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| Delaware                                                                      | 34-0868285                                          |
|-------------------------------------------------------------------------------|-----------------------------------------------------|
| (State                or other jurisdiction of incorporation or organization) | (I.R.S.                Employer Identification No.) |
|                                                                          |                                                |
| One                Allied Drive, Little Rock, Arkansas                        | 72202                                               |
| (Address                of principal executive offices)                       | (Zip                Code)                           |

| Registrant’s                telephone number, including area code | (501)                905-8000 |
|-------------------------------------------------------------------------|-------------------------------|

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| Large                accelerated filer  x   | Accelerated                filer  ¨   | Non-accelerated                filer  ¨ |
|-----------------------------------------------------------------|----------------------------------------------------------------|--------------------------------------------------------|

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**ALLTEL      CORPORATION**

**FORM      10-Q**

**TABLE      OF CONTENTS**

|                   |                                                                                                                      | **Page                No.**  |
|------------------------|---------------------------------------------------------------------------------------------------------------------------|-----------------------------------|
|                   | PART                I- FINANCIAL INFORMATION                                                                              |                              |
|                   |                                                                                                                      |                              |
|                   |                                                                                                                      |                              |
| Item                1. | Financial                Statements                                                                                       |   2                     |
| Item              2.   | Management's                Discussion and Analysis of Financial                 Condition and Results of Operations | 23                                |
| Item                3. | Quantitative                and Qualitative Disclosures About Market                Risk                                  | 40                                |
| Item                4. | Controls                and Procedures                                                                                    | 41                                |

| **PART                II - OTHER INFORMATION** |
|------------------------------------------------|
|                                           |   |   |
|                                           |   |   |
| Item                1.                         | Legal                Proceedings |   * |
| Item                1A.                        | Risk                Factors | 41 |
| Item                2.                         | Unregistered                Sales of Equity Securities and Use of Proceeds | 42 |
| Item                3.                         | Defaults                Upon Senior Securities |   * |
| Item                4.                         | Submission                of Matters to a Vote of Security Holders |   * |
| Item                5.                         | Other                Information |   * |
| Item                6.                         | Exhibits | 42 |

----

*Table          of Contents*

**ALLTEL      CORPORATION**

**FORM      10-Q**

**PART      I - FINANCIAL INFORMATION**

**Item      1.**
** **
**Financial      Statements**

| **CONSOLIDATED                BALANCE SHEETS (UNAUDITED)**                                                                                                                                |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| (Dollars                in millions, except per share amounts)                                                                                                                            |   | September                30, |   | December                31, |   |
| **Assets**                                                                                                                                                                                |   | 2006 |   | 2005 |   |
| **Current                Assets:**                                                                                                                                                        |   |   |   |   |   |
| Cash                and short-term investments                                                                                                                                            |   | $ | 3,086.0 |   | $ | 982.4 |   |
| Accounts                receivable (less allowance for doubtful accounts of $64.0 and $70.6,                respectively)                                                                 |   |   | 835.1 |   |   | 761.8 |   |
| Inventories                                                                                                                                                                               |   |   | 156.2 |   |   | 195.2 |   |
| Prepaid                expenses and other                                                                                                                                                 |   |   | 86.1 |   |   | 92.1 |   |
| Assets                related to discontinued operations                                                                                                                                  |   |   | 3.6 |   |   | 565.4 |   |
| Total                current assets                                                                                                                                                       |   |   | 4,167.0 |   |   | 2,596.9 |   |
| Investments                                                                                                                                                                               |   |   | 367.4 |   |   | 356.4 |   |
| Goodwill                                                                                                                                                                                  |   |   | 7,805.6 |   |   | 7,429.3 |   |
| Other                intangibles                                                                                                                                                          |   |   | 1,858.8 |   |   | 1,861.4 |   |
| **Property,                Plant and Equipment:**                                                                                                                                         |   |   |   |   |   |   |   |
| Land                                                                                                                                                                                      |   |   | 294.4 |   |   | 280.3 |   |
| Building                and improvements                                                                                                                                                  |   |   | 906.1 |   |   | 901.1 |   |
| Operating                plant and equipment                                                                                                                                              |   |   | 7,577.0 |   |   | 7,362.9 |   |
| Information                processing                                                                                                                                                     |   |   | 1,025.2 |   |   | 1,126.5 |   |
| Furniture                and fixtures                                                                                                                                                     |   |   | 165.6 |   |   | 143.6 |   |
| Under                construction                                                                                                                                                         |   |   | 417.7 |   |   | 344.3 |   |
| Total                property, plant and equipment                                                                                                                                        |   |   | 10,386.0 |   |   | 10,158.7 |   |
| Less                accumulated depreciation                                                                                                                                              |   |   | 5,436.0 |   |   | 5,056.0 |   |
| Net                property, plant and equipment                                                                                                                                          |   |   | 4,950.0 |   |   | 5,102.7 |   |
| Other                assets                                                                                                                                                               |   |   | 113.5 |   |   | 248.2 |   |
| Assets                related to discontinued operations                                                                                                                                  |   |   | 67.9 |   |   | 6,418.2 |   |
| **Total                Assets**                                                                                                                                                           |   | $ | 19,330.2 |   | $ | 24,013.1 |   |
|                                                                                                                                                                                      |   |   |   |   |   |   |   |
| **Liabilities                and Shareholders’ Equity**                                                                                                                             |   |   |   |   |   |   |   |
| **Current                Liabilities:**                                                                                                                                                   |   |   |   |   |   |   |   |
| Current                maturities of long-term debt                                                                                                                                       |   | $ | 222.6 |   | $ | 183.0 |   |
| Accounts                payable                                                                                                                                                           |   |   | 464.5 |   |   | 500.0 |   |
| Advance                payments and customer deposits                                                                                                                                     |   |   | 186.8 |   |   | 170.8 |   |
| Accrued                taxes                                                                                                                                                              |   |   | 276.3 |   |   | 141.3 |   |
| Accrued                dividends                                                                                                                                                          |   |   | 66.1 |   |   | 147.8 |   |
| Accrued                interest                                                                                                                                                           |   |   | 56.1 |   |   | 98.3 |   |
| Current                deferred income taxes                                                                                                                                              |   |   | - |   |   | 349.6 |   |
| Other                current liabilities                                                                                                                                                  |   |   | 165.3 |   |   | 206.7 |   |
| Liabilities                related to discontinued operations                                                                                                                             |   |   | 2.5 |   |   | 492.5 |   |
| Total                current liabilities                                                                                                                                                  |   |   | 1,440.2 |   |   | 2,290.0 |   |
| Long-term                debt                                                                                                                                                             |   |   | 2,711.6 |   |   | 5,544.1 |   |
| Deferred                income taxes                                                                                                                                                      |   |   | 1,114.5 |   |   | 1,142.3 |   |
| Other                liabilities                                                                                                                                                          |   |   | 706.3 |   |   | 796.9 |   |
| Liabilities                related to discontinued operations                                                                                                                             |   |   | - |   |   | 1,224.3 |   |
| Total                liabilities                                                                                                                                                          |   |   | 5,972.6 |   |   | 10,997.6 |   |
| **Shareholders’                Equity:**                                                                                                                                            |   |   |   |   |   |   |   |
| Preferred                stock, Series C, $2.06, no par value, 10,307 and 11,122 shares issued                and                outstanding, respectively                                |   |   | 0.3 |   |   | 0.3 |   |
| Common                stock, par value $1 per share, 1.0 billion shares authorized, 378,879,586                and 383,605,936 shares issued and outstanding,                respectively |   |   | 378.9 |   |   | 383.6 |   |
| Additional                paid-in capital                                                                                                                                                 |   |   | 5,119.5 |   |   | 5,339.3 |   |
| Unrealized                holding gain on investments                                                                                                                                     |   |   | 38.0 |   |   | 22.3 |   |
| Foreign                currency translation adjustment                                                                                                                                    |   |   | - |   |   | (2.8 | ) |
| Retained                earnings                                                                                                                                                          |   |   | 7,820.9 |   |   | 7,272.8 |   |
| Total                shareholders’ equity                                                                                                                                           |   |   | 13,357.6 |   |   | 13,015.5 |   |
| **Total                Liabilities and Shareholders’ Equity**                                                                                                                       |   | $ | 19,330.2 |   | $ | 24,013.1 |   |

----

*Table          of Contents*

| **CONSOLIDATED                STATEMENTS OF INCOME (UNAUDITED)  **                                                                               |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                       |   | Three                Months EndedSeptember                30, |   |  Nine                Months EndedSeptember                30, |   |
| (Millions,                except per share amounts)                                                                                                        |   | 2006 |   | 2005 |   |  2006 |   | 2005 |   |
| **Revenues                and sales:**                                                                                                                     |   |   |   |   |   |    |   |   |   |
| Service                revenues                                                                                                                            |   | $ | 1,795.4 |   | $ | 1,614.1 |   | $ | 5,178.7 |   | $ | 4,274.0 |   |
| Product                sales                                                                                                                               |   |   | 211.9 |   |   | 178.9 |   |   | 617.1 |   |   | 461.3 |   |
| Total                revenues and sales                                                                                                                    |   |   | 2,007.3 |   |   | 1,793.0 |   |   | 5,795.8 |   |   | 4,735.3 |   |
| **Costs                and expenses:**                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost                of services (excluding depreciation of $168.6, $151.3, $501.3, and                $417.5,                respectively, included below) |   |   | 610.1 |   |   | 524.4 |   |   | 1,726.9 |   |   | 1,405.4 |   |
| Cost                of products sold                                                                                                                       |   |   | 293.8 |   |   | 250.3 |   |   | 849.8 |   |   | 660.2 |   |
| Selling,                general, administrative and other                                                                                                  |   |   | 438.3 |   |   | 399.1 |   |   | 1,298.5 |   |   | 1,088.9 |   |
| Depreciation                and amortization                                                                                                               |   |   | 307.1 |   |   | 266.2 |   |   | 916.0 |   |   | 699.3 |   |
| Integration                expenses and other charges                                                                                                      |   |   | - |   |   | 14.3 |   |   | 10.8 |   |   | 14.3 |   |
| Total                costs and expense                                                                                                                     |   |   | 1,649.3 |   |   | 1,454.3 |   |   | 4,802.0 |   |   | 3,868.1 |   |
| **Operating                income**                                                                                                                        |   |   | 358.0 |   |   | 338.7 |   |   | 993.8 |   |   | 867.2 |   |
|                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity                earnings in unconsolidated partnerships                                                                                              |   |   | 17.3 |   |   | 10.4 |   |   | 45.6 |   |   | 36.4 |   |
| Minority                interest in consolidated partnerships                                                                                              |   |   | (11.7 | ) |   | (20.6 | ) |   | (37.1 | ) |   | (57.8 | ) |
| Other                income, net                                                                                                                           |   |   | 37.3 |   |   | 15.2 |   |   | 69.1 |   |   | 144.1 |   |
| Interest                expense                                                                                                                            |   |   | (63.8 | ) |   | (78.9 | ) |   | (234.9 | ) |   | (232.9 | ) |
| Gain                (loss) on exchange or disposal of assets and other                                                                                     |   |   | (50.5 | ) |   | 30.5 |   |   | 126.1 |   |   | 218.8 |   |
|                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations before income taxes                                                                                       |   |   | 286.6 |   |   | 295.3 |   |   | 962.6 |   |   | 975.8 |   |
| Income                taxes                                                                                                                                |   |   | 121.3 |   |   | 111.1 |   |   | 374.7 |   |   | 358.1 |   |
|                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations                                                                                                           |   |   | 165.3 |   |   | 184.2 |   |   | 587.9 |   |   | 617.7 |   |
| Income                from discontinued operations (net of income taxes of $7.9, $128.2,                $222.6                and $300.3, respectively)    |   |   | 21.9 |   |   | 176.9 |   |   | 325.6 |   |   | 458.5 |   |
|                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                income                                                                                                                                  |   |   | 187.2 |   |   | 361.1 |   |   | 913.5 |   |   | 1,076.2 |   |
| Preferred                dividends                                                                                                                         |   |   | 0.1 |   |   | - |   |   | 0.1 |   |   | 0.1 |   |
| Net                income applicable to common shares                                                                                                      |   | $ | 187.1 |   | $ | 361.1 |   | $ | 913.4 |   | $ | 1,076.1 |   |
| **Earnings                per share:**                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic:                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations                                                                                                           |   |   | $.43 |   |   | $.51 |   |   | $1.52 |   |   | $1.89 |   |
| Income                from discontinued operations                                                                                                         |   |   | .06 |   |   | .48 |   |   | .84 |   |   | 1.40 |   |
| Net                income                                                                                                                                  |   |   | $.49 |   |   | $.99 |   |   | $2.36 |   |   | $3.29 |   |
| Diluted:                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations                                                                                                           |   |   | $.43 |   |   | $.50 |   |   | $1.51 |   |   | $1.88 |   |
| Income                from discontinued operations                                                                                                         |   |   | .05 |   |   | .48 |   |   | .84 |   |   | 1.39 |   |
| Net                income                                                                                                                                  |   |   | $.48 |   |   | $.98 |   |   | $2.35 |   |   | $3.27 |   |

----

*Table          of Contents*

| **CONSOLIDATED                STATEMENTS OF CASH FLOWS (UNAUDITED)**                                                                       |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                       |   | Nine                Months EndedSeptember                30, |   |
| (Millions)                                                                                                                                 |   | 2006 |   | 2005 |   |
| **Cash                Provided from Operations:**                                                                                          |   |   |   |   |   |
| Net                income                                                                                                                  |   | $ | 913.5 |   | $ | 1,076.2 |   |
| Adjustments                to reconcile net income to net cash provided from                operations:                                    |   |   |   |   |   |   |   |
| Income                from discontinued operations                                                                                         |   |   | (325.6 | ) |   | (458.5 | ) |
| Depreciation                and amortization expense                                                                                       |   |   | 916.0 |   |   | 699.3 |   |
| Provision                for doubtful accounts                                                                                             |   |   | 179.9 |   |   | 131.1 |   |
| Non-cash                portion of (gain) loss on exchange or disposal of assets and                other                                  |   |   | (80.1 | ) |   | (232.7 | ) |
| Non-cash                portion of integration expenses and other charges                                                                  |   |   | - |   |   | 10.0 |   |
| Change                in deferred income taxes                                                                                             |   |   | 6.2 |   |   | 19.0 |   |
| Other,                net                                                                                                                  |   |   | (6.3 | ) |   | 9.5 |   |
| Changes                in operating assets and liabilities, net of effects of acquisitions                and                dispositions: |   |   |   |   |   |   |   |
| Accounts                receivable                                                                                                         |   |   | (245.9 | ) |   | (217.6 | ) |
| Inventories                                                                                                                                |   |   | 39.6 |   |   | 10.0 |   |
| Accounts                payable                                                                                                            |   |   | (35.3 | ) |   | (6.3 | ) |
| Other                current liabilities                                                                                                   |   |   | (320.4 | ) |   | (44.7 | ) |
| Other,                net                                                                                                                  |   |   | (49.7 | ) |   | 7.3 |   |
| Net                cash provided from operations                                                                                           |   |   | 991.9 |   |   | 1,002.6 |   |
| **Cash                Flows from Investing Activities:**                                                                                   |   |   |   |   |   |   |   |
| Additions                to property, plant and equipment                                                                                  |   |   | (718.6 | ) |   | (681.3 | ) |
| Additions                to capitalized software development costs                                                                         |   |   | (24.0 | ) |   | (35.4 | ) |
| Additions                to investments                                                                                                    |   |   | (0.7 | ) |   | (0.9 | ) |
| Purchases                of property, net of cash acquired                                                                                 |   |   | (676.5 | ) |   | (1,135.8 | ) |
| Proceeds                from the sale of assets                                                                                            |   |   | - |   |   | 36.2 |   |
| Proceeds                from the sale of investments                                                                                       |   |   | 200.5 |   |   | 353.9 |   |
| Proceeds                from the return on investments                                                                                     |   |   | 36.7 |   |   | 30.9 |   |
| Other,                net                                                                                                                  |   |   | 10.5 |   |   | 19.6 |   |
| Net                cash used in investing activities                                                                                       |   |   | (1,172.1 | ) |   | (1,412.8 | ) |
| **Cash                Flows from Financing Activities:**                                                                                   |   |   |   |   |   |   |   |
| Dividends                on common and preferred stock                                                                                     |   |   | (447.1 | ) |   | (345.2 | ) |
| Repayments                of long-term debt                                                                                                |   |   | (1,012.2 | ) |   | (2,655.6 | ) |
| Repurchases                of common stock                                                                                                 |   |   | (709.0 | ) |   | - |   |
| Conversion                of convertible debt                                                                                              |   |   | (59.8 | ) |   | - |   |
| Distributions                to minority investors                                                                                         |   |   | (27.7 | ) |   | (44.8 | ) |
| Excess                tax benefits from stock option exercises                                                                             |   |   | 5.4 |   |   | - |   |
| Long-term                debt issued                                                                                                       |   |   | - |   |   | 927.7 |   |
| Common                stock issued                                                                                                         |   |   | 191.5 |   |   | 1,442.8 |   |
| Net                cash used in financing activities                                                                                       |   |   | (2,058.9 | ) |   | (675.1 | ) |
| **Cash                Flows from Discontinued Operations:**                                                                                |   |   |   |   |   |   |   |
| Cash                provided from operating activities                                                                                     |   |   | 604.2 |   |   | 974.9 |   |
| Cash                provided from (used in) investing activities                                                                           |   |   | 3,744.6 |   |   | (227.5 | ) |
| Cash                used in financing activities                                                                                           |   |   | (0.2 | ) |   | (71.5 | ) |
| Net                cash provided from discontinued operations                                                                              |   |   | 4,348.6 |   |   | 675.9 |   |
|                                                                                                                                       |   |   |   |   |   |   |   |
| Effect                of exchange rate changes on cash and short-term                investments                                           |   |   | (5.9 | ) |   | (1.5 | ) |
|                                                                                                                                       |   |   |   |   |   |   |   |
| Increase                (decrease) in cash and short-term investments                                                                      |   |   | 2,103.6 |   |   | (410.9 | ) |
|                                                                                                                                       |   |   |   |   |   |   |   |
| **Cash                and Short-term Investments:**                                                                                        |   |   |   |   |   |   |   |
| Beginning                of the period                                                                                                     |   |   | 982.4 |   |   | 477.2 |   |
| End                of the period                                                                                                           |   | $ | 3,086.0 |   | $ | 66.3 |   |

----

*Table          of Contents*

| **CONSOLIDATED                STATEMENT OF SHAREHOLDERS’ EQUITY****(UNAUDITED)**                     |   |
|------------------------------------------------------------------------------------------------------------|--------|
| (Millions)                                                                                                 |   | PreferredStock |   | CommonStock |   | AdditionalPaid-InCapital |   | UnrealizedHoldingGain                OnInvestments |   | ForeignCurrencyTranslationAdjustment |   | RetainedEarnings |   | Total |   |
| Balance                at December 31, 2005                                                                |   | $ | 0.3 |   | $ | 383.6 |   | $ | 5,339.3 |   | $ | 22.3 |   | $ | (2.8 | ) | $ | 7,272.8 |   | $ | 13,015.5 |   |
| Net                income                                                                                  |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 913.5 |   |   | 913.5 |   |
| Other                comprehensive income, net of tax: (See Note 13)                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized                holding gains on investments, net of reclassification                adjustments |   |   | - |   |   | - |   |   | - |   |   | 15.7 |   |   | - |   |   | - |   |   | 15.7 |   |
| Foreign                currency translation adjustment, net of reclassification                adjustments |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 2.8 |   |   | - |   |   | 2.8 |   |
| Comprehensive                income                                                                        |   |   | - |   |   | - |   |   | - |   |   | 15.7 |   |   | 2.8 |   |   | 913.5 |   |   | 932.0 |   |
| Employee                plans, net                                                                         |   |   | - |   |   | 4.4 |   |   | 186.9 |   |   | - |   |   | - |   |   | - |   |   | 191.3 |   |
| Issuance                of restricted stock                                                                |   |   | - |   |   | 0.3 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 0.3 |   |
| Amortization                of unearned compensation (See Note 2)                                          |   |   | - |   |   | - |   |   | 29.6 |   |   | - |   |   | - |   |   | - |   |   | 29.6 |   |
| Tax                benefit for non-qualified stock options                                                 |   |   | - |   |   | - |   |   | 8.0 |   |   | - |   |   | - |   |   | - |   |   | 8.0 |   |
| Repurchases                of common stock                                                                 |   |   | - |   |   | (12.8 | ) |   | (696.2 | ) |   | - |   |   | - |   |   | - |   |   | (709.0 | ) |
| Conversion                of convertible notes (See Note 3)                                                |   |   | - |   |   | 3.4 |   |   | 36.7 |   |   | - |   |   | - |   |   | - |   |   | 40.1 |   |
| Spin-off                of wireline telecommunications business                                            |   |   | - |   |   | - |   |   | 215.2 |   |   | - |   |   | - |   |   | - |   |   | 215.2 |   |
| Dividends:                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                - $.895 per share                                                                    |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (365.3 | ) |   | (365.3 | ) |
| Preferred                                                                                                  |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (0.1 | ) |   | (0.1 | ) |
| Balance                at September 30, 2006                                                               |   | $ | 0.3 |   | $ | 378.9 |   | $ | 5,119.5 |   | $ | 38.0 |   | $ | - |   | $ | 7,820.9 |   | $ | 13,357.6 |   |

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*Table          of Contents*

**NOTES      TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS**

**_____**

| **1.** | **General:** |
|--------|--------------|

| **2.** | **Accounting                Changes:** |
|--------|----------------------------------------|

----

*Table          of Contents*

**NOTES      TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL      STATEMENTS-(Continued)**

** _____**

| **2.** | **Accounting                Changes, Continued:** |
|--------|---------------------------------------------------|

|                                                                                                                                                                                                           |   |                              |   |                             |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|----------------------------------|--------|
| (Millions,                except per share amounts)                                                                                                                                                            |   | Three                Months Ended |   | Nine                Months Ended |   |
| Compensation                expense related to stock options issued by Alltel                                                                                                                                  |   | $                                 | 4.5    |                             | $      | 14.7 |   |
| Compensation                expense related to stock options converted to Alltel stock options                in                connection with the acquisition of Western Wireless                Corporation |   |                              | 0.5    |                             |   | 1.5 |   |
| Compensation                expense related to restricted stock awards                                                                                                                                         |   |                              | 7.1    |                             |   | 13.4 |   |
| Compensation                expense before income taxes                                                                                                                                                        |   |                              | 12.1   |                             |   | 29.6 |   |
| Income                tax benefit                                                                                                                                                                              |   |                              | (4.2   | )                                |   | (9.6 | ) |
| Compensation                expense, net of tax                                                                                                                                                                |   | $                                 | 7.9    |                             | $      | 20.0 |   |
| Earnings                per share effects of compensation expense, net of tax                                                                                                                                  |   |                              |   |                             |   |   |   |
| Basic                earnings per share                                                                                                                                                                        |   |                              | $.02   |                             |   | $.05 |   |
| Diluted                earnings per share                                                                                                                                                                      |   |                              | $.02   |                             |   | $.05 |   |

|                                                                                                                                                         |   |                              |                           |                             |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------------------------------|----------------------------------|---------|
| (Millions,                except per share amounts)                                                                                                          |   | Three                Months Ended |                           | Nine                Months Ended |    |
| Net                income as reported                                                                                                                        | $      | 361.1                             |                           | $                                | 1,076.2 |   |
| Add                stock-based compensation expense included in net income, net of related                tax effects                                        |   | 1.1                               |                           |                             | 3.1     |   |
| Deduct                stock-based employee compensation expense determined under fair value                method for all awards, net of related tax effects |   | (5.5                              | )                              |                             | (18.5   | ) |
| Pro                forma net income                                                                                                                          | $      | 356.7                             |                           | $                                | 1,060.8 |   |
| Basic                earnings per share:                                                                                                                     |   |                              | As                reported     |                             |    | $.99 |   |   | $3.29 |   |
|                                                                                                                                                         |   |                              | Pro                forma  |                             |    | $.98 |   |   | $3.25 |   |
| Diluted                earnings per share:                                                                                                                   |   |                              | As                reported     |                             |    | $.98 |   |   | $3.27 |   |
|                                                                                                                                                         |   |                              | Pro                forma  |                             |    | $.97 |   |   | $3.22 |   |

----

*Table          of Contents*

**NOTES      TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL      STATEMENTS-(Continued)**

** _____**

| **3.** | **Acquisitions:** |
|--------|-------------------|

|                                                                |   |
|---------------------------------------------------------------------|--------|
| (Millions)                                                          |   |
| Fair                value of assets acquired:                       |   |   |   |
| Current                assets                                       |   | $ | 11.7 |   |
| Property,                plant and equipment                        |   |   | 30.6 |   |
| Goodwill                                                            |   |   | 468.4 |   |
| Cellular                licenses                                    |   |   | 84.4 |   |
| Customer                lists                                       |   |   | 73.5 |   |
| Total                assets acquired                                |   |   | 668.6 |   |
| Liabilities                assumed:                                 |   |   |   |   |
| Current                liabilities                                  |   |   | (25.7 | ) |
| Deferred                income taxes established on acquired assets |   |   | (25.1 | ) |
| Total                liabilities assumed                            |   |   | (50.8 | ) |
| Minority                interest liability acquired                 |   |   | 58.7 |   |
| Net                cash paid                                        |   | $ | 676.5 |   |

----

*Table          of Contents*

**NOTES      TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL      STATEMENTS-(Continued)**

** _____**

| **3.** | **Acquisitions,                Continued:** |
|--------|---------------------------------------------|

----

*Table          of Contents*

**NOTES      TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL      STATEMENTS-(Continued)**

** _____**

| **3.** | **Acquisitions,                Continued:** |
|--------|---------------------------------------------|

|                                                                   |   |                                             |                               |                  |   |
|------------------------------------------------------------------------|--------|--------------------------------------------------|------------------------------------|-----------------------|--------|
| (Millions,                except per share amounts)                    |   | Three                Months                Ended |                               | Nine MonthsEnded |   |
| Revenues                and sales                                      |   |                                             | $1,886.4                           |                  |   | $5,331.3 |   |
| Income                from continuing operations                       |   |                                             | $                  189.2      |                  |   | $                  636.4 |   |
| Combined                earnings per share from continuing operations: |   |                                             |                               |                  |   |   |   |
| Basic                earnings per share                                |   |                                             | $.50                               |                  |   | $1.67 |   |
| Diluted                earnings per share                              |   |                                             | $.49                               |                  |   | $1.64 |   |
| Net                income                                              |   |                                             | $                  353.1 |                  |   | $1,055.0 |   |
| Combined                earnings per share:                            |   |                                             |                               |                  |   |   |   |
| Basic                earnings per share                                |   |                                             | $.93                               |                  |   | $2.77 |   |
| Diluted                earnings per share                              |   |                                             | $.91                               |                  |   | $2.72 |   |

| **4.** | **Goodwill                and Other Intangible                Assets:** |
|--------|-------------------------------------------------------------------------|

|                                                                 |   |   |    |
|----------------------------------------------------------------------|--------|--------|---------|
| (Millions)                                                           |   |   |    |
| Balance                  at December 31, 2005                        |   | $      | 7,429.3 |   |
| Acquired                  during the period                          |   |   | 468.4   |   |
| Allocated                  to assets held for sale during the period |   |   | (18.8   | ) |
| Other                  adjustments                                   |   |   | (73.3   | ) |
| Balance                  at September 30, 2006                       |   | $      | 7,805.6 |   |

----

*Table          of Contents*

**NOTES      TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL      STATEMENTS-(Continued)**

** _____**

| **4.** | **Goodwill                and Other Intangible Assets,                Continued:** |
|--------|------------------------------------------------------------------------------------|

|                                                     |   |                             |    |                            |   |
|----------------------------------------------------------|--------|----------------------------------|---------|---------------------------------|--------|
| (Millions)                                               |   | September                30,2006 |    | December                31,2005 |   |
| Cellular                licenses                         |   | $                                | 1,453.7 |                            | $      | 1,392.3 |   |
| Personal                Communications Services licenses |   |                             | 79.1    |                            |   | 79.1 |   |
|                                                     |   | $                                | 1,532.8 |                            | $      | 1,471.4 |   |

|                             |   |                              |   |
|----------------------------------|--------|-----------------------------------|--------|
|                             |   | September                30, 2006 |   |
| (Millions)                       |   | GrossCost                         |   | AccumulatedAmortization |   | Net                CarryingValue |   |
| Customer                lists    |   | $                                 | 756.6  |   | $ | (434.6 | ) | $ | 322.0 |   |
| Roaming                agreement |   |                              | 6.1    |   |   | (2.1 | ) |   | 4.0 |   |
|                             |   | $                                 | 762.7  |   | $ | (436.7 | ) | $ | 326.0 |   |
|                             |   |                              |   |   |   |   |   |
|                             |   | December                31, 2005  |   |
| (Millions)                       |   | GrossCost                         |   | AccumulatedAmortization |   | Net                CarryingValue |   |
| Customer                lists    |   | $                                 | 691.6  |   | $ | (307.0 | ) | $ | 384.6 |   |
| Roaming                agreement |   |                              | 6.1    |   |   | (0.7 | ) |   | 5.4 |   |
|                             |   | $                                 | 697.7  |   | $ | (307.7 | ) | $ | 390.0 |   |

| **5.** | **Equity                Units:** |
|--------|----------------------------------|

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*Table          of Contents*

**NOTES      TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL      STATEMENTS-(Continued)**

**_____**

| **6.** | **Stock-Based                Compensation:** |
|--------|----------------------------------------------|

|                                   |   |   |                     |
|----------------------------------------|--------|--------|--------------------------|
| Expected                life           |   |   | 5.9                years |   |
| Expected                volatility     |   |   | 22.9%                    |   |
| Dividend                yield          |   |   | 0.8%                     |   |
| Risk-free                interest rate |   |   | 4.5%                     |   |

----

*Table          of Contents*

**NOTES      TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL      STATEMENTS-(Continued)**

| **6.** | **Stock-Based                Compensation, Continued:** |
|--------|---------------------------------------------------------|

|                                                         |   |                                      |     |                                                         |   |
|--------------------------------------------------------------|--------|-------------------------------------------|----------|--------------------------------------------------------------|--------|
|                                                         |   | (Thousands)Number                ofShares |     | WeightedAverage                PricePer                Share |   |
| Outstanding                at December 31, 2005              |   |                                      | 17,316.5 |                                                         |   | $53.94 |   |
| Granted                                                      |   |                                      | 1,357.1  |                                                         |   |                  63.25 |   |
| Exercised                                                    |   |                                      | (2,207.8 | )                                                            |   |                  40.12 |   |
| Forfeited                                                    |   |                                      | (96.0    | )                                                            |   |                  58.93 |   |
| Expired                                                      |   |                                      | (13.8    | )                                                            |   |                  31.83 |   |
| Outstanding                immediately prior to the spin-off |   |                                      | 16,356.0 |                                                         |   |                  56.57 |   |
| Adjustment                in shares resulting from spin-off  |   |                                      | 3,631.0  |                                                         |   |                  - |   |
| Granted                                                      |   |                                      | 10.0     |                                                         |   |                  57.46 |   |
| Exercised                                                    |   |                                      | (2,209.3 | )                                                            |   |                  46.20 |   |
| Forfeited                                                    |   |                                      | (859.5   | )                                                            |   |                  42.40 |   |
| Outstanding                at September 30, 2006             |   |                                      | 16,928.2 |                                                         |   | $46.51 |   |
| Exercisable                at end of period                  |   |                                      | 12,521.8 |                                                         |   | $46.76 |   |

|                                                  |   |                                      |                                                     |                                                    |   |                                                                 |   |                                      |                        |                                                                       |   |
|-------------------------------------------------------|--------|-------------------------------------------|----------------------------------------------------------|---------------------------------------------------------|--------|----------------------------------------------------------------------|--------|-------------------------------------------|-----------------------------|----------------------------------------------------------------------------|--------|
|                                                  |   | Options                Outstanding        |                                                     | Options                Exercisable                      |   |
| Range                ofExercise                Prices |   | (Thousands)Number                ofShares |                                                     | WeightedAverageRemainingContractual                Life |   | WeightedAverageExercise                PricePer                Share |   | (Thousands)Number                ofShares |                        |  WeightedAverageExercise                PricePer                Share |   |
| $                 6.20 - $12.04                  |   |                                      |                       77.1 |                                                    |   | 4.6                years                                             |   |                                      | $                 7.69 |                                                                       |   |                       44.0 |   |   | $                 8.77 |   |
| $21.78                - $26.49                        |   |                                      |                     453.6            |                                                    |   | 1.6                years                                             |   |                                      |                  26.10 |                                                                       |   |                     403.2 |   |   |                  26.05 |   |
| $27.72                - $30.89                        |   |                                      |                  1,347.6                            |                                                    |   | 1.0                years                                             |   |                                      |                  28.23 |                                                                       |   |                  1,347.6 |   |   |                  28.23 |   |
| $35.29                - $41.15                        |   |                                      |                  2,304.5                            |                                                    |   | 6.4                years                                             |   |                                      |                  39.85 |                                                                       |   |                  1,260.5 |   |   |                  39.69 |   |
| $41.58                - $47.84                        |   |                                      |                  4,250.9                            |                                                    |   | 6.4                years                                             |   |                                      |                  44.89 |                                                                       |   |                  2,629.2 |   |   |                  44.93 |   |
| $50.79                - $55.85                        |   |                                      |                  8,311.6                            |                                                    |   | 4.7                years                                             |   |                                      |                  53.34 |                                                                       |   |                  6,664.4 |   |   |                  53.74 |   |
| $57.46                - $59.84                        |   |                                      |                     182.9            |                                                    |   | 3.3                years                                             |   |                                      |                  59.18 |                                                                       |   |                     172.9 |   |   |                  59.28 |   |
|                                                  |   |                                      | 16,928.2                                                 |                                                    |   | 5.0                years                                             |   |                                      | $46.51                      |                                                                       |   | 12,521.8 |   |   | $46.76 |   |

|                                                          |   |                                        |     |                                                             |   |
|---------------------------------------------------------------|--------|---------------------------------------------|----------|------------------------------------------------------------------|--------|
|                                                          |   | (Thousands)Number                  ofShares |     | WeightedAverage                  PricePer                  Share |   |
| Non-vested                  at December 31, 2005              |   |                                        | 5,051.4  |                                                             |   | $51.94 |   |
| Granted                                                       |   |                                        | 1,357.1  |                                                             |   |                    63.25 |   |
| Vested                                                        |   |                                        | (2,068.9 | )                                                                |   |                    52.40 |   |
| Forfeited                                                     |   |                                        | (38.5    | )                                                                |   |                    52.80 |   |
| Non-vested                  immediately prior to the spin-off |   |                                        | 4,301.1  |                                                             |   |                    55.28 |   |
| Adjustment                  in shares resulting from spin-off |   |                                        | 954.9    |                                                             |   |                    - |   |
| Granted                                                       |   |                                        | 10.0     |                                                             |   |                    57.46 |   |
| Forfeited                                                     |   |                                        | (859.6   | )                                                                |   |                    42.40 |   |
| Non-vested                  at September 30, 2006             |   |                                        | 4,406.4  |                                                             |   | $45.82 |   |

----

*Table          of Contents*

**NOTES      TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL      STATEMENTS-(Continued)**

| **6.** | **Stock-Based                Compensation, Continued:** |
|--------|---------------------------------------------------------|

|                                            |   |                           |     |                                                             |   |
|-------------------------------------------------|--------|--------------------------------|----------|------------------------------------------------------------------|--------|
|                                            |   | Number                ofShares |     | WeightedAverageFair                ValuePer                Share |   |
| Non-vested                at December 31, 2005  |   |                           | 302,530  |                                                             |   | $52.52 |   |
| Granted                                         |   |                           | 303,083  |                                                             |   |                  61.34 |   |
| Vested                                          |   |                           | (111,811 | )                                                                |   |                  50.87 |   |
| Forfeited                                       |   |                           | (6,250   | )                                                                |   |                  53.26 |   |
| Non-vested                at September 30, 2006 |   |                           | 487,552  |                                                             |   | $58.37 |   |

| **7.** | **Employee                Benefit Plans and Postretirement Benefits Other Than                Pensions:** |
|--------|-----------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

**NOTES      TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL      STATEMENTS-(Continued)**

| **7.** | **Employee                Benefit Plans and Postretirement Benefits Other Than Pensions,                Continued:** |
|--------|----------------------------------------------------------------------------------------------------------------------|

|                                               |   |                              |   |                             |   |
|----------------------------------------------------|--------|-----------------------------------|--------|----------------------------------|--------|
|                                               |   | Three                Months Ended |   | Nine                Months Ended |   |
| (Millions)                                         |   | 2006                              |   | 2005                             |   | 2006 |   | 2005 |   |
| Benefits                earned during the year     |   | $                                 | 2.3    |                             | $      | 8.7 |   | $ | 14.1 |   | $ | 25.4 |   |
| Interest                cost on benefit obligation |   |                              | 3.0    |                             |   | 14.7 |   |   | 32.3 |   |   | 43.9 |   |
| Special                termination benefits        |   |                              | -      |                             |   | - |   |   | 9.0 |   |   | - |   |
| Settlement                and curtailment losses   |   |                              | 0.3    |                             |   | - |   |   | 3.8 |   |   | - |   |
| Amortization                of prior service cost  |   |                              | 0.3    |                             |   | 0.1 |   |   | 0.8 |   |   | 0.4 |   |
| Recognized                net actuarial loss       |   |                              | 1.0    |                             |   | 7.7 |   |   | 16.2 |   |   | 23.0 |   |
| Expected                return on plan assets      |   |                              | (3.4   | )                                |   | (20.8 | ) |   | (45.3 | ) |   | (62.2 | ) |
| Net                periodic benefit expense        |   | $                                 | 3.5    |                             | $      | 10.4 |   | $ | 30.9 |   | $ | 30.5 |   |

|                                                 |   |                              |   |                             |   |
|------------------------------------------------------|--------|-----------------------------------|--------|----------------------------------|--------|
|                                                 |   | Three                Months Ended |   | Nine                Months Ended |   |
| (Millions)                                           |   | 2006                              |   | 2005                             |   | 2006 |   | 2005 |   |
| Benefits                earned during the year       |   | $                                 | 0.1    |                             | $      | 0.1 |   | $ | 0.3 |   | $ | 0.3 |   |
| Interest                cost on benefit obligation   |   |                              | 0.1    |                             |   | 3.5 |   |   | 6.8 |   |   | 10.5 |   |
| Amortization                of transition obligation |   |                              | -      |                             |   | 0.2 |   |   | 0.4 |   |   | 0.6 |   |
| Amortization                of prior service cost    |   |                              | -      |                             |   | 0.5 |   |   | 0.9 |   |   | 1.5 |   |
| Recognized                net actuarial loss         |   |                              | -      |                             |   | 1.7 |   |   | 3.2 |   |   | 5.1 |   |
| Expected                return on plan assets        |   |                              | -      |                             |   | - |   |   | - |   |   | - |   |
| Net                periodic benefit expense          |   | $                                 | 0.2    |                             | $      | 6.0 |   | $ | 11.6 |   | $ | 18.0 |   |

----

*Table          of Contents*

**NOTES      TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL      STATEMENTS-(Continued)**

| **7.** | **Employee                Benefit Plans and Postretirement Benefits Other Than Pensions,                Continued:** |
|--------|----------------------------------------------------------------------------------------------------------------------|

| **8.** | **Integration                Expenses and Other                Charges:** |
|--------|---------------------------------------------------------------------------|

|                                                                     |   |   |   |
|--------------------------------------------------------------------------|--------|--------|--------|
| (Millions)                                                               |   |   |   |
| Rebranding                and signage costs                              |   | $      | 8.3    |   |
| Computer                system conversion and other integration expenses |   |   | 2.5    |   |
| Total                integration expenses and other charges              |   | $      | 10.8   |   |

|                                                                     |   |   |   |
|--------------------------------------------------------------------------|--------|--------|--------|
| (Millions)                                                               |   |   |   |
| Relocation                costs                                          |   | $      | 0.3    |   |
| Computer                system conversion and other integration expenses |   |   | 14.0   |   |
| Total                integration and other charges                       |   | $      | 14.3   |   |

|                                                                             |   |   |   |
|----------------------------------------------------------------------------------|--------|--------|--------|
| (Millions)                                                                       |   |   |   |
| Balance,                beginning of period                                      |   | $      | 0.1    |   |
| Integration                expenses and other charges recorded during the period |   |   | 10.8   |   |
| Cash                outlays during the period                                    |   |   | (10.8  | ) |
| Balance,                end of period                                            |   | $      | 0.1    |   |

----

*Table          of Contents*

**NOTES      TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL      STATEMENTS-(Continued)**

| **9.** | **Investments                - Special Dividend:** |
|--------|----------------------------------------------------|

| **10.** | **Gain                (Loss) on Exchange or Disposal of Assets and                Other:** |
|---------|--------------------------------------------------------------------------------------------|

| **11.** | **Income                Taxes:** |
|---------|----------------------------------|

|                                                      |   |                              |   |                             |   |
|-----------------------------------------------------------|--------|-----------------------------------|--------|----------------------------------|--------|
|                                                      |   | Three                Months Ended |   | Nine                Months Ended |   |
| (Millions)                                                |   | 2006                              |   | 2005                             |   | 2006 |   | 2005 |   |
| Statutory                federal income tax rates         |   |                              | 35.0   | %                                |   | 35.0 | % |   | 35.0 | % |   | 35.0 | % |
| Increase                (decrease):                       |   |                              |   |                             |   |   |   |   |   |   |   |   |   |
| State                income taxes, net of federal benefit |   |                              | 4.7    |                             |   | 2.8 |   |   | 3.9 |   |   | 2.1 |   |
| Non-deductible                loss on debt exchange       |   |                              | 3.4    |                             |   | - |   |   | 1.0 |   |   | - |   |
| Effective                tax rate adjustment              |   |                              | 1.5    |                             |   | (0.5 | ) |   | 0.2 |   |   | (0.4 | ) |
| Tax-exempt                interest income                 |   |                              | (2.7   | )                                |   | (0.1 | ) |   | (1.4 | ) |   | (0.2 | ) |
| Other                items, net                           |   |                              | 0.4    |                             |   | 0.4 |   |   | 0.2 |   |   | 0.2 |   |
| Effective                income tax rates                 |   |                              | 42.3   | %                                |   | 37.6 | % |   | 38.9 | % |   | 36.7 | % |

----

*Table          of Contents*

**NOTES      TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL      STATEMENTS-(Continued)**

| **11.** | **Income                Taxes, Continued:** |
|---------|---------------------------------------------|

| **12.** | **Discontinued                Operations:** |
|---------|---------------------------------------------|

----

*Table          of Contents*

**NOTES      TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL      STATEMENTS-(Continued)**

| **12.** | **Discontinued                Operations, Continued:** |
|---------|--------------------------------------------------------|

|                                                                |   |                              |   |                             |   |
|---------------------------------------------------------------------|--------|-----------------------------------|--------|----------------------------------|--------|
|                                                                |   | Three                Months Ended |   | Nine                Months Ended |   |
| (Millions)                                                          |   | 2006                              |   | 2005                             |   | 2006 |   | 2005 |   |
| Revenues                and sales                                   |   | $                                 | 127.3  |                             | $      | 920.2 |   | $ | 1,830.8 |   | $ | 2,364.0 |   |
| Operating                expenses (a)                               |   |                              | 97.4   |                             |   | 620.2 |   |   | 1,253.6 |   |   | 1,600.9 |   |
| Operating                income                                     |   |                              | 29.9   |                             |   | 300.0 |   |   | 577.2 |   |   | 763.1 |   |
| Minority                interest expense in unconsolidated entities |   |                              | -      |                             |   | (3.1 | ) |   | (6.0 | ) |   | (3.1 | ) |
| Loss                on disposal of discontinued operations          |   |                              | -      |                             |   | - |   |   | (14.8 | ) |   | - |   |
| Other                income, net                                    |   |                              | 0.6    |                             |   | 13.3 |   |   | 0.9 |   |   | 13.1 |   |
| Interest                expense (b)                                 |   |                              | (0.7   | )                                |   | (5.1 | ) |   | (9.1 | ) |   | (14.3 | ) |
| Pretax                income from discontinued operations           |   |                              | 29.8   |                             |   | 305.1 |   |   | 548.2 |   |   | 758.8 |   |
| Income                tax expense                                   |   |                              | 7.9    |                             |   | 128.2 |   |   | 222.6 |   |   | 300.3 |   |
| Income                from discontinued operations                  |   | $                                 | 21.9   |                             | $      | 176.9 |   | $ | 325.6 |   | $ | 458.5 |   |

|  | (a) | Excludes                general corporate overhead expenses previously allocated to the wireline                business in accordance with Emerging Issues Task Force Issue No.                87-24,                “Allocation of Interest Expense to Discontinued Operations”. The amount of                corporate overhead expenses added back to Alltel’s continuing operations                totaled $10.3 million and $28.9 million for the three and nine months                ended September 30, 2005, respectively, and totaled $7.0 million                for the                nine months ended September 30,                2006. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | Except                for $260.8 million of long-term debt directly related to the wireline                business that was transferred to Windstream and a $50.0 million credit                facility agreement with the Overseas Private Investment Corporation                that                was assumed by the buyer of the Bolivian operations, Alltel had no                outstanding indebtedness directly related to the wireline business,                the                international operations or the domestic markets to be divested,                and                accordingly, no additional interest expense was allocated to discontinued                operations for the periods                presented. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

**NOTES      TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL      STATEMENTS-(Continued)**

| **12.** | **Discontinued                Operations, Continued:** |
|---------|--------------------------------------------------------|

|                                                                |   |                             |   |                            |   |
|---------------------------------------------------------------------|--------|----------------------------------|--------|---------------------------------|--------|
|  (Millions)                                                    |   | September                30,2006 |   | December                31,2005 |   |
| Current                assets                                       |   | $                                | 3.6    |                            | $      | 565.4 |   |
| Property,                plant and equipment, net                   |   |                             | 22.3   |                            |   | 3,276.2 |   |
| Goodwill                and other intangible assets (a) (b)         |   |                             | 45.6   |                            |   | 2,984.6 |   |
| Other                assets                                         |   |                             | -      |                            |   | 157.4 |   |
|                  Non-current assets                  |   |                             | 67.9   |                            |   | 6,418.2 |   |
| Total                assets related to discontinued operations      |   | $                                | 71.5   |                            | $      | 6,983.6 |   |
| Current                liabilities                                  |   | $                                | 2.5    |                            | $      | 492.5 |   |
| Long-term                debt                                       |   |                             | -      |                            |   | 287.1 |   |
| Deferred                income taxes                                |   |                             | -      |                            |   | 718.6 |   |
| Other                liabilities                                    |   |                             | -      |                            |   | 218.6 |   |
|                  Non-current liabilites              |   |                             | -      |                            |   | 1,224.3 |   |
| Total                liabilities related to discontinued operations |   | $                                | 2.5    |                            | $      | 1,716.8 |   |

|  | (a) | At                September 30, 2006, this amount consisted of goodwill ($18.8 million),                cellular licenses ($21.5 million) and customer list ($5.3 million)                related                to the four Minnesota markets required to be                divested. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | At                December 31, 2005, this amount included the fair value of licenses                and                customer lists related to the international operations and domestic                markets to be divested acquired from Western Wireless. Because all                of the                assets acquired from Western Wireless that were classified as held                for                sale were disposed of by June 30, 2006, Alltel did not complete third                party valuations to assign specific fair values to the identifiable                intangible assets of the international operations and domestic markets                to                be divested. This amount also included goodwill of $1,247.9 million                and                other intangible assets of $317.7 million related to the wireline                business. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **13.** | **Comprehensive                Income:** |
|---------|------------------------------------------|

|                                                                                                        |   |                              |          |                             |   |
|-------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|---------------|----------------------------------|--------|
|                                                                                                        |   | Three                Months Ended |          | Nine                Months Ended |   |
| (Millions)                                                                                                  |   | 2006                              |          | 2005                             |   | 2006 |   | 2005 |   |
| Net                income                                                                                   |   | $                                 | 187.2         |                             | $      | 361.1 |   | $ | 913.5 |   | $ | 1,076.2 |   |
| Other                comprehensive income (loss):                                                           |   |                              |          |                             |   |   |   |   |   |   |   |   |   |
| Unrealized                holding gains (losses) on investments:                                            |   |                              |          |                             |   |   |   |   |   |   |   |   |   |
| Unrealized                holding gains (losses) arising in the period                                      |   |                              | -             |                             |   | 36.2 |   |   | 24.2 |   |   | (124.8 | ) |
| Income                tax expense (benefit)                                                                 |   |                              | -             |                             |   | 12.7 |   |   | 8.5 |   |   | (43.7 | ) |
|                                                                                                        |   |                              | -        |                             |   | 23.5 |   |   | 15.7 |   |   | (81.1 | ) |
| Reclassification                adjustments for gains included in net income for the                period  |   |                              | -             |                             |   | - |   |   | - |   |   | (75.8 | ) |
| Income                tax expense                                                                           |   |                              | -             |                             |   | - |   |   | - |   |   | 26.5 |   |
|                                                                                                        |   |                              | -        |                             |   | - |   |   | - |   |   | (49.3 | ) |
|                                                                                                        |   |                              |          |                             |   |   |   |   |   |   |   |   |   |
| Net                unrealized gains (losses) in the period                                                  |   |                              | -             |                             |   | 36.2 |   |   | 24.2 |   |   | (200.6 | ) |
| Income                tax expense (benefit)                                                                 |   |                              | -             |                             |   | 12.7 |   |   | 8.5 |   |   | (70.2 | ) |
|                                                                                                        |   |                              | -        |                             |   | 23.5 |   |   | 15.7 |   |   | (130.4 | ) |
|                                                                                                        |   |                              |          |                             |   |   |   |   |   |   |   |   |   |
| Foreign                currency translation adjustment:                                                     |   |                              |          |                             |   |   |   |   |   |   |   |   |   |
| Translation                adjustments for the period                                                       |   |                              | -             |                             |   | 26.4 |   |   | (2.1 | ) |   | 26.4 |   |
| Reclassification                adjustments for losses included in net income for the                period |   |                              | -             |                             |   | - |   |   | 4.9 |   |   | - |   |
|                                                                                                        |   |                              |  -  |                             |   | 26.4 |   |   | 2.8 |   |   | 26.4 |   |
|                                                                                                        |   |                              |          |                             |   |   |   |   |   |   |   |   |   |
| Other                comprehensive income (loss) before tax                                                 |   |                              | -             |                             |   | 62.6 |   |   | 27.0 |   |   | (174.2 | ) |
| Income                tax expense (benefit)                                                                 |   |                              | -             |                             |   | 12.7 |   |   | 8.5 |   |   | (70.2 | ) |
| Other                comprehensive income (loss)                                                            |   |                              | -             |                             |   | 49.9 |   |   | 18.5 |   |   | (104.0 | ) |
| Comprehensive                income                                                                         |   | $                                 | 187.2         |                             | $      | 411.0 |   | $ | 932.0 |   | $ | 972.2 |   |

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*Table          of Contents*

**NOTES      TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL      STATEMENTS-(Continued)**

| **14.** | **Earnings                per Share:** |
|---------|----------------------------------------|

|                                                                                                                                             |   |                              |   |                             |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|----------------------------------|--------|
|                                                                                                                                             |   | Three                Months Ended |   | Nine                Months Ended |   |
| (Millions,                except per share amounts)                                                                                              |   | 2006                              |   | 2005                             |   | 2006 |   | 2005 |   |
| **Basic                earnings per share:**                                                                                                     |   |                              |   |                             |   |   |   |   |   |
| Income                from continuing operations                                                                                                 |   | $                                 | 165.3  |                             | $      | 184.2 |   | $ | 587.9 |   | $ | 617.7 |   |
| Income                from discontinued operations                                                                                               |   |                              | 21.9   |                             |   | 176.9 |   |   | 325.6 |   |   | 458.5 |   |
| Less                preferred dividends                                                                                                          |   |                              | (0.1   | )                                |   | - |   |   | (0.1 | ) |   | (0.1 | ) |
| Net                income applicable to common shares                                                                                            |   | $                                 | 187.1  |                             | $      | 361.1 |   | $ | 913.4 |   | $ | 1,076.1 |   |
| Weighted                average common shares outstanding for the period                                                                         |   |                              | 384.6  |                             |   | 363.6 |   |   | 386.7 |   |   | 326.7 |   |
| Basic                earnings per share:                                                                                                         |   |                              |   |                             |   |   |   |   |   |   |   |   |   |
| From                continuing operations                                                                                                        |   |                              | $.43   |                             |   | $.51 |   |   | $1.52 |   |   | $1.89 |   |
| From                discontinued operations                                                                                                      |   |                              | .06    |                             |   | .48 |   |   | .84 |   |   | 1.40 |   |
| Net                income                                                                                                                        |   |                              | $.49   |                             |   | $.99 |   |   | $2.36 |   |   | $3.29 |   |
| **Diluted                earnings per share:**                                                                                                   |   |                              |   |                             |   |   |   |   |   |   |   |   |   |
| Net                income applicable to common shares                                                                                            |   | $                                 | 187.1  |                             | $      | 361.1 |   | $ | 913.4 |   | $ | 1,076.1 |   |
| Adjustment                for interest expense on convertible notes, net of tax                                                                  |   |                              | 0.1    |                             |   | 0.6 |   |   | 0.3 |   |   | 0.6 |   |
| Adjustment                for convertible preferred stock dividends                                                                              |   |                              | 0.1    |                             |   | - |   |   | 0.1 |   |   | 0.1 |   |
| Net                income applicable to common shares assuming conversion of preferred                stock                and convertible notes |   | $                                 | 187.3  |                             | $      | 361.7 |   | $ | 913.8 |   | $ | 1,076.8 |   |
| Weighted                average common shares outstanding for the period                                                                         |   |                              | 384.6  |                             |   | 363.6 |   |   | 386.7 |   |   | 326.7 |   |
| Increase                in shares resulting from:                                                                                                |   |                              |   |                             |   |   |   |   |   |   |   |   |   |
|                    Assumed exercise of stock options                                                                              |   |                              | 1.2    |                             |   | 1.8 |   |   | 1.2 |   |   | 1.3 |   |
|                    Assumed conversion of convertible notes                                                                        |   |                              | 0.6    |                             |   | 2.0 |   |   | 0.7 |   |   | 0.8 |   |
| Assumed                conversion of preferred stock                                                                                             |   |                              | 0.2    |                             |   | 0.3 |   |   | 0.2 |   |   | 0.3 |   |
| Non-vested                restricted stock awards                                                                                                |   |                              | 0.1    |                             |   | 0.1 |   |   | 0.1 |   |   | 0.1 |   |
| Weighted                average common shares assuming conversion                                                                                |   |                              | 386.7  |                             |   | 367.8 |   |   | 388.9 |   |   | 329.2 |   |
| Diluted                earnings per share:                                                                                                       |   |                              |   |                             |   |   |   |   |   |   |   |   |   |
| From                continuing operations                                                                                                        |   |                              | $.43   |                             |   | $.50 |   |   | $1.51 |   |   | $1.88 |   |
| From                discontinued operations                                                                                                      |   |                              | .05    |                             |   | .48 |   |   | .84 |   |   | 1.39 |   |
| Net                income                                                                                                                        |   |                              | $.48   |                             |   | $.98 |   |   | $2.35 |   |   | $3.27 |   |

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*Table          of Contents*

**NOTES      TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL      STATEMENTS-(Continued)**

| **15.** | **Subsequent                Events:** |
|---------|---------------------------------------|

----

*Table          of Contents*

**ALLTEL      CORPORATION**

**FORM      10-Q**

**PART      I - FINANCIAL INFORMATION**

**Item      2**
**.      **
**Management’s      Discussion and Analysis of Financial Condition and Results of      Operations**

**EXECUTIVE      SUMMARY**

| · | Revenues                and sales increased 12 percent over 2005 driven by Alltel’s continued                focus on quality customer growth, improvements in data revenues and                additional Eligible Telecommunications Carrier (“ETC”) support. Growth in                revenues and sales in the quarter also reflected the effects of Alltel’s                August 1, 2005 acquisition of Western Wireless Corporation (“Western                Wireless”). Average revenue per customer and retail revenue per customer                both decreased one percent year-over-year to $53.76 and $47.66,                respectively, due to decreases in voice revenues per customer, which                were                partially offset by continued growth in data and ETC revenues.                 Average revenue per customer for the third quarter of 2006 also reflected                additional wholesale transport revenues earned from charging third                parties, principally Windstream Corporation ("Windstream"), for use                of                Alltel’s fiber-optic network. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Excluding                the effects of acquisitions and dispositions, gross customer additions                were 829,000 in the quarter, a 14 percent increase from a year ago,                while                net customer additions were 101,000, a 384 percent increase from                2005.                Alltel added 75,000 net postpay customers and added 26,000 net prepaid                customers during the third quarter of 2006. Postpay churn decreased                25                basis points from the same period a year ago to 1.67 percent, while                total                churn declined 19 basis points year-over-year to 2.18                percent. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Operating                income increased 6 percent from a year ago, primarily reflecting                the                growth in revenues and sales noted above. Growth in operating income                was                affected by additional customer acquisition costs due to the significant                increase in gross customer additions noted                above. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

**SPIN-OFF      OF WIRELINE TELECOMMUNICATIONS BUSINESS**

**ACQUISITIONS**

----

*Table          of Contents*

| **CUSTOMER                AND OTHER OPERATING STATISTICS**      |   |
|-----------------------------------------------------------------|--------|
|                                                            |   | Three                Months EndedSeptember                30, |   | Nine                Months EndedSeptember                30, |   |
| (Thousands,                except per customer amounts)         |   | 2006 |   | 2005 |   | 2006 |   | 2005 |   |
| Customers                                                       |   |   | 11,162.3 |   |   | 10,424.7 |   |   | - |   |   | - |   |
| Average                customers                                |   |   | 11,133.2 |   |   | 9,956.7 |   |   | 10,933.6 |   |   | 9,229.6 |   |
| Gross                customer additions (a)                     |   |   | 805.4 |   |   | 2,065.9 |   |   | 2,493.5 |   |   | 3,595.2 |   |
| Net                customer additions (a)                       |   |   | 77.2 |   |   | 1,357.2 |   |   | 500.0 |   |   | 1,798.2 |   |
| Market                penetration                               |   |   | 14.5% |   |   | 13.8% |   |   | - |   |   | - |   |
| Postpay                customer churn                           |   |   | 1.67% |   |   | 1.92% |   |   | 1.60% |   |   | 1.75% |   |
| Total                churn                                      |   |   | 2.18% |   |   | 2.37% |   |   | 2.03% |   |   | 2.17% |   |
| Retail                minutes of use per customer per month (b) |   |   | 645 |   |   | 614 |   |   | 629 |   |   | 586 |   |
| Retail                revenue per customer per month (c)        |   |   | $47.66 |   |   | $48.08 |   |   | $47.18 |   |   | $46.69 |   |
| Average                revenue per customer per month (d)       |   |   | $53.76 |   |   | $54.04 |   |   | $52.63 |   |   | $51.19 |   |
| Cost                to acquire a new customer (e)               |   |   | $337 |   |   | $339 |   |   | $347 |   |   | $328 |   |

| (a) | Includes                the effects of acquisitions. Excludes reseller customers for all                periods                presented. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Represents                the average monthly minutes that Alltel’s customers use on both the                Company’s network and while roaming on other carriers’                networks. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | Retail                revenue per customer is calculated by dividing wireless retail revenues                by                average customers for the period. A reconciliation of the revenues                used in                computing retail revenue per customer per month was as follows for                the                three and nine month periods ended September                30: |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                             |         |                              |    |                             |   |
|--------------------------------------------------|--------------|-----------------------------------|---------|----------------------------------|--------|
|                                             |         | Three                Months Ended |    | Nine                Months Ended |   |
| (Millions)                                  |    |  2006                        |    | 2005                             |   | 2006 |   | 2005 |   |
| Service                revenues                  |         | $                                 | 1,795.4 |                             | $      | 1,614.1 |   | $ | 5,178.7 |   | $ | 4,274.0 |   |
| Less                wholesale roaming revenues   |         |                              | (171.5  | )                                |   | (170.2 | ) |   | (486.1 | ) |   | (373.5 | ) |
| Less                wholesale transport revenues |         |                              | (32.2   | )                                |   | (7.6 | ) |   | (50.4 | ) |   | (22.0 | ) |
| Total                retail revenues             |         | $                                 | 1,591.7 |                             | $      | 1,436.3 |   | $ | 4,642.2 |   | $ | 3,878.5 |   |

| (d) | Average                revenue per customer per month is calculated by dividing wireless                service                revenues by average customers for the                period. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e) | Cost                to acquire a new customer is calculated by dividing the sum of 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. A                reconciliation of the revenues, expenses and customer additions used                in                computing cost to acquire a new customer was as follows for the three                and                nine month periods ended September                30: |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                            |   |                              |   |                             |   |   |   |   |    |
|-----------------------------------------------------------------|--------|-----------------------------------|--------|----------------------------------|--------|--------|--------|--------|---------|
|                                                            |   | Three                Months Ended |   | Nine                Months Ended |   |
| (Millions,                customers in thousands)               |   | 2006                              |   | 2005                             |   | 2006   |   | 2005   |    |
| Product                sales                                    |   | $                                 | (150.2 | )                                | $      | (138.6 | )      | $      | (441.8  | ) | $ | (360.1 | ) |
| Cost                of products sold                            |   |                              | 173.5  |                             |   | 154.2  |   |   | 503.4   |   |   | 397.3 |   |
| Sales                and marketing expense                      |   |                              | 256.0  |                             |   | 232.1  |   |   | 774.1   |   |   | 616.4 |   |
| Total                costs incurred to acquire new customers    |   | $                                 | 279.3  |                             | $      | 247.7  |   | $      | 835.7   |   | $ | 653.6 |   |
| Gross                customer additions, excluding acquisitions |   |                              | 829.3  |                             |   | 729.6  |   |   | 2,405.3 |   |   | 1,992.4 |   |
| Cost                to acquire a new customer                   |   |                              | $337   |                             |   | $339   |   |   | $347    |   |   | $328 |   |

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*Table          of Contents*

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*Table          of Contents*

| **CONSOLIDATED                RESULTS OF OPERATIONS**                  |   |                                                          |    |                                                         |   |
|------------------------------------------------------------------------|--------|---------------------------------------------------------------|---------|--------------------------------------------------------------|--------|
|                                                                   |   | Three                Months EndedSeptember                30, |    | Nine                Months EndedSeptember                30, |   |
| (Millions,                except per share amounts)                    |   | 2006                                                          |    | 2005                                                         |   | 2006 |   | 2005 |   |
| Revenues                and sales:                                     |   |                                                          |    |                                                         |   |   |   |   |   |
| Service                revenues                                        |   | $                                                             | 1,795.4 |                                                         | $      | 1,614.1 |   | $ | 5,178.7 |   | $ | 4,274.0 |   |
| Product                sales                                           |   |                                                          | 211.9   |                                                         |   | 178.9 |   |   | 617.1 |   |   | 461.3 |   |
| Total                revenues and sales                                |   |                                                          | 2,007.3 |                                                         |   | 1,793.0 |   |   | 5,795.8 |   |   | 4,735.3 |   |
| Costs                and expenses:                                     |   |                                                          |    |                                                         |   |   |   |   |   |   |   |   |   |
| Cost                of services                                        |   |                                                          | 610.1   |                                                         |   | 524.4 |   |   | 1,726.9 |   |   | 1,405.4 |   |
| Cost                of products sold                                   |   |                                                          | 293.8   |                                                         |   | 250.3 |   |   | 849.8 |   |   | 660.2 |   |
| Selling,                general, administrative and other              |   |                                                          | 438.3   |                                                         |   | 399.1 |   |   | 1,298.5 |   |   | 1,088.9 |   |
| Depreciation                and amortization                           |   |                                                          | 307.1   |                                                         |   | 266.2 |   |   | 916.0 |   |   | 699.3 |   |
| Integration                expenses and other charges                  |   |                                                          | -       |                                                         |   | 14.3 |   |   | 10.8 |   |   | 14.3 |   |
| Total                costs and expenses                                |   |                                                          | 1,649.3 |                                                         |   | 1,454.3 |   |   | 4,802.0 |   |   | 3,868.1 |   |
| Operating                income                                        |   |                                                          | 358.0   |                                                         |   | 338.7 |   |   | 993.8 |   |   | 867.2 |   |
| Non-operating                income, net                               |   |                                                          | 42.9    |                                                         |   | 5.0 |   |   | 77.6 |   |   | 122.7 |   |
| Interest                expense                                        |   |                                                          | (63.8   | )                                                            |   | (78.9 | ) |   | (234.9 | ) |   | (232.9 | ) |
| Gain                (loss) on exchange or disposal of assets and other |   |                                                          | (50.5   | )                                                            |   | 30.5 |   |   | 126.1 |   |   | 218.8 |   |
| Income                from continuing operations before income taxes   |   |                                                          | 286.6   |                                                         |   | 295.3 |   |   | 962.6 |   |   | 975.8 |   |
| Income                taxes                                            |   |                                                          | 121.3   |                                                         |   | 111.1 |   |   | 374.7 |   |   | 358.1 |   |
| Income                from continuing operations                       |   |                                                          | 165.3   |                                                         |   | 184.2 |   |   | 587.9 |   |   | 617.7 |   |
| Income                from discontinued operations                     |   |                                                          | 21.9    |                                                         |   | 176.9 |   |   | 325.6 |   |   | 458.5 |   |
| Net                income                                              |   | $                                                             | 187.2   |                                                         | $      | 361.1 |   | $ | 913.5 |   | $ | 1,076.2 |   |
| Basic                earnings per share:                               |   |                                                          |    |                                                         |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations                       |   |                                                          | $.43    |                                                         |   | $.51 |   |   | $1.52 |   |   | $1.89 |   |
| Income                from discontinued operations                     |   |                                                          | .06     |                                                         |   | .48 |   |   | .84 |   |   | 1.40 |   |
| Net                income                                              |   |                                                          | $.49    |                                                         |   | $.99 |   |   | $2.36 |   |   | $3.29 |   |
| Diluted                earnings per share:                             |   |                                                          |    |                                                         |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations                       |   |                                                          | $.43    |                                                         |   | $.50 |   |   | $1.51 |   |   | $1.88 |   |
| Income                from discontinued operations                     |   |                                                          | .05     |                                                         |   | .48 |   |   | .84 |   |   | 1.39 |   |
| Net                income                                              |   |                                                          | $.48    |                                                         |   | $.98 |   |   | $2.35 |   |   | $3.27 |   |

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*Table          of Contents*

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*Table            of Contents*

|                                                                     |   |   |   |
|--------------------------------------------------------------------------|--------|--------|--------|
| (Millions)                                                               |   |   |   |
| Rebranding                and signage costs                              |   | $      | 8.3    |   |
| Computer                system conversion and other integration expenses |   |   | 2.5    |   |
| Total                integration expenses and other charges              |   | $      | 10.8   |   |

|                                                                     |   |
|--------------------------------------------------------------------------|--------|
| (Millions)                                                               |   |   |   |
| Relocation                costs                                          |   | $ | 0.3 |   |
| Computer                system conversion and other integration expenses |   |   | 14.0 |   |
| Total                integration and other charges                       |   | $ | 14.3 |   |

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*Table          of Contents*

| Non-Operating                Income, Net                      |   |                                                          |   |                                                    |   |   |   |   |   |
|---------------------------------------------------------------|--------|---------------------------------------------------------------|--------|--------------------------------------------------------------|--------|--------|--------|--------|--------|
|                                                          |   | Three                Months EndedSeptember                30, |   | Nine                Months EndedSeptember                30, |   |
| (Millions)                                                    |   | 2006                                                          |   |  2005                                                   |   | 2006   |   | 2005   |   |
| Equity                earnings in unconsolidated partnerships |   | $                                                             | 17.3   |                                                         | $      | 10.4   |   | $      | 45.6   |   | $ | 36.4 |   |
| Minority                interest in consolidated partnerships |   |                                                          | (11.7  | )                                                            |   | (20.6  | )      |   | (37.1  | ) |   | (57.8 | ) |
| Other                income, net                              |   |                                                          | 37.3   |                                                         |   | 15.2   |   |   | 69.1   |   |   | 144.1 |   |
| Non-operating                income, net                      |   | $                                                             | 42.9   |                                                         | $      | 5.0    |   | $      | 77.6   |   | $ | 122.7 |   |

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*Table          of Contents*

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*Table            of Contents*

|                                                                |   |                              |   |                             |   |
|---------------------------------------------------------------------|--------|-----------------------------------|--------|----------------------------------|--------|
|                                                                |   | Three                Months Ended |   | Nine                Months Ended |   |
| (Millions)                                                          |   | 2006                              |   | 2005                             |   | 2006 |   | 2005 |   |
| Revenues                and sales                                   |   | $                                 | 127.3  |                             | $      | 920.2 |   | $ | 1,830.8 |   | $ | 2,364.0 |   |
| Operating                expenses                                   |   |                              | 97.4   |                             |   | 620.2 |   |   | 1,253.6 |   |   | 1,600.9 |   |
| Operating                income                                     |   |                              | 29.9   |                             |   | 300.0 |   |   | 577.2 |   |   | 763.1 |   |
| Minority                interest expense in unconsolidated entities |   |                              | -      |                             |   | (3.1 | ) |   | (6.0 | ) |   | (3.1 | ) |
| Loss                on disposal of discontinued operations          |   |                              | -      |                             |   | - |   |   | (14.8 | ) |   | - |   |
| Other                income, net                                    |   |                              | 0.6    |                             |   | 13.3 |   |   | 0.9 |   |   | 13.1 |   |
| Interest                expense                                     |   |                              | (0.7   | )                                |   | (5.1 | ) |   | (9.1 | ) |   | (14.3 | ) |
| Pretax                income from discontinued operations           |   |                              | 29.8   |                             |   | 305.1 |   |   | 548.2 |   |   | 758.8 |   |
| Income                tax expense                                   |   |                              | 7.9    |                             |   | 128.2 |   |   | 222.6 |   |   | 300.3 |   |
| Income                from discontinued operations                  |   | $                                 | 21.9   |                             | $      | 176.9 |   | $ | 325.6 |   | $ | 458.5 |   |

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*Table          of Contents*

| **FINANCIAL                CONDITION, LIQUIDITY AND CAPITAL RESOURCES** |   |
|-------------------------------------------------------------------------|--------|
|                                                                    |   | Nine                Months EndedSeptember                30, |   |
| (Millions,                except per share amounts)                     |   | 2006 |   | 2005 |   |
| Cash                flows from (used in):                               |   |   |   |   |   |
| Operating                activities                                     |   | $ | 991.9 |   | $ | 1,002.6 |   |
| Investing                activities                                     |   |   | (1,172.1 | ) |   | (1,412.8 | ) |
| Financing                activities                                     |   |   | (2,058.9 | ) |   | (675.1 | ) |
| Discontinued                operations                                  |   |   | 4,348.6 |   |   | 675.9 |   |
| Effect                of exchange rate changes                          |   |   | (5.9 | ) |   | (1.5 | ) |
| Increase                (decrease) in cash and short-term investments   |   | $ | 2,103.6 |   | $ | (410.9 | ) |
| Total                capital structure (a)                              |   | $ | 16,292.5 |   | $ | 18,574.3 |   |
| Percent                of equity to total capital (b)                   |   |   | 82.0 | % |   | 69.5 | % |
| Book                value per share (c)                                 |   |   | $35.25 |   |   | $33.72 |   |

| (a) | Computed                as the sum of long-term debt including current maturities, redeemable                preferred stock and total shareholders’equity. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Computed                by dividing total shareholders’ equity by total capital structure as                computed in (a) above. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | Computed                by dividing total shareholders’ equity less preferred stock by the total                number of common shares outstanding at the end of the                period. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                          |                |                                      |        |
|-----------------------------------------------|---------------------|-------------------------------------------|-------------|
|  Description                             |  Moody’s | Standard&                Poor’s |  Fitch |
| Commercial                paper credit rating | Prime-1             | A-2                                       | F1          |
| Long-term                debt credit rating   | A2                  | A-                                        | A           |
| Outlook                                       | Negative            | Stable                                    | Stable      |

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**ALLTEL      CORPORATION**

**FORM      10-Q**

**PART      I - FINANCIAL INFORMATION**

**Item      3**
**.      **
**Quantitative      and Qualitative Disclosures About Market Risk**

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**ALLTEL      CORPORATION**

**FORM      10-Q**

**PART      I - FINANCIAL INFORMATION**

**Item4.**
**Controls      and Procedures**

| (a) | Evaluation                of disclosure controls and                procedures. |
|-----|---------------------------------------------------------------------------------|

| (b) | Remediation                  measures for identified material                  weaknesses. |
|-----|--------------------------------------------------------------------------------------------|

| (c) | Change                in internal control over financial                reporting. |
|-----|------------------------------------------------------------------------------------|

**PART      II - OTHER INFORMATION**

**Item      1A.**
**Risk      Factors**

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**ALLTEL        CORPORATION**

**FORM        10-Q**

**PART        II - OTHER INFORMATION**

**I****tem****2****Unregistered      Sales of Equity Securities and Use of Proceeds**

| (c) | On                January 19, 2006, Alltel’s Board of Directors authorized the Company to                repurchase up to $3.0 billion of its outstanding common stock over                a                three-year period ending December 31, 2008. Alltel did not repurchase                any                of its common shares during the first six months of 2006. Information                pertaining to this authorization for the third quarter of 2006 is                presented in the table below. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                |   |                                                  |                            |                                              |   |                                                                                                     |   |                                                                                                                           |                            |
|-------------------------------------|--------|-------------------------------------------------------|---------------------------------|---------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------|---------------------------------|
|  Period                        |   |  Total                Number of Shares Purchased |                            |  Average                Price Paid per Share |   |  Total                Number of Shares Purchased as Part of Publicly Announced                Plans |   | Maximum                Number of Shares (or Approximate Dollar Value) that May Yet Be Purchased                Under the Plans |                            |
| July                1-31, 2006      |   |                                                  |                  2,500,000 |                                              |   | $54.32                                                                                                   |   |                                                                                                                           |                  2,500,000 |   |   | $2,864.2                million |   |
| August                1-31, 2006    |   |                                                  |                  5,347,500 |                                              |   | $54.98                                                                                                   |   |                                                                                                                           |                  5,347,500 |   |   | $2,570.2                million |   |
| September                1-30, 2006 |   |                                                  |                  5,000,000 |                                              |   | $55.84                                                                                                   |   |                                                                                                                           |                  5,000,000 |   |   | $2,291.0                million |   |
| Totals                              |   |                                                  | 12,847,500                      |                                              |   | $55.19                                                                                                   |   |                                                                                                                           | 12,847,500                      |   |   |   |   |

**Item      6.**
**Exhibits**

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|   | ALLTEL                CORPORATION                                 |
|--------|-------------------------------------------------------------------|
|   | (Registrant)                                                      |
|   |                                                              |
|   |                                                              |
|   | /s/                Sharilyn S. Gasaway                            |
|   | Sharilyn                S. Gasaway                                |
|   | Executive                Vice President - Chief Financial Officer |
|   | (Principal                Financial Officer)                      |
|   | November                8, 2006                                   |

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| Form                10-QExhibit                No. | Description                of Exhibits                                                                                                                                                          |   |
|----------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                               |                                                                                                                                                                                            |   |
| 31(a)                                              | Certification                of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley                Act of 2002.                                                               | (a)    |
|                                               |                                                                                                                                                                                            |   |
| 31(b)                                              | Certification                of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley                Act of 2002.                                                               | (a)    |
|                                               |                                                                                                                                                                                            |   |
| 32(a)                                              | Certification                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as                adopted                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | (a)    |
|                                               |                                                                                                                                                                                            |   |
| 32(b)                                              | Certification                of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as                adopted                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | (a)    |

| (a) | Filed                herewith. |
|-----|--------------------------------|

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