8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

July 27, 2006

CenturyTel, Inc.

(Exact name of registrant as specified in its charter)

Louisiana	1-7784	72-0651161
(State or other jurisdiction of	(Commission File Number)	(I.R.S. Employer
incorporation or organization)		Identification No.)

100 CenturyTel Drive, Monroe, Louisiana 71203

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (318) 388-9000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240. 14a-12)
[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.Results of Operations and Financial Condition.

The following information, except for any forward-looking statements (including our forecasts for the upcoming quarter and full year 2006) and except for our references to non-GAAP financial measures (as defined in Regulation G promulgated by the Securities and Exchange Commission), shall be deemed incorporated by reference into any registration statement heretofore and hereafter filed by us under the Securities Act of 1933, as amended, except to the extent that such incorporated information is superceded by information as of a subsequent date that is included in or incorporated by reference into any such registration statement. None of the following information shall be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

On July 27, 2006, we issued a press release announcing our second quarter 2006 consolidated operating results. More complete information on our operating results will be included in our Quarterly Report on Form 10-Q for the period ended June 30, 2006, which we expect to file shortly with the Securities and Exchange Commission. The complete press release is included as Exhibit 99.

Item 9.01.Financial Statements and Exhibits.

(d)      Exhibit.

99      Press release dated July 27, 2006 reporting second quarter 2006 operating results.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CENTURYTEL, INC.
Dated: July 27, 2006	By: /s/ Neil A. Sweasy
	Neil A. Sweasy
	Vice President and Controller

EX-99

Exhibit 99

FOR IMMEDIATE RELEASE	FOR MORE INFORMATION CONTACT:
July 27, 2006	Media: Patricia Cameron 318.388.9674
	patricia.cameron@centurytel.com
	Investors: Tony Davis 318.388.9525
	tony.davis@centurytel.com

CenturyTel Reports Second Quarter Earnings

Monroe, La… 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
(Excluding nonrecurring items)	6/30/2006		6/30/2005				% Change
(In thousands, except per share amounts and customer units)
Operating Revenues	$	609,131	$	606,413			0.4	%
Operating Cash Flow   (1)	$	297,069	$	316,334			(6.1	)%
Net Income	$	73,562	$	85,118			(13.6	)%
Diluted Earnings Per Share	$	0.61	$	0.64			(4.7	)%
Average Diluted Shares Outstanding		121,636		135,345			(10.1	)%
Capital Expenditures	$	70,367	$	102,011			(31.0	)%
Telephone Access Lines		2,168,317		2,273,279	(2	)	(4.6	)%
High-speed Internet Customers		312,853		194,847			60.60	%
(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 flowdecreased 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											Three months ended June 30, 2005
									As adjusted								As adjusted						Increase
				Less					excluding						Less		excluding						(decrease)
				non-					non-						non-		non-			Increase			excluding
	As			recurring					recurring			As			recurring		recurring			(decrease)			nonrecurring
In thousands, except per share amounts	reported			items					items			reported			items		items			as reported			items
OPERATING REVENUES
Voice*	$	216,786								216,786			221,708					221,708			(2.2	%)		(2.2	%)
Network access		221,586								221,586			239,404					239,404			(7.4	%)		(7.4	%)
Data		84,447								84,447			76,049					76,049			11.0	%		11.0	%
Fiber transport and CLEC		36,051								36,051			21,636					21,636			66.6	%		66.6	%
Other		50,261								50,261			47,616					47,616			5.6	%		5.6	%
		609,131			-					609,131			606,413			-		606,413			0.4	%		0.4	%
OPERATING EXPENSES
Cost of services and products		216,466								216,466			194,873					194,873			11.1	%		11.1	%
Selling, general and administrative		95,596								95,596			95,206					95,206			0.4	%		0.4	%
Depreciation and amortization		131,820								131,820			130,452					130,452			1.0	%		1.0	%
		443,882			-					443,882			420,531			-		420,531			5.6	%		5.6	%
OPERATING INCOME		165,249			-					165,249			185,882			-		185,882			(11.1	%)		(11.1	%)
OTHER INCOME (EXPENSE)
Interest expense		(50,639	)							(50,639	)		(49,647	)				(49,647	)		2.0	%		2.0	%
Income from unconsolidated cellular entity		2,076								2,076			724					724			186.7	%		186.7	%
Nonrecurring gains		118,649			118,649		(1	)		-			-					-			-			-
Other income (expense)		2,734								2,734			1,220					1,220			124.1	%		124.1	%
Income tax expense		(85,701	)		(39,843	)	(2	)		(45,858	)		(53,061	)				(53,061	)		61.5	%		(13.6	%)
NET INCOME	$	152,368			78,806					73,562			85,118			-		85,118			79.0	%		(13.6	%)
BASIC EARNINGS PER SHARE	$	1.32			0.68					0.64			0.65					0.65			103.1	%		(1.5	%)
DILUTED EARNINGS PER SHARE	$	1.26			0.65					0.61			0.64					0.64			96.9	%		(4.7	%)
AVERAGE SHARES OUTSTANDING
Basic		115,441								115,441			130,299					130,299			(11.4	%)		(11.4	%)
Diluted		121,636								121,636			135,345					135,345			(10.1	%)		(10.1	%)
DIVIDENDS PER COMMON SHARE	$	0.0625								0.0625			0.0600					0.0600			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.
* 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												Six months ended June 30, 2005
										As adjusted											As adjusted						Increase
					Less					excluding						Less					excluding						(decrease)
					non-					non-						non-					non-			Increase			excluding
		As			recurring					recurring			As			recurring					recurring			(decrease)			nonrecurring
In thousands, except per share amounts		reported			items					items			reported			items					items			as reported			items
OPERATING REVENUES
Voice*		$	434,235								434,235			446,208								446,208			(2.7	%)		(2.7	%)
Network access			446,832			1,128		(1	)		445,704			469,682								469,682			(4.9	%)		(5.1	%)
Data			167,685			184		(1	)		167,501			148,955								148,955			12.6	%		12.5	%
Fiber transport and CLEC			71,831								71,831			41,879								41,879			71.5	%		71.5	%
Other			100,197								100,197			94,971								94,971			5.5	%		5.5	%
			1,220,780			1,312					1,219,468			1,201,695			-					1,201,695			1.6	%		1.5	%
OPERATING EXPENSES
Cost of services and products			439,418			5,493		(1	)		433,925			386,866								386,866			13.6	%		12.2	%
Selling, general and administrative			191,536			682		(1	)		190,854			189,460								189,460			1.1	%		0.7	%
Depreciation and amortization			266,385								266,385			262,627								262,627			1.4	%		1.4	%
			897,339			6,175					891,164			838,953			-					838,953			7.0	%		6.2	%
OPERATING INCOME			323,441			(4,863	)				328,304			362,742			-					362,742			(10.8	%)		(9.5	%)
OTHER INCOME (EXPENSE)
Interest expense			(100,725	)							(100,725	)		(102,272	)		(1,196	)	(4	)		(101,076	)		(1.5	%)		(0.3	%)
Income from unconsolidated cellular entity			4,149								4,149			2,037								2,037			103.7	%		103.7	%
Nonrecurring gains			118,649			118,649		(2	)		-			-								-			-			-
Other income (expense)			5,258								5,258			2,755			(1,574	)	(5	)		4,329			90.9	%		21.5	%
Income tax expense			(128,979	)		(37,976	)	(3	)		(91,003	)		(100,528	)		2,395		(6	)		(102,923	)		28.3	%		(11.6	%)
NET INCOME		$	221,793			75,810					145,983			164,734			(375	)				165,109			34.6	%		(11.6	%)
BASIC EARNINGS PER SHARE		$	1.86			0.64					1.23			1.25								1.26			48.8	%		(2.4	%)
DILUTED EARNINGS PER SHARE		$	1.80			0.61					1.19			1.23								1.23			46.3	%		(3.3	%)
AVERAGE SHARES OUTSTANDING
Basic			118,917								118,917			131,241								131,241			(9.4	%)		(9.4	%)
Diluted			124,798								124,798			136,257								136,257			(8.4	%)		(8.4	%)
DIVIDENDS PER COMMON SHARE		$	0.1250								0.1250			0.1200								0.1200			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.
*  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, 2006				Dec. 31, 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											Three months ended June 30, 2005
								As adjusted								As adjusted
				Less				excluding						Less		excluding
				non-				non-						non-		non-
In thousands	As			recurring				recurring			As			recurring		recurring
	reported			items				items			reported			items		items
Operating cash flow and cash flow margin
Operating income	$	165,249			-				165,249			185,882			-		185,882
Add: Depreciation and amortization		131,820							131,820			130,452					130,452
Operating cash flow	$	297,069			-				297,069			316,334			-		316,334
Revenues	$	609,131			-				609,131			606,413			-		606,413
Operating income margin (operating income divided by revenues)		27.1	%						27.1	%		30.7	%				30.7	%
Operating cash flow margin (operating cash flow divided by revenues)		48.8	%						48.8	%		52.2	%				52.2	%
Free cash flow (prior to debt service requirements and dividends)
Net income	$	152,368			78,806	(1	)		73,562			85,118			-		85,118
Add: Depreciation and amortization		131,820			-				131,820			130,452			-		130,452
Less: Capital expenditures		(70,367	)		-				(70,367	)		(102,011	)		-		(102,011	)
Free cash flow	$	213,821			78,806				135,015			113,559			-		113,559
Free cash flow	$	213,821										113,559
Nonrecurring gains		(118,649	)									-
Income from unconsolidated cellular entity		(2,076	)									(724	)
Deferred income taxes		12,830										3,806
Changes in current assets and current liabilities		31,674										(8,669	)
(Increase) decrease in other noncurrent assets		3,162										(119	)
Increase in other noncurrent liabilities		593										145
Retirement benefits		7,548										6,513
Excess tax benefits from share-based compensation		(761	)									-
Other, net		3,778										5,572
Add: Capital expenditures		70,367										102,011
Net cash provided by operating activities	$	222,287										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										Six months ended June 30, 2005
									As adjusted								As adjusted
				Less					excluding				Less				excluding
				non-					non-				non-				non-
	As			recurring					recurring		As		recurring				recurring
In thousands	reported			items					items		reported		items				items
Operating cash flow and cash flow margin
Operating income	$	323,441			(4,863	)	(1	)	328,304		362,742		-				362,742
Add: Depreciation and amortization		266,385							266,385		262,627						262,627
Operating cash flow	$	589,826			(4,863	)			594,689		625,369		-				625,369
Revenues	$	1,220,780			1,312		(1	)	1,219,468		1,201,695		-				1,201,695
Operating income margin (operating income divided      by revenues)		26.5	%						26.9	%	30.2	%					30.2	%
Operating cash flow margin (operating cash flow divided     by revenues)		48.3	%						48.8	%	52.0	%					52.0	%
Free cash flow (prior to debt service requirements   and dividends)
Net income	$	221,793			75,810		(2	)	145,983		164,734		(375	)	(3	)	165,109
Add: Depreciation and amortization		266,385			-				266,385		262,627		-				262,627
Less: Capital expenditures		(130,455	)		-				(130,455	)	(176,914	)	-				(176,914	)
Free cash flow	$	357,723			75,810				281,913		250,447		(375	)			250,822
Free cash flow	$	357,723									250,447
Nonrecurring gains		(118,649	)								-
Income from unconsolidated cellular entity		(4,149	)								(2,037	)
Deferred income taxes		22,352									25,947
Changes in current assets and current liabilities		(306	)								18,954
(Increase) decrease in other noncurrent assets		969									(1,477	)
Increase (decrease) in other noncurrent liabilities		1,550									(584	)
Retirement benefits		14,926									12,517
Excess tax benefits from share-based compensation		(4,947	)								-
Other, net		6,393									(1,768	)
Add: Capital expenditures		130,455									176,914
Net cash provided by operating activities	$	406,317									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.