Unassociated Document

CenturyTel Reports Fourth Quarter 2006 Earnings

Monroe, La... CenturyTel, Inc. (NYSE: CTL) announces operating results for fourth quarter 2006.

·	Operating revenues were $607.7 million compared to $620.5 million in fourth quarter 2005.

·	Operating cash flow (as defined in the attached financial schedules) was $300.0 million.

·	Net income, excluding nonrecurring items, was $79.4 million compared to $82.2 million in fourth quarter 2005. Net income, reported under GAAP, was $72.2 million compared to $78.3 million in fourth quarter 2005.

·	Diluted earnings per share, excluding nonrecurring items, was $.68 in fourth quarter 2006 compared to $.61 in fourth quarter 2005, while GAAP diluted earnings per share was $.62 in fourth quarter 2006 and $.59 in fourth quarter 2005.

·	Free cash flow (as defined in the attached financial schedules), excluding nonrecurring items, was $104.8 million in fourth quarter 2006.

·	Nearly 3.2 million shares were repurchased and retired for $132.3 million during the quarter.

Fourth Quarter Highlights	Quarter Ended		Quarter Ended
(Excluding nonrecurring items)	12/31/2006		12/31/2005		% Change
(In thousands, except per share amounts and customer units)

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

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

(1) Operating Cash Flow is a non-GAAP financial measure. A reconciliation of this item to comparable GAAP measures is included in the attached financial schedules.

(2) Excluding adjustments during 2006 to reflect the removal of test lines, database conversion and clean-up, and the sale of our Arizona properties, access line losses for 2006 were

approximately 107,000, a year-over-year line loss of 4.8%.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

__________________________________________

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

	Three months ended December 31, 2006											Three months ended December 31, 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*	$	211,385								211,385			220,207								220,207			(4.0	%)		(4.0	%)
Network access		211,819								211,819			232,570								232,570			(8.9	%)		(8.9	%)
Data		92,337								92,337			80,904								80,904			14.1	%		14.1	%
Fiber transport and CLEC		39,770								39,770			37,214								37,214			6.9	%		6.9	%
Other		52,384								52,384			49,577								49,577			5.7	%		5.7	%
		607,695			-					607,695			620,472			-					620,472			(2.1	%)		(2.1	%)

OPERATING EXPENSES
Cost of services and products		223,132								223,132			212,339								212,339			5.1	%		5.1	%
Selling, general and administrative		84,524								84,524			99,936								99,936			(15.4	%)		(15.4	%)
Depreciation and amortization		126,360								126,360			135,778								135,778			(6.9	%)		(6.9	%)
		434,016			-					434,016			448,053			-					448,053			(3.1	%)		(3.1	%)

OPERATING INCOME		173,679			-					173,679			172,419			-					172,419			0.7	%		0.7	%

OTHER INCOME (EXPENSE)
Interest expense		(47,375	)							(47,375	)		(49,625	)							(49,625	)		(4.5	%)		(4.5	%)
Other income (expense)		(9,306	)		(11,715	)	(1	)		2,409			1,320			(6,250	)	(3	)		7,570			(805.0	%)		(68.2	%)
Income tax expense		(44,765	)		4,499		(2	)		(49,264	)		(45,780	)		2,400		(4	)		(48,180	)		(2.2	%)		2.2	%
NET INCOME	$	72,233			(7,216	)				79,449			78,334			(3,850	)				82,184			(7.8	%)		(3.3	%)

BASIC EARNINGS PER SHARE	$	0.63			(0.06	)				0.70			0.60			(0.03	)				0.63			5.0	%		11.1	%
DILUTED EARNINGS PER SHARE	$	0.62			(0.06	)				0.68			0.59			(0.03	)				0.61			5.1	%		11.5	%

AVERAGE SHARES OUTSTANDING
Basic		113,629								113,629			130,730								130,730			(13.1	%)		(13.1	%)
Diluted		118,874								118,874			135,917								135,917			(12.5	%)		(12.5	%)

DIVIDENDS PER COMMON SHARE	$	0.0625								0.0625			0.0600								0.0600			4.2	%		4.2	%

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

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

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

	Twelve months ended December 31, 2006											Twelve months ended December 31, 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*	$	860,741								860,741			892,272								892,272			(3.5	%)		(3.5	%)
Network access		878,702			1,688		(1	)		877,014			959,838								959,838			(8.5	%)		(8.6	%)
Data		351,495			275		(1	)		351,220			318,770								318,770			10.3	%		10.2	%
Fiber transport and CLEC		149,088								149,088			115,454								115,454			29.1	%		29.1	%
Other		207,704								207,704			192,918								192,918			7.7	%		7.7	%
		2,447,730			1,963					2,445,767			2,479,252			-					2,479,252			(1.3	%)		(1.4	%)

OPERATING EXPENSES
Cost of services and products		888,414			8,585		(1	)		879,829			821,929			5,853		(4	)		816,076			8.1	%		7.8	%
Selling, general and administrative		370,272			845		(1	)		369,427			388,989								388,989			(4.8	%)		(5.0	%)
Depreciation and amortization		523,506								523,506			531,931								531,931			(1.6	%)		(1.6	%)
		1,782,192			9,430					1,772,762			1,742,849			5,853					1,736,996			2.3	%		2.1	%

OPERATING INCOME		665,538			(7,467	)				673,005			736,403			(5,853	)				742,256			(9.6	%)		(9.3	%)

OTHER INCOME (EXPENSE)
Interest expense		(195,957	)							(195,957	)		(201,801	)		(1,196	)	(5	)		(200,605	)		(2.9	%)		(2.3	%)
Other income (expense)		121,568			106,934		(2	)		14,634			3,168			(14,253	)	(6	)		17,421			3,737.4	%		(16.0	%)
Income tax expense		(221,122	)		(32,477	)	(3	)		(188,645	)		(203,291	)		9,511		(7	)		(212,802	)		8.8	%		(11.4	%)
NET INCOME	$	370,027			66,990					303,037			334,479			(11,791	)				346,270			10.6	%		(12.5	%)

BASIC EARNINGS PER SHARE	$	3.17			0.57					2.59			2.55			(0.09	)				2.64			24.3	%		(1.9	%)
DILUTED EARNINGS PER SHARE	$	3.07			0.55					2.52			2.49			(0.09	)				2.58			23.3	%		(2.3	%)

AVERAGE SHARES OUTSTANDING
Basic		116,671								116,671			130,841								130,841			(10.8	%)		(10.8	%)
Diluted		122,229								122,229			136,087								136,087			(10.2	%)		(10.2	%)

DIVIDENDS PER COMMON SHARE	$	0.25								0.25			0.24								0.24			4.2	%		4.2	%

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

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

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

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

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

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

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

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

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

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

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


	Three months ended December 31, 2006										Three months ended December 31, 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	$	173,679			-				173,679			172,419			-				172,419
Add: Depreciation and amortization		126,360			-				126,360			135,778			-				135,778
Operating cash flow	$	300,039			-				300,039			308,197			-				308,197

Revenues	$	607,695			-				607,695			620,472			-				620,472

Operating income margin (operating income divided by revenues)		28.6	%						28.6	%		27.8	%						27.8%

Operating cash flow margin (operating cash flow divided by revenues)		49.4	%						49.4	%		49.7	%						49.7%

Free cash flow (prior to debt service requirements and dividends)
Net income	$	72,233			(7,216	)	(1)		79,449			78,334			(3,850	)	(1)		82,184
Add: Depreciation and amortization		126,360			-				126,360			135,778			-				135,778
Less: Capital expenditures		(101,037	)		-				(101,037	)		(132,914	)		-				(132,914)
Free cash flow	$	97,556			(7,216	)			104,772			81,198			(3,850	)			85,048

Free cash flow	$	97,556										81,198
Income from unconsolidated cellular entity		(821	)									(1,603	)
Deferred income taxes		16,272										36,112
Changes in current assets and current liabilities		7,821										(2,366	)
Decrease in other noncurrent assets		4,649										6,180
Increase in other noncurrent liabilities		152										142
Retirement benefits		(19,369	)									(30,804	)
Excess tax benefits from share-based compensation		(4,174	)									-
Other, net		15,088										9,597
Add: Capital expenditures		101,037										132,914
Net cash provided by operating activities	$	218,211										231,370

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

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


	Twelve months ended December 31, 2006										Twelve months ended December 31, 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	$	665,538			(7,467	)	(1	)	673,005		736,403		(5,853	)	(3	)	742,256
Add: Depreciation and amortization		523,506			-				523,506		531,931		-				531,931
Operating cash flow	$	1,189,044			(7,467	)			1,196,511		1,268,334		(5,853	)			1,274,187

Revenues	$	2,447,730			1,963		(1	)	2,445,767		2,479,252		-				2,479,252

Operating income margin (operating income divided by revenues)		27.2	%						27.5	%	29.7	%					29.9%

Operating cash flow margin (operating cash flow divided by revenues)		48.6	%						48.9	%	51.2	%					51.4%

Free cash flow (prior to debt service requirements and dividends)
Net income	$	370,027			66,990		(2	)	303,037		334,479		(11,791	)	(4	)	346,270
Add: Depreciation and amortization		523,506			-				523,506		531,931		-				531,931
Less: Capital expenditures		(314,071	)		-				(314,071	)	(414,872	)	-				(414,872)
	$	579,462			66,990				512,472		451,538		(11,791	)			463,329

Free cash flow	$	579,462									451,538
Gain on asset dispositions		(118,649	)								(3,500	)
Income from unconsolidated cellular entity		(5,861	)								(4,910	)
Deferred income taxes		49,685									69,530
Changes in current assets and current liabilities		(6,651	)								27,001
Decrease in other noncurrent assets		9,078									1,973
Increase in other noncurrent liabilities		709									2,638
Retirement benefits		5,963									(16,815	)
Excess tax benefits from share-based compensation		(12,034	)								-
Other, net		24,946									22,412
Add: Capital expenditures		314,071									414,872
Net cash provided by operating activities	$	840,719									964,739

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

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


	Three months ended March 31, 2006											Three months ended June 30, 2006											Three months ended September 30, 2006
									As adjusted											As adjusted											As adjusted
	As			SAB 108					for			As			SAB 108					for			As			SAB 108					for
In thousands, except per share amounts	reported			Adjustments					SAB 108			reported			Adjustments					SAB 108			reported			Adjustments					SAB 108

OPERATING REVENUES
Voice	$	217,449			(435	)	(1	)		217,014			216,786			(301	)	(1	)		216,485			216,180			(323	)	(1	)		215,857
Network access		225,246			77		(2	)		225,323			221,586			77		(2	)		221,663			219,820			77		(2	)		219,897
Data		83,238								83,238			84,447								84,447			91,473								91,473
Fiber transport and CLEC		35,780								35,780			36,051								36,051			37,487								37,487
Other		49,936								49,936			50,261								50,261			55,123								55,123
		611,649			(358	)				611,291			609,131			(224	)				608,907			620,083			(246	)				619,837

OPERATING EXPENSES
Cost of services and products		222,952			(397	)	(1	)		222,555			216,466			(275	)	(1	)		216,191			226,831			(295	)	(1	)		226,536
Selling, general and administrative		95,940								95,940			95,596								95,596			94,212								94,212
Depreciation and amortization		134,565			307		(2	)		134,872			131,820			307		(2	)		132,127			129,840			307		(2	)		130,147
		453,457			(90	)				453,367			443,882			32					443,914			450,883			12					450,895

OPERATING INCOME		158,192			(268	)				157,924			165,249			(256	)				164,993			169,200			(258	)				168,942

OTHER INCOME (EXPENSE)
Interest expense		(50,086	)							(50,086	)		(50,639	)							(50,639	)		(47,857	)							(47,857	)
Other income (expense)		4,597								4,597			123,459								123,459			2,818								2,818
Income tax expense		(43,278	)		103		(3	)		(43,175	)		(85,701	)		98		(3	)		(85,603	)		(47,678	)		99		(3	)		(47,579	)
NET INCOME	$	69,425			(165	)				69,260			152,368			(158	)				152,210			76,483			(159	)				76,324

BASIC EARNINGS PER SHARE	$	0.57			0.00					0.57			1.32			0.00					1.32			0.66			0.00					0.66
DILUTED EARNINGS PER SHARE	$	0.55			0.00					0.55			1.26			0.00					1.26			0.65			0.00					0.64

AVERAGE SHARES OUTSTANDING
Basic		122,394								122,394			115,441								115,441			115,221								115,221
Diluted		127,959								127,959			121,636								121,636			120,448								120,448

DIVIDENDS PER COMMON SHARE	$	0.0625								0.0625			0.0625								0.0625			0.0625								0.0625

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

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

	Three months ended March 31, 2006											Three months ended June 30, 2006											Three months ended September 30, 2006
	As reported								As adjusted			As reported								As adjusted			As reported								As adjusted
	excluding								excluding			excluding								excluding			excluding								excluding
	non-								non-			non-								non-			non-								non-
	recurring			SAB 108					recurring			recurring			SAB 108					recurring			recurring			SAB 108					recurring
In thousands, except per share amounts	items			Adjustments					items			items			Adjustments					items			items			Adjustments					items

OPERATING REVENUES
Voice	$	217,449			(435	)	(1	)		217,014			216,786			(301	)	(1	)		216,485			216,180			(323	)	(1	)		215,857
Network access		224,118			77		(2	)		224,195			221,586			77		(2	)		221,663			219,260			77		(2	)		219,337
Data		83,054								83,054			84,447								84,447			91,382								91,382
Fiber transport and CLEC		35,780								35,780			36,051								36,051			37,487								37,487
Other		49,936								49,936			50,261								50,261			55,123								55,123
		610,337			(358	)				609,979			609,131			(224	)				608,907			619,432			(246	)				619,186

OPERATING EXPENSES
Cost of services and products		217,459			(397	)	(1	)		217,062			216,466			(275	)	(1	)		216,191			223,739			(295	)	(1	)		223,444
Selling, general and administrative		95,258								95,258			95,596								95,596			94,049								94,049
Depreciation and amortization		134,565			307		(2	)		134,872			131,820			307		(2	)		132,127			129,840			307		(2	)		130,147
		447,282			(90	)				447,192			443,882			32					443,914			447,628			12					447,640

OPERATING INCOME		163,055			(268	)				162,787			165,249			(256	)				164,993			171,804			(258	)				171,546

OTHER INCOME (EXPENSE)
Interest expense		(50,086	)							(50,086	)		(50,639	)							(50,639	)		(47,857	)							(47,857	)
Other income (expense)		4,597								4,597			4,810								4,810			2,818								2,818
Income tax expense		(45,145	)		103		(3	)		(45,042	)		(45,858	)		98		(3	)		(45,760	)		(48,678	)		99		(3	)		(48,579	)
NET INCOME	$	72,421			(165	)				72,256			73,562			(158	)				73,404			78,087			(159	)				77,928

BASIC EARNINGS PER SHARE	$	0.59			0.00					0.59			0.64			0.00					0.64			0.68			0.00					0.68
DILUTED EARNINGS PER SHARE	$	0.58			0.00					0.57			0.61			0.00					0.61			0.66			0.00					0.66

AVERAGE SHARES OUTSTANDING
Basic		122,394								122,394			115,441								115,441			115,221								115,221
Diluted		127,959								127,959			121,636								121,636			120,448								120,448

DIVIDENDS PER COMMON SHARE	$	0.0625								0.0625			0.0625								0.0625			0.0625								0.0625

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

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

[ ]	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))

		CENTURYTEL, INC.


Dated: February 15, 2007		By: /s/ Neil A. Sweasy
		Neil A. Sweasy
		Vice President and Controller

FOR IMMEDIATE RELEASE	FOR MORE INFORMATION CONTACT:
February 15, 2007	Media: Patricia Cameron 318.388.9674
	patricia.cameron@centurytel.com
	Investors: Tony Davis 318.388.9525
	tony.davis@centurytel.com