================================================================================

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

           [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934 For the quarterly
                period ended September 30, 2000

                                               ------------------
                                       OR

           [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

                         SECURITIES EXCHANGE ACT OF 1934

                          Commission file number 1-4996

                                                 ------
                               ALLTEL CORPORATION

             (Exact name of registrant as specified in its charter)

        Delaware                                                 34-0868285
--------------------------------------------------------------------------------
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                             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
                                                  ------------------------------

--------------------------------------------------------------------------------
            (Former name, former address and former fiscal year, if
                           changed since last report)

      Indicate by check mark whether the registrant (1) has filed all reports
 required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
 1934 during the preceding 12 months (or for such shorter period that the
 registrant was required to file such reports), and (2) has been subject to such
 filing requirements for the past 90 days.

              YES   X        NO
                  ------        ------


 Number of common shares outstanding as of September 30, 2000:

                                           312,655,390

                                           -----------

 The Exhibit Index is located at sequential page 34.

================================================================================



<PAGE>

                               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                           14
Item 3.   Quantitative and Qualitative Disclosures About                31
          Market Risk

                           PART II - OTHER INFORMATION

Item 1.   Legal Proceedings                                              *
Item 2.   Changes in Securities                                          *
Item 3.   Defaults Upon Senior Securities                                *
Item 4    Submission of Matters to Vote of Security Holders              *
Item 5.   Other Information                                              *
Item 6.   Exhibits and Reports on Form 8-K                              32

    * No reportable information under this item.

Forward-Looking Statements

--------------------------
    This Report on Form 10-Q includes, and future filings by the Company on Form
10-K and Form 8-K and future oral and written statements by the Company and its
management may include, certain forward-looking statements, including (without
limitation) statements with respect to anticipated future operating and
financial performance, growth opportunities and growth rates, acquisition and
divestitive opportunities and other similar forecasts and statements of
expectation. Words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates", and "should", and variations of these words
and similar expressions, are intended to identify these forward-looking
statements. Forward-looking statements by the Company and its management are
based on estimates, projections, beliefs and assumptions of management and are
not guarantees of future performance. The Company disclaims any obligation to
update or revise any forward-looking statement based on the occurrence of future
events, the receipt of new information, or otherwise.

    Actual future performance, outcomes and results may differ materially from
those expressed in forward-looking statements made by the Company and its
management as a result of a number of important factors. Representative examples
of these factors include (without limitation) rapid technological developments
and changes in the telecommunications and information services industries;
ongoing deregulation (and the resulting likelihood of significantly increased
price and product/service competition) in the telecommunications industry as a
result of the Telecommunications Act of 1996 and other similar federal and state
legislation and the federal and state rules and regulations enacted pursuant to
that legislation; regulatory limitations on the Company's ability to change its
pricing for communications services; the possible future unavailability of
Statement of Financial Accounting Standards No. 71 to the Company's wireline
subsidiaries; continuing consolidation in certain industries, such as banking,
served by the information services business; and the risks associated with
relatively large, multi-year contracts in the Company's information services
business.

    In addition to these factors, actual future performance, outcomes and
results may differ materially because of other, more general, factors including
(without limitation) general industry and market conditions and growth rates,
domestic and international economic conditions, governmental and public policy
changes and the continued availability of financing in the amounts, at the terms
and on the conditions necessary to support the Company's future business.

                                        1

<PAGE>

                               ALLTEL CORPORATION

                                    FORM 10-Q

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

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


                     CONSOLIDATED BALANCE SHEETS (UNAUDITED)

<TABLE>

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

(Dollars in thousands)
------------------------------------------------------------------------------------------------------------------------
                                                                      September 30,         December 31,   September 30,
ASSETS                                                                         2000                 1999            1999
------------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                  <C>             <C>
CURRENT ASSETS:

  Cash and short-term investments                                       $     8,269          $    17,595     $    36,999
  Accounts receivable (less allowance for doubtful
    accounts of $45,840, $35,017 and $37,301, respectively)               1,194,084              922,159         939,679
  Materials and supplies                                                     12,953               15,130          17,919
  Inventories                                                               201,198              148,292         112,558
  Prepaid expenses and other                                                283,612               64,003          63,784
                                                                         ----------           ----------      ----------
    Total current assets                                                  1,700,116            1,167,179       1,170,939
------------------------------------------------------------------------------------------------------------------------
Investments                                                                 440,858            1,594,029       1,500,460
Goodwill and other intangibles                                            3,099,625            1,997,315       2,009,960
------------------------------------------------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT:
  Wireline                                                                5,533,188            5,194,546       5,138,871
  Wireless                                                                4,486,356            3,545,778       3,399,950
  Information services                                                      885,405              775,532         776,760
  Other                                                                     288,311              241,297         181,671
  Under construction                                                        417,434              533,854         488,602
                                                                         ----------           ----------     -----------
    Total property, plant and equipment                                  11,610,694           10,291,007       9,985,854
  Less accumulated depreciation                                           5,316,106            4,556,462       4,404,424
                                                                         ----------           ----------     -----------
    Net property, plant and equipment                                     6,294,588            5,734,545       5,581,430
------------------------------------------------------------------------------------------------------------------------
Other assets                                                                305,713              281,135         307,569
------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                                            $11,840,900          $10,774,203     $10,570,358
------------------------------------------------------------------------------------------------------------------------


------------------------------------------------------------------------------------------------------------------------
                                                                      September 30,         December 31,   September 30,
LIABILITIES AND SHAREHOLDERS' EQUITY                                           2000                 1999            1999
------------------------------------------------------------------------------------------------------------------------
CURRENT LIABILITIES:
  Current maturities of long-term debt                                  $    64,273          $    71,222     $    73,127
  Accounts payable                                                          592,798              508,045         437,436
  Advance payments and customer deposits                                    135,988              117,915         132,141
  Accrued taxes                                                             336,469               88,723         103,630
  Accrued dividends                                                         101,191              101,607          94,794
  Other current liabilities                                                 260,458              306,455         338,222
                                                                         ----------           ----------      ----------
    Total current liabilities                                             1,491,177            1,193,967       1,179,350
------------------------------------------------------------------------------------------------------------------------
Long-term debt                                                            4,214,460            3,750,413       3,812,688
Deferred income taxes                                                       622,058            1,056,921       1,004,677
Other liabilities                                                           503,363              567,165         562,281
------------------------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY:
  Preferred stock                                                               502                  562           9,102
  Common stock                                                              312,656              314,258         313,930
  Additional capital                                                        915,096              973,356         969,311
  Unrealized holding gain on investments                                     56,926              594,130         527,285
  Retained earnings                                                       3,724,662            2,323,431       2,191,734
                                                                         ----------           ----------      ----------
    Total shareholders' equity                                            5,009,842            4,205,737       4,011,362
------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                              $11,840,900          $10,774,203     $10,570,358
------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                        2

<PAGE>

                  CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>

---------------------------------------------------------------------------------------------------------------------------
                                         Three Months                    Nine Months                    Twelve Months
                                     Ended September  30,            Ended September 30,             Ended September 30,
                                  -------------------------      --------------------------     ---------------------------
<S>                                <C>           <C>              <C>            <C>             <C>             <C>
(Dollars in thousands,
 except per share amounts)               2000          1999             2000           1999            2000            1999
---------------------------------------------------------------------------------------------------------------------------
REVENUES AND SALES:
  Service revenues                 $1,635,071    $1,507,693       $4,744,033     $4,370,360      $6,212,922      $5,725,913
  Product sales                       168,164       168,101          479,187        451,369         649,940         621,313
                                   ----------    ----------       ----------     ----------      ----------      ----------
  Total revenues and sales          1,803,235     1,675,794        5,223,220      4,821,729       6,862,862       6,347,226
---------------------------------------------------------------------------------------------------------------------------
COSTS AND EXPENSES:
  Operations                          945,367       863,886        2,735,663      2,523,304       3,597,135       3,338,975
  Cost of products sold               176,845       163,867          484,784        432,258         651,322         604,941
  Depreciation and amortization       261,415       219,014          715,091        640,969         936,294         842,509
  Merger and integration expenses
    and other charges                   7,687        90,520           24,593         90,520          24,593          90,520
                                   ----------    ----------       ----------     ----------      ----------      ----------
  Total costs and expenses          1,391,314     1,337,287        3,960,131      3,687,051       5,209,344       4,876,945
---------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME                      411,921       338,507        1,263,089      1,134,678       1,653,518       1,470,281

Equity earnings in unconsolidated
  partnerships                         23,479        23,327           95,197         83,298         116,924         116,607
Minority interest in consolidated
  partnerships                        (24,979)      (26,301)         (76,735)       (91,142)       (102,240)       (116,536)
Other income, net                      10,717        10,621           35,144         38,316          51,299          65,583
Interest expense                      (80,057)      (71,297)        (224,994)      (209,913)       (295,256)       (277,986)
Gain on disposal of assets
  and other                           474,855             -        1,812,940              -       1,856,011               -
                                   ----------    ----------       ----------     ----------      ----------      ----------

Income before income taxes            815,936       274,857        2,904,641        955,237       3,280,256       1,257,949
Income taxes                          331,924       124,508        1,201,067        405,075       1,343,210         533,705
                                   ----------    ----------       ----------     ----------      ----------      ----------

Net income                            484,012       150,349        1,703,574        550,162       1,937,046         724,244
Preferred dividends                        40           215              121            674             336             902
                                   ----------    ----------       ----------     ----------      ----------      ----------
Net income applicable to
  common shares                    $  483,972    $  150,134       $1,703,453     $  549,488      $1,936,710      $  723,342
---------------------------------------------------------------------------------------------------------------------------
EARNINGS PER SHARE:
  Basic                                 $1.54          $.48            $5.41          $1.76           $6.15           $2.33
  Diluted                               $1.53          $.47            $5.36          $1.74           $6.09           $2.30

---------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                        3

<PAGE>

                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>

-----------------------------------------------------------------------------------------------------------------------
                                                                    Nine Months                      Twelve Months
                                                                Ended September 30,               Ended September 30,
                                                            -------------------------         -------------------------
<S>                                                          <C>            <C>                <C>           <C>
(Dollars in thousands)                                             2000          1999                2000          1999
-----------------------------------------------------------------------------------------------------------------------

NET CASH PROVIDED FROM OPERATIONS                            $1,143,474     $ 993,239          $1,650,264    $1,443,728
-----------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to property, plant and equipment                   (734,674)     (677,270)         (1,063,879)   (1,017,627)
  Purchase of property, net of cash acquired                   (649,390)      (93,845)           (655,491)      (95,389)
  Additions to capitalized software development costs           (85,997)      (30,901)           (100,188)      (51,978)
  Additions to investments                                      (12,533)       (8,698)            (29,923)      (21,644)
  Proceeds from the sale of investments                         528,154             -             573,175        13,988
  Proceeds from the return on investments                        59,466        68,935              78,385       113,619
  Proceeds from the sale of assets                              224,501             -             224,501             -
  Other, net                                                      1,205           468             (15,906)       37,074
                                                             ----------     ---------          ----------    ----------
    Net cash used in investing activities                      (669,268)     (741,311)           (989,326)   (1,021,957)
-----------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Dividends on preferred and common stock                      (302,741)     (284,154)           (396,763)     (372,154)
  Reductions in long-term debt                                 (385,847)     (277,277)           (453,097)     (350,642)
  Purchase of common stock                                     (164,286)            -            (164,286)         (286)
  Preferred stock redemptions and purchases                          (2)         (540)            (11,377)         (448)
  Distributions to minority investors                           (62,883)      (75,509)           (100,668)     (120,241)
  Long term debt issued                                         414,250       298,174             414,250       321,034
  Common stock issued                                            17,977        35,312              22,273        63,107
                                                             ----------     ---------          ----------    ----------
    Net cash used in financing activities                      (483,532)     (303,994)           (689,668)     (459,630)
-----------------------------------------------------------------------------------------------------------------------

Decrease in cash and short-term investments                      (9,326)      (52,066)            (28,730)      (37,859)

CASH AND SHORT-TERM INVESTMENTS:
  Beginning of the period                                        17,595        89,065              36,999        74,858
                                                             ----------     ---------          ----------    ----------
  End of the period                                          $    8,269     $  36,999          $    8,269    $   36,999
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

                                        4

<PAGE>

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


1.    General:
      Basis of Presentation - The consolidated financial statements at
      ---------------------
      September 30, 2000 and 1999 and for the three, nine and twelve month
      periods then ended for ALLTEL Corporation ("ALLTEL" or the "Company") are
      unaudited. The consolidated financial statements have been prepared in
      accordance with generally accepted accounting principles for interim
      financial reporting and Securities and Exchange Commission rules and
      regulations. Certain information and footnote disclosures have been
      condensed or omitted pursuant to such rules and regulations. The
      consolidated financial statements reflect all adjustments (consisting only
      of normal recurring adjustments) which are, in the opinion of management,
      necessary for a fair presentation of the financial position and operating
      results for the interim periods presented.

      Change in Reporting Wireless Roaming Revenues - During the second quarter
      ---------------------------------------------
      of 2000, the Company changed the reporting presentation for wireless
      customer roaming revenues to a gross basis. This change conforms the
      Company's financial reporting policies to prevailing wireless industry
      practice and is consistent with the reporting policies of the Bell
      Atlantic Corporation ("Bell Atlantic") and GTE Corporation ("GTE")
      properties acquired by the Company in 2000. (See Note 2.) Previously, the
      Company netted these revenues against roaming charges from other wireless
      service providers and included the net amount in operations expense. Prior
      period revenue and operating expense information has been reclassified to
      conform to the new reporting presentation. This change does not affect
      previously reported operating income or net income of the Company.

2.    Exchange of Wireless Assets and Other Purchase Acquisitions:
      On January 31, 2000, ALLTEL, Bell Atlantic, GTE and Vodafone Airtouch
      signed agreements to exchange wireless properties in 13 states. On
      April 3, 2000, ALLTEL completed the exchange of wireless properties with
      Bell Atlantic in 5 states, acquiring operations in Arizona, New Mexico and
      Texas and divesting operations in Nevada and Iowa. In addition to the
      transfer of wireless assets, ALLTEL also paid Bell Atlantic $624.1 million
      in cash to complete this transaction. On June 30, 2000, ALLTEL completed
      the remaining wireless property exchanges with Bell Atlantic and GTE,
      acquiring operations in Alabama, Florida, Ohio, and South Carolina, and
      divesting operations in Illinois, Indiana, New York and Pennsylvania.
      ALLTEL also transferred to Bell Atlantic or GTE certain of its minority
      investments in unconsolidated wireless properties, representing
      approximately 2.6 million potential customers ("POPs"). In connection with
      the transfer of the remaining wireless assets, ALLTEL received $192.5
      million in cash, prepaid vendor credits of $199.6 million and assumed
      long-term debt of $425.0 million.

      Through the completion of the above transactions with Bell Atlantic and
      GTE, ALLTEL acquired interests in 27 wireless markets representing about
      14.6 million POPs and approximately 1,467,000 wireless customers, while
      divesting interests in 42 wireless markets representing 6.9 million POPs
      and approximately 778,000 customers. ALLTEL accounted for these exchange
      transactions as purchases, and accordingly, the accompanying consolidated
      financial statements include the accounts and results of operations of the
      acquired wireless properties from the applicable dates of acquisition.
      Under the purchase method of accounting, tangible and identifiable
      intangible assets acquired are recorded at fair value. The excess of the
      aggregate purchase price over the fair market value of the net assets
      acquired of $1.4 billion has been initially allocated to goodwill and is
      being amortized on a straight-line basis over 25 years. The fair values
      and useful lives of assets acquired have been estimated based on a
      preliminary valuation and are subject to final valuation adjustments.
      ALLTEL has engaged a third-party appraisal firm to perform a study to
      determine the allocation of the total purchase price to the various assets
      acquired. Accordingly, a portion of the excess cost may be classified as
      other intangibles and may be amortized over periods different from the
      goodwill amortization period of 25 years.

                                        5

<PAGE>

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


2.    Exchange of Wireless Assets and Other Purchase Acquisitions, Continued:
      The following unaudited pro forma combined results of operations of the
      Company assumes that the wireless property exchanges with Bell Atlantic
      and GTE were completed as of January 1, 1999 (in thousands, except per
      share amounts):

                                                 For the Nine Months
                                                 Ended September 30,
                                             --------------------------
                                                   2000            1999
                                                   ----            ----
          Revenues and sales                 $5,328,604      $5,041,745
          Net income                         $  876,060      $  462,072
          Basic earnings per share                $2.78           $1.48
          Diluted earnings per share              $2.76           $1.46

      The pro forma amounts represent the historical operating results of the
      properties acquired from Bell Atlantic and GTE with appropriate
      preliminary adjustments that give effect to depreciation and amortization
      and interest expense. The pretax gain of $1,351.6 million (net of related
      tax expense of $567.7 million) recognized by ALLTEL related to the
      wireless property exchanges has been excluded from the pro forma net
      income and earnings per share amounts presented. The pro forma amounts are
      not necessarily indicative of the operating results that would have
      occurred if the Bell Atlantic and GTE properties had been operated by
      ALLTEL during the periods presented. In addition, the pro forma amounts do
      not reflect potential cost savings related to full network optimization
      and the redundant effect of selling and general and administrative
      expenses.

      Operating results of the wireless properties divested in the transactions
      with Bell Atlantic and GTE included in the Company's consolidated results
      of operations for the nine and twelve months ended September 30, 2000,
      were as follows (in thousands):

                                             Nine Months    Twelve Months
                                                Ended           Ended
                                              --------        --------
          Revenues and sales                  $211,262        $349,273
          Operating income                    $ 73,118        $119,753

      Also during 2000, the Company acquired the remaining ownership interests
      in wireless properties in Florida and Georgia in which ALLTEL already
      owned a controlling interest. In July, the Company purchased Benchmark
      Consulting International, a privately held company serving the financial
      services industry. In connection with these acquisitions, the Company paid
      $25.3 million in cash and issued approximately 730,000 shares of ALLTEL
      common stock.

      In conjunction with the business combinations completed during 2000,
      assets acquired, liabilities assumed, common stock issued and assets
      exchanged were as follows (in thousands):

<TABLE>

                                                                           Acquired from                                Combined
                                                    --------------------------------------------------------
          <S>                                        <C>                    <C>                    <C>                <C>
                                                     Bell Atlantic              GTE                  Other                Total
                                                     -------------          -----------            --------           -----------
          Fair value of assets acquired                  $ 479,721          $   767,151            $ 17,443           $ 1,264,315
          Goodwill and other intangibles                   601,188              800,036              67,791             1,469,015
          Liabilities assumed                                    -             (425,000)             (1,942)             (426,942)
          Common stock issued                                    -                    -             (58,035)              (58,035)
          Fair value of assets exchanged                  (456,776)          (1,334,688)                  -            (1,791,464)
                                                         ---------          -----------            --------           -----------
          Net cash paid (received)                       $ 624,133          $  (192,501)           $ 25,257           $   456,889
                                                         =========          ============           ========           ===========

</TABLE>

                                        6

<PAGE>

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


3.    Mergers:
      In September 1999, the Company completed mergers with Liberty Cellular,
      Inc. ("Liberty") and its affiliate KINI L.C. Under terms of the merger
      agreements, the outstanding stock of Liberty and the outstanding ownership
      units of KINI L.C. were exchanged for approximately 7.0 million shares of
      ALLTEL's common stock. In July 1999, the Company completed its merger with
      Aliant Communications Inc. ("Aliant"). Under the terms of the merger
      agreement, Aliant became a wholly-owned subsidiary of ALLTEL, and each
      outstanding share of Aliant common stock was converted into the right to
      receive .67 shares of ALLTEL common stock, 23.9 million common shares in
      the aggregate. These mergers qualified as tax-free reorganizations and
      have been accounted for as poolings-of-interests. In January 1999, the
      Company completed a merger with Standard Group, Inc. ("Standard"). In
      September 1999, the Company also completed mergers with Advanced
      Information Resources, Limited ("AIR") and Southern Data Systems
      ("Southern Data"). In connection with the mergers, approximately 6.5
      million shares of ALLTEL common stock were issued. All three mergers
      qualified as tax-free reorganizations and were accounted for as
      poolings-of-interests. Prior period financial information has not been
      restated, since the operations of the three acquired companies were not
      significant to ALLTEL's consolidated financial statements on either a
      separate or aggregate basis. The accompanying consolidated financial
      statements include the accounts and results of operations of Standard, AIR
      and Southern Data from the applicable date of acquisition.

4.    Merger and Integration Expenses and Other Charges:
      In connection with the exchange of wireless assets with Bell Atlantic and
      GTE, the Company recorded integration expenses and other charges during
      the second and third quarters of 2000, consisting of severance and
      employee benefit costs related to a planned workforce reduction and
      branding and signage costs. The integration plan, completed in September
      2000, provided for the elimination of 22 employees in the Company's
      wireless operations management, engineering and sales support functions.
      As of September 30, 2000, the Company had paid $5.2 million in severance
      and employee-related expenses and all of the employee reductions had been
      completed. In connection with this integration plan, the Company recorded
      a charge of $9.2 million in the third quarter of 2000, consisting of $8.9
      million in branding and signage costs and $0.3 million in severance and
      employee-related expenses. In the second quarter, the Company recorded a
      charge of $8.8 million, which consisted of $5.0 million in severance and
      employee benefit costs and $3.8 million in branding and signage costs.

      During the third quarter of 2000, the Company also recorded a $1.5 million
      reduction in the liabilities associated with its merger and integration
      activities initiated during 1999. The reduction consisted of a $1.0
      million decrease in estimated severance costs to complete the September
      1999 restructuring of the wireline operations and decreases in estimated
      severance costs of $0.3 million and $0.2 million, respectively, related to
      the acquisitions of Aliant and Liberty. The adjustment to the wireline
      restructuring plan reflects a reduction in the expected number of
      employees to be terminated from 308 to 248, while the adjustments to the
      Aliant and Liberty merger and integration plans reflect differences
      between estimated and actual severance costs paid.

      During the second quarter of 2000, the Company also recorded a $2.0
      million reduction in the merger and integration liability related to its
      acquisition of Aliant. This adjustment primarily reflects a decrease in
      severance and employee benefit costs to be paid as a result of reducing
      the expected number of Aliant employees to be terminated from 160 to 132.

      In an effort to improve the operating efficiency of its information
      services business, the Company recorded a restructuring charge of $10.1
      million during the first quarter of 2000. This charge consisted of $5.9
      million in severance and employee benefit costs related to a planned
      workforce reduction and $4.2 million in lease termination costs related to
      the consolidation of certain operating locations. The restructuring plan,
      which resulted in the elimination of 199 employees, was completed in July
      2000. As of September 30, 2000, the Company had paid $5.4 million in
      severance and employee-related expenses and all of the employee reductions
      had been completed. The lease termination costs represent the estimated
      minimum contractual commitments over the next one to four years for
      facilities that the Company has abandoned, net of anticipated sublease
      income.

                                        7

<PAGE>

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


4.    Merger and Integration Expenses and Other Charges, Continued:
      During the third quarter of 1999, the Company recorded a pretax charge of
      $90.5 million in connection with its mergers with Aliant, Liberty, AIR and
      Southern Data and with certain loss contingencies and other restructuring
      activities. The merger and integration expenses, which totaled $73.4
      million, included professional and financial advisors' fees of $24.4
      million, severance and employee-related expenses of $15.4 million and
      other integration costs of $33.6 million. The Company's merger and
      integration plan, as approved by ALLTEL's Board of Directors, provided for
      a reduction of 160 employees of Aliant and 40 employees of Liberty,
      primarily in the corporate support functions, to be substantially
      completed by the third quarter of 2000. As previously discussed, in the
      second quarter of 2000, the Company reduced the expected number of Aliant
      employees to be terminated to 132 and decreased the related accrued
      liability by $2.0 million. In the third quarter of 2000, the Company
      further reduced the accrued liabilities related to the Aliant and Liberty
      mergers by $0.5 million. As of September 30, 2000, the Company had paid
      $10.6 million in severance and employee-related expenses and 153 out of
      the total 172 employee reductions had been completed. The other
      integration costs included $12.5 million of lease termination costs, $10.2
      million of costs associated with the early termination of certain service
      obligations, and a $4.6 million write-down in the carrying value of
      certain in-process and other software development assets that have no
      future alternative use or functionality. Also included are other
      integration costs incurred in the third quarter consisting of branding and
      signage costs of $4.1 million and other expenses of $2.2 million.

      The lease termination costs included a cancellation fee of $7.3 million
      representing the negotiated settlement to terminate the Company's
      contractual commitment to lease building space previously occupied by the
      former 360 Communications Company ("360") operations acquired in 1998. The
      lease termination costs also included a $4.1 million write-off of
      capitalized leasehold improvements and $1.1 million in other disposal
      costs.

      The contract termination fees included $5.2 million related to long-term
      contracts with an outside vendor for customer billing services to be
      provided to the Aliant and Liberty operations. As part of its integration
      plan, the Company will convert both the Aliant and Liberty operations to
      its own internal billing system. Conversion of the Liberty operations was
      completed in November 1999 and conversion of the Aliant operations will
      begin in early 2001. The $5.2 million amount represented the termination
      fee specified in the contracts. Of the total termination fee, $0.3 million
      has been paid with the remainder due upon completion of the conversion of
      the Aliant operations to ALLTEL's billing system. The Company also
      recorded an additional $5.0 million charge to reflect the actual cost of
      terminating its contract with Convergys Corporation ("Convergys") for
      customer billing services to be provided to the former 360 operations. In
      September 1999, the Company and Convergys agreed to a final contract
      termination fee of $55.0 million, of which $50.0 million of termination
      costs were recorded in 1998, as discussed below. Through September 30,
      2000, the Company had paid $30.0 million of the termination fee. In
      addition to the termination fee, the Company will continue to pay
      Convergys for processing customer accounts until all customers are
      switched to ALLTEL's billing system, which is expected to be completed in
      2001.

      In connection with management's plan to reduce costs and improve operating
      efficiencies, the Company recorded a restructuring charge of $17.1 million
      during the third quarter of 1999. This charge consisted of $10.8 million
      in severance and employee benefit costs related to a planned workforce
      reduction and $6.3 million in lease termination costs related to the
      consolidation of certain operating locations. The restructuring plan
      provided for the elimination of approximately 308 employees in the
      Company's wireline operations support functions to be completed by
      September 2000. As previously discussed, in the third quarter of 2000, the
      Company reduced the expected number of employees to be terminated to 248
      and decreased the related accrued liability by $1.0 million. As of
      September 30, 2000, the Company had paid $8.5 million in severance and
      employee-related expenses and 239 of the total 248 employee reductions had
      been completed. The lease termination costs represent the estimated
      minimum contractual commitments over the next one to four years for leased
      facilities that the Company has abandoned.

                                        8

<PAGE>

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


4.    Merger and Integration Expenses and Other Charges, Continued:
      In 1998, the Company recorded transaction costs and one-time charges
      totaling $252.0 million on a pretax basis related to the closing of its
      merger with 360. The merger and integration expenses included professional
      and financial advisors' fees of $31.5 million, severance and
      employee-related expenses of $48.7 million and integration costs of $171.8
      million. The Company's merger and integration plan, as approved by
      ALLTEL's Board of Directors, provided for a reduction of 521 employees,
      primarily in the corporate support functions. As of September 30, 2000,
      the Company had paid $48.2 million in severance and employee-related
      expenses and all of the employee reductions had been completed. The
      integration costs included several adjustments resulting from the
      redirection of a number of strategic initiatives based on the merger with
      360 and ALLTEL's expanded wireless presence. These adjustments included
      a $60.0 million write-down in the carrying value of certain in-process
      software development assets which had no alternative use or functionality,
      $50.0 million of costs associated with the early termination of certain
      service obligations, branding and signage costs of $20.7 million, an
      $18.0 million write-down in the carrying value of certain assets resulting
      from a revised PCS deployment plan, and other integration cost of
      $23.1 million.

      The $50.0 million of costs recorded for contract termination fees related
      to the long-term billing contract with Convergys. As previously noted, in
      September 1999, the Company and Convergys agreed upon a final termination
      fee of $55.0 million. The $18.0 million write-down in the carrying value
      of certain PCS-related assets included approximately $15.0 million related
      to cell site acquisition and improvement costs and capitalized labor and
      engineering charges that were incurred during the initial construction
      phase of the PCS buildout in three markets. As a result of the merger with
      360, the Company elected not to continue to complete construction of its
      PCS network in these three markets. The remaining $3.0 million of the
      PCS-related write-down represented cell site lease termination fees.

      The following is a summary of activity related to the liabilities
      associated with the Company's merger and integration expenses and other
      charges for the twelve months ended September 30:

                                                         (In Thousands)
                                                 -----------------------------
                                                        2000              1999
                                                        ----              ----
         Balance, beginning of period            $   116,172       $   108,509
         Merger and integration expenses and
           other charges                              28,903            90,520
         Reversal of accrued liabilities              (3,500)                -
         Non-cash write-down of assets                (2,734)           (8,696)
         Cash outlays                                (99,252)          (74,161)
                                                 -----------       -----------
         Balance, end of period                  $    38,779       $   116,172
                                                 ===========       ===========

      At September 30, 2000, the remaining unpaid liability related to the
      Company's merger and integration and restructuring activities consists of
      contract termination fees of $29.9 million, severance and employee-related
      expenses of $6.3 million and lease cancellation and termination costs of
      $2.6 million.

5.    Gain on Disposal of Assets and Other:
      In the third quarter of 2000, the Company recorded pretax gains totaling
      $476.3 million from the sale of a portion of its investment in WorldCom,
      Inc. common stock. In addition, the Company recorded a pretax adjustment
      of $1.4 million to reduce the gain recognized from the exchange of
      wireless properties with Bell Atlantic and GTE and the sale of certain PCS
      assets recorded in the second quarter of 2000, as discussed below. The
      adjustment reflected differences in the actual and estimated book values
      of the properties disposed.

      In the second quarter of 2000, the Company recorded pretax gains totaling
      $1,353.1 million from the exchange of wireless properties with Bell
      Atlantic and GTE and the sale of certain PCS assets. In addition, the
      Company recorded a pretax write-down of $15.0 million on its investment in
      APEX Global Information Services, Inc. ("APEX"), a provider of Internet
      access services. The write-off was recorded due to adverse market
      conditions facing APEX and the company's bankruptcy filing.

                                        9

<PAGE>

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


6.    Comprehensive Income:
      Comprehensive income was as follows for the three, nine and twelve month
      periods ended September 30:

<TABLE>

                                                      Three Months Ended           Nine Months Ended          Twelve Months Ended
                                                    ----------------------     ------------------------     -----------------------
      <S>                                           <C>          <C>           <C>             <C>          <C>            <C>
      (Dollars in thousands)                             2000         1999           2000          1999           2000         1999
      ----------------------                             ----         ----           ----          ----           ----         ----
      Net income                                    $ 484,012    $ 150,349     $1,703,574      $550,162     $1,937,046     $724,244
                                                    ---------    ---------     ----------      --------     ----------     --------
      Other comprehensive income (loss):
        Unrealized holding gains (losses)
          on investments arising during
          the period                                 (250,208)    (197,990)      (366,004)      (35,104)      (247,355)     261,683
        Income tax expense (benefit)                  (68,706)     (77,380)      (111,399)      (13,666)       (86,780)     102,574
                                                    ---------    ---------     ----------      --------     ----------     --------
                                                     (181,502)    (120,610)      (254,605)      (21,438)      (160,575)     159,109
                                                    ---------    ---------     ----------      --------     ----------     --------
        Less:  reclassification adjustments

          for gains included in net income           (476,291)           -       (476,291)            -       (519,362)           -
        Income tax expense                            193,692            -        193,692             -        209,578            -
                                                    ---------    ---------     ----------      --------     ----------     --------
                                                     (282,599)           -       (282,599)            -       (309,784)           -
                                                    ---------    ---------     ----------      --------     ----------     --------
        Other comprehensive income

          (loss) before tax                          (726,499)    (197,990)      (842,295)      (35,104)      (766,717)     261,683
        Income tax expense (benefit)                 (262,398)     (77,380)      (305,091)      (13,666)      (296,358)     102,574
                                                    ---------    ---------     ----------      --------     ----------     --------
        Other comprehensive income (loss)            (464,101)    (120,610)      (537,204)      (21,438)      (470,359)     159,109
                                                    ---------    ---------     ----------      --------     ----------     --------
      Comprehensive income                          $  19,911    $  29,739     $1,166,370      $528,724     $1,466,687     $883,353
                                                    =========    =========     ==========      ========     ==========     ========
</TABLE>

7.    Earnings per Share:
      A reconciliation of the net income and number of shares used in computing
      basic and diluted earnings per share was as follows for the three, nine
      and twelve month periods ended September 30:

<TABLE>

                                                      Three Months Ended           Nine Months Ended          Twelve Months Ended
                                                    ----------------------     ------------------------     -----------------------
      <S>                                           <C>          <C>           <C>             <C>          <C>            <C>
      (In thousands, except per share amounts)           2000         1999           2000          1999           2000         1999
      ----------------------------------------           ----         ----           ----          ----           ----         ----
      Basic earnings per share:
      Net income applicable to
          common shares                             $ 483,972    $ 150,134     $1,703,453      $549,488     $1,936,710     $723,342
      Weighted average common shares
          outstanding for the period                  314,302      313,112        314,896       312,396        314,716      310,727
                                                    ---------    ---------     ----------      --------     ----------     --------
      Basic earnings per share                          $1.54         $.48          $5.41         $1.76          $6.15        $2.33
                                                        =====         ====          =====         =====          =====        =====

      Diluted earnings per share:
      Net income applicable to
          common shares                             $ 483,972    $ 150,134     $1,703,453      $549,488     $1,936,710     $723,342
      Adjustments for convertible securities:
          Preferred stock dividends                        40           43            121           131            163          176
                                                    ---------    ---------     ----------      --------     ----------     --------
      Net income applicable to common
          shares assuming conversion                $ 484,012    $ 150,177     $1,703,574      $549,619     $1,936,873     $723,518
                                                    ---------    ---------     ----------      --------     ----------     --------
      Weighted average common shares
          outstanding for the period                  314,302      313,112        314,896       312,396        314,716      310,727
      Increase in shares resulting from:
          Exercise of stock options                     2,059        3,415          2,537         3,474          2,748        3,283
          Conversion of preferred stocks                  405          443            414           449            418          452
                                                    ---------    ---------     ----------      --------     ----------     --------
      Weighted average common shares
          outstanding assuming conversion             316,766      316,970        317,847       316,319        317,882      314,462
                                                    ---------    ---------     ----------      --------     ----------     --------
      Diluted earnings per share                        $1.53         $.47          $5.36         $1.74          $6.09        $2.30
                                                        =====         ====          =====         =====          =====        =====
  </TABLE>

                                       10

<PAGE>

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


8.    Business Segment Information:
      ALLTEL disaggregates its business operations based on differences in
      products and services. The Company evaluates performance based on segment
      operating income, excluding non-recurring and unusual items. Segment
      operating results were as follows for the three, nine and twelve month
      periods ended September 30:

<TABLE>

                                             Three Months Ended                Nine Months Ended             Twelve Months Ended
                                         -------------------------        -------------------------       -------------------------
      <S>                                <C>            <C>               <C>            <C>              <C>            <C>
      (Dollars in thousands)                   2000           1999              2000           1999             2000           1999
      ----------------------                   ----           ----              ----           ----             ----           ----
      Revenues and Sales from
        External Customers:
       Wireless                          $  875,523     $  768,005        $2,449,027     $2,170,242       $3,180,952     $2,824,926
       Wireline                             411,322        412,804         1,254,155      1,207,436        1,668,146      1,577,195
       Emerging businesses                   79,782         68,114           246,206        189,062          327,153        233,700
                                         ----------     ----------        ----------     ----------       ----------     ----------
        Total communications              1,366,627      1,248,923         3,949,388      3,566,740        5,176,251      4,635,821
       Information services                 248,791        246,305           726,483        735,127          968,705        999,643
       Other operations                     106,224        102,673           295,476        274,589          389,669        356,767
                                         ----------     ----------        ----------     ----------       ----------     ----------
        Total business segments           1,721,642      1,597,901         4,971,347      4,576,456        6,534,625      5,992,231
                                         ----------     ----------        ----------     ----------       ----------     ----------
      Intersegment Revenues
        and Sales:

       Wireless                                   -              -                 -              -                -              -
       Wireline                              15,921         13,855            48,450         43,359           61,121         56,481
       Emerging businesses                   23,168          3,242            42,228          7,827           44,826         13,200
                                         ----------     ----------        ----------     ----------       ----------     ----------
        Total communications                 39,089         17,097            90,678         51,186          105,947         69,681
       Information services                  70,837         66,550           222,665        196,976          293,843        238,007
       Other operations                      60,279         51,150           177,369        140,295          248,110        234,312
                                         ----------     ----------        ----------     ----------       ----------     ----------
        Total business segments             170,205        134,797           490,712        388,457          647,900        542,000
                                         ----------     ----------        ----------     ----------       ----------     ----------
      Total Revenues and Sales:
       Wireless                             875,523        768,005         2,449,027      2,170,242        3,180,952      2,824,926
       Wireline                             427,243        426,659         1,302,605      1,250,795        1,729,267      1,633,676
       Emerging businesses                  102,950         71,356           288,434        196,889          371,979        246,900
                                         ----------     ----------        ----------     ----------       ----------     ----------
        Total communications              1,405,716      1,266,020         4,040,066      3,617,926        5,282,198      4,705,502
       Information services                 319,628        312,855           949,148        932,103        1,262,548      1,237,650
       Other operations                     166,503        153,823           472,845        414,884          637,779        591,079
                                         ----------     ----------        ----------     ----------       ----------     ----------
        Total business segments           1,891,847      1,732,698         5,462,059      4,964,913        7,182,525      6,534,231
       Less:   intercompany
               eliminations                  88,612         56,904           238,839        143,184          319,663        187,005
                                         ----------     ----------        ----------     ----------       ----------     ----------
       Total revenues and sales          $1,803,235     $1,675,794        $5,223,220     $4,821,729       $6,862,862     $6,347,226
                                         ==========     ==========        ==========     ==========       ==========     ==========
      Operating Income (Loss):
       Wireless                          $  214,785     $  247,042        $  694,036     $  687,573       $  892,941     $  853,604
       Wireline                             159,608        156,714           497,864        452,429          664,499        591,662
       Emerging businesses                      210        (14,588)          (25,613)       (33,127)         (39,727)       (45,393)
                                         ----------     ----------        ----------     ----------       ----------     ----------
        Total communications                374,603        389,168         1,166,287      1,106,875        1,517,713      1,399,873
       Information services                  47,010         44,479           133,141        128,217          180,240        174,259
       Other operations                       6,454          5,986            15,407         16,300           20,668         22,984
                                         ----------     ----------        ----------     ----------       ----------     ----------
        Total business segments             428,067        439,633         1,314,835      1,251,392        1,718,621      1,597,116
       Corporate operations                  (8,459)       (10,606)          (27,153)       (26,194)         (40,510)       (36,315)
       Merger and integration costs
        and other charges                    (7,687)       (90,520)          (24,593)       (90,520)         (24,593)       (90,520)
                                         ----------     ----------        ----------     ----------       ----------     ----------
        Total corporate expenses            (16,146)      (101,126)          (51,746)      (116,714)         (65,103)      (126,835)
                                         ----------     ----------        ----------     ----------       ----------     ----------
       Total operating income            $  411,921     $  338,507        $1,263,089     $1,134,678       $1,653,518     $1,470,281
                                         ==========     ==========        ==========     ==========       ==========     ==========
</TABLE>

                                       11

<PAGE>

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


8.    Business Segment Information, Continued:
      Segment assets were as follows as of September 30:
<TABLE>

                                                                                                      (Thousands)
                                                                                             -----------------------------
       <S>                                                                                   <C>               <C>
                                                                                                    2000              1999
                                                                                                    ----              ----
        Wireless                                                                             $ 6,611,343       $ 4,733,656
        Wireline                                                                               3,102,705         3,120,991
        Emerging businesses                                                                      459,187           408,550
                                                                                             -----------       -----------
           Total communications                                                               10,173,235         8,263,197
        Information services                                                                     932,008           870,992
        Other operations                                                                         435,023           236,198
                                                                                             -----------       -----------
           Total business segments                                                            11,540,266         9,370,387
                                                                                             -----------       -----------
        Add:  Corporate assets not allocated to segments:
              Headquarters fixed assets, net of accumulated depreciation                         223,684           202,541
              Investments                                                                        157,946           975,792
              Goodwill, net of amortization                                                       99,817           102,819
              Other assets                                                                        59,982            18,170
                                                                                             -----------       -----------
           Total corporate assets                                                                541,429         1,299,322
                                                                                             -----------       -----------
        Less: elimination of intersegment receivables                                           (240,795)          (99,351)
                                                                                             -----------       -----------
                Consolidated assets                                                          $11,840,900       $10,570,358
                                                                                             ===========       ===========
</TABLE>

9.    Litigation-Claims and Assessments:
      On July 12, 1996, the Georgia Public Service Commission ("Georgia PSC")
      issued an order requiring that ALLTEL's wireline subsidiaries which
      operate within its jurisdiction reduce their annual network access charges
      by $24.0 million, prospectively, effective July 1, 1996. The Georgia PSC's
      action was in response to the Company's election to move from a
      rate-of-return method of pricing to an incentive rate structure, as
      provided by a 1995 Georgia telecommunications law. The Company appealed
      the Georgia PSC order. In November 1996, the Superior Court of Fulton
      County, Georgia (the "Superior Court") rendered its decision and reversed
      the Georgia PSC order, finding, among other matters, that the Georgia PSC
      had exceeded its authority by conducting a rate proceeding after the
      Company's election of alternative regulation. The Superior Court did not
      rule on a number of other assertions made by the Company as grounds for
      reversal of the Georgia PSC order.

      The Georgia PSC appealed the Superior Court's decision, and in July 1997,
      the Georgia Court of Appeals reversed the Superior Court's decision. In
      August 1997, the Company filed with the Georgia Supreme Court a petition
      for writ of certiorari requesting that the Georgia Court of Appeals'
      decision be reversed. In October 1998, the Georgia Supreme Court upheld
      the Georgia Court of Appeals' ruling that the Georgia PSC had the
      authority to conduct the rate proceeding. The case was returned to the
      Superior Court for it to rule on the issues it had not previously decided.
      In April 1999, the Superior Court found that with respect to the July 1996
      order, the Georgia PSC did not provide ALLTEL with sufficient notice of
      the charges against the Company, did not provide ALLTEL a fair opportunity
      to present its case and respond to the charges, and failed to satisfy its
      burden of proving that ALLTEL's rates were unjust and unreasonable.
      Further, the Superior Court found that the July 1996 order was an unlawful
      attempt to retroactively reduce ALLTEL's rates and certain statutory
      revenue recoveries. For each of these independent reasons, the Superior
      Court vacated and reversed the July 1996 order and remanded the case with
      instructions to dismiss the case. The Georgia PSC appealed the Superior
      Court's April 1999 decision.

                                       12

<PAGE>

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


9.    Litigation-Claims and Assessments, Continued:
      On April 11, 2000, ALLTEL signed a settlement agreement with the Georgia
      PSC to settle this case. As part of the agreement, ALLTEL agreed to
      accelerate deployment of digital subscriber lines and Internet service to
      its customers in Georgia and to reduce certain optional local calling plan
      rates. In addition, ALLTEL agreed to future reductions in funds received
      from the Georgia Universal Service Fund. These revenue reductions will
      total approximately $12.0 million during the remainder of 2000 and
      approximately $26.0 million in 2001. In exchange for the Company's
      commitments, the Georgia PSC agreed to withdraw its appeal of the Superior
      Court's April 1999 decision.

      On June 27, 2000, the Georgia Court of Appeals acknowledged that the case
      had been settled and thus its ruling was moot, but denied the motion to
      dismiss and reversed the Superior Court's decision. On September 19, 2000,
      ALLTEL and the Georgia PSC reached a final settlement agreement to resolve
      all pending litigation involving the two parties. Under terms of the final
      agreement, ALLTEL will issue a one-time credit of about $25 to
      approximately 450,000 wireline customers in Georgia. The credits will be
      issued to business and residential customers by year-end and will total
      approximately $11.4 million. These one-time credits are in addition to the
      other commitments agreed to by ALLTEL under the settlement agreement
      signed in April 2000, as discussed above. As of September 30, 2000, the
      Company had recorded a liability for the estimated amount of customer
      credits to be issued.

10.   Subsequent Events:
      On October 3, 2000, ALLTEL completed the purchase of wireless properties
      in New Orleans and Baton Rouge, Louisiana from SBC Communications, Inc
      ("SBC"). The purchase also included three rural service areas in
      Louisiana. In connection with this transaction, ALLTEL paid SBC $388.7
      million in cash and acquired approximately 160,000 wireless customers and
      300,000 paging customers. Based on a preliminary evaluation of the fair
      value of assets acquired and liabilities assumed in this transaction,
      ALLTEL estimates that it will record goodwill and other intangibles of
      approximately $240.0 million. The Company will engage a third-party
      appraisal firm to perform a study to determine the final allocation of the
      total purchase price to the various assets acquired. The goodwill and
      other intangible assets and the operating results of the acquired
      properties will be included in the Company's consolidated financial
      statements from the date of acquisition.

      On October 30, 2000, ALLTEL announced that it would sell its PCS
      operations in Birmingham, Ala. to Tritel, Inc. The sale is expected to be
      completed in the first quarter of 2001. On November 9, 2000, the Company
      announced that it would sell 20 PCS licenses in six states to Verizon
      Wireless. The PCS licenses cover markets representing more than 11.4
      million POPs. The sale of PCS licenses is also expected to be completed in
      the first quarter of 2001. Following completion of this transaction, the
      Company will retain 42 PCS licenses representing approximately 17.0
      million POPs.

                                       13

<PAGE>

                               ALLTEL CORPORATION

                                    FORM 10-Q

                         PART I - FINANCIAL INFORMATION

Item 2.  Management's Discussion and Analysis of Financial Condition and
------   ---------------------------------------------------------------
         Results of Operations

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

GENERAL

    The following is a discussion and analysis of the historical results of
operations and financial condition of ALLTEL Corporation ("ALLTEL" or the
"Company"). This discussion should be read in conjunction with the unaudited
consolidated financial statements, including the notes thereto, for the interim
periods ended September 30, 2000 and 1999, and the Company's Annual Report on
Form 10-K, as amended for the year ended December 31, 1999.

EXCHANGE OF WIRELESS ASSETS

    On January 31, 2000, ALLTEL, Bell Atlantic Corporation ("Bell Atlantic"),
GTE Corporation ("GTE") and Vodafone Airtouch ("Vodafone") signed agreements to
exchange wireless properties in 13 states. The companies also signed a new
national roaming agreement that allows their customers to roam on one another's
networks at reduced rates across a footprint covering almost 95 percent of the
U.S. population. On April 3, 2000, ALLTEL completed the exchange of wireless
properties with Bell Atlantic in 5 states, acquiring operations in Arizona
(including Phoenix), Albuquerque, New Mexico and El Paso, Texas and divesting
operations in Nevada and Iowa. In addition to the transfer of wireless assets,
ALLTEL also paid Bell Atlantic $624.1 million in cash to complete this
transaction. On June 30, 2000, ALLTEL completed the remaining wireless property
exchanges with Bell Atlantic and GTE, acquiring operations in Florida (including
Tampa and Pensacola), Ohio (including Cleveland), South Carolina and Mobile,
Alabama, while divesting operations in Illinois, Indiana, New York and
Pennsylvania. ALLTEL also transferred to Bell Atlantic or GTE certain of its
minority investments in unconsolidated wireless properties, representing
approximately 2.6 million potential customers ("POPs"). In connection with the
transfer of the remaining wireless assets, ALLTEL received $192.5 million in
cash, prepaid vendor credits of $199.6 million and assumed long-term debt of
$425.0 million.

    Through the completion of the above transactions, ALLTEL acquired interests
in 27 wireless markets representing about 14.6 million POPs and approximately
1,467,000 wireless customers, while divesting interests in 42 wireless markets
representing 6.9 million POPs and approximately 778,000 customers. ALLTEL
accounted for these exchange transactions as purchases, and accordingly, the
accompanying consolidated financial statements include the accounts and results
of operations of the acquired wireless properties from the applicable date of
acquisition. Under the purchase method of accounting, tangible and identifiable
intangible assets acquired are recorded at fair value. The excess of the
aggregate purchase price over the fair market value of the net assets acquired
of $1.4 billion has been initially allocated to goodwill and is being amortized
on a straight-line basis over 25 years. The fair values and useful lives of
assets acquired have been estimated based on a preliminary valuation and are
subject to final valuation adjustments. ALLTEL has engaged a third-party
appraisal firm to perform a study to determine the allocation of the total
purchase price to the various assets acquired. Accordingly, a portion of the
excess cost may be classified as other intangibles and may be amortized over
different periods other than the goodwill amortization period of 25 years. See
Note 2 to the unaudited interim consolidated financial statements for additional
information regarding the wireless property exchange transactions.

    Also during the second quarter, the Company sold its Personal Communications
Services ("PCS") operations in Mobile, Ala. and the PCS license covering the
Pensacola, Fla. market. The sale of these PCS assets was necessary in order for
ALLTEL to meet the U.S. Department of Justice guidelines regarding the overlap
of wireless properties so that the Company could complete the wireless asset
exchanges with Bell Atlantic and GTE. In connection with the exchange of
wireless properties and the sale of PCS assets, ALLTEL recognized a pretax gain
of $1,351.6 million.

                                       14

<PAGE>

COMPLETION OF MERGERS

    On September 30, 1999, the Company completed mergers with Liberty Cellular,
Inc. ("Liberty") and its affiliate KINI L.C. On July 2, 1999, the Company
completed its merger with Aliant Communications Inc. ("Aliant"). These mergers
were accounted for as poolings-of-interests; and accordingly, all prior period
financial information was restated to include the operations of Aliant, Liberty
and KINI L.C.

    In January 1999, the Company completed a merger with Standard Group, Inc.
("Standard"). In September 1999, the Company also completed mergers with
Advanced Information Resources, Limited ("AIR") and Southern Data Systems
("Southern Data"). In connection with these mergers, approximately 6.5 million
shares of ALLTEL common stock were issued. All three mergers qualified as
tax-free reorganizations and were accounted for as poolings-of-interests. Prior
period financial information was not restated, since the operations of the three
acquired companies were not significant to ALLTEL's consolidated financial
statements on either a separate or aggregate basis. The accompanying
consolidated financial statements include the accounts and results of operations
of Standard, AIR and Southern Data from the applicable date of acquisition. See
Note 3 to the unaudited interim consolidated financial statements for additional
information regarding the merger transactions.

OVERVIEW-CONSOLIDATED RESULTS OF OPERATIONS

<TABLE>

                                       Three Months Ended            Nine Months Ended            Twelve Months Ended
(Dollars in thousands,                    September 30,                September 30,                   September 30,
                                   -------------------------     ------------------------       ------------------------
<S>                                <C>            <C>            <C>           <C>              <C>           <C>
except per share amounts)                2000           1999           2000          1999             2000          1999
------------------------------------------------------------------------------------------------------------------------
Revenues and sales                 $1,803,235     $1,675,794     $5,223,220    $4,821,729       $6,862,862    $6,347,226
Operating income                   $  411,921     $  338,507     $1,263,089    $1,134,678       $1,653,518    $1,470,281
Net income                         $  484,012     $  150,349     $1,703,574    $  550,162       $1,937,046    $  724,244
Earnings per share:
   Basic                                $1.54           $.48          $5.41         $1.76            $6.15         $2.33
   Diluted                              $1.53           $.47          $5.36         $1.74            $6.09         $2.30
------------------------------------------------------------------------------------------------------------------------
</TABLE>

    Revenues and sales increased 8 percent in each of the three, nine and twelve
month periods ended September 30, 2000 or $127.4 million, $401.5 million and
$515.6 million, respectively. Revenue growth in each period reflects strong
market demand for the Company's communications services as further discussed
below.

    Reported operating income, net income and earnings per share for the three,
nine and twelve month periods ended September 30, 2000 and 1999 include the
effects of various non-recurring and unusual items. As further discussed below,
the non-recurring and unusual items include merger and integration expenses and
other charges and gains realized from the exchange or sale of assets. Adjusted
to exclude the effects of the non-recurring and unusual items in each period,
operating income would have increased $2.0 million or less than 1 percent, $73.9
million or 6 percent and $128.8 million or 8 percent in the three, nine and
twelve month periods ended September 30, 2000, respectively. For the same
periods of 2000, net income would have decreased $3.0 million or 1 percent and
increased $51.5 million or 8 percent and $83.7 million or 11 percent,
respectively. When excluding the effects of the non-recurring and unusual items
in each period, basic and diluted earnings per share both would have decreased 1
percent and increased 8 percent in the three and nine month periods ended
September 30, 2000, respectively. For the twelve month period of 2000, basic and
diluted earnings per share would have increased 9 percent and 10 percent,
respectively. Operating results for all periods ended September 30, 2000 were
also adversely affected by additional goodwill amortization of approximately
$20.0 million related to the exchange of wireless assets with Bell Atlantic and
GTE, as previously discussed.

                                       15

<PAGE>

    Operating income, net income and earnings per share adjusted for all
non-extraordinary, non-recurring and unusual items are summarized in the
following table:

<TABLE>

                                          Three Months Ended         Nine Months Ended             Twelve Months Ended
(Dollars in thousands,                       September 30,              September 30,                  September 30,
                                         --------------------     ------------------------      ------------------------
<S>                                      <C>         <C>          <C>           <C>             <C>           <C>
except per share amounts)                    2000        1999           2000          1999            2000          1999
------------------------------------------------------------------------------------------------------------------------
Operating income, as reported            $411,921    $338,507     $1,263,089    $1,134,678      $1,653,518    $1,470,281
Non-recurring and unusual items:
    Litigation settlement                  11,450           -         11,450             -          11,450             -
    Merger and integration
      expenses and other charges            7,687      90,520         24,593        90,520          24,593        90,520
                                         --------    --------     ----------    ----------      ----------    ----------
Operating income, as adjusted            $431,058    $429,027     $1,299,132    $1,225,198      $1,689,561    $1,560,801
------------------------------------------------------------------------------------------------------------------------
Net income, as reported                  $484,012    $150,349     $1,703,574    $  550,162      $1,937,046    $  724,244
Non-recurring and unusual
   items, net of tax:
    Litigation settlement                   6,996           -          6,996             -           6,996             -
    Merger and integration
       expenses and other charges           4,612      66,044         14,553        66,044          14,553        66,044
    Gain on disposal of assets           (282,276)          -     (1,066,564)            -      (1,093,749)            -
    Write-down of investment                    -           -          9,172             -           9,172             -
                                         --------    --------     ----------    ----------      ----------    ----------
Net income, as adjusted                  $213,344    $216,393     $  667,731    $  616,206      $  874,018    $  790,288
------------------------------------------------------------------------------------------------------------------------
Basic earnings per share,
   as reported                              $1.54        $.48          $5.41         $1.76           $6.15         $2.33
Non-recurring and unusual
   items, net of tax:
    Litigation settlement                     .02           -            .02             -             .02             -
    Merger and integration
      expenses and other charges              .02         .21            .05           .21             .05           .21
    Gain on disposal of assets               (.90)          -          (3.39)            -           (3.47)            -
    Write-down of investment                    -           -            .03             -             .03             -
                                            -----        ----          -----         -----           -----         -----
Basic earnings per share,
   as adjusted                              $ .68        $.69          $2.12         $1.97           $2.78         $2.54
------------------------------------------------------------------------------------------------------------------------
Diluted earnings per share,
   as reported                              $1.53        $.47          $5.36         $1.74           $6.09         $2.30
Non-recurring and unusual
   items, net of tax:
    Litigation settlement                     .02           -            .02             -             .02             -
    Merger and integration
      expenses and other charges              .01         .21            .05           .21             .05           .21
    Gain on disposal of assets               (.89)          -          (3.36)            -           (3.44)            -
    Write-down of investment                    -           -            .03             -             .03             -
                                            -----        ----          -----         -----           -----         -----
Diluted earnings per share,
   as adjusted                              $ .67        $.68          $2.10         $1.95           $2.75         $2.51
------------------------------------------------------------------------------------------------------------------------
</TABLE>

The operating income, net income and earnings per share impact of the
non-recurring and unusual items have been presented as supplemental information
only. The non-recurring and unusual items reflected in the above table are
discussed in reference to the caption in the consolidated statements of income
in which they are reported.

                                       16

<PAGE>

Litigation Settlement

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

    As reported in Note 9 to the unaudited interim consolidated financial
statements, on September 19, 2000, ALLTEL and the Georgia Public Service
Commission ("Georgia PSC") reached a final settlement agreement to resolve all
pending litigation involving the two parties. Under terms of the final
agreement, ALLTEL will issue a one-time credit of about $25 to approximately
450,000 wireline customers in Georgia. The credits will be issued to business
and residential customers by year-end and will total approximately $11.4
million. As of September 30, 2000, the Company had recorded a liability for the
estimated amount of the credits with a corresponding reduction in wireline
operating revenues. The one-time customer credits are in addition to other
commitments agreed to by ALLTEL under an earlier version of the settlement
agreement signed on April 11, 2000. As part of the earlier agreement, ALLTEL
agreed to accelerate deployment of digital subscriber lines and Internet service
to its customers in Georgia and to reduce certain optional local calling plan
rates. In addition, ALLTEL agreed to future reductions in funds received from
the Georgia Universal Service Fund. These revenue reductions will total
approximately $12.0 million during 2000 and approximately $26.0 million in 2001.

Merger and Integration Expenses and Other Charges

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

    In connection with the exchange of wireless assets with Bell Atlantic and
GTE, the Company recorded integration expenses and other charges during the
second and third quarters of 2000, consisting of severance and employee benefit
costs related to a planned workforce reduction and branding and signage costs.
The total charge recorded by the Company in the third quarter was $9.2 million
and consisted of $8.9 million in branding and signage costs and $0.3 million in
severance and employee-related expenses. In the second quarter, the Company
recorded a charge of $8.8 million, consisting of $5.0 million in severance and
employee benefit costs and $3.8 million in branding and signage costs.

    During the third quarter of 2000, the Company also recorded a $1.5 million
reduction in the liabilities associated with its merger and integration
activities initiated during 1999. The reduction consisted of a $1.0 million
decrease in estimated severance costs to complete the September 1999
restructuring of the wireline operations and decreases in estimated severance
costs of $0.3 million and $0.2 million, respectively, related to the
acquisitions of Aliant and Liberty. The adjustment to the wireline restructuring
plan reflects a reduction in the expected number of employees to be terminated
from 308 to 248, while the adjustments to the Aliant and Liberty merger and
integration plans reflect differences between actual and estimated severance
costs paid. During the second quarter of 2000, the Company also recorded a $2.0
million reduction in the merger and integration liability related to its
acquisition of Aliant. This adjustment primarily reflects a decrease in
severance and employee benefit costs to be paid as a result of reducing the
expected number of Aliant employees to be terminated from 160 to 132.

    In an effort to improve the operating efficiency of its information services
business, the Company recorded a restructuring charge of $10.1 million during
the first quarter of 2000. This charge consisted of $5.9 million in severance
and employee benefit costs related to a planned workforce reduction and $4.2
million in lease termination costs related to the consolidation of certain
operating locations. The lease termination costs represent the estimated minimum
contractual commitments over the next one to four years for leased facilities
that the Company has abandoned, net of anticipated sublease income.

    During the third quarter of 1999, the Company recorded a pretax charge of
$90.5 million in connection with its mergers with Aliant, Liberty, AIR and
Southern Data and with certain loss contingencies and other restructuring
activities. The merger and integration expenses totaled $73.4 million and
consisted of professional and financial advisors' fees of $24.4 million,
severance and employee-related expenses of $15.4 million and other integration
costs of $33.6 million. The other integration costs included $12.5 million of
lease termination costs, $10.2 million of costs associated with the early
termination of certain service obligations, and a $4.6 million write-down in the
carrying value of certain in-process and other

                                       17

 <PAGE>

software development assets that had no future alternative use or functionality.
The other integration costs also included branding and signage costs of $4.1
million and other expenses of $2.2 million incurred in the third quarter of
1999.

    The lease termination costs consisted of a cancellation fee of $7.3 million
to terminate the Company's contractual commitment to lease building space
previously occupied by the former 360 Communications Company ("360") operations
acquired in 1998, a $4.1 million write-off of capitalized leasehold improvements
and $1.1 million in other disposal costs. The contract termination fees included
$5.2 million related to long-term contracts with an outside vendor for customer
billing services to be provided to the Aliant and Liberty operations. As part of
its integration plan, ALLTEL will convert the Aliant and Liberty operations to
its own internal billing system.  Conversion of the Liberty operations was
completed in November 1999, with conversion of the Aliant operations scheduled
to be begin in early 2001. The Company also recorded an additional $5.0 million
charge to reflect the actual cost of terminating its contract with Convergys
Corporation ("Convergys") for customer billing services to be provided to the
former 360 operations.  In September 1999, ALLTEL and Convergys agreed to a
final contract termination fee of $55.0 million, of which $50.0 million was
recorded in 1998. Through September 30, 2000, the Company has paid Convergys
$30.0 million of the termination fee with the remaining payments due in
installments through 2001.

    During the third quarter of 1999, the Company also recorded a restructuring
charge of $17.1 million consisting of $10.8 million in severance and employee
benefit costs related to a planned workforce reduction and $6.3 million in lease
termination costs related to the consolidation of certain operating locations.
The lease termination costs represent the minimum estimated contractual
commitments over the next one to four years for leased facilities that the
Company has abandoned.

    At September 30, 2000, the remaining unpaid liability related to the
Company's merger and integration and restructuring activities was $38.8 million,
consisting of contract termination fees of $29.9 million, severance and
employee-related expenses of $6.3 million and lease cancellation and termination
costs of $2.6 million. Of the remaining contract termination fees, $20.0 million
will be paid by December 31, 2000, $7.5 million in 2001 and $2.4 million in
2002. Cash outlays for the remaining employee-related expenses and lease
termination fees will be disbursed over the next 12 to 48 months. Funding for
the unpaid merger and integration and restructuring liability will be internally
financed from operating cash flows.

    As a result of its integration and restructuring efforts, ALLTEL expects to
realize synergies through a reduction in operating expenses of approximately
$128.0 million in 2000. The Company estimates 40 percent of the cost savings
will result from a reduction in duplicative salaries and employee benefits, 20
percent from a reduction in variable network expenses, 20 percent from volume
purchase discounts, 10 percent from a reduction in branding and advertising
costs and 10 percent from a reduction in information technology expenses. (See
Note 4 to the unaudited interim consolidated financial statements for additional
information regarding the merger and integration expenses and other charges).

Gain on Disposal of Assets and Other

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

    In the third quarter of 2000, the Company recorded pretax gains totaling
$476.3 million from sale of a portion of its investment in WorldCom, Inc.
("WorldCom" formerly MCI WorldCom, Inc.) common stock. In addition, the Company
recorded a pretax adjustment of $1.4 million to reduce the gain recognized from
the exchange of wireless properties with Bell Atlantic and GTE and the sale of
certain PCS assets recorded in the second quarter of 2000, as discussed below.
The adjustment reflected differences in the actual and estimated book values of
the properties disposed.

                                       18

<PAGE>

    In the second quarter of 2000, the Company recorded pretax gains totaling
$1,353.1 million from the exchange of wireless properties with Bell Atlantic and
GTE and the sale of certain PCS assets. In addition, the Company recorded a
pretax write-down of $15.0 million on its investment in APEX Global Information
Services, Inc. ("APEX"), a provider of Internet access services. The write-off
was recorded due to adverse market conditions facing APEX and the company's
bankruptcy filing.

    During the fourth quarter of 1999, the Company recorded a pretax gain of
$43.1 million from the sale of a portion of its investment in WorldCom common
stock.

RESULTS OF OPERATIONS BY BUSINESS SEGMENT
<TABLE>

Communications-Wireless Operations

------------------------------------------------------------------------------------------------------------------------
                                         Three Months Ended          Nine Months Ended             Twelve Months Ended
                                            September 30,              September 30,                   September 30,
                                       ---------------------     -------------------------      ------------------------
<S>                                    <C>          <C>          <C>            <C>             <C>           <C>
(Dollars in thousands)                     2000         1999           2000           1999            2000          1999
------------------------------------------------------------------------------------------------------------------------
Revenues and sales                     $875,523     $768,005     $2,449,027     $2,170,242      $3,180,952    $2,824,926
Operating income                       $214,785     $247,042     $  694,036     $  687,573      $  892,941    $  853,604
------------------------------------------------------------------------------------------------------------------------
</TABLE>

    Wireless revenues and sales increased $107.5 million or 14 percent, $278.8
million or 13 percent and $356.0 million or 13 percent for the three, nine and
twelve month periods ended September 30, 2000, respectively. Operating income
decreased $32.3 million or 13 percent for the three month period of 2000.
Operating income increased $6.5 million or 1 percent and $39.3 million or 5
percent for the nine and twelve month periods of 2000, respectively. During the
past twelve month period, customer growth continued as the number of wireless
customers grew to 6,009,092 from 4,857,847, an increase of 1,151,245 customers
or 24 percent. As previously discussed, in the second quarter, ALLTEL completed
the exchange of wireless properties with Bell Atlantic and GTE. The exchange
transactions accounted for approximately 689,000 of the overall increase in
wireless customers that occurred during the past twelve months. Excluding the
effect of the exchange transactions and other acquisitions, ALLTEL placed
1,524,809 gross units in service during the first nine months of 2000, compared
to 1,215,769 gross units for the same period of 1999.

    Overall, the Company's market penetration rate (number of customers as a
percent of the total population in ALLTEL's service areas) increased to 12.6
percent as of September 30, 2000. Customer churn (average monthly rate of
customer disconnects) increased slightly over prior periods and was 2.45
percent, 2.34 percent and 2.34 percent for the three, nine and twelve months
ended September 30, 2000, respectively, compared to 2.22 percent, 2.14 percent
and 2.21 percent for the same periods in 1999. In an effort to lower churn, the
Company initiated several programs in the third quarter designed to improve
customer retention. These initiatives will include for certain rate plans,
analyzing customer usage patterns over a six-month period and notifying the
customer if a better rate plan is available and migrating customers from analog
equipment to digital through use of equipment subsidies.

    In the second quarter of 2000, ALLTEL changed the reporting presentation for
wireless customer roaming revenues to a gross basis. This change conforms the
Company's financial reporting policies to prevailing wireless industry practice
and is consistent with the reporting policies of the recently acquired Bell
Atlantic and GTE properties. Previously, ALLTEL netted these revenues against
roaming charges from other wireless service providers and included the net
amount in operations expense. Prior period revenue, operating expense and
revenue per customer statistical information have been reclassified to conform
to the new reporting presentation. This change does not affect previously
reported operating income or net income of the Company.

    Wireless revenues and sales increased in all periods primarily due to the
growth in wireless customers. The exchange of wireless properties with Bell
Atlantic and GTE accounted for approximately $84.6 million of the overall
increases in revenues and sales in the three month period of 2000 and
approximately $110.1 million of the overall increases in revenues and sales in
the nine and twelve month periods of 2000.

                                       19

<PAGE>

    Average revenue per customer per month was $49.32, $49.76 and $49.72 for the
three, nine and twelve months ended September 30, 2000, respectively, compared
to $53.52, $51.59 and $51.27 for the same periods of 1999. Reductions in average
revenue per customer per month in each period reflects expansion of local,
regional and national calling plans, decreased roaming rates and continued
penetration into competitive market segments. The Company expects these
industry-wide trends to continue. During the second quarter of 2000, as a result
of its new roaming agreements with Bell Atlantic, GTE and Vodafone, the Company
began offering new rate plans that provide customers with national wireless
coverage with no toll or roaming charges. During the third quarter of 2000, more
than 100,000 customers subscribed to these national rate plans. ALLTEL expects
these national rate plans to increase customer usage of its network and to
provide the Company the ability to compete effectively for the high volume,
roaming customer. Future revenue growth will be dependent upon the Company's
success in adding new customers in its existing markets, increasing customer
usage of its network and providing customers with enhanced products and
services.

    The growth in operating income in the nine and twelve month periods of 2000
primarily reflects the increases in revenues and sales noted above. The decrease
in operating income for the three month period of 2000 is primarily due to
additional goodwill amortization associated with the Bell Atlantic and GTE
property exchanges previously discussed. Increases in advertising and other
selling and marketing costs, consistent with the overall growth in revenues and
sales, the rollout of new rate plans and expanded competition from other
wireless service providers also affected operating income growth in all periods.
Operating income also reflects increased network-related expenses resulting from
increased network traffic due to customer growth and increased depreciation
expense consistent with the growth in wireless plant in service.

    The cost to acquire a new wireless customer represents sales, marketing and
advertising costs and the net equipment cost for each new customer added. Cost
to acquire a new wireless customer was $315, $306 and $303 for the three, nine,
and twelve month periods ended September 30, 2000, respectively, compared to
$306, $316 and $299 for the same periods of 1999. The increases in cost to
acquire a new customer in the three and twelve month periods primarily reflect
the migration from analog to digital equipment and the nationwide branding
campaign. The decrease in cost to acquire a new customer in the nine month
period primarily reflects a reduction in sales commissions paid to national
dealers due to proportionately lower sales generated from these external
distribution channels. While ALLTEL continues to utilize its large dealer
network, the Company has expanded its sales distribution channels through
Company retail stores and kiosks located in shopping malls and other retail
outlets. Incremental sales costs at a Company retail store or kiosk are
significantly lower than commissions paid to national dealers. Accordingly,
ALLTEL intends to manage the costs of acquiring new customers by continuing to
expand and enhance its internal distribution channels.

<TABLE>

Communications-Wireline Operations

------------------------------------------------------------------------------------------------------------------------
                                         Three Months Ended           Nine Months Ended            Twelve Months Ended
                                           September 30,                September 30,                  September 30,
                                       ---------------------     -------------------------      ------------------------
<S>                                    <C>          <C>          <C>            <C>             <C>           <C>
(Dollars in thousands)                     2000         1999           2000           1999            2000          1999
------------------------------------------------------------------------------------------------------------------------
Local service                          $196,698     $195,000     $  602,398     $  571,857      $  800,765    $  747,149
Network access and
  long-distance                         201,769      198,058        611,973        580,992         809,937       757,122
Miscellaneous                            28,776       33,601         88,234         97,946         118,565       129,405
                                       --------     --------     ----------     ----------      ----------    ----------
  Total revenues and sales             $427,243     $426,659     $1,302,605     $1,250,795      $1,729,267    $1,633,676
Operating income                       $159,608     $156,714     $  497,864     $  452,429      $  664,499    $  591,662
------------------------------------------------------------------------------------------------------------------------
</TABLE>

    Wireline revenues and sales increased $0.6 million or less than 1 percent,
$51.8 million or 4 percent and $95.6 million or 6 percent for the three, nine
and twelve months ended September 30, 2000, respectively. Wireline operating
income increased $2.9 million or 2 percent, $45.4 million or 10 percent and
$72.8 million or 12 percent for the three, nine and twelve month periods ended
September 30, 2000, respectively.

                                       20

<PAGE>

    Wireline operating results for all 2000 periods include the effect of the
$11.4 million Georgia PSC litigation settlement previously discussed. Excluding
the effect of this settlement, revenues and sales would have increased $12.0
million or 3 percent, $63.3 million or 5 percent and $107.0 million or 7
percent, and operating income would have increased $14.3 million or 9 percent,
$56.9 million or 13 percent and $84.3 million or 14 percent for the three, nine
and twelve month periods ended September 30, 2000, respectively.

    Local service revenues for all 2000 periods include the effect of the
Georgia PSC litigation settlement. Excluding the effect of the settlement, local
service revenues would have increased $13.1 million or 7 percent, $42.0 million
or 7 percent and $65.1 million or 9 percent in the three, nine and twelve month
periods ended September 30, 2000, respectively. Net of the litigation
settlement, the increases in local service revenues all periods reflect growth
in customer access lines. During the past twelve months, access line growth,
including the sales of residential and second access lines, remained strong as
the number of access lines grew to 2,555,299 from 2,393,450, an increase of more
than 6 percent. Revenues from custom calling and other enhanced services
increased $3.9 million, $11.4 million and $15.7 million in the three, nine and
twelve month periods ended September 30, 2000, respectively, also contributing
to the overall growth in local service revenues in all periods. Local service
revenues also reflect the reclassification of certain service-related revenues
from miscellaneous revenues, which accounted for $2.3 million of the overall
increases in local service revenues for the three, nine and twelve months ended
September 30, 2000. In addition, the acquisition of Standard accounted for $9.3
million of the increase in local service revenues in the twelve month period of
2000.

    Network access and long-distance revenues increased $3.7 million or 2
percent, $31.0 million or 5 percent and $52.8 million or 7 percent in the three,
nine and twelve month periods ended September 30, 2000, respectively. The
increases in each period primarily reflect growth in customer access lines and
higher volumes of access usage. The acquisition of Standard accounted for $26.9
million of the increase in network access and long-distance revenues in the
twelve month period of 2000. The increases in network access and long-distance
revenues in all periods attributable to customer access line growth and
increased access usage were partially offset by reductions in intrastate toll
revenues. Network access and long distance revenues for all 2000 periods also
reflect a $7.2 million reduction in revenues received from the Georgia Universal
Service Fund in connection with the litigation settlement previously discussed.

    Miscellaneous revenues decreased $4.8 million or 14 percent, $9.7 million or
10 percent and $10.8 million or 8 percent for the three, nine and twelve month
periods ended September 30, 2000, respectively. The decreases in each period
primarily reflect a reduction in billing and collection revenues and the
reclassification of certain service-related revenues to local service revenues
previously discussed.

    Growth in operating income for all three periods of 2000 reflects the
increases in wireline operating revenues and reductions in customer service,
network related expenses and other general and administrative expenses,
primarily resulting from the Company's third quarter 1999 restructuring efforts.
The increases in operating income attributable to revenue growth and cost
savings were partially offset by increases in depreciation and amortization, and
selling and marketing expenses. The acquisition of Standard accounted for $19.0
million of the increase in operating income in the twelve month period of 2000.
Selling and marketing expenses increased in all three periods primarily due to
the growth in customer access lines, while depreciation and amortization expense
increased in all three periods primarily due to growth in wireline plant in
service.

                                       21

<PAGE>

Regulatory Matters - Wireline Operations

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

    ALLTEL's wireline subsidiaries, except for the former Aliant operations,
currently follow the accounting for regulated enterprises prescribed by
Statement of Financial Accounting Standards ("SFAS") No. 71, "Accounting for the
Effects of Certain Types of Regulation". Criteria that would give rise to the
discontinuance of SFAS 71 include (1) increasing competition that restricts the
wireline subsidiaries' ability to establish prices to recover specific costs and
(2) significant changes in the manner in which rates are set by regulators from
cost-based regulation to another form of regulation. The Company periodically
reviews these criteria to ensure the continuing application of SFAS 71 is
appropriate. As a result of the passage of the Telecommunications Act of 1996
(the "96 Act") and state telecommunications reform legislation, ALLTEL's
wireline subsidiaries could begin to experience increased competition in their
local service areas. To date, competition has not had a significant adverse
effect on the operations of ALLTEL's wireline subsidiaries.

    While the Company believes that the application of SFAS 71 is still
appropriate, it is possible that changes in regulation, legislation or
competition could result in the Company's wireline operations no longer being
subject to SFAS 71 in the near future. If ALLTEL's wireline subsidiaries no
longer qualified for the provisions of SFAS 71, the accounting impact to the
Company would be an extraordinary non-cash charge to operations of an amount
that would be material. The non-cash charge would include the write-off of
previously established regulatory assets and liabilities and an adjustment of
accumulated depreciation to reflect the difference between recorded depreciation
and the amount of depreciation that would have been recorded had ALLTEL's
wireline subsidiaries not been subject to rate regulation.

    In 1996, the FCC issued regulations implementing the local competition
provisions of the 96 Act. These regulations established pricing rules for state
regulatory commissions to follow with respect to entry by competing carriers
into the local, intrastate markets of Incumbent Local Exchange Carriers
("ILECs") and addressed interconnection, unbundled network elements and resale
rates. The FCC's authority to adopt such pricing rules, including permitting new
entrants to "pick and choose" among the terms and conditions of approved
interconnection agreements, was considered first by the U.S. Eighth Circuit
Court of Appeals (the "Eighth Circuit Court") and then by the U.S. Supreme Court
("Supreme Court"). In January 1999, the Supreme Court ruled that the FCC had the
jurisdiction to carry out certain local competition provisions of the 96 Act. As
part of its ruling, the Supreme Court reinstated the FCC's "pick and choose"
rule. The Supreme Court remanded a portion of the decision to the Eighth Circuit
Court for it to rule on certain issues that it had not previously decided, such
as whether the FCC's pricing rules are consistent with the 96 Act. Other issues
were remanded to the FCC.

    In November 1999, the FCC issued a decision outlining how it would interpret
the "necessary" and "impair" standards set forth in the 96 Act, and which
specific network elements it would require ILECs to unbundle as a result of its
interpretation of those standards. The FCC reaffirmed that ILECs must provide
unbundled access to the following network elements: loops, including loops used
to provide high-capacity and advanced telecommunications services, network
interface devices, local circuit switching, dedicated and shared transport,
signaling and call-related databases, and operations support systems. The FCC
also imposed on ILECs the obligation to unbundle other network elements
including access to sub-loops or portions of sub-loops, fiber optic loops and
transport. At this time, the FCC declined to impose any obligations on ILECs to
provide unbundled access to packet switching or to digital subscriber line
access multiplexers. The FCC has adopted national rules for the unbundling of
the high frequency portion of the local loop. The FCC also began a rulemaking
regarding the ability of carriers to use certain unbundled network elements as a
substitute for the ILEC's special access services.

                                       22

<PAGE>

    In July 2000, the Eighth Circuit Court issued a decision on the earlier
remand from the Supreme Court, and rejected, as contrary to the 96 Act, the use
of hypothetical network costs which the FCC had used in developing certain of
its pricing rules. The FCC's pricing rules related to unbundled network
elements, termination and transport were also vacated. The Eight Circuit Court
upheld its prior decision that ILECs universal subsidies should not be included
in the costs of providing network elements. Finally, the Eighth Circuit Court
also vacated the FCC's rules requiring that (1) ILECs recombine unbundled
network elements for competitors in any technically feasible combination; (2)
all preexisting interconnection agreements be submitted to the states for
review; and (3) the burden of proof for retention of a rural exemption be
shifted to the ILEC. Pending disposition by the Supreme Court of petitions for
certiorari, the Eight Circuit Court has stayed its earlier decision, which
vacated the FCC's use of hypothetical network costs in the development of
certain pricing rules applicable to ILECs.

    In October 1999, the FCC adopted two orders, currently on appeal, involving
universal service. In the first order, the FCC completed development of the cost
model that will be used to estimate non-rural ILECs' forwarding-looking costs of
providing telephone service. In the second order, the FCC adopted a methodology
that uses the costs generated by the cost model to calculate the appropriate
level of support for non-rural carriers serving rural areas. Under the new
funding mechanism, high-cost support will be targeted to the highest cost wire
center within the state and support will be portable. That is, when a non-rural
ILEC loses a customer to a competitor, the competitor may receive the universal
service high-cost support for service provided to that customer. The new
high-cost support mechanism should ensure that rates are reasonably comparable
on average among states, while the states will continue to ensure that rates are
reasonably comparable within their borders. The FCC reiterated that the
high-cost support mechanism for rural carriers will not be revised until January
1, 2001, at the earliest. The FCC also clarified its interpretation of the
definition of a "rural telephone company" under the 96 Act to refer to the legal
entity that provides local exchange services. By May 1, 2000, states are
required to establish different rates for pricing interconnection and unbundled
network elements in at least three defined geographic areas within the state to
reflect geographic cost differences. Based upon ALLTEL's review of the FCC's
current regulations concerning the universal service subsidy, it is unlikely
that material changes in the universal service funding for ALLTEL's rural
rate-of-return wireline subsidiaries will occur prior to 2001. In 2001, the
universal service subsidy for ALLTEL's rural rate-of-return subsidiaries may
change from being based on actual costs to being based on a proxy model.

    Certain states in which the Company's wireline subsidiaries operate have
adopted alternatives to rate-of-return regulation, either through legislative or
regulatory commission actions. The Company has elected alternative regulation
for certain of its wireline subsidiaries in Alabama, Arkansas, Florida, Georgia,
Kentucky, North Carolina and Texas. The Company also has an alternative
regulation application pending in Pennsylvania. The Company continues to
evaluate alternative regulation for its other wireline subsidiaries.

    In June 1998, the FCC began a rulemaking proceeding to consider access
charge reform for rate-of-return ILECs. In October 1998, the FCC began a
proceeding to consider the represcription of the authorized rate-of-return for
the interstate access services of approximately 1,300 ILECs, including the
ALLTEL subsidiaries operating under rate-of-return regulation. Recently, the
Multi-Association Group, a coalition of ILEC trade associations, filed with the
FCC a comprehensive access charge reform and deregulation plan for
rate-of-return ILECs. If adopted as proposed, the plan would provide access
service pricing flexibility to rate-of-return ILECs, resolve certain universal
service issues and moot the pending FCC proceedings on access charge reform and
rate-of-return represcription.

    Because resolution of the regulatory matters discussed above that are
currently under FCC or judicial review is uncertain and regulations to implement
other provisions of the 96 Act have yet to be issued, ALLTEL cannot predict at
this time the specific effects, if any, that the 96 Act and future competition
will have on its wireline operations.

                                       23

<PAGE>
<TABLE>

Communications-Emerging Businesses Operations

                                         Three Months Ended           Nine Months Ended             Twelve Months Ended
                                            September 30,               September 30,                  September 30,
                                       ---------------------       -----------------------        ----------------------
<S>                                    <C>          <C>            <C>            <C>             <C>           <C>
(Dollars in thousands)                     2000         1999           2000           1999            2000          1999
------------------------------------------------------------------------------------------------------------------------
Revenues and sales                     $102,950     $ 71,356       $288,434       $196,889        $371,979      $246,900
Operating loss                         $    210     $(14,588)      $(25,613)      $(33,127)       $(39,727)     $(45,393)
------------------------------------------------------------------------------------------------------------------------
</TABLE>
    Emerging businesses consist of the Company's long-distance, CLEC, Internet
access, network management and PCS operations. Long-distance and Internet access
services are currently marketed to residential and business customers in the
majority of states in which ALLTEL provides communications services. In 1999,
ALLTEL expanded its CLEC product offering to residential customers in various
markets in Arkansas, Florida, Nebraska, North Carolina, Pennsylvania and
Virginia. In 2000, ALLTEL expanded its offering of CLEC service into various
markets in Alabama, Georgia, Missouri and South Carolina and will expand the
offering of this service into additional markets during the fourth quarter of
2000. Network management services are marketed to business customers in select
areas. Following the sale of its Mobile, Ala. operations, ALLTEL currently
offers PCS in Birmingham, Ala. and Jacksonville, Fla.

    Emerging businesses' revenues and sales increased $31.6 million or 44
percent, $91.5 million or 46 percent and $125.1 million or 51 percent for the
three, nine and twelve month periods ended September 30, 2000. The increases in
revenues and sales in both periods primarily reflect growth in the
long-distance, CLEC and Internet operations, primarily driven by growth in
ALLTEL's customer base for these services. Long-distance revenues increased
$20.7 million, $56.2 million and $70.8 million, while CLEC revenues increased
$7.3 million, $17.0 million and $22.0 million in the three, nine and twelve
month periods ended September 30, 2000, respectively. Additionally, during the
three, nine and twelve month periods of 2000, Internet revenues increased $2.9
million, $8.8 million and $13.1 million, respectively.

    Operating losses sustained by emerging businesses decreased $14.8 million or
101 percent, $7.5 million or 23 percent and $5.7 million or 12 percent for the
three, nine and twelve month periods of 2000, respectively, primarily due to
strong revenue growth and improved profit margins in the Company's long-distance
operations. The improved profit margins reflect reduced network costs as a
result of transporting more traffic on ALLTEL's own fiber network. Reduced
losses sustained by the PCS operations primarily reflecting the sale of the
Mobile, Ala. operations also contributed to the overall reduction in emerging
businesses' operating losses during all periods of 2000. Future operating
results will be affected by the planned rollout of CLEC service into additional
markets, reflecting the start-up nature of these operations.

<TABLE>
Information Services Operations

------------------------------------------------------------------------------------------------------------------------
                                        Three Months Ended            Nine Months Ended            Twelve Months Ended
                                           September 30,                September 30,                 September 30,
                                       ---------------------       -----------------------      ------------------------
<S>                                    <C>          <C>            <C>            <C>           <C>           <C>
(Dollars in thousands)                     2000         1999           2000           1999            2000          1999
------------------------------------------------------------------------------------------------------------------------
Revenues and sales                     $319,628     $312,855       $949,148       $932,103      $1,262,548    $1,237,650
Operating income                       $ 47,010     $ 44,479       $133,141       $128,217      $  180,240    $  174,259
------------------------------------------------------------------------------------------------------------------------
</TABLE>
    Information services' revenues and sales increased 2 percent in each of the
three, nine and twelve month periods ended September 30, 2000 or $6.8 million,
$17.0 million and $24.9 million, respectively. Revenues and sales increased in
all periods of 2000, primarily due to growth in the telecommunications
outsourcing operations, which increased $14.4 million, $38.9 million and $63.3
million in the three, nine and twelve month periods, respectively. The increases
in telecommunications revenues in all periods primarily reflect additional
billings to affiliates as a result of the Company's recent acquisitions and
additional revenues earned from a new outsourcing agreement. Revenue growth from
the telecommunications operations was partially offset by decreased revenues
from the financial services business. Financial services revenues, which
includes the residential lending and international operations, decreased in all
periods of 2000 as revenues earned from new and existing contracts and from
acquisitions, including AIR and Southern Data,

                                       24

<PAGE>

were offset by reduced revenues from selected large customers and contract
terminations. These reduced revenue streams primarily reflect the merger and
consolidation activity in the domestic financial services industry.

    Operating income increased $2.5 million or 6 percent, $4.9 million or 4
percent and $6.0 million or 3 percent for the three, nine and twelve month
periods ended September 30, 2000, respectively. The increases in operating
income in all periods primarily reflect the growth in revenues and sales noted
above, partially offset by lower margins earned by the financial services
operations. Financial services operating margins decreased in all periods of
2000 due to the loss of higher margin operations from contract terminations,
partially offset by reduced operating costs as a result of the Company's first
quarter 2000 restructuring activities. Operating income growth for all periods
of 2000 also reflects increases in depreciation and amortization expense.
Depreciation and amortization expense increased $1.6 million, $8.6 million and
$11.6 million in the three, nine and twelve month periods of 2000, respectively,
primarily due to the acquisition of additional data processing equipment and an
increase in amortization of internally developed software.

<TABLE>
Other Operations
------------------------------------------------------------------------------------------------------------------------
                                         Three Months Ended           Nine Months Ended            Twelve Months Ended
                                            September 30,                September 30,                 September 30,
                                       ---------------------       -----------------------        ----------------------
<S>                                    <C>          <C>            <C>            <C>             <C>           <C>
(Dollars in thousands)                     2000         1999           2000           1999            2000          1999
------------------------------------------------------------------------------------------------------------------------
Revenues and sales                     $166,503     $153,823       $472,845       $414,884        $637,779      $591,079
Operating income                       $  6,454     $  5,986       $ 15,407       $ 16,300        $ 20,668      $ 22,984
------------------------------------------------------------------------------------------------------------------------
</TABLE>

    Other operations consist of the Company's product distribution and directory
publishing operations. Revenues and sales increased $12.7 million or 8 percent,
$58.0 million or 14 percent and $46.7 million or 8 percent for the three, nine
and twelve month periods ended September 30, 2000, respectively. Revenues and
sales increased in all periods of 2000 due to additional sales of
telecommunications and data products, including sales to affiliates. Sales of
telecommunications and data products increased $15.7 million, $55.7 million and
$40.6 million in the three, nine and twelve month periods, respectively. Of
these overall increases in telecommunications and data products revenues,
affiliate sales accounted for $9.1 million, $37.1 million and $13.8 million of
the increases in the three, nine and twelve month periods of 2000, respectively.
Sales to affiliates increased primarily due to additional purchases made by the
Company's wireline subsidiaries reflecting the Aliant and Standard acquisitions.
Directory publishing revenues decreased $3.0 million in the three month period
primarily due to a decrease in the number of directory contracts published.

    Operating income increased $0.5 million or 8 percent, decreased $0.9 million
or 5 percent and decreased $2.3 million or 10 percent for the three, nine and
twelve month periods ended September 30, 2000, respectively. The decreases in
other operations operating income for the nine and twelve month periods of 2000
primarily reflect increased data processing costs. Profit margins realized by
the product distribution operations improved slightly in all periods of 2000.
These operations, however, continue to be affected by strong competition from
other distributors and from direct sales by manufacturers.

<TABLE>
Corporate Expenses
----------------------------------------------------------------------------------------------------------------------
                                         Three Months Ended           Nine Months Ended           Twelve Months Ended
                                            September 30,               September 30,                 September 30,
                                        --------------------        ----------------------        --------------------
<S>                                     <C>         <C>             <C>           <C>             <C>         <C>
(Dollars in thousands)                     2000         1999           2000           1999           2000         1999
----------------------------------------------------------------------------------------------------------------------
Corporate operating expenses            $ 8,459     $ 10,606        $27,153       $ 26,194        $40,510     $ 36,315
Merger and integration expenses
    and other charges                     7,687       90,520         24,593         90,520         24,593       90,520
                                        -------     --------        -------       --------        -------     --------
    Total corporate expenses            $16,146     $101,126        $51,746       $116,714        $65,103     $126,835
----------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       25

<PAGE>

    As indicated in the table, corporate expenses include the merger and
integration expenses and other charges, as previously discussed. Excluding the
impact of the merger and integration expenses and other charges in each period,
corporate expenses would have decreased $2.1 million or 20 percent, increased
$1.0 million or 4 percent and increased $4.2 million or 12 percent for the
three, nine and twelve month periods ended September 30, 2000. Net of the merger
and integration expenses and other charges, the increase in corporate expenses
in the twelve month period reflects increased depreciation and amortization
expense. Corporate expenses, net of the merger and integration expenses and
other charges, decreased in the three month period primarily due to a reduction
in employee benefit costs.

<TABLE>
Non-Operating Income, Net
---------------------------------------------------------------------------------------------------------------------
                                         Three Months Ended            Nine Months Ended         Twelve Months Ended
                                            September 30,                September 30,               September 30,
                                        --------------------        ----------------------       --------------------
<S>                                     <C>          <C>            <C>            <C>           <C>         <C>
(Dollars in thousands)                     2000         1999           2000           1999           2000        1999
---------------------------------------------------------------------------------------------------------------------
Equity earnings in

    unconsolidated partnerships         $23,479      $23,327        $95,197        $83,298       $116,924    $116,607
Minority interest in

    consolidated partnerships           (24,979)     (26,301)       (76,735)       (91,142)      (102,240)   (116,536)
Other income, net                        10,717       10,621         35,144         38,316         51,299      65,583
                                        -------      -------        -------        -------       --------    --------
    Non-operating income, net           $ 9,217      $ 7,647        $53,606        $30,472       $ 65,983    $ 65,654
---------------------------------------------------------------------------------------------------------------------
</TABLE>

    As indicated in the table above, non-operating income, net increased $1.6
million or 21 percent, $23.1 million or 76 percent and $0.3 million or 1 percent
in the three, nine and twelve months ended September 30, 2000, respectively. The
decreases in minority interest expense in all periods primarily reflect ALLTEL's
acquisition of the remaining ownership interests in wireless partnerships
serving Richmond, Va., completed during the first quarter of 1999, a Georgia
Rural Service Area ("RSA") completed in January 2000 and in a Florida RSA
completed in August 2000. The Company increased its ownership in the Richmond,
Va. property to 100 percent through the exchange of its minority interest
investment in a wireless limited partnership serving Orlando, Fla. The decreases
in other income, net in the nine and twelve month periods primarily reflect a
reduction in capitalized interest costs. In addition, other income, net for the
twelve months ended September 30, 1999 includes a one-time pretax gain of $7.5
million related to the sale of a minority interest in a subsidiary.

Interest Expense

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

    Interest expense increased $8.8 million or 12 percent, $15.1 million or 7
percent and $17.3 million or 6 percent in the three, nine and twelve month
periods ended September 30, 2000, respectively. The increases in interest
expense in all periods reflect increases in the both the weighted average
borrowing amounts and rates applicable to ALLTEL's commercial paper program and
revolving credit agreement. Additional borrowings under these credit facilities
were used principally to finance the Company's cash payment to complete the
exchange of wireless properties with Bell Atlantic and GTE.

Income Taxes

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

    Income tax expense increased $207.4 million or 167 percent, $796.0 million
or 197 percent and $809.5 million or 152 percent for the three, nine and twelve
month periods ended September 30, 2000, respectively. The increases in income
tax expense in each period primarily reflect the tax-related impact of the gains
recognized on the exchange of wireless assets and sale of WorldCom stock, as
well as the other non-recurring and unusual items previously discussed.
Excluding the impact on tax expense of the non-recurring and unusual items in
each period, income tax expense would have decreased $2.1 million or 1 percent,
increased $30.5 million or 7 percent and increased $28.1 million or 5 percent in
the three, nine and twelve month periods ended September 30, 2000, respectively,
consistent with the Company's operating results excluding non-recurring and
unusual items.

                                       26

<PAGE>

Average Common Shares Outstanding

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

    The average number of common shares outstanding increased less than 1
percent in the three month period and increased 1 percent in both the nine and
twelve month periods ended September 30, 2000, respectively. The increases in
all periods primarily reflect the additional shares issued in September 1999 in
connection with the AIR and Southern Data acquisitions, partially offset by the
Company's repurchase of its common shares during the third quarter of 2000, as
further discussed below.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

    ALLTEL's total capital structure was $9.3 billion at September 30, 2000,
reflecting 54 percent common and preferred equity and 46 percent debt. The
Company's capital structure at December 31, 1999 was $8.0 billion and reflected
52 percent common and preferred equity and 48 percent debt. The Company believes
it has adequate internal and external resources available to finance its ongoing
operating requirements, including capital expenditures, business development and
the payment of dividends.

<TABLE>
                                                                  Nine Months Ended               Twelve Months Ended
(Dollars in thousands)                                              September 30,                    September 30,
------------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>             <C>             <C>             <C>
                                                                    2000          1999              2000            1999
                                                                    ----          ----              ----            ----
Cash flows from (used in):

    Operating activities                                      $1,143,474      $993,239        $1,650,264      $1,443,728
    Investing activities                                        (669,268)     (741,311)         (989,326)     (1,021,957)
    Financing activities                                        (483,532)     (303,994)         (689,668)       (459,630)
                                                              ----------      --------        ----------      ----------
Decrease in cash and short-term investments                   $   (9,326)     $(52,066)       $  (28,730)     $  (37,859)
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

Cash Flows from Operations

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

    Cash provided from operations continues to be ALLTEL's primary source of
liquidity. The increases in the nine and twelve month periods ended September
30, 2000 reflect growth in operating income of the Company before non-recurring
and unusual charges. The increases in cash provided from operations resulting
from earnings growth in both periods of 2000 were partially offset by changes in
working capital requirements, including timing differences in the receipt and
payment of trade receivables and payables.

Cash Flows used in Investing Activities

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

    Capital expenditures for the nine and twelve month periods ended September
30, 2000 were $734.7 million and $1,063.9 million, respectively, compared to
$677.3 million and $1,017.6 million for the same periods in 1999. During the
past two-year period, the Company funded the majority of its capital
expenditures through internally generated funds. Capital expenditures were
incurred primarily to upgrade ALLTEL's telecommunications network, to construct
additional network facilities to provide PCS and digital wireless service and to
offer other communications services, including long-distance, Internet and local
competitive access services. Capital expenditures are forecast at approximately
$1,086.0 million for 2000 and are expected to be funded primarily from
internally generated funds.

    Cash flows used in investing activities for the nine and twelve month
periods of 2000 include cash outlays for the acquisition of property of $649.4
million and $655.5 million, respectively. These amounts principally consist of
$624.1 million paid by ALLTEL in connection with the exchange of wireless assets
with Bell Atlantic completed in April 2000, as previously discussed. Also during
2000, the Company acquired additional ownership interests in wireless properties
in Florida and Georgia and purchased Benchmark Consulting International, a
privately held company serving the financial services industry. In connection
with these acquisitions, the Company paid $25.3 million in cash and issued
approximately 730,000 shares of ALLTEL common stock.

                                       27

<PAGE>

    Cash flows from investing activities for the nine and twelve month periods
of 1999 include cash outlays for the acquisition of property of $93.8 million
and $95.4 million, respectively. These amounts are net of cash acquired of
approximately $24.1 million received in the Standard acquisition and principally
consist of cash outlays of $46.5 million for a wireless property in Colorado,
$30.6 million for a wireless property in Illinois, and $20.0 million for a
wireless property in Alabama.

    Cash flows used in investing activities for the nine and twelve month
periods ended September 30, 2000 include proceeds from the sale of assets of
$224.5 million. These amounts consist of $192.5 million received by ALLTEL to
complete the exchange of wireless assets with GTE in June 2000 and $32.0 million
received from the sale of PCS assets related to the Mobile, Ala. and Pensacola,
Fla. markets as previously discussed. Cash flows used in investing activities
for the nine and twelve month periods ended September 30, 2000 also include
proceeds from the sale of investments of $528.2 million and $573.2 million,
respectively. These amounts principally consist of proceeds of $516.0 million
and $561.0 million, respectively, from the sale of a portion of the Company's
investment in WorldCom common stock. Cash flows used in investing activities for
the nine and twelve month periods ended September 30, 2000 also include proceeds
from the return on investments of $59.5 million and $78.4 million, respectively,
primarily consisting of cash distributions received from ALLTEL's wireless
minority investments. The proceeds received from the asset and investment sales
were used primarily to fund the Company's stock repurchase program and to reduce
borrowings under the Company's commercial paper program or revolving credit
agreement.

Cash Flows from Financing Activities

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

    Dividend payments remain a significant use of capital resources. Common and
preferred dividend payments were $302.7 million and $396.8 million for the nine
and twelve month periods ended September 30, 2000, respectively, compared to
$284.2 million and $372.2 million for the same periods in 1999. The increases in
dividend payments in both periods primarily reflect growth in the annual
dividend rate on ALLTEL's common stock. In October 2000, the Company's Board of
Directors approved an increase in the quarterly common stock dividend rate from
$.32 to $.33 per share. This action raised the annual dividend rate to $1.32 per
share and marked the 40th consecutive year in which ALLTEL has increased its
common stock dividend.

    The Company has a $1.0 billion line of credit under a revolving credit
agreement, which expires in October 2004. During 2000, the Company established a
commercial paper program with a maximum borrowing capacity of $1.25 billion.
Under this program, commercial paper borrowings are supported by the Company's
revolving credit agreement and are deducted from the revolving credit agreement
in determining the amount available for borrowing. Accordingly, the total amount
outstanding under the commercial paper program and the indebtedness incurred
under the revolving credit agreement may not exceed $1.25 billion. ALLTEL
classifies commercial paper borrowings up to $1.0 billion as long-term debt
because the revolving credit agreement supports these borrowings. Commercial
paper borrowings outstanding at September 30, 2000 were $414.3 million with a
weighted average interest rate of 6.6 percent. The commercial paper borrowings
represent all of the long-term debt issued in the nine and twelve month periods
ended September 30, 2000. No borrowings were outstanding under the revolving
credit agreement at September 30, 2000, compared to $341.1 million and $366.1
million that were outstanding at December 31, 1999 and September 30, 1999,
respectively. In April 1999, ALLTEL issued $300 million of debentures, under a
$500 million shelf registration statement to reduce borrowings outstanding under
the Company's revolving credit agreement. The $300 million debentures, net of
issuance costs, represent substantially all of the long-term debt issued in the
nine and twelve month periods ended September 30, 1999.

                                       28

<PAGE>

    Retirements of long-term debt were $385.8 million and $453.1 million for the
nine and twelve months ended September 30, 2000, respectively, compared to
$277.3 million and $350.6 million for the same periods of 1999. The net
reductions from December 31, 1999 and September 30, 1999 in revolving credit
borrowings of $341.1 million and $366.1 million, respectively, represent the
majority of the long-term debt retired in the nine and twelve month periods
ended September 30, 2000, respectively. Scheduled long-term debt retirements,
net of revolving credit agreement activity, amounted to $44.7 million and $87.0
million for the nine and twelve month periods ended September 30, 2000,
respectively, compared to $64.8 million and $84.1 million for the same periods
of 1999. Retirements of long-term debt for the nine and twelve months ended
September 30, 1999 also reflect net reductions of $212.4 million and $267.5
million, respectively, in revolving credit borrowings.

    Distributions to minority investors were $62.9 million and $100.7 million
for the nine and twelve months ended September 30, 2000, respectively, compared
to $75.5 million and $120.3 million for the same periods in 1999. The decreases
in distributions in both periods reflect the acquisition of the remaining
minority interest in wireless properties in Florida and Georgia previously
discussed, and the disposition of certain non-wholly-owned subsidiaries in
connection with the property exchanges with Bell Atlantic and GTE.

    On July 20, 2000, ALLTEL's Board of Directors adopted a stock repurchase
plan that allows the Company to repurchase up to 7.5 million shares of its
outstanding common stock. Through September 30, 2000, ALLTEL had repurchased
nearly 3.0 million of its common shares at a total cost of $164.3 million. As
previously discussed, proceeds from the sale of WorldCom common stock were used
to fund the stock repurchase. The Company expects to finance the cost to
repurchase additional shares under the stock buyback program through internally
generated funds and from the sale of non-strategic assets.

    During September 2000 in conjunction with the stock repurchase program, the
Company entered into a forward purchase contract with a financial institution.
Under terms of the contract, the Company has agreed to purchase ALLTEL common
shares from the financial institution at a specified price (the "forward
price").  The forward price is equal to the financial institution's cost to
acquire the shares plus a premium.  Premiums are based on the net carrying cost
of the shares to the financial institution and accrue over the period that the
contract is outstanding and will be settled at maturity.  The contract, which
matures in one year, may be settled by purchase of the shares at the forward
price or by net settlement in shares or cash.  Any repurchase of shares under
this contract will not be reflected in the Company's consolidated balance sheet
until settlement of the contract occurs.  As of September 30, 2000, the
Company's commitment under the contract involved 825,000 ALLTEL common shares at
a total cost of $41.5 million.  This aggregate cost does not include the premium
component of the forward price.


Recently Issued Accounting Pronouncements

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

    In December 1999, the SEC issued Staff Accounting Bulletin 101, "Revenue
Recognition in Financial Statements", ("SAB 101"), which provides additional
guidance in applying generally accepted accounting principles for revenue
recognition in consolidated financial statements. To conform its revenue
recognition policies to be consistent with the provisions of SAB 101, the
Company will change its method of recognizing wireless access revenues in 2000.
Previously, monthly non-refundable wireless access revenues were recognized when
billed in accordance with contractual arrangements with customers. With this
change, the Company will recognize wireless access revenues over the period in
which the corresponding services are provided. Because ALLTEL bills its
customers on a cycle basis throughout the month, this change in accounting
results in the deferral of approximately 15 days of wireless access revenue.

                                       29

<PAGE>

    The Company is currently evaluating the impact, if any, that SAB 101 may
have on its other communications revenue recognition policies. In June 2000, the
SEC amended SAB 101 to delay reporting accounting changes as a result of
applying the provisions of SAB 101 until the fourth quarter. Accordingly, the
Company will first report the impact of the change in recognizing wireless
access revenues along with any other changes in revenue recognition as a
cumulative effect of a change in accounting in ALLTEL's annual audited
consolidated financial statements for the year ended December 31, 2000. The
impact of this one-time cumulative change in accounting will be material to net
income in 2000. There is no impact to the Company's cash flow from operations as
a result of this change. This change in accounting would not have been material
to the Company's previously reported consolidated results of operations,
financial position or cash flows, if adopted in prior periods.

    In September 2000, the Financial Accounting Standards Board ("FASB") issued
Financial Accounting Standard ("SFAS") No. 140, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities". This
standard, which replaces SFAS No. 125, revises the standards for accounting for
securitizations and other transfers of financial assets and collateral and
requires certain additional disclosures. The Statement is effective for
transfers and servicing of financial assets and extinguishments of liabilities
occurring after March 31, 2001. However, the disclosure requirements regarding
securitizations and collateral and the accounting standards for recognition and
reclassification of collateral prescribed by SFAS No. 140 are effective for
fiscal years ending after December 15, 2000. The Company does not expect the
adoption of this standard to have a material effect on its financial position or
results of operations.

Other Financial Information

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

    On October 3, 2000, ALLTEL completed the purchase of wireless properties in
New Orleans and Baton Rouge, Louisiana from SBC Communications, Inc ("SBC"). The
purchase also included three rural service areas in Louisiana. In connection
with this transaction, ALLTEL paid SBC $388.7 million in cash and acquired
approximately 160,000 wireless customers and 300,000 paging customers. See Note
10 to unaudited interim consolidated financial statements for additional
information regarding this transaction.

    On October 30, 2000, ALLTEL announced that it would sell its PCS operations
in Birmingham, Ala. to Tritel, Inc.  The sale is expected to be completed in the
first quarter of 2001.  On November 9, 2000, the Company announced that it would
sell 20 PCS licenses in six states to Verizon Wireless.  The PCS licenses cover
markets representing more than 11.4 million POPs.  The sale of PCS licenses is
also expected to be completed in the first quarter of 2001.  Following
completion of this transaction, the Company will retain 42 PCS licenses
representing approximately 17.0 million POPs.

                                       30

<PAGE>

                               ALLTEL CORPORATION
                                    FORM 10-Q
                         PART I - FINANCIAL INFORMATION

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

    The Company's market risks at September 30, 2000 are similar to the market
risks discussed in the Company's Annual Report on Form 10-K for the year ended
December 31, 1999. The Company is exposed to market risk from changes in
marketable equity security prices and from changes in interest rates applicable
to its commercial paper borrowings and other long-term debt obligations. The
Company has estimated its market risk using sensitivity analysis. Market risk
has been defined as the potential change in fair value of a financial instrument
due to a hypothetical adverse change in market prices or interest rates. Fair
value for investments was determined using quoted market prices, if available,
or the carrying amount of the investment if no quoted market price was
available. Fair value of long-term debt obligations was determined based on a
discounted cash flow analysis, using the overall weighted rates and maturities
of these obligations compared to terms and rates currently available in the
long-term markets.

    At September 30, 2000, investments of the Company are recorded at fair value
of $440.9 million compared to $1,594.0 million at December 31, 1999. The
decrease in fair value primarily reflects the sale of approximately 15.3 million
shares of WorldCom completed during the third quarter, as previously discussed.
Marketable equity securities, consisting principally of the Company's investment
in WorldCom common stock, amounted to $127.6 million and included unrealized
holding gains of $56.9 million at September 30, 2000. A hypothetical 10 percent
decrease in quoted market prices would result in a $12.8 million decrease in the
fair value of these securities at September 30, 2000.

    The Company has no material future earnings or cash flow exposures from
changes in interest rates on its long-term debt obligations, as substantially
all of the Company's long-term debt obligations are fixed rate obligations. A
hypothetical 10 percent adverse change in interest rates applicable to the
Company's variable rate debt obligations would not be material to the Company's
results of operations. In addition, changes in interest rates can result in
fluctuations in the fair value of the Company's long-term debt obligations.
There have been no material changes in the weighted average maturity or weighted
average interest rates applicable to the Company's outstanding long-term debt
since December 31, 1999. As previously discussed, in connection with the
wireless property exchanges with Bell Atlantic and GTE, the Company assumed
$425.0 million of long-term debt. At September 30, 2000, the fair value of the
Company's long-term debt was estimated to be $4,308.7 million compared to a
carrying value of $4,214.5 million. A hypothetical increase of 71 basis points
(10 percent of the Company's overall weighted average borrowing rate) would
result in an approximate $142.4 million decrease in the fair value of the
Company's long-term debt at September 30, 2000. Currently, the Company does not
use derivative financial instruments to manage its interest rate risks.

    The Company is not currently subject to material foreign currency exchange
rate risk from the effects that exchange rate movements of foreign currency
would have on the Company's future costs or on future cash flows it would
receive from its foreign subsidiaries. Although the Company conducts business in
foreign countries, the international operations are not material to the
Company's operations, financial condition and liquidity. Additionally, the
majority of the Company's international sales transactions are denominated in
U.S. dollars, which mitigates the affect of foreign currency fluctuations. To
date, the Company has not entered into any significant foreign currency forward
exchange contracts or other derivative financial instruments to hedge the
effects of adverse fluctuations in foreign currency exchange rates. Foreign
currency translation gains and losses were not material to the Company's results
of operations for the three, nine and twelve months ended September 30, 2000.

                                       31

<PAGE>

                               ALLTEL CORPORATION

                                    FORM 10-Q

                           Part II - OTHER INFORMATION

Item 6.         Exhibits and Reports on Form 8-K
-------         --------------------------------

    (a)  See the exhibits specified on the Index of Exhibits located at Page 34.

    (b)  Reports on Form 8-K:

         Current Report on Form 8-K dated June 30, 2000, reporting under Item 2,
         Acquisition or Disposition of Assets, that the Company had completed
         the remaining wireless property exchanges with Bell Atlantic and GTE.

         Amendment No. 1 to Current Report on Form 8-K/A dated June 30, 2000,
         included under Item 7, Financial Statements, Pro Forma Financial
         Information and Exhibits, unaudited pro forma summary information for
         the Company after giving effect to the exchange of wireless assets with
         Bell Atlantic and GTE. The unaudited pro forma summary information was
         filed pursuant to Article 11 of Regulation S-X.

         No other reports on Form 8-K have been filed during the quarter for
         which this report is filed.

                                       32

<PAGE>

                                    SIGNATURE

                                    ---------

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

                               ALLTEL CORPORATION

                               ------------------
                                  (Registrant)

                             /s/ Jeffery R. Gardner

                             ----------------------
                               Jeffery R. Gardner

                 Senior Vice President - Chief Financial Officer

                         (Principal Financial Officer)

                                November 13, 2000

                                       33

<PAGE>

                               ALLTEL CORPORATION
                                    FORM 10-Q
                                INDEX OF EXHIBITS

Form 10-Q                                                      Sequential
Exhibit No.               Description                           Page No.
-----------               -----------                          ----------


   (27)           Financial Data Schedule                          35
                  for the nine months ended September 30,
                  2000

                                       34