AT Atlantic Power Corporation

Alltel (NYSE:AT) recorded strong growth in the second quarter by adding 181,000 post-pay customers and dropping churn to an all-time low. Alltel reported fully diluted earnings per share under Generally Accepted Accounting Principles (GAAP) of 56 cents and fully diluted earnings per share of 75 cents from current businesses, a 42 percent increase from a year ago and a record high for the quarter. �This was truly an exceptional quarter that saw our company establish new records for earnings per share, service revenue, operating income, post-pay additions and churn,� said Alltel President and CEO Scott Ford. �The entire Alltel team has done an outstanding job of delivering strong financial results while remaining focused on our customers and working to obtain the approvals necessary to close on the merger agreement.� Among the highlights for the second quarter: Revenues were $2 billion, a 12 percent increase from a year ago. Net income under GAAP was $196 million. Net income from current businesses was $261 million, a 25 percent increase from a year ago. Alltel added 181,000 post-pay customers, up 46 percent from a year ago. Pre-pay net additions were flat during the quarter due to seasonal trends. Wireless service revenue was $1.97 billion, a new record and an increase of 14 percent from a year ago. Post-pay churn was 1.16 percent and total churn was 1.67 percent. Both are record lows for Alltel and year-over-year improvements for the sixth consecutive quarter. Average revenue per wireless customer (ARPU) was $54.10, a 3 percent increase from last year. Data revenue per customer was $5.63, up 73 percent from last year and 20 percent sequentially. Equity free cash flow from current businesses was $243 million, a 42 percent increase. Net cash provided from operations was $552 million, a 114 percent increase from last year. In the quarter, Alltel announced on May 20 it has agreed to be acquired by TPG Capital and Goldman Sachs Capital Partners for $71.50 per share in cash. The necessary regulatory approvals are progressing well. As expected, the Hart-Scott-Rodino waiting period expired on July 5 without issue. Proxy statements were mailed to Alltel shareholders on July 25 and the shareholder meeting to approve the transaction is scheduled for Aug. 29. The Federal Communications Commission filed a Public Notice related to the transfer of Alltel�s licenses on June 25 and, while the company is waiting to hear from the FCC more definitively on the timing of its approval process, Alltel expects a favorable FCC vote this year. The merger agreement (which is summarized in Alltel�s proxy statement and available on the company website) provides that the obligations of TPG/Goldman Sachs to acquire Alltel are not conditioned on financing. TPG and Goldman received written commitments at the time of the deal from several of the largest financial institutions in the world to back their obligations. Alltel has been given no reason to believe that these firms will not honor their obligations. Alltel expects the transaction to close by year end. Alltel operates America�s largest wireless network, which delivers voice and advanced data services nationwide to 12 million customers. Headquartered in Little Rock, Ark., Alltel is a Forbes 500 company with annual revenues of nearly $8 billion. Alltel claims the protection of the safe-harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to uncertainties that could cause actual future events and results to differ materially from those expressed in the forward-looking statements. These forward-looking statements are based on estimates, projections, beliefs, and assumptions and are not guarantees of future events and results. Actual future events and results may differ materially from those expressed in these forward-looking statements as a result of a number of important factors. Representative examples of these factors include (without limitation) occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement with TPG and GS Capital; the inability to complete the merger due to the failure to obtain stockholder approval for the merger or the failure to satisfy other conditions to completion of the merger, including the receipt of all regulatory approvals related to the merger; risks that the proposed transaction disrupts current plans and operations; adverse changes in economic conditions in the markets served by Alltel; the extent, timing, and overall effects of competition in the communications business; material changes in the communications industry generally that could adversely affect vendor relationships with equipment and network suppliers and customer relationships with wholesale customers; changes in communications technology; the risks associated with the integration of acquired businesses; adverse changes in the terms and conditions of the wireless roaming agreements of Alltel; the potential for adverse changes in the ratings given to Alltel's debt securities by nationally accredited ratings organizations; the uncertainties related to Alltel�s strategic investments; the effects of litigation; and the effects of federal and state legislation, rules, and regulations governing the communications industry. In addition to these factors, actual future performance, outcomes, and results may differ materially because of more general factors including (without limitation) general industry and market conditions and growth rates, economic conditions, and governmental and public policy changes. Alltel, NYSE: AT www.alltel.com � ALLTEL CORPORATION CONSOLIDATED HIGHLIGHTS AND OTHER FINANCIAL INFORMATION (UNAUDITED) (In thousands, except per share amounts) � � THREE MONTHS ENDED Increase June 30, June 30, (Decrease) 2007 2006 Amount % UNDER GAAP: Service revenues $ 1,971,616 $ 1,734,128 $ 237,488 14 Total revenues and sales $ 2,175,088 $ 1,945,232 $ 229,856 12 Operating income $ 378,534 $ 343,831 $ 34,703 10 Service revenue operating margin (A) 19.2% � 19.8% � (.6% ) (3 ) Operating margin (B) 17.4% � 17.7% � (.3% ) (2 ) Income from continuing operations $ 198,579 $ 288,429 $ (89,850 ) (31 ) Net income $ 195,696 $ 428,903 $ (233,207 ) (54 ) Earnings per share: Basic $.57 $1.10 $(.53 ) (48 ) Diluted $.56 $1.10 $(.54 ) (49 ) � Weighted average common shares: Basic 344,641 388,752 (44,111 ) (11 ) Diluted 347,727 390,463 (42,736 ) (11 ) � Capital expenditures (C) $ 325,400 $ 299,830 $ 25,570 9 Total assets $ 17,438,572 $ 23,933,548 $ (6,494,976 ) (27 ) � FROM CURRENT BUSINESSES (NON-GAAP) (D): Operating income $ 459,740 $ 388,572 $ 71,168 18 Service revenue operating margin (A) 23.3% � 22.4% � .9% � 4 Operating margin (B) 21.1% � 20.0% � 1.1% � 6 Net income $ 261,084 $ 208,193 $ 52,891 25 Earnings per share: Basic $.76 $.54 $.22 41 Diluted $.75 $.53 $.22 42 Equity free cash flow (E) $ 242,740 $ 170,951 $ 71,789 42 (A) Service revenue operating margin is calculated by dividing operating income by service revenues. (B) Operating margin is calculated by dividing operating income by total revenues and sales. (C) Includes capitalized software development costs. (D) Current businesses excludes the effects of discontinued operations, amortization expense related to acquired, finite-lived intangible assets, gain on disposal of assets, costs associated with Hurricane Katrina, and integration expenses and other charges. (E) Equity free cash flow is calculated as the sum of net income from current businesses plus depreciation expense less capital expenditures, which includes capitalized software development costs as indicated in Note C. � Operating results from current businesses have been reconciled to operating results under GAAP on pages 6 and 7 of this release. � ALLTEL CORPORATION CONSOLIDATED STATEMENTS OF INCOME UNDER GAAP (UNAUDITED)-Page 2 (In thousands, except per share amounts) � THREE MONTHS ENDED June 30, June 30, 2007 2006 Revenues and sales: Service revenues $ 1,971,616 $ 1,734,128 Product sales 203,472 211,104 Total revenues and sales 2,175,088 1,945,232 Costs and expenses: Cost of services 640,212 573,977 Cost of products sold 288,638 283,351 Selling, general, administrative and other 479,442 434,509 Depreciation and amortization 352,271 309,564 Integration expenses and other charges 35,991 - Total costs and expenses 1,796,554 1,601,401 � Operating income 378,534 343,831 � Equity earnings in unconsolidated partnerships 16,406 15,399 Minority interest in consolidated partnerships (8,889 ) (11,482 ) Other income, net 5,591 21,016 Interest expense (47,437 ) (86,438 ) Gain on disposal of assets - 176,639 � Income from continuing operations before income taxes 344,205 458,965 Income taxes 145,626 170,536 � Income from continuing operations 198,579 288,429 Income (loss) from discontinued operations (2,883 ) 140,474 � Net income 195,696 428,903 Preferred dividends 19 21 Net income applicable to common shares $ 195,677 $ 428,882 � Basic earnings per share: Income from continuing operations $.58 $�.74 Income (loss) from discontinued operations (.01 ) .36 Net income $.57 $1.10 � Diluted earnings per share: Income from continuing operations $.57 $�.74 Income (loss) from discontinued operations (.01 ) .36 Net income $.56 $1.10 � ALLTEL CORPORATION CONSOLIDATED HIGHLIGHTS AND OTHER FINANCIAL INFORMATION (UNAUDITED) (In thousands, except per share amounts) � � SIX MONTHS ENDED Increase June 30, June 30, (Decrease) 2007 2006 Amount % UNDER GAAP: Service revenues $ 3,851,736 $ 3,383,276 $ 468,460 14 Total revenues and sales $ 4,253,636 $ 3,788,465 $ 465,171 12 Operating income $ 732,825 $ 635,785 $ 97,040 15 Service revenue operating margin (A) 19.0% � 18.8% � .2% � 1 Operating margin (B) 17.2% � 16.8% � .4% � 2 Income from continuing operations $ 428,862 $ 422,613 $ 6,249 1 Net income $ 425,834 $ 726,310 $ (300,476 ) (41 ) Earnings per share: Basic $1.21 $1.87 $(.66 ) (35 ) Diluted $1.20 $1.86 $(.66 ) (35 ) � Weighted average common shares: Basic 350,910 387,760 (36,850 ) (10 ) Diluted 353,790 389,958 (36,168 ) (9 ) � Capital expenditures (C) $ 495,048 $ 458,217 $ 36,831 8 � FROM CURRENT BUSINESSES (NON-GAAP) (D): Operating income $ 866,258 $ 736,808 $ 129,450 18 Service revenue operating margin (A) 22.5% � 21.8% � .7% � 3 Operating margin (B) 20.4% � 19.4% � 1.0% � 5 Net income $ 486,521 $ 376,766 $ 109,755 29 Earnings per share: Basic $1.39 $.97 $.42 43 Diluted $1.38 $.97 $.41 42 Equity free cash flow (E) $ 602,157 $ 434,957 $ 167,200 38 (A) Service revenue operating margin is calculated by dividing operating income by service revenues. (B) Operating margin is calculated by dividing operating income by total revenues and sales. (C) Includes capitalized software development costs. (D) Current businesses excludes the effects of discontinued operations, amortization expense related to acquired, finite-lived intangible assets, gain on disposal of assets, costs associated with Hurricane Katrina, and integration expenses and other charges. (E) Equity free cash flow is calculated as the sum of net income from current businesses plus depreciation expense less capital expenditures, which includes capitalized software development costs as indicated in Note C. � Operating results from current businesses have been reconciled to operating results under GAAP on pages 6 and 7 of this release. � ALLTEL CORPORATION CONSOLIDATED STATEMENTS OF INCOME UNDER GAAP (UNAUDITED)-Page 2 (In thousands, except per share amounts) � SIX MONTHS ENDED June 30, June 30, 2007 2006 Revenues and sales: Service revenues $ 3,851,736 $ 3,383,276 Product sales 401,900 405,189 Total revenues and sales 4,253,636 3,788,465 Costs and expenses: Cost of services 1,251,207 1,116,761 Cost of products sold 576,147 556,048 Selling, general, administrative and other 949,340 860,205 Depreciation and amortization 701,776 608,876 Integration expenses and other charges 42,341 10,790 Total costs and expenses 3,520,811 3,152,680 � Operating income 732,825 635,785 � Equity earnings in unconsolidated partnerships 31,385 28,331 Minority interest in consolidated partnerships (18,583 ) (25,377 ) Other income, net 13,263 31,807 Interest expense (94,132 ) (171,154 ) Gain on disposal of assets 56,548 176,639 � Income from continuing operations before income taxes 721,306 676,031 Income taxes 292,444 253,418 � Income from continuing operations 428,862 422,613 Income (loss) from discontinued operations (3,028 ) 303,697 � Net income 425,834 726,310 Preferred dividends 39 42 Net income applicable to common shares $ 425,795 $ 726,268 � Basic earnings per share: Income from continuing operations $1.22 $1.09 Income (loss) from discontinued operations (.01 ) .78 Net income $1.21 $1.87 � Diluted earnings per share: Income from continuing operations $1.21 $1.08 Income (loss) from discontinued operations (.01 ) .78 Net income $1.20 $1.86 � � ALLTEL CORPORATION CONSOLIDATED BALANCE SHEETS UNDER GAAP (UNAUDITED)-Page 3 (In thousands) � � ASSETS � June 30, December 31, 2007 2006 � CURRENT ASSETS: Cash and short-term investments $ 456,298 $ 934,228 Accounts receivable (less allowance for doubtful accounts of $64,500 and $54,865, respectively) 839,195 807,307 Inventories 206,473 218,629 Prepaid expenses and other 86,106 67,665 Assets related to discontinued operations - 4,321 � Total current assets 1,588,072 2,032,150 � Investments 187,067 368,871 Goodwill 8,421,305 8,447,013 Other intangibles 2,042,341 2,129,346 � � PROPERTY, PLANT AND EQUIPMENT: Land 328,310 314,902 Buildings and improvements 990,888 955,061 Operating plant and equipment 8,313,569 7,933,840 Information processing 1,114,089 1,048,136 Furniture and fixtures 178,560 173,835 Under construction 431,093 495,968 � Total property, plant and equipment 11,356,509 10,921,742 Less accumulated depreciation 6,257,618 5,690,360 � Net property, plant and equipment 5,098,891 5,231,382 � Other assets 100,896 89,455 Assets related to discontinued operations - 45,497 � � TOTAL ASSETS $ 17,438,572 $ 18,343,714 � � ALLTEL CORPORATION CONSOLIDATED BALANCE SHEETS UNDER GAAP (UNAUDITED)-Page 3 (In thousands) � � LIABILITIES AND SHAREHOLDERS' EQUITY � June 30, December 31, 2007 2006 � CURRENT LIABILITIES: Current maturities of long-term debt $ 39,689 $ 36,285 Accounts payable 496,231 576,126 Advance payments and customer deposits 205,270 186,193 Accrued taxes 180,538 114,109 Accrued dividends 43,010 46,039 Accrued interest 79,105 79,281 Other current liabilities 185,577 156,471 Liabilities related to discontinued operations - 2,761 � Total current liabilities 1,229,420 1,197,265 � � Long-term debt 2,743,942 2,697,412 Deferred income taxes 1,083,342 1,109,479 Other liabilities 700,146 677,609 � Total liabilities 5,756,850 5,681,765 � � � SHAREHOLDERS' EQUITY: Preferred stock 253 258 Common stock 343,864 364,572 Additional paid-in capital 3,031,311 4,296,786 Accumulated other comprehensive�income (loss) (26,053 ) 9,525 Retained earnings 8,332,347 7,990,808 � Total shareholders' equity 11,681,722 12,661,949 � � TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 17,438,572 $ 18,343,714 � � ALLTEL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS UNDER GAAP (UNAUDITED)-Page 4 (In thousands) � THREE MONTHS ENDED June 30, June 30, 2007 2006 Cash Flows from Operating Activities: Net income $ 195,696 $ 428,903 Adjustments to reconcile net income to net cash provided from operating activities: Loss (income) from discontinued operations 2,883 (140,474 ) Depreciation and amortization expense 352,271 309,564 Provision for doubtful accounts 49,566 64,693 Non-cash portion of gain on disposal of assets - (176,639 ) Change in deferred income taxes 34,938 (19,220 ) Other, net (9,441 ) (4,264 ) Changes in operating assets and liabilities, net of the effects of acquisitions and dispositions: Accounts receivable (124,393 ) (127,422 ) Inventories 7,889 34,336 Accounts payable 8,103 32,478 Other current liabilities 34,799 (109,112 ) Other, net (763 ) (35,373 ) Net cash provided from operating activities 551,548 257,470 � Cash Flows from Investing Activities: Additions to property, plant and equipment (315,963 ) (290,528 ) Additions to capitalized software development costs (9,437 ) (9,302 ) Purchases of property, net of cash acquired (3,750 ) (217,487 ) Proceeds from the sale of investments - 199,921 Proceeds from the return on investments 13,880 13,363 Other, net 1,036 4,058 Net cash used in investing activities (314,234 ) (299,975 ) � Cash Flows from Financing Activities: Dividends on common and preferred stock (44,565 ) (149,415 ) Repayments of long-term debt (35,590 ) (41 ) Cash payments to effect conversion of convertible notes - - Distributions to minority investors (13,283 ) (8,483 ) Purchases of common stock (421,514 ) - Excess tax benefits from stock option exercises 1,339 2,276 Long-term debt issued 100,000 - Common stock issued 10,510 33,688 Net cash used in financing activities (403,103 ) (121,975 ) � Cash Flows from Discontinued Operations: Cash provided from (used in) operating activities (3,107 ) 165,013 Cash provided from investing activities 48,365 1,557,828 Cash provided from financing activities - 92,726 Net cash provided from discontinued operations 45,258 1,815,567 � Effect of exchange rate changes on cash and short-term investments - (6,464 ) � Increase (decrease) in cash and short-term investments (120,531 ) 1,644,623 � Cash and Short-term Investments: Beginning of the period 576,829 881,838 End of the period $ 456,298 $ 2,526,461 � � ALLTEL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS UNDER GAAP (UNAUDITED)-Page 4 (In thousands) � SIX MONTHS ENDED June 30, June 30, 2007 2006 Cash Flows from Operating Activities: Net income $ 425,834 $ 726,310 Adjustments to reconcile net income to net cash provided from operating activities: Loss (income) from discontinued operations 3,028 (303,697 ) Depreciation and amortization expense 701,776 608,876 Provision for doubtful accounts 86,827 113,393 Non-cash portion of gain on disposal of assets (56,548 ) (176,639 ) Change in deferred income taxes 47,093 21,267 Other, net (16,163 ) (4,334 ) Changes in operating assets and liabilities, net of the effects of acquisitions and dispositions: Accounts receivable (120,834 ) (136,115 ) Inventories 12,156 71,000 Accounts payable (81,675 ) (68,157 ) Other current liabilities 133,800 (155,913 ) Other, net (22,585 ) (53,684 ) Net cash provided from operating activities 1,112,709 642,307 � Cash Flows from Investing Activities: Additions to property, plant and equipment (477,818 ) (441,201 ) Additions to capitalized software development costs (17,230 ) (17,016 ) Purchases of property, net of cash acquired (6,250 ) (676,418 ) Proceeds from the sale of investments 188,711 199,921 Proceeds from the return on investments 24,811 22,277 Other, net 680 11,377 Net cash used in investing activities (287,096 ) (901,060 ) � Cash Flows from Financing Activities: Dividends on common and preferred stock (90,526 ) (297,152 ) Repayments of long-term debt (36,254 ) (730 ) Cash payments to effect conversion of convertible notes - (59,848 ) Distributions to minority investors (21,055 ) (20,293 ) Purchases of common stock (1,360,298 ) - Excess tax benefits from stock option exercises 5,169 5,657 Long-term debt issued 100,000 - Common stock issued 52,958 88,584 Net cash used in financing activities (1,350,006 ) (283,782 ) � Cash Flows from Discontinued Operations: Cash provided from (used in) operating activities (1,178 ) 599,484 Cash provided from investing activities 47,641 1,492,015 Cash provided from financing activities - 969 Net cash provided from discontinued operations 46,463 2,092,468 � Effect of exchange rate changes on cash and short-term investments - (5,879 ) � Increase (decrease) in cash and short-term investments (477,930 ) 1,544,054 � Cash and Short-term Investments: Beginning of the period 934,228 982,407 End of the period $ 456,298 $ 2,526,461 � ALLTEL CORPORATION SUPPLEMENTAL OPERATING INFORMATION (UNAUDITED)-Page 5 (Dollars in thousands, except per customer amounts) � THREE MONTHS ENDED Increase June 30, June 30, (Decrease) 2007 2006 Amount % � Controlled POPs 79,575,793 78,000,811 1,574,982 2 Customers 12,242,066 11,085,145 1,156,921 10 Penetration rate 15.4% � 14.2% � 1.2% � 8 Average customers 12,147,380 10,951,268 1,196,112 11 Gross customer additions: Internal 789,961 770,589 19,372 3 Acquired - 112,095 (112,095 ) (100 ) Total 789,961 882,684 (92,723 ) (11 ) Net customer additions: Internal 181,494 145,985 35,509 24 Acquired - 112,095 (112,095 ) (100 ) Total 181,494 258,080 (76,586 ) (30 ) Cash costs from current businesses: Cost of services $640,212 $576,212 $64,000 11 Cost of products sold 288,638 283,351 5,287 2 Selling, general, administrative and other 479,442 434,509 44,933 10 Less product sales 203,472 211,104 (7,632 ) (4 ) Total $1,204,820 $1,082,968 $121,852 11 Cash costs from current businesses per unit per month (A) $33.06 $32.96 $.10 - Revenues: Service revenues $1,971,616 $1,734,128 $237,488 14 Less wholesale roaming revenues 170,121 163,590 6,531 4 Less wholesale transport revenues 42,850 7,844 35,006 446 Retail revenues $1,758,645 $1,562,694 $195,951 13 Average revenue per customer per month (B) $54.10 $52.78 $1.32 3 Retail revenue per customer per month (C) $48.26 $47.57 $.69 1 Retail minutes of use per customer per month (D) 724 638 86 13 Postpay churn 1.16% � 1.47% � (.31% ) (21 ) Total churn 1.67% � 1.91% � (.24% ) (13 ) � � (A) Cash costs from current businesses per unit per month is calculated by dividing the sum of the current businesses reported cost of services, cost of products sold, selling, general, administrative and other expenses less product sales by the number of average customers for the period. Measured on a GAAP basis, cash costs per unit per month were $33.06 and $32.87 for the three and six months ended June 30, 2007, respectively, and $32.90 and $32.72 for the same periods of 2006, respectively. (B) Average revenue per customer per month is calculated by dividing service revenues by average customers for the period. (C) Retail revenue per customer per month is calculated by dividing retail revenues (service revenues less wholesale revenues) by average customers for the period. (D) Retail minutes of use per customer per month represents the average monthly minutes that Alltel's customers use on both the Company's network and while roaming on other carriers' networks. � Operating results from current businesses have been reconciled to operating results under GAAP on pages 6 and 7 of this release. � � ALLTEL CORPORATION SUPPLEMENTAL OPERATING INFORMATION (UNAUDITED)-Page 5 (Dollars in thousands, except per customer amounts) � SIX MONTHS ENDED Increase June 30, June 30, (Decrease) 2007 2006 Amount % � Average customers 12,041,655 10,838,881 1,202,774 11 Gross customer additions: Internal 1,657,434 1,576,043 81,391 5 Acquired - 112,095 (112,095 ) (100 ) Total 1,657,434 1,688,138 (30,704 ) (2 ) Net customer additions: Internal 418,128 310,726 107,402 35 Acquired - 112,095 (112,095 ) (100 ) Total 418,128 422,821 (4,693 ) (1 ) Cash costs from current businesses: Cost of services $1,251,207 $1,118,996 $132,211 12 Cost of products sold 576,147 556,048 20,099 4 Selling, general, administrative and other 949,340 860,205 89,135 10 Less product sales 401,900 405,189 (3,289 ) (1 ) Total $2,374,794 $2,130,060 $244,734 11 Cash costs from current businesses per unit per month (A) $32.87 $32.75 $.12 - Revenues: Service revenues $3,851,736 $3,383,276 $468,460 14 Less wholesale roaming revenues 324,308 314,593 9,715 3 Less wholesale transport revenues 89,284 18,194 71,090 391 Retail revenues $3,438,144 $3,050,489 $387,655 13 Average revenue per customer per month (B) $53.31 $52.02 $1.29 2 Retail revenue per customer per month (C) $47.59 $46.91 $.68 1 Retail minutes of use per customer per month (D) 688 620 68 11 Postpay churn 1.24% � 1.56% � (.32% ) (21 ) Total churn 1.72% � 1.95% � (.23% ) (12 ) � � (A) Cash costs from current businesses per unit per month is calculated by dividing the sum of the current businesses reported cost of services, cost of products sold, selling, general, administrative and other expenses less product sales by the number of average customers for the period. Measured on a GAAP basis, cash costs per unit per month were $33.06 and $32.87 for the three and six months ended June 30, 2007, respectively, and $32.90 and $32.72 for the same periods of 2006, respectively. (B) Average revenue per customer per month is calculated by dividing service revenues by average customers for the period. (C) Retail revenue per customer per month is calculated by dividing retail revenues (service revenues less wholesale revenues) by average customers for the period. (D) Retail minutes of use per customer per month represents the average monthly minutes that Alltel's customers use on both the Company's network and while roaming on other carriers' networks. � Operating results from current businesses have been reconciled to operating results under GAAP on pages 6 and 7 of this release. ALLTEL CORPORATION RECONCILIATIONS OF RESULTS OF OPERATIONS UNDER GAAP TO RESULTS OF OPERATIONS FROM CURRENT BUSINESSES (NON-GAAP) (UNAUDITED) - Page 6 (In thousands) � THREE MONTHS ENDED JUNE 30, 2007 � � Depreciation Cost of and Operating Services Amortization Income Under GAAP $640,212 $352,271 $378,534 Items excluded from measuring results from current businesses: Amortization expense related to acquired, finite-lived intangible assets (A) - (45,215 ) 45,215 Integration expenses and other charges (B)(C) - - 35,991 Loss from discontinued operations (I) - - - Net increase (decrease) - (45,215 ) 81,206 From current businesses $640,212 $307,056 $459,740 � � Income Income Before From Income Income Continuing Net Taxes Taxes Operations Income Under GAAP $344,205 $145,626 $198,579 $195,696 Items excluded from measuring results from current businesses: Amortization expense related to acquired, finite-lived intangible assets (A) 45,215 17,589 27,626 27,626 Integration expenses and other charges (B)(C) 35,991 1,112 34,879 34,879 Loss from discontinued operations (I) - - - 2,883 Net increase (decrease) 81,206 18,701 62,505 65,388 From current businesses $425,411 $164,327 $261,084 $261,084 � � Basic Diluted Earnings Earnings Per Share Per Share Under GAAP $.57 $.56 Items excluded from measuring results from current businesses: Amortization expense related to acquired, finite-lived intangible assets (A) .08 .08 Integration expenses and other charges (B)(C) .10 .10 Loss from discontinued operations (I) .01 .01 Net increase (decrease) .19 .19 From current businesses $.76 $.75 � � � � ALLTEL CORPORATION RECONCILIATIONS OF RESULTS OF OPERATIONS UNDER GAAP TO RESULTS OF OPERATIONS FROM CURRENT BUSINESSES (NON-GAAP) (UNAUDITED) - Page 6 (In thousands) � THREE MONTHS ENDED JUNE 30, 2006 � � Depreciation Cost of and Operating Services Amortization Income Under GAAP $573,977 $309,564 $343,831 Items excluded from measuring results from current businesses: Amortization expense related to acquired, finite-lived intangible assets (A) - (46,976 ) 46,976 Reversal of excess bad debt reserve related to Hurricane Katrina (G) 2,235 - (2,235 ) Gain on disposal of assets (H) - - - Income from discontinued operations (I) - - - Net increase (decrease) 2,235 (46,976 ) 44,741 From current businesses $576,212 $262,588 $388,572 � � Income Income Before From Income Income Continuing Net Taxes Taxes Operations Income Under GAAP $458,965 $170,536 $288,429 $428,903 Items excluded from measuring results from current businesses: Amortization expense related to acquired, finite-lived intangible assets (A) 46,976 18,274 28,702 28,702 Reversal of excess bad debt reserve related to Hurricane Katrina (G) (2,235 ) (869 ) (1,366 ) (1,366 ) Gain on disposal of assets (H) (176,639 ) (69,067 ) (107,572 ) (107,572 ) Income from discontinued operations (I) - - - (140,474 ) Net increase (decrease) (131,898 ) (51,662 ) (80,236 ) (220,710 ) From current businesses $327,067 $118,874 $208,193 $208,193 � � Basic Diluted Earnings Earnings Per Share Per Share Under GAAP $1.10 $1.10 Items excluded from measuring results from current businesses: Amortization expense related to acquired, finite-lived intangible assets (A) .08 .07 Reversal of excess bad debt reserve related to Hurricane Katrina (G) - - Gain on disposal of assets (H) (.28 ) (.28 ) Income from discontinued operations (I) (.36 ) (.36 ) Net increase (decrease) (.56 ) (.57 ) From current businesses $ .54 $�.53 � � ALLTEL CORPORATION RECONCILIATIONS OF RESULTS OF OPERATIONS UNDER GAAP TO RESULTS OF OPERATIONS FROM CURRENT BUSINESSES (NON-GAAP) (UNAUDITED)- Page 7 (In thousands) � SIX MONTHS ENDED JUNE 30, 2007 � � Depreciation Cost of and Operating Services Amortization Income Under GAAP $1,251,207 $701,776 $732,825 Items excluded from measuring results from current businesses: Amortization expense related to acquired, finite-lived intangible assets (A) - (91,092 ) 91,092 Integration expenses and other charges (B)(C)(D) - - 42,341 Gain on disposal of assets (E) - - - Loss from discontinued operations (I) - - - Net increase (decrease) - (91,092 ) 133,433 From current businesses $ 1,251,207 $610,684 $866,258 � � Income Income Before From Income Income Continuing Net Taxes Taxes Operations Income Under GAAP $721,306 $292,444 $428,862 $425,834 Items excluded from measuring results from current businesses: Amortization expense related to acquired, finite-lived intangible assets (A) 91,092 35,435 55,657 55,657 Integration expenses and other charges (B)(C)(D) 42,341 3,583 38,758 38,758 Gain on disposal of assets (E) (56,548 ) (19,792 ) (36,756 ) (36,756 ) Loss from discontinued operations (I) - - - 3,028 Net increase (decrease) 76,885 19,226 57,659 60,687 From current businesses $798,191 $311,670 $486,521 $486,521 � � Basic Diluted Earnings Earnings Per Share Per Share Under GAAP $1.21 $1.20 Items excluded from measuring results from current businesses: Amortization expense related to acquired, finite-lived intangible assets (A) .16 .16 Integration expenses and other charges (B)(C)(D) .11 .11 Gain on disposal of assets (E) (.10 ) (.10 ) Loss from discontinued operations (I) .01 .01 Net increase (decrease) .18 .18 From current businesses $1.39 $1.38 � � ALLTEL CORPORATION RECONCILIATIONS OF RESULTS OF OPERATIONS UNDER GAAP TO RESULTS OF OPERATIONS FROM CURRENT BUSINESSES (NON-GAAP) (UNAUDITED)- Page 7 (In thousands) � SIX MONTHS ENDED JUNE 30, 2006 � � Depreciation Cost of and Operating Services Amortization Income Under GAAP $ 1,116,761 $608,876 $635,785 Items excluded from measuring results from current businesses: Amortization expense related to acquired, finite-lived intangible assets (A) - (92,468 ) 92,468 Reversal of excess bad debt reserve related to Hurricane Katrina (G) 2,235 - (2,235 ) Gain on disposal of assets (H) - - - Integration expenses and other charges (F) - - 10,790 Income from discontinued operations (I) - - - Net increase (decrease) 2,235 (92,468 ) 101,023 From current businesses $ 1,118,996 $516,408 $736,808 � � Income Income Before From Income Income Continuing Net Taxes Taxes Operations Income Under GAAP $676,031 $253,418 $422,613 $726,310 Items excluded from measuring results from current businesses: Amortization expense related to acquired, finite-lived intangible assets (A) 92,468 35,970 56,498 56,498 Reversal of excess bad debt reserve related to Hurricane Katrina (G) (2,235 ) (869 ) (1,366 ) (1,366 ) Gain on disposal of assets (H) (176,639 ) (69,067 ) (107,572 ) (107,572 ) Integration expenses and other charges (F) 10,790 4,197 6,593 6,593 Income from discontinued operations (I) - - - (303,697 ) Net increase (decrease) (75,616 ) (29,769 ) (45,847 ) (349,544 ) From current businesses $600,415 $223,649 $376,766 $376,766 � � Basic Diluted Earnings Earnings Per Share Per Share Under GAAP $1.87 $1.86 Items excluded from measuring results from current businesses: Amortization expense related to acquired, finite-lived intangible assets (A) .15 .15 Reversal of excess bad debt reserve related to Hurricane Katrina (G) - - Gain on disposal of assets (H) (.28 ) (.28 ) Integration expenses and other charges (F) .02 .01 Income from discontinued operations (I) (.79 ) (.77 ) Net increase (decrease) (.90 ) (.89 ) From current businesses $�.97 $�.97 � ALLTEL CORPORATION RECONCILIATIONS OF RESULTS OF OPERATIONS UNDER GAAP TO RESULTS OF OPERATIONS FROM CURRENT BUSINESSES (NON-GAAP) (UNAUDITED)-Page 8 (In thousands) � THREE MONTHS ENDED June 30, June 30, 2007 2006 � Net cash provided from operating activities $551,548 $257,470 Adjustments to reconcile to net income under GAAP: Income (loss) from discontinued operations (2,883 ) 140,474 Depreciation and amortization expense (352,271 ) (309,564 ) Provision for doubtful accounts (49,566 ) (64,693 ) Non-cash portion of gain on disposal of assets - 176,639 Change in deferred income taxes (34,938 ) 19,220 Other non-cash changes, net 9,441 4,264 Changes in operating assets and liabilities, net of the effects of acquisitions and dispositions 74,365 205,093 Net income under GAAP 195,696 428,903 Adjustments to reconcile to net income from current businesses, net of tax (see specific items listed on pages 6 and 7) 65,388 (220,710 ) Net income from current businesses 261,084 208,193 Adjustments to reconcile to equity free cash flow from current businesses: Depreciation expense from current businesses 307,056 262,588 Capital expenditures (325,400 ) (299,830 ) Equity free cash flow from current businesses $242,740 $170,951 � � ALLTEL CORPORATION RECONCILIATIONS OF RESULTS OF OPERATIONS UNDER GAAP TO RESULTS OF OPERATIONS FROM CURRENT BUSINESSES (NON-GAAP) (UNAUDITED)-Page 8 (In thousands) � SIX MONTHS ENDED June 30, June 30, 2007 2006 � Net cash provided from operating activities $ 1,112,709 $642,307 Adjustments to reconcile to net income under GAAP: Income (loss) from discontinued operations (3,028 ) 303,697 Depreciation and amortization expense (701,776 ) (608,876 ) Provision for doubtful accounts (86,827 ) (113,393 ) Non-cash portion of gain on disposal of assets 56,548 176,639 Change in deferred income taxes (47,093 ) (21,267 ) Other non-cash changes, net 16,163 4,334 Changes in operating assets and liabilities, net of the effects of acquisitions and dispositions 79,138 342,869 Net income under GAAP 425,834 726,310 Adjustments to reconcile to net income from current businesses, net of tax (see specific items listed on pages 6 and 7) 60,687 (349,544 ) Net income from current businesses 486,521 376,766 Adjustments to reconcile to equity free cash flow from current businesses: Depreciation expense from current businesses 610,684 516,408 Capital expenditures (495,048 ) (458,217 ) Equity free cash flow from current businesses $ 602,157 $434,957 � ALLTEL CORPORATION NOTES TO RECONCILIATIONS OF RESULTS OF OPERATIONS UNDER GAAP TO RESULTS OF OPERATIONS FROM CURRENT BUSINESSES (NON-GAAP) (UNAUDITED)-Page 9 � As disclosed in the ALLTEL Corporation ("Alltel" or the "Company") Form 8-K filed on August 1, 2007, Alltel has presented in this earnings release results of operations from current businesses which exclude the effects of discontinued operations, amortization expense related to acquired, finite-lived intangible assets, gain on disposal of assets, costs associated with Hurricane Katrina, and integration expenses and other charges. Alltel's purpose for excluding items from the current business measures is to focus on Alltel's true earnings capacity associated with providing wireless communications services. Management believes the items excluded from the current business measures are related to strategic activities or other events, specific to the time and opportunity available, and, accordingly, should be excluded when evaluating the trends of the Company's operations. � Alltel believes that presenting the current business measures assists investors in assessing the true business performance of the Company by clarifying for investors the effects that certain items such as asset sales, integration expenses and other business consolidation costs arising from past acquisition and integration activities had on the Company's GAAP consolidated results of operations. The Company uses results from current businesses as management's primary measure of the performance of its business operations. Alltel's management, including the chief operating decision-maker, uses the current business measures consistently for all purposes, including internal reporting purposes, the evaluation of business objectives, opportunities and performance and the determination of management compensation. � (A) Eliminates the effects of amortization expense related to acquired, finite-lived intangible assets. � (B) On May 20, 2007, Alltel entered into an agreement to be acquired by two private investment firms, TPG Partners V, L.P. and GS Capital Partners VI Fund, L.P. Completion of the transaction, which is currently expected to occur by the end of 2007, is contingent upon customary closing conditions, including approval by Alltel's shareholders and certain regulatory approvals, including the approval of the Federal Communications Commission ("FCC"). In connection with this transaction, Alltel incurred $33.1 million of incremental costs, principally consisting of financial advisory, legal and regulatory filing fees. � (C) During the second quarter of 2007, the Company incurred $2.2 million of integration expenses related to its acquisitions of Midwest Wireless Holdings ("Midwest Wireless") and wireless properties in Illinois, Texas and Virginia completed during 2006 (collectively, "the 2006 acquisitions"). These expenses primarily consisted of branding, signage and computer system conversion costs. Alltel also recorded $0.7 million of severance and employee benefit costs associated with the closing of a call center. � (D) During the first quarter of 2007, the Company incurred $2.6 million of integration expenses related to the 2006 acquisitions consisting of branding, signage and computer system conversion costs. Alltel also recorded a pretax charge of $3.7 million associated with the closing of two call centers, consisting of severance and employee benefit costs related to a planned workforce reduction. � (E) Alltel completed the sale of marketable equity securities that had been acquired in connection with its August 1, 2005 merger with Western Wireless Corporation ("Western Wireless"). In connection with the sale of these securities, Alltel recorded a pretax gain of $56.5 million. � (F) The Company incurred $10.8 million of integration expenses related to its acquisition of Western Wireless. These expenses consisted of $8.3 million of rebranding costs and $2.5 million of system conversion costs and other integration costs. � (G) The Company recorded a $2.2 million reduction in its allowance for doubtful accounts to reflect lower than expected write-offs from service interruptions and customer displacement attributable to the effects of Hurricane Katrina. The additional bad debt expense was originally recorded in the third quarter of 2005. � (H) During 2005, federal legislation was enacted which included provisions to dissolve and liquidate the assets of the Rural Telephone Bank ("RTB"). In connection with the dissolution and liquidation, during April 2006, the RTB redeemed all outstanding shares of its Class C stock. As a result, Alltel received liquidating cash distributions of $198.7 million in exchange for its $22.1 million investment in RTB Class C stock. � ALLTEL CORPORATION NOTES TO RECONCILIATIONS OF RESULTS OF OPERATIONS UNDER GAAP TO RESULTS OF OPERATIONS FROM CURRENT BUSINESSES (NON-GAAP) (UNAUDITED) (CONTINUED)-Page 10 � (I) Eliminates the effects of discontinued operations. Loss from discontinued operations in the six month period ended June 30, 2007 included an impairment charge of $1.7 million to reflect the fair value less cost to sell of the four rural markets in Minnesota required to be divested, as further discussed below. � As a condition of receiving approval from the Department of Justice ("DOJ") and the FCC for its acquisition of Midwest Wireless, on September 7, 2006, Alltel agreed to divest certain wireless operations in four rural markets in Minnesota. Accordingly, the four markets to be divested in Minnesota have been classified as discontinued operations in the accompanying unaudited consolidated financial statements. On April 3, 2007, Alltel completed the sale of these properties. � On July 17, 2006, Alltel completed the spin-off of its wireline telecommunications business to its stockholders and the merger of that wireline business with Valor Communications Group, Inc. ("Valor"). The spin-off included the majority of Alltel's communications support services, including directory publishing, information technology outsourcing services, retail long-distance and the wireline sales portion of communications products. The new wireline company formed in the merger of Alltel's wireline operations and Valor is named Windstream Corporation. As a result, Alltel's historical results of operations have been adjusted to reflect the wireline business as discontinued operations in the accompanying unaudited consolidated financial statements. � In addition, as a condition of receiving approval for the Western Wireless acquisition from the DOJ and the FCC, Alltel agreed to divest certain wireless operations of Western Wireless in 16 markets in Arkansas, Kansas and Nebraska. In December 2005, Alltel completed an exchange of wireless properties with United States Cellular Corporation that included a substantial portion of the divestiture requirements related to the merger. In the first quarter of 2006, Alltel completed the required divestitures with the sale of the remaining property in Arkansas. During 2005, Alltel completed the sales of international operations in Georgia, Ghana and Ireland acquired from Western Wireless. During the second quarter of 2006, Alltel completed the sales of the remaining international operations acquired from Western Wireless in Austria, Bolivia, Cote d'Ivoire, Haiti, and Slovenia. As a result, the acquired international operations and interests of Western Wireless and the 16 markets to be divested in Arkansas, Kansas and Nebraska have been classified as discontinued operations in the accompanying unaudited consolidated financial statements.