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CenturyTel Reports Second Quarter Earnings

July 27, 2006

MONROE, La.--(BUSINESS WIRE)--July 27, 2006--

CenturyTel, Inc. (NYSE: CTL) announces operating results for second quarter 2006.

    --  Net income, excluding nonrecurring items, declined 13.6% to
        $73.6 million compared to $85.1 million in second quarter
        2005. Reported under GAAP, second quarter 2006 net income was
        $152.4 million.

    --  Diluted earnings per share, excluding nonrecurring items,
        decreased 4.7% to $.61 from $.64 in second quarter 2005.
        Reported under GAAP, second quarter 2006 diluted earnings per
        share was $1.26.

    --  Free cash flow (as defined in the attached financial
        schedules), excluding nonrecurring items, was $135.0 million
        in second quarter 2006 compared to $113.6 million in second
        quarter 2005.

----------------------------------------------------------------------
Second Quarter Highlights        Quarter Ended Quarter Ended % Change
 (Excluding nonrecurring items)    6/30/06        6/30/05
  (In thousands, except per share
   amounts and customer units)
----------------------------------------------------------------------
  Operating Revenues
  Operating Cash Flow (1)        $   609,131   $  606,413        0.4%
  Net Income                     $   297,069   $  316,334       (6.1)%
  Diluted Earnings Per Share     $    73,562   $   85,118      (13.6)%
  Average Diluted Shares         $       .61   $      .64       (4.7)%
   Outstanding                       121,636      135,345      (10.1)%
  Capital Expenditures           $    70,367   $  102,011      (31.0)%

----------------------------------------------------------------------

  Telephone Access Lines           2,168,317    2,273,279       (4.6)%
  High-speed Internet Customers      312,853      194,847 (2)   60.6%

----------------------------------------------------------------------

    (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) Includes approximately 2,000 access lines in our Arizona
        telephone properties which were sold in second quarter 2006.

"CenturyTel delivered solid results as we experienced strong demand for broadband services and communications bundles during the quarter," Glen F. Post, III, chairman and chief executive officer, said. "The 60% growth in high-speed Internet customers and 45% growth in related revenues over the past twelve months reflect CenturyTel's focus on being the broadband provider of choice in our markets."

Operating revenues rose 0.4% to $609.1 million in second quarter 2006 from $606.4 million in second quarter 2005. This increase primarily resulted from revenues from metro fiber assets acquired in mid-2005 and data revenue growth from high-speed Internet subscribers. These increases more than offset revenue declines attributable to access line losses and lower access revenues.

Operating expenses increased 5.6% to $443.9 million from $420.5 million in second quarter 2005 primarily due to growth in our high-speed Internet connections and expenses related to the metro fiber assets acquired in mid-2005.

Operating cash flow decreased to $297.1 million from $316.3 million. CenturyTel achieved an operating cash flow margin of 48.8% during the quarter versus 52.2% in second quarter 2005. This margin decline was principally driven by access line losses and lower USF and access revenues, along with the growth in lower margin services such as high-speed Internet, fiber transport and CLEC.

Net income, excluding nonrecurring items, was $73.6 million in second quarter 2006 compared to $85.1 million in second quarter 2005. The decrease was primarily driven by the decline in operating cash flow discussed above. Diluted earnings per share, excluding nonrecurring items, was $.61 for second quarter 2006, a 4.7% decrease from the $.64 reported in second quarter 2005. This decrease was driven by lower net income, which was partially offset by the 10.1% decline in average diluted shares outstanding that was a result of share repurchases since second quarter 2005.

As announced July 19, 2006, all repurchases under the Company's February 2006 accelerated share repurchase agreements entered into with investment banks for approximately 14.36 million shares were recently completed and CenturyTel paid the banks $28.4 million cash as final settlement of the agreements. The Company has $500 million remaining under its $1 billion share repurchase program authorized in February of this year.

"We are pleased that the accelerated share repurchase program was completed in less than five months. We currently expect to continue purchasing shares under the remaining $500 million in the open market," Post said.

For the first six months of 2006, operating revenues, excluding nonrecurring items, increased to $1.219 billion from $1.202 billion for the same period in 2005. Operating cash flow, excluding nonrecurring items, was $594.7 million for the first half of 2006 compared to $625.4 million a year ago. Net income, excluding nonrecurring items, was $146.0 million in the first six months of 2006 compared to $165.1 million during the same period in 2005. Diluted earnings per share, excluding nonrecurring items, was $1.19 during the first half of 2006 compared to $1.23 in the first half of 2005.

Under generally accepted accounting principles (GAAP), net income for second quarter 2006 was $152.4 million compared to $85.1 million for second quarter 2005 and diluted earnings per share for second quarter 2006 was $1.26 compared to $.64 for second quarter 2005. Second quarter 2006 net income and diluted earnings per share include a $72.4 million after-tax benefit related to the dissolution of the Rural Telephone Bank and a $6.4 million positive impact from the resolution of various income tax audit issues.

Net income under GAAP for the first six months of 2006 was $221.8 million compared to $164.7 million for the first six months of 2005 and diluted earnings per share for the first six months of 2006 was $1.80 compared to $1.23 for the first six months of 2005. See the accompanying financial schedules for detail of the Company's nonrecurring items for the six months ended June 30, 2006 and 2005.

For the third quarter 2006, CenturyTel expects total revenues of $605 to $615 million and diluted earnings per share of $.57 to $.61. For the full year 2006, diluted earnings per share is expected to be in the range of $2.35 to $2.45, an increase over the $2.30 to $2.40 range previously provided. This increase in 2006 diluted earnings per share guidance is primarily due to the better than anticipated results during second quarter 2006 and the expectation of operating costs being lower in the second half of 2006 than previously anticipated.

These outlook figures exclude nonrecurring items and the potential impact of any future mergers, acquisitions, divestitures, refinancing, share repurchases 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 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 866.814.1912. The call will be accessible for replay through August 2, 2006, by calling 888.266.2081 and entering the access code: 930453. 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 August 17, 2006.

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 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 July 27, 2006. 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 JUNE 30, 2006 AND 2005
                              (UNAUDITED)


                                      Three months ended June 30, 2006
                                     ---------------------------------

                                                                As
                                                              adjusted
                                                  Less       excluding
                                                  non-         non-
In thousands, except per share           As     recurring    recurring
amounts                              reported    items        items
                                     --------- ----------   ----------

 OPERATING REVENUES
     Voice(a)                       $ 216,786                 216,786
     Network access                   221,586                 221,586
     Data                              84,447                  84,447
     Fiber transport and CLEC          36,051                  36,051
     Other                             50,261                  50,261
                                     --------- ----------   ----------
                                      609,131          -      609,131
                                     --------- ----------   ----------

 OPERATING EXPENSES
     Cost of services and products    216,466                 216,466
     Selling, general and
      administrative                   95,596                  95,596
     Depreciation and amortization    131,820                 131,820
                                     --------- ----------   ----------
                                      443,882          -      443,882
                                     --------- ----------   ----------

 OPERATING INCOME                     165,249          -      165,249

 OTHER INCOME (EXPENSE)
     Interest expense                 (50,639)                (50,639)
     Income from unconsolidated
      cellular entity                   2,076                   2,076
     Nonrecurring gains               118,649    118,649 (1)        -
     Other income (expense)             2,734                   2,734
     Income tax expense               (85,701)   (39,843)(2)  (45,858)

                                     --------- ----------   ----------
 NET INCOME                         $ 152,368     78,806       73,562
                                     ========= ==========   ==========

 BASIC EARNINGS PER SHARE           $    1.32       0.68         0.64
 DILUTED EARNINGS PER SHARE         $    1.26       0.65         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 June 30, 2005
                                      -------------------------------
                                                               As
                                                             adjusted
                                                   Less     excluding
                                                   non-       non-
                                          As     recurring  recurring
 In thousands, except per share        reported    items      items
  amounts
                                      --------- ---------- ----------

 OPERATING REVENUES
  Voice(a)                             221,708               221,708
  Network access                       239,404               239,404
  Data                                  76,049                76,049
  Fiber transport and CLEC              21,636                21,636
  Other                                 47,616                47,616
                                      --------- ---------- ----------
                                       606,413          -    606,413
                                      --------- ---------- ----------

 OPERATING EXPENSES
  Cost of services and products        194,873               194,873
  Selling, general and administrative   95,206                95,206
  Depreciation and amortization        130,452               130,452
                                      --------- ---------- ----------
                                       420,531          -    420,531
                                      --------- ---------- ----------

 OPERATING INCOME                      185,882          -    185,882

 OTHER INCOME (EXPENSE)
  Interest expense                     (49,647)              (49,647)
  Income from unconsolidated cellular
   entity                                  724                   724
  Nonrecurring gains                         -                     -
  Other income (expense)                 1,220                 1,220
  Income tax expense                   (53,061)              (53,061)

                                      --------- ---------- ----------
 NET INCOME                             85,118          -     85,118
                                      ========= ========== ==========

 BASIC EARNINGS PER SHARE                 0.65                  0.65
 DILUTED EARNINGS PER SHARE               0.64                  0.64

 AVERAGE SHARES OUTSTANDING
  Basic                                130,299               130,299
  Diluted                              135,345               135,345

DIVIDENDS PER COMMON SHARE              0.0600                0.0600

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

 OPERATING REVENUES
    Voice(a)                                      (2.2%)        (2.2%)
    Network access                                (7.4%)        (7.4%)
    Data                                           11.0%         11.0%
    Fiber transport and CLEC                       66.6%         66.6%
    Other                                           5.6%          5.6%
                                                    0.4%          0.4%

 OPERATING EXPENSES
    Cost of services and products                  11.1%         11.1%
    Selling, general and administrative             0.4%          0.4%
    Depreciation and amortization                   1.0%          1.0%
                                                    5.6%          5.6%

 OPERATING INCOME                                (11.1%)       (11.1%)

 OTHER INCOME (EXPENSE)
    Interest expense                                2.0%          2.0%
    Income from unconsolidated cellular entity    186.7%        186.7%
    Nonrecurring gains                                -             -
    Other income (expense)                        124.1%        124.1%
    Income tax expense                             61.5%       (13.6%)

 NET INCOME                                        79.0%       (13.6%)

 BASIC EARNINGS PER SHARE                         103.1%        (1.5%)
 DILUTED EARNINGS PER SHARE                        96.9%        (4.7%)

 AVERAGE SHARES OUTSTANDING
    Basic                                        (11.4%)       (11.4%)
    Diluted                                      (10.1%)       (10.1%)

DIVIDENDS PER COMMON SHARE                          4.2%          4.2%

 NONRECURRING ITEMS
    (1) - Includes gain recorded upon redemption of Rural Telephone
          Bank stock ($117.8 million) and gain recorded upon sale of
          Arizona properties ($.9 million).
    (2) - Includes $46.3 million aggregate tax expense related to Item
          (1), net of $6.4 million net tax benefit due to the
          resolution of various income tax audit issues.

    (a) 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
                SIX MONTHS ENDED JUNE 30, 2006 AND 2005
                              (UNAUDITED)


                                      Six months ended June 30, 2006
                                    ----------------------------------
                                                                As
                                                              adjusted
                                                  Less       excluding
                                                  non-         non-
                                        As      recurring    recurring
 In thousands, except per share      reported     items        items
  amounts                           ---------- ----------   ----------


 OPERATING REVENUES
      Voice(a)                     $  434,235                 434,235
      Network access                  446,832      1,128 (1)  445,704
      Data                            167,685        184 (1)  167,501
      Fiber transport and CLEC         71,831                  71,831
      Other                           100,197                 100,197
                                    ---------- ----------   ----------
                                    1,220,780      1,312    1,219,468
                                    ---------- ----------   ----------

 OPERATING EXPENSES
      Cost of services and products   439,418      5,493 (1)  433,925
      Selling, general and
       administrative                 191,536        682 (1)  190,854
      Depreciation and amortization   266,385                 266,385
                                    ---------- ----------   ----------
                                      897,339      6,175      891,164
                                    ---------- ----------   ----------

 OPERATING INCOME                     323,441     (4,863)     328,304

 OTHER INCOME (EXPENSE)
      Interest expense               (100,725)               (100,725)
      Income from unconsolidated
       cellular entity                  4,149                   4,149
      Nonrecurring gains              118,649    118,649 (2)        -
      Other income (expense)            5,258                   5,258
      Income tax expense             (128,979)   (37,976)(3)  (91,003)

                                    ---------- ----------   ----------
 NET INCOME                        $  221,793     75,810      145,983
                                    ========== ==========   ==========

 BASIC EARNINGS PER SHARE          $     1.86       0.64         1.23
 DILUTED EARNINGS PER SHARE        $     1.80       0.61         1.19

 AVERAGE SHARES OUTSTANDING
      Basic                           118,917                 118,917
      Diluted                         124,798                 124,798

DIVIDENDS PER COMMON SHARE         $   0.1250                  0.1250



                                     Six months ended June 30, 2005
                                   ----------------------------------
                                                               As
                                                            adjusted
                                                 Less       excluding
                                                 non-         non-
                                       As      recurring    recurring
 In thousands, except per share     reported     items        items
  amounts
                                   ---------- ----------   ----------

 OPERATING REVENUES
  Voice(a)                           446,208                 446,208
  Network access                     469,682                 469,682
  Data                               148,955                 148,955
  Fiber transport and
   CLEC                               41,879                  41,879
  Other                               94,971                  94,971
                                   ---------- ----------   ----------
                                   1,201,695          -    1,201,695
                                   ---------- ----------   ----------

 OPERATING EXPENSES
  Cost of services and
   products                          386,866                 386,866
  Selling, general and
   administrative                    189,460                 189,460
  Depreciation and
   amortization                      262,627                 262,627
                                   ---------- ----------   ----------
                                     838,953          -      838,953
                                   ---------- ----------   ----------

 OPERATING INCOME                    362,742          -      362,742

 OTHER INCOME (EXPENSE)
  Interest expense                  (102,272)    (1,196)(4) (101,076)
  Income from unconsolidated
   cellular entity                     2,037                   2,037
  Nonrecurring gains                       -                       -
  Other income (expense)               2,755     (1,574)(5)    4,329
  Income tax expense                (100,528)     2,395 (6) (102,923)

                                   ---------- ----------   ----------
 NET INCOME                          164,734       (375)     165,109
                                   ========== ==========   ==========

 BASIC EARNINGS PER SHARE               1.25                    1.26
 DILUTED EARNINGS PER
  SHARE                                 1.23                    1.23

 AVERAGE SHARES OUTSTANDING
  Basic                              131,241                 131,241
  Diluted                            136,257                 136,257

DIVIDENDS PER COMMON
 SHARE                                0.1200                  0.1200


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

 OPERATING REVENUES
    Voice(a)                                      (2.7%)        (2.7%)
    Network access                                (4.9%)        (5.1%)
    Data                                           12.6%         12.5%
    Fiber transport and CLEC                       71.5%         71.5%
    Other                                           5.5%          5.5%
                                                    1.6%          1.5%

 OPERATING EXPENSES
    Cost of services and products                  13.6%         12.2%
    Selling, general and administrative             1.1%          0.7%
    Depreciation and amortization                   1.4%          1.4%
                                                    7.0%          6.2%

 OPERATING INCOME                                (10.8%)        (9.5%)

 OTHER INCOME (EXPENSE)
    Interest expense                              (1.5%)        (0.3%)
    Income from unconsolidated cellular
     entity                                       103.7%        103.7%
    Nonrecurring gains                                -             -
    Other income (expense)                         90.9%         21.5%
    Income tax expense                             28.3%       (11.6%)

 NET INCOME                                        34.6%       (11.6%)

 BASIC EARNINGS PER SHARE                          48.8%        (2.4%)
 DILUTED EARNINGS PER SHARE                        46.3%        (3.3%)

 AVERAGE SHARES OUTSTANDING
    Basic                                         (9.4%)        (9.4%)
    Diluted                                       (8.4%)        (8.4%)

DIVIDENDS PER COMMON SHARE                          4.2%          4.2%

NONRECURRING ITEMS

    (1) - Severance and related costs due to workforce reduction,
          including revenue impact.

    (2) - Includes gain recorded upon redemption of Rural Telephone
          Bank stock ($117.8 million) and gain recorded upon sale of
          Arizona properties ($.9 million).

    (3) - Includes $44.4 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) - Write-off of unamortized deferred debt costs associated with
          purchasing and retiring approximately $400 million of Series
          J notes.

    (5) - Includes (i) $4.8 million debt extinguishment charge related
          to purchasing and retiring approximately $400 million of
          Series J notes, net of (ii) $3.2 million of interest income
          related to the settlement of various income tax audits.

    (6) - Includes (i) $1.1 million net tax benefit of Items (4) and
          (5) and (ii) $1.3 million tax benefit related to the
          settlement of various income tax audits.

    (a) 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
                   JUNE 30, 2006 AND DECEMBER 31, 2005
                               (UNAUDITED)

                                                June 30,    Dec. 31,
                                                  2006        2005
                                               ----------- -----------
                                                    (in thousands)
                     ASSETS
CURRENT ASSETS
  Cash and cash equivalents                   $     1,769     158,846
  Other current assets                            238,483     264,170
                                               ----------- -----------
     Total current assets                         240,252     423,016
                                               ----------- -----------

NET PROPERTY, PLANT AND EQUIPMENT
  Property, plant and equipment                 7,844,529   7,801,377
  Accumulated depreciation                     (4,672,522) (4,496,891)
                                               ----------- -----------
     Net property, plant and equipment          3,172,007   3,304,486
                                               ----------- -----------

GOODWILL AND OTHER ASSETS
  Goodwill                                      3,431,136   3,432,649
  Other                                           590,589     602,556
                                               ----------- -----------
      Total goodwill and other assets           4,021,725   4,035,205
                                               ----------- -----------


TOTAL ASSETS                                  $ 7,433,984   7,762,707
                                               =========== ===========


             LIABILITIES AND EQUITY
CURRENT LIABILITIES
  Current maturities of long-term debt        $   381,455     276,736
  Other current liabilities                       438,641     469,494
                                               ----------- -----------
      Total current liabilities                   820,096     746,230

LONG-TERM DEBT                                  2,239,263   2,376,070
DEFERRED CREDITS AND OTHER LIABILITIES          1,073,065   1,023,134
STOCKHOLDERS' EQUITY                            3,301,560   3,617,273
                                               ----------- -----------

TOTAL LIABILITIES AND EQUITY                  $ 7,433,984   7,762,707
                                               =========== ===========


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


                                      Three months ended June 30, 2006
                                     ---------------------------------
                                                                As
                                                              adjusted
                                                  Less       excluding
                                                  non-         non-
 In thousands                            As     recurring    recurring
                                      reported    items        items
                                     --------------------   ----------
 Operating cash flow and cash flow
  margin
  Operating income                  $ 165,249          -      165,249
  Add:  Depreciation and
   amortization                       131,820                 131,820
                                     --------- ----------   ----------
  Operating cash flow               $ 297,069          -      297,069
                                     ========= ==========   ==========

  Revenues                          $ 609,131          -      609,131
                                     ========= ==========   ==========

  Operating income margin (operating
   income divided by revenues)           27.1%                   27.1%
                                     =========              ==========

  Operating cash flow margin
   (operating cash flow divided by
   revenues)                             48.8%                   48.8%
                                     =========              ==========


 Free cash flow (prior to debt
  service requirements and
  dividends)
  Net income                        $ 152,368     78,806 (1)   73,562
  Add:  Depreciation and
   amortization                       131,820          -      131,820
  Less:  Capital expenditures         (70,367)         -      (70,367)
                                     --------- ----------   ----------
  Free cash flow                    $ 213,821     78,806      135,015
                                     ========= ==========   ==========

  Free cash flow                    $ 213,821
  Nonrecurring gains                 (118,649)
  Income from unconsolidated
   cellular entity                     (2,076)
  Deferred income taxes                12,830
  Changes in current assets and
   current liabilities                 31,674
  (Increase) decrease in other
   noncurrent assets                    3,162
  Increase in other noncurrent
   liabilities                            593
  Retirement benefits                   7,548
  Excess tax benefits from share-
   based compensation                    (761)
  Other, net                            3,778
  Add:  Capital expenditures           70,367
                                     ---------
  Net cash provided by operating
   activities                       $ 222,287
                                     =========


                                      Three months ended June 30, 2005
                                      --------------------------------
                                                                As
                                                              adjusted
                                                    Less     excluding
                                                    non-       non-
 In thousands                              As     recurring  recurring
                                        reported    items      items
                                       -------------------- ----------
 Operating cash flow and cash
  flow margin
  Operating income                      185,882          -    185,882
  Add:  Depreciation and
   amortization                         130,452               130,452
                                       --------- ---------- ----------
  Operating cash flow                   316,334          -    316,334
                                       ========= ========== ==========

  Revenues                              606,413          -    606,413
                                       ========= ========== ==========

  Operating income margin (operating
   income divided by revenues)             30.7%                 30.7%
                                       =========            ==========

  Operating cash flow margin
   (operating cash flow divided by
   revenues)                               52.2%                 52.2%
                                       =========            ==========


 Free cash flow (prior to
  debt service requirements
  and dividends)
  Net income                             85,118          -     85,118
  Add:  Depreciation and
   amortization                         130,452          -    130,452
  Less:  Capital expenditures          (102,011)         -   (102,011)
                                       --------- ---------- ----------
  Free cash flow                        113,559          -    113,559
                                       ========= ========== ==========

  Free cash flow                        113,559
  Nonrecurring gains                          -
  Income from unconsolidated
   cellular entity                         (724)
  Deferred income taxes                   3,806
  Changes in current assets
   and current liabilities               (8,669)
  (Increase) decrease in
   other noncurrent assets                 (119)
  Increase in other
   noncurrent liabilities                   145
  Retirement benefits                     6,513
  Excess tax benefits from
   share-based compensation                   -
  Other, net                              5,572
  Add:  Capital expenditures            102,011
                                       ---------
  Net cash provided by
   operating activities                 222,094
                                       =========

 NONRECURRING ITEMS

    (1) - Includes (i) $72.4 million after-tax gains recorded upon
          redemption of Rural Telephone Bank stock and sale of Arizona
          properties and (ii) $6.4 million net tax benefit due to the
          resolution of various income tax audit issues.


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


                                      Six months ended June 30, 2006
                                    ----------------------------------
                                                                As
                                                              adjusted
                                                  Less       excluding
                                                  non-         non-
 In thousands                           As      recurring    recurring
                                     reported     items        items
                                    ---------------------   ----------
 Operating cash flow and cash flow
  margin
   Operating income                $  323,441     (4,863)(1)  328,304
   Add:  Depreciation and
    amortization                      266,385                 266,385
                                    ---------- ----------   ----------
   Operating cash flow             $  589,826     (4,863)     594,689
                                    ========== ==========   ==========

   Revenues                        $1,220,780      1,312 (1)1,219,468
                                    ========== ==========   ==========

   Operating income margin
    (operating income divided by
    revenues)                            26.5%                   26.9%
                                    ==========              ==========

   Operating cash flow margin
    (operating cash flow divided by
    revenues)                            48.3%                   48.8%
                                    ==========              ==========


 Free cash flow (prior to debt
  service requirements and
  dividends)
   Net income                      $  221,793     75,810 (2)  145,983
   Add:  Depreciation and
    amortization                      266,385          -      266,385
   Less:  Capital expenditures       (130,455)         -     (130,455)
                                    ---------- ----------   ----------
   Free cash flow                  $  357,723     75,810      281,913
                                    ========== ==========   ==========

   Free cash flow                  $  357,723
   Nonrecurring gains                (118,649)
   Income from unconsolidated
    cellular entity                    (4,149)
   Deferred income taxes               22,352
   Changes in current assets and
    current liabilities                  (306)
   (Increase) decrease in other
    noncurrent assets                     969
   Increase (decrease) in other
    noncurrent liabilities              1,550
   Retirement benefits                 14,926
   Excess tax benefits from share-
    based compensation                 (4,947)
   Other, net                           6,393
   Add:  Capital expenditures         130,455
                                    ----------
   Net cash provided by operating
    activities                     $  406,317
                                    ==========


                                      Six months ended June 30, 2005
                                    ----------------------------------
                                                                As
                                                             adjusted
                                                  Less       excluding
                                                  non-         non-
 In thousands                           As      recurring    recurring
                                     reported     items        items
                                    ---------------------   ----------
 Operating cash flow and cash flow
  margin
  Operating income                    362,742          -      362,742
  Add:  Depreciation and
   amortization                       262,627                 262,627
                                    ---------- ----------   ----------
  Operating cash flow                 625,369          -      625,369
                                    ========== ==========   ==========

  Revenues                          1,201,695          -    1,201,695
                                    ========== ==========   ==========

  Operating income margin
   (operating income divided by
   revenues)                             30.2%                   30.2%
                                    ==========              ==========

  Operating cash flow margin
   (operating cash flow divided by
   revenues)                             52.0%                   52.0%
                                    ==========              ==========


 Free cash flow (prior to debt
  service requirements and
  dividends)
  Net income                          164,734       (375)(3)  165,109
  Add:  Depreciation and
   amortization                       262,627          -      262,627
  Less:  Capital expenditures        (176,914)         -     (176,914)
                                    ---------- ----------   ----------
  Free cash flow                      250,447       (375)     250,822
                                    ========== ==========   ==========

  Free cash flow                      250,447
  Nonrecurring gains                        -
  Income from unconsolidated
   cellular entity                     (2,037)
  Deferred income taxes                25,947
  Changes in current assets and
   current liabilities                 18,954
  (Increase) decrease in other
   noncurrent assets                   (1,477)
  Increase (decrease) in other
   noncurrent liabilities                (584)
  Retirement benefits                  12,517
  Excess tax benefits from share-
   based compensation                       -
  Other, net                           (1,768)
  Add:  Capital expenditures          176,914
                                    ----------
  Net cash provided by operating
   activities                         478,913
                                    ==========

 NONRECURRING ITEMS

    (1) - Severance and related costs due to workforce reduction,
          including revenue impact.

    (2) - Includes (i) $72.4 million after-tax gains recorded upon
          redemption of Rural Telephone Bank stock and sale of Arizona
          properties, (ii) $3.0 million severance and related costs
          due to workforce reduction, including revenue impact, net of
          tax, and (iii) $6.4 million net tax benefit due to the
          resolution of various income tax audit issues.

    (3) - Includes (i) $3.7 million after-tax expense related to
          purchasing and retiring approximately $400 million of Series
          J notes, net of (ii) $3.3 million net benefit related to the
          settlement of various income tax audits.

Source: CenturyTel, Inc.