MONROE, La., Oct. 27 /PRNewswire-FirstCall/ -- CenturyTel, Inc. (NYSE: CTL) announces operating results for third quarter 2008.

    -- Operating revenues, excluding nonrecurring items, were $650.1 million
       compared to $708.3 million for third quarter 2007. (Third quarter 2007
       revenues included the recognition of $42.2 million of prior period
       revenue settlements.) Reported under GAAP, third quarter 2008 operating
       revenues were $650.1 million.

    -- Net income, excluding nonrecurring items, was $82.8 million compared to
       $108.1 million in third quarter 2007. Reported under GAAP, third
       quarter 2008 net income was $84.7 million.

    -- Diluted earnings per share, excluding nonrecurring items, was $.82
       compared to $.97 in third quarter 2007.  Reported under GAAP, third
       quarter 2008 diluted earnings per share was $.84.

    -- Free cash flow (as defined in the attached financial schedules),
       excluding nonrecurring items, was $140.5 million in third quarter 2008
       compared to $167.3 million in third quarter 2007.

    -- Under the $750 million share repurchase program, 3.7 million shares
       were repurchased and retired for $137.5 million during the quarter.



    Third Quarter Highlights
    (Excluding nonrecurring items      Quarter Ended    Quarter Ended  %Change
     reflected in the attached            9/30/08          9/30/07
     financial schedules)
    (In thousands, except per share
     amounts and subscriber data)

    Operating Revenues                    $650,073         $708,306     (8.2)%
    Operating Cash Flow (1)               $309,079         $363,005    (14.9)%
    Net Income                             $82,760         $108,137    (23.5)%
    Diluted Earnings Per Share                $.82             $.97    (15.5)%
    Average Diluted Shares Outstanding    $100,988         $112,229    (10.0)%
    Capital Expenditures                   $70,606          $77,445     (8.8)%

    Access Lines                         2,041,000 (2)    2,171,000     (6.0)%
    High-Speed Internet Customers          628,000          530,000     18.5%

    (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)  Reflects the disconnect of approximately 1,400 Madison River internal
         company lines.


"CenturyTel continued to experience solid demand for broadband services as we added nearly 20,600 high-speed Internet customers during the third quarter," Glen F. Post, III, chairman and chief executive officer, said. "High-speed Internet revenues increased 21% over the same period a year ago, primarily due to our 18.5% growth in high-speed Internet customers since third quarter 2007."

Operating revenues, excluding nonrecurring items, for third quarter 2008 were $650.1 million compared to $708.3 million in third quarter 2007. This $58.2 million decrease was primarily due to $42.2 million of prior period revenue settlements recognized in third quarter 2007 upon the expiration of a regulatory monitoring period. The remaining $16.0 million decline primarily reflects the impact of access line losses and lower access revenues which more than offset revenue growth related to an increase in high-speed Internet subscribers.

Operating expenses, excluding nonrecurring items, decreased 2.6% to $469.3 million from $481.9 million in third quarter 2007, primarily due to lower depreciation expense associated with fully depreciated assets and reduced personnel expenses. These decreases more than offset an increase associated with growth in high-speed Internet customers.

Operating cash flow, excluding nonrecurring items, decreased to $309.1 million from $363.0 million in third quarter 2007, primarily due to the lower prior period revenue settlements and other revenue declines discussed above. For third quarter 2008, CenturyTel achieved an operating cash flow margin of 47.5% versus 51.2% in third quarter 2007.

"CenturyTel remains focused on providing high-quality, advanced communication services to our customers, including high bandwidth solutions that are critical to economic development and job growth," Post said. "Our strong cash flows enable us to continue to invest in fiber networks, broadband services and emerging technologies that support the communities we serve and provide a foundation for future revenue growth."

Net income, excluding nonrecurring items, was $82.8 million in third quarter 2008 compared to $108.1 million in third quarter 2007. The decrease was primarily driven by the after-tax impact of the decline in prior period revenue settlements discussed above, the revenue impact of access line losses and lower access revenues, along with lower earnings from CenturyTel's interest in an unconsolidated wireless partnership due to 2007 audit adjustments recorded by the general partner in third quarter 2008. Diluted earnings per share, excluding nonrecurring items, was $.82 for third quarter 2008, a 15.5% decrease from the $.97 reported in third quarter 2007. This decrease was primarily due to the lower net income as discussed above, partially offset by the 10.0% decline in average diluted shares outstanding as a result of share repurchases since third quarter 2007.

The Company suspended its share repurchase program on September 15, 2008 due to deterioration in the financial markets.

For the first nine months of 2008, operating revenues, excluding nonrecurring items, increased to $1.956 billion from $1.948 billion for the same period in 2007. Operating cash flow, excluding nonrecurring items, was $946.5 million for the first nine months of 2008 compared to $970.1 million a year ago. Net income, excluding nonrecurring items, was $260.1 million in the first nine months of 2008 compared to $264.4 million during the same period in 2007. Diluted earnings per share, excluding nonrecurring items, was $2.50 during the first nine months of 2008 compared to $2.34 in the first nine months of 2007.

Under generally accepted accounting principles (GAAP), net income for third quarter 2008 was $84.7 million compared to $113.2 million for third quarter 2007 and diluted earnings per share for third quarter 2008 was $.84 compared to $1.01 for third quarter 2007. Third quarter 2008 net income and diluted earnings per share reflect a net after-tax benefit of $2.0 million ($.02 per share) from the sale of a non-core asset. Third quarter 2007 net income and diluted earnings per share reflect a net after-tax charge of $1.4 million ($.01 per share) related to a reduction in workforce and a net after- tax gain of $6.4 million ($.06 per share) from the sale of a non-core asset.

Net income under GAAP for the first nine months of 2008 was $265.7 million compared to $303.3 million for the first nine months of 2007 and diluted earnings per share for the first nine months of 2008 was $2.55 compared to $2.68 for the first nine months of 2007. See the accompanying financial schedules for detail of the Company's nonrecurring items for the nine months ended September 30, 2008 and 2007.

Outlook. For fourth quarter 2008, CenturyTel expects total revenues of $635 to $645 million and diluted earnings per share of $.78 to $.83. The Company has also increased and narrowed the range of anticipated full year 2008 diluted earnings per share guidance from $3.20 to $3.30 to $3.28 to $3.33, which reflects actual year-to-date results and the fourth quarter outlook.

All outlook figures provided under this section are presented excluding the potential impact of any future mergers, acquisitions or divestitures, or other nonrecurring events.

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.

Other. Earlier this morning, CenturyTel and EMBARQ Corporation announced they had reached a definitive agreement under which CenturyTel will acquire EMBARQ in a tax-free, stock-for-stock transaction creating one of the leading communications companies in the United States. Information about the proposed merger between CenturyTel and EMBARQ can be found in a separate news release issued today.

Investor Call. CenturyTel and EMBARQ will co-host a conference call with the financial community today, October 27, 2008, at 10:00 am Eastern Time / 9:00 am Central Time to discuss the transaction announced this morning as well as CenturyTel's and EMBARQ's third quarter financial results. The conference call will be streamed live over CenturyTel's Web site at http://www.centurytel.com and over EMBARQ's Web site at http://www.embarq.com. Interested parties can also access the call by dialing (866) 610-1072 (international: (973) 935-2840), and referencing code 70807213, ten minutes prior to the start of the call.

A digital recording of the call will be available as promptly as practicable and ending November 10, 2008 at 11:59 pm Eastern Time / 10:59 pm Central Time. The replay can be accessed by dialing (800) 642-1687 (international: (706) 645-9291) and referencing code 70807213. A replay of the call will also be available on the investor relations sections of both companies' web sites.

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 pay a $2.80 per share common dividend annually, which may be affected by changes in its cash requirements, capital spending plans, cash flow or financial position; 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 and plans are described in greater detail in the Company's Annual Report on Form 10-K for the year ended December 31, 2007, as updated and supplemented 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 October 27, 2008. The Company undertakes no obligation to update any of its forward- looking statements for any reason.

Additional Information

CenturyTel and EMBARQ plan to file a joint proxy statement/prospectus with the SEC. INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. You will be able to obtain the joint proxy statement/prospectus, as well as other filings containing information about CenturyTel and EMBARQ, free of charge, at the website maintained by the SEC at www.sec.gov. Copies of the joint proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained, free of charge, by directing a request to CenturyTel, 100 CenturyTel Drive, Monroe, Louisiana, 71203 Attention: Corporate Secretary, or to EMBARQ, 5454 W. 100th Street, Overland Park, Kansas, 66211, Attention: Shareholder Relations. The respective directors and executive officers of CenturyTel and EMBARQ and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding CenturyTel's directors and executive officers is available in its proxy statement filed with the SEC by CenturyTel on March 27, 2008, and information regarding EMBARQ directors and executive officers is available in its proxy statement filed with the SEC by EMBARQ on March 17, 2008. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained the joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available. This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

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 SEPTEMBER 30, 2008 AND 2007
                                 (UNAUDITED)

                                    Three months ended September 30, 2008
                                                                As adjusted
                                                       Less      excluding
                                                       non-         non-
    In thousands, except per              As        recurring    recurring
     share amounts                     reported        items        items

     OPERATING REVENUES
        Voice                           $218,253                 218,253
        Network access                   205,385                 205,385
        Data                             132,631                 132,631
        Fiber transport and CLEC          38,006                  38,006
        Other                             55,798                  55,798
                                         650,073         -       650,073

OPERATING EXPENSES

        Cost of services and products    242,243                 242,243
        Selling, general and
         administrative                   98,751                  98,751
        Depreciation and amortization    128,352                 128,352
                                         469,346         -       469,346

     OPERATING INCOME                    180,727         -       180,727

     OTHER INCOME (EXPENSE)
        Interest expense                 (49,483)                (49,483)
        Other income (expense)             4,113     3,152 (1)       961
        Income tax expense               (50,624)   (1,179)(2)   (49,445)

     NET INCOME                          $84,733     1,973        82,760

     BASIC EARNINGS PER SHARE              $0.84      0.02          0.82
     DILUTED EARNINGS PER SHARE            $0.84      0.02          0.82

AVERAGE SHARES OUTSTANDING

        Basic                            100,402                 100,402
        Diluted                          100,988                 100,988

    DIVIDENDS PER COMMON SHARE           $1.3325                  1.3325


                    Three months ended September 30, 2007
                                         As adjusted                Increase
                                   Less    excluding               (decrease)
    In thousands,                  non-       non-     Increase     excluding
     except per           As    recurring recurring  (decrease)   nonrecurring
     share amounts     reported   items      items   as reported      items

OPERATING REVENUES

      Voice             229,862              229,862     (5.1%)        (5.1%)
      Network access    248,490      527(3)  247,963    (17.3%)       (17.2%)
      Data              134,630              134,630     (1.5%)        (1.5%)
      Fiber transport
       and CLEC          41,811               41,811     (9.1%)        (9.1%)
      Other              54,040               54,040      3.3%          3.3%
                        708,833      527     708,306     (8.3%)        (8.2%)

OPERATING EXPENSES

Cost of services

and products 246,430 1,967(3) 244,463 (1.7%) (0.9%)

Selling, general

and

administrative 101,612 774(3) 100,838 (2.8%) (2.1%)

Depreciation and

       amortization     136,606              136,606     (6.0%)        (6.0%)
                        484,648    2,741     481,907     (3.2%)        (2.6%)

OPERATING INCOME 224,185 (2,214) 226,399 (19.4%) (20.2%)

OTHER INCOME

(EXPENSE)

      Interest expense  (55,176)             (55,176)   (10.3%)       (10.3%)
      Other income
       (expense)         14,761   10,437(4)    4,324    (72.1%)       (77.8%)
      Income tax
       expense          (70,568)  (3,158)(5) (67,410)   (28.3%)       (26.7%)

     NET INCOME         113,202    5,065     108,137    (25.1%)       (23.5%)

     BASIC EARNINGS
      PER SHARE            1.04     0.05        0.99    (19.2%)       (17.2%)
     DILUTED EARNINGS
      PER SHARE            1.01     0.05        0.97    (16.8%)       (15.5%)

     AVERAGE SHARES
      OUTSTANDING
       Basic            108,996             108,996     (7.9%)         (7.9%)
       Diluted          112,229             112,229    (10.0%)        (10.0%)

    DIVIDENDS PER
     COMMON SHARE        0.0650              0.0650  1,950.0%       1,950.0%

NONRECURRING ITEMS

(1) - Gain on the sale of a non-core asset.

(2) - Tax effect of item (1).

(3) - Severance and related costs due to workforce reduction,

             including revenue impact.

(4) - Gain on the sale of a non-core asset.

(5) - Tax effect of items (3) and (4).



                               CenturyTel, Inc.
                      CONSOLIDATED STATEMENTS OF INCOME
                NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
                                 (UNAUDITED)

                                       Nine months ended September 30, 2008
                                                                  As adjusted
                                                          Less      excluding
                                                          non-         non-
    In thousands, except per                 As        recurring    recurring
     share amounts                        reported       items        items

     OPERATING REVENUES
        Voice                             $658,634                   658,634
        Network access                     621,987      1,012(1)     620,975
        Data                               390,463         21(1)     390,442
        Fiber transport and CLEC           120,805                   120,805
        Other                              164,904                   164,904
                                         1,956,793      1,033      1,955,760

OPERATING EXPENSES

        Cost of services and products      719,681                   719,681
        Selling, general and
         administrative                    297,212      7,655(1)     289,557
        Depreciation and amortization      394,990                   394,990
                                         1,411,883      7,655      1,404,228

     OPERATING INCOME                      544,910     (6,622)       551,532

     OTHER INCOME (EXPENSE)
        Interest expense                  (148,771)                 (148,771)
        Other income (expense)              25,437     12,713(2)      12,724
        Income tax expense                (155,916)      (524)(3)   (155,392)

     NET INCOME                           $265,660      5,567        260,093

     BASIC EARNINGS PER SHARE                $2.57       0.05           2.51
     DILUTED EARNINGS PER SHARE              $2.55       0.05           2.50

AVERAGE SHARES OUTSTANDING

        Basic                              103,396                   103,396
        Diluted                            104,086                   104,086

    DIVIDENDS PER COMMON SHARE             $1.4675                    1.4675


                    Nine months ended September 30, 2007
                                          As adjusted               Increase
                                   Less    excluding               (decrease)
    In thousands,                  non-       non-     Increase     excluding
     except per           As    recurring  recurring  (decrease)  nonrecurring
     share amounts     reported   items       items   as reported      items

OPERATING REVENUES

      Voice             664,435               664,435    (0.9%)        (0.9%)

Network access 726,091 49,514(4) 676,577 (14.3%) (8.2%)

      Data              338,700               338,700    15.3%         15.3%

Fiber transport

and CLEC 120,851 13(4) 120,838 (0.0%) (0.0%)

      Other             149,602    1,869(5)   147,733    10.2%         11.6%
                      1,999,679   51,396    1,948,283    (2.1%)         0.4%

OPERATING EXPENSES

Cost of services

and products 686,349 (2,085)(6) 688,434 4.9% 4.5%

Selling, general

and

administrative 290,525 774(6) 289,751 2.3% (0.1%)

Depreciation and

       amortization     398,701               398,701    (0.9%)        (0.9%)
                      1,375,575   (1,311)   1,376,886     2.6%          2.0%

OPERATING INCOME 624,104 52,707 571,397 (12.7%) (3.5%)

OTHER INCOME

(EXPENSE)

      Interest expense (159,804)             (159,804)   (6.9%)        (6.9%)
      Other income
       (expense)         28,131   10,437(7)    17,694    (9.6%)       (28.1%)
      Income tax
       expense         (189,094) (24,248)(8) (164,846)  (17.5%)        (5.7%)

     NET INCOME         303,337   38,896      264,441   (12.4%)        (1.6%)

     BASIC EARNINGS
      PER SHARE            2.77     0.36         2.41    (7.2%)         4.1%
     DILUTED EARNINGS
      PER SHARE            2.68     0.34         2.34    (4.9%)         6.8%

     AVERAGE SHARES
      OUTSTANDING
       Basic            109,478               109,478    (5.6%)        (5.6%)
       Diluted          114,086               114,086    (8.8%)        (8.8%)

    DIVIDENDS PER
     COMMON SHARE        0.1950                0.1950   652.6%        652.6%

NONRECURRING ITEMS

       (1) - Curtailment loss related to Supplemental Executive Retirement
             Plan, including revenue impact.
       (2) - Gain on the sales of non-core assets ($7.3 million), gain upon
             liquidation of Supplemental Executive Retirement Plan trust
             assets ($4.5 million), and interest income recorded upon the
             resolution of certain income tax audit issues ($919,000).
       (3) - Includes $2.3 million net income tax expense related to items
             (1) and (2) and $1.8 million income tax benefit recorded upon
             resolution of certain income tax audit issues.
       (4) - Revenue recorded upon settlement of a dispute with a carrier
             ($49.0 million) and revenue impact of severance and related costs
             due to workforce reductions ($.5 million).
       (5) - Reimbursement of amounts upon a change in our satellite
             television arrangement.
       (6) - Severance and related costs due to workforce reductions ($2.7
             million), net of reimbursement of amounts upon a change in our
             satellite television arrangement ($4.1 million).
       (7) - Gain on sale of non-core asset.
       (8) - Tax effects of items (4) through (7).



                               CenturyTel, Inc.
                         CONSOLIDATED BALANCE SHEETS
                   SEPTEMBER 30, 2008 AND DECEMBER 31, 2007
                                 (UNAUDITED)

                                               September 30,      December 31,
                                                   2008               2007
                                                       (in thousands)
                     ASSETS

CURRENT ASSETS

        Cash and cash equivalents                $258,957             34,402
        Other current assets                      249,826            257,997
           Total current assets                   508,783            292,399

NET PROPERTY, PLANT AND EQUIPMENT

        Property, plant and equipment           8,793,320          8,666,106
        Accumulated depreciation               (5,877,970)        (5,557,730)
           Net property, plant and
            equipment                           2,915,350          3,108,376

GOODWILL AND OTHER ASSETS

        Goodwill                                4,010,027          4,010,916
        Other                                     838,742            772,862
           Total goodwill and other
            assets                              4,848,769          4,783,778

    TOTAL ASSETS                               $8,272,902          8,184,553

             LIABILITIES AND EQUITY

CURRENT LIABILITIES

        Current maturities of long-term
         debt                                     $45,357            279,898
        Other current liabilities                 429,356            456,637
           Total current liabilities              474,713            736,535

    LONG-TERM DEBT                              3,299,266          2,734,357

DEFERRED CREDITS AND OTHER

     LIABILITIES                                1,302,683          1,304,456
    STOCKHOLDERS' EQUITY                        3,196,240          3,409,205

    TOTAL LIABILITIES AND EQUITY               $8,272,902          8,184,553



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

                                      Three months ended September 30, 2008
                                                                  As adjusted
                                                          Less      excluding
                                                          non-         non-
    In thousands                             As        recurring    recurring
                                          reported       items        items

Operating cash flow and cash flow

margin

       Operating income                   $180,727           -       180,727

Add: Depreciation and

        amortization                       128,352           -       128,352
       Operating cash flow                $309,079           -       309,079

       Revenues                           $650,073           -       650,073

Operating income margin (operating

        income divided by revenues)           27.8%                     27.8%

Operating cash flow margin

(operating cash flow divided by

        revenues)                             47.5%                     47.5%


Free cash flow (prior to debt

service requirements and dividends)

       Net income                          $84,733       1,973(1)     82,760

Add: Depreciation and

        amortization                       128,352           -       128,352

Less: Capital expenditures (70,606) - (70,606)

       Free cash flow                     $142,479       1,973       140,506

       Free cash flow                     $142,479
       Gain on asset dispositions           (3,811)
       Deferred income taxes                10,532

Changes in current assets and

        current liabilities                  3,337

Decrease in other noncurrent

        assets                               3,854

Increase (decrease) in other

        noncurrent liabilities               1,501
       Retirement benefits                   3,144

Excess tax benefits from share-

        based compensation                    (713)
       Other, net                            9,317
       Add:  Capital expenditures           70,606

Net cash provided by operating

        activities                        $240,246

                                      Three months ended September 30, 2007
                                                                  As adjusted
                                                          Less      excluding
                                                          non-         non-
    In thousands                             As        recurring    recurring
                                          reported       items        items

Operating cash flow and cash flow

margin

       Operating income                    224,185      (2,214)(2)   226,399

Add: Depreciation and

        amortization                       136,606           -       136,606
       Operating cash flow                 360,791      (2,214)      363,005

       Revenues                            708,833         527(2)    708,306

Operating income margin (operating

        income divided by revenues)           31.6%                     32.0%

Operating cash flow margin

(operating cash flow divided by

        revenues)                             50.9%                     51.2%


Free cash flow (prior to debt

service requirements and dividends)

       Net income                          113,202       5,065(3)    108,137

Add: Depreciation and

        amortization                       136,606           -       136,606

Less: Capital expenditures (77,445) - (77,445)

       Free cash flow                      172,363       5,065       167,298

       Free cash flow                      172,363

Gain on asset dispositions (10,436)

       Deferred income taxes                13,106

Changes in current assets and

        current liabilities                (42,321)

Decrease in other noncurrent

        assets                               4,400

Increase (decrease) in other

        noncurrent liabilities              (2,542)
       Retirement benefits                   6,745

Excess tax benefits from share-

        based compensation                    (122)
       Other, net                           12,770
       Add:  Capital expenditures           77,445

Net cash provided by operating

        activities                         231,408

NONRECURRING ITEMS

(1) - Gain on the sale of a non-core asset, net of tax.

(2) - Severance and related costs due to workforce reduction, including

             revenue impact (presented on a pre-tax basis).

(3) - After-tax effect of gain on sale of non-core asset and severance

             and related costs due to workforce reduction.



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

                                       Nine months ended September 30, 2008
                                                                  As adjusted
                                                          Less      excluding
                                                          non-         non-
    In thousands                             As        recurring    recurring
                                          reported       items        items

Operating cash flow and cash flow

margin

       Operating income                   $544,910     (6,622)(1)    551,532

Add: Depreciation and

        amortization                       394,990          -        394,990
       Operating cash flow                $939,900     (6,622)       946,522

       Revenues                         $1,956,793      1,033(1)   1,955,760

Operating income margin (operating

        income divided by revenues)           27.8%                     28.2%

Operating cash flow margin

(operating cash flow divided by

        revenues)                             48.0%                     48.4%


Free cash flow (prior to debt

service requirements and dividends)

       Net income                          $265,660     5,567(2)      260,093

Add: Depreciation and

        amortization                        394,990         -         394,990

Less: Capital expenditures (185,004) - (185,004)

       Free cash flow                      $475,646     5,567         470,079

       Free cash flow                      $475,646

Gain on asset dispositions and

liquidation of marketable

        securities                          (12,452)
       Deferred income taxes                 23,957

Changes in current assets and

        current liabilities                 (53,689)

Decrease in other noncurrent

        assets                                6,108

Decrease in other noncurrent

        liabilities                          (3,978)
       Retirement benefits                   21,346

Excess tax benefits from share-

        based compensation                     (787)
       Other, net                            26,078
       Add:  Capital expenditures           185,004

Net cash provided by operating

        activities                         $667,233

                                       Nine months ended September 30, 2007
                                                                  As adjusted
                                                          Less      excluding
                                                          non-         non-
    In thousands                             As        recurring    recurring
                                          reported       items        items

Operating cash flow and cash flow

margin

       Operating income                    624,104      52,707(3)     571,397

Add: Depreciation and

        amortization                       398,701           -        398,701
       Operating cash flow               1,022,805      52,707        970,098

       Revenues                          1,999,679      51,396(4)   1,948,283

Operating income margin (operating

        income divided by revenues)           31.2%                      29.3%

Operating cash flow margin

(operating cash flow divided by

        revenues)                             51.1%                      49.8%


Free cash flow (prior to debt

service requirements and dividends)

       Net income                          303,337     38,896(5)      264,441

Add: Depreciation and

        amortization                       398,701          -         398,701

Less: Capital expenditures (184,301) - (184,301)

       Free cash flow                      517,737     38,896         478,841

       Free cash flow                      517,737

Gain on asset dispositions and

liquidation of marketable

        securities                         (10,436)
       Deferred income taxes                43,111

Changes in current assets and

        current liabilities                 28,514

Decrease in other noncurrent

        assets                               8,053

Decrease in other noncurrent

        liabilities                        (14,209)
       Retirement benefits                  21,392

Excess tax benefits from share-

        based compensation                  (6,434)
       Other, net                           17,404
       Add: Capital expenditures           184,301

Net cash provided by operating

        activities                         789,433

NONRECURRING ITEMS

       (1) - Curtailment loss related to Supplemental Executive Retirement
             Plan, including revenue impact.
       (2) - Includes (i) after-tax impact of gain upon liquidation of
             Supplemental Executive Retirement Plan trust assets ($2.8
             million), (ii) after-tax impact of gain on sales of non-core
             assets ($4.6 million), and (iii) net benefit due to the
             resolution of certain income tax audit issues ($2.3 million), all
             partially offset by the after-tax impact of Item (1) ($4.1
             million).
       (3) - 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,
             net of (iii) impact of severance and related costs due to
             workforce reduction ($2.2 million).
       (4) - Includes (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).
       (5) - Includes after-tax gain on sale of non-core asset and the
             after-tax effect of Item (3).

SOURCE CenturyTel, Inc.