# EXHIBIT 99-2

HECTOR COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)

|                                                    | June 302006 |  | December 312005
|--------------------------------------------------- | ----------- |  | ---------------
|Assets:                                             |             |  |                
|Current assets:                                     |             | 
|Cash and cash equivalents                           |             |  | $              
|Construction fund                                   |             |  |                
|Accounts receivable, net                            |             |  |                
|Materials, supplies and inventories                 |             |  |                
|Other current assets                                |             |  |                
|                                                    |             |  |                
|Total current assets                                |             |  |                
|                                                   
|Property, plant and equipment                       |             |  |                
|less accumulated depreciation                       |             |  |                
|                                                    |             |  |                
|Net property, plant and equipment                   |             |  |                
|Other assets:                                       |             | 
|Excess of cost over net assets acquired             |             |  |                
|Investment in Midwest Wireless Holdings, LLC        |             |  |                
|Investment in other unconsolidated affiliates       |             |  |                
|Other investments                                   |             |  |                
|Other assets                                        |             |  |                
|                                                    |             |  |                
|Total other assets                                  |             |  |                
|                                                    |             |  |                
|Total Assets                                        |             |  | $              
|                                                    |             |  |                
|                                                   
|Liabilities and Stockholders Equity:               |             | 
|Current liabilities:                                |             | 
|Notes payable and current portion of long-term debt |             |  | $              
|Accounts payable                                    |             |  |                
|Accrued expenses                                    |             |  |                
|Income taxes payable                                |             |  |                
|                                                    |             |  |                
|Total current liabilities                           |             |  |                
|                                                   
|Long-term debt, less current portion                |             |  |                
|Deferred investment tax credits                     |             |  |                
|Deferred income taxes                               |             |  |                
|Deferred compensation                               |             |  |                
|                                                   
|Stockholders Equity                                |             |  |                
|                                                    |             |  |                
|Total Liabilities and Stockholders Equity          |             |  | $              
|                                                    |             |  |                

See the notes to the consolidated financial statements.

1

---

HECTOR COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)

|                                                                  | Three Months Ended June 30 |  | Six Months Ended June 30
|----------------------------------------------------------------- | -------------------------- |  | ------------------------
|
|Revenues:                                                         |                            |  |                         
|Local network                                                     |                            |  | $                       
|Network access                                                    |                            |  |                         
|Nonregulated services:                                            |                            | 
|Video services                                                    |                            |  |                         
|Internet services                                                 |                            |  |                         
|Other nonregulated services                                       |                            |  |                         
|                                                                  |                            |  |                         
|Total revenues                                                    |                            |  |                         
|                                                                 
|Costs and expenses:                                               |                            | 
|Plant operations, excluding depreciation                          |                            |  |                         
|Customer operations                                               |                            |  |                         
|General and administrative                                        |                            |  |                         
|Depreciation and amortization                                     |                            |  |                         
|Other operating expenses:                                         |                            | 
|Operating taxes                                                   |                            |  |                         
|Video service expenses                                            |                            |  |                         
|Internet expenses                                                 |                            |  |                         
|Other                                                             |                            |  |                         
|                                                                  |                            |  |                         
|Total costs and expenses                                          |                            |  |                         
|                                                                 
|Operating income                                                  |                            |  |                         
|                                                                 
|Other income and (expenses):                                      |                            | 
|Interest expense                                                  |                            |  |                         
|Interest and dividend income                                      |                            |  |                         
|Income from investment in Midwest Wireless Holdings, LLC          |                            |  |                         
|Income (loss) from investments in other unconsolidated affiliates |                            |  |                         
|Gain on sale of RTB Stock                                         |                            |  |                         
|Gain on sale of other assets                                      |                            |  |                         
|                                                                  |                            |  |                         
|Other income (expense), net                                       |                            |  |                         
|                                                                 
|Income before income taxes                                        |                            |  |                         
|                                                                 
|Income tax expense                                                |                            |  |                         
|                                                                  |                            |  |                         
|Net income                                                        |                            |  | $                       
|                                                                  |                            |  |                         
|                                                                 
|Basic net income per share                                        |                            |  | $                       
|Diluted net income per share                                      |                            |  | $                       
|Dividends per share                                               |                            |  | $                       

See the notes to the consolidated financial statements.

2

---

HECTOR COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                           | Six Months Ended June 30
|---------------------------------------------------------- | ------------------------
|
|CASH FLOWS FROM OPERATING ACTIVITIES:                      |                         
|Net Income                                                 |                         
|Adjustments to reconcile net income to net cash            |                         
|provided by operating activities:                          |                         
|Depreciation and amortization                              |                         
|Stock based compensation                                   |                         
|Income from Midwest Wireless Holdings LLC                  |                         
|Gain on sale of RTB Stock                                  |                         
|Gain on sale of assets                                     |                         
|Loss (income) from other unconsolidated affiliates         |                         
|Cash distributions from Midwest Wireless Holdings LLC      |                         
|Cash distributions from other unconsolidated affiliates    |                         
|Noncash investment income                                  |                         
|Changes in assets and liabilities:                         |                         
|Accounts receivable                                        |                         
|Materials, supplies and inventories                        |                         
|Other current assets                                       |                         
|Accounts payable                                           |                         
|Accrued expenses                                           |                         
|Income taxes payable                                       |                         
|Deferred income taxes                                      |                         
|Deferred investment tax credits                            |                         
|Deferred compensation                                      |                         
|                                                           |                         
|Net cash provided by operating activities                  |                         
|                                                          
|CASH FLOWS FROM INVESTING ACTIVITIES:                      |                         
|Purchases of property, plant and equipment                 |                         
|Change in RUS construction fund                            |                         
|Purchases of other investments                             |                         
|Investments in other partnerships and LLCs                 |                         
|Proceeds from other investments                            |                         
|Proceeds from sales of assets                              |                         
|                                                           |                         
|Net cash provided by investing activities                  |                         
|                                                          
|CASH FLOWS FROM FINANCING ACTIVITIES:                      |                         
|Repayment of notes payable and long-term debt              |                         
|Proceeds from issuance of notes payable and long-term debt |                         
|Issuance of common stock                                   |                         
|Cash dividends                                             |                         
|Purchase of stock                                          |                         
|                                                           |                         
|Net cash used in financing activities                      |                         
|                                                           |                         
|                                                          
|NET INCREASE IN CASH AND CASH EQUIVALENTS                  |                         
|                                                          
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR             |                         
|                                                           |                         
|                                                          
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                 |                         
|                                                           |                         
|                                                          
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:         |                         
|Interest paid                                              |                         
|Income taxes paid                                          |                         

See the notes to the consolidated financial statements.

3

---

HECTOR COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The consolidated financial statements include the accounts of Hector
Communications Corporation (HCC or Company) and its subsidiaries. All material intercompany transactions
and accounts have been eliminated. Accounting practices prescribed by regulatory authorities have been considered in the
preparation of the financial statements and formulation of accounting policies for telephone subsidiaries. These policies conform
to generally accepted accounting principles as applied to regulated public utilities in accordance with Statement of Financial
Accounting Standards No. 71, Accounting for the Effects of Certain Types of Regulation (SFAS 71).

The balance sheet and statement of stockholders equity as of June 30,
2006 and the statements of income and cash flows for the periods ended June 30, 2006 and 2005 have been prepared by the Company
without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations, and changes in cash flows at June 30, 2006 and 2005 have been made.

Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested
these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the
Companys December 31, 2005 Annual Report to Shareholders. The results of operations for the periods ended June 30 are not
necessarily indicative of the operating results for the entire year.

The presentation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets,
liabilities, and disclosure of contingent assets and liabilities at the balance sheet date, and the reported amounts of revenues
and expenses during the reporting period. The estimates and assumptions used in the accompanying consolidated financial statements
are based upon managements evaluation of the relevant facts and circumstances as of the time of the financial statements.
Actual results could differ from those estimates. The Companys financial statements are also affected by depreciation rates
prescribed by regulators, which may result in different depreciation rates than for an unregulated enterprise.

Revenues are recognized when earned, regardless of the period in which they
are billed. Network access revenues are furnished in conjunction with interexchange carriers and are determined by cost separation
studies and nationwide average schedules. Revenues include estimates pending finalization of cost studies. Network access revenues
are based upon interstate tariffs filed with the Federal Communications Commission by the National Exchange Carriers Association
and state tariffs filed with state regulatory agencies. Management believes recorded revenues are reasonable based on estimates of
cost separation studies, which are typically settled within two years.

4

---

Income taxes have been calculated in proportion to the earnings and tax
credits generated by operations. The Companys effective income tax rate is higher than the U.S. rate due to the effect of
state income taxes.

Certain other amounts in the 2005 financial statements have been reclassified
to conform to the 2006 financial statement presentation. These reclassifications had no effect on net income or stockholders
equity as previously reported.

COMPREHENSIVE INCOME

The Companys comprehensive income includes net income and unrealized
gains and losses on investments in marketable securities, net of deferred taxes. Comprehensive income for the three-month periods
ended June 30, 2006 and 2005 was $7,351,690 and $1,506,782, respectively. Comprehensive income for the six-month periods ended
June 30, 2006 and 2005 was $8,982,164 and $2,884,964, respectively.

MERGER AGREEMENT

On June 27, 2006, the Company entered into an agreement and plan of merger
which provides for the acquisition of the Company by Hector Acquisition Corp. (HAC). HAC is owned by three one-third
owners, Blue Earth Valley Communications, Inc., Arvig Enterprises, Inc. and New Ulm Telecom, Inc. Completion of the merger is
subject to a number of conditions including approval by the Companys shareholders, approval by state and federal regulatory
authorities and achievement of working capital and long-term debt levels specified in the agreement. In addition, completion of
the merger is subject to closing of Alltel Corporations acquisition of Midwest Wireless. The merger is expected to close in
October 2006. Shareholders of the Company will receive $36.40 per share in cash and outstanding stock options will be cashed out.

The Company has entered into employment agreements or change in control
agreements with officers and key employees of the Company. The agreements provide for severance payments in the event of a change
in control of the Company and employment termination for reasons other than cause.

STOCK-BASED COMPENSATION

The company adopted Statement of Financial Accounting Standards (SFAS) No.
123R, Share-Based Payment, on January 1, 2006. This statement requires Hector to recognize the cost of employee and
director services received in exchange for the stock options it has awarded. Under SFAS 123R, Hector is required to recognize
compensation expense over an awards vesting period based on the awards fair value at the date of grant. Hector has
elected to adopt SFAS 123R on a modified prospective basis; accordingly the financial statements for periods prior to January 1,
2006 do not include stock-based compensation costs calculated under the fair value method.

5

---

Prior to January 1, 2006 Hector applied APB Opinion No. 25, Accounting
for Stock Issued to Employees for measurement and recognition of stock-based transactions with its employees and directors.
If Hector had recognized compensation cost for its stock-based transactions based on the fair value of the options method
prescribed by SFAS No. 123R, net income and net income per share for the three and six month periods ended June 30, 2005 would
have been as follows:

|                                                      | Three Months EndedJune 30, 2005 |  | Six Months EndedJune 30, 2005
|----------------------------------------------------- | ------------------------------- |  | -----------------------------
|Net income as reported                                |                                 |  | $                            
|Less: Total stock-based employee compensation expense |                                 | 
|determined under the fair value method for all awards |                                 |  |                              
|Pro forma net income                                  |                                 |  | $                            
|                                                     
|Basic net income per share:                           |                                 | 
|As reported                                           |                                 |  | $                            
|                                                     
|Pro forma                                             |                                 |  | $                            
|                                                     
|Diluted net income per share:                         |                                 | 
|As reported                                           |                                 |  | $                            
|                                                     
|Pro forma                                             |                                 |  | $                            

The Company did not issue any new stock option awards to key employees in the
first six months of 2006. Each of the Companys non-employee directors received an automatic grant of 3,000 shares of
nonqualified stock options on May 25, 2006 concurrent with the Companys annual shareholders meeting. The fair values of the
stock options granted in 2006 were estimated on the date of grant using the Black-Scholes option pricing model and the following
assumptions:

|                               | 
|------------------------------ | 
|Exercise price                 | 
|Expected option holding period | 
|Risk free interest rate        | 
|Expected volatility            | 
|Expected dividend yield        | 

Estimated fair value of the non-employee director options granted in 2006 was
$11.20 per share. Total compensation expense recognized for these options was $202,000. Stock based compensation expense
recognized in the three-month period and six-month period ended June 30, 2006 for awards issued in prior years was $44,000 and
$88,000 respectively.

A summary of stock option activity for the six months ended June 30, 2006 is
as follows:

|                               | Shares |  | AveragePrice
|------------------------------ | ------ |  | ------------
|Outstanding, December 31, 2005 |        |  |             
|Granted                        |        |  |             
|Exercised                      |        |  |             
|Canceled                       |        |  |             
|                               |        |  |             
|Outstanding June 30, 2006      |        |  |             
|                               |        |  |             

6

---

Options issued to officers and key employees are subject to vesting. Options
issued in 2005 vested and became exercisable six months from the date of issue. Options issued prior to 2005 are vested and become
exercisable one-third at the date of issue, one-third one year from date of issue and one-third two years from date of issue.
There are provisions in the stock plans that accelerate vesting of stock options upon a change in control of the Company. The
following table summarizes the status of stock options outstanding at June 30, 2006:

|Range of Exercise Prices | Shares |  | Weighted AverageRemainingOption Life |         | WeightedAverageExercise Price
|------------------------ | ------ |  | ------------------------------------ | ------- | -----------------------------
|$  7.25 to $  9.99       |        |  |                                      | 1,000   |                              
|$10.00 to $12.00         |        |  |                                      | 71,092  |                              
|$12.01 to $15.00         |        |  |                                      | 106,050 |                              
|$15.01 to $20.00         |        |  |                                      | 91,650  |                              
|$20.01 to $29.97         |        |  |                                      | 78,050  |                              

MARKETABLE SECURITIES

Marketable securities consist principally of equity securities of other
telecommunications companies. The Companys marketable securities portfolio is classified as available-for-sale. The cost and
fair value of available-for-sale investment securities was as follows:

|                  | Cost |  | GrossUnrealizedGains |           | GrossUnrealizedLosses |   | FairValue
|----------------- | ---- |  | -------------------- | --------- | --------------------- | - | ---------
|June 30, 2006     |      |  | $                    | 1,102,009 |                       | $ | 785,639  
|December 31, 2005 |      |  |                      | 1,102,009 |                       |   | 844,188  

Net unrealized gains on marketable securities, net of related deferred taxes,
are included in accumulated other comprehensive income as follows:

|                  | NetUnrealizedGains |  | DeferredIncomeTaxes |         | AccumulatedComprehensiveIncome
|----------------- | ------------------ |  | ------------------- | ------- | ------------------------------
|June 30, 2006     |                    |  | $                   | 707,073 |                               
|December 31, 2005 |                    |  |                     | 787,666 |                               

These amounts have no cash effect and are not included in the statement of
cash flows.

OTHER INVESTMENTS  RURAL TELEPHONE BANK STOCK

As part of its borrowing agreements, the Company made stock investments in
CoBank, Rural Telephone Finance Cooperative and the Rural Telephone Bank (RTB). In 2005, the Board of Directors of the
RTB approved resolutions to liquidate the bank and redeem its stock. Congress removed legal restrictions on the redemption of RTB
stock in 2005. In April 2006 the RTB was dissolved and outstanding RTB stock was redeemed at par value. The Company received the
par value of its RTB stock, which was $11,610,000 and recorded a gain on sale of $10,341,000.

7

---

GOODWILL AND INTANGIBLE ASSETS

The Company accounts for goodwill and other intangible assets under SFAS No.
142, Goodwill and Other Intangible Assets. Under the provisions of this accounting standard, goodwill and intangible
assets with indefinite useful lives are no longer amortized but are instead tested for impairment on at least an annual basis and
when changes in circumstances indicate that the value of goodwill may be below its carrying value.

For 2005, the Company performed its annual impairment test of goodwill during
the third quarter. The determined fair value of the reporting units was sufficient to pass the first step impairment test, and no
impairment was recorded.

The carrying value of HCCs goodwill was $30,921,000 at June 30, 2006
and December 31, 2005; $29,586,000 of goodwill is related to the Companys telephone operations and $1,335,000 of goodwill is
related to other operations.

Changes in the Companys intangible and other assets are as follows:

|                                           | IntangibleAssets |  | OtherAssets |         | Consolidated
|------------------------------------------ | ---------------- |  | ----------- | ------- | ------------
|Balance December 31, 2005                  |                  |  | $           | 163,868 |             
|Capitalization of prepaid engineering fees |                  |  |             |         |             
|Amortization                               |                  |  |             | (20,308 | )           
|                                           |                  |  |             |         |             
|Balance June 30, 2006                      |                  |  | $           | 143,560 |             
|                                           |                  |  |             |         |             

MIDWEST WIRELESS HOLDINGS, LLC

Midwest Wireless Holdings LLC (Midwest Wireless) provides
wireless telecommunications services to 456,000 customers in fourteen rural service areas and one metropolitan service area in
Minnesota, Wisconsin and Iowa. Population of the service areas is approximately 1,910,000. Midwest Wireless offers a complete
package of services, including custom calling features, facsimile and data transmission.

Midwest Wireless is owned by telecommunications companies (principally ILECs)
located within Midwest Wireless operating footprint in southern Minnesota, northern Iowa and southeastern Wisconsin. HCC
owns 8% of Midwest Wireless Holdings LLC. HCC accounts for its investment in Midwest Wireless using the equity method. Income from
this investment was $3,043,000 and $2,367,000 in the six-month periods ended June 30, 2006 and 2005, respectively. Cash
distributions received from Midwest Wireless were $1,593,000 and $923,000 in the same respective periods.

Income statement information for Midwest Wireless for the periods ended
June 30, 2006 and 2005 was as follows:

|                 | Three Months Ended March 31 |  | Six Months Ended June 30
|---------------- | --------------------------- |  | ------------------------
|
|Revenues         |                             |  | $                       
|Operating income |                             |  |                         
|Net income       |                             |  |                         

On November 17, 2005 Midwest Wireless and Alltel Corporation
(Alltel) entered into a definitive agreement for Alltel to purchase Midwest Wireless. Compensation paid by Alltel
would total $1.075 billion, including payments to Midwest Wireless shareholders, payments to minority interest holders in certain
Midwest properties and assumption of Midwest Wireless outstanding debt. The Company estimates its pretax share of the
proceeds will be $64,900,000. Legal issues raised by U.S. Cellular Corporation related to the definitive agreement have been
settled and Midwest Wireless expects to close the transaction in the September/October 2006 timeframe, subject to satisfaction of
customary conditions and receipt of regulatory approvals.

8

---

SEGMENT INFORMATION

The Company operates in two business segments. The majority of the
Companys operations consist of providing basic telephone services (often referred to as plain old telephone
service or POTS) to residential and business customers within its service territories. POTS revenues consist
mainly of fees for local service which are billed directly to customers and access revenues which are received for intrastate and
interstate exchange services provided to long distance carriers. POTS revenues are subject to regulation by a number of state and
federal government agencies.

The Company also provides a number of nonregulated telecommunications
services to customers. These services include cable television or video service, internet access services, lease of fiber optic
transport facilities, billing and collection services to long distance carriers, telephone directory services and equipment
rental. The Company also makes retail sales of consumer telecommunications equipment and sells wireless telephone services on a
commission basis.

Segment information is as follows:

|                               | POTS |  | Other Services |            | Total
|------------------------------ | ---- |  | -------------- | ---------- | -----
|Six Months Ended June 30, 2006 |      |  |                |            |      
|                              
|Revenues                       |      |  | $              | 10,404,111 |      
|Costs and expenses             |      |  |                | 7,844,955  |      
|                               |      |  |                |            |      
|Operating income               |      |  | $              | 2,559,156  |      
|                               |      |  |                |            |      
|Depreciation and amortization  |      |  | $              | 3,007,516  |      
|                               |      |  |                |            |      
|Total assets                   |      |  | $              | 89,408,933 |      
|                               |      |  |                |            |      
|Capital expenditures           |      |  | $              | 1,376,766  |      
|                               |      |  |                |            |      
|                              
|Six Months Ended June 30, 2005 |      | 
|                              
|Revenues                       |      |  | $              | 10,481,436 |      
|Costs and expenses             |      |  |                | 8,097,305  |      
|                               |      |  |                |            |      
|Operating income               |      |  | $              | 2,384,131  |      
|                               |      |  |                |            |      
|Depreciation and amortization  |      |  | $              | 3,026,640  |      
|                               |      |  |                |            |      
|Total assets                   |      |  | $              | 94,931,391 |      
|                               |      |  |                |            |      
|Capital expenditures           |      |  | $              | 874,170    |      
|                               |      |  |                |            |      

|                                 | POTS |  | Other Services |           | Total
|-------------------------------- | ---- |  | -------------- | --------- | -----
|Three Months Ended June 30, 2006 |      |  |                |           |      
|                                
|Revenues                         |      |  | $              | 5,298,944 |      
|Costs and expenses               |      |  |                | 3,945,815 |      
|                                 |      |  |                |           |      
|Operating income                 |      |  | $              | 1,353,129 |      
|                                 |      |  |                |           |      
|Depreciation and amortization    |      |  | $              | 1,504,170 |      
|                                 |      |  |                |           |      
|Capital expenditures             |      |  | $              | 352,988   |      
|                                 |      |  |                |           |      
|                                
|Three Months Ended June 30, 2005 |      | 
|                                
|Revenues                         |      |  | $              | 5,335,861 |      
|Costs and expenses               |      |  |                | 4,177,004 |      
|                                 |      |  |                |           |      
|Operating income                 |      |  | $              | 1,158,857 |      
|                                 |      |  |                |           |      
|Depreciation and amortization    |      |  | $              | 1,513,321 |      
|                                 |      |  |                |           |      
|Capital expenditures             |      |  | $              | 565,571   |      
|                                 |      |  |                |           |      

9

---