> The following is a
summary of the effects of the adoption of this FSP on our condensed consolidated
balance sheet as of December 31, 2008: </FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=283></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=69></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>December 31 2008
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Impact of<BR>adoption
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=2><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Assets:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Long-term deferred income
taxes—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(40</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Liabilities:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Long-term borrowing—net of unamortized debt
discount and other</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(104</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total stockholders' deficit</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>(63</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT
size=2><BR>)</FONT></TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE -->
<P style="FONT-FAMILY: times"><FONT
size=2> Effective January 1,
2009, we adopted FSP Emerging Issues Task Force ("EITF") 03-6-1, "Determining
Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities" (ASC 260-10). This FSP states that unvested
share-based payment awards that contain non-forfeitable rights to dividends are
participating securities and must be included in the computation of earnings per
share pursuant to the two-class method. Under this FSP, our unvested restricted
stock grants are now considered participating securities. The two-class method
requires earnings to be allocated between common shareholders and holders of
unvested restricted stock grants. Upon adoption, we retrospectively recomputed
earnings per common share for all periods presented, which did not have a
material effect on the earnings per common share we reported historically. The
changes in the earnings per common share presented in these financial statements
as compared to amounts previously presented are the result of the adoption of
FSP APB 14-1. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> Effective January 1,
2009, we adopted FSP Financial Accounting Standard ("FAS") 157-4, "Determining
Fair Value When the Volume and Level of Activity for the Asset or Liability Have
<!-- SEQ.=4,FOLIO='7',FILE='DISK104:[09ZCF1.09ZCF73701]DG73701A.;20',USER='DHOLBRO',CD='28-JUL-2009;22:59' --><A
name=page_xxx73701_1_8></A>Significantly Decreased and Identifying Transactions
That Are Not Orderly" (ASC 820-10-65). This FSP provides guidelines for ensuring
that fair value measurements are consistent with the principles presented in
Statement of Financial Accounting Standards ("SFAS") No. 157, "Fair Value
Measurements" ("SFAS No. 157") (ASC 820-10). The adoption of this FSP has
not had a material effect on our financial position or results of operations.
</FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> Effective January 1,
2009, we adopted FSP FAS 115-2 and FAS 124-2, "Recognition and
Presentation of Other-Than-Temporary Impairments" (ASC 320-10-65). This FSP
provides additional guidance designed to create greater clarity and consistency
in accounting for and presenting impairment losses on securities. The adoption
of this FSP has not had a material effect on our financial position or results
of operations. </FONT></P></BODY></HTML>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD>
<META http-equiv=Content-Type content="text/html; charset=utf-8">
<META content="MSHTML 6.00.2900.3492" name=GENERATOR></HEAD>
<BODY>
<P style="FONT-FAMILY: times"><FONT size=2><B>Note 5: Borrowings
</B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> As of June 30, 2009
and December 31, 2008, our long-term borrowings, net of unamortized
discounts and premiums, consisted of the following: </FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=264></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=29></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=44></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>June 30,<BR>2009
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>December 31,<BR>2008
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=5><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Current portion of long-term
borrowings:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Long-term notes</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,062</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>792</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Long-term capital lease and other
obligations</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>23</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>28</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total current portion of long-term
borrowings</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,085</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>820</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Long-term borrowings:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Long-term notes</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>12,956</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>12,673</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Long-term capital lease and other
obligations</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>82</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>62</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total long-term borrowings—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>13,038</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>12,735</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total long-term borrowings—net, including
current portion</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT
size=2><BR>14,123</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT
size=2><BR>13,555</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE -->
<P style="FONT-FAMILY: times"><FONT
size=2> We were in compliance
with all provisions and covenants of our borrowings as of June 30, 2009.
</FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> Effective January 1,
2009, we adopted FSP APB 14-1 (ASC 470-20). This FSP requires issuers of
convertible debt that may be settled fully or partially in cash upon conversion
to account separately for the liability and equity components of the convertible
debt. The carrying amount of the equity component of our 3.50% Convertible
Senior Notes was $164 million as of June 30, 2009 and
December 31, 2008. At June 30, 2009 and December 31, 2008, the
liability component of these notes had a principal amount of $1.265 billion
at both dates; an unamortized discount value of $78 million and
$104 million, respectively; and a net carrying amount of
$1.187 billion and $1.161 billion, respectively. The remaining
discount will be amortized over the next 16 months. The effective interest
rate on our 3.50% Convertible Senior Notes is 8.77%. The interest expense,
inclusive of the 3.50% coupon and amortization of the discount and debt issuance
costs are recognized for the three and six months ended June 30, 2009 was
$26 million and $51 million, respectively. The interest expense,
inclusive of the 3.50% coupon and amortization of the discount and debt issuance
costs, recognized for the three and six months ended June 30, 2008 was
$24 million and $49 million, respectively. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The holders of our 3.50%
Convertible Senior Notes have the option to require us to repurchase their notes
for cash every five years on November 15, beginning in 2010, and receive
cash from us equal to the par value of the notes. We believe that, if the
trading price of our common stock is below the conversion price on
November 15, 2010, the likelihood of holders requiring us to repurchase
their notes will increase the more the conversion price exceeds the trading
price of our common stock. The conversion value of the notes as of June 30,
2009 was calculated by using the current conversion rate of 191.2981 per $1,000
in principal amount of the notes or a conversion price of $5.23, adjusted for
certain events, including the payment of dividends, as described in the
indenture governing the notes. </FONT></P>
<P style="FONT-FAMILY: times"><FONT size=2><!-- SEQ.=10,FOLIO='13',FILE='DISK104:[09ZCF1.09ZCF73701]DI73701A.;19',USER='DHOLBRO',CD='28-JUL-2009;22:59' --><A
name=page_xxx73701_1_14></A></FONT></P>
<P style="FONT-FAMILY: times"><FONT size=2><B><I>Repayment </I></B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> On January 2, 2009,
we redeemed $230 million aggregate principal amount of QCII's Floating Rate
Senior Notes due 2009. </FONT></P>
<P style="FONT-FAMILY: times"><FONT size=2><B><I>New Issuance
</I></B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> In April 2009, our wholly
owned subsidiary, Qwest Corporation ("QC"), issued approximately
$811 million of 8.375% Senior Notes due 2016. QC is using the net proceeds
of $738 million for general corporate purposes, including repayment of
indebtedness and funding and refinancing investments in its telecommunication
assets. </FONT></P>
<P style="FONT-FAMILY: times"><FONT size=2><B><I>Credit Facility
</I></B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> In April 2009, in
connection with the addition of a new lender to our revolving credit facility
(referred to as the Credit Facility), the amount available to us under the
Credit Facility increased from $850 million to $910 million. In July
2009, in connection with a $35 million increase in commitment by an
existing lender to the Credit Facility, the amount available to us under the
Credit Facility increased from $910 million to $945 million. The
Credit Facility is currently undrawn and expires in October 2010. Any amounts
drawn on the Credit Facility are guaranteed by our wholly owned subsidiary, QSC,
and are secured by a senior lien on the stock of QC. </FONT></P></BODY></HTML>
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<P style="FONT-FAMILY: times"><FONT size=2><B>Note 12: Commitments and
Contingencies </B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> Throughout this note,
when we refer to a class action as "putative" it is because a class has been
alleged, but not certified in that matter. Until and unless a class has been
certified by the court, it has not been established that the named plaintiffs
represent the class of plaintiffs they purport to represent. <!-- SEQ.=18,FOLIO='21',FILE='DISK104:[09ZCF1.09ZCF73701]DM73701A.;19',USER='DHOLBRO',CD='28-JUL-2009;22:59' --><A
name=page_xxx73701_1_22></A>Settlement classes have been certified in connection
with the settlements of certain of the putative class actions described below
where the courts held that the named plaintiffs represented the settlement class
they purported to represent. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> To the extent
appropriate, we have provided reserves for each of the matters described below.
</FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The terms and conditions
of applicable bylaws, certificates or articles of incorporation, agreements or
applicable law may obligate us to indemnify our former directors, officers and
employees with respect to certain of the matters described below, and we have
been advancing legal fees and costs to many former directors, officers and
employees in connection with certain matters described below. </FONT></P>
<P style="FONT-FAMILY: times"><FONT size=2><B>KPNQwest Litigation/Investigation
</B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> On January 27, 2009,
the trustees in the Dutch bankruptcy proceeding for KPNQwest, N.V. (of
which we were a major shareholder) filed a lawsuit in the federal district court
for the District of Colorado alleging violations of the Racketeer Influenced and
Corrupt Organizations Act and breach of duty and mismanagement under Dutch law.
We are a defendant in this lawsuit along with Joseph P. Nacchio, our former
chief executive officer, Robert S. Woodruff, our former chief financial officer,
and John McMaster, the former president and chief executive officer of KPNQwest.
Plaintiffs allege, among other things, that defendants' actions were a cause of
the bankruptcy of KPNQwest, and they seek damages for the bankruptcy deficit of
KPNQwest of approximately $2.4 billion. Plaintiffs also seek treble and
punitive damages as well as an award of plaintiffs' attorneys' fees and costs. A
lawsuit asserting the same claims that was previously filed in the federal
district court for the District of New Jersey was dismissed without prejudice,
and that dismissal was affirmed on appeal. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> On September 13,
2006, Cargill Financial Markets, Plc and Citibank, N.A. filed a lawsuit in
the District Court of Amsterdam, located in the Netherlands, against us, KPN
Telecom B.V., Koninklijke KPN N.V. ("KPN"), Mr. Nacchio,
Mr. McMaster, and other former employees or supervisory board members of
us, KPNQwest or KPN. The lawsuit alleges that defendants misrepresented
KPNQwest's financial and business condition in connection with the origination
of a credit facility and wrongfully allowed KPNQwest to borrow funds under that
facility. Plaintiffs allege damages of approximately €219 million (or
approximately $308 million based on the exchange rate on June 30,
2009). </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> On October 31, 2002,
Richard and Marcia Grand, co-trustees of the R.M. Grand Revocable Living Trust,
dated January 25, 1991, filed a lawsuit in Arizona Superior Court. As
amended and following the appeal of a partial summary judgment against
plaintiffs which was affirmed in part and reversed in part, plaintiffs allege,
among other things, that defendants violated state securities laws in connection
with plaintiffs' investments in KPNQwest securities. We are a defendant in this
lawsuit along with Qwest B.V. (one of our subsidiaries), Mr. Nacchio
and Mr. McMaster. The Arizona Superior Court dismissed most of plaintiffs'
claims, and plaintiffs voluntarily dismissed the remainder of their claims.
Plaintiffs have appealed the court's decision to the Arizona Court of Appeals.
Plaintiffs claim to have lost approximately $9 million in their investments
in KPNQwest, and are also seeking interest and attorneys' fees. </FONT></P>
<P style="FONT-FAMILY: times"><FONT size=2><!-- SEQ.=19,FOLIO='22',FILE='DISK104:[09ZCF1.09ZCF73701]DM73701A.;19',USER='DHOLBRO',CD='28-JUL-2009;22:59' --><A
name=page_xxx73701_1_23></A></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> On August 23, 2005,
the Dutch Shareholders Association (Vereniging van Effectenbezitters, or VEB)
filed a petition for inquiry with the Enterprise Chamber of the Amsterdam Court
of Appeals, located in the Netherlands, with regard to KPNQwest. VEB sought an
inquiry into the policies and course of business at KPNQwest that are alleged to
have caused the bankruptcy of KPNQwest in May 2002, and an investigation into
alleged mismanagement of KPNQwest by its executive management, supervisory board
members, joint venture entities (us and KPN), and KPNQwest's outside auditors
and accountants. On December 28, 2006, the Enterprise Chamber ordered an
inquiry into the management and conduct of affairs of KPNQwest for the period
January 1 through May 23, 2002. On December 5, 2008, the
Enterprise Chamber appointed investigators to conduct the inquiry. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> We will continue to
defend against the pending KPNQwest litigation matters vigorously. </FONT></P>
<P style="FONT-FAMILY: times"><FONT size=2><B>Securities Litigation
</B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> On January 28, 2009,
certain investment companies managed by Munder Capital Management ("Munder
Funds")—which were excluded at their request from the settlement class in the
Nacchio/Woodruff settlement described below under "Settlement of Consolidated
Securities Action"—filed a lawsuit against Messrs. Nacchio and Woodruff
alleging that during the time they were affiliated with us, they violated
federal securities laws by issuing false and misleading financial reports and
statements, falsely inflating revenue and decreasing expenses, creating false
perceptions of revenue and growth prospects and employing improper accounting
practices. Munder Funds contend that they have incurred losses resulting from
their investment in our securities of approximately $110 million, and they
seek compensatory and rescissionary damages, pre- and post-judgment interest,
costs and attorneys' fees. </FONT></P>
<P style="FONT-FAMILY: times"><FONT size=2><B>Other Matters </B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> Several putative class
actions relating to the installation of fiber optic cable in certain
rights-of-way were filed against us on behalf of landowners on various dates and
in various courts in California, Colorado, Georgia, Illinois, Indiana, Kansas,
Massachusetts, Mississippi, Missouri, Oregon, South Carolina, Tennessee and
Texas. For the most part, the complaints challenge our right to install our
fiber optic cable in railroad rights-of-way. Complaints in Colorado, Illinois
and Texas, also challenge our right to install fiber optic cable in utility and
pipeline rights-of-way. The complaints allege that the railroads, utilities and
pipeline companies own the right-of-way as an easement that did not include the
right to permit us to install our fiber optic cable in the right-of-way without
the plaintiffs' consent. Most actions (California, Colorado, Georgia, Kansas,
Mississippi, Missouri, Oregon, South Carolina, Tennessee and Texas) purport to
be brought on behalf of state-wide classes in the named plaintiffs' respective
states. The Massachusetts action purports to be on behalf of state-wide classes
in all states in which Qwest has fiber optic cable in railroad rights-of-way
(other than Louisiana and Tennessee), and also on behalf of two classes of
landowners whose properties adjoin railroad rights-of-way originally derived
from federal land grants. Several actions purport to be brought on behalf of
multi-state classes. The Illinois state court action purports to be on behalf of
landowners in Illinois, Iowa, Kentucky, Michigan, Minnesota, Nebraska, Ohio and
Wisconsin. The Illinois federal court action purports to be on behalf of
landowners in Arkansas, California, Florida, Illinois, Indiana, Missouri,
Nevada, New Mexico, Montana and Oregon. The Indiana action purports to be on
behalf of a national class of <!-- SEQ.=20,FOLIO='23',FILE='DISK104:[09ZCF1.09ZCF73701]DM73701A.;19',USER='DHOLBRO',CD='28-JUL-2009;22:59' --><A
name=page_xxx73701_1_24></A>landowners adjacent to railroad rights-of-way over
which our network passes. The complaints seek damages on theories of trespass
and unjust enrichment, as well as punitive damages. On July 18, 2008, a
federal district court in Massachusetts entered an order preliminarily approving
a settlement of all of the actions described above, except the action pending in
Tennessee. On November 18, 2008, the court held a hearing to consider final
approval of the proposed settlement and the parties are awaiting the court's
decision. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> Qwest Communications
Company, LLC ("QCC") is a defendant in litigation filed by several billing
agents for the owners of payphones seeking compensation for coinless calls made
from payphones. The matter is pending in the United States District Court for
the District of Columbia. Generally, the payphone owners claim that QCC
underpaid the amount of compensation due to them under Federal Communications
Commission ("FCC") regulations for coinless calls placed from their phones onto
QCC's network. The claim seeks compensation for calls, as well as interest and
attorneys' fees. QCC will vigorously defend against this action. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> A putative class action
filed on behalf of certain of our retirees was brought against us, the Qwest
Group Life Insurance Plan and other related entities in federal district court
in Colorado in connection with our decision to reduce the life insurance benefit
for these retirees to a $10,000 benefit. The action was filed on March 30,
2007. The plaintiffs allege, among other things, that we and other defendants
were obligated to continue their life insurance benefit at the levels in place
before we decided to reduce them. Plaintiffs seek restoration of the life
insurance benefit to previous levels and certain equitable relief. The district
court ruled in our favor on the central issue of whether we properly reserved
our right to reduce the life insurance benefit under applicable law and plan
documents. The plaintiffs subsequently amended their complaint to assert
additional claims. The court has since dismissed or granted summary judgment to
us on five of the eight claims asserted by plaintiffs. We believe the three
remaining claims are without merit, and we have moved for summary judgment on
those claims. </FONT></P>
<P style="FONT-FAMILY: times"><FONT size=2><B>Matters resolved during second
quarter, 2009: </B></FONT></P>
<P style="FONT-FAMILY: times"><FONT size=2><B>Settlement of Consolidated
Securities Action </B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> Twelve putative class
actions purportedly brought on behalf of purchasers of our publicly traded
securities between May 24, 1999, and February 14, 2002 were
consolidated into a consolidated securities action pending in federal district
court in Colorado against us and various other defendants. The first of these
actions was filed on July 27, 2001. Plaintiffs alleged, among other things,
that defendants issued false and misleading financial results and made false
statements about our business and investments, including materially false
statements in certain of our registration statements. The most recent complaint
in this matter sought unspecified compensatory damages and other relief.
However, counsel for plaintiffs indicated that the putative class would seek
damages in the tens of billions of dollars. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> In November 2005, we,
certain other defendants, and the putative class representatives entered into,
and filed with the federal district court in Colorado, a Stipulation of Partial
Settlement that settled the consolidated securities action against us and
certain other defendants (the "Qwest <!-- SEQ.=21,FOLIO='24',FILE='DISK104:[09ZCF1.09ZCF73701]DM73701A.;19',USER='DHOLBRO',CD='28-JUL-2009;22:59' --><A
name=page_xxx73701_1_25></A>settlement"). No parties admit any wrongdoing as
part of the Qwest settlement. Pursuant to the Qwest settlement, we deposited
approximately $400 million in cash into a settlement fund. In connection
with the Qwest settlement, we received $10 million from Arthur
Andersen LLP. As part of the Qwest settlement, the class representatives
and the settlement class they represent are also releasing Arthur Andersen.
</FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The Qwest settlement
resolved and released the individual claims of the class representatives and the
claims of the settlement class they represent against us and all defendants
except Joseph Nacchio, our former chief executive officer, and Robert Woodruff,
our former chief financial officer. In September 2006, the federal district
court in Colorado issued an order approving the proposed Qwest settlement and
certified a class for settlement purposes of purchasers of our publicly traded
securities between May 24, 1999 and July 28, 2002, over the objections
of Messrs. Nacchio and Woodruff. Messrs. Nacchio and Woodruff then
appealed that order to the United States Court of Appeals for the Tenth Circuit.
In addressing that appeal, the Tenth Circuit held that the federal district
court order overruling Nacchio and Woodruff's objections to the Qwest settlement
was not sufficiently specific, and it remanded the case to the district court
with instructions to consider certain issues and to provide a more detailed
explanation for its earlier decision overruling those objections. Subsequent to
the remand, a settlement was reached involving the claims of the putative class
against Messrs. Nacchio and Woodruff as described below that resulted in
the implementation of the Qwest settlement. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> On August 4, 2008,
we, Messrs. Nacchio and Woodruff, and the putative class representatives
entered into a Stipulation of Settlement (the "Nacchio/Woodruff settlement"). On
May 26, 2009, the court approved the Nacchio/Woodruff settlement and
certified a class for settlement purposes of purchasers of our publicly traded
securities between May 24, 1999 and July 28, 2002. The
Nacchio/Woodruff settlement (i) settled the individual claims of the class
representatives and the class they represented against Messrs. Nacchio and
Woodruff and (ii) resulted in the withdrawal by Messrs. Nacchio and
Woodruff of their objections to the Qwest settlement and the resolution of their
indemnification dispute with us arising from the Qwest settlement. Under the
Nacchio/Woodruff settlement, we deposited $40 million into a settlement
fund, and Messrs. Nacchio and Woodruff have contributed a total of
$5 million of insurance proceeds. No parties admit any wrongdoing as a part
of the Nacchio/Woodruff settlement. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The Qwest settlement and
the Nacchio/Woodruff settlement became final on June 26, 2009, at which
point our rights pertaining to the amounts we deposited into the settlement fund
were extinguished. This resulted in a decrease in our other non-current assets
and a corresponding decrease in our other non-current liabilities of
approximately $442 million. </FONT></P></BODY></HTML>
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<P style="FONT-FAMILY: times"><FONT size=2><B>Note 10: Comprehensive Income
</B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> Comprehensive income
includes the amortization of actuarial gains and losses and prior service costs
for our pension and post-retirement benefit plans, changes in the fair value and
related amortization of certain financial derivative instruments (which qualify
for hedge accounting) and unrealized gains and losses on certain investments.
The components of comprehensive income for the three and six months ended
June 30, 2009 and 2008 are detailed below: </FONT></P><!-- User-specified TAGGED TABLE -->
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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=319></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=16></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=16></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=16></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=16></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=5><FONT size=1><B>Three
Months<BR>Ended<BR>June 30, </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=5><FONT size=1><B>Six
Months<BR>Ended<BR>June 30, </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2009 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2008 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2009 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2008 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=11><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Net income</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>212</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>180</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>418</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>330</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Other comprehensive income (loss)—net of
deferred taxes:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Post-retirement benefit plans—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(13</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(15</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(25</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(31</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Pension—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>14</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>23</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Unrealized gain on derivative
instruments—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>5</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>4</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Unrealized gain (loss) on auction rate
securities and other—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>5</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(4</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total other comprehensive income (loss)—net of
deferred taxes</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>7</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(11</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(31</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Comprehensive income</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>219</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>169</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>420</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>299</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD
style="FONT-FAMILY: times"> </TD></TR></TBODY></TABLE></DIV></BODY></HTML>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD>
<META http-equiv=Content-Type content="text/html; charset=utf-8">
<META content="MSHTML 6.00.2900.3492" name=GENERATOR></HEAD>
<BODY>
<P style="FONT-FAMILY: times"><FONT size=2><B>Note 6: Derivative Financial
Instruments </B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> We sometimes use
derivative financial instruments, specifically interest rate swap contracts, to
manage interest rate risks. We execute these instruments with financial
institutions we deem creditworthy and monitor our exposure to these
counterparties. An interest rate hedge is generally designated as either a cash
flow hedge or a fair value hedge. In a cash flow hedge, a borrower of variable
interest debt agrees with another party to make fixed payments equivalent to
paying fixed rate interest on debt in exchange for receiving payments from the
other party equivalent to receiving variable rate interest on debt, the effect
of which is to eliminate some portion of the variability in the borrower's
overall cash flows. In a fair value hedge, a borrower of fixed rate debt agrees
with another party to make variable payments equivalent to paying variable rate
interest on the debt in exchange for receiving fixed payments from the other
party equivalent to receiving fixed rate interest on debt, the effect of which
is to eliminate some portion of the variability in the fair value of the
borrower's overall debt portfolio. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> We recognize all
derivatives on our condensed consolidated balance sheets at fair value. We
generally designate the derivative as either a cash flow hedge or a fair value
hedge on the date on which we enter into the derivative instrument. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> For a derivative that is
designated as and meets all of the required criteria for a cash flow hedge, we
record in accumulated other comprehensive loss on our condensed consolidated
balance sheets any changes in the fair value of the derivative. We then
reclassify these amounts into earnings as the underlying hedged item affects
earnings. In addition, if there are any changes in the fair value of the <!-- SEQ.=11,FOLIO='14',FILE='DISK104:[09ZCF1.09ZCF73701]DI73701A.;19',USER='DHOLBRO',CD='28-JUL-2009;22:59' --><A
name=page_xxx73701_1_15></A>derivative arising from ineffectiveness of the cash
flow hedging relationship, we record those amounts immediately in other expense
(income)—net in our condensed consolidated statements of operations. For a
derivative that is designated as and meets all of the required criteria for a
fair value hedge, we record in other expense (income)—net in our condensed
consolidated statements of operations the changes in fair value of the
derivative and the underlying hedged item. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> We assess quarterly
whether each derivative is highly effective in offsetting changes in fair values
or cash flows of the hedged item. If we determine that a derivative is not
highly effective as a hedge, or if a derivative ceases to be a highly effective
hedge, we discontinue hedge accounting with respect to that derivative
prospectively. We record immediately in earnings changes in the fair value of
derivatives that are not designated as hedges. </FONT></P>
<UL>
<P style="FONT-FAMILY: times"><FONT size=2><B><I>Interest Rate Hedges
</I></B></FONT></P></UL>
<P style="FONT-FAMILY: times"><FONT
size=2> During 2008, we entered
into the interest rate hedges described below as part of our short-term and
long-term debt strategies. One objective of our short-term debt strategy is to
take advantage of favorable interest rates by swapping floating rate debt to
fixed rate debt using cash flow hedges. One objective of our long-term debt
strategy is to achieve a more balanced ratio of fixed rate to floating rate debt
by swapping a portion of our fixed interest rate debt to floating rate debt
through fair value hedges. This decreases our exposure to changes in the fair
value of our fixed interest rate debt due to changes in interest rates.
</FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> We evaluate counterparty
credit risk before entering into any hedge transaction. Thereafter, we continue
to closely monitor the financial market and the risk that our counterparties
will default on their obligations to us. We are prepared to unwind these hedge
transactions if our counterparties' credit risk becomes unacceptable to us.
</FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> In March 2008, QC entered
into interest rate hedges on $500 million of the outstanding
$750 million aggregate principal amount of its Floating Rate Notes due
2013. The notes bear interest at a rate per year equal to LIBOR plus 3.25%.
These hedges had the economic effect of converting QC's floating interest rate
to fixed interest rates of approximately 6.0% for a term of approximately two
years. QC designated these interest rate swaps as cash flow hedges. We did not
recognize any gain or loss in earnings for hedge ineffectiveness for the six
months ended June 30, 2009. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> In March 2008, QC also
entered into interest rate hedges on the outstanding $500 million aggregate
principal amount of its 6.5% Notes due 2017. These hedges had the economic
effect of converting QC's fixed interest rate to a floating interest rate until
these notes mature in 2017. QC designated these interest rate swaps as fair
value hedges. QC terminated these hedges in the fourth quarter of 2008.
</FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The cash flow hedges were
valued using projected future cash flows, discounted at mid-market implied
forward LIBOR. This valuation was determined excluding accrued interest.
</FONT></P>
<P style="FONT-FAMILY: times"><FONT size=2><!-- SEQ.=12,FOLIO='15',FILE='DISK104:[09ZCF1.09ZCF73701]DI73701A.;19',USER='DHOLBRO',CD='28-JUL-2009;22:59' --><A
name=page_xxx73701_1_16></A></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The fair value of
derivative instruments designated as hedging instruments as of June 30,
2009 is described below: </FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=148></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" width=90></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=31></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" width=104></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=31></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=4><FONT size=1><B>Asset Derivatives </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=4><FONT size=1><B>Liability Derivatives
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle><FONT size=1><B>Balance sheet location </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Fair value </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle><FONT size=1><B>Balance sheet location </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Fair value </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=9><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Cash flow hedging contracts</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=middle><FONT size=2>Other current
assets</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=middle><FONT size=2>Other current
liabilities</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>7</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT
size=2> </FONT></TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE -->
<P style="FONT-FAMILY: times"><FONT
size=2> The fair value of
derivative instruments designated as hedging instruments as of December 31,
2008 is described below: </FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=179></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" width=81></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=31></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" width=81></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=31></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=4><FONT size=1><B>Asset Derivatives </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=4><FONT size=1><B>Liability Derivatives
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle><FONT size=1><B>Balance sheet location </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Fair value </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle><FONT size=1><B>Balance sheet location </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Fair value </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=9><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Cash flow hedging contracts</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=middle><FONT size=2>Other
non-current<BR>assets</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=middle><FONT size=2>Other
non-current<BR>liabilities</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>8</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT
size=2> </FONT></TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE -->
<P style="FONT-FAMILY: times"><FONT
size=2> For additional
information on the fair value of our financial instruments, see Note 3—Fair
Value of Financial Instruments. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The following table
presents the effect of derivative instruments on our condensed consolidated
statements of operations for the three and six months ended June 30, 2009
and our condensed consolidated balance sheet as of June 30, 2009:
</FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=234></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" width=96></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" width=96></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" noWrap align=left colSpan=2>
<DIV
style="MARGIN-BOTTOM: 0pt; WIDTH: 170pt; BORDER-BOTTOM: #000000 1pt solid"><FONT
size=1><B>Derivatives in Cash Flow Hedging Relationships <!-- COMMAND=ADD_SCROPPEDRULE,170pt --></B></FONT></DIV></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle><FONT size=1><B>Three Months Ended<BR>June 30, 2009
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle><FONT size=1><B>Six Months Ended<BR>June 30, 2009
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=3><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Interest rate contracts:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Amount of gain recognized in other
comprehensive income on derivative (effective portion), net of deferred
taxes of $—for both periods</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Location of amount reclassified from
accumulated other comprehensive income into income (effective
portion)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>Interest
expense—net</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>Interest
expense—net</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Amount of loss reclassified from accumulated
other comprehensive income into interest expense (effective portion), net
of deferred taxes of $—and $1, respectively</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$2</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Location of amount recognized in income on
derivative (ineffective portion and amount excluded from effectiveness
testing)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>Not
Applicable</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>Not
Applicable</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Amount recognized in income on derivative
(ineffective portion and amount excluded from effectiveness
testing)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>$—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>$—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT
size=2> </FONT></TD></TR></TBODY></TABLE></DIV></BODY></HTML>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD>
<META http-equiv=Content-Type content="text/html; charset=utf-8">
<META content="MSHTML 6.00.2900.3492" name=GENERATOR></HEAD>
<BODY>
<P style="FONT-FAMILY: times"><FONT size=2><B>Note 7: Severance and
Restructuring </B></FONT></P>
<P style="FONT-FAMILY: times"><FONT size=2><B><I>Severance </I></B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> For the three months
ended June 30, 2009 and 2008, we recorded severance expenses of
$23 million and $2 million, respectively. For the six months ended
June 30, 2009 and 2008, we recorded severance expenses of $46 million
and $47 million, respectively. A portion of our severance charges is
included in each of cost of sales, selling expenses and general, administrative
and other operating expenses in our condensed consolidated statements of
operations. We have not included any severance charges in our segment expenses.
As of June 30, 2009 and December 31, 2008, our severance liability was
$59 million and $56 million, respectively. We expect to pay
substantially all of the accrued severance charges during the next twelve
months. </FONT></P>
<P style="FONT-FAMILY: times"><FONT size=2><B><I>Restructuring
</I></B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> During 2004 and previous
years, as part of our ongoing efforts to evaluate our operating costs, we
established restructuring programs, which included workforce reductions,
consolidation of excess facilities, and restructuring of certain business
functions. As of June 30, 2009, the remaining restructuring reserve for
these programs related to leases for real estate that we ceased using in prior
periods and consisted of our estimates of amounts to be paid for these leases in
excess of our estimates of any sublease revenue we may collect. We expect this
reserve will be used over the remaining lease terms, which range from 0.5 to
16.5 years, with a weighted average of 12.6 years. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The remaining reserve
balances are included on our condensed consolidated balance sheets in accrued
expenses and other current liabilities for the current portion and other
long-term liabilities for the long-term portion. The provisions, reversals, and
adjustments are included in general, administrative and other expenses in our
condensed consolidated statements of operations. We have not included any
restructuring charges in our segment expenses. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The following table
presents the details of our real estate restructuring reserves for the six
months ended June 30, 2009: </FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=283></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=69></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Real Estate<BR>Restructuring
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=2><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Balance at December 31, 2008</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>226</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Provisions</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Utilization</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(13</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Reversals and adjustments</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Balance at June 30, 2009</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>214</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD
style="FONT-FAMILY: times"> </TD></TR></TBODY></TABLE></DIV></BODY></HTML>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD>
<META http-equiv=Content-Type content="text/html; charset=utf-8">
<META content="MSHTML 6.00.2900.3492" name=GENERATOR></HEAD>
<BODY>
<P style="FONT-FAMILY: times"><FONT size=2><B>Note 13: Dividends
</B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> Our Board of Directors
declared the following dividends payable in 2009: </FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=121></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" width=121></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=31></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=40></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=85></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" noWrap align=left>
<DIV
style="MARGIN-BOTTOM: 0pt; WIDTH: 50pt; BORDER-BOTTOM: #000000 1pt solid"><FONT
size=1><B>Date Declared
<!-- COMMAND=ADD_SCROPPEDRULE,50pt --></B></FONT></DIV></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle><FONT size=1><B>Record Date </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Dividend<BR>Per Share
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Total<BR>Amount </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Payment Date </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=left><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=2><FONT size=1><B>(in
millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>December 10, 2008</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"
align=left><FONT size=2></FONT><FONT size=2>February 13,
2009</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>0.08</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>137</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>March 6, 2009</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>April 15, 2009</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"
align=left><FONT size=2></FONT><FONT size=2>May 22,
2009</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>0.08</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>137</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>June 12, 2009</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>July 27, 2009</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"
align=left><FONT size=2></FONT><FONT size=2>August 21,
2009</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>0.08</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>138</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>September 11,
2009</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT
size=2> </FONT></TD></TR></TBODY></TABLE></DIV></BODY></HTML>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD>
<META http-equiv=Content-Type content="text/html; charset=utf-8">
<META content="MSHTML 6.00.2900.3492" name=GENERATOR></HEAD>
<BODY>
<P style="FONT-FAMILY: times"><FONT size=2><B>Note 2: Earnings Per Common
Share </B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> Basic earnings per common
share excludes dilution and is computed by dividing net income allocated to
common stockholders by the weighted average number of shares of common stock
outstanding for the period. Diluted earnings per common share reflects the
potential dilution that could occur if certain outstanding stock options are
exercised and certain performance shares require payout in common stock.
</FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The following is a
reconciliation of the number of shares used in the basic and diluted earnings
per common share computations for the three and six months ended June 30,
2009 and 2008: </FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=219></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=41></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=41></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=41></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=41></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=5><FONT size=1><B>Three Months Ended<BR>June 30,
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=5><FONT size=1><B>Six Months Ended<BR>June 30,
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2009 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2008 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2009 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2008 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=11><FONT
size=1><B>(Dollars in millions except per<BR>share amounts, shares in
thousands)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Net income allocated to common
shareholders</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>211</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>180</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>415</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>329</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Basic weighted average common shares
outstanding</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT
size=2><BR>1,707,928</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT
size=2><BR>1,742,294</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT
size=2><BR>1,705,016</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT
size=2><BR>1,752,743</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Dilutive effect of options with strike prices
equal to or less than the average price of our common stock, calculated
using the treasury stock method</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>899</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,456</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>460</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,842</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Dilutive effect of performance
shares</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT
size=2><BR>13,943</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>211</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT
size=2><BR>9,776</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>137</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Diluted weighted average common shares
outstanding</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT
size=2>1,722,770</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT
size=2>1,744,961</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT
size=2>1,715,252</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT
size=2>1,756,722</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Earnings per common share:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Basic</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>0.12</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>0.10</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>0.24</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>0.19</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Diluted</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>0.12</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>0.10</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>0.24</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>0.19</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT
size=2> </FONT></TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE -->
<P style="FONT-FAMILY: times"><FONT
size=2> We had weighted average
unvested restricted stock grants outstanding of approximately 13 million
shares and 11 million shares during the three and six months ended
June 30, 2009, respectively, and 8 million shares and 7 million
shares during the three and six months ended June 30, 2008, respectively. <!-- SEQ.=5,FOLIO='8',FILE='DISK104:[09ZCF1.09ZCF73701]DG73701A.;20',USER='DHOLBRO',CD='28-JUL-2009;22:59' --><A
name=page_xxx73701_1_9></A>These shares are excluded from the earnings per
common share calculation, and these shareholders have their own earnings per
share calculation whereby they were allocated net income of approximately
$1 million and $3 million for the three and six months ended
June 30, 2009, respectively. For the three months ended June 30, 2008
these shares were allocated less than $1 million of net income for the
purposes of calculating basic and diluted earnings per share and approximately
$1 million for the purposes of calculating basic and diluted earnings per
share for the six months ended June 30, 2008. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The following is a
summary of the securities that could potentially dilute basic earnings per
common share, but have been excluded from the computations of diluted earnings
per common share for the three and six months ended June 30, 2009 and 2008:
</FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=279></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" width=22></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" width=22></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=5><FONT size=1><B>Three Months Ended<BR>June 30,
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=5><FONT size=1><B>Six Months Ended<BR>June 30,
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2009 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2008 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2009 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2008 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=11><FONT
size=1><B>(Shares in thousands)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Outstanding options to purchase common stock
excluded because the strike prices of the options exceeded the average
price of common stock during the period</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>54,903</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>56,385</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>59,885</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>51,751</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times">
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Outstanding options to purchase common stock
excluded because the market-based vesting conditions have not been
met</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT
size=2><BR>2,083</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT
size=2><BR>2,340</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT
size=2><BR>2,083</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT
size=2><BR>2,340</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times">
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Other outstanding instruments excluded because
the impact would have been antidilutive</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT
size=2><BR>2,285</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>307</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT
size=2><BR>1,738</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>228</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE -->
<P style="FONT-FAMILY: times"><FONT
size=2> The above table does not
include the potential dilutive effects of the equity premium on our 3.50%
Convertible Senior Notes, which were not convertible as of June 30, 2009.
The number of shares we would have to issue upon conversion of this debt is
determined by a formula that uses our stock price as a major input as described
in Note 5—Borrowings; however, there is no dilutive impact for the three
and six months ended June 30, 2009. </FONT></P></BODY></HTML>
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<P style="FONT-FAMILY: times"><FONT size=2><B>Note 8: Employee Benefits
</B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The components of net
periodic benefits expense for our pension, non-qualified pension and
post-retirement benefit plans for the three and six months ended June 30,
2009 and 2008 are detailed below: </FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=226></TD>
<TD style="FONT-FAMILY: times" width=16></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=20></TD>
<TD style="FONT-FAMILY: times" width=16></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=20></TD>
<TD style="FONT-FAMILY: times" width=16></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" width=20></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" width=16></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" width=20></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=17><FONT size=1><B>Three Months Ended June 30,
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=5><FONT size=1><B>Pension Plan </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=5><FONT size=1><B>Non-Qualified<BR>Pension Plan
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=5><FONT size=1><B>Post-Retirement<BR>Benefit Plans
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2009 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2008 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2009 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2008 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2009 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2008 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=17><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Net periodic benefits expense:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Service cost</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>26</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>31</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Interest cost</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>127</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>123</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>53</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>56</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Expected return on plan assets</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(139</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(163</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(17</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(31</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Recognized prior service cost</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(2</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(25</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(26</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Recognized net actuarial loss</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>22</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>4</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total net periodic benefits expense
(income)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>36</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(11</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>19</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE -->
<P style="FONT-FAMILY: times"><FONT size=2><BR></FONT> </P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=226></TD>
<TD style="FONT-FAMILY: times" width=16></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=20></TD>
<TD style="FONT-FAMILY: times" width=16></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=20></TD>
<TD style="FONT-FAMILY: times" width=16></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" width=18></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" width=16></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=16></TD>
<TD style="FONT-FAMILY: times" width=20></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=16></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=17><FONT size=1><B>Six Months Ended June 30,
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=5><FONT size=1><B>Pension Plan </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=5><FONT size=1><B>Non-Qualified<BR>Pension Plan
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=5><FONT size=1><B>Post-Retirement<BR>Benefit Plans
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2009 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2008 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2009 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2008 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2009 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2008 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=17><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Net periodic benefits expense:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Service cost</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>52</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>61</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>4</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Interest cost</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>253</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>246</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>107</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>113</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Expected return on plan assets</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(283</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(326</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(34</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(62</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Recognized prior service cost</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(50</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(52</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Recognized net actuarial loss</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>37</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>15</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>7</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total net periodic benefits expense
(income)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>59</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(22</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>5</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>42</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>12</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE -->
<P style="FONT-FAMILY: times"><FONT
size=2> The net periodic benefits
expense for our pension, non-qualified pension and post-retirement benefit plans
is recorded in general, administrative and other operating expenses in our
condensed consolidated statements of operations. The measurement date used to
determine pension, non-qualified pension and post-retirement benefits is
December 31; however, during the three months ended June 30, 2009 we
recorded adjustments to the net periodic benefits expense primarily for
adjustments to our estimates of the fair value of certain private-equity and
alternative investments held by our plan trusts that were estimated based on
preliminary information at December 31, 2008. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> In May 2009, we modified
our target allocations for post-retirement benefit plan assets to 35% equity,
50% fixed income, 5% real estate and 10% other in order to reduce volatility in
the portfolio. In conjunction with this modification, we expect our long-term
rate of return on plan assets to decrease; however, we do not believe this
decrease will materially change the life of the trust. </FONT></P></BODY></HTML>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD>
<META http-equiv=Content-Type content="text/html; charset=utf-8">
<META content="MSHTML 6.00.2900.3492" name=GENERATOR></HEAD>
<BODY>
<P style="FONT-FAMILY: times"><FONT size=2><B>Note 3: Fair Value of
Financial Instruments </B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> Our financial instruments
consist of cash and cash equivalents, certain of our current and non-current
investments (consisting of auction rate securities and an investment fund),
accounts receivable, accounts payable, interest rate hedges and long-term notes
including the current portion. The carrying values of cash and cash equivalents,
accounts receivable and accounts payable, interest rate hedges, the investment
fund, and auction rate securities approximate their fair values. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> Fair value is defined as
the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the
measurement date. We use valuation techniques that maximize the use of
observable inputs and minimize the use of unobservable inputs when determining
fair value and then we rank the estimated values based on the reliability of the
inputs used following the fair value hierarchy set forth by the FASB in SFAS
No. 157 (ASC 820-1). </FONT></P>
<P style="FONT-FAMILY: times"><FONT size=2><!-- SEQ.=6,FOLIO='9',FILE='DISK104:[09ZCF1.09ZCF73701]DI73701A.;19',USER='DHOLBRO',CD='28-JUL-2009;22:59' --><A
name=page_xxx73701_1_10></A></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The table below presents
the fair values for certain of our current and non-current investments, interest
rate hedges and long-term notes including the current portion, as well as the
input levels used to determine these fair values as of June 30, 2009 and
December 31, 2008: </FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=226></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=22></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=29></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=44></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=2> </FONT></TH>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=5><FONT size=1><B>Fair value as of </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Level </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>June 30,<BR>2009
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>December 31,<BR>2008
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=5><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Assets:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Auction rate securities</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=middle><FONT size=2>3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>93</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>90</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Investment fund</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=middle><FONT size=2>3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>13</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>20</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total assets</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=middle><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>106</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>110</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Liabilities:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Long-term notes, including the current
portion</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=middle><FONT size=2>1 &
2</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>13,040</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>11,043</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Interest rate hedges</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=middle><FONT size=2>3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>7</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>8</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total liabilities</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=middle><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>13,047</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>11,051</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE -->
<P style="FONT-FAMILY: times"><FONT
size=2> The three levels of the
FASB fair value hierarchy are as follows: </FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width="24%"></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" width="73%"></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" noWrap align=left>
<DIV
style="MARGIN-BOTTOM: 0pt; WIDTH: 41pt; BORDER-BOTTOM: #000000 1pt solid"><FONT
size=1><B>Input Level
<!-- COMMAND=ADD_SCROPPEDRULE,41pt --></B></FONT></DIV></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle><FONT size=1><B>Description of Input </B></FONT></TH></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=2>Level 1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>Inputs are based upon
unadjusted quoted prices for identical instruments traded in active
markets.</FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><BR><FONT size=2>Level 2</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2><BR> </FONT></TD>
<TD style="FONT-FAMILY: times"><BR><FONT size=2>Inputs are based upon
quoted prices for similar instruments in active markets, quoted prices for
identical or similar instruments in markets that are not active, and
model-based valuation techniques for which all significant assumptions are
observable in the market or can be corroborated by observable market data
for substantially the full term of the assets or liabilities.</FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><BR><FONT size=2>Level 3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2><BR> </FONT></TD>
<TD style="FONT-FAMILY: times"><BR><FONT size=2>Inputs are generally
unobservable and typically reflect management's estimates of assumptions
that market participants would use in pricing the asset or liability. The
fair values are therefore determined using model-based techniques that
include option pricing models, discounted cash flow models, and similar
techniques.</FONT></TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE -->
<P style="FONT-FAMILY: times"><FONT
size=2> We determined the fair
value of our auction rate securities using a discounted cash flow model that
takes into consideration the interest rate of the securities, the probability
that we will be able to sell the securities in an auction or that the securities
will be redeemed early, the probability that a default will occur and its
severity, a discount rate and other factors. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> We determined the fair
value of our investment fund based on the asset values of the securities
underlying the fund. </FONT></P>
<P style="FONT-FAMILY: times"><FONT size=2><!-- SEQ.=7,FOLIO='10',FILE='DISK104:[09ZCF1.09ZCF73701]DI73701A.;19',USER='DHOLBRO',CD='28-JUL-2009;22:59' --><A
name=page_xxx73701_1_11></A></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> We determined the fair
value of our interest rate hedges using projected future cash flows, discounted
at the mid-market implied forward London Interbank Offered Rate ("LIBOR"). We
valued the debt underlying the fair value hedges using projected future cash
flows, discounted at mid-market implied forward LIBOR, plus a constant spread
above LIBOR determined at the inception of the hedging relationship. We
determined these valuations excluding accrued interest. For additional
information on our derivative financial instruments, see Note 6—Derivative
Financial Instruments. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> We determined the fair
values of our long-term notes including the current portion based on quoted
market prices where available or, if not available, based on discounted future
cash flows using current market interest rates. Unlike the items listed above,
our long-term notes including the current portion are reflected on our condensed
consolidated balance sheets at original cost net of unamortized discounts and
premiums. The carrying value of our long-term notes including the current
portion was $14.017 billion as of June 30, 2009. For additional
information, see Note 5—Borrowings. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The table below presents
a rollforward of the instruments valued using Level 3 inputs for the six
months ended June 30, 2009: </FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=196></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=40></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=35></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=40></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=3><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=8><FONT size=1><B>Instruments Valued Using
Level 3 Inputs </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=3><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Auction rate<BR>securities
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Investment<BR>fund </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Interest rate<BR>hedges
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=3><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=8><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=3>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Balance at January 1</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>90</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>20</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(8</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Transfers into (out of)
Level 3</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Additions</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Dispositions</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(8</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Realized and unrealized losses:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Included in other (expense)
income—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Included in other comprehensive
income</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=3> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=3>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Balance at June 30</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>93</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>13</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(7</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=3> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD
style="FONT-FAMILY: times"> </TD></TR></TBODY></TABLE></DIV></BODY></HTML>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD>
<META http-equiv=Content-Type content="text/html; charset=utf-8">
<META content="MSHTML 6.00.2900.3492" name=GENERATOR></HEAD>
<BODY>
<P style="FONT-FAMILY: times"><FONT size=2><B>Note 14: Financial Statements
of Guarantors </B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> QCII and two of its
subsidiaries, Qwest Capital Funding, Inc. ("QCF") and Qwest Services
Corporation ("QSC"), guarantee the payment of certain of each other's registered
debt securities. As of June 30, 2009, QCII had outstanding a total of
$1.825 billion aggregate principal amount of senior notes that were issued
in February 2004 and June 2005 and that are guaranteed by QCF and QSC (the "QCII
Guaranteed Notes"). These notes are guaranteed through their respective maturity
dates, the latest of which is in February 2014. Each series of QCF's outstanding
notes totaling $2.747 billion in aggregate principal amount is guaranteed
on a senior unsecured basis by QCII (the "QCF Guaranteed Notes"). These notes
are guaranteed through their respective maturity dates, the latest of which is
in February 2031. The guarantees are full and unconditional and joint and
several. A significant amount of QCII's and QSC's income and cash flow are
generated by their subsidiaries. As a result, the funds necessary to meet their
debt service or guarantee obligations are provided in large part by
distributions or advances from their subsidiaries. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The following information
sets forth our condensed consolidating statements of operations for the three
and six months ended June 30, 2009 and 2008, our condensed consolidating
balance sheets as of June 30, 2009 and December 31, 2008, and our
condensed consolidating statements of cash flows for the six months ended
June 30, 2009 and 2008. The information for QCII is presented on a
stand-alone basis, information for QSC and QCF is presented on a combined basis
and information for all of our other subsidiaries is presented on a combined
basis. Each entity's investments in its subsidiaries, if any, are presented
under the equity method. The condensed consolidating statements of operations
and balance sheets include the effects of consolidating adjustments to our
subsidiaries' tax provisions and the related income tax assets and liabilities
in the QSC and QCII results. Both QSC and QCF are 100% owned by QCII, and QCF is
a finance subsidiary of QCII. Other than as already described in this note, the
accounting principles used to determine the amounts reported in this note are
the same as those used in our condensed consolidated financial statements.
</FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The effects of our
adoption of FSP APB 14-1 (ASC 470-20) , which relates to the accounting for
convertible debt, are reflected in all columns except for the "Subsidiary
Non-Guarantors" column in the financial statements that follow. We periodically
restructure the internal capital structure of our subsidiaries based on the
needs of our business. </FONT></P>
<P style="FONT-FAMILY: times" align=center><FONT size=2><!-- SEQ.=6,FOLIO='26',FILE='DISK104:[09ZCF1.09ZCF73701]DO73701A.;4',USER='EDGCOMP1',CD='30-JUL-2009;16:32' --><A
name=page_xxx73701_1_27></A></FONT></P>
<P style="FONT-FAMILY: times" align=center><FONT size=2><A
name=xxx73701_qwest_communications_internati__qwe04892></A><A
name=toc_xxx73701_1></A></FONT><FONT size=2><B><BR>QWEST COMMUNICATIONS
INTERNATIONAL INC. <BR><BR>CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
<BR><BR>THREE MONTHS ENDED JUNE 30, 2009 <BR><BR>(UNAUDITED) <BR></B></FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=193></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=32></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=37></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=41></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=42></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QCII(1) </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QSC(2) &<BR>QCF(3)
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Subsidiary<BR>Non-<BR>Guarantors
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Eliminations </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QCII<BR>Consolidated </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=14><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Operating revenue:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Operating revenue</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,090</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,090</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Operating revenue—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total operating revenue</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,087</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,090</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Operating expenses:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Cost of sales (exclusive of depreciation and
amortization)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>934</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>934</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Selling</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>494</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>494</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>General, administrative and other
operating</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>12</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>584</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>593</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(6</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Depreciation and amortization</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>578</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>578</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total operating expenses</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>12</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,584</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,599</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Other expense (income)—net:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Interest expense—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>64</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>51</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>161</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>276</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Interest expense—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>95</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>103</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(204</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Interest income—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(205</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>204</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Other—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(23</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>21</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(2</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>(Income) loss from equity investments in
subsidiaries</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(277</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(20</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>297</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total other (income) expense—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(207</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(102</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>286</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>297</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>274</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Income before income taxes</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>195</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>102</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>217</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>(297</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2><BR>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>217</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Income tax benefit (expense)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>17</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>182</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(204</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(5</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Net income (loss)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>212</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>284</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>13</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(297</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>212</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE --><!-- COMMAND=ADD_LINERULETXT,NOSHADE COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="LEFT" -->
<HR align=left width="26%" color=#000000 noShade SIZE=1>
<DL compact>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(1)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QCII is the issuer of the QCII
Guaranteed Notes and is a guarantor of the QCF Guaranteed Notes.
<BR><BR></FONT>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(2)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QSC is a guarantor of the QCII
Guaranteed Notes. </FONT>
<P style="FONT-FAMILY: times"><FONT size=2><!-- SEQ.=7,FOLIO='27',FILE='DISK104:[09ZCF1.09ZCF73701]DO73701A.;4',USER='EDGCOMP1',CD='30-JUL-2009;16:32' --><A
name=page_xxx73701_1_28></A></FONT></P>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(3)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QCF is the issuer of the QCF
Guaranteed Notes and is a guarantor of the QCII Guaranteed Notes.
</FONT></DD></DL>
<P style="FONT-FAMILY: times" align=center><FONT size=2><A
name=xxx73701_qwest_communications_internati__qwe04891></A><A
name=toc_xxx73701_2></A></FONT><FONT size=2><B><BR>QWEST COMMUNICATIONS
INTERNATIONAL INC. <BR><BR>CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
<BR><BR>THREE MONTHS ENDED JUNE 30, 2008 <BR><BR>(UNAUDITED) <BR></B></FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=193></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=32></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=37></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=41></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=42></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QCII(1) </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QSC(2) &<BR>QCF(3)
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Subsidiary<BR>Non-<BR>Guarantors
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Eliminations </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QCII<BR>Consolidated </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=14><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Operating revenue:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Operating revenue</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,382</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,382</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Operating revenue—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>11</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(8</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total operating revenue</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,393</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(8</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,382</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Operating expenses:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Cost of sales (exclusive of depreciation and
amortization)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,149</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,149</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Selling</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>532</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>532</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>General, administrative and other
operating</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>51</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>509</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>559</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>8</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(8</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Depreciation and amortization</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>578</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>578</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total operating expenses</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>51</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,776</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(8</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,818</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Other expense (income)—net:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Interest expense—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>68</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>53</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>149</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>270</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Interest expense—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>62</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>208</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(272</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Interest income—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(271</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>272</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Other—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(8</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(4</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>(Income) loss from equity investments in
subsidiaries</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(267</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(298</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>565</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total other (income) expense—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(194</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(462</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>357</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>565</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>266</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Income before income taxes</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>143</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>460</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>260</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>(565</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2><BR>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>298</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Income tax benefit (expense)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>37</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(193</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>38</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(118</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Net income (loss)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>180</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>267</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>298</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(565</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>180</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE --><!-- COMMAND=ADD_LINERULETXT,NOSHADE COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="LEFT" -->
<HR align=left width="26%" color=#000000 noShade SIZE=1>
<DL compact>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(1)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QCII is the issuer of the QCII
Guaranteed Notes and is a guarantor of the QCF Guaranteed Notes.
<BR><BR></FONT>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(2)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QSC is a guarantor of the QCII
Guaranteed Notes. <BR><BR></FONT>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(3)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QCF is the issuer of the QCF
Guaranteed Notes and is a guarantor of the QCII Guaranteed Notes. </FONT>
<P style="FONT-FAMILY: times" align=center><FONT size=2><!-- SEQ.=8,FOLIO='28',FILE='DISK104:[09ZCF1.09ZCF73701]DS73701A.;5',USER='EDGCOMP1',CD='30-JUL-2009;16:32' --><A
name=page_xxx73701_1_29></A></FONT></P></DD></DL>
<P style="FONT-FAMILY: times" align=center><FONT size=2><A
name=xxx73701_qwest_communications_internati__qwe04826></A><A
name=toc_xxx73701_3></A></FONT><FONT size=2><B><BR>QWEST COMMUNICATIONS
INTERNATIONAL INC. <BR><BR>CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
<BR><BR>SIX MONTHS ENDED JUNE 30, 2009 <BR><BR>(UNAUDITED) <BR></B></FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=193></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=32></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=37></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=41></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=42></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QCII(1) </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QSC(2) &<BR>QCF(3)
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Subsidiary<BR>Non-<BR>Guarantors
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Eliminations </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QCII<BR>Consolidated </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=14><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Operating revenue:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Operating revenue</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6,263</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6,263</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Operating revenue—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(4</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total operating revenue</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6,266</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(4</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6,263</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Operating expenses:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Cost of sales (exclusive of depreciation and
amortization)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,862</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,862</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Selling</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,042</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,042</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>General, administrative and other
operating</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>24</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,143</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,168</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Operating expenses—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>4</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(4</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Depreciation and amortization</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,151</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,151</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total operating expenses</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>24</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>5,202</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(4</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>5,223</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Other expense (income)—net:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Interest expense—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>127</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>101</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>308</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>536</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Interest expense—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>13</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>181</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>297</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(491</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Interest income—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(491</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>491</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Other—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(28</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>18</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(11</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>(Income) loss from equity investments in
subsidiaries</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(540</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(37</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>577</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total other (income) expense—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(401</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(274</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>623</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>577</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>525</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Income before income taxes</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>377</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>274</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>441</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>(577</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2><BR>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>515</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Income tax benefit (expense)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>41</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>274</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(412</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(97</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Net income (loss)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>418</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>548</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>29</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(577</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>418</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE --><!-- COMMAND=ADD_LINERULETXT,NOSHADE COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="LEFT" -->
<HR align=left width="26%" color=#000000 noShade SIZE=1>
<DL compact>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(1)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QCII is the issuer of the QCII
Guaranteed Notes and is a guarantor of the QCF Guaranteed Notes.
<BR><BR></FONT>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(2)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QSC is a guarantor of the QCII
Guaranteed Notes. <BR><BR></FONT>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(3)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QCF is the issuer of the QCF
Guaranteed Notes and is a guarantor of the QCII Guaranteed Notes. </FONT>
<P style="FONT-FAMILY: times" align=center><FONT size=2><!-- SEQ.=9,FOLIO='29',FILE='DISK104:[09ZCF1.09ZCF73701]DU73701A.;5',USER='EDGCOMP1',CD='30-JUL-2009;16:32' --><A
name=page_xxx73701_1_30></A></FONT></P></DD></DL>
<P style="FONT-FAMILY: times" align=center><FONT size=2><A
name=xxx73701_qwest_communications_internati__qwe04825></A><A
name=toc_xxx73701_4></A></FONT><FONT size=2><B><BR>QWEST COMMUNICATIONS
INTERNATIONAL INC. <BR><BR>CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
<BR><BR>SIX MONTHS ENDED JUNE 30, 2008 <BR><BR>(UNAUDITED) <BR></B></FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=193></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=32></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=37></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=41></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=42></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QCII(1) </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QSC(2) &<BR>QCF(3)
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Subsidiary<BR>Non-<BR>Guarantors
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Eliminations </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QCII<BR>Consolidated </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=14><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Operating revenue:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Operating revenue</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6,781</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6,781</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Operating revenue—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(9</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>23</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(14</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total operating revenue</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(9</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6,804</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(14</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6,781</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Operating expenses:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Cost of sales (exclusive of depreciation and
amortization)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,330</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,330</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Selling</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,082</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,082</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>General, administrative and other
operating</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>59</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(7</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,079</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,131</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Operating expenses—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>14</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(14</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Depreciation and amortization</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,154</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,154</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total operating expenses</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>59</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(7</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>5,659</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(14</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>5,697</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Other expense (income)—net:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Interest expense—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>136</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>106</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>300</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>542</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Interest expense—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>110</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>394</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(507</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Interest income—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(505</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(2</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>507</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Other—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(6</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>(Income) loss from equity investments in
subsidiaries</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(461</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(270</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>731</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total other (income) expense—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(319</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(565</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>694</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>731</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>541</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Income before income taxes</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>260</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>563</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>451</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>(731</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2><BR>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2><BR>543</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Income tax benefit (expense)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>70</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(106</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(177</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(213</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Net income (loss)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>330</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>457</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>274</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(731</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>330</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE --><!-- COMMAND=ADD_LINERULETXT,NOSHADE COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="LEFT" -->
<HR align=left width="26%" color=#000000 noShade SIZE=1>
<DL compact>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(1)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QCII is the issuer of the QCII
Guaranteed Notes and is a guarantor of the QCF Guaranteed Notes.
<BR><BR></FONT>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(2)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QSC is a guarantor of the QCII
Guaranteed Notes. <BR><BR></FONT>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(3)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QCF is the issuer of the QCF
Guaranteed Notes and is a guarantor of the QCII Guaranteed Notes. </FONT>
<P style="FONT-FAMILY: times" align=center><FONT size=2><!-- SEQ.=10,FOLIO='30',FILE='DISK104:[09ZCF1.09ZCF73701]DW73701A.;13',USER='EDGCOMP1',CD='30-JUL-2009;16:32' --><A
name=page_xxx73701_1_31></A></FONT></P></DD></DL>
<P style="FONT-FAMILY: times" align=center><FONT size=2><A
name=xxx73701_qwest_communications_internati__qwe03645></A><A
name=toc_xxx73701_5></A></FONT><FONT size=2><B><BR>QWEST COMMUNICATIONS
INTERNATIONAL INC. <BR><BR>CONDENSED CONSOLIDATING BALANCE SHEETS
<BR><BR>JUNE 30, 2009 <BR><BR>(UNAUDITED) <BR></B></FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=9></TD>
<TD style="FONT-FAMILY: times" width=195></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=4></TD>
<TD style="FONT-FAMILY: times" width=25></TD>
<TD style="FONT-FAMILY: times" width=13></TD>
<TD style="FONT-FAMILY: times" align=right width=4></TD>
<TD style="FONT-FAMILY: times" width=33></TD>
<TD style="FONT-FAMILY: times" width=13></TD>
<TD style="FONT-FAMILY: times" align=right width=4></TD>
<TD style="FONT-FAMILY: times" width=38></TD>
<TD style="FONT-FAMILY: times" width=13></TD>
<TD style="FONT-FAMILY: times" align=right width=4></TD>
<TD style="FONT-FAMILY: times" width=42></TD>
<TD style="FONT-FAMILY: times" width=13></TD>
<TD style="FONT-FAMILY: times" align=right width=4></TD>
<TD style="FONT-FAMILY: times" width=43></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QCII(1) </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QSC(2) &<BR>QCF(3)
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Subsidiary<BR>Non-<BR>Guarantors
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Eliminations </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QCII<BR>Consolidated </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=14><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" align=middle colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2><B>ASSETS</B></FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Current assets:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Cash and cash equivalents</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>18</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>731</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,047</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,796</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Accounts receivable—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>17</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,308</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,331</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Accounts receivable—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>694</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>449</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>23</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,166</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Notes receivable—affiliates(4)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>5,329</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>102</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(5,431</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Deferred income taxes—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>335</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>249</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(8</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>576</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Prepaid expenses and other</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>19</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>352</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(27</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>345</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total current assets</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>730</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6,869</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,081</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(6,632</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>4,048</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Property, plant and equipment—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>12,622</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>12,622</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Capitalized software—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>885</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>885</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Investments in subsidiaries(4)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,006</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,619</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(3,625</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Deferred income taxes—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>885</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,151</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>223</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,196</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,063</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Prepaid pension, post-retirement and other
post-employment benefits—net—affiliate</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,947</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>73</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,010</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(4,030</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Other</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>119</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>321</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>437</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(269</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>608</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total assets</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6,687</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>11,033</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>18,258</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(15,752</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>20,226</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" align=middle colSpan=2>
<P
style="MARGIN-TOP: 10pt; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2><B>LIABILITIES AND<BR>STOCKHOLDERS' (DEFICIT)
EQUITY</B></FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Current liabilities:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Current portion of long-term
borrowings</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>562</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>523</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,085</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Current borrowings—affiliates(4)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>102</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>5,329</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(5,431</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Accounts payable</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>761</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>767</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Accounts payable—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>17</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>4</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>26</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(47</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Accrued expenses and other</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>290</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>73</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,040</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(18</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,385</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Accrued expenses and
other—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>537</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>580</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,119</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Deferred income taxes—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>8</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(8</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Deferred revenue and advance
billings</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>560</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(9</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>551</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total current liabilities</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>419</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6,511</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,490</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(6,632</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,788</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Long-term borrowings—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,966</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,183</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>7,889</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>13,038</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Pension, post-retirement and other
post-employment benefits obligations—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,259</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,259</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Pension, post-retirement and other
post-employment benefits obligations and other—affiliate</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,082</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>366</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,582</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(4,030</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Deferred income taxes—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,196</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,196</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Deferred revenue</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>509</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>509</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Other</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>12</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>940</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(269</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>683</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total liabilities</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>7,738</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>9,060</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>16,606</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(12,127</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>21,277</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Stockholders' (deficit) equity</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,051</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,973</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,652</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(3,625</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,051</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total liabilities and stockholders' (deficit)
equity</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6,687</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>11,033</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>18,258</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(15,752</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>20,226</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE --><!-- COMMAND=ADD_LINERULETXT,NOSHADE COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="LEFT" -->
<HR align=left width="26%" color=#000000 noShade SIZE=1>
<DL compact>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(1)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QCII is the issuer of the QCII
Guaranteed Notes and is a guarantor of the QCF Guaranteed Notes.
<BR><BR></FONT>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(2)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QSC is a guarantor of the QCII
Guaranteed Notes. <BR><BR></FONT>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(3)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QCF is the issuer of the QCF
Guaranteed Notes and is a guarantor of the QCII Guaranteed Notes.
<BR><BR></FONT>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(4)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QSC invested $9.9 billion in
a subsidiary non-guarantor by assuming $9.9 billion of the subsidiary's
current borrowings-affiliate from QCF. In connection with that non-cash
transaction, QSC and QCF offset $4.4 billion of their respective current
borrowings-affiliate and notes receivable-affiliate. </FONT>
<P style="FONT-FAMILY: times" align=center><FONT size=2><!-- SEQ.=11,FOLIO='31',FILE='DISK104:[09ZCF1.09ZCF73701]DY73701A.;7',USER='EDGCOMP1',CD='30-JUL-2009;16:32' --><A
name=page_xxx73701_1_32></A></FONT></P></DD></DL>
<P style="FONT-FAMILY: times" align=center><FONT size=2><A
name=xxx73701_qwest_communications_internati__qwe03774></A><A
name=toc_xxx73701_6></A></FONT><FONT size=2><B><BR>QWEST COMMUNICATIONS
INTERNATIONAL INC. <BR><BR>CONDENSED CONSOLIDATING BALANCE SHEETS
<BR><BR>DECEMBER 31, 2008 <BR><BR>(UNAUDITED) <BR></B></FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=9></TD>
<TD style="FONT-FAMILY: times" width=195></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=4></TD>
<TD style="FONT-FAMILY: times" width=25></TD>
<TD style="FONT-FAMILY: times" width=13></TD>
<TD style="FONT-FAMILY: times" align=right width=4></TD>
<TD style="FONT-FAMILY: times" width=33></TD>
<TD style="FONT-FAMILY: times" width=13></TD>
<TD style="FONT-FAMILY: times" align=right width=4></TD>
<TD style="FONT-FAMILY: times" width=38></TD>
<TD style="FONT-FAMILY: times" width=13></TD>
<TD style="FONT-FAMILY: times" align=right width=4></TD>
<TD style="FONT-FAMILY: times" width=42></TD>
<TD style="FONT-FAMILY: times" width=13></TD>
<TD style="FONT-FAMILY: times" align=right width=4></TD>
<TD style="FONT-FAMILY: times" width=43></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QCII(1) </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QSC(2) &<BR>QCF(3)
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Subsidiary<BR>Non-<BR>Guarantors
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Eliminations </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QCII<BR>Consolidated </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=14><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" align=middle colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2><B>ASSETS</B></FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Current assets:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Cash and cash equivalents</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>307</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>258</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>565</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Accounts receivable—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>20</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,444</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,465</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Accounts receivable—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>535</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>628</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>22</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,185</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Notes receivable—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>13,773</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>117</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(13,890</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Deferred income taxes—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>327</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>253</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(8</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>572</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Prepaid expenses and other</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>29</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>377</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(38</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>368</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total current assets</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>555</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>15,065</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,471</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(15,121</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,970</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Property, plant and equipment—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>13,045</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>13,045</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Capitalized software—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>875</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>875</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Investments in subsidiaries</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,224</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(7,772</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>5,548</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Deferred income taxes—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>886</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,269</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>275</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,262</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,168</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Prepaid pension, post-retirement and other
post-employment benefits—net—affiliate</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,978</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>84</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,059</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(4,121</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Other</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>525</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>211</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>498</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(151</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,083</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total assets</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>7,168</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>9,857</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>18,223</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(15,107</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>20,141</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" align=middle colSpan=2>
<P
style="MARGIN-TOP: 10pt; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2><B>LIABILITIES AND<BR>STOCKHOLDERS' (DEFICIT)
EQUITY</B></FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Current liabilities:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Current portion of long-term
borrowings</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>230</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>562</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>28</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>820</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Current borrowings—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>145</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,948</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>9,797</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(13,890</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Accounts payable</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>819</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>820</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Accounts payable—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>20</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>130</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(152</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Accrued expenses and other</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>424</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>172</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,069</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(24</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,641</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Accrued expenses and
other—affiliates</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>375</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>656</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,033</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Deferred income taxes—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>8</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(8</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Deferred revenue and advance
billings</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>586</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(14</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>572</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total current liabilities</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>829</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>5,060</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>13,085</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(15,121</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,853</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Long-term borrowings—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,935</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,183</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>7,617</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>12,735</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Pension, post-retirement and other
post-employment benefits obligations—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,232</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,232</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Pension, post-retirement and other
post-employment benefits obligations and other—affiliate</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,143</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>431</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,547</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(4,121</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Deferred income taxes—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,262</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,262</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Deferred revenue</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>519</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>519</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Other</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>415</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>924</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(151</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,188</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total liabilities</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>8,554</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>7,674</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>25,954</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(20,655</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>21,527</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Stockholders' (deficit) equity</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,386</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,183</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(7,731</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>5,548</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,386</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total liabilities and stockholders' (deficit)
equity</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>7,168</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>9,857</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>18,223</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(15,107</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>20,141</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE --><!-- COMMAND=ADD_LINERULETXT,NOSHADE COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="LEFT" -->
<HR align=left width="26%" color=#000000 noShade SIZE=1>
<DL compact>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(1)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QCII is the issuer of the QCII
Guaranteed Notes and is a guarantor of the QCF Guaranteed Notes.
<BR><BR></FONT>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(2)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QSC is a guarantor of the QCII
Guaranteed Notes. <BR><BR></FONT>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(3)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QCF is the issuer of the QCF
Guaranteed Notes and is a guarantor of the QCII Guaranteed Notes. </FONT>
<P style="FONT-FAMILY: times" align=center><FONT size=2><!-- SEQ.=12,FOLIO='32',FILE='DISK104:[09ZCF1.09ZCF73701]EA73701A.;9',USER='EDGCOMP1',CD='30-JUL-2009;16:32' --><A
name=page_xxx73701_1_33></A></FONT></P></DD></DL>
<P style="FONT-FAMILY: times" align=center><FONT size=2><A
name=xxx73701_qwest_communications_internati__qwe04799></A><A
name=toc_xxx73701_7></A></FONT><FONT size=2><B><BR>QWEST COMMUNICATIONS
INTERNATIONAL INC. <BR><BR>CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
<BR><BR>SIX MONTHS ENDED JUNE 30, 2009 <BR><BR>(UNAUDITED) <BR></B></FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=204></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=4></TD>
<TD style="FONT-FAMILY: times" width=25></TD>
<TD style="FONT-FAMILY: times" width=14></TD>
<TD style="FONT-FAMILY: times" align=right width=4></TD>
<TD style="FONT-FAMILY: times" width=33></TD>
<TD style="FONT-FAMILY: times" width=14></TD>
<TD style="FONT-FAMILY: times" align=right width=4></TD>
<TD style="FONT-FAMILY: times" width=38></TD>
<TD style="FONT-FAMILY: times" width=14></TD>
<TD style="FONT-FAMILY: times" align=right width=4></TD>
<TD style="FONT-FAMILY: times" width=42></TD>
<TD style="FONT-FAMILY: times" width=14></TD>
<TD style="FONT-FAMILY: times" align=right width=4></TD>
<TD style="FONT-FAMILY: times" width=43></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QCII(1) </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QSC(2) &<BR>QCF(3)
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Subsidiary<BR>Non-<BR>Guarantors
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Eliminations </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QCII<BR>Consolidated </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=14><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Cash (used for) provided by operating
activities</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(126</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>639</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,128</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>21</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,662</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Investing activities:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Expenditures for property, plant and equipment
and capitalized software</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(682</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(682</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Proceeds from sale of investment
securities</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>5</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>5</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Changes in interest in investments managed by
QSC</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>8</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(7</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Net (increase) decrease in short-term affiliate
loans</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(406</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>15</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>391</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Dividends received from
subsidiaries</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>640</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,200</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,840</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Cash infusion to subsidiaries</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(706</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>706</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Other</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(7</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(7</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Cash provided by (used for) investing
activities</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>639</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>101</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(681</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(743</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(684</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Financing activities:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Proceeds from long-term
borrowings</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>738</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>738</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Repayments of long-term borrowings, including
current maturities</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(230</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(18</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(248</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Net (repayments of) proceeds from short-term
affiliate borrowings</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(43</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>322</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>112</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(391</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Proceeds from issuances of common
stock</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>34</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>34</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Dividends paid</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(274</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(274</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Equity infusion from parent</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>706</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(706</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Dividends paid to parent</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(640</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,200</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,840</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Other</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>18</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>4</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(21</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Cash (used for) provided by financing
activities</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(495</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(316</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>342</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>722</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>253</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Cash and cash equivalents:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Increase in cash and cash
equivalents</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>18</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>424</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>789</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,231</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Beginning balance</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>307</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>258</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>565</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Ending balance</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>18</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>731</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,047</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,796</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE --><!-- COMMAND=ADD_LINERULETXT,NOSHADE COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="LEFT" -->
<HR align=left width="26%" color=#000000 noShade SIZE=1>
<DL compact>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(1)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QCII is the issuer of the QCII
Guaranteed Notes and is a guarantor of the QCF Guaranteed Notes.
<BR><BR></FONT>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(2)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QSC is a guarantor of the QCII
Guaranteed Notes. <BR><BR></FONT>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(3)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QCF is the issuer of the QCF
Guaranteed Notes and is a guarantor of the QCII Guaranteed Notes. </FONT>
<P style="FONT-FAMILY: times" align=center><FONT size=2><!-- SEQ.=13,FOLIO='33',FILE='DISK104:[09ZCF1.09ZCF73701]EC73701A.;6',USER='EDGCOMP1',CD='30-JUL-2009;16:32' --><A
name=page_xxx73701_1_34></A></FONT></P></DD></DL>
<P style="FONT-FAMILY: times" align=center><FONT size=2><A
name=xxx73701_qwest_communications_internati__qwe04798></A><A
name=toc_xxx73701_8></A></FONT><FONT size=2><B><BR>QWEST COMMUNICATIONS
INTERNATIONAL INC. <BR><BR>CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
<BR><BR>SIX MONTHS ENDED JUNE 30, 2008 <BR><BR>(UNAUDITED) <BR></B></FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=203></TD>
<TD style="FONT-FAMILY: times" width=12></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=32></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=37></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=41></TD>
<TD style="FONT-FAMILY: times" width=15></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=42></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QCII(1) </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QSC(2) &<BR>QCF(3)
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Subsidiary<BR>Non-<BR>Guarantors
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>Eliminations </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>QCII<BR>Consolidated </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=14><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Cash (used for) provided by operating
activities</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(285</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>557</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,006</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>19</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,297</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Investing activities:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Expenditures for property, plant and equipment
and capitalized software</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(950</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(950</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Proceeds from sale of investment
securities</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>42</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>42</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Changes in interest in investments managed by
QSC</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>23</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>28</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(51</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Cash infusion to subsidiaries</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(806</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>806</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Net (increase) decrease in short-term affiliate
loans</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,315</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,315</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Dividends received from
subsidiaries</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>575</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,000</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,575</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Other</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>7</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>7</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Cash provided by (used for) investing
activities</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>598</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,051</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(994</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>546</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(901</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Financing activities:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Repayments of long-term borrowings, including
current maturities</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(23</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(23</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Net proceeds from (repayments of) short-term
affiliate borrowings</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>103</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>885</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>327</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,315</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Proceeds from issuances of common
stock</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>17</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>17</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Dividends paid</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(282</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(282</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Repurchases of common stock</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(258</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(258</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Equity infusion from parent</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>806</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(806</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Dividends paid to parent</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(575</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,000</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,575</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Other</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>17</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(2</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>7</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(19</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Cash (used for) provided by financing
activities</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(403</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>308</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>117</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(565</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(543</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Cash and cash equivalents:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>(Decrease) increase in cash and cash
equivalents</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(90</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(186</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>129</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(147</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Beginning balance</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>90</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>481</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>331</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>902</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Ending balance</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>295</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>460</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>—</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>755</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE --><!-- COMMAND=ADD_LINERULETXT,NOSHADE COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="LEFT" -->
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<DL compact>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(1)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QCII is the issuer of the QCII
Guaranteed Notes and is a guarantor of the QCF Guaranteed Notes.
<BR><BR></FONT>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(2)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QSC is a guarantor of the QCII
Guaranteed Notes. <BR><BR></FONT>
<DT style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"><FONT size=2>(3)</FONT>
<DD style="FONT-FAMILY: times"><FONT size=2>QCF is the issuer of the QCF
Guaranteed Notes and is a guarantor of the QCII Guaranteed Notes. </FONT>
<P style="FONT-FAMILY: times"><FONT size=2><!-- SEQ.=14,FOLIO='34',FILE='DISK104:[09ZCF1.09ZCF73701]EC73701A.;6',USER='EDGCOMP1',CD='30-JUL-2009;16:32' --></FONT></P></DD></DL></BODY></HTML>
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<BODY>
<P style="FONT-FAMILY: times"><FONT size=2><B>Note 4: Investments
</B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> As of June 30, 2009
and December 31, 2008, our investments included auction rate securities of
$93 million and $90 million, respectively, which are classified as
non-current, available-for-sale investments and are included in other
non-current assets at their estimated fair value on our condensed consolidated
balance sheets. Auction rate securities are generally long-term debt instruments
that provide liquidity through a Dutch auction process that resets the
applicable interest rate at pre-determined calendar intervals, generally every
28 days. This mechanism generally allows existing investors to rollover
their holdings and continue to own their respective securities or liquidate
their holdings by selling their securities at par value. Prior to August 2007,
we invested in these securities for short periods of time as part of our cash
management program. However, the uncertainties in the <!-- SEQ.=8,FOLIO='11',FILE='DISK104:[09ZCF1.09ZCF73701]DI73701A.;19',USER='DHOLBRO',CD='28-JUL-2009;22:59' --><A
name=page_xxx73701_1_12></A>credit markets have prevented us and other investors
from liquidating holdings of these securities in auctions since the third
quarter of 2007. These securities: </FONT></P>
<UL>
<LI><FONT size=2>are structured obligations of special purpose reinsurance
entities associated with life insurance companies and are referred to as
"Triple X" securities; </FONT></LI></UL>
<UL>
<LI><FONT size=2>currently pay interest every 28 days at one-month LIBOR
plus 200 basis points;<BR> </FONT>
<LI><FONT size=2>are rated A; </FONT></LI></UL>
<UL>
<LI><FONT size=2>are insured against loss of principal and interest by two
bond insurers. One bond insurer had a credit rating of BBB and the other bond
insurer was not rated at June 30, 2009;<BR> </FONT>
<LI><FONT size=2>are collateralized by the issuers;<BR> </FONT>
<LI><FONT size=2>and mature between 2033 and 2036. </FONT></LI></UL>
<P style="FONT-FAMILY: times"><FONT
size=2> We recorded an immaterial
amount of unrealized gains and losses, net of deferred income taxes, on these
auction rate securities for the three months ended June 30, 2009 and 2008,
and for the six months ended June 30, 2009 and 2008. The cumulative
unrealized loss, net of deferred income taxes, related to these securities was
$17 million at both June 30, 2009 and December 31, 2008. These
unrealized losses were recorded in accumulated other comprehensive loss on our
condensed consolidated balance sheets. The cost basis of these securities was
$120 million and $117 million as of June 30, 2009 and
December 31, 2008, respectively. We consider the decline in fair value to
be a temporary impairment because we believe it is more likely than not that we
will ultimately recover the entire $120 million cost basis, in part because
the securities are rated investment grade, the securities are fully
collateralized and the issuers continue to make required interest payments. At
some point in the future, we may determine that the decline in fair value is
other than temporary if, among other factors, the issuers cease making required
interest payments or if we believe it is more likely than not that we will be
required to sell these securities before their values recover; we would then
recognize the portion of the other-than-temporary decline in fair value that is
due to credit loss in other expense (income)—net in our condensed consolidated
statements of operations. Because we are uncertain as to when the liquidity
issues relating to these investments will improve, we continued to classify
these securities as non-current as of June 30, 2009.
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<BODY>
<P style="FONT-FAMILY: times"><FONT size=2><B>Note 11: Segment Information
</B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> Our operating revenue is
generated from our business markets, mass markets and wholesale markets
segments. Our Chief Operating Decision Maker ("CODM") regularly reviews
information for each of our segments to evaluate performance and to allocate
resources. The accounting principles used to determine segment results are the
same as those used in our condensed consolidated financial statements.
</FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> Segment income consists
of each segment's revenue and expenses. The following table summarizes segment
information for the three and six months ended June 30, 2009 and 2008:
</FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=241></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=5><FONT size=1><B>Three Months Ended<BR>June 30,
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=5><FONT size=1><B>Six Months Ended<BR>June 30,
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2009 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2008 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2009 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2008 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=2><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=11><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total segment revenue</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,000</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,291</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6,093</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6,609</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total segment expense</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,444</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,713</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,942</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,451</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total segment income</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,556</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,578</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,151</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,158</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total margin percentage</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>52</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>%</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>48</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>%</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>52</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>%</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>48</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>%</FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Business markets:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Revenue</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,019</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,013</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,036</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,005</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Expense</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>611</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>632</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,232</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,249</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Income</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>408</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>381</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>804</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>756</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Margin percentage</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>40</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>%</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>38</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>%</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>39</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>%</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>38</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>%</FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Mass markets:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Revenue</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,269</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,454</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,593</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,938</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Expense</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>578</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>725</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,178</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,488</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Income</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>691</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>729</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,415</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,450</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Margin percentage</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>54</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>%</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>50</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>%</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>55</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>%</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>49</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>%</FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=2>
<P
style="MARGIN-TOP: 12pt; MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Wholesale markets:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Revenue</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>712</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>824</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,464</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,666</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Expense</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>255</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>356</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>532</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>714</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Income</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>457</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>468</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>932</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>952</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Margin percentage</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>64</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>%</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>57</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>%</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>64</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>%</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>57</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT
size=2>%</FONT></TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE -->
<P style="FONT-FAMILY: times"><FONT size=2><!-- SEQ.=17,FOLIO='20',FILE='DISK104:[09ZCF1.09ZCF73701]DK73701A.;30',USER='DHOLBRO',CD='28-JUL-2009;22:59' --><A
name=page_xxx73701_1_21></A></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The following table
reconciles segment income to net income for the three and six months ended
June 30, 2009 and 2008: </FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=244></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=28></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=28></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=5><FONT size=1><B>Three Months Ended<BR>June 30,
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=5><FONT size=1><B>Six Months Ended<BR>June 30,
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2009 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2008 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2009 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2008 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=11><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total segment income</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,556</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,578</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,151</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,158</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Other revenue (primarily USF
surcharges)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>90</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>91</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>170</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>172</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Unassigned expenses (primarily general and
administrative)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(577</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(527</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,130</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,092</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Depreciation and amortization</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(578</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(578</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,151</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(1,154</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total other expense—net</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(274</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(266</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(525</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(541</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR vAlign=bottom bgColor=white>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Income tax expense</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(5</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(118</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(97</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>(213</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2>)</FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=bottom bgColor=#cceeff>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Net income</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>212</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>180</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>418</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>330</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times"
align=right colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR></TBODY></TABLE></DIV><!-- end of user-specified TAGGED TABLE -->
<P style="FONT-FAMILY: times"><FONT
size=2> The following table
summarizes revenue derived from external customers for our major products and
services for the three and six months ended June 30, 2009 and 2008:
</FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 border=0>
<TBODY>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=10></TD>
<TD style="FONT-FAMILY: times" width=231></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times" align=right width=5></TD>
<TD style="FONT-FAMILY: times" width=24></TD>
<TD style="FONT-FAMILY: times"
width=3></TD><!-- TABLE COLUMN WIDTHS END --></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=3><FONT
size=2> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=5><FONT size=1><B>Three Months Ended<BR>June 30,
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=5><FONT size=1><B>Six Months Ended<BR>June 30,
</B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=3><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2009 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2008 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2009 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times"
align=middle colSpan=2><FONT size=1><B>2008 </B></FONT></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=bottom>
<TH style="FONT-FAMILY: times" align=left colSpan=3><FONT
size=1> </FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH>
<TH style="FONT-FAMILY: times" align=middle colSpan=11><FONT
size=1><B>(Dollars in millions)</B></FONT><BR></TH>
<TH style="FONT-FAMILY: times"><FONT size=1> </FONT></TH></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times" colSpan=3>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Operating revenue by products and
services:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Segment revenue:</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Data, Internet and video services</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,364</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,333</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,727</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>2,635</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Voice services</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,603</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>1,833</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,278</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,720</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times">
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Wireless products and services</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>33</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>125</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>88</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>254</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=3> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total segment revenue</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,000</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,291</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6,093</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6,609</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR vAlign=top bgColor=#cceeff>
<TD style="FONT-FAMILY: times"><FONT size=0> </FONT></TD>
<TD style="FONT-FAMILY: times" colSpan=2>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Other revenue (primarily USF
surcharges)</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>90</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>91</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>170</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>172</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD></TR>
<TR style="FONT-SIZE: 1.5pt" vAlign=top>
<TD style="FONT-FAMILY: times" colSpan=3> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD>
<TD style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align=right
colSpan=2> </TD>
<TD style="FONT-FAMILY: times"> </TD></TR>
<TR vAlign=top bgColor=white>
<TD style="FONT-FAMILY: times" colSpan=3>
<P style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: times"><FONT
size=2></FONT><FONT size=2>Total operating revenue</FONT></P></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,090</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>3,382</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6,263</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT size=2> </FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>$</FONT></TD>
<TD style="FONT-FAMILY: times" align=right><FONT size=2>6,781</FONT></TD>
<TD style="FONT-FAMILY: times"><FONT
size=2> </FONT></TD></TR></TBODY></TABLE></DIV></BODY></HTML>
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<P style="FONT-FAMILY: times"><FONT size=2><B>Note 9: Tax Matters
</B></FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> During the three and six
months ended June 30, 2009, we reduced our income tax expense by
$86 million and $108 million, respectively, compared to reductions of
$18 million in both the three and six months ended June 30, 2008, due
to the recognition of previously unrecognized tax benefits and settlements that
are discrete to those periods. The benefits recorded for previously unrecognized
tax positions were the result of increases in the amount the benefit that we
believe is more likely than not to be sustained on various individual tax
positions. Also, during the three months ended June 30, 2009, we executed a
settlement with the IRS relating to its audit of our 2002-2003 tax years. This
settlement did not have a material impact on our condensed consolidated
financial statements. </FONT></P>
<P style="FONT-FAMILY: times"><FONT
size=2> The Company had
unrecognized tax benefits as of June 30, 2009 of $231 million, which
was a decrease of $202 million from the balance at December 31, 2008.
This net decrease was due to a decrease of $221 million relating to the
elimination of unrecognized tax benefits as the result of settlements and a
decrease of $116 million primarily relating to the recognition of
previously unrecognized tax benefits discussed above, partially offset by an
increase of $135 million for current period activity relating to tax
positions originally taken by the Company in prior years for which the full
benefit has not been recognized by us. Approximately $58 million of the
$231 million unrecognized tax benefits we have at June 30, 2009 could
affect our effective tax rate as these positions would permanently decrease the
cumulative amount that we would ever have to pay the taxing authorities. The
remaining unrecognized tax benefits would not affect our effective tax rate as
these benefits relate to the timing of deductions and would not impact the
cumulative amount that we would ever have to pay the taxing authorities.
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2063000000
2168000000
Qwest Communications International Inc
0001037949
10-Q
2009-06-30
true
Yes
Yes
Large Accelerated Filer
1723796075
The purpose of this Amendment No. 1 to the Quarterly Report on Form 10-Q of Qwest Communications International Inc. for the quarter ended June 30, 2009, as filed with the Securities and Exchange Commission on July 30, 2009, is to furnish a corrected Exhibit 101 (XBRL formatted data) to the Form 10-Q as required by Rule 405 of Regulation S-T. No other changes have been made to the Form 10-Q other than those described below. This Amendment No. 1 does not modify or update in any way disclosures made in the Form 10-Q. The Exhibit 101 furnished on July 30, 2009 inadvertently excluded certain tables that have been included in this corrected Exhibit 101. Exhibit 101 to this report provides the following items from our Form 10-Q formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Balance Sheets, (iii) the Condensed Consolidated Statements of Cash Flows and (iv) the Notes to Condensed Consolidated Financial Statements tagged as blocks of text. Users of this data are advised that pursuant to Rule 406T of Regulation S-T these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.
--12-31
No