MONROE, La., Feb. 14 /PRNewswire-FirstCall/ -- CenturyTel, Inc. (NYSE: CTL) announces operating results for fourth quarter 2007.

-- Operating revenues, excluding nonrecurring items, increased 8.3% to $657.8 million from $607.7 million in fourth quarter 2006. Operating revenues, reported under GAAP, were $656.6 million.

-- Operating cash flow (as defined in the attached financial schedules), excluding nonrecurring items, grew 7.1% to $321.5 million from $300.0 million in fourth quarter 2006.

-- Net income, excluding nonrecurring items, increased 13.1% to $89.8 million from $79.4 million in fourth quarter 2006. Net income, reported under GAAP, was $115.0 million compared to $72.2 million in fourth quarter 2006.

-- Diluted earnings per share, excluding nonrecurring items, grew 20.6% to $.82 from $.68 in fourth quarter 2006, while GAAP diluted earnings per share was $1.04 in fourth quarter 2007 and $.62 in fourth quarter 2006.

-- Free cash flow (as defined in the attached financial schedules), excluding nonrecurring items, was $85.6 million in fourth quarter 2007 and a record $564.5 million for full year 2007.

-- Over 2.8 million shares were repurchased and retired for $122.1 million during the quarter.

    Fourth Quarter Highlights

    (Excluding nonrecurring
    items reflected in the
    attached financial
    schedules)
    (In thousands, except
    per share amounts and       Quarter Ended   Quarter Ended    % Change
    subscriber data)               12/31/07        12/31/06

    Operating Revenues             $657,846        $607,695          8.3%
    Operating Cash Flow (1)        $321,472        $300,039          7.1%
    Net Income                     $ 89,822        $ 79,449         13.1%
    Diluted Earnings Per Share     $    .82        $    .68         20.6%
    Average Diluted Shares
     Outstanding                   $110,119        $118,874        (7.4)%
    Capital Expenditures           $141,744        $101,037         40.3%

    Access Lines (2)              2,135,000       2,094,000          2.0%
    High-Speed Internet
     Customers (2)                  555,000         369,000         50.4%

    (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) Quarter ended 12/31/2007 access lines and high-speed Internet
        customers include the effects of our April 2007 Madison River
        acquisition. Excluding the effects of this acquisition, access lines
        decreased 5.7% and high-speed Internet customers increased 34.9%.


"CenturyTel achieved strong fourth quarter and full year 2007 results driven by solid demand for broadband services, the acquisition of the Madison River properties and our success in aligning our costs with the changing landscape of our business," Glen F. Post, III, chairman and chief executive officer, said. "We remain focused on our goal of being the premier broadband company in our markets, as high-speed Internet customers and data revenues increased 50% and 31%, respectively, during 2007."

Operating revenues, excluding nonrecurring items, increased 8.3% to $657.8 million in fourth quarter 2007 from $607.7 million in fourth quarter 2006. Revenue increases during the quarter of approximately $73 million resulted primarily from $49 million in revenue contribution from the Madison River properties acquired in second quarter 2007, along with growth in high-speed Internet customers and long distance minutes of use. These increases were partially offset by revenue declines of approximately $23 million primarily attributable to previously anticipated access line losses and lower access revenues, along with lower revenues under the amended satellite television agreement.

Operating expenses, excluding nonrecurring items, increased 9.2% to $473.9 million from $434.0 million in fourth quarter 2006, principally due to expenses associated with the Madison River properties, growth in high-speed Internet customers and marketing activities, which were partially offset by lower personnel costs.

"We generated record free cash flow of $564 million this year while also making strategic capital investments of $326 million," Post said. "Additionally, we returned nearly $490 million to shareholders during 2007 through the repurchase of nearly 10.2 million common shares for approximately $460 million and $29 million in cash dividends."

Operating cash flow, excluding nonrecurring items, for fourth quarter 2007 grew 7.1% to $321.5 million from $300.0 million in fourth quarter 2006. CenturyTel achieved an operating cash flow margin, excluding nonrecurring items, of 48.9% during the quarter versus 49.4% in fourth quarter 2006. This margin decline was expected due to the growth in lower margin revenues and the anticipated decline in higher margin revenues discussed above.

Other income and income tax expense were favorably impacted during fourth quarter 2007 due, respectively, to higher income from the Company's equity interest in a wireless partnership and a lower effective tax rate.

Net income, excluding nonrecurring items, was $89.8 million, a 13.1% increase from $79.4 million in fourth quarter 2006. Diluted earnings per share, excluding nonrecurring items, increased 20.6% to $.82 in fourth quarter 2007 compared to $.68 in fourth quarter 2006 due to the items discussed above and the reduction in diluted shares outstanding as a result of share repurchases during 2007.

For the year 2007, operating revenues, excluding nonrecurring items, were $2.606 billion compared to $2.446 billion in 2006, a 6.6% increase. Operating cash flow, excluding nonrecurring items, was $1.292 billion for 2007 compared to $1.197 billion a year ago. Net income, excluding nonrecurring items, was $354.3 million compared to $303.0 million in 2006, while diluted earnings per share was $3.16 compared to $2.52 in 2006.

Under generally accepted accounting principles (GAAP), net income for fourth quarter 2007 was $115.0 million compared to $72.2 million for fourth quarter 2006. Diluted earnings per share was $1.04 in fourth quarter 2007 compared to $.62 in fourth quarter 2006. Fourth quarter 2007 results reflect an after-tax benefit of $1.8 million related to hurricane-related insurance reimbursements, an after-tax benefit of $2.4 million related to the liquidation of Rural Telephone Bank stock, and a $32.7 million tax benefit related to the adjustment of income tax reserves, which were partially offset by $12.2 million of after-tax impairment charges associated with certain operating and non-operating investments described further in the attached financial schedules. Fourth quarter 2006 results reflect after-tax impairment charges of $7.2 million associated with certain non-operating investments.

Under GAAP, for the year 2007, the Company reported net income of $418.4 million, or $3.72 per diluted share, compared to net income of $370.0 million, or $3.07 per diluted share, for the year 2006. See the accompanying financial schedules for detail of the Company's nonrecurring items for the years 2007 and 2006.

Outlook for 2008. For full year 2008, CenturyTel anticipates operating revenues to be flat to modestly higher than 2007 operating revenues. The Company expects revenue increases associated with the full year contribution of the Madison River acquisition versus the eight months recognized in 2007 and growth in high-speed Internet and data revenues. These increases are expected to offset revenue declines associated with the $42 million of revenue settlements recorded in third quarter 2007 that will not reoccur in 2008, lower access revenues, reduced universal service funding and access line losses.

For full year 2008, CenturyTel anticipates diluted earnings per share to be in the range of $2.90 to $3.00. The following items are expected to have a positive impact on 2008 diluted earnings per share:

-- anticipated further penetration of broadband service offerings and expected cost efficiencies (including incremental synergies associated with the Madison River properties) - $.16 to $.20; and
-- share repurchases made during 2007 and January 2008 along with anticipated lower interest expense - $.22 to $.24.

The following items are expected to negatively impact 2008 diluted earnings per share:

-- lower revenue settlements mentioned above -- ($.23) to ($.25);
-- reduced interstate universal service funding -- ($.08) to ($.10); and
-- anticipated access line losses of 4.5% to 6.0%, continued pressure on access revenues and expected lower income in 2008 from the Company's equity interest in a wireless partnership -- ($.28) to ($.30).

For first quarter 2008, CenturyTel expects total revenues of $646 to $656 million and diluted earnings per share of $.69 to $.73.

Finally, the Company expects its capital expenditures in 2008 to be approximately $300 million, an 8% reduction from 2007 capital expenditures of $326 million.

These 2008 outlook figures exclude the effects of nonrecurring items, any share repurchases made after January 31, 2008, and any future mergers, acquisitions, divestitures or other similar business transactions.

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 schedules. 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 http://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 866.244.4635. The call will be accessible for replay through February 20, 2008, by calling 888.266.2081 and entering the conference ID number 1185533. 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 http://www.centurytel.com prior to March 5, 2008.

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 adjust to changes in the communications industry; the Company's ability to effectively manage its expansion opportunities, including 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 continued access to credit markets on favorable terms; 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, 2006, 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 14, 2008. 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 http://www.centurytel.com.


                                CenturyTel, Inc.
                        CONSOLIDATED STATEMENTS OF INCOME
                  THREE MONTHS ENDED DECEMBER 31, 2007 AND 2006
                                   (UNAUDITED)

                                         Three months ended December 31, 2007
                                                                   As adjusted
                                                        Less        excluding
                                                        non-          non-
     In thousands, except per share           As      recurring     recurring
      amounts                              reported     items         items

     OPERATING REVENUES
        Voice*                              $225,525                  225,525
        Network access                       215,415     (1,216)(1)   216,631
        Data                                 122,055        (68)(1)   122,123
        Fiber transport and CLEC              38,466                   38,466
        Other*                                55,101                   55,101
                                             656,562     (1,284)      657,846

     OPERATING EXPENSES
        Cost of services and products        251,026     13,740 (2)   237,286
        Selling, general and
         administrative                       99,008        (80)(2)    99,088
        Depreciation and amortization        137,554                  137,554
                                             487,588     13,660       473,928

     OPERATING INCOME                        168,974    (14,944)      183,918

     OTHER INCOME (EXPENSE)
        Interest expense                     (53,102)                 (53,102)
        Other income (expense)                10,639      2,206 (3)     8,433
        Income tax expense                   (11,478)    37,949 (4)   (49,427)

     NET INCOME                             $115,033     25,211        89,822

     BASIC EARNINGS PER SHARE                  $1.05       0.23          0.82
     DILUTED EARNINGS PER SHARE                $1.04       0.23          0.82

     AVERAGE SHARES OUTSTANDING
        Basic                                109,008                  109,008
        Diluted                              110,119                  110,119

    DIVIDENDS PER COMMON SHARE               $0.0650                   0.0650



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

     OPERATING REVENUES
       Voice*               214,208              214,208       5.3%      5.3%
       Network access       211,819              211,819       1.7%      2.3%
       Data                  92,337               92,337      32.2%     32.3%
       Fiber transport
        and CLEC             39,770               39,770      (3.3%)    (3.3%)
       Other*                49,561               49,561      11.2%     11.2%
                            607,695      -       607,695       8.0%      8.3%

     OPERATING EXPENSES
       Cost of services
        and products        223,132              223,132      12.5%      6.3%
       Selling, general
        and administrative   84,524               84,524      17.1%     17.2%
       Depreciation and
        amortization        126,360              126,360       8.9%      8.9%
                            434,016      -       434,016      12.3%      9.2%

     OPERATING INCOME       173,679      -       173,679      (2.7%)     5.9%

     OTHER INCOME
     (EXPENSE)
       Interest expense     (47,375)             (47,375)     12.1%     12.1%
       Other income
        (expense)            (9,306) (11,715)(5)   2,409    (214.3%)   250.1%
       Income tax expense   (44,765)   4,499 (6) (49,264)    (74.4%)     0.3%

     NET INCOME              72,233   (7,216)     79,449      59.3%     13.1%

     BASIC EARNINGS
      PER SHARE                0.63    (0.06)       0.70      66.7%     17.1%
     DILUTED EARNINGS
      PER SHARE                0.62    (0.06)       0.68      67.7%     20.6%

     AVERAGE SHARES
      OUTSTANDING
       Basic                113,629              113,629      (4.1%)    (4.1%)
       Diluted              118,874              118,874      (7.4%)    (7.4%)

    DIVIDENDS PER
     COMMON SHARE            0.0625               0.0625       4.0%      4.0%

    NONRECURRING ITEMS
       (1)  -  Revenue reduction associated with gain on liquidation of
               Rural Telephone Bank.
       (2)  -  Includes write-down due to impairment of CLEC assets
               ($16.6 million), net of insurance reimbursements associated
               with previously recorded hurricane related expenses
               ($3.0 million).
       (3) -   Includes gain on liquidation of Rural Telephone Bank
               ($5.2 million), net of $3.0 million impairment of a
               nonoperating investment.
       (4)  -  Includes $32.7 million benefit due to the recognition of
               previously unrecognized tax benefits in accordance with FIN 48,
               plus the aggregate tax effect of Items (1) through (3).
       (5)  -  Impairment of nonoperating investments.
       (6)  -  Tax effect of Item (5).

    * Revenues from voice mail services previously reflected in "Other"
      revenues have been reclassified to "Voice" revenues for all periods.



                                CenturyTel, Inc.
                        CONSOLIDATED STATEMENTS OF INCOME
                 TWELVE MONTHS ENDED DECEMBER 31, 2007 AND 2006
                                   (UNAUDITED)

                                         Twelve months ended December 31, 2007
                                                                  As adjusted
                                                       Less        excluding
                                                       non-           non-
     In thousands, except per share           As     recurring      recurring
      amounts                              reported    items          items

     OPERATING REVENUES
        Voice*                            $  889,960                  889,960
        Network access                       941,506   48,298  (1)    893,208
        Data                                 460,755      (68) (1)    460,823
        Fiber transport and CLEC             159,317       13  (1)    159,304
        Other*                               204,703    1,869  (2)    202,834
                                           2,656,241   50,112       2,606,129

     OPERATING EXPENSES
        Cost of services and products        937,375   11,655  (3)    925,720
        Selling, general and
         administrative                      389,533      694  (3)    388,839
        Depreciation and amortization        536,255                  536,255
                                           1,863,163   12,349       1,850,814

     OPERATING INCOME                        793,078   37,763         755,315

     OTHER INCOME (EXPENSE)
        Interest expense                    (212,906)                (212,906)
        Other income (expense)                38,770   12,643  (4)     26,127
        Income tax expense                  (200,572)  13,701  (5)   (214,273)

     NET INCOME                           $  418,370   64,107         354,263

     BASIC EARNINGS PER SHARE             $     3.82     0.59            3.24
     DILUTED EARNINGS PER SHARE           $     3.72     0.57            3.16

     AVERAGE SHARES OUTSTANDING
        Basic                                109,360                  109,360
        Diluted                              113,094                  113,094

    DIVIDENDS PER COMMON SHARE            $     0.26                     0.26



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

     OPERATING REVENUES
       Voice*            $  871,767                871,767      2.1%     2.1%
       Network access       878,702    1,688 (6)   877,014      7.1%     1.8%
       Data                 351,495      275 (6)   351,220     31.1%    31.2%
       Fiber transport
        and CLEC            149,088                149,088      6.9%     6.9%
       Other*               196,678                196,678      4.1%     3.1%
                          2,447,730    1,963     2,445,767      8.5%     6.6%

     OPERATING EXPENSES
       Cost of services
        and products        888,414    8,585 (6)   879,829      5.5%     5.2%
       Selling, general
        and administrative  370,272      845 (6)   369,427      5.2%     5.3%
       Depreciation and
        amortization        523,506                523,506      2.4%     2.4%
                          1,782,192    9,430     1,772,762      4.5%     4.4%

     OPERATING INCOME       665,538   (7,467)      673,005     19.2%    12.2%

     OTHER INCOME
      (EXPENSE)
       Interest expense    (195,957)              (195,957)     8.6%     8.6%
       Other income
        (expense)           121,568  106,934 (7)    14,634    (68.1%)   78.5%
       Income tax expense  (221,122) (32,477)(8)  (188,645)    (9.3%)   13.6%

     NET INCOME          $  370,027   66,990       303,037     13.1%    16.9%

     BASIC EARNINGS
      PER SHARE          $     3.17     0.57          2.59     20.5%    25.1%
     DILUTED EARNINGS
      PER SHARE          $     3.07     0.55          2.52     21.2%    25.4%

     AVERAGE SHARES
      OUTSTANDING
       Basic                116,671                116,671     (6.3%)   (6.3%)
       Diluted              122,229                122,229     (7.5%)   (7.5%)

    DIVIDENDS PER
     COMMON SHARE        $     0.25                   0.25      4.0%     4.0%

     NONRECURRING ITEMS
       (1) -  Includes (i) revenue recorded upon settlement of a dispute
              with a carrier ($49.0 million) and (ii) revenue impact of
              severance and related costs due to workforce reductions
              ($.5 million), net of (iii) revenue reduction associated with
              gain on liquidation of Rural Telephone Bank ($1.3 million).
       (2) -  Reimbursement of amounts upon a change in our satellite
              television arrangement.
       (3) -  Includes (i) write-down due to impairment of CLEC assets
              ($16.6 million) and (ii) severance and related costs due to
              workforce reductions ($2.7 million), net of (iii) reimbursement
              of amounts upon a change in our satellite television arrangement
              ($4.1 million) and (iv) insurance reimbursements associated with
              previously recorded hurricane related expenses ($3.0 million).
       (4) -  Includes (i) gain on sale of non-core asset ($10.4 million) and
              (ii) gain on liquidation of Rural Telephone Bank ($5.2 million),
              net of (iii) $3.0 million impairment of a nonoperating
              investment.
       (5) -  Includes (i) $32.7 million benefit due to the recognition of
              previously unrecognized tax benefits in accordance with FIN 48,
              net of the aggregate tax effects of items (1) through (4)
              ($19.0 million).
       (6) -  Severance and related costs due to workforce reduction,
              including revenue effect.
       (7) -  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.
       (8) -  Includes $38.9 million net tax expense related to Items (6) and
              (7), net of $6.4 million net tax benefit due to the resolution
              of various income tax audit issues.

    * Revenues from voice mail services previously reflected in "Other"
      revenues have been reclassified to "Voice" revenues for all periods.



                                  CenturyTel, Inc.
                             CONSOLIDATED BALANCE SHEETS
                       DECEMBER 31, 2007 AND DECEMBER 31, 2006
                                     (UNAUDITED)

                                              December 31,       December 31,
                                                  2007               2006
                                                       (in thousands)
                     ASSETS
    CURRENT ASSETS
        Cash and cash equivalents            $     34,402             25,668
        Other current assets                      257,997            264,449
           Total current assets                   292,399            290,117

    NET PROPERTY, PLANT AND EQUIPMENT
        Property, plant and equipment           8,677,141          7,893,760
        Accumulated depreciation               (5,557,730)        (4,784,483)
           Net property, plant and equipment    3,119,411          3,109,277

    GOODWILL AND OTHER ASSETS
        Goodwill                                4,005,966          3,431,136
        Other                                     769,862            610,477
            Total goodwill and other assets     4,775,828          4,041,613


    TOTAL ASSETS                             $  8,187,638          7,441,007


             LIABILITIES AND EQUITY
    CURRENT LIABILITIES
        Short-term debt and current
         maturities of long-term debt        $    279,898            178,012
        Other current liabilities                 456,637            439,553
            Total current liabilities             736,535            617,565

    LONG-TERM DEBT                              2,734,357          2,412,852
    DEFERRED CREDITS AND OTHER LIABILITIES      1,307,541          1,219,639
    STOCKHOLDERS' EQUITY                        3,409,205          3,190,951

    TOTAL LIABILITIES AND EQUITY             $  8,187,638          7,441,007



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

                                         Three months ended December 31, 2007
                                                                 As adjusted
                                                       Less       excluding
                                                       non-         non-
     In thousands                            As     recurring     recurring
                                          reported    items         items
     Operating cash flow and
      cash flow margin
       Operating income                  $  168,974   (14,944)(1)   183,918
       Add:  Depreciation and
        amortization                        137,554         -       137,554
       Operating cash flow               $  306,528   (14,944)      321,472

       Revenues                          $  656,562    (1,284)(2)   657,846

       Operating income margin (operating
        income divided by revenues)           25.7%                   28.0%

       Operating cash flow margin
        (operating cash flow divided by
        revenues)                             46.7%                   48.9%


     Free cash flow (prior to debt
      service requirements and dividends)
       Net income                        $  115,033    25,211 (3)    89,822
       Add:  Depreciation and
        amortization                        137,554         -       137,554
       Less:  Capital expenditures         (141,744)        -      (141,744)
       Free cash flow                    $  110,843    25,211        85,632

       Free cash flow                    $  110,843
       Gain on asset dispositions            (5,207)
       Deferred income taxes                (42,093)
       Changes in current assets and
        current liabilities                   9,094
       Decrease in other noncurrent
        assets                                4,665
       Increase in other noncurrent
        liabilities                          (6,163)
       Retirement benefits                    5,549
       Excess tax benefits from share-
        based compensation                        7
       Other, net                            22,114
       Add:  Capital expenditures           141,744
       Net cash provided by operating
        activities                       $  240,553



                                         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)(4)     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
       Gain on asset dispositions                  -
       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                             14,267
       Add:  Capital expenditures            101,037
       Net cash provided by operating
        activities                         $ 218,211

     NONRECURRING ITEMS
       (1)  -  Includes write-down due to impairment of CLEC assets
               ($16.6 million) and revenue reduction associated with gain from
               liquidation of Rural Telephone Bank ($1.3 million), net of
               insurance reimbursements associated with previously recorded
               hurricane related expenses ($3.0 million).
       (2)  -  Revenue effect of gain from liquidation of Rural Telephone
               Bank.
       (3)  -  Includes (i) $32.7 million income tax benefit due to the
               recognition of previously unrecognized tax benefits in
               accordance with FIN 48, (ii) the after-tax effects of (a) the
               gain from liquidation of the Rural Telephone Bank, including
               revenue effect, and (b) insurance reimbursements associated
               with previously recorded hurricane related expenses, net of
               (iii) the after-tax effects of (a) the write-down due to
               impairment of CLEC assets and (b) the impairment of a
               nonoperating investment.
       (4)  -  Impairment of nonoperating investments (presented on an
               after-tax basis).



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

                                         Twelve months ended December 31, 2007
                                                                  As adjusted
                                                        Less        excluding
                                                        non-           non-
     In thousands                             As      recurring     recurring
                                           reported     items          items
     Operating cash flow and
      cash flow margin
       Operating income                    $  793,078   37,763 (1)    755,315
       Add:  Depreciation and
        amortization                          536,255        -        536,255
       Operating cash flow                 $1,329,333   37,763      1,291,570

       Revenues                            $2,656,241   50,112 (2)  2,606,129

       Operating income margin (operating
        income divided by revenues)             29.9%                   29.0%

       Operating cash flow margin
        (operating cash flow divided by
        revenues)                               50.0%                   49.6%


     Free cash flow (prior to debt
      service requirements and dividends)
       Net income                          $  418,370   64,107 (3)    354,263
       Add:  Depreciation and
        amortization                          536,255        -        536,255
       Less:  Capital expenditures           (326,045)       -       (326,045)
                                           $  628,580   64,107        564,473

       Free cash flow                      $  628,580
       Gain on asset dispositions             (15,643)
       Deferred income taxes                    1,018
       Changes in current assets and
        current liabilities                    37,608
       Decrease in other noncurrent
        assets                                 12,718
       Increase in other noncurrent
        liabilities                           (20,372)
       Retirement benefits                     26,941
       Excess tax benefits from share-
        based compensation                     (6,427)
       Other, net                              39,518
       Add:  Capital expenditures             326,045
       Net cash provided by operating
        activities                         $1,029,986



                                         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)(4)    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 (4)  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 (5)    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)
       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                             19,085
       Add:  Capital expenditures            314,071
       Net cash provided by operating
        activities                        $  840,719

     NONRECURRING ITEMS
       (1)  -  Includes (i) $49.0 million revenue recorded upon settlement of
               a dispute with a carrier; (ii) $5.9 million reimbursement of
               amounts upon a change in our satellite television arrangement
               and (iii) $3.0 million insurance reimbursements associated with
               previously recorded hurricane related expenses.  These
               favorable items were partially offset by (i) write-down due to
               impairment of CLEC assets ($16.6 million), (ii) impact of
               severance and related costs due to workforce reduction ($2.2
               million), and (iii) revenue reduction associated with gain from
               liquidation of Rural Telephone Bank ($1.3 million).
       (2)  -  Includes the sum of (i) $49.0 million revenue recorded upon
               settlement of a dispute with a carrier; (ii) $1.9 million
               reimbursement of amounts upon a change in our satellite
               television arrangement and (iii) revenue impact of severance
               and related costs due to workforce reduction ($.5 million), net
               of revenue reduction associated with gain from liquidation of
               Rural Telephone Bank ($1.3 million).
       (3)  -  Includes the after-tax impact of Item (1), the after-tax gain
               on the sale of a non-core asset, the after-tax gain from
               liquidation of Rural Telephone Bank, the after-tax impairment
               of a nonoperating investment, and $32.7 million income tax
               benefit due to the recognition of previously unrecognized tax
               benefits in accordance with FIN 48.
       (4)  -  Severance and related costs due to workforce reduction
               (including revenue effect).
       (5)  -  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.