EX-99.A 2 alltel8k99a012105.htm PRESS RELEASE OF ALLTEL CORPORATION DATED JANUARY 21, 2005

Exhibit 99(a)

 

For additional information contact:  Andrew Moreau 501-905-7962
Vice President - Corporate Communications
andrew.moreau@alltel.com
Rob Clancy 501-905-8991
Vice President - Investor Relations
rob.clancy@alltel.com
Release Date: Jan. 21, 2005

 

ALLTEL achieves double-digit earnings growth

as wireless revenues rise 11 percent

Wireless gains 139,000 net adds, average customer revenue up 4 percent

LITTLE ROCK, Ark. - ALLTEL today announced that the company achieved double-digit earnings growth in the fourth quarter and for all of 2004, driven by outstanding performance in the wireless business. Fully diluted earnings per share under Generally Accepted Accounting Principles (GAAP) was 89 cents for the quarter and $3.39 for the year. Fully diluted earnings per share from current businesses in the quarter was 89 cents, a 16 percent increase from a year ago. Fully diluted earnings per share from current businesses in the year was $3.37, a 10 percent increase from a year ago.

Among the highlights for the fourth quarter:

  • Total revenues were $2.1 billion, a 6 percent increase from a year ago. Total operating income was $501 million, a 6 percent increase. Net income under GAAP was $271 million. Net income from current businesses was $270 million, a 13 percent increase.
  • Wireless revenues were $1.3 billion, an 11 percent increase from a year ago. The company added more than 139,000 net new wireless customers, most of which were post-pay, a 46 percent increase from a year ago. Average revenue per customer was $49.24, a 4 percent increase. Post-pay churn was 1.68 percent, a 14 percent improvement from a year ago and the best post-pay churn rate for the fourth quarter since 1998.
  • ALLTEL added a record 26,000 net new broadband customers, with total penetration reaching 12 percent of addressable lines. Wireline average revenue per customer was $66.98, a 1 percent increase. Feature revenue per eligible line increased 7 percent.
  • Equity free cash flow from current businesses was $226 million, a 4 percent increase. Net cash from operations was level at $623 million.

"ALLTEL delivered fourth-quarter and annual results that reflect the focus our entire organization has placed on achieving superior financial results while improving service to our customers," said Scott Ford, ALLTEL president and chief executive officer. "Our wireless business continues to improve in almost every area, producing double-digit revenue growth driven by our focus on adding high-value customers, who also are increasing their use of our wireless data services. Our wireline business had a record quarter of broadband growth and ALLTEL continues to maintain industry-leading margins.

"This was an outstanding year for our company. ALLTEL is growing the business, delivering value for our shareholders and improving service for our customers."

Among the highlights for the year:

  • Total revenues were $8.2 billion, a 3 percent increase from year-end 2003. Total operating income was $1.9 billion, a 1 percent increase. Net income under GAAP was $1 billion. Net income from current businesses was $1 billion, a 9 percent increase.
  • The company's net new wireless customer additions reached nearly 511,000, an 86 percent increase from 2003 and the largest annual gain since 1998. Average revenue per customer was $48.13, the highest annual rate in four years. Post-pay churn for the year was 1.74 percent, the best annual rate since 1998.
  • ALLTEL now has more than 243,000 broadband customers, a 59 percent increase from year-end 2003. Average revenue per wireline customer was $65.87, a 2 percent increase.
  • Equity free cash flow from current businesses was $1.2 billion, a 17 percent increase from a year ago. Net cash from operations remained level at $2.5 billion.
  • ALLTEL returned more than $1 billion in capital to shareholders by paying more than $450 million in dividends and repurchasing 11.2 million shares of stock for $600 million.

In 2004, the company expanded its footprint by acquiring the wireless assets of MobileTel in Louisiana and certain wireless assets from U.S. Cellular and TDS Telecom in Georgia, Florida, Mississippi, North Carolina, Ohio and Wisconsin. ALLTEL also announced in 2004 it would acquire Cingular assets in Oklahoma, Texas, Kentucky, Connecticut, Mississippi and Kansas. That transaction is expected to close in the second quarter of 2005.

Earlier this month, ALLTEL reached an agreement to merge with Western Wireless Corp. in a $6 billion stock-and-cash transaction that is expected to close by mid-year. The company will gain about 1.4 million domestic wireless customers in 19 midwestern and western states that are contiguous to existing properties. It also will add about 1.6 million international customers.

ALLTEL is a customer-focused communications company with more than 13 million customers and $8 billion in annual revenues. ALLTEL provides wireless, local telephone, long-distance, Internet and broadband services to residential and business customers in 26 states.

ALLTEL claims the protection of the safe-harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to uncertainties that could cause actual future events and results to differ materially from those expressed in the forward-looking statements. These forward-looking statements are based on estimates, projections, beliefs, and assumptions and are not guarantees of future events and results. Actual future events and results may differ materially from those expressed in these forward-looking statements as a result of a number of important factors. Representative examples of these factors include (without limitation) adverse changes in economic conditions in the markets served by ALLTEL; the extent, timing, and overall effects of competition in the communications business; material changes in the communications industry generally that could adversely affect vendor relationships with equipment and network suppliers and customer relationships with wholesale customers; changes in communications technology; the risks associated with the integration of acquired businesses; adverse changes in the terms and conditions of the company's wireless roaming agreements; the potential for adverse changes in the ratings given to ALLTEL's debt securities by nationally accredited ratings organizations; the availability and cost of financing in the corporate debt markets; the uncertainties related to ALLTEL's strategic investments; the effects of work stoppages; the effects of litigation; and the effects of federal and state legislation, rules, and regulations governing the communications industry. In addition to these factors, actual future performance, outcomes, and results may differ materially because of more general factors including (without limitation) general industry and market conditions and growth rates, economic conditions, and governmental and public policy changes.

-end-

ALLTEL, NYSE: AT

www.alltel.com

ALLTEL CORPORATION
CONSOLIDATED HIGHLIGHTS
BUSINESS SEGMENTS AND OTHER CONSOLIDATED FINANCIAL INFORMATION
(In thousands, except per share amounts)

                                                                 
    THREE MONTHS ENDED     TWELVE MONTHS ENDED  
                    Increase                             Increase        
    December 31,     December 31,     (Decrease)             December 31,     December 31,     (Decrease)        
    2004     2003     Amount     %     2004     2003     Amount     %  
UNDER GAAP:
                                                               
Revenues and sales:
                                                               
Wireless
  $ 1,326,772     $ 1,191,932     $ 134,840       11     $ 5,078,087     $ 4,728,399     $ 349,688       7  
Wireline
    607,775       615,784       (8,009 )     (1 )     2,419,809       2,436,079       (16,270 )     (1 )
Communications support services
    248,489       247,139       1,350       1       923,855       959,061       (35,206 )     (4 )
 
                                                   
Total business segments
    2,183,036       2,054,855       128,181       6       8,421,751       8,123,539       298,212       4  
Less intercompany eliminations
    43,243       41,179       2,064       5       175,610       143,629       31,981       22  
 
                                                   
Total revenues and sales
  $ 2,139,793     $ 2,013,676     $ 126,117       6     $ 8,246,141     $ 7,979,910     $ 266,231       3  
 
                                                   
Segment income:
                                                               
Wireless
  $ 260,154     $ 231,607     $ 28,547       12     $ 1,020,239     $ 998,000     $ 22,239       2  
Wireline
    235,666       236,830       (1,164 )     -       925,991       883,873       42,118       5  
Communications support services
    13,885       17,623       (3,738 )     (21 )     62,717       76,417       (13,700 )     (18 )
 
                                                   
Total segment income
    509,705       486,060       23,645       5       2,008,947       1,958,290       50,657       3  
Less: corporate expenses
    9,342       12,008       (2,666 )     (22 )     36,427       41,316       (4,889 )     (12 )
restructuring and other charges
    (873 )     -       (873 )     -       50,892       18,979       31,913       168  
 
                                                   
Total operating income
  $ 501,236     $ 474,052     $ 27,184       6     $ 1,921,628     $ 1,897,995     $ 23,633       1  
 
                                                   
Operating margin (A):
                                                               
Wireless
    19.6 %     19.4 %     .2 %     1       20.1 %     21.1 %     (1.0 %)     (5 )
Wireline
    38.8 %     38.5 %     .3 %     1       38.3 %     36.3 %     2.0 %     6  
Communications support services
    5.6 %     7.1 %     (1.5 %)     (21 )     6.8 %     8.0 %     (1.2 %)     (15 )
Consolidated
    23.4 %     23.5 %     (.1 %)     -       23.3 %     23.8 %     (.5 %)     (2 )
Net income
  $ 270,645     $ 258,935     $ 11,710       5     $ 1,046,235     $ 1,330,119     $ (283,884 )     (21 )
Earnings per share:
                                                               
Basic
     $.89        $.83        $.06       7        $3.40        $4.27        $(.87 )     (20 )
Diluted
     $.89        $.83        $.06       7        $3.39        $4.25        $(.86 )     (20 )
Weighted average common shares:
                                                               
Basic
    302,809       312,413       (9,604 )     (3 )     307,288       311,784       (4,496 )     (1 )
Diluted
    304,095       313,265       (9,170 )     (3 )     308,339       312,767       (4,428 )     (1 )
Annual dividend rate per common share
     $1.52        $1.48        $.04       3                                  
FROM CURRENT BUSINESSES (NON-GAAP) (B):
                                                               
Operating income
  $ 500,363     $ 474,052     $ 26,311       6     $ 1,972,520     $ 1,916,974     $ 55,546       3  
Operating margin (A)
    23.4 %     23.5 %     (.1 %)     -       23.9 %     24.0 %     (.1 %)     -  
Net income
  $ 270,058     $ 239,994     $ 30,064       13     $ 1,038,110     $ 954,395     $ 83,715       9  
Earnings per share:
                                                               
Basic
     $.89        $.77        $.12       16        $3.38        $3.06        $.32       10  
Diluted
     $.89        $.77        $.12       16        $3.37        $3.05        $.32       10  


(A)  
Operating margin is calculated by dividing segment income by the corresponding amount of segment revenues and sales.
 
(B)  
Current businesses excludes the effects of discontinued operations, early termination of debt, restructuring and other charges, gain on disposal of assets, write-down of investments, and the reversal of certain income tax contingency reserves.

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ALLTEL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME UNDER GAAP-Page 2
(In thousands, except per share amounts)

                                 
    THREE MONTHS ENDED     TWELVE MONTHS ENDED  
    December 31,     December 31,     December 31,     December 31,  
    2004     2003     2004     2003  
Revenues and sales:
                               
Service revenues
  $ 1,897,402     $ 1,806,026     $ 7,374,279     $ 7,156,067  
Product sales
    242,391       207,650       871,862       823,843  
 
                       
Total revenues and sales
    2,139,793       2,013,676       8,246,141       7,979,910  
 
                       
Costs and expenses:
                               
Cost of services
    604,818       567,946       2,374,220       2,273,598  
Cost of products sold
    299,603       262,058       1,075,545       1,043,468  
Selling, general, administrative and other
    402,489       388,290       1,524,165       1,498,122  
Depreciation and amortization
    332,520       321,330       1,299,691       1,247,748  
Restructuring and other charges
    (873 )     -       50,892       18,979  
 
                       
Total costs and expenses
    1,638,557       1,539,624       6,324,513       6,081,915  
 
                       
Operating income
    501,236       474,052       1,921,628       1,897,995  
Equity earnings in unconsolidated partnerships
    14,970       16,401       68,486       64,373  
Minority interest in consolidated partnerships
    (19,227 )     (17,093 )     (80,096 )     (78,604 )
Other income, net
    11,360       3,596       34,500       11,068  
Interest expense
    (87,512 )     (90,881 )     (352,490 )     (378,627 )
Gain on disposal of assets, write-down of investments and other
    -       30,999       -       17,933  
 
                       
Income from continuing operations before income taxes
    420,827       417,074       1,592,028       1,534,138  
Income taxes
    150,182       158,139       565,331       580,609  
 
                       
Income from continuing operations
    270,645       258,935       1,026,697       953,529  
Discontinued operations:
                               
Income from discontinued operations (net of income taxes)
    -       -       19,538       37,072  
Gain on sale of discontinued operations (net of income taxes)
    -       -       -       323,927  
 
                       
Income before cumulative effect of accounting change
    270,645       258,935       1,046,235       1,314,528  
Cumulative effect of accounting change (net of income taxes)
    -       -       -       15,591  
 
                       
Net income
    270,645       258,935       1,046,235       1,330,119  
Preferred dividends
    25       27       103       111  
 
                       
Net income applicable to common shares
  $ 270,620     $ 258,908     $ 1,046,132     $ 1,330,008  
 
                       
Basic earnings per share:
                               
Income from continuing operations
     $.89        $.83        $3.34        $3.06  
Income from discontinued operations
    -       -       .06       1.16  
Cumulative effect of accounting change
    -       -       -       .05  
 
                       
Net income
     $.89        $.83        $3.40        $4.27  
 
                       
Diluted earnings per share:
                               
Income from continuing operations
     $.89        $.83        $3.33        $3.05  
Income from discontinued operations
    -       -       .06       1.15  
Cumulative effect of accounting change
    -       -       -       .05  
 
                       
Net income
     $.89        $.83        $3.39        $4.25  
 
                       

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ALLTEL CORPORATION
RECONCILIATION OF RESULTS OF OPERATIONS UNDER GAAP TO RESULTS OF OPERATIONS FROM CURRENT BUSINESSES (NON-GAAP)-Page 3
for the three months ended December 31, 2004
(In thousands, except per share amounts)

                                                         
                                                    Corporate  
    Results of     Items     Results of     Segment Information     Operations  
    Operations     Excluded from     Operations                     Communications     and  
    Under     Current     from Current                     Support     Intercompany  
    GAAP     Businesses     Businesses     Wireless     Wireline     Services     Eliminations  
Revenues and sales:
                                                       
Service revenues
  $ 1,897,402     $ -     $ 1,897,402     $ 1,252,773     $ 597,315     $ 81,462     $ (34,148 )
Product sales
    242,391       -       242,391       73,999       10,460       167,027       (9,095 )
 
                                         
Total revenues and sales
    2,139,793       -       2,139,793       1,326,772       607,775       248,489       (43,243 )
 
                                         
Costs and expenses:
                                                       
Cost of services
    604,818       -       604,818       399,114       173,146       64,297       (31,739 )
Cost of products sold
    299,603       -       299,603       154,747       8,576       146,997       (10,717 )
Selling, general, administrative and other
    402,489       -       402,489       318,968       62,466       14,856       6,199  
Depreciation and amortization
    332,520       -       332,520       193,789       127,921       8,454       2,356  
Restructuring and other charges
    (873 )     873 (A)     -       -       -       -       -  
 
                                         
Total costs and expenses
    1,638,557       873       1,639,430       1,066,618       372,109       234,604       (33,901 )
 
                                         
Operating income
    501,236       (873 )     500,363     $ 260,154     $ 235,666     $ 13,885     $ (9,342 )
 
                                               
Equity earnings in unconsolidated partnerships
    14,970       -       14,970                                  
Minority interest in consolidated partnerships
    (19,227 )     -       (19,227 )                                
Other income, net
    11,360       -       11,360                                  
Interest expense
    (87,512 )     -       (87,512 )                                
Gain on disposal of assets, write-down of investments and other
    -       -       -                                  
 
                                                 
Income from continuing operations before income taxes
    420,827       (873 )     419,954                                  
Income taxes
    150,182       (286 )(F)     149,896                                  
 
                                                 
Income from continuing operations
    270,645       (587 )     270,058                                  
Discontinued operations:
                                                       
Income from discontinued operations (net of income taxes)
    -       -       -                                  
Gain on sale of discontinued operations (net of income taxes)
    -       -       -                                  
 
                                                 
Income before cumulative effect of accounting change
    270,645       (587 )     270,058                                  
Cumulative effect of accounting change (net of income taxes)
    -       -       -                                  
 
                                                 
Net income
    270,645       (587 )     270,058                                  
Preferred dividends
    25       -       25                                  
 
                                                 
Net income applicable to common shares
  $ 270,620     $ (587 )   $ 270,033                                  
 
                                                 
Basic earnings per share:
                                                       
Income from continuing operations
    $.89       $-       $.89                                  
Income from discontinued operations
    -       -       -                                  
Cumulative effect of accounting change
    -       -       -                                  
 
                                                 
Net income
    $.89       $-       $.89                                  
 
                                                 
Diluted earnings per share:
                                                       
Income from continuing operations
    $.89       $-       $.89                                  
Income from discontinued operations
    -       -       -                                  
Cumulative effect of accounting change
    -       -       -                                  
 
                                                 
Net income
    $.89       $-       $.89                                  
 
                                                 

See notes on pages 7 and 8 for a description of the line items marked (A) - (I).

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ALLTEL CORPORATION
RECONCILIATION OF RESULTS OF OPERATIONS UNDER GAAP TO RESULTS OF OPERATIONS FROM CURRENT BUSINESSES (NON-GAAP)-Page 4
for the three months ended December 31, 2003
(In thousands, except per share amounts)

                                                         
                                                    Corporate  
    Results of     Items     Results of     Segment Information     Operations  
    Operations     Excluded from     Operations                     Communications     and  
    Under     Current     from Current                     Support     Intercompany  
    GAAP     Businesses     Businesses     Wireless     Wireline     Services     Eliminations  
Revenues and sales:
                                                       
Service revenues
  $ 1,806,026     $ -     $ 1,806,026     $ 1,128,024     $ 605,665     $ 105,910     $ (33,573 )
Product sales
    207,650       -       207,650       63,908       10,119       141,229       (7,606 )
 
                                         
Total revenues and sales
    2,013,676       -       2,013,676       1,191,932       615,784       247,139       (41,179 )
 
                                         
Costs and expenses:
                                                       
Cost of services
    567,946       -       567,946       350,603       173,751       74,876       (31,284 )
Cost of products sold
    262,058       -       262,058       131,243       7,495       131,568       (8,248 )
Selling, general, administrative and other
    388,290       -       388,290       303,033       65,644       13,896       5,717  
Depreciation and amortization
    321,330       -       321,330       175,446       132,064       9,176       4,644  
Restructuring and other charges
    -       -       -       -       -       -       -  
 
                                         
Total costs and expenses
    1,539,624       -       1,539,624       960,325       378,954       229,516       (29,171 )
 
                                         
Operating income
    474,052       -       474,052     $ 231,607     $ 236,830     $ 17,623     $ (12,008 )
 
                                               
Equity earnings in unconsolidated partnerships
    16,401       -       16,401                                  
Minority interest in consolidated partnerships
    (17,093 )     -       (17,093 )                                
Other income, net
    3,596       -       3,596                                  
Interest expense
    (90,881 )     -       (90,881 )                                
Gain on disposal of assets, write-down of investments and other
    30,999       (30,999 )(C)     -                                  
 
                                                 
Income from continuing operations before income taxes
    417,074       (30,999 )     386,075                                  
Income taxes
    158,139       (12,058 )(F)     146,081                                  
 
                                                 
Income from continuing operations
    258,935       (18,941 )     239,994                                  
Discontinued operations:
                                                       
Income from discontinued operations (net of income taxes)
    -       -       -                                  
Gain on sale of discontinued operations (net of income taxes)
    -       -       -                                  
 
                                                 
Income before cumulative effect of accounting change
    258,935       (18,941 )     239,994                                  
Cumulative effect of accounting change (net of income taxes)
    -       -       -                                  
 
                                                 
Net income
    258,935       (18,941 )     239,994                                  
Preferred dividends
    27       -       27                                  
 
                                                 
Net income applicable to common shares
  $ 258,908     $ (18,941 )   $ 239,967                                  
 
                                                 
Basic earnings per share:
                                                       
Income from continuing operations
     $.83        $(.06 )      $.77                                  
Income from discontinued operations
    -       -       -                                  
Cumulative effect of accounting change
    -       -       -                                  
 
                                                 
Net income
     $.83        $(.06 )      $.77                                  
 
                                                 
Diluted earnings per share:
                                                       
Income from continuing operations
     $.83        $(.06 )      $.77                                  
Income from discontinued operations
    -       -       -                                  
Cumulative effect of accounting change
    -       -       -                                  
 
                                                 
Net income
     $.83        $(.06 )      $.77                                  
 
                                                 

See notes on pages 7 and 8 for a description of the line items marked (A) - (I).

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ALLTEL CORPORATION
RECONCILIATION OF RESULTS OF OPERATIONS UNDER GAAP TO RESULTS OF OPERATIONS FROM CURRENT BUSINESSES (NON-GAAP)-Page 5
for the twelve months ended December 31, 2004
(In thousands, except per share amounts)

                                                         
                                                    Corporate  
    Results of     Items     Results of     Segment Information     Operations  
    Operations     Excluded from     Operations                     Communications     and  
    Under     Current     from Current                     Support     Intercompany  
    GAAP     Businesses     Businesses     Wireless     Wireline     Services     Eliminations  
Revenues and sales:
                                                       
Service revenues
  $ 7,374,279     $ -     $ 7,374,279     $ 4,791,235     $ 2,380,788     $ 346,662     $ (144,406 )
Product sales
    871,862       -       871,862       286,852       39,021       577,193       (31,204 )
 
                                         
Total revenues and sales
    8,246,141       -       8,246,141       5,078,087       2,419,809       923,855       (175,610 )
 
                                         
Costs and expenses:
                                                       
Cost of services
    2,374,220       -       2,374,220       1,543,576       704,335       257,845       (131,536 )
Cost of products sold
    1,075,545       -       1,075,545       573,646       28,711       514,239       (41,051 )
Selling, general, administrative and other
    1,524,165       -       1,524,165       1,201,789       244,327       54,729       23,320  
Depreciation and amortization
    1,299,691       -       1,299,691       738,837       516,445       34,325       10,084  
Restructuring and other charges
    50,892       (50,892 )(A)(B)     -       -       -       -       -  
 
                                         
Total costs and expenses
    6,324,513       (50,892 )     6,273,621       4,057,848       1,493,818       861,138       (139,183 )
 
                                         
Operating income
    1,921,628       50,892       1,972,520     $ 1,020,239     $ 925,991     $ 62,717     $ (36,427 )
 
                                               
Equity earnings in unconsolidated partnerships
    68,486       -       68,486                                  
Minority interest in consolidated partnerships
    (80,096 )     -       (80,096 )                                
Other income, net
    34,500       -       34,500                                  
Interest expense
    (352,490 )     -       (352,490 )                                
Gain on disposal of assets, write-down of investments and other
    -       -       -                                  
 
                                                 
Income from continuing operations before income taxes
    1,592,028       50,892       1,642,920                                  
Income taxes
    565,331       39,479 (F)(G)     604,810                                  
 
                                                 
Income from continuing operations
    1,026,697       11,413       1,038,110                                  
Discontinued operations:
                                                       
Income from discontinued operations (net of income taxes)
    19,538       (19,538 )(G)     -                                  
Gain on sale of discontinued operations (net of income taxes)
    -       -       -                                  
 
                                                 
Income before cumulative effect of accounting change
    1,046,235       (8,125 )     1,038,110                                  
Cumulative effect of accounting change (net of income taxes)
    -       -       -                                  
 
                                                 
Net income
    1,046,235       (8,125 )     1,038,110                                  
Preferred dividends
    103       -       103                                  
 
                                                 
Net income applicable to common shares
  $ 1,046,132     $ (8,125 )   $ 1,038,007                                  
 
                                                 
Basic earnings per share:
                                                       
Income from continuing operations
     $3.34        $ .04        $3.38                                  
Income from discontinued operations
    .06       (.06 )     -                                  
Cumulative effect of accounting change
    -       -       -                                  
 
                                                 
Net income
     $3.40        $(.02 )      $3.38                                  
 
                                                 
Diluted earnings per share:
                                                       
Income from continuing operations
     $3.33        $ .04        $3.37                                  
Income from discontinued operations
    .06       (.06 )     -                                  
Cumulative effect of accounting change
    -       -       -                                  
 
                                                 
Net income
     $3.39        $(.02 )      $3.37                                  
 
                                                 

See notes on pages 7 and 8 for a description of the line items marked (A) - (I).

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ALLTEL CORPORATION
RECONCILIATION OF RESULTS OF OPERATIONS UNDER GAAP TO RESULTS OF OPERATIONS FROM CURRENT BUSINESSES (NON-GAAP)-Page 6
for the twelve months ended December 31, 2003
(In thousands, except per share amounts)

                                                         
                                                    Corporate  
    Results of     Items     Results of     Segment Information     Operations  
    Operations     Excluded from     Operations                     Communications     and  
    Under     Current     from Current                     Support     Intercompany  
    GAAP     Businesses     Businesses     Wireless     Wireline     Services     Eliminations  
Revenues and sales:
                                                       
Service revenues
  $ 7,156,067     $ -     $ 7,156,067     $ 4,466,462     $ 2,395,625     $ 428,983     $ (135,003 )
Product sales
    823,843       -       823,843       261,937       40,454       530,078       (8,626 )
 
                                         
Total revenues and sales
    7,979,910       -       7,979,910       4,728,399       2,436,079       959,061       (143,629 )
 
                                         
Costs and expenses:
                                                       
Cost of services
    2,273,598       -       2,273,598       1,367,812       737,161       299,006       (130,381 )
Cost of products sold
    1,043,468       -       1,043,468       536,648       29,131       486,936       (9,247 )
Selling, general, administrative and other
    1,498,122       -       1,498,122       1,154,961       259,406       60,511       23,244  
Depreciation and amortization
    1,247,748       -       1,247,748       670,978       526,508       36,191       14,071  
Restructuring and other charges
    18,979       (18,979 )(D)     -       -       -       -       -  
 
                                         
Total costs and expenses
    6,081,915       (18,979 )     6,062,936       3,730,399       1,552,206       882,644       (102,313 )
 
                                         
Operating income
    1,897,995       18,979       1,916,974     $ 998,000     $ 883,873     $ 76,417     $ (41,316 )
 
                                               
Equity earnings in unconsolidated partnerships
    64,373       -       64,373                                  
Minority interest in consolidated partnerships
    (78,604 )     -       (78,604 )                                
Other income, net
    11,068       -       11,068                                  
Interest expense
    (378,627 )     -       (378,627 )                                
Gain on disposal of assets, write-down of investments and other
    17,933       (17,933 )(C)(E)     -                                  
 
                                                 
Income from continuing operations before income taxes
    1,534,138       1,046       1,535,184                                  
Income taxes
    580,609       180 (F)     580,789                                  
 
                                                 
Income from continuing operations
    953,529       866       954,395                                  
Discontinued operations:
                                                       
Income from discontinued operations (net of income taxes)
    37,072       (37,072 )(H)     -                                  
Gain on sale of discontinued operations (net of income taxes)
    323,927       (323,927 )(H)     -                                  
 
                                                 
Income before cumulative effect of accounting change
    1,314,528       (360,133 )     954,395                                  
Cumulative effect of accounting change (net of income taxes)
    15,591       (15,591 )(I)     -                                  
 
                                                 
Net income
    1,330,119       (375,724 )     954,395                                  
Preferred dividends
    111       -       111                                  
 
                                                 
Net income applicable to common shares
  $ 1,330,008     $ (375,724 )   $ 954,284                                  
 
                                                 
Basic earnings per share:
                                                       
Income from continuing operations
     $3.06        $      -        $3.06                                  
Income from discontinued operations
    1.16       (1.16 )     -                                  
Cumulative effect of accounting change
    .05       (.05 )     -                                  
 
                                                 
Net income
     $4.27        $(1.21 )      $3.06                                  
 
                                                 
Diluted earnings per share:
                                                       
Income from continuing operations
     $3.05        $      -        $3.05                                  
Income from discontinued operations
    1.15       (1.15 )     -                                  
Cumulative effect of accounting change
    .05       (.05 )     -                                  
 
                                                 
Net income
     $4.25        $(1.20 )      $3.05                                  
 
                                                 

See notes on pages 7 and 8 for a description of the line items marked (A) - (I).

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ALLTEL CORPORATION
NOTES TO RECONCILIATIONS OF RESULTS OF OPERATIONS UNDER GAAP TO RESULTS OF OPERATIONS FROM CURRENT BUSINESSES (NON-GAAP)-Page 7

   
As disclosed in the Company’s Form 8-K filed on January 21, 2005, ALLTEL has presented in this earnings release results of operations from current businesses which exclude the effects of discontinued operations, early termination of debt, restructuring and other charges, gain on disposal of assets, write-down of investments, and the reversal of certain income tax contingency reserves. ALLTEL’s purpose for excluding items from the current business measures is to focus on ALLTEL’s true earnings capacity associated with providing telecommunication services. Management believes the items excluded from the current business measures are related to strategic activities or other events, specific to the time and opportunity available, and, accordingly, should be excluded when evaluating the trends of the Company’s operations.
 
   
ALLTEL believes that presenting the current business measures assists investors in assessing the true business performance of the Company by clarifying for investors the effects that certain items such as asset sales, restructuring expenses and other business consolidation costs arising from past acquisition and restructuring activities had on the Company’s GAAP consolidated results of operations. The Company uses results from current businesses as management’s primary measure of the performance of its business segments. ALLTEL management, including the chief operating decision-maker, uses the current business measures consistently for all purposes, including internal reporting purposes, the evaluation of business objectives, opportunities and performance and the determination of management compensation.
 
   
As the Company evaluates segment performance based on segment income, which is computed as revenues and sales less operating expenses, the restructuring and other charges, gain on disposal of assets, write-down of investments and debt prepayment penalties have not been allocated to the business segments. In addition, none of the non-operating items such as equity earnings in unconsolidated partnerships, minority interest expense, other income, net, interest expense and income taxes have been allocated to the segments.
 
(A)  
The Company recorded a $0.9 million reduction in the liabilities associated with the restructuring efforts initiated in the first quarter of 2004 (see Note B), consisting of $0.7 million in employee relocation expenses and $0.2 million in severance and employee benefit costs.
 
(B)  
The Company announced its plans to reorganize its operating structure and exit its CLEC operations in the Jacksonville, Florida market. In connection with these activities, the Company recorded a restructuring charge of $29.3 million consisting of severance and employee benefit costs related to a planned workforce reduction, employee relocation costs, lease termination and other restructuring-related costs. The Company also recorded a $2.3 million reduction in the liabilities associated with various restructuring activities initiated prior to 2003. In addition, the Company recorded a write-down of $24.8 million in the carrying value of certain corporate and regional facilities to fair value in conjunction with the proposed leasing or sale of those facilities.
 
(C)  
The Company recorded a pretax gain of $31.0 million from the sale of certain assets and related liabilities, including selected customer contracts and capitalized software development costs, associated with the Company’s telecommunications information services operations.
 
(D)  
These charges included severance and employee benefit costs of $8.5 million related to a planned workforce reduction, primarily resulting from the closing of certain call center locations. The Company also recorded a $2.7 million reduction in the liabilities associated with various restructuring activities initiated prior to 2003. ALLTEL also wrote off $13.2 million of certain capitalized software development costs that had no alternative future use or functionality.
 
(E)  
ALLTEL recorded pretax write-downs totaling $6.0 million to reflect other-than-temporary declines in the fair value of certain investments in unconsolidated limited partnerships. In addition, the Company retired, prior to its stated maturity dates, $249.1 million of long-term debt, representing all of the long-term debt outstanding under the Rural Utilities Services, Rural Telephone Bank and Federal Financing Bank programs. In connection with the early retirement of the debt, the Company incurred pretax termination fees of $7.1 million.
 
(F)  
Tax-related effect of the items discussed in Notes A - E above.

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ALLTEL CORPORATION
NOTES TO RECONCILIATIONS OF RESULTS OF OPERATIONS UNDER GAAP TO RESULTS OF OPERATIONS FROM CURRENT BUSINESSES (NON-GAAP)-Page 8

(G)  
During the third quarter of 2004, the Internal Revenue Service (“IRS”) completed its fieldwork related to the audits of the Company’s consolidated federal income tax returns for the fiscal years 1997 through 2001. As a result of the IRS completing this phase of their audits, ALLTEL reassessed its income tax contingency reserves related to the periods under examination. Based upon this reassessment, ALLTEL recorded a $129.3 million reduction in its income tax contingency reserves in the third quarter of 2004. The corresponding effects of the reversal of these tax contingencies resulted in a reduction in goodwill of $94.5 million and a reduction in income tax expense associated with continuing operations of $19.7 million. In addition, $15.1 million of the income tax contingency reserves reversed related to the financial services division of ALLTEL’s information services subsidiary, ALLTEL Information Services, Inc., that was sold to Fidelity National Financial Inc. (“Fidelity National”) on April 1, 2003. (See Note H.) Pursuant to the terms of the sale agreement, ALLTEL retained, as of the date of sale, all income tax liabilities related to the sold operations and agreed to indemnify Fidelity National from any future tax liability imposed on the financial services division for periods prior to the date of sale. The adjustment of the tax contingency reserves related to the disposed financial services division has been reported as “discontinued operations” in the Company’s consolidated financial statements for the twelve months ended December 31, 2004. Discontinued operations for the twelve months ended December 31, 2004 also included a tax benefit of $4.4 million attributable to a foreign tax credit carryback recognized as a result of the IRS audits.
 
(H)  
Eliminates the effects of discontinued operations. On April 1, 2003, ALLTEL completed the sale of the financial services division of its information services subsidiary, ALLTEL Information Services, Inc., to Fidelity National, for $1.05 billion received as $775.0 million in cash and $275.0 million in Fidelity National common stock. As part of this transaction, Fidelity National acquired ALLTEL’s mortgage servicing, retail and wholesale banking and commercial lending operations, as well as the community/regional bank division.
 
(I)  
Represents the cumulative effect of the change in accounting resulting from the Company’s adoption of Statement of Financial Accounting Standards (“SFAS”) No. 143, “Accounting for Asset Retirement Obligations”. In accordance with federal and state regulations, depreciation expense for ALLTEL’s wireline operations historically included an additional provision for cost of removal. For ALLTEL’s wireline operations in Kentucky and Nebraska not subject to SFAS No. 71, “Accounting for the Effects of Certain Types of Regulation”, effective with the adoption of SFAS No. 143, the Company ceased recognition of the cost of removal provision in depreciation expense and eliminated the cumulative cost of removal included in accumulated depreciation because it did not meet the recognition and measurement principles of an asset retirement obligation under SFAS No. 143. As a result of a Federal Communications Commission ruling, ALLTEL continues to record a regulatory liability for cost of removal for its wireline subsidiaries that follow the accounting prescribed by SFAS No. 71.

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ALLTEL CORPORATION
SUPPLEMENTAL OPERATING INFORMATION-Page 9
(Dollars in thousands, except per customer amounts)

                                                                 
    THREE MONTHS ENDED     TWELVE MONTHS ENDED  
                    Increase                             Increase        
    December 31,     December 31,     (Decrease)             December 31,     December 31,     (Decrease)        
    2004     2003     Amount     %     2004     2003     Amount     %  
Wireless:
                                                               
Controlled POPs
    62,313,192       60,368,281       1,944,911       3                                  
Customers
    8,626,487       8,023,425       603,062       8                                  
Penetration rate
    13.8 %     13.3 %     .5 %     4                                  
Average customers
    8,481,561       7,956,723       524,838       7       8,295,939       7,834,470       461,469       6  
Gross customer additions:
                                                               
Internal
    690,811       696,888       (6,077 )     (1 )     2,720,339       2,709,369       10,970       -  
Acquired
    92,345       -       92,345       -       92,345       147,462       (55,117 )     (37 )
 
                                                   
Total
    783,156       696,888       86,268       12       2,812,684       2,856,831       (44,147 )     (2 )
 
                                                   
Net customer additions:
                                                               
Internal
    139,415       95,374       44,041       46       510,717       274,365       236,352       86  
Acquired
    92,345       -       92,345       -       92,345       147,462       (55,117 )     (37 )
 
                                                   
Total
    231,760       95,374       136,386       143       603,062       421,827       181,235       43  
 
                                                   
Customer acquisition costs:
                                                               
Product sales
  $ (50,530 )   $ (45,486 )   $ (5,044 )     (11 )   $ (209,874 )   $ (176,429 )   $ (33,445 )     (19 )
Cost of products sold
    80,557       76,980       3,577       5       322,737       296,757       25,980       9  
Selling and marketing expenses
    198,572       190,854       7,718       4       743,889       714,026       29,863       4  
 
                                                   
Total
  $ 228,599     $ 222,348     $ 6,251       3     $ 856,752     $ 834,354     $ 22,398       3  
 
                                                   
Cost to acquire a new customer (A)
    $331       $319       $12       4       $315       $308       $7       2  
Cash costs:
                                                               
Product sales
  $ (73,999 )   $ (63,908 )   $ (10,091 )     (16 )   $ (286,852 )   $ (261,937 )   $ (24,915 )     (10 )
Cost of services
    399,114       350,603       48,511       14       1,543,576       1,367,812       175,764       13  
Cost of products sold
    154,747       131,243       23,504       18       573,646       536,648       36,998       7  
Selling, general, administrative and other
    318,968       303,033       15,935       5       1,201,789       1,154,961       46,828       4  
 
                                                   
Total
    798,830       720,971       77,859       11       3,032,159       2,797,484       234,675       8  
Less customer acquisition costs
    228,599       222,348       6,251       3       856,752       834,354       22,398       3  
 
                                                   
Total
  $ 570,231     $ 498,623     $ 71,608       14     $ 2,175,407     $ 1,963,130     $ 212,277       11  
 
                                                   
Cash cost per unit per month, excluding customer acquisition costs (B)
    $22.41       $20.89       $1.52       7       $21.85       $20.88       $.97       5  
Revenues:
                                                               
Service revenues
  $ 1,252,773     $ 1,128,024     $ 124,749       11     $ 4,791,235     $ 4,466,462     $ 324,773       7  
Less wholesale revenues
    94,748       91,584       3,164       3       372,446       387,471       (15,025 )     (4 )
 
                                                   
Retail revenues
  $ 1,158,025     $ 1,036,440     $ 121,585       12     $ 4,418,789     $ 4,078,991     $ 339,798       8  
 
                                                   
Average revenue per customer per month (C)
    $49.24       $47.26       $1.98       4       $48.13       $47.51       $.62       1  
Retail revenue per customer per month (D)
    $45.51       $43.42       $2.09       5       $44.39       $43.39       $1.00       2  
Retail minutes of use per customer per month (E)
    534       406       128       32       494       375       119       32  
Postpay churn
    1.68 %     1.96 %     (.28 %)     (14 )     1.74 %     2.09 %     (.35 %)     (17 )
Total churn
    2.17 %     2.53 %     (.36 %)     (14 )     2.23 %     2.59 %     (.36 %)     (14 )
Service revenue operating margin (F)
    20.8 %     20.5 %     .3 %     1       21.3 %     22.3 %     (1.0 %)     (4 )
Capital expenditures (G)
    $270,236       $223,242       $46,994       21       $797,106       $788,430       $8,676       1  


(A)  
Cost to acquire a new customer is calculated by dividing the sum of the GAAP reported product sales, cost of products sold and sales and marketing expenses (included within “Selling, general, administrative and other”), as reported in the Consolidated Statements of Income, by the number of internal gross customer additions in the period. Customer acquisition costs exclude amounts related to the Company’s customer retention efforts.
 
(B)  
Cash cost per unit per month, excluding customer acquisition costs, is calculated by dividing the sum of the GAAP reported product sales, cost of services, cost of products sold, selling, general, administrative and other expenses as reported in the Consolidated Statements of Income, less customer acquisition costs, by the number of average customers for the period.
 
(C)  
Average revenue per customer per month is calculated by dividing wireless service revenues by average customers for the period.
 
(D)  
Retail revenue per customer per month is calculated by dividing wireless retail revenues (service revenues less wholesale revenues) by average customers for the period.
 
(E)  
Retail minutes of use per customer per month represents the average monthly minutes that ALLTEL’s customers use on both the Company’s network and while roaming on other carriers’ networks.
 
(F)  
Service revenue operating margin is calculated by dividing wireless segment income by wireless service revenues.
 
(G)  
Includes capitalized software development costs.

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ALLTEL CORPORATION
SUPPLEMENTAL OPERATING INFORMATION-Page 10
(Dollars in thousands, except per customer amounts)

                                                                 
    THREE MONTHS ENDED     TWELVE MONTHS ENDED  
                    Increase                             Increase        
    December 31,     December 31,     (Decrease)             December 31,     December 31,     (Decrease)        
    2004     2003     Amount     %     2004     2003     Amount     %  
Wireline:
                                                               
Customers
    3,009,388       3,095,635       (86,247 )     (3 )                                
Average customers
    3,024,635       3,108,589       (83,954 )     (3 )     3,061,529       3,136,777       (75,248 )     (2 )
DSL customers
    243,325       153,028       90,297       59                                  
Average revenue per customer per month (H)
    $66.98       $66.03       $.95       1       $65.87       $64.72       $1.15       2  
Capital expenditures (G)
    $100,730       $115,964       $(15,234 )     (13 )     $336,498       $386,235       $(49,737 )     (13 )
Communications support services:
                                                               
Long-distance customers
    1,770,852       1,680,181       90,671       5                                  
Capital expenditures (G)
    $5,738       $3,738       $2,000       54       $15,150       $18,999       $(3,849 )     (20 )
Consolidated:
                                                               
Equity free cash flow (I)
    $225,693       $218,043       $7,650       4       $1,180,072       $1,007,733       $172,339       17  
Capital expenditures (G)
    $376,885       $343,281       $33,604       10       $1,157,729       $1,194,410       $(36,681 )     (3 )
Total assets
    $16,603,736       $16,661,138       $(57,402 )     -                                  


(G)  
Includes capitalized software development costs.
 
(H)  
Average revenue per customer per month is calculated by dividing total wireline revenues by average customers for the period.
 
(I)  
Equity free cash flow is calculated as the sum of net income from current businesses plus depreciation and amortization less capital expenditures which includes capitalized software development costs as indicated in Note G.

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ALLTEL CORPORATION
CONSOLIDATED BALANCE SHEETS UNDER GAAP-Page 11
(In thousands)

ASSETS

                 
    December 31,     December 31,  
    2004     2003  
CURRENT ASSETS:
               
Cash and short-term investments
  $ 484,934     $ 657,764  
Accounts receivable (less allowance for doubtful accounts of $53,606 and $46,333, respectively)
    912,665       890,015  
Inventories
    156,785       122,133  
Prepaid expenses and other
    62,383       59,210  
 
           
Total current assets
    1,616,767       1,729,122  
 
           
Investments
    804,861       722,698  
Goodwill
    4,875,718       4,854,263  
Other intangibles
    1,306,140       1,336,956  
PROPERTY, PLANT AND EQUIPMENT:
               
Land
    278,084       259,180  
Buildings and improvements
    1,134,824       1,052,994  
Wireline
    6,735,748       6,514,694  
Wireless
    5,763,965       5,255,820  
Information processing
    1,048,446       946,749  
Other
    489,936       482,255  
Under construction
    385,283       398,232  
 
           
Total property, plant and equipment
    15,836,286       14,909,924  
Less accumulated depreciation
    8,288,195       7,289,145  
 
           
Net property, plant and equipment
    7,548,091       7,620,779  
 
           
Other assets
    452,159       397,320  
 
           
TOTAL ASSETS
  $ 16,603,736     $ 16,661,138  
 
           

LIABILITIES AND SHAREHOLDERS’ EQUITY

                 
    December 31,     December 31,  
    2004     2003  
CURRENT LIABILITIES:
               
Current maturities of long-term debt
  $ 224,958     $ 277,235  
Accounts payable
    448,161       479,786  
Advance payments and customer deposits
    219,338       205,277  
Accrued taxes
    158,197       114,618  
Accrued dividends
    105,922       116,162  
Accrued interest
    120,259       107,085  
Other current liabilities
    183,523       192,504  
 
           
Total current liabilities
    1,460,358       1,492,667  
 
           
Long-term debt
    5,352,422       5,581,243  
Deferred income taxes
    1,715,119       1,417,667  
Other liabilities
    947,172       1,147,364  
SHAREHOLDERS’ EQUITY:
               
Preferred stock
    307       348  
Common stock
    302,268       312,644  
Additional paid-in capital
    197,902       750,131  
Unrealized holding gain on investments
    153,926       73,634  
Foreign currency translation adjustment
    482       569  
Retained earnings
    6,473,780       5,884,871  
 
           
Total shareholders’ equity
    7,128,665       7,022,197  
 
           
         
         
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
  $ 16,603,736     $ 16,661,138  
 
           


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ALLTEL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS UNDER GAAP-Page 12
(In thousands)

                                 
    THREE MONTHS ENDED     TWELVE MONTHS ENDED  
    December 31,     December 31,     December 31,     December 31,  
    2004     2003     2004     2003  
Net Cash Provided from Operations:
                               
Net income
  $ 270,645     $ 258,935     $ 1,046,235     $ 1,330,119  
Adjustments to reconcile net income to net cash provided from operations:
                               
Income from discontinued operations
    -       -       (19,538 )     (360,999 )
Cumulative effect of accounting change
    -       -       -       (15,591 )
Depreciation and amortization
    332,520       321,330       1,299,691       1,247,748  
Provision for doubtful accounts
    47,601       42,152       184,871       184,670  
Non-cash portion of restructuring and other charges
    -       -       25,569       13,245  
Non-cash portion of gain on disposal of assets, write-down of investments and other
    -       (30,999 )     -       (25,035 )
Increase in deferred income taxes
    74,794       83,536       263,390       225,021  
Reversal of income tax contingency reserves
    -       -       (19,656 )     -  
Other, net
    (5,861 )     (9,903 )     (14,336 )     (11,403 )
Changes in operating assets and liabilities, net of the effects of acquisitions and dispositions:
                               
Accounts receivable
    (41,856 )     9,877       (206,132 )     (79,681 )
Inventories
    (44,750 )     21,817       (33,842 )     17,141  
Accounts payable
    65,854       53,692       (27,174 )     21,803  
Other current liabilities
    6,490       (12,708 )     70,602       30,177  
Other, net
    (82,646 )     (113,555 )     (102,831 )     (102,461 )
 
                       
Net cash provided from operations
    622,791       624,174       2,466,849       2,474,754  
 
                       
Cash Flows from Investing Activities:
                               
Additions to property, plant and equipment
    (368,122 )     (331,221 )     (1,125,402 )     (1,137,716 )
Additions to capitalized software development costs
    (8,763 )     (12,060 )     (32,327 )     (56,694 )
Additions to investments
    (423 )     (2,705 )     (3,228 )     (13,532 )
Purchases of property, net of cash acquired
    (185,136 )     -       (185,136 )     (160,560 )
Proceeds from the sale of assets
    -       46,072       -       46,072  
Proceeds from the return on or sale of investments
    21,497       14,046       88,612       48,348  
Other, net
    (313 )     (7,833 )     (907 )     8,140  
 
                       
Net cash used in investing activities
    (541,260 )     (293,701 )     (1,258,388 )     (1,265,942 )
 
                       
Cash Flows from Financing Activities:
                               
Dividends on preferred and common stock
    (122,223 )     (109,214 )     (467,570 )     (436,391 )
Reductions in long-term debt
    (22,246 )     (19,146 )     (277,240 )     (763,429 )
Distributions to minority investors
    (17,240 )     (23,085 )     (66,917 )     (67,551 )
Repurchases of common stock
    (88,419 )     -       (595,350 )     -  
Common stock issued
    5,146       18,205       25,873       49,131  
 
                       
Net cash used in financing activities
    (244,982 )     (133,240 )     (1,381,204 )     (1,218,240 )
 
                       
Net cash provided from (used in) discontinued operations
    -       (106,376 )     -       531,791  
Effect of exchange rate changes on cash and short-term investments
    -       5       (87 )     760  
 
                       
Increase (decrease) in cash and short-term investments
    (163,451 )     90,862       (172,830 )     523,123  
Cash and Short-term Investments:
                               
Beginning of the period
    648,385       566,902       657,764       134,641  
 
                       
End of the period
  $ 484,934     $ 657,764     $ 484,934     $ 657,764  
 
                       

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ALLTEL CORPORATION
RECONCILIATIONS OF RESULTS OF OPERATIONS UNDER GAAP TO RESULTS OF OPERATIONS FROM CURRENT BUSINESSES (NON-GAAP)-Page 13
(In thousands)

                                 
    THREE MONTHS ENDED     TWELVE MONTHS ENDED  
    December 31,     December 31,     December 31,     December 31,  
    2004     2003     2004     2003  
Net cash provided from operations
  $ 622,791     $ 624,174     $ 2,466,849     $ 2,474,754  
Adjustments to reconcile to net income under GAAP:
                               
Income from discontinued operations
    -       -       19,538       360,999  
Cumulative effect of accounting change
    -       -       -       15,591  
Depreciation and amortization expense
    (332,520 )     (321,330 )     (1,299,691 )     (1,247,748 )
Provision for doubtful accounts
    (47,601 )     (42,152 )     (184,871 )     (184,670 )
Non-cash portion of restructuring and other charges
    -       -       (25,569 )     (13,245 )
Non-cash portion of gain on disposal of assets, write-down of investments and other
    -       30,999       -       25,035  
Increase in deferred income taxes
    (74,794 )     (83,536 )     (263,390 )     (225,021 )
Reversal of income tax contingency reserves
    -       -       19,656       -  
Other non-cash changes, net
    5,861       9,903       14,336       11,403  
Changes in operating assets and liabilities, net of the effects of acquisitions and dispositions
    96,908       40,877       299,377       113,021  
 
                       
Net income under GAAP
    270,645       258,935       1,046,235       1,330,119  
Adjustments to reconcile to net income from current businesses:
                               
Restructuring and other charges, net of tax
    (587 )     -       31,069       9,449  
Gain on disposal of assets, write-down of investments and other, net of tax
    -       (18,941 )     -       (8,583 )
Reversal of income tax contingency reserves
    -       -       (19,656 )     -  
Cumulative effect of accounting change
    -       -       -       (15,591 )
Income from discontinued operations
    -       -       (19,538 )     (360,999 )
 
                       
Net income from current businesses
    270,058       239,994       1,038,110       954,395  
Adjustments to reconcile to equity free cash flow from current businesses:
                               
Depreciation and amortization expense
    332,520       321,330       1,299,691       1,247,748  
Capital expenditures
    (376,885 )     (343,281 )     (1,157,729 )     (1,194,410 )
 
                       
Equity free cash flow from current businesses
  $ 225,693     $ 218,043     $ 1,180,072     $ 1,007,733  
 
                       

-end-


The following information was filed by Alltel Corp on Friday, January 21, 2005 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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