**UNITED        STATESSECURITIES AND EXCHANGE COMMISSION**

**Washington, D. C.        20549**

**FORM        10-K**

**ALLTEL        CORPORATION**

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

|                                                 |   |   |   |                                      |
|------------------------------------------------------|--------|--------|--------|-------------------------------------------|
| Title of each                  class                 |   |   |   | Name of each exchange on which registered |
| Common Stock                                         |   |   |   | New York Stock Exchange                   |
| $2.06 No Par Cumulative                  Convertible |   |   |   |                                      |
|   Preferred                  Stock         |   |   |   | New York Stock                Exchange    |

|                                                                                          |   |   |   |              |
|-----------------------------------------------------------------------------------------------|--------|--------|--------|-------------------|
| Document                                                                                      |   |   |   | Incorporated Into |
| Proxy statement                  for the                  2007 Annual Meeting of Stockholders |   |   |   | Part III          |
| The Exhibit Index is                  located on pages 22 to 29.                         |   |   |   |              |

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| **ALLTEL                  Corporation** |
|-----------------------------------------|
| **Form                  10-K**          |
| **Table                  of Contents**  |
|                                    |
|                                    | **Page                  No.** |
| **Part                  I**             |
| Item                  1.                | Business |   2 |
| Item                  1A.               | Risk                  Factors | 12 |
| Item                  1B.               | Unresolved                  Staff Comments | 13 |
| Item                  2.                | Properties | 13 |
| Item                  3.                | Legal                  Proceedings | 14 |
| Item                  4.                | Submission                  of Matters to a Vote of Security                  Holders | 14 |
|                                    |
| **Part                  II**            |
| Item                  5.                | Market                  for Registrant’s Common Equity, Related Stockholder                  Matters and Issuer Purchases |   |
|                                    | of                  Equity Securities | 14 |
| Item                  6.                | Selected                  Financial Data | 15 |
| Item                  7.                | Management’s                  Discussion and Analysis of Financial Condition                  and Results of Operations | 15 |
| Item                  7A.               | Quantitative                  and Qualitative Disclosures About Market                  Risk | 15 |
| Item                  8.                | Financial                  Statements and Supplementary                  Data | 15 |
| Item                  9.                | Changes                  in and Disagreements with Accountants on Accounting                  and Financial Disclosure | 15 |
| Item                  9A.               | Controls                  and Procedures | 15 |
| Item                  9B.               | Other                  Information | 16 |
|                                    |
| **Part                  III**           |
| Item                  10.               | Directors,                  Executive Officers and Corporate                  Governance | 16 |
| Item                  11.               | Executive                  Compensation | 17 |
| Item                  12.               | Security                  Ownership of Certain Beneficial Owners and                  Management and Related |   |
|                                    | Stockholder                  Matters | 17 |
| Item                  13.               | Certain                  Relationships and Related Transactions and Director                  Independence | 17 |
| Item                  14.               | Principal                  Accountant Fees and Services | 17 |
|                                    |
| **Part                  IV**            |
| Item                  15.               | Exhibits                  and Financial Statement                  Schedules | 18 |

**Forward-Looking        Statements**

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| **ALLTEL                  Corporation** |
|-----------------------------------------|
| **Form                  10-K, Part I**  |

**Item        1.**** ****Business**

**General**

** **
**www.all**
**t**
**el.com**

**Overview        of Wireless Operations**

**Employees**

----

| **ALLTEL                  Corporation** |
|-----------------------------------------|
| **Form                  10-K, Part I**  |

**Item        1.**
** **
**Business**

**Acquisitions        Completed During the Past Five Years**

----

| **ALLTEL                  Corporation** |
|-----------------------------------------|
| **Form                  10-K, Part I**  |

**Item        1.**
** **
**Business**

**Acquisitions        Completed During the Past Five Years**
**        (Continued)**

**Dispositions        Completed During the Past Five Years**

----

| **ALLTEL                  Corporation** |
|-----------------------------------------|
| **Form                  10-K, Part I**  |

**Item        1.**
** **
**Business**

**Dispositions        Completed During the Past Five Years**
**        (Continued)**

**Product        Offerings and Pricing**

----

| **ALLTEL                  Corporation** |
|-----------------------------------------|
| **Form                  10-K, Part I**  |

**Item        1.**
** **
**Business**

**Product        Offerings and Pricing**
**        (Continued)**

**Marketing**

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| **ALLTEL                  Corporation** |
|-----------------------------------------|
| **Form                  10-K, Part I**  |

**Item        1.**
** **
**Business**

**Distribution**

**Competition**

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| **ALLTEL                  Corporation** |
|-----------------------------------------|
| **Form                  10-K, Part I**  |

**Item        1.**
** **
**Business**

**Technology**

**Regulation**

**Regulation        - Wireless Spectrum**

----

| **ALLTEL                  Corporation** |
|-----------------------------------------|
| **Form                  10-K, Part I**  |

**Item        1.**
** **
**Business**

**Regulation        - Wireless Spectrum**
**        (Continued)**

**Regulation        - Universal Service**

----

| **ALLTEL                  Corporation** |
|-----------------------------------------|
| **Form                  10-K, Part I**  |

**Item        1.**
** **
**Business**

**Regulation        - E-911**

**Regulation        - CALEA**

**Regulation        - Inter-Carrier Compensation**

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| **ALLTEL                  Corporation** |
|-----------------------------------------|
| **Form                  10-K, Part I**  |

**Item        1.**
** **
**Business**

**Regulation        - Telephone Numbers**

**Regulation        - Customer Billing**

**Regulation        - CMRS Roaming**

**Regulation        - Customer Proprietary Network Information (“CPNI”)**

**Regulation        - Analog Sunset**

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| **ALLTEL                  Corporation** |
|-----------------------------------------|
| **Form                  10-K, Part I**  |

**Item        1.**
** **
**Business**

**Regulation        - Warn Act/Emergency Alerts**

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

***Alltel        faces intense competition in its businesses that could reduce its market        share        or adversely affect its financial performance.***

***Alltel        is subject to government regulation of the telecommunications        industry.***

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| **ALLTEL                  Corporation** |
|-----------------------------------------|
| **Form                  10-K, Part I**  |

**Item        1A.**
** **
**Risk        Factors **
**(Continued)**

***Rapid        and significant changes in technology could require Alltel to significantly        increase capital investment or could result in reduced demand for its services.***

**Item        1B.**** ****Unresolved        Staff Comments**

**Item        2.**** ****Properties**

|                                           |   | (Millions) |     |
|------------------------------------------------|--------|------------|----------|
| Land                                           |   | $          | 314.9    |   |
| Buildings                  and improvements    |   |       | 955.1    |   |
| Operating                  plant and equipment |   |       | 7,933.8  |   |
| Information                  processing        |   |       | 1,048.1  |   |
| Furniture                  and fixtures        |   |       | 173.8    |   |
| Total                                          |   | $          | 10,425.7 |   |

----

| **ALLTEL                  Corporation** |
|-----------------------------------------|
| **Form                  10-K, Part I**  |

**Item        3.**** ****Legal        Proceedings**

**Item        4.**** ****Submission        of Matters to a Vote of Security Holders**

| **Form                  10-K, Part II** |
|-----------------------------------------|

**Item        5.**** ****Market        for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases        of Equity Securities**

| (a) | The                  outstanding shares of Alltel’s Common Stock are listed and traded on the                  New York Stock Exchange and trade under the symbol AT. The following                  table                  reflects the range of high, low and closing prices of Alltel’s Common                  Stock as reported by Thomson Financial for each quarter in 2006                  and                  2005: |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|
|   |   |   |   |   | Dividend |
| Year   | Qtr.   | High | Low | Close | Declared |
| 2006   | 4th    | $62.66 | $52.83 | $60.48 | $.125 |
|   | 3rd    | $65.64 | $52.34 | $55.50 | $.173 |
|   | 2nd    | $66.45 | $59.32 | $63.83 | $.385 |
|   | 1st    | $67.96 | $58.80 | $64.75 | $.385 |
| 2005   | 4th    | $68.19 | $58.00 | $63.10 | $.385 |
|   | 3rd    | $66.95 | $60.45 | $65.11 | $.380 |
|   | 2nd    | $62.36 | $54.82 | $62.28 | $.380 |
|   | 1st    | $59.85 | $54.20 | $54.85 | $.380 |

|   | As                    previously discussed, on July 17, 2006, Alltel completed the                    spin-off of                    its wireline business to its stockholders. Market prices presented                    in the                    table above include the value of the wireline business through                    the date of                    the spin-off. Following the spin-off, Alltel lowered its annual                    dividend                    rate from $1.54 to $.50 per share. Dividends declared for the                    third                    quarter of 2006 included a one-time dividend of $.048 per share                    related to                    the spin-off. As                    of December 31, 2006, the approximate number of stockholders                    of common                    stock including an estimate for those holding shares in brokers’ accounts                    was 181,000. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (b)    | Not                    applicable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (c)    | On                    January 19, 2006, Alltel’s Board of Directors authorized the Company to                    repurchase up to $3.0 billion of its outstanding common stock                    over a                    three-year period ending December 31, 2008. During the third                    quarter of                    2006, Alltel repurchased 12,847,500 shares of its common stock                    at a total                    cost of $709.0 million, or an average cost of $55.19 per share.                    Alltel did                    not repurchase any of its common shares during the first six                    months of                    2006. Information pertaining to this authorization for the fourth                    quarter                    of 2006 is presented in the table                    below.                                                                                                             |

|     Period         |   |    Total                    Number of Shares Purchased |   |    Average                    Price Paid per Share |   |  Total                    Number of Shares Purchased as Part ofPublicly                    Announced Plans |   | Maximum                    Number of Shares (or Approximate Dollar Value) that May Yet Be                    Purchased                    Under the Plans |
|----------------------------------------|--------|-----------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|
| October                    1-31, 2006  |   |                      5,500,000                                   |   | $56.66                                                            |   |                      5,500,000                                                                             |   | $1,979.4                    million                                                                                                                       |
| November                    1-30, 2006 |   |                      5,125,000                                   |   | $55.89                                                            |   |                      5,125,000                                                                             |   | $1,692.9                    million                                                                                                                       |
| December                    1-31, 2006 |   |                      5,000,000                                   |   | $57.70                                                            |   |                      5,000,000                                                                             |   | $1,404.4                    million                                                                                                                       |
| Totals                                 |   | 15,625,000                                                            |   | $56.74                                                            |   | 15,625,000                                                                                                      |   |                                                                                                                                                      |

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| **ALLTEL                  Corporation** |
|-----------------------------------------|
| **Form                  10-K, Part II** |

**Item        6.**** ****Selected        Financial Data**

**Item        7.**** ****Management’s        Discussion and Analysis of Financial Condition and Results of        Operations**

**Item        7A.**** ****Quantitative        and Qualitative Disclosures About Market Risk**

**Item        8.**** ****Financial        Statements and Supplementary Data**

**Item        9.**** ****Changes        in and Disagreements with Accountants on Accounting and Financial        Disclosure**

**Item        9A.**** ****Controls        and Procedures**

|                    (a) | Evaluation                  of disclosure controls and procedures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|-----------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
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|                        | The                  term “disclosure controls and procedures” (defined in SEC Rule 13a-15(e))                  refers to the controls and other procedures of a company that are                  designed                  to ensure that information required to be disclosed by a company                  in the                  reports that it files under the Securities Exchange Act of 1934                  (the                  “Exchange Act”) is recorded, processed, summarized and reported within                  required time periods and include, without limitation, controls                  and                  procedures designed to ensure that information required to be disclosed                  by                  a company in the reports that it files or submits under the Exchange                  Act                  is accumulated and communicated to the company’s management, including the                  company’s principal executive and financial officers, as appropriate to                  allow timely decisions regarding required disclosure. Alltel’s management,                  with the participation of the Chief Executive Officer and Chief                  Financial                  Officer, have evaluated the effectiveness of the Company’s disclosure                  controls and procedures as of the end of the period covered by                  this annual                  report (the “Evaluation Date”). Based on that evaluation, Alltel’s Chief                  Executive Officer and Chief Financial Officer have concluded that,                  as of                  the Evaluation Date, such controls and procedures were                  effective. |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                    (b) | Management’s                  report on internal control over financial reporting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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|                        | Management’s                  Report on Internal Control Over Financial Reporting, which appears                  on page                  F-31 of the Financial Supplement, is incorporated by reference                  herein.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                    (c) | Changes                  in internal control over financial reporting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                        | As                  of September 30, 2006, Alltel’s management determined that the Company did                  not maintain effective controls over its accounting for unusual                  and                  complex transactions. Specifically, as described in Alltel’s Current                  Report on Form 8-K/A filed on November 1, 2006, the Company did                  not                  maintain effective controls to ensure that its accounting for its                  spin-off                  and merger of its wireline business was accounted for in accordance                  with                  generally accepted accounting principles. This resulted in an adjustment                  to retained earnings, additional paid in capital and income from                  discontinued operations. Accordingly, Alltel’s management determined that                  the control deficiency constituted a material weakness in the Company’s                  internal control over financial reporting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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| **ALLTEL                  Corporation** |
|-----------------------------------------|
| **Form                  10-K, Part II** |

**Item        9A.**
** **
**Controls        and Procedures  **
**(Continued)**

|                    (c) | Changes                  in internal control over financial reporting,                  continued.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|-----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                        | In                  the fourth quarter of 2006, Alltel’s management implemented changes to                  Alltel’s internal control over financial reporting to reduce the                  likelihood of an error arising out of unusual and complex transactions                  in                  the future. The changes to Alltel’s internal control over financial                  reporting included enhancing roles and responsibilities for researching                  and reviewing the accounting treatment and financial statement                  presentation of unusual and complex transactions. With                  the implementation of the above-described changes to Alltel’s internal                  control over financial reporting, Alltel’s management has concluded that                  the material weakness with respect to accounting for unusual and                  complex                  transactions has been fully remediated as of December 31, 2006.                  Other than                  the changes to internal control over financial reporting discussed                  in the                  previous paragraph, there were no changes in Alltel’s internal control                  over financial reporting that occurred during the period covered                  by this                  annual report that have materially affected, or are reasonably                  likely to                  materially affect, Alltel’s internal control over financial                  reporting. |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

**Item        9B.**** ****Other        Information**

| **Form                  10-K, Part III** |
|------------------------------------------|

**Item        10.**** ****Directors,        Executive Officers and Corporate Governance**

|  Name                           | Age |  Position                                                            |
|--------------------------------------|-----|---------------------------------------------------------------------------|
| Scott                  T. Ford       | 44  | President                  and Chief Executive Officer                    |
| Kevin                  L. Beebe      | 47  | Group                  President - Operations                             |
| Jeffrey                  H. Fox      | 44  | Group                  President - Shared Services                        |
| C.J.                  Duvall Jr.     | 48  | Executive                  Vice President - Human Resources               |
| Sharilyn                  S. Gasaway | 38  | Executive                  Vice President - Chief Financial Officer       |
| Richard                  N. Massey   | 50  | Executive                  Vice President - General Counsel and Secretary |
| Keith                  A. Kostuch    | 44  | Senior                  Vice President - Strategic Planning               |
| Sue                  P. Mosley       | 48  | Controller                                                                |
| John                  A. Ebner       | 37  | Treasurer                                                                 |

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| **ALLTEL                  Corporation**  |
|------------------------------------------|
| **Form                  10-K, Part III** |

**Item        11.**** ****Executive        Compensation**

**Item        12.**** ****Security        Ownership of Certain Beneficial Owners and Management and Related Stockholder        Matters**

|                                                                           |   | (a)                                                                                                                                                |     | (b)                                                                                  |   | (c)                                                                                                                                                           |   |
|--------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|----------|-------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|     (Thousands,                  except per share amounts) |   |   Number                  of securitiesto                  be issued uponexercise                  ofoutstanding                  options (2) |     |    Weighted-average                  exercise price of outstanding options |   | Number                  of securities available for future issuance under equity compensation                  plans, excluding securities reflected in column (a) |   |
| Equity                  compensation plans approved                            |   |                                                                                                                                                    |     |                                                                                      |   |                                                                                                                                                               |   |
| by                  security holders (1)                                       |   |                                                                                                                                                    | 15,807.1 |                                                                                      |   | $47.23                                                                                                                                                             |   |   | 13,812.0 |   |
| Equity                  compensation plans not approved                        |   |                                                                                                                                                    |     |                                                                                      |   |                                                                                                                                                               |   |   |   |   |
| by                  security holders                                           |   |                                                                                                                                                    | -        |                                                                                      |   | -                                                                                                                                                                  |   |   | - |   |
| Totals                                                                         |   |                                                                                                                                                    | 15,807.1 |                                                                                      |   | $47.23                                                                                                                                                             |   |   | 13,812.0 |   |

| (1)    | Includes                  the ALLTEL Corporation 1991 Stock Option Plan, ALLTEL Corporation                  1994                  Stock Option Plan for Employees, ALLTEL Corporation 1994 Stock                  Option Plan                  for Nonemployee Directors, ALLTEL Corporation 1998 Equity Incentive                  Plan,                  and the ALLTEL Corporation 2001 Equity Incentive Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (2)    | Does                  not include 369,159 stock options with a weighted-average exercise                  price                  of $27.57, which were assumed by Alltel in connection with the                  Company’s                  mergers with 360° Communications Company in 1998 and Western Wireless                  Corporation in 2005. These options were issued under the Amended                  and                  Restated 360° Communications Company 1996 Equity Incentive Plan, 360°                  Communications Company 1996 Replacement Stock Option Plan, Western                  Wireless Corporation 2005 Long-Term Equity Incentive Plan and the                  Amended                  and Restated 1994 Management Incentive Stock Option Plan of Western                  Wireless Corporation. These plans have been frozen since the merger                  dates,                  with respect to the granting of any additional options. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

**Item        13.**** ****Certain        Relationships and Related Transactions and Director        Independence**

**Item        14.**** ****Principal        Accountant Fees and Services**

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| **ALLTEL                  Corporation** |
|-----------------------------------------|
| **Form                  10-K, Part IV** |

**Item        15****.****Exhibits        and Financial Statement Schedules**

|   |   |                                                                                                                                                                                                                                                                                                                                                      |                                            |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------|
| 1.     |   | Financial                  Statements:The                  following Consolidated Financial Statements of ALLTEL Corporation                  and                  subsidiaries for the year ended December 31, 2006, included in                  the                  Financial Supplement, which is incorporated by reference                  herein: |                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                      | FinancialSupplementPage                  Number |
|   |   | Management’s                  Report on Internal Control Over Financial Reporting                                                                                                                                                                                                                                                                   | F-31                                            |
|   |   | Report                  of Independent Registered Public Accounting Firm                                                                                                                                                                                                                                                                                  | F-32                  - F-33                    |
|   |   | Consolidated                  Balance Sheets - as of December 31, 2006 and 2005                                                                                                                                                                                                                                                                           | F-34                                            |
|   |   | Consolidated                  Statements of Income -for                  the years ended December 31, 2006, 2005 and 2004                                                                                                                                                                                                                                 |  F-35                                      |
|   |   | Consolidated                  Statements of Cash Flows -                                                                                                                                                                                                                                                                                                  |                                            |
|   |   | for                  the years ended December 31, 2006, 2005 and 2004                                                                                                                                                                                                                                                                                     | F-36                                            |
|   |   | Consolidated                  Statements of Shareholders’ Equity -                                                                                                                                                                                                                                                                                  |                                            |
|   |   | for                  the years ended December 31, 2006, 2005 and 2004                                                                                                                                                                                                                                                                                     | F-37                                            |
|   |   | Notes                  to Consolidated Financial Statements                                                                                                                                                                                                                                                                                               | F-38                  - F-73                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                      |                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                      | Form                  10-K                      |
| 2.     |   | Financial                  Statement Schedules:                                                                                                                                                                                                                                                                                                           | Page                  Number                    |
|   |   | Report                  of Independent Registered Public Accounting Firm                                                                                                                                                                                                                                                                                  | 20                                              |
|   |   | Schedule                  II. Valuation and Qualifying Accounts                                                                                                                                                                                                                                                                                           | 21                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                      |                                            |
| 3.     |   | Exhibits:                                                                                                                                                                                                                                                                                                                                                 |                                            |
|   |   | Exhibit                  Index                                                                                                                                                                                                                                                                                                                            | 22-29                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                      |                                            |

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|  ALLTEL                  Corporation                                   |                               |
|-----------------------------------------------------------------------------|------------------------------------|
| Registrant                                                                  |                               |
|                                                                        |                               |
| By                                                                          | /s/                  Scott T. Ford |   | Date: February                  20, 2007 |
|  Scott                  T. Ford, President and Chief Executive Officer |                               |

| By                                                                                         | /s/                  Sharilyn S. Gasaway                  |                                     | Date: February                  20, 2007 |
|--------------------------------------------------------------------------------------------|-----------------------------------------------------------|------------------------------------------|-----------------------------------------------|
|  Sharilyn                  S. Gasaway, Executive Vice President -                     |                                                      |
|  Chief                  Financial Officer                                             |                                                      |
|  (Principal                  Financial Officer)                                       |                                                      |
|                                                                                       |                                                      |
| By                                                                                         | /s/                  Scott T. Ford                        |                                     |                                          |
|  Scott                  T. Ford, President, Chief Executive Officer and Director      |                                                      |
|                                                                                       | By                                                   | /s/                  Sharilyn S. Gasaway |                                          |
| *Sue                  P. Mosley, Controller(Principal                  Accounting Officer) | *                  (Sharilyn S. Gasaway,Attorney-in-fact) |
|                                                                                       | Date:                  February 20, 2007                  |
| *Joe                  T. Ford, Chairman and Director                                       |                                                      |
|                                                                                       |                                                      |
| *John                  R. Belk, Director                                                   |                                                      |
|                                                                                       |                                                      |
| *Peter                  A. Bridgman, Director                                              |                                                      |
|                                                                                       |                                                      |
| *William                  H. Crown, Director                                               |                                                      |
|                                                                                       |                                                      |
| *Lawrence                  L. Gellerstedt III, Director                                    |                                                      |
|                                                                                       |                                                      |
| *Emon                  A. Mahony, Jr., Director                                            |                                                      |
|                                                                                       |                                                      |
| *John                  P. McConnell, Director                                              |                                                      |
|                                                                                       |                                                      |
| *Josie                  C. Natori, Director                                                |                                                      |
|                                                                                       |                                                      |
| *John                  W. Stanton, Director                                                |                                                      |
|                                                                                       |                                                      |
| *Warren                  A. Stephens, Director                                             |                                                      |
|                                                                                       |                                                      |
| *Ronald                  Townsend, Director                                                |                                                      |

----

**Report        of Independent Registered Public Accounting Firm on**

**Financial        Statement Schedule**

----

| Column                  A                                     |   | Column                  B   |   | Column                  C   |   | Column                  D                          |   | Column                  E                          |
|---------------------------------------------------------------|--------|-----------------------------|--------|-----------------------------|--------|----------------------------------------------------|--------|----------------------------------------------------|
|                                                          |   |                        |   | Additions                   |   |                                               |   |                                               |
|                                                          |   | Balance                  at |   | Charged                  to |   | Charged                                            |   |                                               |   | Balance                  at |
|                                                          |   | Beginning                   |   | Cost                  and   |   | to                  Other                          |   | Deductions                                         |   | End                  of |
| Description                                                   |   | of                  Period  |   | Expenses                    |   | Accounts                                           |   | Describe                                           |   | Period |
| Allowance                  for doubtful accounts,             |   |                        |   |                        |   |                                               |   |                                               |   |   |
| customers                  and other:                         |   |                        |   |                        |   |                                               |   |                                               |   |   |
| For                  the years ended:                         |   |                        |   |                        |   |                                               |   |                                               |   |   |
| December                  31, 2006                            |   | $70.6                       |   | $227.3                      |   | $                    -                   |   | $243.0                                             | (A) | $54.9 |
| December                  31, 2005                            |   | $37.0                       |   | $192.5                      |   | $                                     -       |   | $158.9                                             | (A) | $70.6 |
| December                  31, 2004                            |   | $29.5                       |   | $146.5                      |   | $                    -                   |   | $139.0                                             | (A) | $37.0 |
|                                                          |   |                        |   |                        |   |                                               |   |                                               |   |   |
| Valuation                  allowance for deferred tax assets: |   |                        |   |                        |   |                                               |   |                                               |   |   |
| For                  the years ended:                         |   |                        |   |                        |   |                                               |   |                                               |   |   |
| December                  31, 2006                            |   | $14.2                       |   | $                  4.6      |   | $                                      - |   | $      -             |   | $18.8 |
| December                  31, 2005                            |   | $16.2                       |   | $                  2.6      |   | $                  0.7                             |   | $                   5.3                       | (B) | $14.2 |
| December                  31, 2004                            |   | $13.5                       |   | $                  2.7      |   | $                                      - |   | $                       - |   | $16.2 |
|                                                          |   |                        |   |                        |   |                                               |   |                                               |   |   |
| Accrued                  liabilities related to restructuring |   |                        |   |                        |   |                                               |   |                                               |   |   |
| and                  other charges:                           |   |                        |   |                        |   |                                               |   |                                               |   |   |
| For                  the years ended:                         |   |                        |   |                        |   |                                               |   |                                               |   |   |
| December                  31, 2006                            |   | $                  0.2      |   | $                  13.7     | (C)    | $                    -                   |   | $                  13.8                            | (D) | $                  0.1 |
| December                  31, 2005                            |   | $                  0.7      |   | $                  23.0     | (E)    | $                   -                         |   | $                  23.5                            | (F) | $                  0.2 |
| December                  31, 2004                            |   | $                  0.5      |   | $                  39.3     | (G)    | $                   -                         |   | $                  39.1                            | (H) | $                  0.7 |
|                                                          |   |                        |   |                        |   |                                               |   |                                               |   |   |

| Notes: |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (A)    | Accounts                  charged off net of recoveries of amounts previously written                  off.                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (B)    | Reduction                  in valuation allowance due to utilization of state net operating                  loss                  carryforwards.                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (C)    | During                  2006, Alltel recorded integration expenses of $13.7 million related                  to its                  acquisition of Western Wireless Corporation (“Western Wireless”) in 2005                  and the acquisitions of Midwest Wireless Holdings and wireless                  properties                  in Illinois, Texas and Virginia completed during 2006.                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (D)    | Included                  cash outlays of $13.8 million for expenses paid in 2006, primarily                  consisting of branding, signage and computer system conversion                  costs                  related to the acquisitions discussed in Note (C).                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (E)    | During                  2005, Alltel recorded integration expenses of $23.0 million in                  connection                  with its exchange of wireless assets with Cingular Wireless LLC                  (“Cingular”), merger with Western Wireless and the acquisition of wireless                  properties in Alabama and Georgia.                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (F)    | Included                  cash outlays of $8.5 million for expenses paid in 2005 and non-cash                  charges of $15.0 million, primarily consisting of handset subsidies                  incurred to migrate the customer base to CDMA handsets in the markets                  acquired from Cingular and those acquired in Alabama and Georgia.                  The                  handset subsidies were included in the total amount of integration                  expenses discussed in Note (E).                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (G)    | During                  2004, the Company recorded restructuring and other charges of $14.5                  million related to a planned workforce reduction and the reorganization                  of                  its operations and support teams. Alltel also recorded a write-down                  in the                  carrying value of certain corporate and regional facilities to                  fair value                  in conjunction with the proposed leasing or sale of those facilities                  of                  $24.8 million. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (H)    | Included                  cash outlays of $14.1 million for expenses paid in 2004 and non-cash                  charges of $25 million, primarily consisting of the carrying value                  of                  certain corporate and regional facilities discussed in Note                  (G).                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | See                  Note 10 on pages F-64 to F-65 of the Financial Supplement, which                  is                  incorporated herein by reference, for additional information regarding                  the                  restructuring and other charges recorded by Alltel in 2006, 2005                  and                  2004.                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

----

| Number                  and Name |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|----------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (3)(a)(1)                        | Amended                  and Restated Certificate of Incorporation of ALLTEL Corporation                  (incorporated herein by reference to Exhibit B to Proxy Statement,                  dated                  March 9, l990).                                                                                                                                                                                                                                                                                                                                                  | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (a)(2)                           | Amendment                  No. 1 to Amended and Restated Certificate of Incorporation of ALLTEL                  Corporation (incorporated herein by reference to Annex F of ALLTEL                  Corporation Registration Statement (File No. 333-51915) on Form                  S-4 dated                  May 6, 1998).                                                                                                                                                                                                                                                        | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (b)                              | Bylaws                  of ALLTEL Corporation (As amended as of January 29, 1998) (incorporated                  herein by reference to Exhibit 3(b) to Form 10-K for the fiscal                  year ended                  December 31, 1997).                                                                                                                                                                                                                                                                                                                                     | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (4)(a)                           | Rights                  Agreement dated as of January 30, l997, between ALLTEL Corporation                  and                  First Union National Bank of North Carolina (incorporated herein                  by                  reference to Form 8-K dated February 3, 1997, filed with the Commission                  on                  February 4, 1997).                                                                                                                                                                                                                | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (a)(1)                           | Amendment                  No. 1 to January 30, 1997 Rights Agreement dated as of February                  2, 2005                  between ALLTEL Corporation and Computershare Investor Services,                  LLC                  (incorporated herein by reference to Exhibit 4(a)(1) to Form 10-Q                  for the                  period ended March 31, 2005).                                                                                                                                                                                                  | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (b)                              | The                  Company agrees to provide to the Commission, upon request, copies                  of any                  agreement defining rights of long-term debt holders.                                                                                                                                                                                                                                                                                                                                                                                                  | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (c)                              | Indenture                  dated as of March 7, 1996, between 360°                  Communications Company and Citibank, N.A., as Trustee (the “1996                  360°                  Indenture”) (incorporated herein by reference to Exhibit 4.2 to                  360°                  Communications Company’s Annual Report on Form 10-K for the fiscal year                  ended December 31, 1995).                                                                                                                                | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (d)                              | First                  Supplemental Indenture dated as of February 1, 1999, among 360°                  Communications Company, ALLTEL Corporation and Citibank, N.A. as                  trustee                  (incorporated herein by reference to Exhibit 4(e) to Form 10-Q                  for the                  period ended March 31, 2003).                                                                                                                                                                                                                        | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (e)                              | Indenture                  dated as of March 1, 1997, between 360°                  Communications Company and Citibank, N.A., as Trustee (the “1997                  360°                  Indenture”) (incorporated herein by reference to Exhibit 4.6 to                  360°                  Communications Company’s Current Report on Form 8-K dated March 17,                  1997).                                                                                                                                                       | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (f)                              | Form                  of 7.60% Senior Note Due 2009 issued under the 1997 360°                  Indenture (incorporated herein by reference to Exhibit 4.7 to                  360°                  Communications Company’s Current Report on Form 8-K dated March 17,                  1997).                                                                                                                                                                                                                                                                      | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (g)                              | Form                  of 6.65% Senior Note Due 2008 issued under the 1997 360°                  Indenture (incorporated herein by reference to Exhibit 4.8 to                  360°                  Communications Company’s Current Report on Form 8-K dated January 13,                  1998).                                                                                                                                                                                                                                                                    | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (h)                              | First                  Supplemental Indenture dated as of February 1, 1999, among 360°                  Communications Company, ALLTEL Corporation and Citibank, N.A. as                  trustee                  (incorporated herein by reference to Exhibit 4(i) to Form 10-Q                  for the                  period ended March 31, 2003).                                                                                                                                                                                                                        | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (10)(a)                          | Five                  Year Revolving Credit Agreement dated as of July 28, 2004, between                  ALLTEL                  Corporation and Bank of America, N.A., JPMorgan Chase Bank, Banc                  of                  America Securities LLC and J.P. Morgan Securities Inc., Citicorp                  USA,                  Inc., KeyBank National Association, Wachovia Bank, National Association,                  and Barclays Bank PLC (incorporated herein by reference to Form                  10-Q for                  the period ended June 30, 2004). | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |

----

| Number                  and Name |                                                                                                                                                                                                                                                                                                                                                                                            |
|----------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                             |                                                                                                                                                                                                                                                                                                                                                                                            |   |
| (10)(b)(1)                       | Agreement                  by and between ALLTEL Corporation and Joe T. Ford effective as                  of July 26,                  2001 (incorporated herein by reference to Exhibit 10(b)(4) to Form                  10-K                  for the fiscal year ended December 31, 2001).                                                                                                 | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                            |   |
| (b)(1)(a)                        | Amendment,                  effective as of May 8, 2006, to Agreement by and between ALLTEL                  Corporation and Joe T. Ford effective as of July 26, 2001 (incorporated                  herein by reference to Exhibit 10(a) to Form 10-Q for the period                  ended                  March 31, 2006).                                                                 | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                            |   |
| (c)(1)                           | Employment                  Agreement by and between ALLTEL Corporation and Scott T. Ford effective                  as                  of July 24, 2003 (incorporated herein by reference to Exhibit 10(c)(9)                  to                  Form 10-Q for the period ended September 30, 2003).                                                                                        | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                            |   |
| (c)(1)(a)                        | Amendment,                  effective as of May 8, 2006, to Employment Agreement by and between                  ALLTEL                  Corporation and Scott T. Ford effective as of July 24, 2003 (incorporated                  herein by reference to Exhibit 10(b) to Form 10-Q for the period                  ended                  March 31, 2006).                                   | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                            |   |
| (c)(2)                           | Employment                  Agreement by and between Alltel Corporation and Scott T. Ford effective                  as                  of May 5, 2006 (incorporated herein by reference to Exhibit 10(c)                  to Form                  10-Q for the period ended March 31, 2006).                                                                                                 | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                            |   |
| (c)(3)                           | Employment                  Agreement by and between Alltel Corporation and Kevin L. Beebe                  effective                  as of May 5, 2006 (incorporated herein by reference to Exhibit                  10(d) to                  Form 10-Q for the period ended March 31, 2006).                                                                                                | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                            |   |
| (c)(4)                           | Employment                  Agreement by and between Alltel Corporation and Jeffrey H. Fox                  effective                  as of May 5, 2006 (incorporated herein by reference to Exhibit                  10(e) to                  Form 10-Q for the period ended March 31, 2006).                                                                                                | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                            |   |
| (c)(5)                           | Employment                  Agreement by and between Alltel Corporation and C.J. Duvall Jr.                  effective                  as of May 5, 2006 (incorporated herein by reference to Exhibit                  10(f) to                  Form 10-Q for the period ended March 31, 2006).                                                                                               | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                            |   |
| (c)(6)                           | Employment                  Agreement by and between Alltel Corporation and Sharilyn S. Gasaway                  effective as of May 5, 2006 (incorporated herein by reference to                  Exhibit                  10(g) to Form 10-Q for the period ended March 31, 2006).                                                                                                            | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                            |   |
| (c)(7)                           | Employment                  Agreement by and between Alltel Corporation and Richard N. Massey                  effective as of May 5, 2006 (incorporated herein by reference to                  Exhibit                  10(h) to Form 10-Q for the period ended March 31, 2006).                                                                                                              | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                            |   |
| (c)(8)                           | Employment                  Agreement by and between Alltel Corporation and Keith A. Kostuch                  effective                  as of May 5, 2006 (incorporated herein by reference to Exhibit                  10(i) to                  Form 10-Q for the period ended March 31, 2006).                                                                                              | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                            |   |
| (c)(9)                           | Employment                  Agreement by and between Alltel Corporation and Sue P. Mosley effective                  as                  of May 5, 2006 (incorporated herein by reference to Exhibit 10(j)                  to Form                  10-Q for the period ended March 31, 2006).                                                                                                 | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                            |   |
| (c)(10)                          | Employment                  Agreement by and between Alltel Corporation and John A. Ebner effective                  as                  of May 5, 2006 (incorporated herein by reference to Exhibit 10(k)                  to Form                  10-Q for the period ended March 31, 2006).                                                                                                 | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                            |   |
| (d)(1)                           | Alltel                  Corporation Supplemental Executive Retirement Plan, as amended                  and                  restated effective November 1, 2006 (incorporated herein by reference                  to                  Exhibit 10.1 to Current Report on Form 8-K dated November 1, 2006                  and                  filed with the Commission on November 3, 2006). | * |

----

| Number                  and Name |                                                                                                                                                                                                                                                                                                                                                                                                    |
|----------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                             |                                                                                                                                                                                                                                                                                                                                                                                                    |   |
| (10)(e)(1)                       | Executive                  Deferred Compensation Plan of ALLTEL Corporation, as amended and                  restated                  effective October 1, 1993 (incorporated herein by reference to                  Exhibit                  10(e) to Form 10-K for the fiscal year ended December 31,                  1993).                                                                       | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                    |   |
| (e)(2)                           | Amendment                  No. 1 to Executive Deferred Compensation Plan of ALLTEL Corporation                  (October 1, 1993 Restatement) effective January 29, 1998 (incorporated                  herein by reference to Exhibit 10(f)(2) to Form 10-K for the fiscal                  year                  ended December 31, 1997).                                                            | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                    |   |
| (e)(3)                           | Amendment                  No. 2 to Executive Deferred Compensation Plan of ALLTEL Corporation                  (October 1, 1993 Restatement) effective April 23, 1998 (incorporated                  herein by reference to Exhibit 10(f)(3) to Form 10-K for the fiscal                  year                  ended December 31, 2002).                                                              | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                    |   |
| (e)(4)                           | Amendment                  No. 3 to Executive Deferred Compensation Plan of ALLTEL Corporation                  (October 1, 1993 Restatement) effective January 28, 1999 (incorporated                  herein by reference to Exhibit 10(f)(4) to Form 10-K for the fiscal                  year                  ended December 31, 2002).                                                            | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                    |   |
| (e)(5)                           | Amendment                  No. 4 to Executive Deferred Compensation Plan of ALLTEL Corporation                  (October 1, 1993 Restatement) effective April 21, 1999 (incorporated                  herein by reference to Exhibit 10(f)(5) to Form 10-K for the fiscal                  year                  ended December 31, 2002).                                                              | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                    |   |
| (e)(6)                           | Amendment                  No. 5 to Executive Deferred Compensation Plan of ALLTEL Corporation                  (October 1, 1993 Restatement) effective April 25, 2002 (incorporated                  herein by reference to Exhibit 10(f)(6) to Form 10-K for the fiscal                  year                  ended December 31, 2002).                                                              | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                    |   |
| (e)(7)                           | Amendment                  No. 6 to Executive Deferred Compensation Plan of ALLTEL Corporation                  (October 1, 1993 Restatement) effective December 8, 2005 (incorporated                  herein by reference to Exhibit 10(e)(7) to Form 10-K for the fiscal                  year                  ended December 31, 2005).                                                            | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                    |   |
| (e)(8)                           | Amendment                  No. 7 to Executive Deferred Compensation Plan of ALLTEL Corporation                  (October 1, 1993 Restatement) effective November 1, 2006 (incorporated                  herein by reference to Exhibit 10.3 to Current Report on Form 8-K                  dated                  November 1, 2006 and filed with the Commission on November 3,                  2006). | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                    |   |
| (e)(9)                           | Deferred                  Compensation Plan for Directors of ALLTEL Corporation, as amended                  and                  restated effective October 1, 1993 (incorporated herein by reference                  to                  Exhibit 10(f) to Form 10-K for the fiscal year ended December 31,                  1993).                                                                   | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                    |   |
| (e)(10)                          | Amendment                  No. 1 to Deferred Compensation Plan for Directors of ALLTEL Corporation                  (October 1, 1993 Restatement) (incorporated herein by reference                  to Exhibit                  10(f)(3) to Form 10-K for the fiscal year ended December 31,                  1996).                                                                                   | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                    |   |
| (e)(11)                          | Amendment                  No. 2 to Deferred Compensation Plan for Directors of ALLTEL Corporation                  (October 1, 1993 Restatement) effective April 25, 2002 (incorporated                  herein by reference to Exhibit 10(f)(9) to Form 10-K for the fiscal                  year                  ended December 31, 2002).                                                          | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                    |   |
| (e)(12)                          | ALLTEL                  Corporation 1999 Nonemployee Directors Stock Compensation Plan                  (as Amended                  and Restated effective January 22, 2004) (incorporated herein by                  reference                  to Exhibit (f)(10) to Form 10-K for the fiscal year ended December                  31,                  2003).                                       | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                    |   |
| (e)(13)                          | ALLTEL                  Corporation 1998 Management Deferred Compensation Plan, effective                  June 23,                  1998 (incorporated herein by reference to Exhibit 10(f)(5) to Form                  10-Q                  for the period ended June 30, 1998).                                                                                                                     | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                    |   |
| (e)(14)                          | Amendment                  No. 1 to the ALLTEL Corporation 1998 Management Deferred Compensation                  Plan                  effective June 23, 1998 (incorporated herein by reference to Exhibit                  10(f)(11) to Form 10-K for the fiscal year ended December 31,                  2002).                                                                                     | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                    |   |

----

| Number                  and Name |                                                                                                                                                                                                                                                                                                                                                                                     |
|----------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                             |                                                                                                                                                                                                                                                                                                                                                                                     |   |
| (10)(e)(15)                      | Amendment                  No. 2 to the ALLTEL Corporation 1998 Management Deferred Compensation                  Plan                  effective April 25, 2002 (incorporated herein by reference to Exhibit                  10(f)(12) to Form 10-K for the fiscal year ended December 31,                  2002).                                                                     | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                     |   |
| (e)(16)                          | Amendment                  No. 3 to the ALLTEL Corporation 1998 Management Deferred Compensation                  Plan                  effective December 8, 2005 (incorporated herein by reference to                  Exhibit                  10(e)(15) to Form 10-K for the fiscal year ended December 31,                  2005).                                                  | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                     |   |
| (e)(17)                          | Amendment                  No. 4 to the ALLTEL Corporation 1998 Management Deferred Compensation                  Plan                  effective July 16, 2006 (incorporated herein by reference to Exhibit                  10.7                  to Current Report on Form 8-K dated July 17, 2006 and filed with                  the                  Commission on July 21, 2006). | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                     |   |
| (e)(18)                          | ALLTEL                  Corporation 1998 Directors’ Deferred Compensation Plan, effective June 23,                  1998 (incorporated herein by reference to Exhibit 10(f)(6) to Form                  10-Q                  for the period ended June 30, 1998).                                                                                                                 | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                     |   |
| (e)(19)                          | Amendment                  No. 1 to the ALLTEL Corporation 1998 Directors’ Deferred Compensation                  Plan, effective April 25, 2002 (incorporated herein by reference                  to                  Exhibit 10(f)(14) to Form 10-K for the fiscal year ended December                  31,                  2002).                                             | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                     |   |
| (f)(1)                           | ALLTEL                  Corporation 1991 Stock Option Plan (incorporated herein by reference                  to                  Exhibit A to Proxy Statement, dated March 8, 1991).                                                                                                                                                                                                    | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                     |   |
| (f)(2)                           | First                  Amendment to ALLTEL Corporation 1991 Stock Option Plan (incorporated                  herein by reference to Exhibit 10(g)(3) to Form 10-K for the fiscal                  year                  ended December 31, 2000).                                                                                                                                        | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                     |   |
| (f)(3)                           | ALLTEL                  Corporation 1994 Stock Option Plan for Employees (incorporated                  herein by                  reference to Exhibit A to Proxy Statement dated March 4,                  1994).                                                                                                                                                                      | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                     |   |
| (f)(4)                           | First                  Amendment to ALLTEL Corporation 1994 Stock Option Plan for Employees                  (incorporated herein by reference to Exhibit 10(g)(5) to Form 10-K                  for the                  fiscal year ended December 31, 2000).                                                                                                                          | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                     |   |
| (f)(5)                           | ALLTEL                  Corporation Amended and Restated 1994 Stock Option Plan for Nonemployee                  Directors, effective November 1, 2006 (incorporated herein by reference                  to                  Exhibit 10.2 to Current Report on Form 8-K dated November 1, 2006                  and                  filed with the Commission on November 3, 2006).    | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                     |   |
| (f)(6)                           | ALLTEL                  Corporation 1998 Equity Incentive Plan (incorporated herein by                  reference                  to Annex G of ALLTEL Corporation Registration Statement (File No.                  333-51915) on Form S-4 dated May 6, 1998).                                                                                                                         | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                     |   |
| (f)(7)                           | First                  and Second Amendments to ALLTEL Corporation 1998 Equity Incentive                  Plan                  (incorporated herein by reference to Exhibit 10(g)(9) to Form 10-K                  for the                  fiscal year ended December 31, 2000).                                                                                                       | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                     |   |
| (f)(8)                           | ALLTEL                  Corporation 2001 Equity Incentive Plan (incorporated herein by                  reference                  to Appendix C to Proxy Statement dated March 5, 2001).                                                                                                                                                                                                | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                     |   |
| (g)(1)                           | Amended                  and Restated 360° Communications Company 1996 Equity Incentive Plan                  (incorporated herein by reference to Form S-8 (File No. 333-88923)                  of                  ALLTEL Corporation filed with the Commission on October 13,                  1999).                                                                           | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                     |   |
| (g)(2)                           | Western                  Wireless Corporation 2005 Long-Term Equity Incentive Plan (incorporated                  herein by reference to Form S-8 (File No. 333-127081) of ALLTEL                  Corporation filed with the Commission on August 1, 2005).                                                                                                                             | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                     |   |
|                             |                                                                                                                                                                                                                                                                                                                                                                                     |   |
|                             |                                                                                                                                                                                                                                                                                                                                                                                     |   |

----

| Number                  and Name |                                                                                                                                                                                                                                                                                                                                                                                                  |
|----------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                             |                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (10)(g)(3)                       | Amended                  and Restated 1994 Management Incentive Stock Option Plan of Western                  Wireless Corporation (incorporated herein by reference to Form                  S-8 (File                  No. 333-127081) of ALLTEL Corporation filed with the Commission                  on August                  1, 2005).                                                        | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (h)(1)                           | Alltel                  Corporation Performance Incentive Compensation Plan, as amended                  and                  restated effective as of January 1, 2006 (incorporated herein by                  reference                  to Exhibit 10.1 to Current Report on Form 8-K dated April 20, 2006                  and                  filed with the Commission on April 26, 2006).     | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (i)(1)                           | Alltel                  Corporation Long-Term Performance Incentive Compensation Plan,                  as amended                  and restated effective January 1, 2006 (incorporated herein by                  reference                  to Exhibit 10.2 to Current Report on Form 8-K dated April 20, 2006                  and                  filed with the Commission on April 26, 2006). | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (j)(1)                           | ALLTEL                  Corporation Pension Plan (January 1, 2001 Restatement) (incorporated                  herein by reference to Exhibit 10(k) to Form 10-K for the fiscal                  year                  ended December 31, 2001).                                                                                                                                                       | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (j)(2)                           | Amendment                  No. 1 to ALLTEL Corporation Pension Plan (January 1, 2001 Restatement)                  (incorporated herein by reference to Exhibit 10(k)(1) to Form 10-Q                  for the                  period ended September 30, 2002).                                                                                                                                     | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (j)(3)                           | Amendment                  No. 2 to ALLTEL Corporation Pension Plan (January 1, 2001 Restatement)                  (incorporated herein by reference to Exhibit 10(k)(3) to Form 10-K                  for the                  fiscal year ended December 31, 2002).                                                                                                                                 | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (j)(4)                           | Amendment                  No. 3 to ALLTEL Corporation Pension Plan (January 1, 2001 Restatement)                  (incorporated herein by reference to Exhibit 10(k)(4) to Form 10-Q                  for the                  period ended June 30, 2003).                                                                                                                                          | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (j)(5)                           | Amendment                  No. 4 to ALLTEL Corporation Pension Plan (January 1, 2001 Restatement)                  (incorporated herein by reference to Exhibit 10(k)(9) to Form 10-Q                  for the                  period ended June 30, 2004).                                                                                                                                          | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (j)(6)                           | Amendment                  No. 5 to ALLTEL Corporation Pension Plan (January 1, 2001 Restatement)                  (incorporated herein by reference to Exhibit 10(k)(5) to Form 10-K                  for the                  fiscal year ended December 31, 2003).                                                                                                                                 | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (j)(7)                           | Amendment                  No. 6 to ALLTEL Corporation Pension Plan (January 1, 2001 Restatement)                  (incorporated herein by reference to Exhibit (10)(k)(6) to Form                  10-K for                  the fiscal year ended December 31, 2003).                                                                                                                               | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (j)(8)                           | Amendment                  No. 7 to ALLTEL Corporation Pension Plan (January 1, 2001 Restatement)                  (incorporated herein by reference to Exhibit (10)(k)(7) to Form                  10-K for                  the fiscal year ended December 31, 2003).                                                                                                                               | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (j)(9)                           | Amendment                  No. 8 to ALLTEL Corporation Pension Plan (January 1, 2001 Restatement)                  (incorporated herein by reference to Exhibit (10)(k)(8) to Form                  10-K for                  the fiscal year ended December 31, 2003).                                                                                                                               | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (j)(10)                          | Amendment                  No. 9 to ALLTEL Corporation Pension Plan (January 1, 2001 Restatement)                  (incorporated herein by reference to Exhibit (10)(k)(10) to Form                  10-K for                  the fiscal year ended December 31, 2004).                                                                                                                              | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (j)(11)                          | Amendment                  No. 10 to ALLTEL Corporation Pension Plan (January 1, 2001 Restatement)                  (incorporated herein by reference to Exhibit (10)(k)(11) to Form                  10-K for                  the fiscal year ended December 31, 2004).                                                                                                                             | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                  |   |

----

| Number                  and Name |                                                                                                                                                                                                                                                                           |
|----------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                             |                                                                                                                                                                                                                                                                           |   |
| (10)(j)(12)                      | Amendment                  No. 11 to ALLTEL Corporation Pension Plan (January 1, 2001 Restatement)                  (incorporated herein by reference to Exhibit (10)(k)(12) to Form                  10-K for                  the fiscal year ended December 31, 2004).      | * |
|                             |                                                                                                                                                                                                                                                                           |   |
| (j)(13)                          | Amendment                  No. 12 to ALLTEL Corporation Pension Plan (January 1, 2001 Restatement)                  (incorporated herein by reference to Exhibit (10)(k)(13) to Form                  10-Q for                  the period ended September 30, 2005).          | * |
|                             |                                                                                                                                                                                                                                                                           |   |
| (j)(14)                          | Amendment                  No. 13 to ALLTEL Corporation Pension Plan (January 1, 2001 Restatement)                  (incorporated herein by reference to Exhibit (10)(j)(14) to Form                  10-K for                  the fiscal year ended December 31, 2005).      | * |
|                             |                                                                                                                                                                                                                                                                           |   |
| (j)(15)                          | Amendment                  No. 14 to ALLTEL Corporation Pension Plan (January 1, 2001 Restatement)                  (incorporated herein by reference to Exhibit (10)(j)(15) to Form                  10-K for                  the fiscal year ended December 31, 2005).      | * |
|                             |                                                                                                                                                                                                                                                                           |   |
| (j)(16)                          | Amendment                  No. 15 to ALLTEL Corporation Pension Plan (January 1, 2001 Restatement)                  (incorporated herein by reference to Exhibit (10)(j)(16) to Form                  10-Q for                  the period ended June 30, 2006).               | * |
|                             |                                                                                                                                                                                                                                                                           |   |
| (k)(1)                           | ALLTEL                  Corporation Profit Sharing Plan (January 1, 2002 Restatement)                  (incorporated herein by reference to Exhibit 10(l) to Form 10-Q                  for the                  period ended March 31, 2002).                                 | * |
|                             |                                                                                                                                                                                                                                                                           |   |
| (k)(2)                           | Amendment                  No. 1 to ALLTEL Corporation Profit Sharing Plan (January 1, 2002                  Restatement) (incorporated herein by reference to Exhibit 10(l)(2)                  to Form                  10-K for the fiscal year ended December 31, 2002).   | * |
|                             |                                                                                                                                                                                                                                                                           |   |
| (k)(3)                           | Amendment                  No. 2 to ALLTEL Corporation Profit Sharing Plan (January 1, 2002                  Restatement) (incorporated herein by reference to Exhibit 10(I)(3)                  to Form                  10-K for the fiscal year ended December 31, 2003).   | * |
|                             |                                                                                                                                                                                                                                                                           |   |
| (k)(4)                           | Amendment                  No. 3 to ALLTEL Corporation Profit Sharing Plan (January 1, 2002                  Restatement) (incorporated herein by reference to Exhibit 10(I)(4)                  to Form                  10-K for the fiscal year ended December 31, 2003).   | * |
|                             |                                                                                                                                                                                                                                                                           |   |
| (k)(5)                           | Amendment                  No. 4 to ALLTEL Corporation Profit Sharing Plan (January 1, 2002                  Restatement) (incorporated herein by reference to Exhibit 10(I)(5)                  to Form                  10-K for the fiscal year ended December 31, 2003).   | * |
|                             |                                                                                                                                                                                                                                                                           |   |
| (k)(6)                           | Amendment                  No. 5 to ALLTEL Corporation Profit Sharing Plan (January 1, 2002                  Restatement) (incorporated herein by reference to Exhibit (10)(l)(6)                  to                  Form 10-K for the fiscal year ended December 31, 2004). | * |
|                             |                                                                                                                                                                                                                                                                           |   |
| (k)(7)                           | Amendment                  No. 6 to ALLTEL Corporation Profit Sharing Plan (January 1, 2002                  Restatement). (incorporated herein by reference to Exhibit (10)(l)(7)                  to                  Form 10-Q for the period ended September 30, 2005).    | * |
|                             |                                                                                                                                                                                                                                                                           |   |
| (k)(8)                           | Amendment                  No. 7 to ALLTEL Corporation Profit Sharing Plan (January 1, 2002                  Restatement) (incorporated herein by reference to Exhibit (10)(k)(8)                  to                  Form 10-K for the fiscal year ended December 31, 2005). | * |
|                             |                                                                                                                                                                                                                                                                           |   |
| (k)(9)                           | Amendment                  No. 8 to ALLTEL Corporation Profit Sharing Plan (January 1, 2002                  Restatement) (incorporated herein by reference to Exhibit (10)(k)(9)                  to                  Form 10-Q for the period ended June 30, 2006).          | * |
|                             |                                                                                                                                                                                                                                                                           |   |
|                             |                                                                                                                                                                                                                                                                           |   |

----

| Number                  and Name |                                                                                                                                                                                                                                                                                                                                                                     |
|----------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                             |                                                                                                                                                                                                                                                                                                                                                                     |   |
| (10)(k)(10)                      | Amendment                  No. 9 to ALLTEL Corporation Profit Sharing Plan (January 1, 2002                  Restatement) (incorporated herein by reference to Exhibit (10)(k)(10)                  to                  Form 10-Q for the period ended June 30, 2006).                                                                                                   | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                     |   |
| (k)(11)                          | Amendment                  No. 10 to ALLTEL Corporation Profit Sharing Plan (January 1, 2002                  Restatement).                                                                                                                                                                                                                                              | (a) |
|                             |                                                                                                                                                                                                                                                                                                                                                                     |   |
| (k)(12)                          | Amendment                  No. 11 to ALLTEL Corporation Profit Sharing Plan (January 1, 2002                  Restatement).                                                                                                                                                                                                                                              | (a) |
|                             |                                                                                                                                                                                                                                                                                                                                                                     |   |
| (k)(13)                          | Amendment                  No. 12 to ALLTEL Corporation Profit Sharing Plan (January 1, 2002                  Restatement).                                                                                                                                                                                                                                              | (a) |
|                             |                                                                                                                                                                                                                                                                                                                                                                     |   |
| (l)(1)                           | ALLTEL                  Corporation Benefit Restoration Plan (January 1, 1996 Restatement)                  (incorporated herein by reference to Exhibit 10(m) to Form 10-K                  for the                  fiscal year ended December 31, 1995).                                                                                                              | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                     |   |
| (l)(2)                           | Amendment                  No. 1 to ALLTEL Corporation Benefit Restoration Plan (January 1,                  1996                  Restatement).                                                                                                                                                                                                                         | (a) |
|                             |                                                                                                                                                                                                                                                                                                                                                                     |   |
| (l)(3)                           | Amendment                  No. 2 to ALLTEL Corporation Benefit Restoration Plan (January 1,                  1996                  Restatement).                                                                                                                                                                                                                         | (a) |
|                             |                                                                                                                                                                                                                                                                                                                                                                     |   |
| (l)(4)                           | Amendment                  No. 3 to ALLTEL Corporation Benefit Restoration Plan (January 1,                  1996                  Restatement) (incorporated herein by reference to Exhibit 10.5                  to Current                  Report on Form 8-K dated July 17, 2006 and filed with the Commission                  on                  July 21, 2006). | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                     |   |
| (l)(5)                           | Amendment                  No. 4 to ALLTEL Corporation Benefit Restoration Plan (January 1,                  1996                  Restatement).                                                                                                                                                                                                                         | (a) |
|                             |                                                                                                                                                                                                                                                                                                                                                                     |   |
| (m)(1)                           | ALLTEL                  Corporation Comprehensive Plan of Group Insurance (January 1, 2006                  Restatement).                                                                                                                                                                                                                                                | (a) |
|                             |                                                                                                                                                                                                                                                                                                                                                                     |   |
| (n)(1)                           | Amended                  and Restated ALLTEL Corporation Supplemental Medical Expense Reimbursement                  Plan (incorporated herein by reference to Exhibit 10(p) to Form                  10-K for                  the fiscal year ended December 31, 1990).                                                                                                | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                     |   |
| (n)(2)                           | First                  Amendment to ALLTEL Corporation Supplemental Medical Expense Reimbursement                  Plan (incorporated herein by reference to Exhibit 10(n)(1) to Form                  10-K                  for the fiscal year ended December 31, 2001).                                                                                               | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                     |   |
| (n)(3)                           | Amendment                  No. 2 to ALLTEL Corporation Supplemental Medical Expense Reimbursement                  Plan (incorporated herein by reference to Exhibit 10.8 to Current                  Report                  on Form 8-K dated July 17, 2006 and filed with the Commission on                  July 21,                  2006).                         | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                     |   |
| (o)(1)                           | ALLTEL                  Corporation 401(k) Plan (January 1, 2001 Restatement) (incorporated                  herein                  by reference to Exhibit 10(o) to Form 10-K for the fiscal year                  ended                  December 31, 2001).                                                                                                          | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                     |   |
| (o)(2)                           | Amendment                  No. 1 to ALLTEL Corporation 401(k) Plan (January 1, 2001 Restatement)                  (incorporated herein by reference to Exhibit 10(o)(2) to Form 10-K                  for the                  fiscal year ended December 31, 2002).                                                                                                     | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                     |   |
| (o)(3)                           | Amendment                  No. 2 to ALLTEL Corporation 401(k) Plan (January 1, 2001 Restatement)                  (incorporated herein by reference to Exhibit 10(o)(3) to Form 10-K                  for the                  fiscal year ended December 31, 2002).                                                                                                     | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                     |   |
| (o)(4)                           | Amendment                  No. 3 to ALLTEL Corporation 401(k) Plan (January 1, 2001 Restatement)                  (incorporated herein by reference to Exhibit 10(o)(4) to Form 10-Q                  for the                  period ended June 30, 2003).                                                                                                              | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                     |   |
| (o)(5)                           | Amendment                  No. 4 to ALLTEL Corporation 401(k) Plan (January 1, 2001 Restatement)                  (incorporated herein by reference to Exhibit 10(o)(5) to Form 10-K                  for the                  fiscal year ended December 31, 2003).                                                                                                     | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                     |   |
| (o)(6)                           | Amendment                  No. 5 to ALLTEL Corporation 401(k) Plan (January 1, 2001 Restatement)                  (incorporated herein by reference to Exhibit 10(o)(6) to Form 10-K                  for the                  fiscal year ended December 31, 2003).                                                                                                     | * |
|                             |                                                                                                                                                                                                                                                                                                                                                                     |   |
|                             |                                                                                                                                                                                                                                                                                                                                                                     |   |

----

| Number                    and Name |                                                                                                                                                                                                                                                                            |
|------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                               |                                                                                                                                                                                                                                                                            |   |
| (10)(o)(7)                         | Amendment                    No. 6 to ALLTEL Corporation 401(k) Plan (January 1, 2001 Restatement)                    (incorporated herein by reference to Exhibit 10(o)(7) to Form                    10-Q for the                    period ended June 30, 2004).             | * |
|                               |                                                                                                                                                                                                                                                                            |   |
| (o)(8)                             | Amendment                    No. 7 to ALLTEL Corporation 401(k) Plan (January 1, 2001 Restatement)                    (incorporated herein by reference to Exhibit (10)(o)(8) to Form                    10-K for                    the fiscal year ended December 31, 2004).  | * |
|                               |                                                                                                                                                                                                                                                                            |   |
| (o)(9)                             | Amendment                    No. 8 to ALLTEL Corporation 401(k) Plan (January 1, 2001 Restatement)                    (incorporated herein by reference to Exhibit (10)(o)(9) to Form                    10-Q for                    the period ended September 30, 2005).      | * |
|                               |                                                                                                                                                                                                                                                                            |   |
| (o)(10)                            | Amendment                    No. 9 to ALLTEL Corporation 401(k) Plan (January 1, 2001 Restatement)                    (incorporated herein by reference to Exhibit (10)(n)(10) to Form                    10-K for                    the fiscal year ended December 31, 2005). | * |
|                               |                                                                                                                                                                                                                                                                            |   |
| (o)(11)                            | Amendment                    No. 10 to ALLTEL Corporation 401(k) Plan (January 1, 2001 Restatement)                    (incorporated herein by reference to Exhibit (10)(n)(11) to Form                    10-Q for                    the period ended June 30, 2006).         | * |
|                               |                                                                                                                                                                                                                                                                            |   |
| (o)(12)                            | Amendment                    No. 11 to ALLTEL Corporation 401(k) Plan (January 1, 2001 Restatement)                    (incorporated herein by reference to Exhibit (10)(n)(12) to Form                    10-Q for                    the period ended June 30, 2006).         | * |
|                               |                                                                                                                                                                                                                                                                            |   |
| (o)(13)                            | Amendment                    No. 12 to ALLTEL Corporation 401(k) Plan (January 1, 2001 Restatement)                    (incorporated herein by reference to Exhibit (10)(n)(13) to Form                    10-Q for                    the period ended June 30, 2006).         | * |
|                               |                                                                                                                                                                                                                                                                            |   |
| (o)(14)                            | Amendment                    No. 13 to ALLTEL Corporation 401(k) Plan (January 1, 2001                    Restatement).                                                                                                                                                         | (a) |
|                               |                                                                                                                                                                                                                                                                            |   |
| (o)(15)                            | Amendment                    No. 14 to ALLTEL Corporation 401(k) Plan (January 1, 2001                    Restatement).                                                                                                                                                         | (a) |
|                               |                                                                                                                                                                                                                                                                            |   |
| (11)                               | Statement                    Re: Computation of per share earnings.                                                                                                                                                                                                             | (a) |
|                               |                                                                                                                                                                                                                                                                            |   |
| (12)                               | Statement                    Re: Computation of ratios.                                                                                                                                                                                                                         | (a) |
|                               |                                                                                                                                                                                                                                                                            |   |
| (21)                               | Subsidiaries                    of ALLTEL Corporation.                                                                                                                                                                                                                          | (a) |
|                               |                                                                                                                                                                                                                                                                            |   |
| (23)                               | Consent                    of PricewaterhouseCoopers LLP.                                                                                                                                                                                                                       | (a) |
|                               |                                                                                                                                                                                                                                                                            |   |
| (24)                               | Powers                    of attorney.                                                                                                                                                                                                                                          | (a) |
|                               |                                                                                                                                                                                                                                                                            |   |
| 31(a)                              | Certification                    of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley                    Act of 2002.                                                                                                                                       | (a) |
|                               |                                                                                                                                                                                                                                                                            |   |
| 31(b)                              | Certification                    of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley                    Act of 2002.                                                                                                                                       | (a) |
|                               |                                                                                                                                                                                                                                                                            |   |
| 32(a)                              | Certification                    of Chief Executive Officer pursuant to 18 U.S.C. Section 1350,                    as adopted                    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                     | (a) |
|                               |                                                                                                                                                                                                                                                                            |   |
| 32(b)                              | Certification                    of Chief Financial Officer pursuant to 18 U.S.C. Section 1350,                    as adopted                    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                     | (a) |
|                               |                                                                                                                                                                                                                                                                            |   |

----

**ALLTEL      CORPORATION**

**FINANCIAL      SUPPLEMENT**

**TO      ANNUAL REPORT ON FORM 10-K**

**FOR      THE YEAR ENDED DECEMBER 31, 2006**

----

**ALLTEL      CORPORATION**

**INDEX      TO FINANCIAL SUPPLEMENT**

**TO      ANNUAL REPORT ON FORM 10-K**

**FOR      THE YEAR ENDED DECEMBER 31, 2006**

| **Management’s                Discussion and Analysis of Financial                Condition**      |                       |
|----------------------------------------------------------------------------------------------------------|----------------------------|
| **and                Results of Operations**                                                             | F-2                - F-27  |
|                                                                                                     |                       |
| **Selected                Financial Data**                                                               | F-28                - F-29 |
|                                                                                                     |                       |
| **Management’s                Responsibility for Financial                Statements**             | F-30                       |
|                                                                                                     |                       |
| **Management’s                Report on Internal Control Over                Financial Reporting** | F-31                       |
|                                                                                                     |                       |
| **Report                of Independent Registered Public Accounting                Firm**                | F-32                - F-33 |
|                                                                                                     |                       |
| **Annual                Financial Statements:**                                                          |                       |
|                                                                                                     |                       |
| Consolidated                Balance Sheets                                                               |                       |
| as                of December 31, 2006 and 2005                                                          | F-34                       |
|                                                                                                     |                       |
| Consolidated                Statements of Income                                                         |                       |
| for                the years ended December 31, 2006, 2005 and                2004                       | F-35                       |
|                                                                                                     |                       |
| Consolidated                Statements of Cash Flows                                                     |                       |
| for                the years ended December 31, 2006, 2005 and                2004                       | F-36                       |
|                                                                                                     |                       |
| Consolidated                Statements of Shareholders’                Equity                      |                       |
| for                the years ended December 31, 2006, 2005 and                2004                       | F-37                       |
|                                                                                                     |                       |
| Notes                to Consolidated Financial                Statements                                 | F-38                - F-73 |
|                                                                                                     |                       |

----

**MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS      OF OPERATIONS**

| ·   | Revenues                and sales increased 20 percent over 2005 driven by postpay customer                growth, increased revenues derived from data services and additional                Eligible Telecommunications Carrier (“ETC”) support. Growth in revenues                and sales in 2006 also reflected the effects of Alltel’s August 1, 2005                acquisition of Western Wireless Corporation (“Western Wireless”). Average                monthly revenue per customer and monthly retail revenue per customer                increased year-over-year 2 percent and 1 percent to $52.68 and $47.02,                respectively, as the growth in data and ETC revenues discussed above                was                partially offset by decreases in voice revenues per customer. Average                revenue per customer for 2006 also reflected additional wholesale                transport revenues earned from charging third parties, principally                Windstream, for use of Alltel’s fiber-optic                network. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Gross                customer additions were 3.8 million in 2006, and net customer additions                were 1.2 million. Excluding the effects of acquisitions and dispositions,                gross customer additions were 3.3 million in 2006, a 17 percent increase                from a year ago, while net customer additions were 640,000, an 87                percent                increase from 2005. Alltel added 379,000 net postpay customers and                261,000                net prepaid customers during 2006. The net gain in prepaid customers                included the addition of 102,000 net customers in the fourth quarter of                2006, driven by continued success of both Alltel’s “U” prepaid service and                Simple Freedom, Alltel’s phone-in-the-box prepay service that is sold                primarily through Wal-Mart. Postpay churn decreased 20 basis points                from                2005 to 1.57 percent, while total churn, which includes prepay customer                losses, declined 17 basis points year-over-year to 2.00                percent. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Operating                income increased 20 percent from a year ago, primarily reflecting                the                growth in revenues and sales noted above. Growth in operating income                was                affected by additional customer acquisition costs due to the significant                increase in gross customer additions noted                above. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**SPIN-OFF      OF WIRELINE TELECOMMUNICATIONS BUSINESS**

**ACQUISITIONS      COMPLETED DURING 2006, 2005 AND 2004**

----

----

| **CUSTOMER              AND OTHER OPERATING STATISTICS**        |     |   |     |   |    |
|-----------------------------------------------------------------|----------|--------|----------|--------|---------|
| (Thousands,                except per customer amounts)         | 2006     |   | 2005     |   | 2004    |
| Customers                                                       | 11,823.9 |   | 10,662.3 |   | 8,626.5 |
| Average                customers                                | 11,120.8 |   | 9,550.8  |   | 8,295.9 |
| Gross                customer additions (a)                     | 3,825.4  |   | 4,523.2  |   | 2,812.7 |
| Net                customer additions (a)                       | 1,161.6  |   | 2,035.8  |   | 603.1   |
| Market                penetration                               | 15.0%    |   | 14.0%    |   | 13.8%   |
| Postpay                customer churn                           | 1.57%    |   | 1.77%    |   | 1.74%   |
| Total                churn                                      | 2.00%    |   | 2.17%    |   | 2.23%   |
| Retail                minutes of use per customer per month (b) | 634      |   | 597      |   | 494     |
| Retail                revenue per customer per month (c)        | $47.02   |   | $46.68   |   | $44.39  |
| Average                revenue per customer per month (d)       | $52.68   |   | $51.69   |   | $48.47  |
| Cost                to acquire a new customer (e)               | $346     |   | $332     |   | $310    |

| (a)    | Includes                the effects of acquisitions. Excludes reseller customers for all                periods                presented.                                                                                                                                                                                                                             |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                  |
| (b)    | Represents                the average monthly minutes that Alltel’s customers use on both the                Company’s network and while roaming on other carriers’                networks.                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                  |
| (c)    | Retail                revenue per customer is calculated by dividing wireless retail revenues                by                average customers for the period. A reconciliation of the revenues                used in                computing retail revenue per customer per month was as follows for                the                years ended December 31: |

|                                             |   |
|--------------------------------------------------|--------|
| (Millions)                                       |   | 2006 |   | 2005 |   | 2004 |   |
| Service                revenues                  |   | $ | 7,029.8 |   | $ | 5,924.5 |   | $ | 4,826.0 |   |
| Less                wholesale roaming revenues   |   |   | (654.3 | ) |   | (545.1 | ) |   | (372.4 | ) |
| Less                wholesale transport revenues |   |   | (100.3 | ) |   | (29.4 | ) |   | (34.8 | ) |
| Total                retail revenues             |   | $ | 6,275.2 |   | $ | 5,350.0 |   | $ | 4,418.8 |   |

| (d)    | Average                revenue per customer per month is calculated by dividing wireless                service                revenues by average customers for the period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (e)    | Cost                to acquire a new customer is calculated by dividing the sum of product                sales, cost of products sold and sales and marketing expenses (included                within “Selling, general, administrative and other”), as reported in the                consolidated statements of income, by the number of internal gross                customer additions in the period. Customer acquisition costs exclude                amounts related to the Company’s customer retention efforts. A                reconciliation of the revenues, expenses and customer additions used                in                computing cost to acquire a new customer was as follows for the years                ended December 31: |

|                                                            |   |   |    |
|-----------------------------------------------------------------|--------|--------|---------|
| (Millions,                customers in thousands)               |   | 2006   |    | 2005 |   | 2004 |   |   |   |
| Product                sales                                    |   | $      | (606.4  | ) | $ | (497.5 | ) | $ | (396.0 | ) |
| Cost                of products sold                            |   |   | 699.1   |   |   | 564.9 |   |   | 492.6 |   |
| Sales                and marketing expense                      |   |   | 1,051.8 |   |   | 871.4 |   |   | 745.6 |   |
| Total                costs incurred to acquire new customers    |   | $      | 1,114.6 |   | $ | 938.8 |   | $ | 842.2 |   |
| Gross                customer additions, excluding acquisitions |   |   | 3,303.9 |   |   | 2,830.1 |   |   | 2,720.3 |   |
| Cost                to acquire a new customer                   |   |   | $346    |   |   | $332 |   |   | $310 |   |

----

----

| **CONSOLIDATED                RESULTS OF OPERATIONS**                           |
|---------------------------------------------------------------------------------|
| (Millions,                except per share amounts)                             |   | 2006 |   | 2005 |   | 2004 |  |
| Revenues                and sales:                                              |   |   |   |   |   |   |  |
| Service                revenues                                                 |   | $ | 7,029.8 |   | $ | 5,924.5 |   | $ | 4,826.0 |   |
| Product                sales                                                    |   |   | 854.2 |   |   | 648.0 |   |   | 472.9 |   |
| Total                revenues and sales                                         |   |   | 7,884.0 |   |   | 6,572.5 |   |   | 5,298.9 |   |
| Costs                and expenses:                                              |   |   |   |   |   |   |   |   |   |   |
| Cost                of services                                                 |   |   | 2,340.6 |   |   | 1,959.9 |   |   | 1,552.6 |   |
| Cost                of products sold                                            |   |   | 1,176.9 |   |   | 941.8 |   |   | 743.6 |   |
| Selling,                general, administrative and other                       |   |   | 1,755.3 |   |   | 1,518.8 |   |   | 1,268.6 |   |
| Depreciation                and amortization                                    |   |   | 1,239.9 |   |   | 994.8 |   |   | 775.9 |   |
| Integration                expenses, restructuring and other charges            |   |   | 13.7 |   |   | 23.0 |   |   | 39.3 |   |
| Total                costs and expenses                                         |   |   | 6,526.4 |   |   | 5,438.3 |   |   | 4,380.0 |   |
| Operating                income                                                 |   |   | 1,357.6 |   |   | 1,134.2 |   |   | 918.9 |   |
| Non-operating                income, net                                        |   |   | 97.5 |   |   | 121.5 |   |   | 9.7 |   |
| Interest                expense                                                 |   |   | (282.5 | ) |   | (314.5 | ) |   | (333.1 | ) |
| Gain                on exchange or disposal of assets and other                 |   |   | 126.1 |   |   | 218.8 |   |   | - |   |
| Income                from continuing operations before income taxes            |   |   | 1,298.7 |   |   | 1,160.0 |   |   | 595.5 |   |
| Income                taxes                                                     |   |   | 475.0 |   |   | 424.5 |   |   | 183.4 |   |
| Income                from continuing operations                                |   |   | 823.7 |   |   | 735.5 |   |   | 412.1 |   |
| Income                from discontinued operations, net of tax                  |   |   | 305.7 |   |   | 603.3 |   |   | 634.1 |   |
| Income                before cumulative effect of accounting change, net of tax |   |   | 1,129.4 |   |   | 1,338.8 |   |   | 1,046.2 |   |
| Cumulative                effect of accounting change                           |   |   | - |   |   | (7.4 | ) |   | - |   |
| Net                income                                                       |   | $ | 1,129.4 |   | $ | 1,331.4 |   | $ | 1,046.2 |   |
| Basic                earnings per share:                                        |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations                                |   |   | $2.15 |   |   | $2.16 |   |   | $1.34 |   |
| Income                from discontinued operations                              |   |   | .80 |   |   | 1.77 |   |   | 2.06 |   |
| Cumulative                effect of accounting change                           |   |   | - |   |   | (.02 | ) |   | - |   |
| Net                income                                                       |   |   | $2.95 |   |   | $3.91 |   |   | $3.40 |   |
| Diluted                earnings per share:                                      |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations                                |   |   | $2.14 |   |   | $2.14 |   |   | $1.34 |   |
| Income                from discontinued operations                              |   |   | .79 |   |   | 1.75 |   |   | 2.05 |   |
| Cumulative                effect of accounting change                           |   |   | - |   |   | (.02 | ) |   | - |   |
| Net                income                                                       |   |   | $2.93 |   |   | $3.87 |   |   | $3.39 |   |

----

----

----

|                                                                       |   |   |   |
|----------------------------------------------------------------------------|--------|--------|--------|
| (Millions)                                                                 |   |   |   |
| Rebranding                and signage costs                                |   | $      | 9.3    |   |
| Computer                system conversion and other integration expenses   |   |   | 4.4    |   |
| Total                integration expenses, restructuring and other charges |   | $      | 13.7   |   |

|                                                                       |   |   |   |
|----------------------------------------------------------------------------|--------|--------|--------|
| (Millions)                                                                 |   |   |   |
| Computer                system conversion and other integration expenses   |   | $      | 22.3   |   |
| Relocation                costs                                            |   |   | 0.7    |   |
| Total                integration expenses, restructuring and other charges |   | $      | 23.0   |   |

----

|                                                                       |   |   |   |
|----------------------------------------------------------------------------|--------|--------|--------|
| (Millions)                                                                 |   |   |   |
| Severance                and employee benefit costs                        |   | $      | 10.9   |   |
| Relocation                costs                                            |   |   | 2.8    |   |
| Lease                termination and other exit costs                      |   |   | 0.8    |   |
| Write-down                in the carrying value of certain facilities      |   |   | 24.8   |   |
| Total                integration expenses, restructuring and other charges |   | $      | 39.3   |   |

| Non-Operating                Income, Net                      |   |   |   |   |   |   |   |
|---------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| (Millions)                                                    |   | 2006   |   | 2005   |   | 2004   |   |
| Equity                earnings in unconsolidated partnerships |   | $      | 60.1   |   | $      | 43.4   |   | $ | 68.5 |   |
| Minority                interest in consolidated partnerships |   |   | (46.6  | )      |   | (69.1  | )      |   | (80.1 | ) |
| Other                income, net                              |   |   | 84.0   |   |   | 147.2  |   |   | 21.3 |   |
| Non-operating                income, net                      |   | $      | 97.5   |   | $      | 121.5  |   | $ | 9.7 |   |

----

----

----

|                                                      |   |   |    |   |   |    |   |
|-----------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|
| (Millions)                                                |   | 2006   |    | 2005   |   | 2004    |   |
| Revenues                and sales                         |   | $      | 1,839.3 |   | $      | 3,369.8 |   | $ | 2,947.2 |   |
| Operating                expenses                         |   |   | 1,290.5 |   |   | 2,325.4 |   |   | 1,944.5 |   |
| Operating                income                           |   |   | 548.8   |   |   | 1,044.4 |   |   | 1,002.7 |   |
| Minority                interest in consolidated entities |   |   | (6.0    | )      |   | (5.9    | )      |   | - |   |
| Other                income, net                          |   |   | 0.9     |   |   | 11.6    |   |   | 13.2 |   |
| Interest                expense                           |   |   | (9.1    | )      |   | (19.4   | )      |   | (19.4 | ) |
| Loss                on sale of discontinued operations    |   |   | (14.8   | )      |   | -       |   |   | - |   |
| Income                before taxes                        |   |   | 519.8   |   |   | 1,030.7 |   |   | 996.5 |   |
| Income                tax expense                         |   |   | 214.1   |   |   | 427.4   |   |   | 362.4 |   |
| Income                from discontinued operations        |   | $      | 305.7   |   | $      | 603.3   |   | $ | 634.1 |   |

----

----

----

----

| **FINANCIAL                CONDITION, LIQUIDITY AND CAPITAL RESOURCES** |   |
|-------------------------------------------------------------------------|--------|
| (Millions,                except per share amounts)                     |   | 2006 |   | 2005 |   | 2004 |   |
| Cash                flows from (used in):                               |   |   |   |   |   |   |   |
| Operating                activities from continuing operations          |   | $ | 1,490.2 |   | $ | 1,565.3 |   | $ | 1,288.1 |   |
| Investing                activities from continuing operations          |   |   | (2,693.6 | ) |   | (1,636.9 | ) |   | (914.3 | ) |
| Financing                activities from continuing operations          |   |   | (3,184.8 | ) |   | (748.3 | ) |   | (1,359.1 | ) |
| Discontinued                operations                                  |   |   | 4,345.9 |   |   | 1,326.9 |   |   | 810.1 |   |
| Effect                of exchange rate changes                          |   |   | (5.9 | ) |   | (1.8 | ) |   | (0.1 | ) |
| Change                in cash and short-term investments                |   | $ | (48.2 | ) | $ | 505.2 |   | $ | (175.3 | ) |
| Total                capital structure (a)                              |   |   | $15,396.4 |   |   | $18,743.3 |   |   | $12,424.1 |   |
| Percent                equity to total capital (b)                      |   |   | 82.2% |   |   | 69.4% |   |   | 57.4% |   |
| Book                value per share (c)                                 |   |   | $34.73 |   |   | $33.93 |   |   | $23.58 |   |

| (a) | Computed                as the sum of long-term debt including current maturities, redeemable                preferred stock and total shareholders’ equity.                                 |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Computed                by dividing total shareholders’ equity by total capital structure as                computed in (a) above.                                                           |
| (c) | Computed                by dividing total shareholders’ equity less preferred stock by the total                number of common shares outstanding at the end of the                period. |

----

----

----

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

----

----

|                                                            |   |                                  |   |
|-----------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                            |   | Payments                Due by Period |   |
|                                                            |   | Less                than              |   | 1-3 |   | 3-5 |   | More                than |   |    |   |
| (Millions)                                                      |   | 1                Year                 |   | Years |   | Years |   | 5                Years |   | Total |   |
| Long-term                debt, including current maturities (a) |   | $                                     | 36.3   |   | $ | 92.7 |   | $ | 297.4 |   | $ | 2,302.0 |   | $ | 2,728.4 |   |
| Interest                payments on long-term debt obligations  |   |                                  | 196.9  |   |   | 386.2 |   |   | 355.0 |   |   | 1,692.2 |   |   | 2,630.3 |   |
| Operating                leases                                 |   |                                  | 189.0  |   |   | 280.9 |   |   | 132.2 |   |   | 180.4 |   |   | 782.5 |   |
| Purchase                obligations (b)                         |   |                                  | 105.8  |   |   | 92.8 |   |   | 5.3 |   |   | - |   |   | 203.9 |   |
| Site                maintenance fees - cell sites (c)           |   |                                  | 33.2   |   |   | 71.6 |   |   | 78.9 |   |   | 212.8 |   |   | 396.5 |   |
| Other                long-term liabilities (d)                  |   |                                  | 278.4  |   |   | 338.3 |   |   | 195.9 |   |   | 672.8 |   |   | 1,485.4 |   |
| Total                contractual obligations and commitments    |   | $                                     | 839.6  |   | $ | 1,262.5 |   | $ | 1,064.7 |   | $ | 5,060.2 |   | $ | 8,227.0 |   |

| (a)    | Excludes                $(9.6) million of unamortized discounts and the fair value of interest                rate swap agreements of $14.9 million included in long-term debt                at                December 31, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (b)    | Purchase                obligations represent amounts payable under non-cancelable contracts                and                include commitments for wireless handset purchases, network facilities                and                transport services, agreements for software licensing and long-term                marketing programs.                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (c)    | In                connection with the leasing of 1,773 of the Company’s cell site towers to                American Tower, Alltel is obligated to pay American Tower a monthly                fee                per tower for management and maintenance services for the duration                of the                fifteen-year lease agreement, which expires in phases during 2016                and                2017.                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (d)    | Other                long-term liabilities primarily consist of deferred tax liabilities,                minority interests, other postretirement benefit obligations, and                deferred                compensation. Deferred rental revenue of $301.7 million related to                Alltel’s agreement to lease cell site towers to American Tower was not                included in the table above. The deferred rental revenue represents                cash                proceeds received in advance by Alltel under terms of the agreement                and                will be recognized as revenue ratably over the remaining lease term                ending                in 2017. |

----

----

----

----

----

**SELECTED      FINANCIAL DATA**

|                                                                                                                                                              |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| The                following table presents certain selected consolidated financial                data as                of and for the years ended December 31: |   |
|                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| (Millions,                except per share amounts)                                                                                                               |   | 2006 |   | 2005 |   | 2004 |   | 2003 |   | 2002 |   |   |
| **Revenues                and sales**                                                                                                                             |   | $ | 7,884.0 |   | $ | 6,572.5 |   | $ | 5,298.9 |   | $ | 4,917.5 |   | $ | 4,385.9 |   |
| Operating                expenses                                                                                                                                 |   |   | 6,512.7 |   |   | 5,415.3 |   |   | 4,340.7 |   |   | 3,999.4 |   |   | 3,501.4 |   |
| Integration                expenses, restructuring and other charges                                                                                              |   |   | 13.7 |   |   | 23.0 |   |   | 39.3 |   |   | 6.8 |   |   | 27.7 |   |
| Total                costs and expenses                                                                                                                           |   |   | 6,526.4 |   |   | 5,438.3 |   |   | 4,380.0 |   |   | 4,006.2 |   |   | 3,529.1 |   |
| **Operating                income**                                                                                                                               |   |   | 1,357.6 |   |   | 1,134.2 |   |   | 918.9 |   |   | 911.3 |   |   | 856.8 |   |
| Non-operating                income (expense), net                                                                                                                |   |   | 97.5 |   |   | 121.5 |   |   | 9.7 |   |   | (8.6 | ) |   | (7.7 | ) |
| Interest                expense                                                                                                                                   |   |   | (282.5 | ) |   | (314.5 | ) |   | (333.1 | ) |   | (352.1 | ) |   | (310.2 | ) |
| Gain                on exchange or disposal of assets and other                                                                                                   |   |   | 126.1 |   |   | 218.8 |   |   | - |   |   | (6.0 | ) |   | 1.0 |   |
| Income                from continuing operations before income taxes                                                                                              |   |   | 1,298.7 |   |   | 1,160.0 |   |   | 595.5 |   |   | 544.6 |   |   | 539.9 |   |
| Income                taxes                                                                                                                                       |   |   | 475.0 |   |   | 424.5 |   |   | 183.4 |   |   | 200.7 |   |   | 199.6 |   |
| Income                from continuing operations                                                                                                                  |   |   | 823.7 |   |   | 735.5 |   |   | 412.1 |   |   | 343.9 |   |   | 340.3 |   |
| Income                from discontinued operations, net of tax                                                                                                    |   |   | 305.7 |   |   | 603.3 |   |   | 634.1 |   |   | 970.6 |   |   | 584.0 |   |
| Income                before cumulative effect of accounting change                                                                                               |   |   | 1,129.4 |   |   | 1,338.8 |   |   | 1,046.2 |   |   | 1,314.5 |   |   | 924.3 |   |
| Cumulative                effect of accounting change, net of tax                                                                                                 |   |   | - |   |   | (7.4 | ) |   | - |   |   | 15.6 |   |   | - |   |
| **Net                income**                                                                                                                                     |   |   | 1,129.4 |   |   | 1,331.4 |   |   | 1,046.2 |   |   | 1,330.1 |   |   | 924.3 |   |
| Preferred                dividends                                                                                                                                |   |   | 0.1 |   |   | 0.1 |   |   | 0.1 |   |   | 0.1 |   |   | 0.1 |   |
| Net                income applicable to common shares                                                                                                             |   | $ | 1,129.3 |   | $ | 1,331.3 |   | $ | 1,046.1 |   | $ | 1,330.0 |   | $ | 924.2 |   |
| **Basic                earnings per share:**                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations                                                                                                                  |   |   | $2.15 |   |   | $2.16 |   |   | $1.34 |   |   | $1.10 |   |   | $1.09 |   |
| Income                from discontinued operations                                                                                                                |   |   | .80 |   |   | 1.77 |   |   | 2.06 |   |   | 3.12 |   |   | 1.88 |   |
| Cumulative                effect of accounting change                                                                                                             |   |   | - |   |   | (.02 | ) |   | - |   |   | .05 |   |   | - |   |
| Net                income                                                                                                                                         |   |   | $2.95 |   |   | $3.91 |   |   | $3.40 |   |   | $4.27 |   |   | $2.97 |   |
| **Diluted                earnings per share:**                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations                                                                                                                  |   |   | $2.14 |   |   | $2.14 |   |   | $1.34 |   |   | $1.10 |   |   | $1.09 |   |
| Income                from discontinued operations                                                                                                                |   |   | .79 |   |   | 1.75 |   |   | 2.05 |   |   | 3.10 |   |   | 1.87 |   |
| Cumulative                effect of accounting change                                                                                                             |   |   | - |   |   | (.02 | ) |   | - |   |   | .05 |   |   | - |   |
| Net                income                                                                                                                                         |   |   | $2.93 |   |   | $3.87 |   |   | $3.39 |   |   | $4.25 |   |   | $2.96 |   |
| Dividends                per common share                                                                                                                         |   |   | $1.07 |   |   | $1.525 |   |   | $1.49 |   |   | $1.42 |   |   | $1.37 |   |
| Weighted                average common shares:                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                                             |   |   | 382.7 |   |   | 340.8 |   |   | 307.3 |   |   | 311.8 |   |   | 311.0 |   |
| Diluted                                                                                                                                                           |   |   | 385.0 |   |   | 344.1 |   |   | 308.4 |   |   | 312.8 |   |   | 312.3 |   |
| Total                assets                                                                                                                                       |   | $ | 18,343.7 |   | $ | 24,013.1 |   | $ | 16,603.7 |   | $ | 16,661.1 |   | $ | 16,244.6 |   |
| Total                shareholders’ equity                                                                                                                   |   | $ | 12,661.9 |   | $ | 13,015.5 |   | $ | 7,128.7 |   | $ | 7,022.2 |   | $ | 5,998.1 |   |
| Total                redeemable preferred stock and long-term debt                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (including                current maturities)                                                                                                                     |   | $ | 2,734.4 |   | $ | 5,727.9 |   | $ | 5,295.4 |   | $ | 5,554.6 |   | $ | 6,055.9 |   |

|                                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|---------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Notes                to Selected Financial Information: |
|                                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                         |        | See                Note 14 to the consolidated financial statements for a discussion                of the                Company’s discontinued operations. In addition to the spun-off wireline                business, discontinued operations for the years 2003 and 2002 also                include                the operating results of the financial services division, which was                sold                to Fidelity National Financial, Inc. (“Fidelity National”) on April 1,                2003. In connection with the sale, Alltel recorded an after-tax gain                of                $323.9 million, which has been included in income from discontinued                operations in 2003. |
|                                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                    |   | On                August 1, 2005, Alltel completed its merger with Western Wireless                Corporation (“Western Wireless”). The acquisition of Western Wireless                accounted for $709.8 million and $446.5 million of the overall increases                in revenues and sales and $70.1 million and $86.3 million of the                overall                increases in operating income in 2006 and 2005,                respectively.                                                                                                                                                                                                                                                                  |

|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| A.     |   | Net                income for 2006 included $13.7 million of integration expenses incurred                in                connection with Alltel’s recent acquisitions of Western Wireless, Midwest                Wireless Holdings and wireless properties in Illinois, Texas and                Virginia.                The integration expenses, which consisted primarily of rebranding,                signage                and system conversion costs, decreased net income $8.4 million or                $.02 per                share. (See Note 10 to the consolidated financial statements.) Net                income                for 2006 included a pretax gain of $176.6 million related to the                liquidation of Alltel’s investment in Rural Telephone Bank Class C                stock.  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

----

**,      **

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | During                2006, Alltel also repurchased prior to maturity $1.0 billion of long-term                debt and terminated a related interest swap agreement. In connection                with                the early termination of the debt and interest rate swap agreement,                Alltel                incurred net pretax termination fees of $23.0 million. Following                the                spin-off of the wireline business, Alltel completed a debt exchange                in                which the Company transferred to two investment banks certain debt                securities received in the spin-off transaction in exchange for certain                Alltel debt securities. In completing the tax-free debt exchange,                Alltel                incurred a loss of $27.5 million. These transactions increased net                income                $68.8 million or $.18 per share in 2006 (See Note 12 to the consolidated                financial statements.) Net income for 2006 also reflected a reduction                in                income tax expense associated with continuing operations of $29.9                million,                or $.08 per share, resulting from Alltel’s adjustment of its income tax                liabilities including contingency reserves to reflect the results                of                audits of the Company’s consolidated federal income tax returns for the                fiscal years 1997 through 2003. (See Note 2 to the consolidated financial                statements.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| B.     | Net                income for 2005 included $18.5 million of integration expenses incurred                in                connection with the Company’s exchange of wireless assets with Cingular                Wireless LLC (“Cingular”) and purchase of wireless properties in Alabama                and Georgia. The integration expenses primarily consisted of handset                subsidies incurred to migrate the acquired customer base to CDMA                handsets.                Alltel also incurred $4.5 million of integration expenses related                to its                acquisition of Western Wireless, primarily consisting of system conversion                and relocation costs. These transactions decreased net income $14.0                million or $.04 per share. (See Note 10 to the consolidated financial                statements.) Net income for 2005 included the effect of a special                cash                dividend of $111.0 million related to the Company’s investment in Fidelity                National common stock, which increased net income $69.8 million or                $.20                per share. (See Note 11 to the consolidated financial statements.)                Net                income for 2005 included pretax gains of $158.0 million related to                Alltel’s exchange of certain wireless assets with Cingular. During 2005,                Alltel also completed the sale of all of its shares of Fidelity National                common stock and recognized a pretax gain of $75.8 million. In addition,                Alltel incurred pretax termination fees of $15.0 million related                to the                early retirement of long-term debt and a related interest rate swap                agreement. These transactions increased net income $136.7 million                or $.40                per share. (See Note 12 to the consolidated financial statements.)                * *Effective                December 31, 2005, Alltel adopted FASB Interpretation No. 47, “Accounting                for Conditional Asset Retirement Obligations”. The cumulative effect of                this accounting change resulted in a one-time non-cash charge of                $7.4                million, net of income tax benefit of $4.6 million, or $.02 per share.                (See Note 2 to the consolidated financial statements.) |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| C.     | Net                income for 2004 included pretax charges of $14.5 million related                to a                planned workforce reduction and reorganization of Alltel’s operations and                support teams. Alltel also recorded a write-down in the carrying                value of                certain corporate and regional facilities to fair value in conjunction                with the proposed leasing or sale of those facilities of $24.8 million.                These transactions decreased net income $24.0 million or $.08 per                share.                (See Note 10 to the consolidated financial statements.) Net income                for                2004 also reflected a reduction in income tax expense associated                with                continuing operations of $17.9 million, or $.06 per share, resulting                from                Alltel’s adjustment of its income tax contingency reserves to reflect the                results of audits of Alltel’s consolidated federal income tax returns for                the fiscal years 1997 through 2001. (See Note 2 to the consolidated                financial statements.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| D.     | Net                income for 2003 included pretax charges of $1.4 million primarily                related                to the closing of certain call center locations and the write-off                of $7.7                million of certain capitalized software development costs with no                alternative future use or functionality. Alltel also recorded a $2.3                million reduction in the liabilities associated with various restructuring                activities initiated prior to 2003 to reflect differences between                estimated and actual costs paid in completing the previous planned                restructuring activities. These transactions decreased net income                $4.1                million or $.01 per share. Net income for 2003 also included pretax                write-downs totaling $6.0 million to reflect other-than-temporary                declines                in the fair value of certain investments in unconsolidated limited                partnerships. These write-downs decreased net income $3.9 million                or $.01                per share*.*Effective                January 1, 2003, Alltel adopted SFAS No. 143 “Accounting for Asset                Retirement Obligations”. The cumulative effect of this accounting change                resulted in a one-time non-cash credit of $15.6 million, net of income                tax                expense of $10.3 million, or $.05 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| E.     | Net                income for 2002 included pretax charges of $12.4 million incurred                in                connection with restructuring Alltel’s call center and retail store                operations. The Company also incurred integration expenses of $8.2                million                related to its acquisition of wireless properties from CenturyTel,                Inc.                Alltel also recorded write-downs in the carrying value of certain                cell                site equipment of $7.1 million. These charges decreased net income                $16.9                million or $.05 per share. Net income for 2002 included a pretax                gain of                $22.1 million realized from the sale of a wireless property, partially                offset by pretax write-downs of $16.3 million related to investments                in                marketable securities. Alltel also recorded a pretax adjustment of                $4.8                million to reduce the gain recognized from the dissolution of a wireless                partnership that was initially recorded in 2001. These transactions                increased net income $0.6 million or less than $.01 per                share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

----

**MANAGEMENT’S      RESPONSIBILITY FOR FINANCIAL      STATEMENTS**

| Scott                T. Ford           | Sharilyn                S. Gasaway       |
|----------------------------------------|------------------------------------------|
| President                and           | Executive                Vice President- |
| Chief                Executive Officer | Chief                Financial Officer   |

----

**MANAGEMENT’S      REPORT ON INTERNAL CONTROL OVER FINANCIAL      REPORTING**

| Scott                T. Ford           | Sharilyn                S. Gasaway       |
|----------------------------------------|------------------------------------------|
| President                and           | Executive                Vice President- |
| Chief                Executive Officer | Chief                Financial Officer   |

----

**REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING      FIRM**

----

----

| **CONSOLIDATED                BALANCE SHEETS**                                                        |   |
|-------------------------------------------------------------------------------------------------------|--------|
| December                31,                                                                           |   |
| (Dollars                in millions, except per share amounts)                                        |   |
| **Assets**                                                                                            |   | 2006 |   | 2005 |   |
| **Current                Assets:**                                                                    |   |   |   |   |   |
| Cash                and short-term investments                                                        |   | $ | 934.2 |   | $ | 982.4 |   |
| Accounts                receivable (less allowance for doubtful                                       |   |   |   |   |   |   |   |
| accounts                of $54.9 and $70.6, respectively)                                             |   |   | 807.3 |   |   | 761.8 |   |
| Inventories                                                                                           |   |   | 218.6 |   |   | 195.2 |   |
| Prepaid                expenses and other                                                             |   |   | 67.7 |   |   | 92.1 |   |
| Assets                related to discontinued operations                                              |   |   | 4.3 |   |   | 565.4 |   |
| Total                current assets                                                                   |   |   | 2,032.1 |   |   | 2,596.9 |   |
| Investments                                                                                           |   |   | 368.9 |   |   | 356.4 |   |
| Goodwill                                                                                              |   |   | 8,447.0 |   |   | 7,429.3 |   |
| Other                intangibles                                                                      |   |   | 2,129.4 |   |   | 1,861.4 |   |
| **Property,                Plant and Equipment:**                                                     |   |   |   |   |   |   |   |
| Land                                                                                                  |   |   | 314.9 |   |   | 280.3 |   |
| Building                and improvements                                                              |   |   | 955.1 |   |   | 901.1 |   |
| Operating                plant and equipment                                                          |   |   | 7,933.8 |   |   | 7,362.9 |   |
| Information                processing                                                                 |   |   | 1,048.1 |   |   | 1,126.5 |   |
| Furniture                and fixtures                                                                 |   |   | 173.8 |   |   | 143.6 |   |
| Under                construction                                                                     |   |   | 496.0 |   |   | 344.3 |   |
| Total                property, plant and equipment                                                    |   |   | 10,921.7 |   |   | 10,158.7 |   |
| Less                accumulated depreciation                                                          |   |   | 5,690.3 |   |   | 5,056.0 |   |
| Net                property, plant and equipment                                                      |   |   | 5,231.4 |   |   | 5,102.7 |   |
| Other                assets                                                                           |   |   | 89.4 |   |   | 248.2 |   |
| Assets                related to discontinued operations                                              |   |   | 45.5 |   |   | 6,418.2 |   |
| **Total                Assets**                                                                       |   | $ | 18,343.7 |   | $ | 24,013.1 |   |
| **Liabilities                and Shareholders’ Equity**                                         |   |   |   |   |   |   |   |
| **Current                Liabilities:**                                                               |   |   |   |   |   |   |   |
| Current                maturities of long-term debt                                                   |   | $ | 36.3 |   | $ | 183.0 |   |
| Accounts                payable                                                                       |   |   | 576.1 |   |   | 500.0 |   |
| Advance                payments and customer deposits                                                 |   |   | 186.2 |   |   | 170.8 |   |
| Accrued                taxes                                                                          |   |   | 114.1 |   |   | 141.3 |   |
| Accrued                dividends                                                                      |   |   | 46.0 |   |   | 147.8 |   |
| Accrued                interest                                                                       |   |   | 79.3 |   |   | 98.3 |   |
| Current                deferred income taxes                                                          |   |   | - |   |   | 349.6 |   |
| Other                current liabilities                                                              |   |   | 156.5 |   |   | 206.7 |   |
| Liabilities                related to discontinued operations                                         |   |   | 2.8 |   |   | 492.5 |   |
| Total                current liabilities                                                              |   |   | 1,197.3 |   |   | 2,290.0 |   |
| Long-term                debt                                                                         |   |   | 2,697.4 |   |   | 5,544.1 |   |
| Deferred                income taxes                                                                  |   |   | 1,109.5 |   |   | 1,142.3 |   |
| Other                liabilities                                                                      |   |   | 677.6 |   |   | 796.9 |   |
| Liabilities                related to discontinued operations                                         |   |   | - |   |   | 1,224.3 |   |
| Total                liabilities                                                                      |   |   | 5,681.8 |   |   | 10,997.6 |   |
| **Shareholders’                Equity:**                                                        |   |   |   |   |   |   |   |
| Preferred                stock, Series C, $2.06, no par value, 10,307 and 11,122                      |   |   |   |   |   |   |   |
| shares                issued and outstanding, respectively                                            |   |   | 0.3 |   |   | 0.3 |   |
| Common                stock, par value $1 per share, 1.0 billion shares                authorized,    |   |   |   |   |   |   |   |
| 364,505,820                and 383,605,936 shares issued and outstanding,                respectively |   |   | 364.5 |   |   | 383.6 |   |
| Additional                paid-in capital                                                             |   |   | 4,296.8 |   |   | 5,339.3 |   |
| Accumulated                other comprehensive income                                                 |   |   | 9.5 |   |   | 19.5 |   |
| Retained                earnings                                                                      |   |   | 7,990.8 |   |   | 7,272.8 |   |
| Total                shareholders’ equity                                                       |   |   | 12,661.9 |   |   | 13,015.5 |   |
| **Total                Liabilities and Shareholders’ Equity**                                   |   | $ | 18,343.7 |   | $ | 24,013.1 |   |

----

| **CONSOLIDATED                STATEMENTS OF INCOME**                                                                        |   |   |    |    |   |    |   |
|-----------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------------|--------|--------------|--------|
| For                the years ended December 31,                                                                             |   |   |    |    |   |    |   |
|                                                                                                                        |   |   |    |    |   |    |   |
| (Millions,                except per share amounts)                                                                         |   | 2006   |    |  2005   |   |  2004   |   |
| **Revenues                and sales:**                                                                                      |   |   |    |    |   |    |   |
| Service                revenues                                                                                             |   | $      | 7,029.8 |         | $      | 5,924.5      |   | $ | 4,826.0 |   |
| Product                sales                                                                                                |   |   | 854.2   |         |   | 648.0        |   |   | 472.9 |   |
| Total                revenues and sales                                                                                     |   |   | 7,884.0 |         |   | 6,572.5      |   |   | 5,298.9 |   |
| **Costs                and expenses:**                                                                                      |   |   |    |         |   |         |   |   |   |   |
| Cost                of services (excluding depreciation of $674.0, $577.7 and                                               |   |   |    |         |   |         |   |   |   |   |
| $513.3                in 2006, 2005 and 2004, respectively included below)                                                  |   |   | 2,340.6 |         |   | 1,959.9      |   |   | 1,552.6 |   |
| Cost                of products sold                                                                                        |   |   | 1,176.9 |         |   | 941.8        |   |   | 743.6 |   |
| Selling,                general, administrative and other                                                                   |   |   | 1,755.3 |         |   | 1,518.8      |   |   | 1,268.6 |   |
| Depreciation                and amortization                                                                                |   |   | 1,239.9 |         |   | 994.8        |   |   | 775.9 |   |
| Integration                expenses, restructuring and other charges                                                        |   |   | 13.7    |         |   | 23.0         |   |   | 39.3 |   |
| Total                costs and expenses                                                                                     |   |   | 6,526.4 |         |   | 5,438.3      |   |   | 4,380.0 |   |
| **Operating                income**                                                                                         |   |   | 1,357.6 |         |   | 1,134.2      |   |   | 918.9 |   |
|                                                                                                                        |   |   |    |         |   |         |   |   |   |   |
| Equity                earnings in unconsolidated partnerships                                                               |   |   | 60.1    |         |   | 43.4         |   |   | 68.5 |   |
| Minority                interest in consolidated partnerships                                                               |   |   | (46.6   | )            |   | (69.1        | )      |   | (80.1 | ) |
| Other                income, net                                                                                            |   |   | 84.0    |         |   | 147.2        |   |   | 21.3 |   |
| Interest                expense                                                                                             |   |   | (282.5  | )            |   | (314.5       | )      |   | (333.1 | ) |
| Gain                on exchange or disposal of assets and other                                                             |   |   | 126.1   |         |   | 218.8        |   |   | - |   |
|                                                                                                                        |   |   |    |         |   |         |   |   |   |   |
| Income                from continuing operations before income taxes                                                        |   |   | 1,298.7 |         |   | 1,160.0      |   |   | 595.5 |   |
| Income                taxes                                                                                                 |   |   | 475.0   |         |   | 424.5        |   |   | 183.4 |   |
|                                                                                                                        |   |   |    |         |   |         |   |   |   |   |
| Income                from continuing operations                                                                            |   |   | 823.7   |         |   | 735.5        |   |   | 412.1 |   |
| Income                from discontinued operations                                                                          |   |   |    |         |   |         |   |   |   |   |
| (net                of income tax expense of $214.1, $427.4 and $362.4 in                2006, 2005 and 2004, respectively) |   |   | 305.7   |         |   | 603.3        |   |   | 634.1 |   |
|                                                                                                                        |   |   |    |         |   |         |   |   |   |   |
| Income                before cumulative effect of accounting change                                                         |   |   | 1,129.4 |         |   | 1,338.8      |   |   | 1,046.2 |   |
| Cumulative                effect of accounting change                                                                       |   |   |    |         |   |         |   |   |   |   |
| (net                of income tax benefit of $4.6 in 2005)                                                                  |   |   | -       |         |   | (7.4         | )      |   | - |   |
|                                                                                                                        |   |   |    |         |   |         |   |   |   |   |
| Net                income                                                                                                   |   |   | 1,129.4 |         |   | 1,331.4      |   |   | 1,046.2 |   |
| Preferred                dividends                                                                                          |   |   | 0.1     |         |   | 0.1          |   |   | 0.1 |   |
| Net                income applicable to common shares                                                                       |   | $      | 1,129.3 |         | $      | 1,331.3      |   | $ | 1,046.1 |   |
| **Earnings                per share:**                                                                                      |   |   |    |         |   |         |   |   |   |   |
| Basic:                                                                                                                      |   |   |    |         |   |         |   |   |   |   |
| Income                from continuing operations                                                                            |   |   | $2.15   |         |   | $2.16        |   |   | $1.34 |   |
| Income                from discontinued operations                                                                          |   |   | .80     |         |   | 1.77         |   |   | 2.06 |   |
| Cumulative                effect of accounting change                                                                       |   |   | -       |         |   | (.02         | )      |   | - |   |
| Net                income                                                                                                   |   |   | $2.95   |         |   | $3.91        |   |   | $3.40 |   |
| Diluted:                                                                                                                    |   |   |    |         |   |         |   |   |   |   |
| Income                from continuing operations                                                                            |   |   | $2.14   |         |   | $2.14        |   |   | $1.34 |   |
| Income                from discontinued operations                                                                          |   |   | .79     |         |   | 1.75         |   |   | 2.05 |   |
| Cumulative                effect of accounting change                                                                       |   |   | -       |         |   | (.02         | )      |   | - |   |
| Net                income                                                                                                   |   |   | $2.93   |         |   | $3.87        |   |   | $3.39 |   |

----

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

|                                                                                                    |   |   |     |   |   |     |   |
|---------------------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|----------|--------|
| (Millions)                                                                                              |   | 2006   |     | 2005   |   | 2004     |   |
| **Cash                Provided from Operations:**                                                       |   |   |     |   |   |     |   |
| Net                income                                                                               |   | $      | 1,129.4  |   | $      | 1,331.4  |   | $ | 1,046.2 |   |
| Adjustments                to reconcile net income to net cash provided from                operations: |   |   |     |   |   |     |   |   |   |   |
| Income                from discontinued operations                                                      |   |   | (305.7   | )      |   | (603.3   | )      |   | (634.1 | ) |
| Cumulative                effect of accounting change                                                   |   |   | -        |   |   | 7.4      |   |   | - |   |
| Depreciation                and amortization                                                            |   |   | 1,239.9  |   |   | 994.8    |   |   | 775.9 |   |
| Provision                for doubtful accounts                                                          |   |   | 227.3    |   |   | 192.5    |   |   | 146.5 |   |
| Non-cash                portion of integration expenses, restructuring and other                charges |   |   | -        |   |   | 15.0     |   |   | 25.6 |   |
| Non-cash                portion of gain on exchange or disposal of assets and                other      |   |   | (80.0    | )      |   | (232.7   | )      |   | - |   |
| Increase                in deferred income taxes                                                        |   |   | 38.7     |   |   | 71.8     |   |   | 187.7 |   |
| Adjustments                to income tax liabilities including contingency reserves                     |   |   | (29.9    | )      |   | -        |   |   | (19.7 | ) |
| Other,                net                                                                               |   |   | (13.9    | )      |   | 5.1      |   |   | (19.3 | ) |
| Changes                in operating assets and liabilities, net of effects of                           |   |   |     |   |   |     |   |   |   |   |
| acquisitions                and dispositions:                                                           |   |   |     |   |   |     |   |   |   |   |
| Accounts                receivable                                                                      |   |   | (237.0   | )      |   | (228.7   | )      |   | (181.8 | ) |
| Inventories                                                                                             |   |   | (20.0    | )      |   | (46.6    | )      |   | (44.8 | ) |
| Accounts                payable                                                                         |   |   | 67.2     |   |   | 111.1    |   |   | (21.2 | ) |
| Other                current liabilities                                                                |   |   | (516.4   | )      |   | (94.6    | )      |   | 96.1 |   |
| Other,                net                                                                               |   |   | (9.4     | )      |   | 42.1     |   |   | (69.0 | ) |
| Net                cash provided from operations                                                        |   |   | 1,490.2  |   |   | 1,565.3  |   |   | 1,288.1 |   |
| **Cash                Flows from Investing Activities:**                                                |   |   |     |   |   |     |   |   |   |   |
| Additions                to property, plant and equipment                                               |   |   | (1,164.5 | )      |   | (949.0   | )      |   | (778.3 | ) |
| Additions                to capitalized software development costs                                      |   |   | (32.6    | )      |   | (43.1    | )      |   | (27.8 | ) |
| Additions                to investments                                                                 |   |   | (0.5     | )      |   | (0.9     | )      |   | (3.2 | ) |
| Purchases                of property, net of cash acquired                                              |   |   | (1,760.6 | )      |   | (1,137.6 | )      |   | (185.1 | ) |
| Proceeds                from the sale of assets                                                         |   |   | -        |   |   | 84.4     |   |   | - |   |
| Proceeds                from the sale of investments                                                    |   |   | 200.6    |   |   | 353.9    |   |   | - |   |
| Proceeds                from the return on investments                                                  |   |   | 50.8     |   |   | 36.8     |   |   | 81.0 |   |
| Other,                net                                                                               |   |   | 13.2     |   |   | 18.6     |   |   | (0.9 | ) |
| Net                cash used in investing activities                                                    |   |   | (2,693.6 | )      |   | (1,636.9 | )      |   | (914.3 | ) |
| **Cash                Flows from Financing Activities:**                                                |   |   |     |   |   |     |   |   |   |   |
| Dividends                on common and preferred stock                                                  |   |   | (513.1   | )      |   | (490.5   | )      |   | (467.6 | ) |
| Repayments                of long-term debt                                                             |   |   | (1,198.5 | )      |   | (2,655.7 | )      |   | (255.2 | ) |
| Repurchases                of common stock                                                              |   |   | (1,595.6 | )      |   | -        |   |   | (595.3 | ) |
| Cash                payments to effect conversion of convertible notes                                  |   |   | (67.6    | )      |   | -        |   |   | - |   |
| Distributions                to minority investors                                                      |   |   | (38.2    | )      |   | (65.6    | )      |   | (66.9 | ) |
| Excess                tax benefits from stock option exercises                                          |   |   | 12.2     |   |   | -        |   |   | - |   |
| Long-term                debt issued, net of issuance costs                                             |   |   | -        |   |   | 1,000.0  |   |   | - |   |
| Common                stock issued                                                                      |   |   | 216.0    |   |   | 1,463.5  |   |   | 25.9 |   |
| Net                cash used in financing activities                                                    |   |   | (3,184.8 | )      |   | (748.3   | )      |   | (1,359.1 | ) |
| **Cash                Flows from Discontinued Operations:**                                             |   |   |     |   |   |     |   |   |   |   |
| Cash                provided from operating activities                                                  |   |   | 599.5    |   |   | 1,242.5  |   |   | 1,178.7 |   |
| Cash                provided from (used in) investing activities                                        |   |   | 3,746.6  |   |   | 171.4    |   |   | (344.1 | ) |
| Cash                used in financing activities                                                        |   |   | (0.2     | )      |   | (87.0    | )      |   | (24.5 | ) |
| Net                cash provided from discontinued operations                                           |   |   | 4,345.9  |   |   | 1,326.9  |   |   | 810.1 |   |
|                                                                                                    |   |   |     |   |   |     |   |   |   |   |
| Effect                of exchange rate changes on cash and short-term                investments        |   |   | (5.9     | )      |   | (1.8     | )      |   | (0.1 | ) |
|                                                                                                    |   |   |     |   |   |     |   |   |   |   |
| Increase                (decrease) in cash and short-term investments                                   |   |   | (48.2    | )      |   | 505.2    |   |   | (175.3 | ) |
| **Cash                and Short-term Investments:**                                                     |   |   |     |   |   |     |   |   |   |   |
| Beginning                of the year                                                                    |   |   | 982.4    |   |   | 477.2    |   |   | 652.5 |   |
| End                of the year                                                                          |   | $      | 934.2    |   | $      | 982.4    |   | $ | 477.2 |   |
|                                                                                                    |   |   |     |   |   |     |   |   |   |   |

----

**CONSOLIDATED      STATEMENTS OF SHAREHOLDERS’EQUITY**

|                                                                    |   |            |   |         |   |             |   |                                     |     |           |   |        |   |
|-------------------------------------------------------------------------|--------|-----------------|--------|--------------|--------|------------------|--------|------------------------------------------|----------|----------------|--------|-------------|--------|
|                                                                    |   |            |   |         |   |             |   |  Accumulated                   |     |           |   |        |   |
|                                                                    |   |            |   |         |   | Additional  |   |  Other                         |     |           |   |        |   |
|                                                                    |   | Preferred  |   | Common  |   | Paid-In     |   |  Comprehensive                 |     | Retained  |   |        |   |
|                                                                    |   | Stock      |   | Stock   |   | Capital     |   |  Income                (Loss)  |     | Earnings  |   | Total  |   |
| Balance                at December 31, 2003                             |   | $               | 0.4    |         | $      | 312.6            |   | $                                        | 750.1    |           | $      | 74.2        |   | $ | 5,884.9 |   | $ | 7,022.2 |   |
| Net                income                                               |   |            | -      |         |   | -                |   |                                     | -        |           |   | -           |   |   | 1,046.2 |   |   | 1,046.2 |   |
| Other                comprehensive income, net of tax (See Note 15)     |   |            |   |         |   |             |   |                                     |     |           |   |        |   |   |   |   |   |   |   |
| Unrealized                holding gains on investments,                 |   |            |   |         |   |             |   |                                     |     |           |   |        |   |   |   |   |   |   |   |
| net                of reclassification adjustments                      |   |            | -      |         |   | -                |   |                                     | -        |           |   | 80.3        |   |   | - |   |   | 80.3 |   |
| Foreign                currency translation adjustment                  |   |            | -      |         |   | -                |   |                                     | -        |           |   | (0.1        | )      |   | - |   |   | (0.1 | ) |
| Comprehensive                income                                     |   |            | -      |         |   | -                |   |                                     | -        |           |   | 80.2        |   |   | 1,046.2 |   |   | 1,126.4 |   |
| Employee                plans, net                                      |   |            | -      |         |   | 0.6              |   |                                     | 25.2     |           |   | -           |   |   | - |   |   | 25.8 |   |
| Restricted                stock, net of unearned compensation           |   |            | -      |         |   | 0.2              |   |                                     | 2.8      |           |   | -           |   |   | - |   |   | 3.0 |   |
| Tax                benefit for non-qualified stock options              |   |            | -      |         |   | -                |   |                                     | 3.9      |           |   | -           |   |   | - |   |   | 3.9 |   |
| Conversion                of preferred stock                            |   |            | (0.1   | )            |   | -                |   |                                     | -        |           |   | -           |   |   | - |   |   | - |   |
| Repurchases                of stock                                     |   |            | -      |         |   | (11.2            | )      |                                     | (584.1   | )              |   | -           |   |   | - |   |   | (595.3 | ) |
| Dividends:                                                              |   |            |   |         |   |             |   |                                     |     |           |   |        |   |   |   |   |   |   |   |
| Common                - $1.49 per share                                 |   |            | -      |         |   | -                |   |                                     | -        |           |   | -           |   |   | (457.2 | ) |   | (457.2 | ) |
| Preferred                                                               |   |            | -      |         |   | -                |   |                                     | -        |           |   | -           |   |   | (0.1 | ) |   | (0.1 | ) |
| Balance                at December 31, 2004                             |   |            | 0.3    |         |   | 302.3            |   |                                     | 197.9    |           |   | 154.4       |   |   | 6,473.8 |   |   | 7,128.7 |   |
| Net                income                                               |   |            | -      |         |   | -                |   |                                     | -        |           |   | -           |   |   | 1,331.4 |   |   | 1,331.4 |   |
| Other                comprehensive loss, net of tax (See Note 15)       |   |            |   |         |   |             |   |                                     |     |           |   |        |   |   |   |   |   |   |   |
| Unrealized                holding losses on investments,                |   |            |   |         |   |             |   |                                     |     |           |   |        |   |   |   |   |   |   |   |
| net                of reclassification adjustments                      |   |            | -      |         |   | -                |   |                                     | -        |           |   | (131.6      | )      |   | - |   |   | (131.6 | ) |
| Foreign                currency translation adjustment,                 |   |            |   |         |   |             |   |                                     |     |           |   |        |   |   |   |   |   |   |   |
| net                of reclassification adjustments                      |   |            | -      |         |   | -                |   |                                     | -        |           |   | (3.3        | )      |   | - |   |   | (3.3 | ) |
| Comprehensive                income                                     |   |            | -      |         |   | -                |   |                                     | -        |           |   | (134.9      | )      |   | 1,331.4 |   |   | 1,196.5 |   |
| Acquisitions                (See Note 3)                                |   |            | -      |         |   | 54.3             |   |                                     | 3,688.2  |           |   | -           |   |   | - |   |   | 3,742.5 |   |
| Settle                equity unit purchase obligation (See Note 5)      |   |            | -      |         |   | 24.5             |   |                                     | 1,360.5  |           |   | -           |   |   | - |   |   | 1,385.0 |   |
| Employee                plans, net                                      |   |            | -      |         |   | 2.3              |   |                                     | 76.7     |           |   | -           |   |   | - |   |   | 79.0 |   |
| Restricted                stock, net of unearned compensation           |   |            | -      |         |   | 0.2              |   |                                     | 6.1      |           |   | -           |   |   | - |   |   | 6.3 |   |
| Tax                benefit for non-qualified stock options              |   |            | -      |         |   | -                |   |                                     | 9.9      |           |   | -           |   |   | - |   |   | 9.9 |   |
| Dividends:                                                              |   |            |   |         |   |             |   |                                     |     |           |   |        |   |   |   |   |   |   |   |
| Common                - $1.525 per share                                |   |            | -      |         |   | -                |   |                                     | -        |           |   | -           |   |   | (532.3 | ) |   | (532.3 | ) |
| Preferred                                                               |   |            | -      |         |   | -                |   |                                     | -        |           |   | -           |   |   | (0.1 | ) |   | (0.1 | ) |
| Balance                at December 31, 2005                             |   |            | 0.3    |         |   | 383.6            |   |                                     | 5,339.3  |           |   | 19.5        |   |   | 7,272.8 |   |   | 13,015.5 |   |
| Net                income                                               |   |            | -      |         |   | -                |   |                                     | -        |           |   | -           |   |   | 1,129.4 |   |   | 1,129.4 |   |
| Other                comprehensive income, net of tax (See Note 15)     |   |            |   |         |   |             |   |                                     |     |           |   |        |   |   |   |   |   |   |   |
| Unrealized                holding gains on investments                  |   |            | -      |         |   | -                |   |                                     | -        |           |   | 15.2        |   |   | - |   |   | 15.2 |   |
| Foreign                currency translation adjustment,                 |   |            |   |         |   |             |   |                                     |     |           |   |        |   |   |   |   |   |   |   |
| net                of reclassification adjustments                      |   |            | -      |         |   | -                |   |                                     | -        |           |   | 2.8         |   |   | - |   |   | 2.8 |   |
| Comprehensive                income                                     |   |            | -      |         |   | -                |   |                                     | -        |           |   | 18.0        |   |   | 1,129.4 |   |   | 1,147.4 |   |
| Employee                plans, net                                      |   |            | -      |         |   | 5.1              |   |                                     | 210.7    |           |   | -           |   |   | - |   |   | 215.8 |   |
| Issuance                of restricted stock                             |   |            | -      |         |   | 0.3              |   |                                     | -        |           |   | -           |   |   | - |   |   | 0.3 |   |
| Amortization                of stock-based compensation (See Note 2)    |   |            | -      |         |   | -                |   |                                     | 37.5     |           |   | -           |   |   | - |   |   | 37.5 |   |
| Tax                benefit for non-qualified stock options              |   |            | -      |         |   | -                |   |                                     | 11.7     |           |   | -           |   |   | - |   |   | 11.7 |   |
| Conversion                of convertible notes (See Note 3)             |   |            | -      |         |   | 4.0              |   |                                     | 41.4     |           |   | -           |   |   | - |   |   | 45.4 |   |
| Spin-off                of wireline telecommunications business         |   |            | -      |         |   | -                |   |                                     | 223.3    |           |   | -           |   |   | - |   |   | 223.3 |   |
| Repurchases                of stock                                     |   |            | -      |         |   | (28.5            | )      |                                     | (1,567.1 | )              |   | -           |   |   | - |   |   | (1,595.6 | ) |
| Adjustment                to initially apply the recognition provisions |   |            |   |         |   |             |   |                                     |     |           |   |        |   |   |   |   |   |   |   |
| of                SFAS No. 158, net of tax (See Note 9)                 |   |            | -      |         |   | -                |   |                                     | -        |           |   | (28.0       | )      |   | - |   |   | (28.0 | ) |
| Dividends:                                                              |   |            |   |         |   |             |   |                                     |     |           |   |        |   |   |   |   |   |   |   |
| Common                - $1.07 per share                                 |   |            | -      |         |   | -                |   |                                     | -        |           |   | -           |   |   | (411.3 | ) |   | (411.3 | ) |
| Preferred                                                               |   |            | -      |         |   | -                |   |                                     | -        |           |   | -           |   |   | (0.1 | ) |   | (0.1 | ) |
| Balance                at December 31, 2006                             |   | $               | 0.3    |         | $      | 364.5            |   | $                                        | 4,296.8  |           | $      | 9.5         |   | $ | 7,990.8 |   | $ | 12,661.9 |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **1.** | **Summary                of Significant** **Accounting                Policies**: |
|--------|----------------------------------------------------------------------------------------|

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **1.** | **Summary                of Significant** **Accounting                Policies, Continued:** |
|--------|---------------------------------------------------------------------------------------------------|

|                                                      |   |   |   |   |   |
|-----------------------------------------------------------|--------|--------|--------|--------|--------|
| (Millions)                                                |   | 2006   |   | 2005   |   |
| Investments                in unconsolidated partnerships |   | $      | 165.1  |   | $      | 157.2 |   |
| Equity                securities                          |   |   | 189.8  |   |   | 166.5 |   |
| Other                cost investments                     |   |   | 14.0   |   |   | 32.7 |   |
|                                                      |   | $      | 368.9  |   | $      | 356.4 |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **1.** | **Summary                of Significant** **Accounting                Policies, Continued:** |
|--------|---------------------------------------------------------------------------------------------------|

|                                         | Depreciable                Lives |        |
|----------------------------------------------|----------------------------------|--------|
| Buildings                and improvements    | 5-35                years        |   |
| Operating                plant and equipment | 3-20                years        |   |
| Information                processing        |  3-7                years   |   |
| Furniture                and fixtures        | 5-10                years        |   |
|                                         |                             |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **1.** | **Summary                of Significant** **Accounting                Policies, Continued:** |
|--------|---------------------------------------------------------------------------------------------------|

|                                                                   |   |       |   |       |   |       |   |
|------------------------------------------------------------------------|--------|------------|--------|------------|--------|------------|--------|
| (Millions)                                                             |   | 2006       |   |  2005 |        |            |   |
|                                                                   |   | Settlement |   | Carrying   |   | Settlement |   | Carrying |   |
|                                                                   |   | Value      |   | Amount     |   | Value      |   | Amount |   |
| Minority                interest liability - finite-lived partnerships |   |       | $19.6  |       |   | $5.1       |   |   | $19.6 |   |   | $4.7 |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **1.** | **Summary                of Significant** **Accounting                Policies, Continued:** |
|--------|---------------------------------------------------------------------------------------------------|

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **1.** | **Summary                of Significant** **Accounting                Policies, Continued:** |
|--------|---------------------------------------------------------------------------------------------------|

|                                                                            |   |   |    |   |   |    |   |
|---------------------------------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|
| (Millions,                except per share amounts)                             |   | 2006   |    | 2005   |   | 2004    |   |
| **Basic                earnings per share:**                                    |   |   |    |   |   |    |   |
| Income                from continuing operations                                |   | $      | 823.7   |   | $      | 735.5   |   | $ | 412.1 |   |
| Income                from discontinued operations                              |   |   | 305.7   |   |   | 603.3   |   |   | 634.1 |   |
| Cumulative                effect of accounting change                           |   |   | -       |   |   | (7.4    | )      |   | - |   |
| Less                preferred dividends                                         |   |   | (0.1    | )      |   | (0.1    | )      |   | (0.1 | ) |   |
| Net                income applicable to common shares                           |   | $      | 1,129.3 |   | $      | 1,331.3 |   | $ | 1,046.1 |   |
| Weighted                average common shares outstanding for the year          |   |   | 382.7   |   |   | 340.8   |   |   | 307.3 |   |
| Basic                earnings per share:                                        |   |   |    |   |   |    |   |   |   |   |
| Income                from continuing operations                                |   |   | $2.15   |   |   | $2.16   |   |   | $1.34 |   |
| Income                from discontinued operations                              |   |   | .80     |   |   | 1.77    |   |   | 2.06 |   |
| Cumulative                effect of accounting change                           |   |   | -       |   |   | (.02    | )      |   | - |   |
| Net                income                                                       |   |   | $2.95   |   |   | $3.91   |   |   | $3.40 |   |
| **Diluted                earnings per share:**                                  |   |   |    |   |   |    |   |   |   |   |
| Net                income applicable to common shares                           |   | $      | 1,129.3 |   | $      | 1,331.3 |   | $ | 1,046.1 |   |
| Adjustment                for interest expense on convertible notes, net of tax |   |   | 0.4     |   |   | 1.4     |   |   | - |   |
| Adjustment                for convertible preferred stock dividends             |   |   | 0.1     |   |   | 0.1     |   |   | 0.1 |   |
| Net                income applicable to common shares assuming conversion       |   |   |    |   |   |    |   |   |   |   |
| of                above securities                                              |   | $      | 1,129.8 |   | $      | 1,332.8 |   | $ | 1,046.2 |   |
| Weighted                average common shares outstanding for the year          |   |   | 382.7   |   |   | 340.8   |   |   | 307.3 |   |
| Increase                in shares resulting from:                               |   |   |    |   |   |    |   |   |   |   |
| Assumed                exercise of stock options                                |   |   | 1.3     |   |   | 1.5     |   |   | 0.8 |   |
| Assumed                conversion of convertible notes                          |   |   | 0.7     |   |   | 1.5     |   |   | - |   |
| Assumed                conversion of convertible preferred stock                |   |   | 0.2     |   |   | 0.2     |   |   | 0.3 |   |
| Non-vested                restricted stock awards                               |   |   | 0.1     |   |   | 0.1     |   |   | - |   |
| Weighted                average common shares, assuming conversion              |   |   |    |   |   |    |   |   |   |   |
| of                above securities                                              |   |   | 385.0   |   |   | 344.1   |   |   | 308.4 |   |
| Diluted                earnings per share:                                      |   |   |    |   |   |    |   |   |   |   |
| Income                from continuing operations                                |   |   | $2.14   |   |   | $2.14   |   |   | $1.34 |   |
| Income                from discontinued operations                              |   |   | .79     |   |   | 1.75    |   |   | 2.05 |   |
| Cumulative                effect of accounting change                           |   |   | -       |   |   | (.02    | )      |   | - |   |
| Net                income                                                       |   |   | $2.93   |   |   | $3.87   |   |   | $3.39 |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **1.** | **Summary                of Significant** **Accounting                Policies, Continued:** |
|--------|---------------------------------------------------------------------------------------------------|

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

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

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

|   |   |   |
|--------|--------|--------|

|                                                                                                          |   |   |   |
|---------------------------------------------------------------------------------------------------------------|--------|--------|--------|
| (Millions,                except per share amounts)                                                           |   |   |   |
| Compensation                expense related to stock options issued by Alltel                                 |   | $      | 19.3   |   |
| Compensation                expense related to stock options converted to Alltel stock                options |   |   |   |   |
| in                connection with the acquisition of Western Wireless                Corporation              |   |   | 2.0    |   |
| Compensation                expense related to restricted stock awards                                        |   |   | 16.2   |   |
| Compensation                expense before income taxes                                                       |   |   | 37.5   |   |
| Income                tax benefit                                                                             |   |   | (12.1  | ) |
| Compensation                expense, net of tax                                                               |   | $      | 25.4   |   |
| Earnings                per share effects of compensation expense, net of tax                                 |   |   |   |   |
| Basic                earnings per share                                                                       |   |   | $.07   |   |
| Diluted                earnings per share                                                                     |   |   | $.07   |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

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

|                                                                                             |   |    |                           |
|--------------------------------------------------------------------------------------------------|--------|---------|--------------------------------|
| (Millions,                except per share amounts)                                              |   | 2005    |                           | 2004 |   |
| Net                income as reported                                                            | $      | 1,331.4 |                           | $ | 1,046.2 |   |
| Add                stock-based compensation expense included in                                  |   |    |                           |   |   |   |
| net                income, net of related tax effects                                            |   | 4.2     |                           |   | 1.8 |   |
| Deduct                stock-based employee compensation expense determined                       |   |    |                           |   |   |   |
| under                fair value method for all awards, net of related tax                effects |   | (23.3   | )                              |   | (26.3 | ) |
| Pro                forma net income                                                              | $      | 1,312.3 |                           | $ | 1,021.7 |   |
| Basic                earnings per share:                                                         |   |    | As                reported     |   |   | $3.91 |   |   | $3.40 |   |
|                                                                                             |   |    | Pro                forma  |   |   | $3.85 |   |   | $3.32 |   |
| Diluted                earnings per share:                                                       |   |    | As                reported     |   |   | $3.87 |   |   | $3.39 |   |
|                                                                                             |   |    | Pro                forma  |   |   | $3.81 |   |   | $3.31 |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

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

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

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

|                                                         |   |                            |    |         |   |
|--------------------------------------------------------------|--------|---------------------------------|---------|--------------|--------|
|                                                         |   | Acquired                from    |    |    |   |
|  (Millions)                                             |   | Midwest                Wireless |    |  Other  |   |  Combined                Totals |   |
| Fair                value of assets acquired:                |   |                            |    |    |   |    |   |
| Current                assets                                |   | $                               | 33.7    |         | $      | 11.7 |   | $ | 45.4 |   |
| Investments                                                  |   |                            | 2.9     |         |   | - |   |   | 2.9 |   |
| Property,                plant and equipment                 |   |                            | 108.8   |         |   | 30.6 |   |   | 139.4 |   |
| Goodwill                                                     |   |                            | 654.9   |         |   | 465.2 |   |   | 1,120.1 |   |
| Cellular                licenses                             |   |                            | 125.0   |         |   | 84.4 |   |   | 209.4 |   |
| Customer                list                                 |   |                            | 190.0   |         |   | 73.5 |   |   | 263.5 |   |
| Total                assets acquired                         |   |                            | 1,115.3 |         |   | 665.4 |   |   | 1,780.7 |   |
| Liabilities                assumed:                          |   |                            |    |         |   |   |   |   |   |   |
| Current                liabilities                           |   |                            | (31.8   | )            |   | (28.5 | ) |   | (60.3 | ) |
| Deferred                taxes established on acquired assets |   |                            | -       |         |   | (18.5 | ) |   | (18.5 | ) |
| Total                liabilities assumed                     |   |                            | (31.8   | )            |   | (47.0 | ) |   | (78.8 | ) |
| Minority                interest liability acquired          |   |                            | -       |         |   | 58.7 |   |   | 58.7 |   |
| Net                cash paid                                 |   | $                               | 1,083.5 |         | $      | 677.1 |   | $ | 1,760.6 |   |
|                                                         |   |                            |    |         |   |   |   |   |   |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

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

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

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

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

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

|                                                         |   |                            |     |           |   |
|--------------------------------------------------------------|--------|---------------------------------|----------|----------------|--------|
|                                                         |   | Acquired                from    |     |           |   |
|  (Millions)                                             |   | Western                Wireless |     |  Cingular |   | U.S.                Cellular |   |  Other |   | CombinedTotals |   |
| Fair                value of assets acquired:                |   |                            |     |           |   |   |   |   |   |   |   |
| Current                assets                                |   | $                               | 195.4    |           | $      | 1.1 |   | $ | 4.7 |   | $ | 4.3 |   | $ | 205.5 |   |
| Investments                                                  |   |                            | 132.2    |           |   | - |   |   | - |   |   | - |   |   | 132.2 |   |
| Property,                plant and equipment                 |   |                            | 506.7    |           |   | 38.0 |   |   | 30.5 |   |   | 10.2 |   |   | 585.4 |   |
| Other                assets                                  |   |                            | 7.1      |           |   | - |   |   | 2.1 |   |   | - |   |   | 9.2 |   |
| Assets                held for sale                          |   |                            | 2,751.0  |           |   | - |   |   | - |   |   | - |   |   | 2,751.0 |   |
| Goodwill                                                     |   |                            | 3,431.0  |           |   | 269.0 |   |   | 57.1 |   |   | 39.7 |   |   | 3,796.8 |   |
| Cellular                licenses                             |   |                            | 505.0    |           |   | 91.0 |   |   | 17.3 |   |   | 3.4 |   |   | 616.7 |   |
| Customer                list                                 |   |                            | 326.0    |           |   | 10.9 |   |   | 24.0 |   |   | 1.9 |   |   | 362.8 |   |
| Roaming                agreement                             |   |                            | 6.1      |           |   | - |   |   | - |   |   | - |   |   | 6.1 |   |
| Total                assets acquired                         |   |                            | 7,860.5  |           |   | 410.0 |   |   | 135.7 |   |   | 59.5 |   |   | 8,465.7 |   |
| Liabilities                assumed:                          |   |                            |     |           |   |   |   |   |   |   |   |   |   |   |   |   |
| Current                liabilities                           |   |                            | (177.0   | )              |   | (5.5 | ) |   | (3.9 | ) |   | (2.4 | ) |   | (188.8 | ) |
| Deferred                taxes established on acquired assets |   |                            | (482.8   | )              |   | - |   |   | - |   |   | - |   |   | (482.8 | ) |
| Long-term                debt                                |   |                            | (2,112.9 | )              |   | - |   |   | - |   |   | - |   |   | (2,112.9 | ) |
| Other                liabilities                             |   |                            | (25.7    | )              |   | - |   |   | - |   |   | - |   |   | (25.7 | ) |
| Liabilities                related to assets held for sale   |   |                            | (398.8   | )              |   | - |   |   | - |   |   | - |   |   | (398.8 | ) |
| Total                liabilities assumed                     |   |                            | (3,197.2 | )              |   | (5.5 | ) |   | (3.9 | ) |   | (2.4 | ) |   | (3,209.0 | ) |
|                                                         |   |                            |     |           |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                stock issued                           |   |                            | (3,742.5 | )              |   | - |   |   | - |   |   | - |   |   | (3,742.5 | ) |
| Fair                value of assets exchanged                |   |                            | -        |           |   | (265.9 | ) |   | (180.0 | ) |   | - |   |   | (445.9 | ) |
| Minority                interest liability acquired          |   |                            | -        |           |   | 14.4 |   |   | - |   |   | 6.7 |   |   | 21.1 |   |
| Net                cash paid (received)                      |   | $                               | 920.8    |           | $      | 153.0 |   | $ | (48.2 | ) | $ | 63.8 |   | $ | 1,089.4 |   |

|                                                                            |   |   |    |   |   |
|---------------------------------------------------------------------------------|--------|--------|---------|--------|--------|
| (Millions,                except per share amounts)                             |   | 2005   |    | 2004   |   |
| Revenues                and sales                                               |   | $      | 7,168.6 |   | $      | 6,248.6 |   |
| Income                from continuing operations                                |   | $      | 769.1   |   | $      | 592.6 |   |
| Earnings                per share from continuing operations:                   |   |   |    |   |   |   |   |
| Basic                                                                           |   |   | $2.01   |   |   | $1.53 |   |
| Diluted                                                                         |   |   | $1.97   |   |   | $1.51 |   |
| Income                before cumulative effect of accounting change             |   | $      | 1,345.1 |   | $      | 1,226.7 |   |
| Earnings                per share before cumulative effect of accounting change |   |   |    |   |   |   |   |
| Basic                                                                           |   |   | $3.52   |   |   | $3.18 |   |
| Diluted                                                                         |   |   | $3.44   |   |   | $3.12 |   |
| Net                income                                                       |   | $      | 1,337.7 |   | $      | 1,226.7 |   |
| Earnings                per share:                                              |   |   |    |   |   |   |   |
| Basic                                                                           |   |   | $3.50   |   |   | $3.18 |   |
| Diluted                                                                         |   |   | $3.42   |   |   | $3.12 |   |
|                                                                            |   |   |    |   |   |   |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

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

|                                                           |   |                         |   |                       |   |
|----------------------------------------------------------------|--------|------------------------------|--------|----------------------------|--------|
|                                                           |   | Acquired                from |   |                       |   |
|  (Millions)                                               |   | U.S. Cellular           |   | TDS                Telecom |   |  Other |   | Combined                Totals |   |
| Fair                value of assets acquired:                  |   |                         |   |                       |   |   |   |   |   |
| Current                assets                                  |   | $                            | 2.0    |                       | $      | 9.7 |   | $ | 2.2 |   | $ | 13.9 |   |
| Property,                plant and equipment                   |   |                         | 5.2    |                       |   | 23.7 |   |   | 3.4 |   |   | 32.3 |   |
| Goodwill                                                       |   |                         | 55.8   |                       |   | 33.4 |   |   | 26.8 |   |   | 116.0 |   |
| Cellular                and PCS licenses                       |   |                         | 3.8    |                       |   | 6.3 |   |   | 4.5 |   |   | 14.6 |   |
| Customer                list                                   |   |                         | 4.1    |                       |   | 6.9 |   |   | 4.2 |   |   | 15.2 |   |
| Other                assets                                    |   |                         | 0.7    |                       |   | 0.3 |   |   | - |   |   | 1.0 |   |
| Less                investments in unconsolidated partnerships |   |                         | -      |                       |   | (14.9 | ) |   | (2.8 | ) |   | (17.7 | ) |
| Total                assets acquired                           |   |                         | 71.6   |                       |   | 65.4 |   |   | 38.3 |   |   | 175.3 |   |
| Liabilities                assumed:                            |   |                         |   |                       |   |   |   |   |   |   |   |   |   |
| Current                liabilities                             |   |                         | (1.8   | )                          |   | (2.4 | ) |   | (1.4 | ) |   | (5.6 | ) |
| Other                liabilities                               |   |                         | (1.6   | )                          |   | - |   |   | (4.6 | ) |   | (6.2 | ) |
| Total                liabilities assumed                       |   |                         | (3.4   | )                          |   | (2.4 | ) |   | (6.0 | ) |   | (11.8 | ) |
| Minority                interest liability acquired            |   |                         | 16.8   |                       |   | 0.2 |   |   | 4.6 |   |   | 21.6 |   |
| Net                cash paid (received)                        |   | $                            | 85.0   |                       | $      | 63.2 |   | $ | 36.9 |   | $ | 185.1 |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

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

|                                                               |   |
|--------------------------------------------------------------------|--------|
| (Millions)                                                         |   |
| Balance                at December 31, 2004                        |   | $ | 3,627.7 |   |
| Acquired                during the period                          |   |   | 3,796.8 |   |
| Other                adjustments                                   |   |   | 4.8 |   |
| Balance                at December 31, 2005                        |   |   | 7,429.3 |   |
| Acquired                during the period                          |   |   | 1,120.1 |   |
| Allocated                to assets held for sale during the period |   |   | (29.6 | ) |
| Other                adjustments                                   |   |   | (72.8 | ) |
| Balance                at December 31, 2006                        |   | $ | 8,447.0 |   |

|                                     |   |   |    |   |   |
|------------------------------------------|--------|--------|---------|--------|--------|
| (Millions)                               |   | 2006   |    | 2005   |   |
| Cellular                and PCS licenses |   | $      | 1,657.8 |   | $      | 1,471.4 |   |

|                             |   |   |        |
|----------------------------------|--------|--------|-------------|
|                             |   | 2006   |        |
|                             |   |   |        |   |   | Net |   |
|                             |   | Gross  |        | Accumulated |   | Carrying |   |
| (Millions)                       |   | Cost   |        | Amortization |   | Value |   |
| Customer                lists    |   | $      | 946.6       |   | $ | (478.6 | ) | $ | 468.0 |   |
| Roaming                agreement |   |   | 6.1         |   |   | (2.5 | ) |   | 3.6 |   |
|                             |   | $      | 952.7       |   | $ | (481.1 | ) | $ | 471.6 |   |
|                             |   |   |
|                             |   | 2005   |
|                                  |   |   |        |   |   |   |   |   | Net  |   |
|                                  |   |   | Gross  |   |   | Accumulated |   |   | Carrying |   |
| (Millions)                       |   |   | Cost        |   |   | Amortization |   |   | Value |   |
| Customer                lists    |   | $      | 691.6       |   | $ | (307.0 | ) | $ | 384.6 |   |
| Roaming                agreement |   |   | 6.1         |   |   | (0.7 | ) |   | 5.4 |   |
|                             |   | $      | 697.7       |   | $ | (307.7 | ) | $ | 390.0 |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **5.** | **Debt:** |
|--------|-----------|

|                                                                             |   |   |                    |   |   |
|----------------------------------------------------------------------------------|--------|--------|-------------------------|--------|--------|
| (Millions)                                                                       |   | 2006   |                    | 2005   |   |
| Issued                by ALLTEL Corporation:                                     |   |   |                    |   |   |
| Equity                unit senior notes, 4.656%, due 2007 (a)                    |   | $      | 35.6                    |   | $      | 1,385.0 |   |
| Commercial                paper borrowings (a)                                   |   |   | -                       |   |   | 1,000.0 |   |
| Debentures                and notes, without collateral:                         |   |   |                    |   |   |   |   |
| 7.00%,                due 2012                                                   |   |   | 800.0                   |   |   | 800.0 |   |
| 6.50%,                due 2013                                                   |   |   | 200.0                   |   |   | 200.0 |   |
| 7.00%,                due 2016                                                   |   |   | 300.0                   |   |   | 300.0 |   |
| 6.80%,                due 2029                                                   |   |   | 300.0                   |   |   | 300.0 |   |
| 7.875%,                due 2032                                                  |   |   | 700.0                   |   |   | 700.0 |   |
| Collateralized                note, 10.00%, due 2010                             |   |   | 0.2                     |   |   | 0.3 |   |
| Industrial                revenue bonds, 5.28% and 4.11%, due 2008               |   |   | 1.3                     |   |   | 1.9 |   |
| Issued                by subsidiaries of ALLTEL Corporation:                     |   |   |                    |   |   |   |   |
| Debentures                and notes, without collateral:                         |   |   |                    |   |   |   |   |
| ALLTEL                Communications Inc. - 9.00%, due 2006                      |   |   | -                       |   |   | 182.2 |   |
| ALLTEL                Communications Inc. - 6.65%, due 2008 (a) (b)              |   |   | 39.0                    |   |   | 100.0 |   |
| ALLTEL                Communications Inc. - 7.60%, due 2009 (a) (b)              |   |   | 53.0                    |   |   | 200.0 |   |
| ALLTEL                Ohio Limited Partnership - 8.00%, due 2010 (a) (b)         |   |   | 297.3                   |   |   | 425.0 |   |
| Western                Wireless LLC - 4.625% convertible notes, due 2023 (b) (c) |   |   | 2.0                     |   |   | 115.0 |   |
| Other                subsidiaries - 4.50%, due 2006                              |   |   | -                       |   |   | 0.1 |   |
| Market                value of interest rate swaps                               |   |   | 14.9                    |   |   | 28.6 |   |
| Discount                on long-term debt                                        |   |   | (9.6                    | )      |   | (11.0 | ) |
|                                                                             |   |   | 2,733.7                 |   |   | 5,727.1 |   |
| Less                current maturities                                           |   |   | (36.3                   | )      |   | (183.0 | ) |
| Total                long-term debt                                              |   | $      | 2,697.4                 |   | $      | 5,544.1 |   |
| Weighted                rate                                                     |   |   | 7.3%                    |   |   | 6.2% |   |
| Weighted                maturity                                                 |   |   | 13                years |   |   | 7                years |   |
|                                                                             |   |   |                    |   |   |   |   |

|   | (a) | Through                the completion of a debt exchange and cash tender offer in the third                quarter of 2006, Alltel repaid $1.0 billion of commercial paper borrowings                and retired $1,349.4 million of the outstanding equity unit notes,                $61.0                million of the 6.65 percent notes due 2008, $147.0 million of the                7.60                percent notes due 2009 and $127.7 million of the 8.00 percent notes                due                2010. (See Note 12). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Repayment              of subsidiary's debt obligation quaranteed by ALLTEL              Corporation. |
|--------|-----|-------------------------------------------------------------------------------------------------------|
|   | (c) | During                2006, an aggregate principal amount of $113.0 million of the notes                were                converted into cash and shares of Alltel common                stock. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **5.** | **Debt,                Continued:** |
|--------|-------------------------------------|

|                                                      |   |   |   |   |   |   |   |
|-----------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| (Millions)                                                |   | 2006   |   | 2005   |   | 2004   |   |
| Interest                expense related to long-term debt |   | $      | 298.8  |   | $      | 351.5  |   | $ | 386.5 |   |
| Other                interest                             |   |   | -      |   |   | 0.1    |   |   | 0.6 |   |
| Effects                of interest rate swaps             |   |   | (3.2   | )      |   | (20.5  | )      |   | (40.2 | ) |
| Less                capitalized interest                  |   |   | (13.1  | )      |   | (16.6  | )      |   | (13.8 | ) |
|                                                      |   | $      | 282.5  |   | $      | 314.5  |   | $ | 333.1 |   |

|       |   |       |    |
|------------|--------|------------|---------|
| Year       |   | (Millions) |    |
| 2007       |   | $          | 36.3    |   |
| 2008       |   |       | 39.7    |   |
| 2009       |   |       | 53.0    |   |
| 2010       |   |       | 297.4   |   |
| 2011       |   |       | -       |   |
| Thereafter |   |       | 2,302.0 |   |
| Total      |   | $          | 2,728.4 |   |

| **6.** | **Financial                Instruments and Investments**: |
|--------|-----------------------------------------------------------|

|                                                        |   |   |    |     |   |    |
|-------------------------------------------------------------|--------|--------|---------|----------|--------|---------|
| (Millions)                                                  |   | 2006   |    | 2005     |        |         |
|                                                        |   | Fair   |    | Carrying |   | Fair    |   | Carrying |   |
|                                                        |   | Value  |    | Amount   |   | Value   |   | Amount |   |
| Investments                                                 |   | $      | 368.9   |     | $      | 368.9   |   | $ | 356.4 |   | $ | 356.4 |   |
| Long-term                debt, including current maturities |   | $      | 2,764.7 |     | $      | 2,733.7 |   | $ | 6,299.8 |   | $ | 5,727.1 |   |
| Redeemable                preferred stock                   |   | $      | 10.8    |     | $      | 0.7     |   | $ | 9.6 |   | $ | 0.8 |   |
| Foreign                currency forward exchange contracts  |   | $      | -       |     | $      | -       |   | $ | 25.0 |   | $ | 25.0 |   |
| Interest                rate swaps                          |   | $      | 14.9    |     | $      | 14.9    |   | $ | 28.6 |   | $ | 28.6 |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **7.** | **Supplemental                Cash Flow Information From Continuing Operations**: |
|--------|-----------------------------------------------------------------------------------|

|                                                                       |   |   |                       |   |   |                             |   |
|----------------------------------------------------------------------------|--------|--------|----------------------------|--------|--------|----------------------------------|--------|
| (Millions)                                                                 |   | 2006   |                       | 2005   |   | 2004                             |   |
| Interest                paid, net of amounts capitalized                   |   | $      | 287.7                      |   | $      |  357.1                      |   | $ | 359.8 |   |
| Income                taxes paid                                           |   | $      | 949.0                      |   | $      |  562.2                      |   | $ | 98.0 |   |
| Non-cash                investing and financing activities:                |   |   |                       |   |   |                             |   |   |   |   |
| Change                in fair value of investments in equity securities    |   | $      |                  23.4 |   | $      | (126.7                           | )      | $ | 116.9 |   |
| Change                in fair value of foreign currency exchange contracts |   | $      | -                          |   | $      |                   25.0 |   | $ | - |   |
| Change                in fair value of interest rate swaps                 |   | $      |  (13.7                | )      | $      |                  (37.5      | )      | $ | (12.6 | ) |

| **8.** | **Stock-Based** **Compensation                Plans:** |
|--------|-------------------------------------------------------------|

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

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **8.** | **Stock-Based** **Compensation                Plans, Continued:** |
|--------|------------------------------------------------------------------------|

|                                   |   |   |   |                     |   |   |                     |   |
|----------------------------------------|--------|--------|--------|--------------------------|--------|--------|--------------------------|--------|
|                                   |   |   |   | 2005                     |   |   | 2004                     |   |
| Expected                life           |   |   |   | 5.0                years |   |   | 4.9                years |   |
| Expected                volatility     |   |   |   | 27.4%                    |   |   | 30.7%                    |   |
| Dividend                yield          |   |   |   | 2.7%                     |   |   | 2.9%                     |   |
| Risk-free                interest rate |   |   |   | 3.7%                     |   |   | 3.2%                     |   |

|                                                         |   |                                |                                                            |                         |   |
|--------------------------------------------------------------|--------|-------------------------------------|-----------------------------------------------------------------|------------------------------|--------|
|                                                         |   |                                |                                                            | Weighted                     |   |
|                                                         |   | (Thousands)Number                of |                                                            | Average                Price |   |
|                                                         |   | Shares                              |                                                            | Per                Share     |   |
| Outstanding                at January 1, 2004                |   |                                | 15,912.3                                                        |                         |   | $55.32 |   |
| Granted                                                      |   |                                |  1,351.3                                                   |                         |   |   50.78 |   |
| Exercised                                                    |   |                                |                    (690.3)                       |                         |   |   38.57 |   |
| Forfeited                                                    |   |                                |                    (651.0)                       |                         |   |   57.86 |   |
| Outstanding                at December 31, 2004              |   |                                | 15,922.3                                                        |                         |   | $55.56 |   |
| Granted                                                      |   |                                |   1,409.3                                             |                         |   |                  55.53 |   |
| Converted                from Western Wireless due to merger |   |                                |   2,889.5                                             |                         |   |                  28.61 |   |
| Exercised                                                    |   |                                |                  (2,321.2)                                 |                         |   |                  33.90 |   |
| Forfeited                                                    |   |                                |                     (576.6)                 |                         |   |                  56.72 |   |
| Expired                                                      |   |                                |                        (6.8) |                         |   |                    8.92 |   |
| Outstanding                at December 31, 2005              |   |                                | 17,316.5                                                        |                         |   |  $53.94 |   |
| Granted                                                      |   |                                |                  1,357.1                                   |                         |   |                  63.25 |   |
| Exercised                                                    |   |                                |  (2,207.8)                                                 |                         |   |                  40.12 |   |
| Forfeited                                                    |   |                                |                      (96.0)            |                         |   |                  58.93 |   |
| Expired                                                      |   |                                |                      (13.8)            |                         |   |                  31.83 |   |
| Outstanding                immediately prior to the spin-off |   |                                | 16,356.0                                                        |                         |   |                  56.57 |   |
| Adjustment                in shares resulting from spin-off  |   |                                |                  3,631.0                                   |                         |   |                   - |   |
| Granted                                                      |   |                                |                       10.0        |                         |   |                  57.46 |   |
| Exercised                                                    |   |                                |                  (2,928.3)                                 |                         |   |   44.74 |   |
| Forfeited                                                    |   |                                |                     (892.5)                 |                         |   |   42.69 |   |
| Outstanding                at December 31, 2006              |   |                                | 16,176.2                                                        |                         |   | $46.78 |   |
| Exercisable                at end of period                  |   |                                | 11,784.3                                                        |                         |   | $47.11 |   |
|                                                         |   |                                |                                                            |                         |   |   |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **8.** | **Stock-Based** **Compensation                Plans, Continued:** |
|--------|------------------------------------------------------------------------|

|                           |   |                               |                                                            |                               |   |                          |   |                     |                        |                                |   |
|--------------------------------|--------|------------------------------------|-----------------------------------------------------------------|------------------------------------|--------|-------------------------------|--------|--------------------------|-----------------------------|-------------------------------------|--------|
|                           |   | Options                Outstanding |                                                            | Options                Exercisable |   |
|                           |   |                               |                                                            | Weighted                           |   | Weighted                      |   |                     |                        |  Weighted                      |   |
|                           |   | (Thousands)                        |                                                            | Average                            |   | Average                       |   | (Thousands)              |                        |  Average                       |   |
| Range                of        |   | Number                of           |                                                            | Remaining                          |   | Exercise                Price |   | Number                of |                        |  Exercise                Price |   |
| Exercise                Prices |   | Shares                             |                                                            | Contractual                Life    |   | Per                Share      |   | Shares                   |                        |  Per                Share      |   |
| $                6.20 - $12.04 |   |                               |                         64.9 |                               |   | 4.5                years      |   |                     | $                 7.50 |                                |   |                        37.8 |   |   | $                8.44 |   |
| $21.78                - $28.23 |   |                               |                    1,574.8                       |                               |   | 1.0                years      |   |                     |  27.93                 |                                |   |                   1,526.1 |   |   |  27.98 |   |
| $35.29                - $41.15 |   |                               |                    2,244.1                       |                               |   | 6.1                years      |   |                     |  39.93                 |                                |   |                   1,206.9 |   |   |  39.80 |   |
| $41.58                - $47.84 |   |                               |                    4,027.1                       |                               |   | 6.2                years      |   |                     |  44.90                 |                                |   |                   2,405.3 |   |   |  44.94 |   |
| $50.79                - $55.85 |   |                               |                   8,082.4                             |                               |   | 4.5                years      |   |                     |  53.33                 |                                |   |                   6,435.3 |   |   |  53.73 |   |
| $57.46                - $59.84 |   |                               |                      182.9                  |                               |   | 3.0                years      |   |                     |  59.18                 |                                |   |                      172.9 |   |   |  59.28 |   |
|                           |   |                               |  16,176.2                                                  |                               |   | 4.8                years      |   |                     | $46.78                      |                                |   | 11,784.3 |   |   | $47.11 |   |

|                                                        |                                                                |   |                                                                                  |                        |
|-------------------------------------------------------------|---------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|-----------------------------|
|                                                        | (Thousands)                                                         |   | Weighted                                                                              |                        |
|                                                        | Number                of                                            |   | Average                Price                                                          |                        |
|                                                        | Shares                                                              |   | Per                Share                                                              |                        |
| Non-vested                at December 31, 2005              |  5,051.4                                                       |   | $51.94                                                                                |                        |
| Granted                                                     |  1,357.1                                                       |   |   63.25                                                                     |                        |
| Vested                                                      |  (2,068.9)                                                     |   |   52.40                                                                     |                        |
| Forfeited                                                   |                     (38.5)                      |   |                  52.80                                                           |                        |
| Non-vested                immediately prior to the spin-off |  4,301.1                                                       |        |                                                                                  |                  55.28 |   |
| Adjustment                in shares resulting from spin-off |                    954.9                             |        |                                                                                  |                  -     |   |
| Granted                                                     |                      10.0                       |        |                                                                                  |                  57.46 |   |
| Vested                                                      |                                     (14.5)      |        |                                                                                  |                  22.50 |   |
| Forfeited                                                   |           (859.6) |   |                          42.40 |                        |
|  Non-vested              at December 31, 2006          |        4,391.9                   |   |        $45.89                                      |                        |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **8.** | **Stock-Based** **Compensation                Plans, Continued:** |
|--------|------------------------------------------------------------------------|

|                                           |                                                |   |                        |   |
|------------------------------------------------|-----------------------------------------------------|--------|-----------------------------|--------|
|                                           |                                                |   | Weighted                    |   |
|                                           |                                                |   | Average                     |   |
|                                           | Number                of                            |   | Fair                Value   |   |
|                                           | Shares                                              |   | Per                Share    |   |
| Non-vested                at December 31, 2005 | 302,530                                             |   | $52.52                      |   |
| Granted                                        | 303,083                                             |   |                  61.34 |   |
| Vested                                         | (111,811)                                           |   |                  50.87 |   |
| Forfeited                                      |                                   (6,250) |   |                  53.26 |   |
| Non-vested                at December 31, 2006 | 487,552                                             |   | $58.37                      |   |

| **9.** | **Employee                Benefit Plans and Postretirement Benefits Other Than                Pensions:** |
|--------|-----------------------------------------------------------------------------------------------------------|

|                                                                        |   |                                                                            |     |                                                            |   |                                              |   |                                                                                    |   |
|-----------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------|----------|-----------------------------------------------------------------|--------|---------------------------------------------------|--------|-----------------------------------------------------------------------------------------|--------|
|    (Millions)                                                |   | Before Application                of SFAS No.                158 |     | Additional Minimum Pension                Liabilities |   |  SFASNo                .158 Adjustments |   | After                    Application of                SFAS No.                158 |   |
| Other                assets - prepaid pension benefit cost                  |   | $                                                                               | 44.3     |                                                            | $      | -                                                 |   | $                                                                                       | (24.0  | ) | $ | 20.3 |   |
| Other                assets - intangible asset prepaid pension benefit cost |   | $                                                                               | -        |                                                            | $      | 5.8                                               |   | $                                                                                       | (5.8   | ) | $ | - |   |
| Other                current liabilities                                    |   | $                                                                               | 152.9    |                                                            | $      | -                                                 |   | $                                                                                       | 3.6    |   | $ | 156.5 |   |
| Deferred                income taxes                                        |   | $                                                                               | 1,127.3  |                                                            | $      | -                                                 |   | $                                                                                       | (17.8  | ) | $ | 1,109.5 |   |
| Noncurrent                liabilities for unfunded pension benefits         |   | $                                                                               | 48.0     |                                                            | $      | 5.8                                               |   | $                                                                                       | 9.0    |   | $ | 62.8 |   |
| Noncurrent                liabilities for other postretirement benefits     |   | $                                                                               | 3.9      |                                                            | $      | -                                                 |   | $                                                                                       | 3.4    |   | $ | 7.3 |   |
| Total                liabilities                                            |   | $                                                                               | 5,677.8  |                                                            | $      | 5.8                                               |   | $                                                                                       | (1.8   | ) | $ | 5,681.8 |   |
| Accumulated                other comprehensive income                       |   | $                                                                               | 37.5     |                                                            | $      | -                                                 |   | $                                                                                       | (28.0  | ) | $ | 9.5 |   |
| Total                shareholders’ equity                             |   | $                                                                               | 12,689.9 |                                                            | $      | -                                                 |   | $                                                                                       | (28.0  | ) | $ | 12,661.9 |   |
|                                                                        |   |                                                                            |     |                                                            |   |                                              |   |                                                                                    |   |   |   |   |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **9.** | **Employee                Benefit Plans and Postretirement Benefits Other Than Pensions,                Continued:** |
|--------|----------------------------------------------------------------------------------------------------------------------|

|                                                         |   |                            |   |                                   |   |
|--------------------------------------------------------------|--------|---------------------------------|--------|----------------------------------------|--------|
|                                                         |   | Pension                Benefits |   | Postretirement                Benefits |   |
| (Millions)                                                   |   | 2006                            |   | 2005                                   |   | 2004 |   | 2006 |   | 2005 |   | 2004 |   |
| Benefits                earned during the year               |   | $                               | 16.4   |                                   | $      | 36.2 |   | $ | 30.5 |   | $ | 0.3 |   | $ | 0.5 |   | $ | 0.5 |   |
| Interest                cost on benefit obligation           |   |                            | 35.2   |                                   |   | 56.3 |   |   | 51.9 |   |   | 6.9 |   |   | 14.0 |   |   | 16.5 |   |
| Amortization                of transition obligation         |   |                            | -      |                                   |   | - |   |   | - |   |   | 0.4 |   |   | 0.8 |   |   | 0.9 |   |
| Amortization                of prior service cost            |   |                            | 1.0    |                                   |   | 0.5 |   |   | 0.2 |   |   | 0.9 |   |   | 1.8 |   |   | 1.6 |   |
| Recognized                net actuarial loss                 |   |                            | 17.2   |                                   |   | 30.5 |   |   | 19.9 |   |   | 3.2 |   |   | 6.8 |   |   | 9.3 |   |
| Special                termination benefits                  |   |                            | 9.1    |                                   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Losses                from plan settlements and curtailments |   |                            | 3.6    |                                   |   | 2.5 |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Effects                of Medicare subsidy                   |   |                            | -      |                                   |   | - |   |   | - |   |   | - |   |   | - |   |   | (2.9 | ) |
| Expected                return on plan assets                |   |                            | (48.6  | )                                      |   | (82.9 | ) |   | (70.5 | ) |   | - |   |   | - |   |   | - |   |
| Total                net periodic benefit expense            |   | $                               | 33.9   |                                   | $      | 43.1 |   | $ | 32.0 |   | $ | 11.7 |   | $ | 23.9 |   | $ | 25.9 |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **9.** | **Employee                Benefit Plans and Postretirement Benefits Other Than Pensions,                Continued:** |
|--------|----------------------------------------------------------------------------------------------------------------------|

|                                          |   |                            |   |                                   |   |
|-----------------------------------------------|--------|---------------------------------|--------|----------------------------------------|--------|
|                                          |   | Pension                Benefits |   | Postretirement                Benefits |
|                                          |   | 2006                            |   |                                   |   | 2005 |   | 2004 |   | 2006 |   |   |   | 2005 |   | 2004 |
| Discount                rate                  |   | 6.12%                           |   | (a)                                    |   | 6.00% |   | 6.40% |   | 6.02% |   | (b) |   | 6.00% |   | 6.40% |
| Expected                return on plan assets |   |                            | 8.50%  |                                   |   |   |   | 8.50% |   |   | 8.50% |   |   | - |   |   |   |   | - |   | - |
| Rate                of compensation increase  |   |                            | 3.50%  |                                   |   |   |   | 3.50% |   |   | 3.50% |   |   | - |   |   |   |   | - |   | - |

| (a)    | Reflects                weighted average discount rate. Expense for the period January 1,                2006 to                June 30, 2006 calculated using discount rate of 5.80%. Expense for                the                period July 1, 2006 to December 31, 2006 calculated using discount                rate of                6.43%. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                 |
| (b)    | Reflects                weighted average discount rate. Expense for the period January 1,                2006 to                June 30, 2006 calculated using discount rate of 5.70%. Expense for                the                period July 1, 2006 to December 31, 2006 calculated using discount                rate of                6.33%. |
|   |                                                                                                                                                                                                                                                                                                                                                 |

|                                                                                               |   |                                  |    |                   |   |
|----------------------------------------------------------------------------------------------------|--------|---------------------------------------|---------|------------------------|--------|
|                                                                                               |   |  Pension                Benefits |    | PostretirementBenefits |   |
| (Millions)                                                                                         |   | 2006                                  |    | 2005                   |   | 2006 |   | 2005 |   |
| Fair                value of plan assets at beginning of year                                      |   | $                                     | 1,013.1 |                   | $      | 1,001.2 |   | $ | - |   | $ | - |   |
| Employer                contributions                                                              |   |                                  | 20.2    |                   |   | 5.2 |   |   | 6.9 |   |   | 15.6 |   |
| Participant                contributions                                                           |   |                                  | -       |                   |   | - |   |   | 3.7 |   |   | 5.2 |   |
| Transfer                to Windstream due to spin-off of wireline business                         |   |                                  | (851.2  | )                      |   | - |   |   | - |   |   | - |   |
| Settlements                                                                                        |   |                                  | (16.9   | )                      |   | - |   |   | - |   |   | - |   |
| Actual                return on plan assets                                                        |   |                                  | 38.2    |                   |   | 66.8 |   |   | - |   |   | - |   |
| Benefits                paid                                                                       |   |                                  | (31.8   | )                      |   | (60.1 | ) |   | (10.6 | ) |   | (20.8 | ) |
| Fair                value of plan assets at end of year                                            |   |                                  | 171.6   |                   |   | 1,013.1 |   |   | - |   |   | - |   |
| Projected                benefit obligation at beginning of year                                   |   |                                  | 1,055.9 |                   |   | 1,002.9 |   |   | 243.0 |   |   | 242.1 |   |
| Benefits                earned                                                                     |   |                                  | 16.4    |                   |   | 36.2 |   |   | 0.3 |   |   | 0.5 |   |
| Interest                cost on projected benefit obligation                                       |   |                                  | 35.2    |                   |   | 56.3 |   |   | 6.9 |   |   | 14.0 |   |
| Special                termination benefits                                                        |   |                                  | 9.1     |                   |   | - |   |   | - |   |   | - |   |
| Participant                contributions                                                           |   |                                  | -       |                   |   | - |   |   | 3.7 |   |   | 5.2 |   |
| Plan                amendments                                                                     |   |                                  | 3.2     |                   |   | 4.0 |   |   | - |   |   | - |   |
| Plan                settlements and curtailments                                                   |   |                                  | (16.9   | )                      |   | (41.3 | ) |   | - |   |   | - |   |
| Transfer                to Windstream due to spin-off of wireline business                         |   |                                  | (790.9  | )                      |   | - |   |   | (222.5 | ) |   | - |   |
| Effect                of Medicare subsidy                                                          |   |                                  | -       |                   |   | - |   |   | 1.4 |   |   |   |   |
| Actuarial                (gain) loss                                                               |   |                                  | (62.7   | )                      |   | 57.9 |   |   | (14.7 | ) |   | 2.0 |   |
| Benefits                paid                                                                       |   |                                  | (31.8   | )                      |   | (60.1 | ) |   | (10.6 | ) |   | (20.8 | ) |
| Projected                benefit obligation at end of year                                         |   |                                  | 217.5   |                   |   | 1,055.9 |   |   | 7.5 |   |   | 243.0 |   |
| Funded                status - plan assets less than projected benefit                obligation   |   |                                  | (45.9   | )                      |   | (42.8 | ) |   | (7.5 | ) |   | (243.0 | ) |
| Unrecognized                actuarial loss                                                         |   |                                  | -       |                   |   | 234.5 |   |   | - |   |   | 87.4 |   |
| Unrecognized                prior service cost                                                     |   |                                  | -       |                   |   | 5.7 |   |   | - |   |   | 13.6 |   |
| Unrecognized                net transition obligation                                              |   |                                  | -       |                   |   | - |   |   | - |   |   | 5.8 |   |
| Net                amount recognized                                                               |   | $                                     | (45.9   | )                      | $      | 197.4 |   | $ | (7.5 | ) | $ | (136.2 | ) |
| Amounts                recognized in the consolidated balance sheet:                               |   |                                  |    |                   |   |   |   |   |   |   |   |   |   |
| Noncurrent                assets                                                                   |   | $                                     | 20.3    |                   | $      | 249.5 |   | $ | - |   | $ | - |   |
| Current                liabilities                                                                 |   |                                  | (3.4    | )                      |   | - |   |   | (0.2 | ) |   | - |   |
| Noncurrent                liabilities                                                              |   |                                  | (62.8   | )                      |   | (52.1 | ) |   | (7.3 | ) |   | (136.2 | ) |
|                                                                                               |   | $                                     | (45.9   | )                      | $      | 197.4 |   | $ | (7.5 | ) | $ | (136.2 | ) |
| Amounts                recognized in accumulated other comprehensive income                (loss): |   |                                  |    |                   |   |   |   |   |   |   |   |   |   |
| Transition                obligation                                                               |   | $                                     | -       |                   | $      | - |   | $ | (0.1 | ) | $ | - |   |
| Prior                service cost                                                                  |   |                                  | (7.6    | )                      |   | - |   |   | (0.1 | ) |   | - |   |
| Net                actuarial loss                                                                  |   |                                  | (34.6   | )                      |   | - |   |   | (3.4 | ) |   | - |   |
|                                                                                               |   | $                                     | (42.2   | )                      | $      | - |   | $ | (3.6 | ) | $ | - |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **9.** | **Employee                Benefit Plans and Postretirement Benefits Other Than Pensions,                Continued:** |
|--------|----------------------------------------------------------------------------------------------------------------------|

|                                          |   |                            |   |                                   |   |   |   |
|-----------------------------------------------|--------|---------------------------------|--------|----------------------------------------|--------|--------|--------|
|                                          |   | Pension                Benefits |   | Postretirement                Benefits |   |   |   |
|                                          |   | 2006                            |   | 2005                                   |   | 2006   |   | 2005 |   |
| Discount                rate                  |   |                            | 5.94%  |                                   |   | 5.80%  |   |   | 5.91% |   |   | 5.70% |   |
| Expected                return on plan assets |   |                            | 8.50%  |                                   |   | 8.50%  |   |   | - |   |   | - |   |
| Rate                of compensation increase  |   |                            | 3.50%  |                                   |   | 3.50%  |   |   | - |   |   | - |   |

|                                                                         |   |       |                         |                                     |   |
|------------------------------------------------------------------------------|--------|------------|------------------------------|------------------------------------------|--------|
|                                                                         |   | Target     |                         | Percentage                of Plan Assets |   |
|                                                                         |   | Allocation |                         | At                December 31:           |   |
| Asset                Category                                                |   | 2007       |                         | 2006                                     |   | 2005 |   |
| Equity                securities                                             |   |       | 62.5%                - 77.5% |                                     |   |                   72.3% |   |   |                  71.6% |   |
| Fixed                income securities                                       |   |       | 15.0%                - 35.0% |                                     |   |                   25.3% |   |   |                  25.3% |   |
| Money                market and other short-term interest bearing securities |   |       | 0.0%                - 7.5%   |                                     |   |                    2.4% |   |   |                    3.1% |   |
|                                                                         |   |       |                         |                                     |   | 100.0% |   |   | 100.0% |   |

|                                                                          |   |   |   |   |   |   |   |   |
|-------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                          |   |   | 2006   |   | 2005   |   | 2004   |   |
| Healthcare                cost trend rate assumed for next year               |   |   | 9.00%  |   | 10.00% |   | 10.00% |   |
| Rate                that the cost trend rate ultimately declines to           |   |   | 5.00%  |   | 5.00%  |   | 5.00%  |   |
| Year                that the rate reaches the rate it is assumed to remain at |   |   | 2013   |   | 2011   |   | 2010   |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **9.** | **Employee                Benefit Plans and Postretirement Benefits Other Than Pensions,                Continued:** |
|--------|----------------------------------------------------------------------------------------------------------------------|

|                                                    |                            |   |                            |
|---------------------------------------------------------|---------------------------------|--------|---------------------------------|
|                                                    | Pension                         |   | Postretirement                  |
| (Millions)                                              | Benefits                        |   | Benefits                        |
| Expected                employer contributions for 2007 | $                3.4            |   | $                0.2            |
| Expected                benefit payments:               |                            |   |                            |
| 2007                                                    | $ 6.3                      |   | $                0.2            |
| 2008                                                    |                   6.7 |   |                   0.2 |
| 2009                                                    |                   7.1 |   |                   0.3 |
| 2010                                                    |                   7.7 |   |                   0.3 |
| 2011                                                    |                   8.3 |   |                   0.3 |
| 2012                - 2016                              |  58.1                      |   |                   1.8 |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **10.** | **Integration                Expenses, Restructuring and Other                Charges:** |
|---------|------------------------------------------------------------------------------------------|

|                                                                       |   |   |   |
|----------------------------------------------------------------------------|--------|--------|--------|
| (Millions)                                                                 |   |   |   |
| Rebranding                and signage costs                                |   | $      | 9.3    |   |
| Computer                system conversion and other integration expenses   |   |   | 4.4    |   |
| Total                integration expenses, restructuring and other charges |   | $      | 13.7   |   |

|                                                                       |   |   |   |
|----------------------------------------------------------------------------|--------|--------|--------|
| (Millions)                                                                 |   |   |   |
| Computer                system conversion and other integration expenses   |   | $      | 22.3   |   |
| Relocation                costs                                            |   |   | 0.7    |   |
| Total                integration expenses, restructuring and other charges |   | $      | 23.0   |   |

|                                                                       |   |   |   |
|----------------------------------------------------------------------------|--------|--------|--------|
| (Millions)                                                                 |   |   |   |
| Severance                and employee benefit costs                        |   | $      | 10.9   |   |
| Relocation                costs                                            |   |   | 2.8    |   |
| Lease                termination and other exit costs                      |   |   | 0.8    |   |
| Write-down                in the carrying value of certain facilities      |   |   | 24.8   |   |
| Total                integration expenses, restructuring and other charges |   | $      | 39.3   |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **10.** | **Integration                Expenses, Restructuring and Other Charges,                Continued:** |
|---------|-----------------------------------------------------------------------------------------------------|

|                                                                 |   |   |   |   |   |
|----------------------------------------------------------------------|--------|--------|--------|--------|--------|
| (Millions)                                                           |   | 2006   |   | 2005   |   |
| Balance,                beginning of year                            |   | $      | 0.2    |   | $      | 0.7 |   |
| Integration                expenses, restructuring and other charges |   |   | 13.7   |   |   | 23.0 |   |
| Non-cash                write-down of assets                         |   |   | -      |   |   | (15.0 | ) |
| Cash                outlays                                          |   |   | (13.8  | )      |   | (8.5 | ) |
| Balance,                end of year                                  |   | $      | 0.1    |   | $      | 0.2 |   |

| **11.** | **Investments                - Special Cash Dividend:** |
|---------|---------------------------------------------------------|

| **12.** | **Gain                on Disposal of Assets and                Other:** |
|---------|-------------------------------------------------------------------------|

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **13.** | **Income                Taxes:** |
|---------|----------------------------------|

|       |   |   |   |   |   |   |   |
|------------|--------|--------|--------|--------|--------|--------|--------|
| (Millions) |   | 2006   |   | 2005   |   | 2004   |   |
| Current:   |   |   |   |   |   |   |   |
| Federal    |   | $      | 280.6  |   | $      | 301.3  |   | $ | (7.7 | ) |
| State      |   |   | 77.6   |   |   | 24.3   |   |   | (2.3 | ) |
|       |   |   | 358.2  |   |   | 325.6  |   |   | (10.0 | ) |
| Deferred:  |   |   |   |   |   |   |   |   |   |   |
| Federal    |   |   | 113.1  |   |   | 85.1   |   |   | 166.8 |   |
| State      |   |   | 3.7    |   |   | 13.8   |   |   | 26.6 |   |
|       |   |   | 116.8  |   |   | 98.9   |   |   | 193.4 |   |
|       |   | $      | 475.0  |   | $      | 424.5  |   | $ | 183.4 |   |

|                                                                                |   |       |   |       |   |       |   |
|-------------------------------------------------------------------------------------|--------|------------|--------|------------|--------|------------|--------|
|                                                                                |   | 2006  |   | 2005  |   | 2004  |   |
| Statutory              federal income tax rates                                     |   |       | 35.0   | %          |   | 35.0       | %      |   | 35.0 | % |
| Increase              (decrease):                                                   |   |       |   |       |   |       |   |   |   |   |
| State                income taxes, net of federal benefit                           |   |       | 4.1    |       |   | 2.1        |   |   | 2.7 |   |
| Adjustments                to income tax liabilities including contingency reserves |   |       | (2.2   | )          |   | (0.7       | )      |   | (4.0 | ) |
| Tax-exempt                interest income                                           |   |       | (1.2   | )          |   | (0.3       | )      |   | - |   |
| Non-deductible                loss on debt exchange                                 |   |       | 0.7    |       |   | -          |   |   | - |   |
| Allowance                of prior year loss on disposal of a subsidiary             |   |       | -      |       |   | -          |   |   | (3.0 | ) |
| Other                items, net                                                     |   |       | 0.2    |       |   | 0.5        |   |   | 0.1 |   |
| Effective              income tax rates                                             |   |       | 36.6   | %          |   | 36.6       | %      |   | 30.8 | % |
|                                                                                |   |       |   |       |   |       |   |   |   |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **13.** | **Income                Taxes, Continued:** |
|---------|---------------------------------------------|

|                                                                                                                          |   |   |    |   |   |
|-------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|
| (Millions)                                                                                                                    |   | 2006   |    | 2005   |   |
| Deferred                tax assets:                                                                                           |   |   |    |   |   |
| Partnership                investments                                                                                        |   | $      | (29.9   | )      | $      | (29.4 | ) |
| Deferred                compensation                                                                                          |   |   | (32.4   | )      |   | (32.6 | ) |
| Operating                loss carryforwards                                                                                   |   |   | (28.1   | )      |   | (122.1 | ) |
| Allowance                for doubtful accounts                                                                                |   |   | (8.1    | )      |   | (20.2 | ) |
| Pension                and other employee benefits                                                                            |   |   | (16.1   | )      |   | - |   |
| Other                                                                                                                         |   |   | (37.0   | )      |   | (48.1 | ) |
|                                                                                                                          |   |   | (151.6  | )      |   | (252.4 | ) |
| Valuation                allowance                                                                                            |   |   | 18.8    |   |   | 14.2 |   |
| Total                deferred tax assets                                                                                      |   |   | (132.8  | )      |   | (238.2 | ) |
| Deferred                tax liabilities:                                                                                      |   |   |    |   |   |   |   |
| Property,                plant and equipment                                                                                  |   |   | 398.6   |   |   | 468.9 |   |
| Goodwill                and other intangibles                                                                                 |   |   | 740.9   |   |   | 660.0 |   |
| International                assets held for sale                                                                             |   |   | -       |   |   | 484.4 |   |
| Capitalized                software development costs                                                                         |   |   | 33.3    |   |   | 26.1 |   |
| Pension                and other employee benefits                                                                            |   |   | -       |   |   | 34.1 |   |
| Unrealized                holding gain on investments                                                                         |   |   | 32.2    |   |   | 24.1 |   |
| Other                                                                                                                         |   |   | 13.1    |   |   | 32.5 |   |
| Total                deferred tax liabilities                                                                                 |   |   | 1,218.1 |   |   | 1,730.1 |   |
| Net                deferred income tax liability                                                                              |   | $      | 1,085.3 |   | $      | 1,491.9 |   |
| Current                deferred income tax liabilities                                                                        |   | $      | -       |   | $      | 349.6 |   |
| Noncurrent                deferred income tax liabilities                                                                     |   |   | 1,109.5 |   |   | 1,142.3 |   |
| Less                current deferred income tax assets (included in Prepaid expenses                and                other) |   |   | (24.2   | )      |   | - |   |
| Net                deferred income tax liability                                                                              |   | $      | 1,085.3 |   | $      | 1,491.9 |   |

| **14.** | **Discontinued                Operations:** |
|---------|---------------------------------------------|

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **14.** | **Discontinued                Operations, Continued:** |
|---------|--------------------------------------------------------|

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **14.** | **Discontinued                Operations, Continued:** |
|---------|--------------------------------------------------------|

|                                                      |   |   |    |       |   |       |   |
|-----------------------------------------------------------|--------|--------|---------|------------|--------|------------|--------|
| (Millions)                                                |   | 2006   |    |  2005 |   |  2004 |   |
| Revenues                and sales                         |   | $      | 1,839.3 |       | $      | 3,369.8    |   | $ | 2,947.2 |   |
| Operating                expenses (a)                     |   |   | 1,290.5 |       |   | 2,325.4    |   |   | 1,944.5 |   |
| Operating                income                           |   |   | 548.8   |       |   | 1,044.4    |   |   | 1,002.7 |   |
| Minority                interest in consolidated entities |   |   | (6.0    | )          |   | (5.9       | )      |   | - |   |
| Other                expense, net                         |   |   | 0.9     |       |   | 11.6       |   |   | 13.2 |   |
| Interest                expense (b)                       |   |   | (9.1    | )          |   | (19.4      | )      |   | (19.4 | ) |
| Loss                on sale of discontinued operations    |   |   | (14.8   | )          |   | -          |   |   | - |   |
| Income                before income taxes                 |   |   | 519.8   |       |   | 1,030.7    |   |   | 996.5 |   |
| Income                tax expense (c)                     |   |   | 214.1   |       |   | 427.4      |   |   | 362.4 |   |
| Income                from discontinued operations        |   | $      | 305.7   |       | $      | 603.3      |   | $ | 634.1 |   |

| (a)    | Excludes                general corporate overhead expenses previously allocated to the wireline                business in accordance with Emerging Issues Task Force Issue No.                87-24,                “Allocation of Interest Expense to Discontinued Operations”. The amount of                corporate overhead expenses added back to Alltel’s continuing operations                totaled $7.0 million in 2006, $42.1 million in 2005 and $42.3 million                in                2004. Operating expenses for 2006 included an impairment charge of                $30.5                million to reflect the fair value less cost to sell of the four rural                markets in Minnesota required to be divested, and resulted in the                write-down in the carrying values of goodwill ($25.9 million) and                customer                list ($4.6 million) allocated to these markets.                                                          |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (b)    | Except                for $260.8 million of long-term debt directly related to the wireline                business that was transferred to Windstream and a $50.0 million credit                facility agreement that was assumed by the buyer of the Bolivian                operations, Alltel had no outstanding indebtedness directly related                to the                wireline business, the international operations or the domestic markets                to                be divested, and accordingly, no additional interest expense was                allocated                to discontinued operations for the periods presented.                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (c)    | Includes                an income tax benefit recorded in 2006 due to the reversal of $7.6                million                of income tax contingency reserves attributable to the spun-off wireline                business and sold financial services division. Income tax expense                for 2004                also includes an income tax benefit of $16.9 million due to the reversal                of federal income tax contingency reserves attributable to the spun-off                wireline business and the sold financial services division. In connection                with the IRS audits of the Company’s consolidated federal income tax                returns for the fiscal years 1997 through 2001, Alltel also recorded                a                foreign tax credit carryback benefit of $4.4 million. (See Note 2                for a                further discussion of the reversal of income tax contingency reserves                recorded in 2006 and 2004). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **14.** | **Discontinued                Operations, Continued:** |
|---------|--------------------------------------------------------|

|                                                                |   |   |   |   |   |
|---------------------------------------------------------------------|--------|--------|--------|--------|--------|
| (Millions)                                                          |   | 2006   |   | 2005   |   |
| Current                assets                                       |   | $      | 4.3    |   | $      | 565.4 |   |
| Property,                plant and equipment, net                   |   |   | 19.6   |   |   | 3,276.2 |   |
| Goodwill                and other intangible assets (a) (b)         |   |   | 25.9   |   |   | 2,984.6 |   |
| Other                assets                                         |   |   | -      |   |   | 157.4 |   |
| Non-current                assets                                   |   |   | 45.5   |   |   | 6,418.2 |   |
| Total                assets related to discontinued operations      |   | $      | 49.8   |   | $      | 6,983.6 |   |
| Current                liabilities                                  |   | $      | 2.8    |   | $      | 492.5 |   |
| Long-term                debt                                       |   |   | -      |   |   | 287.1 |   |
| Deferred                income taxes                                |   |   | -      |   |   | 718.6 |   |
| Other                liabilities                                    |   |   | -      |   |   | 218.6 |   |
| Non-current                liabilities                              |   |   | -      |   |   | 1,224.3 |   |
| Total                liabilities related to discontinued operations |   | $      | 2.8    |   | $      | 1,716.8 |   |

| (a)    | At                December 31, 2006, this amount consisted of goodwill ($3.7 million),                cellular licenses ($21.5 million) and customer list ($0.7 million)                related                to the four Minnesota markets required to be divested.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| (b)    | At                December 31, 2005, this amount included the fair value of licenses                and                customer lists related to the international operations and domestic                markets to be divested acquired from Western Wireless. Because all                of the                assets acquired from Western Wireless that were classified as held                for                sale were disposed of by June 30, 2006, Alltel did not complete third                party valuations to assign specific fair values to the identifiable                intangible assets of the international operations and domestic markets                to                be divested. This amount also included goodwill of $1,247.9 million                and                other intangible assets of $317.7 million related to the wireline                business. |

| **15.** | **Other                Comprehensive Income                (Loss):** |
|---------|----------------------------------------------------------------------|

|                                                                   |   |   |   |   |   |   |   |
|------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| (Millions)                                                             |   | 2006   |   | 2005   |   | 2004   |   |
| Unrealized                holding gains (losses) on investments:       |   |   |   |   |   |   |   |
| Unrealized                holding gains (losses) arising in the period |   | $      | 23.4   |   | $      | (126.7 | )      | $ | 116.9 |   |
| Income                tax expense (benefit)                            |   |   | 8.2    |   |   | (44.4  | )      |   | 36.2 |   |
|                                                                   |   |   | 15.2   |   |   | (82.3  | )      |   | 80.7 |   |
| Reclassification                adjustments for (gains) losses         |   |   |   |   |   |   |   |   |   |   |
| included                in net income for the period                   |   |   | -      |   |   | (75.8  | )      |   | (0.7 | ) |
| Income                tax expense (benefit)                            |   |   | -      |   |   | 26.5   |   |   | 0.3 |   |
|                                                                   |   |   | -      |   |   | (49.3  | )      |   | (0.4 | ) |
| Net                unrealized gains (losses) in the period             |   |   | 23.4   |   |   | (202.5 | )      |   | 116.2 |   |
| Income                tax expense (benefit)                            |   |   | 8.2    |   |   | (70.9  | )      |   | 35.9 |   |
|                                                                   |   |   | 15.2   |   |   | (131.6 | )      |   | 80.3 |   |
| Foreign                currency translation adjustment:                |   |   |   |   |   |   |   |   |   |   |
| Translation                adjustment for the period                   |   |   | (2.1   | )      |   | (4.1   | )      |   | (0.1 | ) |
| Reclassification                adjustments for losses included in     |   |   |   |   |   |   |   |   |   |   |
| net                income for the period                               |   |   | 4.9    |   |   | 0.8    |   |   | - |   |
|                                                                   |   |   | 2.8    |   |   | (3.3   | )      |   | (0.1 | ) |
| Other                comprehensive income (loss) before tax            |   |   | 26.2   |   |   | (205.8 | )      |   | 116.1 |   |
| Income                tax expense (benefit)                            |   |   | 8.2    |   |   | (70.9  | )      |   | 35.9 |   |
| Other                comprehensive income (loss)                       |   | $      | 18.0   |   | $      | (134.9 | )      | $ | 80.2 |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **15.** | **Other                Comprehensive Income (Loss),                Continued:** |
|---------|---------------------------------------------------------------------------------|

|                                                   |   |   |   |   |   |
|--------------------------------------------------------|--------|--------|--------|--------|--------|
| (Millions)                                             |   | 2006   |   | 2005   |   |
| Unrealized                holding gains on investments |   | $      | 37.5   |   | $      | 22.3 |   |
| Foreign                currency translation adjustment |   |   | -      |   |   | (2.8 | ) |
| Defined                benefit pension plans           |   |   | (25.8  | )      |   | - |   |
| Other                postretirement benefit plan       |   |   | (2.2   | )      |   | - |   |
| Accumulated                other comprehensive income  |   | $      | 9.5    |   | $      | 19.5 |   |

| **16.** | **Commitments                and Contingencies:** |
|---------|---------------------------------------------------|

|       |   |   |       |   |   |   |
|------------|--------|--------|------------|--------|--------|--------|
| Year       |   |   | (Millions) |        |        |   |
| 2007       |   |   |       |   | $      | 189.0  |   |
| 2008       |   |   |       |   |   | 158.7  |   |
| 2009       |   |   |       |   |   | 122.2  |   |
| 2010       |   |   |       |   |   | 82.8   |   |
| 2011       |   |   |       |   |   | 49.4   |   |
| Thereafter |   |   |       |   |   | 180.4  |   |
| Total      |   |   |       |   | $      | 782.5  |   |

| **17.** | **Agreement                to Lease Cell Site Towers:** |
|---------|---------------------------------------------------------|

|                                                                                    |   |   |   |   |   |
|-----------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|
| (Millions)                                                                              |   | 2006   |   | 2005   |   |
| Deferred                rental income - current (included in other current liabilities) |   | $      | 35.5   |   | $      | 35.5 |   |
| Deferred                rental income - long-term (included in other liabilities)       |   |   | 301.7  |   |   | 337.2 |   |
| Total                deferred rental income                                             |   | $      | 337.2  |   | $      | 372.7 |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **18.** | **Quarterly                Financial Information -                (Unaudited):** |
|---------|----------------------------------------------------------------------------------|

|                                                                  |   |                                                |    |
|-----------------------------------------------------------------------|--------|-----------------------------------------------------|---------|
|                                                                  |   | For                the year ended December 31, 2006 |    |
| (Millions,                except per share amounts)                   |   | Total                                               |    | 4th |   | 3rd |   | 2nd |   | 1st |   |
| Revenues                and sales                                     |   | $                                                   | 7,884.0 |   | $ | 2,088.2 |   | $ | 2,007.3 |   | $ | 1,945.2 |   | $ | 1,843.3 |   |
| Operating                income                                       |   | $                                                   | 1,357.6 |   | $ | 363.8 |   | $ | 358.0 |   | $ | 343.8 |   | $ | 292.0 |   |
| Income                from continuing operations, net of tax          |   | $                                                   | 823.7   |   | $ | 235.8 |   | $ | 165.3 |   | $ | 288.4 |   | $ | 134.2 |   |
| Income                (loss) from discontinued operations, net of tax |   |                                                | 305.7   |   |   | (19.9 | ) |   | 21.9 |   |   | 140.5 |   |   | 163.2 |   |
| Net                income                                             |   | $                                                   | 1,129.4 |   | $ | 215.9 |   | $ | 187.2 |   | $ | 428.9 |   | $ | 297.4 |   |
| Preferred                dividends                                    |   |                                                | 0.1     |   |   | - |   |   | 0.1 |   |   | - |   |   | - |   |
| Net                income applicable to common shares                 |   | $                                                   | 1,129.3 |   | $ | 215.9 |   | $ | 187.1 |   | $ | 428.9 |   | $ | 297.4 |   |
| Basic                earnings per share:                              |   |                                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations                      |   |                                                | $2.15   |   |   | $.63 |   |   | $.43 |   |   | $                 .74 |   |   | $.35 |   |
| Income                (loss) from discontinued operations             |   |                                                | .80     |   |   | (.05 | ) |   | .06 |   |   | .36 |   |   | .42 |   |
| Net                income                                             |   |                                                | $2.95   |   |   | $.58 |   |   | $.49 |   |   | $1.10 |   |   | $.77 |   |
| Diluted                earnings per share:                            |   |                                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations                      |   |                                                | $2.14   |   |   | $.63 |   |   | $.43 |   |   | $                 .74 |   |   | $.35 |   |
| Income                (loss) from discontinued operations             |   |                                                | .79     |   |   | (.05 | ) |   | .05 |   |   | .36 |   |   | .42 |   |
| Net                income                                             |   |                                                | $2.93   |   |   | $.58 |   |   | $.48 |   |   | $1.10 |   |   | $.77 |   |

|                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|----------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Notes                to Quarterly Financial Information: |
| A.                                                       | During                the fourth quarter of 2006, Alltel incurred $2.9 million of integration                expenses related to its recent acquisitions of Midwest Wireless and                wireless properties in Illinois, Texas and Virginia. These expenses                primarily consisted of branding, signage and computer system conversion                costs. These expenses decreased net income $1.8 million or less than                $.01                per share. (See Note 10). During the fourth quarter of 2006, Alltel                recorded a $37.5 million adjustment to its income tax liabilities                including its contingency reserves to reflect the settlement with                the IRS                of all of the Company’s tax liabilities related to its consolidated                federal income tax returns for the years 1997 through 2003. The effects                of                the adjustment to the income tax liabilities resulted in a decrease                in                income tax expense from continuing operations of $29.9 million, or                $.08                per share, and a reduction in income tax expense from discontinued                operations of $7.6 million, or $.02 per share. (See Note 2). Loss                from                discontinued operations included an impairment charge of $30.5 million                to                reflect the fair value less cost to sell of the four rural markets                in                Minnesota required to be divested. The effects of the impairment                charge                decreased income from discontinued operations $28.7 million, or $.07                per                share. (See Note 14). |
|                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| B.                                                       | During                the third quarter of 2006, Alltel repurchased prior to maturity $1.0                billion of long-term debt and terminated a related interest swap                agreement. In connection with the early termination of the debt and                interest rate swap agreement, Alltel incurred net pretax termination                fees                of $23.0 million. Following the spin-off of the wireline business,                Alltel                completed a debt exchange in which the Company transferred to two                investment banks certain debt securities received in the spin-off                transaction in exchange for certain Alltel debt securities. In completing                the tax-free debt exchange, Alltel incurred a loss of $27.5 million.                These                transactions decreased net income $38.8 million or $.10 per share                in 2006.                (See Note 12).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| C.                                                       | During                the second quarter of 2006, Alltel recorded a pretax gain of $176.6                million related to the liquidation of its investment in Rural Telephone                Bank Class C stock. This transaction increased net income $107.6                million                or $.28 per share in 2006. (See Note 12).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| D.                                                       | During                the first quarter of 2006, Alltel incurred $10.8 million of integration                expenses incurred in connection with Alltel’s acquisition of Western                Wireless. The integration expenses primarily consisted of branding,                signage and system conversion costs. These expenses decreased net                income                $6.6 million or $.02 per share. (See Note 10).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**18.**
**Quarterly      Financial Information - (Unaudited), Continued:**

|                                                                |   |                                                |
|---------------------------------------------------------------------|--------|-----------------------------------------------------|
|                                                                |   | For                the year ended December 31, 2005 |
| (Millions,                except per share amounts)                 |   | Total                                               |   | 4th |   | 3rd |   | 2nd |   | 1st |   |
| Revenues                and sales                                   |   | $                                                   | 6,572.5 |   | $ | 1,837.2 |   | $ | 1,793.0 |   | $ | 1,526.0 |   | $ | 1,416.3 |   |
| Operating                income                                     |   | $                                                   | 1,134.2 |   | $ | 267.0 |   | $ | 338.7 |   | $ | 291.1 |   | $ | 237.4 |   |
| Income                from continuing operations, net of tax        |   | $                                                   | 735.5 |   | $ | 117.8 |   | $ | 184.2 |   | $ | 259.9 |   | $ | 173.6 |   |
| Income                from discontinued operations, net of tax      |   |                                                | 603.3 |   |   | 144.8 |   |   | 176.9 |   |   | 142.2 |   |   | 139.4 |   |
| Income                before cumulative effect of accounting change |   | $                                                   | 1,338.8 |   | $ | 262.6 |   | $ | 361.1 |   | $ | 402.1 |   | $ | 313.0 |   |
| Cumulative                effect of accounting change, net of tax   |   |                                                | (7.4 | ) |   | (7.4 | ) |   | - |   |   | - |   |   | - |   |
| Net                income                                           |   | $                                                   | 1,331.4 |   | $ | 255.2 |   | $ | 361.1 |   | $ | 402.1 |   | $ | 313.0 |   |
| Preferred                dividends                                  |   |                                                | 0.1 |   |   | - |   |   | - |   |   | 0.1 |   |   | - |   |
| Net                income applicable to common shares               |   | $                                                   | 1,331.3 |   | $ | 255.2 |   | $ | 361.1 |   | $ | 402.0 |   | $ | 313.0 |   |
| Basic                earnings per share:                            |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations                    |   |                                                | $2.16 |   |   | $.31 |   |   | $.51 |   |   | $                 .83 |   |   | $                 .58 |   |
| Income                from discontinued operations                  |   |                                                | 1.77 |   |   | .37 |   |   | .48 |   |   | .45 |   |   | .46 |   |
| Cumulative                effect of accounting change               |   |                                                | (.02 | ) |   | (.02 | ) |   | - |   |   | - |   |   | - |   |
| Net                income                                           |   |                                                | $3.91 |   |   | $.66 |   |   | $.99 |   |   | $1.28 |   |   | $1.04 |   |
| Diluted                earnings per share:                          |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations                    |   |                                                | $2.14 |   |   | $.31 |   |   | $.50 |   |   | $                 .82 |   |   | $                 .57 |   |
| Income                from discontinued operations                  |   |                                                | 1.75 |   |   | .37 |   |   | .48 |   |   | .45 |   |   | .46 |   |
| Cumulative                  effect of accounting change             |   |                                                | (.02 | ) |   | (.02 | ) |   | - |   |   | - |   |   | - |   |
| Net                income                                           |   |                                                | $3.87 |   |   | $.66 |   |   | $.98 |   |   | $1.27 |   |   | $1.03 |   |

|                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|----------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Notes                to Quarterly Financial Information: |
| E.                                             | During                the fourth quarter of 2005, Alltel recorded $8.7 million of integration                expenses related to its acquisition of Western Wireless, purchase                of                wireless properties in Alabama and Georgia and the exchange of wireless                properties with Cingular. These expenses decreased net income $5.2                million, or $.01 per share. (See Note 10). In the fourth quarter                of 2005,                Alltel adopted the measurement and recognition provisions of FIN                47 in                accounting for conditional asset retirement obligations. The cumulative                effect of this accounting change resulted in a one-time non-cash                charge of                $7.4 million, net of income tax benefit of $4.6 million, or $.02                per                share. (See Note 2.) |
|                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| F.                                                       | During                the third quarter of 2005, the Company recorded an additional pretax                gain                of $30.5 million related to the exchange of three wireless partnership                interests with Cingular. Alltel also incurred $14.3 million of integration                expenses related to its acquisition of Western Wireless and exchange                of                wireless properties with Cingular. These transactions increased net                income                $9.9 million or $.03 per share. (See Notes 10 and 12).                                                                                                                                                                                                                                                                                                                                           |
|                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| G.                                                       | During                the second quarter of 2005, in connection with the Company’s exchange of                certain wireless assets with Cingular, Alltel recorded a pretax gain                of                $127.5 million. The Company also recorded a pretax gain of $75.8                million                from the sale of all of its shares of Fidelity National common stock.                In                addition, the Company incurred net pretax termination fees of                approximately $15.0 million in connection with the early termination                of                $450.0 million of long-term debt and a related interest rate swap                agreement. These transactions increased net income $118.0 million                or $.37                per share (See Note 12).                                                                                  |
|                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| H.                                                       | During                the first quarter of 2005, the Company received a special cash dividend                of                $111.0 million on its investment in Fidelity National common                stock.                This transaction increased net income $69.8 million or $.20 per share.                (See Note 11).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

**19.**
**Subsequent      Event:**