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[
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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[
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Operating
income from current businesses
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Other
income, net from current businesses
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Income
taxes from current businesses
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Net
income from current businesses
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Basic
and diluted earnings per share from current businesses
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Equity
free cash flow from current
businesses
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The current business measures are non-GAAP financial measures that
differ
from their respective GAAP counterparts in that they exclude the
effects
of discontinued operations,
amortization expense related to acquired, finite-lived intangible
assets,
a special cash dividend received on the Company’s investment in Fidelity
National Financial,
Inc. common stock, gain (loss) on the exchange or disposal of assets,
debt
prepayment expenses, costs associated with Hurricane Katrina, a change
in
accounting
for certain operating leases and integration expenses and other
charges.
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Alltel’s purpose for excluding items from the current business measures
is
to focus on Alltel's true earnings capacity associated with providing
telecommunication 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. For these reasons, 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. 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, resource allocation and the determination
of management
compensation.
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2
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Equity
free cash flow from current businesses is a non-GAAP financial measure
that is computed as net income from current businesses plus depreciation
and amortization
less capital expenditures including capitalized software development
costs. The Company believes that reporting equity free cash flow
from
current businesses
assists investors in understanding Alltel’s ability to generate sufficient
positive cash flows to fund its ongoing cash operating requirements
including
capital expenditures, payment of dividends and debt service obligations.
Equity free cash flow from current businesses should not be considered
in
isolation or as a substitute for cash flow from operations prepared
in
accordance with GAAP.
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The
financial tables of Alltel’s Press Release include a reconciliation of
each of the non-GAAP financial measures discussed above to its most
directly comparable financial
measure calculated and presented in accordance with GAAP. A copy
of
Alltel’s Press Release dated October 27, 2006 is attached hereto as
Exhibit 99(a) and
is furnished as a part of this filing.
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On October 27, 2006, the Company also released quarterly supplemental
unaudited financial information from current businesses of Alltel
for the
nine months ended
September 30, 2006 and for the year ended December 31, 2005. The
supplemental unaudited financial information from current businesses
gives
effect to
the spin-off of the wireline telecommunications business of Alltel
to its
stockholders that was completed on July 17, 2006. The supplemental
selected financial
information from current businesses also reflects the add back to
Alltel’s
continuing operations general corporate overhead expenses previously
allocated
to the wireline business in accordance with Emerging Issues Task
Force
Issue No. 87-24, “Allocation of Interest to Discontinued Operations”. In
accordance
with Statement of Financial Accounting Standards (“SFAS”) No. 144
“Accounting for the Impairment or Disposal of Long-Lived Assets”,
the
results of operations of the wireline telecommunications business
have
been presented as discontinued operations for all periods presented
in the
accompanying
supplemental financial data. Following the spin-off, Alltel provides
wireless voice and data communications services to more than 11 million
customers
in 35 states. Alltel manages its wireless business and retained portion
of
communications support services as a single operating segment,
and
accordingly, Alltel’s continuing operations consist of a single reportable
business segment, wireless communications services. In accordance
with
SFAS
No. 131 “Disclosures about Segments of an Enterprise and Related
Information”, all prior period segment information included in the
accompanying supplemental
financial data has been reclassified to report only one operating
segment.
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The quarterly supplemental information includes a
reconciliation of each of the non-GAAP financial measures presented
within
to its most directly comparable financial
measure calculated and presented in accordance with GAAP. The quarterly
supplemental financial information is attached hereto as Exhibit
99(b) and
is
furnished as a part of this filing.
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Exhibit
99(a)
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Press
Release dated October 27, 2006 of
Alltel
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Exhibit
99(b)
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Supplemental
Quarterly Financial Information from Current Business of Alltel for
the
nine
months ended September 30, 2006 and for the year ended
December
31, 2005
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3
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4
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Exhibit
99(b)
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Supplemental
Quarterly Financial Information from Current Businesses of Alltel
for the
nine months ended September 30, 2006 and for the year
ended
December 31, 2005
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5
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