MONROE, La., Feb. 15 /PRNewswire-FirstCall/ -- CenturyTel, Inc. (NYSE: CTL) announces operating results for fourth quarter 2006.

 

  • Operating revenues were $607.7 million compared to $620.5 million in fourth quarter 2005.
  • Operating cash flow (as defined in the attached financial schedules) was $300.0 million.
  • Net income, excluding nonrecurring items, was $79.4 million compared to $82.2 million in fourth quarter 2005. Net income, reported under GAAP, was $72.2 million compared to $78.3 million in fourth quarter 2005.
  • Diluted earnings per share, excluding nonrecurring items, was $.68 in fourth quarter 2006 compared to $.61 in fourth quarter 2005, while GAAP diluted earnings per share was $.62 in fourth quarter 2006 and $.59 in fourth quarter 2005.
  • Free cash flow (as defined in the attached financial schedules), excluding nonrecurring items, was $104.8 million in fourth quarter 2006.
  • Nearly 3.2 million shares were repurchased and retired for $132.3 million during the quarter.

 



    Fourth Quarter Highlights
     (Excluding nonrecurring items)
      (In thousands, except per
       share amounts and           Quarter Ended    Quarter Ended    % Change
       operating data)               12/31/06         12/31/05

    Operating Revenues              $ 607,695        $ 620,472         (2.1)%
    Operating Cash Flow (1)         $ 300,039        $ 308,197         (2.6)%
    Net Income                      $  79,449        $  82,184         (3.3)%
    Diluted Earnings Per Share      $     .68        $     .61         11.5 %
    Average Diluted Shares
     Outstanding                      118,874          135,917        (12.5)%
    Capital Expenditures            $ 101,037        $ 132,914        (24.0)%

    Telephone Access Lines (2)      2,094,000        2,214,000         (5.4)%
    High-speed Internet Customers     369,000          249,000         48.2 %

    (1) Operating Cash Flow is a non-GAAP financial measure. A reconciliation
        of this item to comparable GAAP measures is included in the attached
        financial schedules.
    (2) Excluding adjustments during 2006 to reflect the removal of test
        lines, database conversion and clean-up, and the sale of our
        Arizona properties, access line losses for 2006 were
        approximately 107,000, a year-over-year line loss of 4.8%.

"CenturyTel generated a record $512 million of free cash flow during 2006, reflecting our continued success in aligning our costs and capital deployment with the changing landscape of our industry," Glen F. Post, III, chairman and chief executive officer, said. "At the same time, we invested more than $300 million in our business and returned more than $800 million to shareholders through the repurchase of more than 21 million common shares."

Operating revenues were $607.7 million in fourth quarter 2006 compared to $620.5 million in fourth quarter 2005. Revenue increases during the quarter of approximately $17 million resulted primarily from an increase in high-speed Internet customers and growth in fiber transport revenues, as well as new initiatives. These increases were more than offset by revenue declines of approximately $30 million primarily attributable to previously anticipated lower access revenues, reduced universal service funding, and access line losses.

Operating expenses decreased 3.1% to $434 million from $448 million in fourth quarter 2005, principally due to a $9.4 million decline in depreciation expense primarily associated with fully depreciated assets. Additionally, cash expenses were $4.6 million lower than in fourth quarter 2005 driven primarily by lower marketing, personnel and contract labor costs that more than offset increased expenses associated with new initiatives, long distance usage and growth in high-speed Internet customers.

"CenturyTel remains focused on being the broadband provider of choice in our markets. Customer demand for high-quality broadband service drove more than 29,000 high-speed Internet additions during the quarter resulting in over 120,000 net additions for the full year, a 48.2% annual increase," Post said. "We also expanded our addressable market for broadband services during the quarter with the launch of CenturyTel's first mesh-WiFi network in Vail, Colorado."

Operating cash flow for fourth quarter 2006 was $300.0 million. CenturyTel achieved an operating cash flow margin of 49.4% during the quarter versus 49.7% in fourth quarter 2005. This margin decline was expected due to the growth in lower margin revenues versus the anticipated decline in higher margin revenues discussed above.

Net income, excluding nonrecurring items, was $79.4 million compared to $82.2 million in fourth quarter 2005. Diluted earnings per share, excluding nonrecurring items, increased to $.68 in fourth quarter 2006 compared to $.61 in fourth quarter 2005, primarily due to the reduction in diluted shares outstanding as a result of share repurchases during 2006.

For the year 2006, operating revenues, excluding nonrecurring items, were $2.446 billion compared to $2.479 billion in 2005, a 1.4% decrease. Operating cash flow, excluding nonrecurring items, was $1.197 billion for 2006 compared to $1.274 billion a year ago. Net income, excluding nonrecurring items, was $303.0 million compared to $346.3 million in 2005, while diluted earnings per share was $2.52 compared to $2.58 in 2005.

Under generally accepted accounting principles (GAAP), net income for fourth quarter 2006 was $72.2 million compared to $78.3 million for fourth quarter 2005. Diluted earnings per share was $.62 in fourth quarter 2006 compared to $.59 in fourth quarter 2005. Fourth quarter 2006 and fourth quarter 2005 results reflect after-tax charges of $7.2 million and $3.9 million, respectively, related to impairment charges associated with certain non-operating investments.

For the year 2006, prepared in accordance with GAAP, the Company reported net income of $370.0 million, or $3.07 per diluted share, compared to net income of $334.5 million, or $2.49 per diluted share, for the year 2005. See the accompanying financial schedules for detail of the Company's nonrecurring items for the years 2006 and 2005.

Outlook for 2007. For full year 2007, CenturyTel expects 2007 diluted earnings per share to be in the range of $2.60 to $2.70. As previously communicated, the Company expects revenue settlements related to prior periods to positively impact 2007 diluted earnings per share by $.17 to $.22. CenturyTel also expects share repurchases made during 2006 and January 2007 along with modestly lower interest expense to positively impact 2007 diluted earnings per share by $.10 to $.15. Additionally, CenturyTel believes it will continue to drive growth from the further penetration of its broadband service offerings and continued expansion in its fiber business that is anticipated to positively impact 2007 diluted earnings per share by $.08 to $.12, excluding depreciation expense. Also, lower depreciation expense, primarily due to certain telephone assets becoming fully depreciated that more than offsets higher depreciation related to broadband investments and new initiatives, is anticipated to positively impact 2007 diluted earnings per share by $.03 to $.05. These increases are expected to more than offset the negative impact on 2007 diluted earnings per share of $.30 to $.35 related to anticipated access line losses of 4.5% to 6.0% and continued pressure on access revenues.

For first quarter 2007, CenturyTel expects total revenues of $600 to $610 million and diluted earnings per share of $.60 to $.65.

Finally, the Company expects its capital expenditures in 2007 to be approximately $325 million, a slight increase over the $314 million expended in 2006.

These 2007 outlook figures exclude nonrecurring items, any share repurchases made after January 31, 2007, the pending acquisition of Madison River Communications Corp. and any future mergers, acquisitions, divestitures or other similar business transactions.

Other. During the fourth quarter of 2006, CenturyTel adopted the requirements of Staff Accounting Bulletin No. 108 (SAB 108), which required the results of operations previously reported in the first, second and third quarters of 2006 to be adjusted. The attached schedules reflect the nature of the adjustments and reconcile amounts previously reported to those amounts as adjusted for the application of SAB 108, both on a GAAP and non-GAAP basis.

In addition, the Company's stockholders' equity was reduced approximately $98 million during fourth quarter 2006 upon the adoption of SFAS 158, which requires companies to reflect the unrecognized actuarial loss related to pension and post-retirement plans as a reduction in stockholders' equity.

Reconciliation to GAAP. This release includes certain non-GAAP financial measures, including but not limited to operating cash flow, free cash flow and adjustments to GAAP measures to exclude the effect of nonrecurring items. In addition to providing key metrics for management to evaluate the Company's performance, we believe these measurements assist investors in their understanding of period-to-period operating performance and in identifying historical and prospective trends. Reconciliations of non-GAAP financial measures to the most comparable GAAP measures are included in the attached financial statements. Reconciliation of additional non-GAAP financial measures that may be discussed during the earnings call described below will be available in the Investor Relations portion of the Company's Web site at www.centurytel.com. Investors are urged to consider these non-GAAP measures in addition to, and not in substitution for, measures prepared in accordance with GAAP.

Investor Call. As previously announced, CenturyTel's management will host a conference call at 10:30 a.m. Central Time today. Interested parties can access the call by dialing 866.814.8448. The call will be accessible for replay through February 21, 2007, by calling 888.266.2081 and entering the conference ID number 1023612. Investors can also listen to CenturyTel's earnings conference call and replay by accessing the Investor Relations portion of the Company's Web site at www.centurytel.com prior to March 8, 2007.

In addition to historical information, this release includes certain forward-looking statements, estimates and projections that are based on current expectations only, and are subject to a number of risks, uncertainties and assumptions, many of which are beyond the control of the Company. Actual events and results may differ materially from those anticipated, estimated or projected if one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect. Factors that could affect actual results include but are not limited to: the timing, success and overall effects of competition from a wide variety of competitive providers; the risks inherent in rapid technological change; the effects of ongoing changes in the regulation of the communications industry; the Company's ability to effectively manage its expansion opportunities, including successfully financing and timely consummating pending acquisitions, successfully integrating newly-acquired properties into the Company's operations, and retaining and hiring key personnel; possible changes in the demand for, or pricing of, the Company's products and services; the Company's ability to successfully introduce new product or service offerings on a timely and cost- effective basis; the Company's ability to collect its receivables from financially troubled communications companies; the Company's ability to successfully negotiate collective bargaining agreements on reasonable terms without work stoppages; the effect of adverse weather; other risks referenced from time to time in the Company's filings with the Securities and Exchange Commission (the "SEC"); and the effects of more general factors such as changes in interest rates, in tax rates, in accounting policies or practices, in operating, medical or administrative costs, in general market, labor or economic conditions, or in legislation, regulation or public policy. These and other uncertainties related to the Company's business are described in greater detail in the Company's Annual Report on Form 10-K for the year ended December 31, 2005, as updated by the Company's subsequent SEC reports. You should be aware that new factors may emerge from time to time and it is not possible for management to identify all such factors, nor can it predict the impact of each such factor on the business or the extent to which any one or more factors may cause actual results to differ from those reflected in any forward-looking statements. You are further cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The information contained in this release is as of February 15, 2007. The Company undertakes no obligation to update any of its forward- looking statements for any reason.

CenturyTel (NYSE: CTL) is a leading provider of communications, high speed Internet and entertainment services in small-to-mid-size cities through our broadband and fiber transport networks. Included in the S&P 500 Index, CenturyTel delivers advanced communications with a personal touch to customers in 25 states. Visit us at www.centurytel.com.


                                CenturyTel, Inc.
                        CONSOLIDATED STATEMENTS OF INCOME
                  THREE MONTHS ENDED DECEMBER 31, 2006 AND 2005
                                   (UNAUDITED)

                                         Three months ended December 31, 2006
                                                                   As adjusted
                                                        Less        excluding
                                                        non-          non-
     In thousands, except per share           As      recurring     recurring
      amounts                              reported     items         items

     OPERATING REVENUES
        Voice*                              $211,385                  211,385
        Network access                       211,819                  211,819
        Data                                  92,337                   92,337
        Fiber transport and CLEC              39,770                   39,770
        Other                                 52,384                   52,384
                                             607,695        -         607,695

     OPERATING EXPENSES
        Cost of services and products        223,132                  223,132
        Selling, general and
         administrative                       84,524                   84,524
        Depreciation and amortization        126,360                  126,360
                                             434,016        -         434,016

     OPERATING INCOME                        173,679        -         173,679

     OTHER INCOME (EXPENSE)
        Interest expense                     (47,375)                 (47,375)
        Other income (expense)                (9,306)   (11,715)(1)     2,409
        Income tax expense                   (44,765)     4,499 (2)   (49,264)

     NET INCOME                              $72,233     (7,216)       79,449

     BASIC EARNINGS PER SHARE                  $0.63      (0.06)         0.70
     DILUTED EARNINGS PER SHARE                $0.62      (0.06)         0.68

     AVERAGE SHARES OUTSTANDING
        Basic                                113,629                  113,629
        Diluted                              118,874                  118,874

    DIVIDENDS PER COMMON SHARE               $0.0625                   0.0625



     NONRECURRING ITEMS
       (1)  -  Impairment of nonoperating investments.
       (2)  -  Tax effect of Item (1).
       (3)  -  Impairment of nonoperating investment.
       (4)  -  Tax effect of Item (3).

    * Revenues previously reported as "Local service" and "Long distance"
      have been combined into this "Voice" category for all periods
      presented.



                                           Three months ended December 31,
                                                        2005
                                                                 As adjusted
                                                       Less       excluding
                                                       non-         non-
     In thousands, except per share          As     recurring     recurring
      amounts                             reported    items         items

     OPERATING REVENUES
        Voice*                             $220,207                 220,207
        Network access                      232,570                 232,570
        Data                                 80,904                  80,904
        Fiber transport and CLEC             37,214                  37,214
        Other                                49,577                  49,577
                                            620,472       -         620,472

     OPERATING EXPENSES
        Cost of services and products       212,339                 212,339
        Selling, general and
         administrative                      99,936                  99,936
        Depreciation and amortization       135,778                 135,778
                                            448,053       -         448,053

     OPERATING INCOME                       172,419       -         172,419

     OTHER INCOME (EXPENSE)
        Interest expense                    (49,625)                (49,625)
        Other income (expense)                1,320    (6,250)(3)     7,570
        Income tax expense                  (45,780)    2,400 (4)   (48,180)

     NET INCOME                             $78,334    (3,850)       82,184

     BASIC EARNINGS PER SHARE                 $0.60     (0.03)         0.63
     DILUTED EARNINGS PER SHARE               $0.59     (0.03)         0.61

     AVERAGE SHARES OUTSTANDING
        Basic                               130,730                 130,730
        Diluted                             135,917                 135,917

    DIVIDENDS PER COMMON SHARE              $0.0600                  0.0600


     NONRECURRING ITEMS
       (1)  -  Impairment of nonoperating investments.
       (2)  -  Tax effect of Item (1).
       (3)  -  Impairment of nonoperating investment.
       (4)  -  Tax effect of Item (3).

    * Revenues previously reported as "Local service" and "Long distance"
      have been combined into this "Voice" category for all periods
      presented.



                                                                 Increase
                                                                (decrease)
                                              Increase          excluding
     In thousands, except per share          (decrease)        nonrecurring
      amounts                                as reported          items

     OPERATING REVENUES
         Voice*                                 (4.0%)            (4.0%)
         Network access                         (8.9%)            (8.9%)
         Data                                   14.1%             14.1%
         Fiber transport and CLEC                6.9%              6.9%
         Other                                   5.7%              5.7%
                                                (2.1%)            (2.1%)

     OPERATING EXPENSES
         Cost of services and products           5.1%              5.1%
         Selling, general and
          administrative                       (15.4%)           (15.4%)
         Depreciation and amortization          (6.9%)            (6.9%)
                                                (3.1%)            (3.1%)

     OPERATING INCOME                            0.7%              0.7%

     OTHER INCOME (EXPENSE)
         Interest expense                       (4.5%)            (4.5%)
         Other income (expense)               (805.0%)           (68.2%)
         Income tax expense                     (2.2%)             2.2%

     NET INCOME                                 (7.8%)            (3.3%)

     BASIC EARNINGS PER SHARE                    5.0%             11.1%
     DILUTED EARNINGS PER SHARE                  5.1%             11.5%

     AVERAGE SHARES OUTSTANDING
         Basic                                 (13.1%)           (13.1%)
         Diluted                               (12.5%)           (12.5%)

    DIVIDENDS PER COMMON SHARE                   4.2%              4.2%


     NONRECURRING ITEMS
       (1)  -  Impairment of nonoperating investments.
       (2)  -  Tax effect of Item (1).
       (3)  -  Impairment of nonoperating investment.
       (4)  -  Tax effect of Item (3).

    * Revenues previously reported as "Local service" and "Long distance"
      have been combined into this "Voice" category for all periods
      presented.



                                CenturyTel, Inc.
                        CONSOLIDATED STATEMENTS OF INCOME
                 TWELVE MONTHS ENDED DECEMBER 31, 2006 AND 2005
                                   (UNAUDITED)

                                         Twelve months ended December 31, 2006
                                                                  As adjusted
                                                        Less       excluding
                                                        non-          non-
                                              As     recurring     recurring
     In thousands, except per share
     amounts                               reported    items         items

     OPERATING REVENUES
        Voice*                              $860,741                  860,741
        Network access                       878,702     1,688 (1)    877,014
        Data                                 351,495       275 (1)    351,220
        Fiber transport and CLEC             149,088                  149,088
        Other                                207,704                  207,704
                                           2,447,730     1,963      2,445,767

     OPERATING EXPENSES
        Cost of services and products        888,414     8,585 (1)    879,829
        Selling, general and
         administrative                      370,272       845 (1)    369,427
        Depreciation and amortization        523,506                  523,506
                                           1,782,192     9,430      1,772,762

     OPERATING INCOME                        665,538    (7,467)       673,005

     OTHER INCOME (EXPENSE)
        Interest expense                    (195,957)                (195,957)
        Other income (expense)               121,568   106,934 (2)     14,634
        Income tax expense                  (221,122)  (32,477)(3)   (188,645)

     NET INCOME                             $370,027    66,990        303,037

     BASIC EARNINGS PER SHARE                  $3.17      0.57           2.59
     DILUTED EARNINGS PER SHARE                $3.07      0.55           2.52

     AVERAGE SHARES OUTSTANDING
        Basic                                116,671                  116,671
        Diluted                              122,229                  122,229

    DIVIDENDS PER COMMON SHARE                 $0.25                     0.25

     NONRECURRING ITEMS
       (1)  -  Severance and related costs due to workforce reduction,
       including revenue effect.
       (2)  -  Includes (i) gains of $117.8 million recorded upon redemption
                 of Rural Telephone Bank stock and $.9 million recorded upon
                 sale of Arizona properties, net of (ii) $11.7 million
                 impairment of nonoperating investments.
       (3)  -  Includes $38.9 million net tax expense related to Items (1) and
                 (2), net of $6.4 million net tax benefit due to the
                 resolution of various income tax audit issues.
       (4)  -  Expenses associated with Hurricanes Katrina and Rita.
       (5)  -  Write-off of unamortized deferred debt costs associated
                 with purchasing and retiring approximately $400 million of
                 Series J notes.
       (6)  -  Includes (i) a $16.2 million impairment of nonoperating
                 investment and a $4.8 million debt extinguishment charge
                 related to purchasing and retiring approximately $400 million
                 of Series J notes, net of (ii) a $3.5 million gain on sale of
                 nonoperating investment and $3.2 million of interest income
                 related to the settlement of various income tax audits.
       (7)  -  Includes (i) $1.3 million tax benefit related to the settlement
                 of various income tax audits and (ii) $8.2 million net tax
                 benefit of items (4) through (6).

    * Revenues previously reported as "Local service" and "Long distance"
      have been combined into this "Voice" category for all periods
      presented.


                                CenturyTel, Inc.
                        CONSOLIDATED STATEMENTS OF INCOME
                 TWELVE MONTHS ENDED DECEMBER 31, 2006 AND 2005
                                   (UNAUDITED)

                                         Twelve months ended December 31, 2005
                                                                  As adjusted
                                                        Less       excluding
                                                        non-          non-
                                              As     recurring     recurring
     In thousands, except per share
     amounts                               reported    items         items

     OPERATING REVENUES
        Voice*                              $892,272                  892,272
        Network access                       959,838                  959,838
        Data                                 318,770                  318,770
        Fiber transport and CLEC             115,454                  115,454
        Other                                192,918                  192,918
                                           2,479,252       -        2,479,252

     OPERATING EXPENSES
        Cost of services and products        821,929     5,853 (4)    816,076
        Selling, general and
         administrative                      388,989                  388,989
        Depreciation and amortization        531,931                  531,931
                                           1,742,849     5,853      1,736,996

     OPERATING INCOME                        736,403    (5,853)       742,256

     OTHER INCOME (EXPENSE)
        Interest expense                    (201,801)   (1,196)(5)   (200,605)
        Other income (expense)                 3,168   (14,253)(6)     17,421
        Income tax expense                  (203,291)    9,511 (7)   (212,802)

     NET INCOME                             $334,479   (11,791)       346,270

     BASIC EARNINGS PER SHARE                  $2.55     (0.09)          2.64
     DILUTED EARNINGS PER SHARE                $2.49     (0.09)          2.58

     AVERAGE SHARES OUTSTANDING
        Basic                                130,841                  130,841
        Diluted                              136,087                  136,087

    DIVIDENDS PER COMMON SHARE                 $0.24                     0.24

     NONRECURRING ITEMS
       (1)  -  Severance and related costs due to workforce reduction,
       including revenue effect.
       (2)  -  Includes (i) gains of $117.8 million recorded upon redemption
                 of Rural Telephone Bank stock and $.9 million recorded upon
                 sale of Arizona properties, net of (ii) $11.7 million
                 impairment of nonoperating investments.
       (3)  -  Includes $38.9 million net tax expense related to Items (1) and
                 (2), net of $6.4 million net tax benefit due to the
                 resolution of various income tax audit issues.
       (4)  -  Expenses associated with Hurricanes Katrina and Rita.
       (5)  -  Write-off of unamortized deferred debt costs associated
                 with purchasing and retiring approximately $400 million of
                 Series J notes.
       (6)  -  Includes (i) a $16.2 million impairment of nonoperating
                 investment and a $4.8 million debt extinguishment charge
                 related to purchasing and retiring approximately $400 million
                 of Series J notes, net of (ii) a $3.5 million gain on sale of
                 nonoperating investment and $3.2 million of interest income
                 related to the settlement of various income tax audits.
       (7)  -  Includes (i) $1.3 million tax benefit related to the settlement
                 of various income tax audits and (ii) $8.2 million net tax
                 benefit of items (4) through (6).

    * Revenues previously reported as "Local service" and "Long distance"
      have been combined into this "Voice" category for all periods
      presented.


                                CenturyTel, Inc.
                        CONSOLIDATED STATEMENTS OF INCOME
                 TWELVE MONTHS ENDED DECEMBER 31, 2006 AND 2005
                                   (UNAUDITED)


                                                                 Increase
                                                                (decrease)
                                              Increase          excluding
                                             (decrease)        nonrecurring
     In thousands, except per share
     amounts                                 as reported          items

     OPERATING REVENUES
         Voice*                                 (3.5%)            (3.5%)
         Network access                         (8.5%)            (8.6%)
         Data                                   10.3%             10.2%
         Fiber transport and CLEC               29.1%             29.1%
         Other                                   7.7%              7.7%
                                                (1.3%)            (1.4%)

     OPERATING EXPENSES
         Cost of services and products           8.1%              7.8%
         Selling, general and
          administrative                        (4.8%)            (5.0%)
         Depreciation and amortization          (1.6%)            (1.6%)
                                                 2.3%              2.1%

     OPERATING INCOME                           (9.6%)            (9.3%)

     OTHER INCOME (EXPENSE)
         Interest expense                       (2.9%)            (2.3%)
         Other income (expense)               3737.4%            (16.0%)
         Income tax expense                      8.8%            (11.4%)

     NET INCOME                                 10.6%            (12.5%)

     BASIC EARNINGS PER SHARE                   24.3%             (1.9%)
     DILUTED EARNINGS PER SHARE                 23.3%             (2.3%)

     AVERAGE SHARES OUTSTANDING
         Basic                                 (10.8%)           (10.8%)
         Diluted                               (10.2%)           (10.2%)

    DIVIDENDS PER COMMON SHARE                   4.2%              4.2%

     NONRECURRING ITEMS
       (1)  -  Severance and related costs due to workforce reduction,
                including revenue effect.
       (2)  -  Includes (i) gains of $117.8 million recorded upon redemption
                of Rural Telephone Bank stock and $.9 million recorded upon
                sale of Arizona properties, net of (ii) $11.7 million
                impairment of nonoperating investments.
       (3)  -  Includes $38.9 million net tax expense related to Items (1) and
                (2), net of $6.4 million net tax benefit due to the
                resolution of various income tax audit issues.
       (4)  -  Expenses associated with Hurricanes Katrina and Rita.
       (5)  -  Write-off of unamortized deferred debt costs associated
                with purchasing and retiring approximately $400 million of
                Series J notes.
       (6)  -  Includes (i) a $16.2 million impairment of nonoperating
                investment and a $4.8 million debt extinguishment charge
                related to purchasing and retiring approximately $400 million
                of Series J notes, net of (ii) a $3.5 million gain on sale of
                nonoperating investment and $3.2 million of interest income
                related to the settlement of various income tax audits.
       (7)  -  Includes (i) $1.3 million tax benefit related to the settlement
                of various income tax audits and (ii) $8.2 million net tax
                benefit of items (4) through (6).

    * Revenues previously reported as "Local service" and "Long distance"
      have been combined into this "Voice" category for all periods
      presented.



                                  CenturyTel, Inc.
                             CONSOLIDATED BALANCE SHEETS
                       DECEMBER 31, 2006 AND DECEMBER 31, 2005
                                     (UNAUDITED)

                                               December 31,       December 31,
                                                   2006               2005
                                                        (in thousands)
                     ASSETS
    CURRENT ASSETS
        Cash and cash equivalents                 $25,668            158,846
        Other current assets                      264,449            264,170
           Total current assets                   290,117            423,016

    NET PROPERTY, PLANT AND EQUIPMENT
        Property, plant and equipment           7,893,760          7,801,377
        Accumulated depreciation               (4,784,483)        (4,496,891)
           Net property, plant and
            equipment                           3,109,277          3,304,486

    GOODWILL AND OTHER ASSETS
        Goodwill                                3,431,136          3,432,649
        Other                                     610,477            602,556
            Total goodwill and other
             assets                             4,041,613          4,035,205


    TOTAL ASSETS                               $7,441,007          7,762,707


             LIABILITIES AND EQUITY
    CURRENT LIABILITIES
        Short-term debt and current
         maturities of long-term debt            $178,012            276,736
        Other current liabilities                 439,553            469,494
            Total current liabilities             617,565            746,230

    LONG-TERM DEBT                              2,412,852          2,376,070
    DEFERRED CREDITS AND OTHER
     LIABILITIES                                1,219,639          1,023,134
    STOCKHOLDERS' EQUITY                        3,190,951          3,617,273

    TOTAL LIABILITIES AND EQUITY               $7,441,007          7,762,707



                                 CenturyTel, Inc.
                  RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
                                   (UNAUDITED)


                                         Three months ended December 31, 2006
                                                                  As adjusted
                                                        Less       excluding
                                                        non-          non-
     In thousands                             As     recurring     recurring
                                           reported    items         items
     Operating cash flow and cash flow
      margin
       Operating income                     $173,679         -        173,679
       Add:  Depreciation and
        amortization                         126,360         -        126,360
       Operating cash flow                  $300,039         -        300,039

       Revenues                             $607,695         -        607,695

       Operating income margin (operating
        income divided by revenues)            28.6%                    28.6%

       Operating cash flow margin
        (operating cash flow divided by
        revenues)                              49.4%                    49.4%


     Free cash flow (prior to debt
      service requirements and dividends)
       Net income                            $72,233    (7,216)(1)     79,449
       Add:  Depreciation and
        amortization                         126,360         -        126,360
       Less:  Capital expenditures          (101,037)        -       (101,037)
       Free cash flow                        $97,556    (7,216)       104,772

       Free cash flow                        $97,556
       Income from unconsolidated
        cellular entity                         (821)
       Deferred income taxes                  16,272
       Changes in current assets and
        current liabilities                    7,821
       Decrease in other noncurrent
        assets                                 4,649
       Increase in other noncurrent
        liabilities                              152
       Retirement benefits                   (19,369)
       Excess tax benefits from share-
        based compensation                    (4,174)
       Other, net                             15,088
       Add:  Capital expenditures            101,037
       Net cash provided by operating
        activities                          $218,211

     NONRECURRING ITEMS
       (1)  -  Impairment of nonoperating investments (presented on an after-
               tax basis).


                                 CenturyTel, Inc.
                  RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
                                   (UNAUDITED)


                                         Three months ended December 31, 2005
                                                                  As adjusted
                                                        Less       excluding
                                                        non-          non-
     In thousands                             As     recurring     recurring
                                           reported    items         items
     Operating cash flow and cash flow
      margin
       Operating income                     $172,419         -        172,419
       Add:  Depreciation and
        amortization                         135,778         -        135,778
       Operating cash flow                  $308,197         -        308,197

       Revenues                             $620,472         -        620,472

       Operating income margin (operating
        income divided by revenues)            27.8%                    27.8%

       Operating cash flow margin
        (operating cash flow divided by
        revenues)                              49.7%                    49.7%


     Free cash flow (prior to debt
      service requirements and dividends)
       Net income                            $78,334    (3,850)(1)     82,184
       Add:  Depreciation and
        amortization                         135,778         -        135,778
       Less:  Capital expenditures          (132,914)        -       (132,914)
       Free cash flow                        $81,198    (3,850)        85,048

       Free cash flow                        $81,198
       Income from unconsolidated
        cellular entity                       (1,603)
       Deferred income taxes                  36,112
       Changes in current assets and
        current liabilities                   (2,366)
       Decrease in other noncurrent
        assets                                 6,180
       Increase in other noncurrent
        liabilities                              142
       Retirement benefits                   (30,804)
       Excess tax benefits from share-
        based compensation                         -
       Other, net                              9,597
       Add:  Capital expenditures            132,914
       Net cash provided by operating
        activities                          $231,370



     NONRECURRING ITEMS
       (1)  -  Impairment of nonoperating investments (presented on an after-
               tax basis).



                                 CenturyTel, Inc.
                  RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
                                   (UNAUDITED)


                                         Twelve months ended December 31, 2006
                                                                  As adjusted
                                                        Less       excluding
                                                        non-          non-
     In thousands                             As      recurring    recurring
                                           reported     items        items
     Operating cash flow and cash flow
      margin
       Operating income                      $665,538   (7,467)(1)    673,005
       Add:  Depreciation and
        amortization                          523,506        -        523,506
       Operating cash flow                 $1,189,044   (7,467)     1,196,511

       Revenues                            $2,447,730    1,963 (1)  2,445,767

       Operating income margin (operating
        income divided by revenues)             27.2%                   27.5%

       Operating cash flow margin
        (operating cash flow divided by
        revenues)                               48.6%                   48.9%


     Free cash flow (prior to debt
      service requirements and dividends)
       Net income                            $370,027   66,990 (2)    303,037
       Add:  Depreciation and
        amortization                          523,506        -        523,506
       Less:  Capital expenditures           (314,071)       -       (314,071)
                                             $579,462   66,990        512,472

       Free cash flow                        $579,462
       Gain on asset dispositions            (118,649)
       Income from unconsolidated
        cellular entity                        (5,861)
       Deferred income taxes                   49,685
       Changes in current assets and
        current liabilities                    (6,651)
       Decrease in other noncurrent
        assets                                  9,078
       Increase in other noncurrent
        liabilities                               709
       Retirement benefits                      5,963
       Excess tax benefits from share-
        based compensation                    (12,034)
       Other, net                              24,946
       Add:  Capital expenditures             314,071
       Net cash provided by operating
        activities                           $840,719

     NONRECURRING ITEMS
       (1)  -  Severance and related costs due to workforce reduction
                (including revenue effect).
       (2)  -  Includes (i) $72.4 million after-tax gains recorded upon
                 redemption of Rural Telephone Bank stock and sale of Arizona
                 properties, (ii) $7.2 million after-tax impairment of
                 nonoperating investments, (iii) $4.6 million severance and
                 related costs due to workforce reduction (including revenue
                 effect), net of tax, and (iv) $6.4 million net tax benefit
                 due to the resolution of various income tax audit issues.
       (3)  -  Expenses associated with Hurricanes Katrina and Rita (presented
                 on a pre-tax basis).
       (4)  -  Includes (i) a $10.0 million after-tax impairment of
                 nonoperating investment, a $3.7 million after-tax expense
                 related to purchasing and retiring approximately $400 million
                 of Series J notes and a $3.6 million after- tax expense
                 associated with Hurricanes Katrina and Rita, net of (ii) a
                 $3.3 million net benefit related to the settlement of various
                 income tax audits and a $2.2 million after-tax gain on sale
                 of nonoperating investment.


                                 CenturyTel, Inc.
                  RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
                                   (UNAUDITED)


                                         Twelve months ended December 31, 2005
                                                                  As adjusted
                                                        Less       excluding
                                                        non-          non-
     In thousands                             As     recurring     recurring
                                           reported    items         items
     Operating cash flow and cash flow
      margin
       Operating income                     $736,403    (5,853)(3)    742,256
       Add:  Depreciation and
        amortization                         531,931         -        531,931
       Operating cash flow                $1,268,334    (5,853)     1,274,187

       Revenues                           $2,479,252         -      2,479,252

       Operating income margin (operating
        income divided by revenues)            29.7%                    29.9%

       Operating cash flow margin
        (operating cash flow divided by
        revenues)                              51.2%                    51.4%


     Free cash flow (prior to debt
      service requirements and dividends)
       Net income                           $334,479   (11,791)(4)    346,270
       Add:  Depreciation and
        amortization                         531,931         -        531,931
       Less:  Capital expenditures          (414,872)        -       (414,872)
                                            $451,538   (11,791)       463,329

       Free cash flow                       $451,538
       Gain on asset dispositions             (3,500)
       Income from unconsolidated
        cellular entity                       (4,910)
       Deferred income taxes                  69,530
       Changes in current assets and
        current liabilities                   27,001
       Decrease in other noncurrent
        assets                                 1,973
       Increase in other noncurrent
        liabilities                            2,638
       Retirement benefits                   (16,815)
       Excess tax benefits from share-
        based compensation                         -
       Other, net                             22,412
       Add:  Capital expenditures            414,872
       Net cash provided by operating
        activities                          $964,739

     NONRECURRING ITEMS
       (1)  -  Severance and related costs due to workforce reduction
                (including revenue effect).
       (2)  -  Includes (i) $72.4 million after-tax gains recorded upon
                 redemption of Rural Telephone Bank stock and sale of Arizona
                 properties, (ii) $7.2 million after-tax impairment of
                 nonoperating investments, (iii) $4.6 million severance and
                 related costs due to workforce reduction (including revenue
                 effect), net of tax, and (iv) $6.4 million net tax benefit
                 due to the resolution of various income tax audit issues.
       (3)  -  Expenses associated with Hurricanes Katrina and Rita (presented
                 on a pre-tax basis).
       (4)  -  Includes (i) a $10.0 million after-tax impairment of
                 nonoperating investment, a $3.7 million after-tax expense
                 related to purchasing and retiring approximately $400 million
                 of Series J notes and a $3.6 million after- tax expense
                 associated with Hurricanes Katrina and Rita, net of (ii) a
                 $3.3 million net benefit related to the settlement of various
                 income tax audits and a $2.2 million after-tax gain on sale
                 of nonoperating investment.



                               CenturyTel, Inc.
                      CONSOLIDATED STATEMENTS OF INCOME
                   FIRST, SECOND AND THIRD QUARTERS OF 2006
                ADJUSTED TO REFLECT THE APPLICATION OF SAB 108
                          PRESENTED ON A GAAP BASIS
                                 (UNAUDITED)


                                         Three months ended March 31, 2006
                                                                  As adjusted
                                       As           SAB 108           for
     In thousands, except           reported      Adjustments       SAB 108
      per share amounts

     OPERATING REVENUES
      Voice                        $217,449            (435) (1)  217,014
      Network access                225,246              77  (2)  225,323
      Data                           83,238                        83,238
      Fiber transport and CLEC       35,780                        35,780
      Other                          49,936                        49,936
                                    611,649            (358)      611,291

     OPERATING EXPENSES
      Cost of services and
       products                     222,952            (397) (1)  222,555
      Selling, general and
       administrative                95,940                        95,940
      Depreciation and
       amortization                 134,565             307 (2)   134,872
                                    453,457             (90)      453,367

     OPERATING INCOME               158,192            (268)      157,924

     OTHER INCOME (EXPENSE)
      Interest expense              (50,086)                      (50,086)
      Other income (expense)          4,597                         4,597
      Income tax expense            (43,278)            103 (3)   (43,175)

     NET INCOME                     $69,425            (165)       69,260

     BASIC EARNINGS PER SHARE         $0.57            0.00          0.57
     DILUTED EARNINGS PER SHARE       $0.55            0.00          0.55

     AVERAGE SHARES OUTSTANDING
    Basic                           122,394                       122,394
    Diluted                         127,959                       127,959

    DIVIDENDS PER COMMON SHARE      $0.0625                        0.0625



                                         Three months ended June 30, 2006

                                                                  As adjusted
                                       As           SAB 108           for
     In thousands, except           reported      Adjustments       SAB 108
      per share amounts

     OPERATING REVENUES
      Voice                         $216,786         (301) (1)      216,485
      Network access                 221,586           77  (2)      221,663
      Data                            84,447                         84,447
      Fiber transport and CLEC        36,051                         36,051
      Other                           50,261                         50,261
                                     609,131         (224)          608,907

     OPERATING EXPENSES
      Cost of services and products  216,466         (275) (1)      216,191
      Selling, general and
       administrative                 95,596                         95,596
      Depreciation and amortization  131,820          307  (2)      132,127
                                     443,882           32           443,914

    OPERATING INCOME                 165,249         (256)          164,993

    OTHER INCOME (EXPENSE)
     Interest expense                (50,639)                       (50,639)
     Other income (expense)          123,459                        123,459
     Income tax expense              (85,701)          98  (3)      (85,603)

    NET INCOME                      $152,368         (158)          152,210

    BASIC EARNINGS PER SHARE           $1.32         0.00              1.32
    DILUTED EARNINGS PER SHARE         $1.26         0.00              1.26

    AVERAGE SHARES OUTSTANDING
     Basic                           115,441                        115,441
     Diluted                         121,636                        121,636

    DIVIDENDS PER COMMON SHARE       $0.0625                         0.0625



                                     Three months ended September 30, 2006

                                                                  As adjusted
                                       As           SAB 108           for
     In thousands, except           reported      Adjustments       SAB 108
      per share amounts

    OPERATING REVENUES
     Voice                          $216,180         (323) (1)      215,857
     Network access                  219,820           77  (2)      219,897
     Data                             91,473                         91,473
     Fiber transport and CLEC         37,487                         37,487
     Other                            55,123                         55,123
                                     620,083         (246)          619,837
    OPERATING EXPENSES
     Cost of services and products   226,831         (295) (1)      226,536
     Selling, general and
      administrative                  94,212                         94,212
     Depreciation and amortization   129,840          307  (2)      130,147
                                     450,883           12           450,895

    OPERATING INCOME                 169,200         (258)          168,942

    OTHER INCOME (EXPENSE)
     Interest expense                (47,857)                       (47,857)
     Other income (expense)            2,818                          2,818
     Income tax expense              (47,678)          99 (3)       (47,579)

    NET INCOME                       $76,483         (159)           76,324

    BASIC EARNINGS PER SHARE            0.66         0.00              0.66
    DILUTED EARNINGS PER SHARE          0.65         0.00              0.64

    AVERAGE SHARES OUTSTANDING
     Basic                           115,221                        115,221
     Diluted                         120,448                        120,448

    DIVIDENDS PER COMMON SHARE       $0.0625                         0.0625

    SAB 108 adjustments
     (1) To record deferral of installation revenues and related costs.
     (2) To record amortization of additional billing system costs related to
         capitalized interest, including related revenue effect.
     (3) Tax effect of Items (1) and (2).


                                CenturyTel, Inc.
                      CONSOLIDATED STATEMENTS OF INCOME
                   FIRST, SECOND AND THIRD QUARTERS OF 2006
                ADJUSTED TO REFLECT THE APPLICATION OF SAB 108
                        PRESENTED ON A NON-GAAP BASIS
                                 (UNAUDITED)


                                       Three months ended March 31, 2006

                                  As reported                  As adjusted
                                   excluding                    excluding
                                      non-                         non-
                                   recurring       SAB 108      recurring
    In thousands, except             items       Adjustments      items

     per share amounts

    OPERATING REVENUES
     Voice                         $217,449         (435) (1)     217,014
     Network access                 224,118           77  (2)     224,195
     Data                            83,054                        83,054
     Fiber transport and CLEC        35,780                        35,780
     Other                           49,936                        49,936
                                    610,337         (358)         609,979

    OPERATING EXPENSES
     Cost of services and products  217,459         (397) (1)     217,062
     Selling, general and
      administrative                 95,258                        95,258
     Depreciation and amortization  134,565          307  (2)     134,872
                                    447,282          (90)         447,192

    OPERATING INCOME                163,055         (268)         162,787

    OTHER INCOME (EXPENSE)
     Interest expense               (50,086)                      (50,086)
     Other income (expense)           4,597                         4,597
     Income tax expense             (45,145)         103 (3)      (45,042)

    NET INCOME                      $72,421         (165)          72,256

    BASIC EARNINGS PER SHARE          $0.59         0.00             0.59
    DILUTED EARNINGS PER SHARE        $0.58         0.00             0.57

    AVERAGE SHARES OUTSTANDING
     Basic                          122,394                       122,394
     Diluted                        127,959                       127,959

    DIVIDENDS PER COMMON SHARE      $0.0625                        0.0625



                                       Three months ended March 31, 2006
                                  As reported                  As adjusted
                                   excluding                    excluding
                                      non-                         non-
                                   recurring       SAB 108      recurring
    In thousands, except             items       Adjustments      items
     per share amounts

    OPERATING REVENUES
     Voice                         $216,786        (301) (1)     216,485
     Network access                 221,586          77  (2)     221,663
     Data                            84,447                       84,447
     Fiber transport and CLEC        36,051                       36,051
     Other                           50,261                       50,261
                                    609,131        (224)         608,907

    OPERATING EXPENSES
     Cost of services and products  216,466        (275) (1)     216,191
     Selling, general and            95,596                       95,596
      administrative
     Depreciation and amortization  131,820         307  (2)     132,127
                                    443,882          32          443,914

    OPERATING INCOME                165,249        (256)         164,993

    OTHER INCOME (EXPENSE)
     Interest expense               (50,639)                     (50,639)
     Other income (expense)           4,810                        4,810
     Income tax expense             (45,858)         98 (3)      (45,760)

    NET INCOME                      $73,562        (158)          73,404

    BASIC EARNINGS PER SHARE          $0.64        0.00             0.64
    DILUTED EARNINGS PER SHARE        $0.61        0.00             0.61

    AVERAGE SHARES OUTSTANDING
     Basic                          115,441                      115,441
     Diluted                        121,636                      121,636

    DIVIDENDS PER COMMON SHARE      $0.0625                       0.0625



                                       Three months ended March 31, 2006
                                  As reported                  As adjusted
                                   excluding                    excluding
                                      non-                         non-
                                   recurring       SAB 108      recurring
    In thousands, except             items       Adjustments      items
     per share amounts

    OPERATING REVENUES
     Voice                         $216,180       (323) (1)      215,857
     Network access                 219,260         77  (2)      219,337
     Data                            91,382                       91,382
     Fiber transport and CLEC        37,487                       37,487
     Other                           55,123                       55,123
                                    619,432       (246)          619,186

    OPERATING EXPENSES
     Cost of services and products  223,739       (295) (1)      223,444
     Selling, general and
      administrative                 94,049                       94,049
     Depreciation and amortization  129,840        307 (2)       130,147
                                    447,628         12           447,640
    OPERATING INCOME                171,804       (258)          171,546

    OTHER INCOME (EXPENSE)
     Interest expense               (47,857)                     (47,857)
     Other income (expense)           2,818                        2,818
     Income tax expense             (48,678)        99 (3)       (48,579)

    NET INCOME                      $78,087       (159)           77,928

    BASIC EARNINGS PER SHARE          $0.68       0.00              0.68
    DILUTED EARNINGS PER SHARE        $0.66       0.00              0.66

    AVERAGE SHARES OUTSTANDING
     Basic                          115,221                      115,221
     Diluted                        120,448                      120,448

    DIVIDENDS PER COMMON SHARE      $ 0.0625                       0.0625

SOURCE CenturyTel, Inc.

CONTACT: 
Media: Patricia Cameron, +1-318-388-9674, patricia.cameron@centurytel.com, 

Investors: Tony Davis +1-318-388-9525, tony.davis@centurytel.com, both of CenturyTel, Inc.