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Delaware		4813		20-3767946
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

Richard N. Massey, Esq. Executive Vice President And Secretary Alltel Corporation One Allied Drive Little Rock, AR 72202 Tel. (501) 905-8000 Fax (501) 905-0962		Daniel L. Heard, Esq. Kutak Rock LLP 425 W. Capitol Avenue Suite 1100 Little Rock, AR 72201 Tel. (501) 975-3000 Fax (501) 975-3001

Proposed Maximum

Proposed Maximum

Title of Each Class of

Amount to be

Offering Price

Aggregate

Amount of

Securities to be Registered

Registered(1)

Per Unit

Offering Price(2)

Registration Fee(3)

Common Stock, par value $.01 per share

389,107,443 shares

N/A

$3,595,352,774

$384,703

(1)	This Registration Statement relates to shares of common stock, par value $.01 per share, of Alltel Holding Corp. (“Spinco”) which will be distributed pursuant to a spin-off transaction to a third-party exchange agent for the benefit of holders of common stock, par value $1 per share, of Alltel Corporation (“Alltel”) and which will be immediately converted into that number of shares of common stock , par value $0.0001, of Valor Communications Group, Inc. (“Valor”) that Alltel stockholders will be entitled to receive pursuant to the proposed merger of Spinco with and into Valor. The amount of Spinco common stock to be registered represents the maximum number of shares of Spinco common stock that will be distributed to the third party exchange agent for the benefit of holders of Alltel common stock upon consummation of the spin-off. One share of Spinco common stock will be distributed to the exchange agent for each share of Alltel common stock outstanding on the record date of the spin-off. Because it is not possible to accurately state the number of shares of Alltel common stock that will be outstanding as of the record date of the spin-off, this calculation is based on 388,857,700 shares of Alltel common stock outstanding as of April 28, 2006.
(2)	Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(f)(2) of the Securities Act, based on the book value (computed as of April 28, 2006, the most recent date for which such information is available) of the common stock of Spinco.
(3)	Computed in accordance with Rule 457(f) and Section 6(b) under the Securities Act of 1933 by multiplying (A) the proposed maximum aggregate offering price for all securities to be registered by (B) 0.000107. A total of $400,070.83 was previously paid by the Valor in connection with the filing of the Registration Statement on Form S-4 on February 28, 2006 (File No. 333-132073) and Amendment 1 thereto filed on April 12, 2006 (File No. 333-132073). Thus, the aggregate registration fees payable in connection with the transaction have previously been paid. Accordingly, no filing fee is paid herewith.

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The information in this proxy statement/ prospectus-information statement is not complete and may be changed. Valor Communications Group, Inc. may not distribute or issue the shares of Valor common stock being registered pursuant to this registration statement until the registration statement filed with the Securities and Exchange Commission is effective. This proxy statement/ prospectus-information statement is not an offer to distribute these securities and Valor Communications Group, Inc. is not soliciting offers to receive these securities in any state where such offer or distribution is not permitted.

	Sincerely,
	John J. Mueller
	President and Chief Executive Officer
	Member of the Board of Directors

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	Sincerely,
	Scott T. Ford
	President and Chief Executive Officer

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	1. to adopt the Agreement and Plan of Merger, dated as of December 8, 2005 and amended on May 18, 2006, as such may be further amended from time to time (the “Merger Agreement”), by and among Alltel Corporation, Alltel Holding Corp. (“Spinco”) and Valor Communications Group, Inc., pursuant to which (i) Spinco will merge with and into Valor, after which Valor will survive as a stand-alone company and will hold and conduct the combined business operations of Valor and Spinco and (ii) Valor will issue an aggregate number of shares in the merger equal to 5.667 multiplied by Valor’s total number of shares of common stock outstanding on a fully diluted basis immediately prior to the merger, which we expect to equal approximately 405,000,000 shares;
	2. to approve the amendment of the certificate of incorporation of Valor pursuant to the merger to increase the authorized number of shares of Valor common stock from 200,000,000 to 1,000,000,000;
	3. to approve the issuance of up to 405,000,000 shares of Valor common stock to Alltel stockholders in accordance with the terms of the Merger Agreement;
	4. to adopt and approve the 2006 Equity Incentive Plan, a copy of which is attached as Annex G to this proxy statement/ prospectus-information statement;
	5. to elect eleven (11) directors to serve until the 2007 Annual Meeting of Stockholders or until their successors are duly elected and qualified or until their earlier removal, resignation or death;
	6. to ratify the appointment of Deloitte & Touche LLP as Valor’s independent registered public accounting firm for the fiscal year ending December 31, 2006 or until their earlier removal or termination;
	7. to adjourn the annual meeting, if necessary, to solicit additional proxies for the adoption of the merger agreement, approval of the amendment to the Certificate of Incorporation and Bylaws of Valor pursuant to the merger or approval of the issuance of shares of Valor common stock pursuant to the merger; and
	8. to transact any and all other business that may properly come before the annual meeting or any adjourned session of the annual meeting.

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	By Order of the Board of Directors,

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QUESTIONS AND ANSWERS ABOUT THE TRANSACTIONS				vi
SUMMARY				1
SELECTED HISTORICAL FINANCIAL DATA OF SPINCO				13
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF VALOR				16
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA				18
COMPARATIVE HISTORICAL AND PRO FORMA PER SHARE DATA				19
VALOR COMMUNICATIONS GROUP, INC. MARKET PRICE AND DIVIDEND INFORMATION				20
THE MERGER				21
	Introduction			21
	The Companies			21
RISK FACTORS				23
	Risks Relating to the Spin-Off and the Merger			23
	Risks Relating to Windstream’s Business After the Merger			26
THE TRANSACTIONS				33
	Transaction Timeline			33
	The Spin-Off			33
	The Merger			34
	Calculation of Merger Consideration			35
	Background of the Merger			37
	Valor’s Reasons for the Merger			43
	Valor Board of Directors’ Recommendation to Valor Stockholders			45
	Opinion of Valor’s Financial Advisor — Wachovia Securities			46
	Valuation of Valor on a Stand-Alone Basis			48
	Implied Percentage Ownership Analysis			51
	Pro Forma Merger Analysis			52
	Opinion of Valor’s Financial Advisor — Bear Stearns			54
	Alltel’s Reasons for the Spin-Off and the Merger			63
	Board of Directors and Management of Windstream After the Merger			65
	Interests of Certain Persons in the Merger			65
	Regulatory Approvals			68
	Accounting Treatment			69
	Federal Securities Law Consequences; Resale Restrictions			69
	No Appraisal Rights			70
	Name Change; Listing			70
	Dividend Policy of Windstream			70
	Assumptions and Considerations			74
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE SPIN-OFF AND THE MERGER				76
THE MERGER AGREEMENT				79
	The Merger			79
	Effective Time			79
	Merger Consideration			80
	Distribution of Per Share Merger Consideration			80
	Treatment of Fractional Shares			80
	Officers and Directors of Windstream			80
	Stockholders Meeting			80

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	Related Transactions			81
	Financing			81
	Corporate Offices			81
	Representations and Warranties			81
	Conduct of Business Pending Closing			82
	Proxy Materials			83
	Reasonable Best Efforts			83
	Employee Matters			84
	No Solicitation			84
	Insurance and Indemnification			85
	Amendment of Company Securityholders Agreement			86
	Dividend Policy of Windstream			86
	Conditions to the Completion of the Merger			86
	Termination			88
	Termination Fee Payable in Certain Circumstances			88
	Indemnification			89
	Amendments			90
	Expenses			90
	Tax Matters			90
THE DISTRIBUTION AGREEMENT				92
	General			92
	Preliminary Transactions			92
	Coordination of Asset Separation Transactions			93
	Spinco Financing			93
	Net Debt Adjustment			93
	Covenants			94
	Conditions to the Completion of the Spin-Off			94
	Subsequent Transfers			94
	Mutual Release; Indemnification			94
	Insurance			95
	Non-Solicitation of Employees			95
	Expenses			96
	Termination			96
THE VOTING AGREEMENT				96
ADDITIONAL AGREEMENTS RELATED TO THE SPIN-OFF AND THE MERGER				97
	Employee Benefits Agreement			97
	The Tax Sharing Agreement			99
	Transition Services Agreement			101
	Shared Assets and Shares Contracts Agreements			102
FINANCING OF WINDSTREAM				103
	Committed Financings			103
	Indebtedness Before and After Merger			104
	Proposed Terms of the Senior Secured Credit Facilities			104
SPINCO MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS				107
	Basis of Presentation			107
	Executive Summary			108
	Pending Acquisitions to be Completed During 2006			108

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SPINCO — DESCRIPTION OF BUSINESS				141
	General			141
	Employees			141
	Organizational Structure and Operating Segments			141
	ILEC Operations			141
	Competition			142
	Local Service — Regulation			143
	Federal Regulation			143
	State Regulation			144
	Universal Service			146
	Unbundled Network Elements			147
	Network Access Services — Regulation			148
	Technology			150
	CLEC Operations			150
	Long-Distance and Network Management Operations			151
	Product Distribution			151
	Directory Publishing			151
	Telecommunications Information Services			151
MANAGEMENT OF WINDSTREAM FOLLOWING THE MERGER				152
	Board of Directors			152
	Management			154
COMPENSATION OF EXECUTIVE OFFICERS OF WINDSTREAM				156
	Summary Compensation Table			156
	Option Grants in Last Fiscal Year			157
	Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values			158
	Long-Term Incentive Plan — Awards in Last Fiscal Year			158
OTHER COMPENSATION ARRANGEMENTS				158
	Change in Control Agreements			158
	Defined Benefit Pension Plan			159
	Benefit Restoration Plan			159
	Supplemental Executive Retirement Plan			160
	Grantor Trust			160
OWNERSHIP OF WINDSTREAM COMMON STOCK				160
DESCRIPTION OF SPINCO CAPITAL STOCK				162
	Authorized Shares			162
	Voting Rights			162
	Dividends and Dividend Policy			162
	Liquidation Rights			162
	Preemptive Rights			162
	Indemnification of Officers and Directors			162
	Delaware Anti-Takeover Statute			162
DESCRIPTION OF WINDSTREAM CAPITAL STOCK				163
	General			163
	Preferred Stock			163
	Common Stock			163
	Delaware Anti-Takeover Statute			163
	Rights of Appraisal			164
	Board of Directors			164

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	Stockholders			165
	Voting on Certain Fundamental Issues			165
	Amendment of the Windstream Certificate			166
	Amendment of the Windstream Bylaws			166
	Limitation on Liability of Directors			166
	Indemnification			166
	Name Change; Listing			167
	Transfer Agent and Registrar			167
COMPARISON OF THE RIGHTS OF STOCKHOLDERS BEFORE AND AFTER THE SPIN-OFF AND MERGER				168
	Shares of Stock			168
	Board of Directors			168
	Stockholders			168
	Certain Related Party Transactions			170
	Rights of Alltel Corporation Stockholders Before and After the Merger			170
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION				171
THE ANNUAL MEETING				184
	Date, Time and Place			184
	Matters for Consideration			184
	Annual Meeting Record Date; Voting Information			185
	Quorum			185
	Required Vote			185
	Voting by Proxy			186
	Revocability of Proxies and Changes to a Valor Stockholder’s Vote			187
	Solicitation of Proxies			187
	Voting by Valor Management			187
	Other Matters			188
	Stockholder Proposals for the 2007 Annual Meeting			188
	2005 Annual Report on Form 10-K			188
	Certain Information			188
PROPOSAL 1. ADOPTION OF THE MERGER AGREEMENT				189
PROPOSAL 2. AMENDMENT OF THE CERTIFICATE OF INCORPORATION OF VALOR PURSUANT TO THE MERGER TO INCREASE THE AUTHORIZED SHARES OF VALOR COMMON STOCK FROM 200,000,000 TO 1,000,000,000				189
PROPOSAL 3. ISSUANCE OF VALOR COMMON STOCK PURSUANT TO THE MERGER				190
PROPOSAL 4. ADOPTION OF 2006 EQUITY INCENTIVE PLAN				190
	Federal Income Tax Consequences			197
	Registration with the SEC			198
	Plan Benefits			198
	Current Equity Compensation Plan Information			199
PROPOSAL 5. ELECTION OF DIRECTORS				199
	Nominees for Director			199
	Director Compensation			201
GOVERNANCE OF VALOR AND COMMITTEES OF THE BOARD OF DIRECTORS				201
	Director Independence			202
	Committees of the Board			202
	Nominations by Stockholders			203
COMMUNICATIONS WITH THE BOARD OF DIRECTORS				204

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COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION				204
	Overall Compensation Policies			204
	Compensation of Chief Executive Officer			206
	Conclusion			206
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION				207
EXECUTIVE COMPENSATION				207
	Summary Compensation Table			207
	Employment and Severance Agreements			208
BENEFICIAL OWNERSHIP OF VALOR COMMON STOCK				211
PERFORMANCE GRAPH				213
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE				214
RELATED PARTY TRANSACTIONS				214
	Equity Sponsors			214
	Management			214
AUDIT COMMITTEE REPORT				215
PROPOSAL 6. RATIFICATION OF APPOINTMENT OF DELOITTE & TOUCHE LLP AS VALOR’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2006				215
PROPOSAL 7. ADJOURNMENT FOR THE PURPOSE OF OBTAINING ADDITIONAL VOTES FOR THE MERGER PROPOSALS				216
SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS				217
EXPERTS				218
LEGAL MATTERS				218
WHERE YOU CAN FIND ADDITIONAL INFORMATION				219
FINANCIAL STATEMENTS				F-1

ANNEX A-1		AGREEMENT AND PLAN OF MERGER
ANNEX A-2		AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
ANNEX B		DISTRIBUTION AGREEMENT
ANNEX C		VOTING AGREEMENT
ANNEX D-1		OPINION OF WACHOVIA SECURITIES
ANNEX D-2		OPINION OF BEAR, STEARNS & CO. INC.
ANNEX E		FORM OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF WINDSTREAM
ANNEX F		FORM OF AMENDED AND RESTATED BYLAWS OF WINDSTREAM
ANNEX G		2006 EQUITY INCENTIVE PLAN
ANNEX H		VALOR AUDIT COMMITTEE CHARTER
ANNEX I-1		PROJECTED FINANCIAL INFORMATION PROVIDED BY VALOR COMMUNICATIONS GROUP, INC. TO ALLTEL CORPORATION AND ALLTEL’S FINANCIAL ADVISORS
ANNEX I-2		PROJECTED FINANCIAL INFORMATION PROVIDED BY ALLTEL CORPORATION TO VALOR COMMUNICATIONS GROUP, INC. AND VALOR’S FINANCIAL ADVISORS
EX-4.1: FOR OF AMENDED SECURITYHOLDERS' AGREEMENT
EX-8.1: OPINION OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
EX-8.2: OPINION OF KIRKLAND & ELLIS LLP
EX-23.1: CONSENT OF PRICEWATERHOUSECOOPERS LLP
EX-23.2: CONSENT OF DELOITTE & TOUCHE LLP
EX-99.2: CONSENT OF WACHOVIA SECURITIES
EX-99.3: CONSENT OF BEAR, STEARNS & CO. INC.
EX-99.4: OPINION OF DUFF & PHELPS, LLC
EX-99.5: OPINION OF DUFF & PHELPS, LLC

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Q:		What are Valor Communications Group, Inc. stockholders being asked to vote on at the annual meeting?
A:		Valor Communications Group, Inc. (also referred to herein as “Valor”) stockholders are being asked to consider and vote upon proposals to adopt the merger agreement entered into among Valor, Alltel Corporation (also referred to herein as “Alltel”) and Alltel Holding Corp. (also referred to herein as “Spinco”), to approve the increase of the authorized number of shares of Valor common stock pursuant to the merger, to approve the issuance of Valor common stock to Alltel stockholders pursuant to the merger and to adopt the 2006 Equity Incentive Plan. Other matters to be considered and voted upon at the annual meeting are the election of directors, ratification of Valor’s independent auditors and such other matters as may properly come before the meeting.
Q:		What will happen in the spin-off?
A:		First, Alltel will contribute its wireline telecommunications business to Spinco in exchange for, among other things, a special dividend in the aggregate amount of approximately $2.275 billion and the distribution by Spinco to Alltel of certain Spinco debt securities, which Alltel intends to exchange for outstanding Alltel debt securities or otherwise transfer to Alltel’s creditors representing approximately $1.673 billion in debt reduction to Alltel. As the sole stockholder of Spinco, Alltel will receive 100% of the special dividend. After the contribution and immediately prior to the merger, Alltel will spin-off Spinco by distributing all of the shares of Spinco common stock to a third-party exchange agent to be held for the benefit of Alltel stockholders on a pro rata basis. Such shares will be immediately converted into that number of shares of Valor common stock Alltel stockholders will be entitled to receive in the merger. As a result, Alltel stockholders will never hold Spinco securities.
Q:		What will happen in the merger?
A:		In the merger, Spinco will merge with and into Valor in accordance with the terms of the merger agreement. Valor will survive the merger as a stand-alone company holding and conducting the combined business operations of Valor and Spinco. Immediately following the merger, Valor will change its name to Windstream Corporation and its common stock will be quoted on the New York Stock Exchange under the symbol “WIN”. For ease of reference, throughout this proxy statement/prospectus-information statement we will refer to Windstream Corporation, the new company formed by the merger of Valor and Spinco as “Windstream.”
Q:		What will Alltel Corporation stockholders be entitled to receive pursuant to the transactions?
A:		As a result of the merger, it is currently estimated that Alltel stockholders will be entitled to receive approximately 1.04 shares of Valor common stock for each share of Alltel common stock that they own as of the record date for the spin-off. However, this amount will be finally determined at the effective time of the merger based on Valor shares outstanding immediately prior to the effective time and Alltel shares outstanding on the record date for the spin-off. Therefore will change to the extent that Valor or Alltel’s shares outstanding at such times are not the same as our estimates due to increases or decreases in share amounts for any reason, however, we expect that the number of shares of Valor common stock will not change significantly as Valor currently has no plans to issue any shares of its common stock prior to the effective time of the merger other than pursuant to grants of equity incentive awards in the ordinary course of business. Based on the closing price of Valor common stock on May 22, 2006 of $12.78, as reported by the New York Stock Exchange, the approximate value Alltel stockholders will receive in the merger will equal $13.29 per each share of Alltel common stock they own on the record date for the spin-off. However, any change in the market value of Valor common stock prior to the effective time of the merger would cause the estimated per share value Alltel stockholders will receive in the merger to also change. No fractional shares of Valor common stock will be issued to Alltel stockholders in the merger. Alltel stockholders that otherwise would be entitled to a fraction of a Valor common share will be entitled to receive a cash payment in lieu of issuance of that fractional share. See “The Merger Agreement — Merger Consideration” on page [ •  ]. Following the merger, approximately 85% of the outstanding common shares of Windstream will be held by Alltel stockholders collectively.

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Q:		Has Alltel set a record date for the distribution of Spinco shares in the spin-off?
A:		No. Alltel will publicly announce the record date when it has been determined. This announcement will be made prior to the completion of the spin-off and the merger.
Q:		What should Alltel stockholders do now?
A:		Alltel common stockholders should carefully read this proxy statement/ prospectus-information statement, which contains important information about the spin-off, the merger, Spinco and Valor. Alltel stockholders are not required to take any action to approve the spin-off, the merger or any of the transactions contemplated thereby. After the merger, Windstream will mail to holders of Alltel common stock who are entitled to receive shares of Valor common stock book-entry statements evidencing their ownership of Valor common stock and other information regarding their receipt of Valor common stock.
		ALLTEL STOCKHOLDERS WILL NOT BE REQUIRED TO SURRENDER THEIR EXISTING ALLTEL CORPORATION COMMON SHARES IN THE SPIN-OFF TRANSACTION OR THE MERGER AND THEY SHOULD NOT RETURN THEIR ALLTEL STOCK CERTIFICATES.
Q:		How will the market price of Alltel common stock be affected by the merger?
A:		The market value of Alltel common stock following the merger will decrease in order to give effect to the distribution. Some or all of this decrease in value realized by Alltel stockholders will be offset by the value of the Windstream common stock they will receive in the merger. However, there can be no assurances that the combined trading prices of shares of Alltel common stock and Windstream common stock after the merger will be equal to or greater than the trading price of shares of Alltel common stock prior to the merger. Until the market has fully evaluated the business of Alltel without the business of Windstream, the price at which shares of Alltel common stock trade may fluctuate significantly. Similarly, until the market has fully evaluated the combined businesses of Valor and Spinco on a stand-alone basis, the price at which shares of Windstream common stock trade may fluctuate significantly.
Q:		What will be the indebtedness of Windstream following completion of the spin-off and merger?
A:		By virtue of the merger, Windstream will assume $267.0 million in Alltel debt, of which $81.0 million (plus related make-whole premiums) will be refinanced with borrowings from its new credit facilities and/or a portion of the net proceeds from the issuance of senior unsecured debt securities in an offering under Rule 144A, promulgated under the Securities Act of 1933, as amended. Windstream will also assume $400.0 million in outstanding Valor notes, which will be equally and ratably secured with debt under the new credit facilities. Windstream will be required to offer to repurchase any of the outstanding Valor notes that may be tendered as a result of the merger, which constitutes a change of control under the indenture governing the Valor notes, and will borrow additional amounts under its new credit facilities to the extent necessary to fund the purchase of any Valor notes that are tendered. However, no Valor bonds are expected to be tendered as a result of the merger as their current trading price exceeds the put price. The trading price of the bonds was $102.75 as of May 18, 2006 versus a put price of $101. In addition, Windstream will refinance approximately $781.0 million (plus related premiums) outstanding under Valor’s existing credit facility with borrowings from its new credit facilities and/or a portion of the net proceeds from the issuance of senior unsecured debt securities in a Rule 144A offering. The amounts assumed by Windstream, together with the issuance of the debt securities, the borrowings under the new credit facilities and certain expenses related to the spin-off, merger and financing transactions, will result in Windstream having approximately $5.5 billion in total debt immediately following completion of the merger.
Q:		Does Valor’s Board support the merger?
A:		Yes. The Valor Board of Directors has unanimously approved the merger agreement and the merger and unanimously recommends that Valor stockholders vote FOR the proposals to adopt the merger agreement, to approve the increase of the authorized number of shares of Valor common stock pursuant to the merger, to approve the issuance of Valor common stock to Alltel stockholders pursuant to the merger and to adopt the 2006 Equity Incentive Plan.

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Q:		How will my rights as a Windstream stockholder after the merger differ from my current rights as a Valor stockholder?
A:		After the merger, your rights as a stockholder will be governed by the amended and restated certificate of incorporation and the restated bylaws, attached to this document as Annex E and Annex F, respectively, rather than the current certificate of incorporation and bylaws of Valor. A comparison of the differences of your rights as a stockholder under these two governing documents is discussed in the section titled “Comparison of the Rights of Valor Stockholders Before and After the Spin-Off and Merger” starting on page [ •  ] of this proxy statement/ prospectus-information statement.
Q:		What will happen to Valor’s dividend policy as a result of the merger?
A:		The merger agreement provides that the initial dividend policy of Windstream (which may be changed at any time by Windstream’s Board of Directors) will provide for the payment, subject to applicable law, of regular quarterly dividends on each issued and outstanding share of common stock of $0.25 per share. See “The Transactions — Dividend Policy.”
Q:		Will Valor pay a dividend for the third quarter?
A:		Yes. Valor expects to pay a pro-rated third quarter dividend based upon its current policy of paying dividends on each share of its common stock at a rate of $1.44 per share per annum. Valor will pay such dividend to Valor stockholders of record as of the close of business on the business day immediately preceding the closing date of the merger, and the dividend will be payable for the period between July 1, 2006 through the closing date of the merger. For example, if closing occurs on July 17, Valor will pay a pro-rata dividend for the 17 days of the third quarter at its quarterly dividend rate of $0.36 per share, or $.07 per share (17/92 x $0.36).
Q:		What are the material tax consequences to Valor stockholders and Alltel stockholders resulting from the spin-off and the merger?
A:		The merger will be tax-free to Valor stockholders. Alltel stockholders will not recognize any gain or loss for U.S. federal income tax purposes as a result of the spin-off or the merger, except for any gain or loss attributable to the receipt of cash in lieu of a fractional share of Valor common stock. The material U.S. federal income tax consequences of the spin-off and the merger are described in more detail under “Certain United States Federal Income Tax Consequences of the Spin-Off and the Merger” on page [ •  ].
Q:		Are there risks associated with the merger?
A:		Yes. We may not achieve the expected benefits of the merger because of the risks and uncertainties discussed in the section titled “Risk Factors” starting on page [ •  ] and the section titled “Special Note Concerning Forward-Looking Statements” starting on page [ •  ]. Those risks include, among other things, risks relating to the uncertainty that we will be able to integrate the existing Valor business with the Spinco business successfully and uncertainties relating to the performance of the businesses following the completion of the merger.
Q:		What should Valor stockholders do now?
A:		After carefully reading and considering the information contained in this proxy statement/ prospectus-information statement, Valor stockholders should vote their shares as soon as possible so that their shares will be represented and voted at the Valor annual meeting. Please follow the instructions set forth on the enclosed proxy card or on the voting instruction form provided by the record holder if your shares are held in the name of your broker or other nominee.
Q.		Have any stockholders already agreed to vote for the merger?
A.		Yes. Holders of approximately 41% of Valor common stock have agreed to vote for the adoption of the merger agreement and have signed a voting agreement with Spinco to that effect.

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Q:		How do Valor stockholders vote?
A:		Valor stockholders may vote before the annual meeting in one of the following ways:
		• use the toll-free number, if any, shown on your proxy card;
		• visit the website, if any, shown on your proxy card to submit a proxy via the Internet; or
		• complete, sign, date and return the enclosed proxy card in the enclosed postage-paid envelope.
Q:		What if a Valor stockholder does not vote on the matters relating to the merger?
A:		If you are a Valor stockholder and you fail to respond with a vote or fail to instruct your broker or other nominee how to vote on the proposals to adopt the merger agreement, to approve the increase of the authorized number of shares of Valor common stock pursuant to the merger, and to approve the issuance of Valor common stock to Alltel stockholders pursuant to the merger, it will have the same effect as a vote against these proposals, each of which must be approved for the merger to occur. If you respond and abstain from voting, your proxy will have the same effect as a vote against these proposals. If you respond but do not indicate how you want to vote on the proposals, your proxy will be counted as a vote in favor of these proposals.
Q:		What stockholder approvals are needed in connection with the merger?
A:		The merger cannot be completed unless the merger agreement is adopted, the increase of the authorized number of shares of Valor common stock pursuant to the merger is approved, and the issuance of Valor common stock to Alltel stockholders pursuant to the merger is approved by the affirmative vote of the holders of a majority of the voting power of the outstanding shares of Valor common stock entitled to vote at the annual meeting. No vote of Alltel stockholders is required or being sought in connection with the spin-off transaction or the merger.
Q:		Why are Valor stockholders being asked to approve the 2006 Equity Incentive Plan?
A:		Valor stockholders are being asked to approve the 2006 Equity Incentive Plan to ensure that upon completion of the merger, Windstream has in place an equity incentive plan that will enable it to address equity incentives for the management of Windstream in a timely manner.
		As of April 28, 2006, a total of 307,997 shares of our common stock remain available for awards under our 2005 Long-Term Equity Incentive Plan (the “2005 Plan”), adopted in February 2005. Windstream will be a considerably larger company than Valor was at the time of the adoption of the 2005 Plan and will correspondingly have more key employees. As a result, to ensure that Windstream has adequate means to provide equity incentive compensation for its employees thereafter, the Board of Directors deems it to be in the best interests of Valor for its stockholders to approve the adoption of the 2006 Equity Incentive Plan.
Q:		Who can vote at the Valor annual meeting?
A:		Holders of Valor common stock can vote their shares at the annual meeting if they are holders of record of those shares at the close of business on May 5, 2006, the record date for the annual meeting.
Q:		When and where is the annual meeting of Valor stockholders?
A:		The annual meeting of Valor stockholders will be held on Tuesday, June 27, 2006 at the Sheraton New York Hotel & Towers, 811 Seventh Avenue, New York, New York 10019, at 2:00 p.m., local time.
Q:		If I am not going to attend the annual meeting, should I return my proxy card(s)?
A:		Yes. Returning your proxy card(s) ensures that your shares will be represented at the annual meeting, even if you are unable to or do not attend.
Q:		Can Valor stockholders change their vote after they mail their proxy card?
A:		Yes. If you are a holder of record of Valor common stock and have properly completed and submitted your proxy card, you can change your vote in any of the following ways:
		• by sending a written notice to the corporate secretary of Valor that is received prior to the annual meeting stating that you revoke your proxy;
		• by properly completing a new proxy card bearing a later date and properly submitting it so that it is received prior to the annual meeting;

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		• by logging onto the Internet website specified on your proxy card in the same manner you would to submit your proxy electronically or by calling the telephone number specified on your proxy card prior to the annual meeting, in each case if you are eligible to do so and following the instructions on the proxy card; or
		• by attending the annual meeting and voting in person.
		Simply attending the annual meeting will not revoke a proxy.
		If you are a Valor stockholder whose shares are held in “street name” by your broker and you have directed such person to vote your shares, you should instruct such person to change your vote.
Q:		If my Valor shares are held in “street name” by my broker, will my broker vote my shares for me?
A:		Your broker will vote your Valor shares only if you provide instructions on how to vote. You should follow the directions provided by your broker regarding how to instruct your broker to vote your shares. Without instructions, your shares will not be voted, which will have the effect of a vote against the adoption of the merger agreement, the approval of the increase of the authorized number of shares of Valor common stock pursuant to the merger, and the approval of the issuance of Valor common stock to Alltel stockholders pursuant to the merger.
Q:		Can Alltel or Valor stockholders demand appraisal of their shares?
A:		No. Neither Alltel nor Valor stockholders have appraisal rights under Delaware law in connection with the spin-off, the merger or the transactions contemplated thereby.
Q:		When will the merger be completed?
A:		We are working to complete the merger as quickly as possible. If approved by the Valor stockholders, we hope to complete the merger as early as the third quarter of 2006. However, it is possible that factors outside our control could require us to complete the merger at a later time or not complete it at all. For a discussion of the conditions to the merger see “Merger Agreement — Conditions to Merger” beginning on page [ •  ].
Q:		Who can answer my questions?
A:		If you are a Valor stockholder and you have any questions about the merger, the annual meeting, or if you need assistance in voting your shares, please contact:

	Investor Relations Department
	Valor Communications Group, Inc.
	201 E. John Carpenter Freeway, Suite 200
	Irving, Texas 75062
	Attn: Investor Relations
	Tel: (866) 779-1296
	Email address: investorrelations@valortelecom.com

		If you are an Alltel stockholder and you have any questions regarding the distribution of Spinco shares, the merger or any matter described in this proxy statement/ prospectus-information statement, please direct your questions to:

	Investor Relations Department
	Alltel Corporation
	One Allied Drive
	Little Rock, Arkansas 72202
	Tel: (877) 446-3682
	Email address: alltel.investor.relations@alltel.com

		In addition, if you have questions about the merger or if you need additional copies of this proxy statement/ prospectus-information statement you may also contact:

	Georgeson Shareholder
	17 State Street, 10th Floor
	New York, NY 10004
	Call toll free: (888) 206-1124

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	Valor Communications Group, Inc.

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	Alltel Holding Corp.

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	•	the necessity of consolidating an organization with its corporate headquarters located in Irving, Texas with an organization with its corporate headquarters located in Little Rock, Arkansas;
	•	the challenge of integrating the business cultures of Valor with the new management team principally comprised of former Alltel employees, which may prove to be incompatible; and
	•	the need to retain key officers and personnel of Spinco and Valor.

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	After the close of the transaction, sales of Windstream common stock may negatively affect its market price.

	Regulatory agencies may delay or impose conditions on approval of the spin-off and the merger, which may diminish the anticipated benefits of the merger.

	Some of the directors, officers and stockholders of Valor have interests that may be different from, or in addition to, the interests of Valor stockholders.

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	•	arrangements regarding the appointment of directors and officers of Valor;
	•	restrictions upon certain restricted shares under Valor stock plans issued prior to the date of the merger agreement, including those held by executive officers and directors, will lapse; and
	•	modifications to employment and severance arrangements maintained for Valor executive officers that may result in increased benefits to such officers.

	The merger agreement contains provisions that may discourage other companies from trying to acquire Valor.

If the spin-off does not constitute a tax-free spin-off under section 355 of the Code or the merger does not constitute a tax-free reorganization under section 368(a) of the Code, either as a result of actions taken in connection with the spin-off or the merger or as a result of subsequent acquisitions of stock of Alltel or stock of Windstream, then Alltel, Windstream and/or Alltel stockholders may be responsible for payment of United States federal income taxes.

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	•	depending on the reasons for termination of the merger agreement, the requirement that Valor pay Alltel a termination fee of $35 million;
	•	substantial costs related to the merger, such as legal, accounting, filing, financial advisory and financial printing fees, must be paid regardless of whether the merger is completed; and
	•	potential disruption to the businesses of Valor and distraction of its workforce and management team.

	Valor Stockholders will have a reduced ownership and voting interest after the merger and will exercise less influence over management.

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	Windstream will provide services to its customers over access lines, and if it loses access lines like Spinco and Valor historically have, its revenues, earnings and cash flow from operations could be adversely affected.

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	In 2005, Spinco and Valor received 5.8% and 22.8% of their respective revenues from state and federal Universal Service Funds, and any adverse regulatory developments with respect to these funds could adversely affect Windstream’s profitability following completion of the merger.

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	Windstream’s substantial indebtedness could adversely affect its operations and financial condition.

	•	limiting its operational flexibility due to the covenants contained in its debt agreements;
	•	limiting its ability to invest operating cash flow in its business due to debt service requirements;
	•	limiting its ability to compete with companies that are not as highly leveraged and that may be better positioned to withstand economic downturns;
	•	increasing its vulnerability to economic downturns and changing market conditions; and
	•	to the extent that Windstream’s debt is subject to floating interest rates, increasing its vulnerability to fluctuations in market interest rates.

	Windstream will be subject to restrictive debt covenants, which may restrict its operational flexibility.

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	Windstream may be affected by significant restrictions following the merger with respect to certain actions that could jeopardize the tax-free status of the spin-off or the merger.

	•	generally, for two years after the spin-off, taking, or permitting any of its subsidiaries to take, an action that might be a disqualifying action without receiving the prior consent of Alltel;
	•	for two years after the spin-off, entering into any agreement, understanding or arrangement or engaging in any substantial negotiations with respect to any transaction involving the acquisition of Windstream stock or the issuance of shares of Windstream’s stock, or options to acquire or other rights in respect of such stock, in excess of a permitted basket of 71,130,989 shares (as adjusted for stock splits, stock dividends, recapitalizations, reclassifications and similar transactions), unless, generally, the shares are issued to qualifying Windstream employees or retirement plans, each in accordance with “safe harbors” under regulations issued by the IRS;
	•	for two years after the spin-off, repurchasing Windstream’s shares, except to the extent consistent with guidance issued by the IRS;
	•	for two years after the spin-off, permitting certain wholly-owned subsidiaries that were wholly-owned subsidiaries of Spinco at the time of the spin-off to cease the active conduct of the Spinco business to the extent so conducted by those subsidiaries immediately prior to the spin-off; and
	•	for two years after the spin-off, voluntarily dissolving, liquidating, merging or consolidating with any other person, unless (i) Windstream is the survivor of the merger or consolidation or (ii) prior to undertaking such action, Windstream receives the prior consent of Alltel.

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	Weak economic conditions may decrease demand for Windstream’s services.

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	•	the issuance to Alltel of Spinco common stock to be distributed in the spin-off (which we will refer to as the “distribution”),
	•	the payment of a special dividend to Alltel in an amount not to exceed Alltel’s tax basis in Spinco (which is estimated to equal approximately $2.275 billion), which Alltel will use to repurchase stock pursuant to a special stock buyback program authorized by the Alltel Board of Directors in connection with the spin-off, to repay outstanding indebtedness, or both, within one year following the spin-off, and
	•	the distribution by Spinco to Alltel of certain Spinco debt securities (which we will refer to as the “exchange notes”), which Alltel intends to exchange for outstanding Alltel debt securities or otherwise transfer to Alltel’s creditors representing approximately $1.673 billion in debt reduction to Alltel. Such exchange is not required by the terms of Alltel’s outstanding debt securities.

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	For purposes of this calculation only it is assumed that the effective time of the merger occurred on April 28, 2006. On April 28, 2006 there were 389,107,443 shares of Alltel common stock outstanding and 71,096,887 fully-diluted shares of Valor common stock outstanding.
	Step 1: Calculate the “aggregate merger consideration.” The merger agreement provides that Valor will issue to holders of Alltel common stock a number of Valor shares equal to the number of fully-diluted shares of Valor common stock outstanding as of the effective time of the merger multiplied by 5.667. As of April 28, 2006 there were 71,096,887 shares of Valor common stock outstanding. Therefore to determine the aggregate merger consideration we must multiply 71,096,887 by 5.667, which equals 402,906,058.63 shares.
	Step 2: Determine number of Spinco shares outstanding. Pursuant to the distribution agreement Alltel and Spinco have determined that one share of Spinco common stock will be issued for each share of Alltel common stock outstanding on the record date for the spin-off. Assuming for purposes of this illustration only that 389,107,443 shares of Alltel common stock will be outstanding as of such date, there will be 389,107,443 shares of Spinco common stock outstanding as of the effective time of the merger.
	Step 3: Calculate the “per share merger consideration.” The merger agreement provides that each share of Spinco common stock will be converted into the right to receive a number of Valor shares equal to the aggregate merger consideration, divided by the number of Spinco shares outstanding as the effective time of the merger. In this illustration the aggregate merger consideration equals 402,906,058.63 shares and the number of Spinco shares outstanding as of the effective time is 389,107,443. Hence, to determine the per share merger consideration we must divide 402,906,058.63 by 389,107,443, which equals approximately 1.04.
	Based on the foregoing, it is currently estimated that Alltel stockholders will receive approximately 1.04 shares of Valor common stock in exchange for each Alltel share such stockholder owns on the record date for the spin-off and that Valor will be obligated to issue in the aggregate 402,906,058.63 shares of Valor common stock to Alltel stockholders. This issuance would result in Alltel stockholders collectively owning approximately 85%, and Valor’s stockholders will collectively own approximately 15%, of the shares of common stock of Windstream on a fully diluted basis following completion of the merger.

Valor Common						Approximate per
Stock Outstanding		Spinco Common		Aggregate Merger		Share Merger
(fully-diluted)		Stock Outstanding		Consideration		Consideration
71,096,887		389,107,443		402,906,058.63		1.04

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	•	stock for stock merger;
	•	82/18 relative post-merger ownership percentage between Alltel and Valor shareholders;
	•	$5.3 billion in debt (3 times leverage);
	•	Alltel to receive $4.1 billion in cash and debt relief;
	•	post-merger dividend of $1 per share;
	•	65% dividend payout; and
	•	flexibility on governance and management arrangements.

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	•	spin-off of the Alltel wireline business and its merger with Valor on a tax-free basis to Alltel, Valor and their respective shareholders;
	•	Alltel to receive a cash dividend up to its tax basis in Spinco which was estimated at such time to equal approximately $2.4 billion;
	•	Alltel to exchange approximately $1.5 billion of its parent-level debt for Spinco debt securities, and the merged company assumes $0.3 billion of Spinco debt;
	•	86/14 post-merger ownership percentage between Alltel and Valor shareholders;
	•	post-merger dividend of $1.00 per Alltel equivalent share;
	•	Valor designates one Board seat;
	•	Alltel designates the post-merger management team; and
	•	Valor’s largest shareholders (Welsh, Carson, Anderson & Stowe, Vestar Capital Partners and Citicorp Venture Capital) agree to an irrevocable voting agreement to support the transaction and agree to a six month lock-up agreement.

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	•	85/15 post-merger ownership percentage between Alltel and Valor shareholders;
	•	Post-merger dividend of $1 per share;
	•	Only Welsh, Carson, Anderson & Stowe and Vestar Capital Partners agree to a voting agreement to support the transaction, and Welsh Carson agrees to a three month lock-up, subject to an agreement for the orderly sale of their stock following expiration of the lock-up; and,
	•	Spinco to pay the transaction fees of Alltel and Spinco, and Valor to assume responsibility for payment of its transaction fees.

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	•	Certainty of closing;
	•	Dividend and cash issues;
	•	Termination fees;
	•	Tax indemnification issues;
	•	Spinco employee benefits issues; and,
	•	Valor participation in decisions regarding the separation of the Alltel wireline business.

	•	Certainty of closing:

	•	Valor proposed that it have the right to change its recommendation accepting the merger without receiving a superior proposal. Alltel agreed subject to Valor’s payment of a $35 million break-up fee under certain circumstances;
	•	Valor proposed that it have the right to terminate the merger agreement to accept a superior proposal. Alltel agreed subject to Valor’s agreement to pay a $35 million break-up fee;
	•	Valor proposed a term that would extend the termination date on the merger agreement in order for the parties to obtain financing or required approvals. Valor later withdrew this proposal;

	•	Dividend and cash issues:

	•	Valor proposed that it pay its dividend, including a partial quarter dividend, if applicable, through closing, and Alltel agreed;
	•	Valor proposed that Alltel pay its transaction fees and expenses. Alltel disagreed, and the parties agreed that Spinco would bear all transaction fees and expenses of both Alltel and Spinco, subject to a cap of $115 million;

	•	Termination fees:

	•	After significant negotiation on the amount of and circumstances under which a break-up fee would be payable, Valor agreed to pay a $35 million break-up fee if: 1) it terminates the merger agreement to accept a superior offer; 2) it changes its recommendation on this merger or recommends another acquisition proposal; or 3) if another party makes an acquisition proposal and either party terminates

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		due to a failure of the shareholder vote or failure to complete the merger within one year, and Valor completes an acquisition or signs a definitive agreement within 12 months thereafter;
	•	Alltel agreed to pay a $35 million break-up fee if: 1) either party terminates the agreement because of failure to complete the merger within one year and the financing condition is not met; or 2) Valor terminates due to a breach by Alltel that results in the financing condition not being met;
	•	Alltel agreed to pay a $20 million break-up fee if: 1) either party terminates the agreement because of failure to complete the merger within one year and the tax ruling is not met; or 2) Valor terminates due to a breach by Alltel that results in the tax ruling not being obtained;

	•	Tax issues:

	•	Gross-up of indemnity payments for taxes due- Valor took the position that no gross-up should occur. The parties ultimately agreed to the gross-up for payments other than those related to universal service fund issues;
	•	Indemnity for pre-closing universal service fund related payments- Valor proposed no indemnification. The parties ultimately agreed to require indemnity, but net of any tax refunds and benefits, and not subject to gross-up;
	•	Indemnity for all other pre-closing income tax liabilities – Valor proposed no indemnity and Alltel agreed;
	•	Indemnity for pre-closing other tax liabilities- Valor proposed no indemnification for such payments. The parties ultimately agreed to require indemnification, but Valor will control the decision to contest such taxing decisions and will receive the benefit of any favorable ruling in such proceedings;
	•	Stock issuance by surviving company in the first two years after closing- Valor proposed a basket with no requirement of Alltel to consent and no indemnity attached. The parties agreed to a 10% basket, without consent or indemnity attached;

	•	Spinco employee benefits issues:

	•	Valor proposed specific identification of all active and retired employees allocated to Spinco. Alltel agreed, subject to the ability of the Steering Committee to evaluate additions or changes, and to Valor consent;
	•	In negotiations on pensions and benefits plans, Valor was able to confirm that the plans were fully funded and that Spinco’s financial statements and projections incorporated the liabilities associated with the Spinco employees. Also, Valor confirmed the intention of Spinco to replicate existing Alltel plans, and Valor ensured the protection of its employees under such plans;
	•	New Spinco equity grants will dilute Valor and Spinco shareholders in a proportionate manner;
	•	Shares tendered to Valor by its employees to satisfy tax obligations on stock grants vesting on January 1, 2006 were excluded from the calculation of fully diluted shares for purposes of calculating the merger exchange ratio;
	•	Valor’s proposed retention and severance plan was accepted by Alltel without modifications; and,

	•	Valor participation in decisions regarding the separation of the Alltel wireline business:

	•	Valor proposed that a Steering Committee be formed, and that the Steering Committee have access to and involvement in all material aspects of the separation of assets, subject to Valor consent if any decision individually or in the aggregate would have a material and adverse impact on Valor. Alltel accepted this proposal.

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		Total Switched				Percent of
		Access Lines				Total Access
Company		12/31/05(1)				Lines(2)
AT&T			49,413,000				27.73	%
Verizon			48,803,000				27.39	%
BellSouth			20,037,000				12.07	%
Qwest			14,739,000				7.95	%
Embarq			7,350,000				4.13	%
Windstream (Pro Forma)			3,404,000				1.91	%
Citizens			2,219,000				1.25	%
CenturyTel			2,214,000				1.24	%
Commonwealth			461,000				0.26	%
Alaska Com			271,000				0.15	%
Iowa Telcom			259,000				0.15	%
Fairpoint			245,000				0.14	%
Consolidated			242,000				0.14	%
Total Industry(2)			178,179,552				84.49	%

	(1)	Source: Company Filings with the Securities and Exchange Commission for all amounts other than Windstream. All access line totals represent approximate amounts.
	(2)	FCC’s Trend Report Table 1, End User Switched Access Lines Reported, June 2005

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	•	Reviewed the merger agreement, including the financial terms of the merger, and the agreements contemplated thereby;
	•	Reviewed Annual Reports on Form 10-K of Alltel for the three fiscal years ended December 31, 2004; Annual Reports on Form 10-K of Valor for the fiscal year ended December 31, 2004; certain interim reports to stockholders and Quarterly Reports on Form 10-Q of Alltel and Valor; and certain business, financial, and other information regarding each of Alltel and Valor that was publicly available;
	•	Reviewed certain business, financial, and other information regarding Valor and its prospects that was furnished to Wachovia Securities by, and discussed with, the management of Valor, including projections for Valor for the four years ended December 31, 2008, which are attached to this proxy statement/prospectus-information statement as Annex I-1;
	•	Reviewed certain business, financial, and other information regarding Alltel and Spinco and their prospects that were furnished to Wachovia Securities by, and discussed with, the management of Alltel and Spinco, including projections for Alltel and Spinco for the three years ended December 31, 2007, which are attached to this proxy statement/prospectus as Annex I-2;
	•	Reviewed the stock price and trading history of Valor common stock;
	•	Compared the available business, financial, and other information regarding each of Valor and Spinco with similar information regarding certain publicly traded companies that Wachovia Securities deemed relevant;
	•	Compared the proposed financial terms of the merger agreement with the financial terms of certain other business combinations and transactions that Wachovia Securities deemed relevant;
	•	Developed discounted cash flow models for each of Valor and Spinco based upon estimates provided by the management of each of Valor and Spinco, as to each of Valor and Spinco respectively, and certain estimates discussed with the management of Valor;
	•	Reviewed the potential pro forma impact of the merger on Valor’s financial statements;
	•	Considered other information such as financial, economic and market criteria that Wachovia Securities deemed relevant; and

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	•	Participated in the discussions and negotiations among representatives of Valor and Alltel and their respective financial and legal advisors that resulted in the merger agreement.

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Implied Valor

Reference

Equity Value per

Low

High

Median

Mean

Multiple Range

Share

Enterprise Value to 2005(E) EBITDA (earnings before interest, taxes, depreciation and amortization)

5.5x

8.3x

6.9x

6.9x

6.1x - 7.8x

$7.64 - $14.29

Equity Value to 2005(E) Free Cash Flow

6.3x

9.5x

8.0x

8.0x

7.0 - 9.3x

$12.75 - $16.97

Enterprise Value per Access Line

$3,158.4

$4,509.1

$3,675.0

$3,678.8

$3,175 - 4,153

$7.32 - $14.46

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Target		Acquiror
NTELOS		Quadrangle/CVC
Verizon Communications — Hawaii		The Carlyle Group
TXU Communications		Consolidated Communications
Illinois Consolidated Telephone Co.		Homebase Acquisition Corp.
Conestoga Enterprises		D&E Communications
Verizon — KY		ALLTEL
Verizon — AL, MO		CenturyTel
Kerrville Communications		VALOR Telecom
Global Crossing ILEC		Citizens Communications
GTE Corp. (Illinois)		Citizens Communications

Reference

Implied Equity

Low

High

Median

Multiple Range

Value per Share

Enterprise Value to LTM (last twelve months) EBITDA

6.0x

9.4x

7.4x

6.5x - 7.5x

$9.15 - $13.01

Enterprise Value per Access Line

$2,334

$4,370

$3,137

$3,250 - $4,000

$7.86 - $13.34

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Target		Acquiror
First National Bankshares FL		Fifth Third Bancorp
Varco International Inc.		National-Oilwell Inc.
Artesyn Technologies Inc.		Bel Fuse Inc.
Cornerstone Realty Income Trust		Colonial Properties Trust
Veritas Software Corp.		Symantec Corp.
Public Svc Enterprise Group Inc.		Exelon Corp.
Gillette Co.		Procter & Gamble Co.
AT&T Co.		SBC Communications Inc.
Great Lakes Chemical Corp.		Crompton Corp.
Ask Jeeves Inc.		IAC/ InterActive Corp.
Mykrolis Corp.		Entegris Inc.
Macromedia Inc.		Adobe Systems Inc.
SpectraSite Inc.		American Tower Corp.
Cinergy Corp.		Duke Energy Corp.
Shurgard Storage Centers Inc.		Public Storage Inc.
WFS Financial Inc.		Wachovia Corporation
Westcorp		Wachovia Corporation
Medicis Pharmaceutical Corp.		Mentor Corp.

Implied Valor

Reference Multiple

Equity Value

Low

High

Median

Mean

Range

per Share

30-Day Premium

(3.4)%

35.8%

16.8%

17.3%

(3.4)% - 35.8%

$12.07 - $16.97

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														Valor Implied Percentage
														Ownership of Combined
														Company
		Reference				Valor Implied				Spinco Implied Equity				Low End of				High End of
		Multiple Range				Equity Value				Value 2005(E)				Ranges				Ranges
Enterprise Value per 2005(E) Access Lines			$3,175 - $4,153				$520 - $1,029				$5,024 - $7,841				9.4%				11.6%
Enterprise Value to 2005(E) EBITDA			6.1x - 7.8x				$544 - $1,017				$4,487 - $6,922				10.8%				12.8%
Equity Value to 2005(E) Free Cash Flow			7.0x - 9.3x				$907 - $1,207				$3,558 - $4,734				20.3%				20.3%

		Implied Valor %
Access Lines 2005(E)-2006(P)			15.3% - 15.5%
EBITDA 2005(E)-2006(P)			16.3% - 16.3%
Free Cash Flow 2005(E)-2006(P)			20.3% - 21.2%

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		Low End of Range				High End of Range
Valor			Implied				Ownership
% of Combined Company			14.8%				15.3%

		Low End of Range				High End of Range
Valor Implied Ownership % of Combined Company			12.7%				13.4%

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		Windstream
		Reference
		Multiple
		Range				2005(PF)				2006(P)				2007(P)				2008(P)
EBITDA Multiple			6.5x - 7.5x				23.4% - 35.4%				18.5% - 28.8%				20.2% - 30.7%				20.2% - 30.4%
Dividend Yield			7.0% - 8.0%				8.5% - 14.1%				8.5% - 14.1%				8.5% - 14.1%				8.5% - 14.1%
Free Cash Flow Multiple			6.5x - 9.5x				(21.1)%				(26.6)%				(22.5)%				(23.9%)

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	•	reviewed the merger agreement and the distribution agreement;
	•	reviewed the voting agreement, dated as of December 8, 2005, among Alltel, Spinco and the stockholders of Valor named therein;
	•	reviewed Valor’s Annual Reports on Form 10-K for the year ended December 31, 2004, its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2005, June 30, 2005 and September 30, 2005 and its Current Reports on Form 8-K filed since January 1, 2005;
	•	reviewed Spinco’s Draft Audited Financial Statements for the years ended December 31, 2002, 2003 and 2004, its unaudited interim consolidated balance sheet as of September 30, 2005, and the related unaudited interim consolidated income statement and statement of cash flows for the nine months ended September 30, 2005;
	•	reviewed Alltel’s Annual Reports on Form 10-K for the years ended December 31, 2002, 2003 and 2004, its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2005, June 30, 2005 and September 30, 2005 and its Current Reports on Form 8-K filed since January 1, 2005;
	•	reviewed certain operating and financial information relating to Valor and Spinco’s businesses and prospects (as prepared and furnished to Bear Stearns by Valor and Alltel’s senior managements, respectively), including projections for Valor for the six years ended December 31, 2010 as prepared by Valor’s senior management, which are attached to this proxy statement/prospectus-information statement as Annex I-1, and projections for Spinco for the three years ended December 31, 2007 as prepared by Alltel’s management, which are attached to this proxy statement/prospectus-information statement as Annex I-2, as well as certain publicly available research analyst projections for Alltel/ Spinco for the years ended December 31, 2008, 2009 and 2010 (which research analyst projections were reviewed by and discussed with the senior management of Valor);
	•	reviewed certain estimates of cost savings and other synergies estimates expected to result from the merger, as prepared and provided to Bear Stearns by Valor’s senior management and discussed with Alltel’s senior management, including persons who will become members of Windstream’s senior management;
	•	met with certain members of Valor and Alltel’s senior management, including persons who will become members of Windstream’s senior management, to discuss Valor and Spinco’s respective businesses, operations, historical and projected financial results and future prospects;
	•	reviewed the historical prices, trading multiples and trading volume of the common shares of Valor;
	•	reviewed publicly available financial data, stock market performance data and trading multiples of companies which Bear Stearns deemed generally comparable to Valor and Spinco, as appropriate;
	•	reviewed the terms of recent mergers and acquisitions involving companies which Bear Stearns deemed generally comparable to Valor;
	•	performed discounted cash flow analyses based on the projections for Valor and Spinco and the synergy estimates for the combined company, including certain tax attributes available to Valor and Spinco;
	•	reviewed the pro forma financial results, financial condition and capitalization of the combined company giving effect to the merger; and
	•	conducted such other studies, analyses, inquiries and investigations as Bear Stearns deemed appropriate.

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	Summary of Financial Analyses

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	Spinco Valuation

	•	Alaska Communications Systems Group, Inc.;
	•	Citizens Communications Company (“Citizens”);
	•	Consolidated Communications Holdings, Inc.;
	•	FairPoint Communications, Inc.;
	•	Iowa Telecommunications Services, Inc.;
	•	Valor Communications Group, Inc.;
	•	CenturyTel, Inc. (“CenturyTel”); and
	•	Commonwealth Telephone Enterprises, Inc.

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											All Comparable
			Citizens				CenturyTel				Companies
Enterprise Value as a Multiple of:
	2005E EBITDA			7.2	x			5.4	x			5.4x - 8.0x
	2006E EBITDA			7.5	x			5.6	x			5.6x - 8.0x
	2005E Access Lines		$	3,601			$	3,098				$2,191 - $4,009
	2006E Access Lines		$	3,754			$	3,255				$2,204 - $4,115
Equity Value as a Multiple of:
	2005E Actual LFCF			7.7	x			8.5	x			6.1x - 9.7x
	2006E Actual LFCF			8.0	x			8.8	x			6.2x - 9.3x
	2005E Normalized LFCF			9.2	x			9.3	x			7.3x - 11.0x
	2006E Normalized LFCF			9.7	x			9.4	x			7.1x - 10.9x
Dividend Yield				7.9	%			0.7	%			0.7% - 13.7%

			Low				High
Enterprise Value as a Multiple of:
	2005E EBITDA			6.7	x			7.5	x
	2006E EBITDA			6.9	x			7.6	x
	2005E Access Lines		$	3,000			$	3,600
	2006E Access Lines		$	3,200			$	3,800
Equity Value as a Multiple of:
	2005E Actual LFCF			7.75	x			9.0	x
	2006E Actual LFCF			8.0	x			9.0	x
	2005E Normalized LFCF			8.7	x			10.0	x
	2006E Normalized LFCF			8.7	x			10.0	x
Dividend Yield				7.25	%			8.25	%

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	Valor Valuation

			$12.00				$14.00
As of December 6, 2005:
	Current Price			(1.4	)%			15.0	%
	20-Day Average Price			0.3	%			17.0	%
As of November 23, 2005:
	Current Price			3.2	%			20.4	%
	20-Day Average Price			(1.9	)%			14.5	%

	•	The Carlyle Group/ Verizon Hawaii Inc. — May 2, 2005;
	•	Consolidated Communications Holdings, Inc./ TXU Corp. — April 14, 2004;
	•	Alltel Corporation/ Verizon Communications Inc. (Kentucky) — August 1, 2002;

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	•	Homebase Acquisition Texas Corp./ Illinois Consolidated Telephone Co. — December 31, 2002; and
	•	CenturyTel, Inc./ Verizon Communications Inc. (Alabama and Missouri) — July 1, 2002 and August 31, 2002.

			LTM EBITDA				Access Lines
Most Comparable Transactions:
	High			7.8	x		$	3,199
	Mean			7.2	x		$	2,894
	Low			6.7	x		$	2,263
Other Transactions:
	High			12.0	x		$	5,698
	Mean			8.6	x		$	3,371
	Low			6.2	x		$	2,235
All Transactions:
	High			12.0	x		$	5,698
	Mean			8.2	x		$	3,292
	Low			6.2	x		$	2,235

	Transaction Combination Analysis

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		2005E
Valor			15.3	%
Spinco			84.7	%

		2005E				2006E				2007E
Valor			16.3	%			16.3	%			16.5	%
Spinco			83.7	%			83.7	%			83.5	%

		2005E				2006E				2007E
Valor			17.2	%			16.7	%			16.0	%
Spinco			82.8	%			83.3	%			84.0	%

		2005E				2006E				2007E
Valor			18.7	%			20.0	%			19.7	%
Spinco			81.3	%			80.0	%			80.3	%

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						With Potential
		No Synergies				Synergies
Valor			0.9% - 3.3%				7.8% - 11.6%
Spinco			2.4% - 2.7%				9.8% - 10.7%

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	•	the creation of skilled management teams at both Alltel and Windstream having proven track records of delivering financial results, a great breadth of experience in the communications industry, and a deep commitment to providing quality communications services to customers;
	•	the expectation that Alltel will receive cash proceeds and debt reduction totaling approximately $4.2 billion resulting from the spin-off, which will result in Alltel having net debt of approximately $1.2 billion and being levered at about 0.5 times net debt to operating income before depreciation and amortization;
	•	the potential value, as determined by evaluating pre and post transaction discounted cash flows, EBITDA (or earnings before interest, taxes, depreciation and amortization), yield, and other measures of the pre and post transaction wireline businesses, created for Alltel stockholders who, in the aggregate, will collectively hold 85% of the outstanding shares of Windstream immediately following the merger and the expectation of strong investor demand for both a pure-play wireless company and a pure-play rural wireline company;
	•	Alltel’s and Valor’s wireline businesses have complementary geographic footprints with favorable rural characteristics, and their integration will benefit from Alltel’s existing billing system outsourcing relationship with Valor, providing the potential to create a market leader in the rural wireline telecommunications industry;
	•	the potential positive financial impact resulting from such a combination (including, without limitation, the expected achievement of $40 million in net annual synergies from the combination) which would benefit Alltel stockholders through the spin-off and merger;
	•	the tax-efficient structure for Alltel and Alltel’s stockholders of the proposed spin-off and immediate merger of Spinco with and into Valor; and
	•	the expectation that Windstream will pay an annual dividend of $1 per share of common stock, which equals $1.04 per equivalent Alltel share.

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	•	Anthony J. de Nicola, Valor’s current Chairman of the Board of Directors, is expected to be appointed to the board of Windstream;
	•	John J. Mueller, Valor’s current chief executive officer, has entered into a consulting agreement with Windstream which is described below under the heading “Consulting Agreement with Mr. Mueller;”
	•	W. Grant Raney and Cynthia B. Nash, current executive officers of Valor, have accepted offers of employment with Windstream (to be effective only upon the closing of the transactions) which are described below under the heading “Employment Arrangements with Mr. Raney and Ms. Nash;”
	•	a portion of certain executive officers’ cash awards and shares of restricted stock that were scheduled to vest January 1, 2007, shall vest upon the consummation of the merger, as set forth below;
	•	the severance benefits payable to Messrs. Mueller, Raney and Ojile and Ms. Nash for termination of employment by Valor without “Cause” or by the executive officer for “Good Reason,” as each such term is defined in their employment agreements with Valor, were increased from 18 months of base salary to 24 months. Also, the bonus payment prescribed in the executive officers’ employment agreements were increased to two times annual target bonus;

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	•	the acceleration of vesting of restricted stock grants scheduled to vest in 2008 and beyond for Messrs. Mueller, Ojile and Vaughn, Valor executive officers who will not remain employed by Windstream; and
	•	prior to the completion of the merger, Valor Securityholders’ Agreement with certain of its stockholders will be amended so that persons affiliated with Welsh, Carson, Anderson & Stowe, or WCAS and Vestar Capital Partners, who collectively own approximately 41% of Valor’s outstanding common stock, will receive the following benefits:

	•	Windstream will file and use reasonable best efforts to have declared effective an “evergreen” Shelf Registration Statement permitting sales of securities of Windstream by WCAS and Vestar as soon as practicable after consummation of the merger;
	•	if requested by the holders of at least 50% of the outstanding securities initially held by WCAS, Vestar and their respective affiliates, Windstream will conduct one underwritten offering, including management participation in road shows and similar customary obligations;
	•	WCAS and Vestar will have customary piggyback registration rights in connection with any registration by Windstream of sales of its equity securities (other than on Forms S-4 or S-8), whether for Windstream’s own account or for the benefit of one or more stockholders exercising demand registration rights; and
	•	Windstream will pay customary fees and expenses of registrations.

						Number of Shares
		Amount of Cash				Restricted Stock								Windstream
Name of Executive		Award to be				Subject to				Severance				Annual Base
Officer or Director		Accelerated				Accelerated Vesting				Benefits				Salary
John J. Mueller(1)		$	400,000				331,002			$	2,000,000				—
Jerry E. Vaughn		$	0				338,937			$	1,587,500	(2)			—
W. Grant Raney		$	200,000				73,556			$	0			$	257,000	(3)
William M. Ojile, Jr.(1)		$	100,000				125,045			$	750,000				—
Cynthia B. Nash		$	60,000				40,456			$	0			$	220,000	(4)
Anthony J. de Nicola			—				6,470				—				—
Sanjay Swani			—				6,470				—				—
Norman W. Alpert			—				6,470				—				—
Kenneth R. Cole			—				6,470				—				—
Federico F. Peña			—				6,470				—				—
Edward J. Heffernan			—				6,470				—				—
Stephen B. Brodeur			—				6,470				—				—
Michael E. Donovan			—				6,470				—				—
M. Ann Padilla			—				6,470				—				—
Edward L. Lujan			—				6,470				—				—

(1)	Severance benefits represent twenty-four months of base salary and two times each executive’s target bonus amount.
(2)	Amount includes a tax gross-up benefit payable to Mr. Vaughn to compensate him for excise taxes estimated to be $775,000 imposed upon him pursuant to Section 280G of the Internal Revenue Code of 1986, as amended.
(3)	Mr. Raney will also receive a retention bonus in the amount of $250,000 if employed by Windstream at the effective time of the merger and an additional $250,000 if employed by Windstream on the six month anniversary of the effective time of the merger. In addition, Mr. Raney will be eligible to receive annual incentive bonuses up to 50% of his base salary based on the achievement of specified goals established by Windstream.

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(4)

Ms. Nash will also receive a retention bonus in the amount of $150,000 if employed by Windstream at the effective time of the merger and an additional $150,000 if employed by Windstream on the six month anniversary of the effective time of the merger. In addition, Ms. Nash will be eligible to receive annual incentive bonuses up to 40% of her base salary based on the achievement of specified goals established by Windstream.

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	Telecommunications Regulatory Approvals

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	United States Antitrust Laws

	•	The relative voting interests in the combined entity after the combination. In this case shareholders of Alltel, the sole shareholder of Spinco, will receive approximately 85% of the equity ownership and associated voting rights in the combined entity.
	•	The composition of the governing body of the combined entity. In this case the merger agreement provides that the composition of the Board of Directors of the surviving company will be largely determined by Alltel and/or Spinco.
	•	The composition of the senior management of the combined entity. In this case the merger agreement provides that the senior management of the combined entity was to be exclusively determined by Alltel and/or Spinco.

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	•	operating and financial results of both Valor and Spinco in recent years, including in particular the fact that pro forma combined operating income before depreciation and amortization (pro forma OIBDA), excluding the royalty expense that Spinco has historically paid to Alltel which will cease upon the consummation of this transaction, was $1,633.7 million in 2005;
	•	the anticipated capital expenditure requirements of Windstream;
	•	Windstream’s expected other cash needs, primarily related to working capital requirements; and
	•	the terms of Windstream’s expected indebtedness.

	•	while the merger agreement contemplates the payment of a $0.25 per share quarterly dividend, this policy could be modified or revoked by Windstream’s Board of Directors at any time in its sole discretion;
	•	the amount of dividends distributed will be subject to covenant restrictions under Windstream’s new senior secured credit facility which will restrict its ability to take certain action with respect to dividends and payments in respect of capital stock, with the exception of dividends up to the sum of excess free cash flow and net cash equity issuance proceeds so long as the pro forma leverage ratio does not exceed 4.50 to 1.0. Subject to the assumptions, considerations and limitations set forth in the following discussion under the heading “Minimum Operating Income Before Depreciation and Amortization (OIBDA),” Windstream’s pro forma leverage ratio during the year following the closing of the merger is estimated to be no greater than 3.70 to 1.0.
	•	the amount of dividends distributed will be subject to restrictions under Delaware law pursuant to which the Windstream Board of Directors will be permitted to declare dividends only to the extent of a “surplus” (which is defined as total assets at fair market value minus total liabilities, minus statutory capital) or, if there is no surplus, out of Windstream’s net profits for the then current and/or immediately preceding fiscal year;
	•	Windstream’s stockholders have no contractual or other legal right to receive dividends; and
	•	Windstream may not have enough cash to pay dividends due to changes in Windstream’s cash from operations, working capital requirements and/or anticipated cash needs.

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	Minimum Operating Income Before Depreciation and Amortization (OIBDA)

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			Amount
			(Dollars in
			millions)
Estimated Minimum OIBDA Required to Pay Dividends on Common Stock
Estimated cash required to pay dividends on outstanding common stock(1)			$	474.0
Add:
	Estimated capital expenditures(2)			400.0
	Estimated cash interest expense(3)			385.6
	Estimated cash income taxes(4)			222.9
	Estimated principal repayments on outstanding indebtedness(5)			10.0
Minimum OIBDA			$	1,492.5
Estimated total leverage ratio derived from the above minimum OIBDA(6)				3.7x
Estimated interest coverage ratio derived from the above minimum OIBDA(7)				3.9x

(1)	The table below sets forth the assumed number of outstanding shares of common stock upon the closing of the merger and the estimated per share and aggregate dividend amounts payable on such shares during the year following the closing of this offering:

Estimated Shares Outstanding(i)			474,002,946
Per Share Dividend		$	1.00
Aggregate Dividend		$	474,002,946

	(i)	comprised of the outstanding shares of Valor common stock as of May 1, 2006 plus the shares expected to be issued in conjunction with the merger. (see Calculation of Merger Consideration — page 32)

(2)	The majority of Windstream’s capital expenditures will relate to its telecommunications network. Historical capital expenditures of Valor, Spinco and on a combined basis for the year ended December 31, 2005 were $57.4 million, $356.9 million and $414.3 million respectively.
(3)	Reflects Windstream’s anticipated cash interest expense under its revolving credit facility, senior secured term loan facilities and the senior notes. See Note (x) in “Unaudited Pro Forma Combined Condensed Financial Information” on page 182 for further discussion of interest expense anticipated to be incurred by Windstream, the interest rate assumptions included in such calculation and the sensitivity of such calculations to fluctuations of interest rates.
(4)	Determined by calculating pro forma income tax expense on a combined basis for 2005 in the amount of $267.9 million, less $45.0 million representing current year impact of tax deductible amortization of intangible assets and the use of net operating loss carryforwards held by Valor. The foregoing calculation is not based on an estimation of the anticipated taxable income for 2006, which is subject to many factors beyond the control of Windstream’s management or its determination at this time. Actual payments of income taxes may be materially different from the amounts presented.
(5)	Reflects anticipated principal repayments due during 2006 on Windstream’s outstanding indebtedness. See Note (x) in “Unaudited Pro Forma Combined Condensed Financial Information” on page 182 for further discussion of anticipated future repayments of long-term debt obligations.

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(6)	The estimated total leverage ratio is calculated as total pro forma debt of $5,534.7 million (see Note (f) in “Unaudited Pro Forma Combined Condensed Financial Information” on page 177), divided by minimum OIBDA.
(7)	The estimated interest coverage ratio is calculated as minimum OIBDA divided by estimated cash interest expense.

		Year Ended December 31, 2005
										Pro Forma				Pro Forma
		Spinco				Valor(1)				Adjustment(2)				Combined
Pro Forma Cash Available to Pay Dividends (GAAP)(Dollars in Millions)
Net cash provided from operations		$	953.9			$	191.1			$	268.8			$	1,413.8
Other income, net			(11.6	)			1.9				—				(9.7	)
Intercompany interest income			(23.3	)			—				—				(23.3	)
Interest expense			19.1				79.5				—				98.6
Income tax expense			267.9				14.3				—				282.2
Deferred income taxes			(4.9	)			(14.2	)			—				(19.1	)
Provision for doubtful accounts			(29.2	)			(6.1	)			—				(35.3	)
Non cash asset impairments			—				(1.7	)			—				(1.7	)
Non cash stock compensation			—				(12.7	)			—				(12.7	)
Changes in working capital			(66.3	)			(3.0	)			—				(69.3	)
Other, net			2.4				7.8				—				10.2
Pro Forma OIBDA (Non-GAAP)		$	1,108.0			$	256.9			$	268.8			$	1,633.7
Less:
Capital Expenditures(3)			356.9				57.4				—				414.3
Estimated cash interest expense(4)			17.9				83.3				284.4				385.6
Cash income taxes(5)			222.9				—				—				222.9
Cash Available to Pay Dividends		$	510.3			$	116.2			$	(15.6	)		$	610.9

(1)	Valor has historically calculated Cash Available to Pay Dividends as Adjusted EBITDA minus capital expenditures, cash interest, cash income taxes and any other charges excluded from adjusted EBITDA that have been or will be settled in cash. Windstream does not currently anticipate utilizing adjusted EBITDA as a non-GAAP measure and as such, the presentation of Valor’s historical Cash Available to Pay Dividends has been modified to conform to the presentation expected to be presented by Windstream, which substitutes operating income before depreciation and amortization (OIBDA) in the place of adjusted EBITDA . The most significant difference between these two measures for Valor is that adjusted EBITDA excludes the impact of non-cash stock compensation ($12.7 million in 2005) and other non-cash items defined in Valor’s existing credit facility while OIBDA does not.
(2)	Reflects the elimination of the royalty expense that Spinco has historically paid to Alltel, which will cease upon the consummation of the spin-off and the merger.
(3)	Consists of capital expenditures of both Spinco and Valor for the year ended December 31, 2005.
(4)	Reflects Windstream’s anticipated cash interest expense under its revolving credit facility, senior secured term loan facilities and senior notes. See Note (x) in “Unaudited Pro Forma Combined Condensed Financial Information” on page 182 for further discussion of interest expense anticipated to be incurred

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	by Windstream, the interest rate assumptions included in such calculation and the sensitivity of such calculations to fluctuations of interest rates.

(5)

Calculated as pro forma income tax expense of $267.9 million, less $45.0 million representing the use of net operating loss carryforwards held by Valor. The foregoing calculation is not based on an estimation of the anticipated taxable income for 2006, which is subject to many factors beyond the control of Windstream’s management or its determination at this time. Actual payments of income taxes may be materially different.

	•	For fiscal year 2005, pro forma combined OIBDA including both Valor and Spinco, excluding the royalty expense that Spinco has historically paid to Alltel which will cease upon the consummation of this transaction, was $1,633.7 million.
	•	For fiscal year 2005, the combined capital expenditures of Valor and Spinco were $414.3 million. Windstream’s management expects capital expenditures for the twelve month period following the close of the merger to be approximately $400.0 million.
	•	Absent the significant increase in Valor’s working capital that resulted from the change in its capital structure in 2005, neither Valor nor Spinco has experienced significant adverse changes in working capital requirements in the last 2 years.
	•	Windstream’s management has analyzed the impact of its intention to pay dividends at the level described above on its operations and performance in prior years and has determined that the revolving credit facility would have had sufficient capacity to finance any fluctuations in working capital and other cash needs, including the payment of dividends at the levels described above. Windstream currently does not intend to borrow under its revolving credit facility to pay dividends.

	•	That the general business climate, including such factors as consumer demand for services, the level of competition experienced and the regulatory environment, will remain consistent with previous periods; and
	•	The absence of extraordinary business events, such as new industry-altering technological developments or adverse regulatory developments, that may adversely affect Windstream’s business, results of operations or anticipated capital expenditures.

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	Restrictions on Payment of Dividends

	Delaware Law

	Senior Secured Credit Facilities

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	•	an individual who is a citizen or a resident of the United States;
	•	a corporation, or other entity taxable as a corporation for United States federal income tax purposes, created or organized under the laws of the United States or any state thereof or the District of Columbia;
	•	an estate, the income of which is subject to United States federal income taxation regardless of its source; or
	•	a trust, if (i) a court within the United States is able to exercise primary jurisdiction over its administration and one or more United States persons have the authority to control all of its substantial decisions, or (ii) in the case of a trust that was treated as a domestic trust under the law in effect before 1997, a valid election is in place under applicable Treasury regulations.

	•	insurance companies,
	•	dealers or traders in securities or currencies,
	•	tax-exempt organizations,
	•	financial institutions,
	•	mutual funds,
	•	partnerships or other entities classified as partnerships for United States federal income tax purpose and investors in such entities,
	•	holders who hold their shares as a hedge or as part of a hedging, straddle, conversion, synthetic security, integrated investment or other risk-reduction transaction,
	•	holders who are subject to the alternative minimum tax, or
	•	holders who acquired their shares upon the exercise of employee stock options or otherwise as compensation.

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	The Spin-Off

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	The Merger

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	•	due organization, good standing and qualification;
	•	capital structure;
	•	authority to enter into the merger agreement (and the other agreements executed in connection therewith) and no conflicts with or violations of governance documents or laws;
	•	documents filed with the SEC and financial statements;
	•	absence of certain changes or events;
	•	no material investigations or litigation;
	•	compliance with applicable laws and possession of required licenses and regulatory approvals;
	•	accuracy of information supplied for use in this proxy statement/ prospectus-information statement;
	•	compliance with environmental laws;
	•	tax matters;
	•	employee benefit plan matters;
	•	labor matters;
	•	intellectual property matters;
	•	communications regulatory matters;
	•	material contracts;
	•	title to real properties;
	•	opinion of company financial advisors;
	•	payment of fees to finders or brokers in connection with the merger;

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	•	approval by the Board of Directors; and
	•	affiliate transactions.

	•	declaring or paying dividends in respect of its capital stock; provided, Valor may, and intends to, continue paying quarterly dividends at an annual rate of $1.44 per share in accordance with its existing dividend policy until the transaction closes;
	•	splitting, combining or reclassifying its capital stock or issuing securities in respect of, in lieu of or in substitution for its capital stock;
	•	repurchasing, redeeming or otherwise acquiring its capital stock;
	•	issuing, delivering, or selling any shares of its capital stock or any securities convertible into or exercisable for, or any right to acquire, capital stock;
	•	making acquisitions of a substantial equity interest or material assets of another entity or selling, leasing, disposing of or otherwise encumber assets, other than inventory in the ordinary course of business consistent with past practice;
	•	incurring debt, other than under existing agreements or in the ordinary course of business which is not material;
	•	incurring any capital expenditures other than in the ordinary course of business consistent with past practice;
	•	changing its accounting methods other than in accordance with accounting principles generally accepted in the United States;
	•	making or rescinding any material tax elections or settling or compromising any material income tax liabilities, amending any material tax returns and changing any method of reporting income or deductions;
	•	paying, discharging or satisfying any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than in the ordinary course of business consistent with past practice; and
	•	taking or agreeing or committing to take any action that would result in any of such party’s representations and warranties set forth in the merger agreement or the other transaction agreements being or becoming untrue or in any of the conditions set forth in merger agreement not being satisfied at the effective time of the merger.

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	•	amending its organizational documents in any manner that would prevent or materially impair or delay the consummation of the transactions contemplated by the merger agreement;
	•	compensation and benefit matters with respect to directors, officers and employees;
	•	establishing, adopting, entering into, terminating or amending any collective bargaining agreement;
	•	complete or partial liquidation or dissolution of Valor or any of its subsidiaries;
	•	entering into or amending agreements or arrangements with related parties; and
	•	modifying, amending, terminating, renewing or failing to use reasonable best efforts to renew any material contract or waiving, releasing or assigning any material rights or claims except in the ordinary course of business consistent with past practice.

	•	the obtaining of all necessary actions or non-actions, waivers, consents, and approvals;
	•	the making of all necessary registrations and filings pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;
	•	the filing of all applications necessary to obtain state public service, or public utility commissions, and FCC consent to the transfer of control of certain licenses held by Spinco;
	•	the taking of all steps as may be necessary to obtain an approval or waiver from, or to avoid an action or proceeding by, any governmental authority; and
	•	the defending of any lawsuits or other legal proceedings.

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	•	knowingly solicit, initiate or encourage any inquiry or proposal that constitutes or could reasonably be expected to lead to an acquisition proposal;
	•	provide any non-public information or data to any person relating to or in connection with an acquisition proposal, engage in any discussions or negotiations concerning an acquisition proposal, or otherwise knowingly facilitate any effort or attempt to make or implement an acquisition proposal;
	•	approve, recommend, agree to or accept, or propose publicly to approve, recommend, agree to or accept, any acquisition proposal; or
	•	approve, recommend, agree to or accept, or propose to approve, recommend, agree to or accept, or execute or enter into, any letter of intent, agreement in principle, merger agreement, acquisition agreement, option agreement or other similar agreement related to any acquisition proposal.

	•	any merger, consolidation, share exchange, business combination, recapitalization or other similar transaction or series of related transactions involving Valor or any of its significant subsidiaries;
	•	any direct or indirect purchase or sale, lease, exchange, transfer or other disposition of the consolidated assets (including stock of Valor’s subsidiaries) of Valor and its subsidiaries, taken as a whole, constituting 15% or more of the total consolidated assets of Valor and its subsidiaries, taken as a whole, or accounting for 15% or more of the total consolidated revenues of Valor and its subsidiaries, taken as a whole, in any one transaction or in a series of transactions;
	•	any direct or indirect purchase or sale of or tender offer, exchange offer or any similar transaction or series of related transactions engaged in by any person involving 15% or more of the outstanding shares of Valor common stock; or
	•	any other substantially similar transaction or series of related transactions that would reasonably be expected to prevent or materially impair or delay the consummation of the transactions contemplated by the merger agreement or the other agreements executed in connection therewith.

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	•	Valor stockholders have not yet adopted and approved the merger agreement;
	•	the Valor board, after consulting with its legal advisors, determines in good faith, that failure to take such action would be a breach of its fiduciary duties to stockholders under applicable laws;
	•	before approving or recommending a proposal or terminating the merger agreement, the Valor board has provided Alltel with at least three business days’ notice of such action;
	•	before providing any information or data to any person in connection with an acquisition proposal by that person, Valor’s Board of Directors receives from that person an executed confidentiality agreement with terms substantially the same as those contained in the confidentiality agreement between Alltel and Valor; and
	•	before providing any non-public information or data to any person or entering into discussions with any person, Valor’s Board of Directors promptly notifies Alltel of any such inquiry, proposal or offer received from, any information requested by, or any discussions or negotiations sought to be initiated or continued with, that person and identifies the material terms and conditions of the acquisition proposal and the identity of the person making such acquisition proposal.

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	•	WCAS will agree not to sell, transfer or otherwise dispose of Valor shares for a period of 90 days after consummation of the merger;
	•	Windstream will file and use reasonable best efforts to have declared effective an “evergreen” shelf registration statement permitting sales of securities of Windstream by WCAS and Vestar as soon as practicable after consummation of the merger (provided that WCAS will not be able to sell shares of Windstream prior to the expiration of the lock-up referred to above) which will remain effective until each of WCAS and Vestar can sell all of its Windstream securities under Securities Act Rule 144 without volume limitations;
	•	if requested by the holders of at least 50% of the outstanding registrable securities (initially held by WCAS, Vestar and their respective affiliates), Valor will conduct one underwritten offering, including management participation in road shows and similar customary obligations (underwriters to be selected by Valor); and
	•	WCAS and Vestar will have customary piggyback registration rights in connection with any registration by Valor of sales of its equity securities (other than on Forms S-4 or S-8), whether for Valor’s own account or for the benefit of one or more stockholders exercising demand registration rights.

	•	the completion of the spin-off transaction in accordance with the terms of the merger agreement and the distribution agreement;
	•	the termination or expiration of the applicable waiting period under the Hart-Scott-Rodino Act and receipt of certain other approvals as set forth in the merger agreement;
	•	receipt of the requisite consents of regulators in the telecommunications industry;
	•	the effectiveness of the registration statement of which this proxy statement/ prospectus-information statement is a part;
	•	the approval for listing on the New York Stock Exchange of the Valor common stock to be issued pursuant to the spin-off and the merger;
	•	the approval of the holders of a majority in voting power of all outstanding shares of Valor common stock at the annual meeting, in accordance with applicable law and the rules, and regulations of the New York Stock Exchange;
	•	the completion of the financing of the transaction;

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	•	receipt by Alltel and Spinco (and, to the extent applicable, Valor) of the requisite IRS rulings regarding the spin-off and the merger;
	•	receipt by Alltel of a legal opinion from Alltel’s counsel to the effect that the spin-off will qualify as tax-free to Alltel, Spinco and the stockholders of Alltel under Section 355 and related provisions of the Code, which opinion will rely on the IRS rulings as to matters covered by the rulings;
	•	receipt by each of Alltel and Spinco, on the one hand, and Valor, on the other hand, of a legal opinion stating that the merger will constitute a reorganization under Section 368(a) of the Code;
	•	receipt by the boards of directors of Alltel, Spinco and Valor of customary “solvency” and “surplus” opinions of a nationally recognized investment banking or appraisal firm in form and substance reasonably satisfactory to such boards and, to the extent relating to Spinco, reasonably satisfactory to Valor; and
	•	the absence of any statute, rule, regulation, order or injunction having the effect of restraining, enjoining or prohibiting the contribution transaction, the distribution transaction or the merger or imposing any restrictions or requirements thereon or on Alltel, Spinco or Valor that would reasonably be expected to have a material adverse effect on Alltel or Windstream following the merger.

	•	performance by Valor, in all material respects, of all its obligations and compliance by Valor, in all material respects, with all covenants required by the merger agreement, as certified in writing by a senior officer of Valor;
	•	the accuracy of Valor’s representations and warranties set forth in the merger agreement (subject to certain exceptions), without any qualification as to materiality or material adverse effect set forth therein, except where the failure of such representations and warranties to be true and correct would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on Valor and its subsidiaries, as certified in writing by a senior officer of Valor;
	•	the absence of any event, occurrence, development or state of circumstances or facts that has had, individually or in the aggregate, a material adverse effect on Valor, except as previously disclosed; and
	•	delivery of evidence, in form and substance reasonably satisfactory to Alltel and Spinco, demonstrating that Valor’s securityholders agreement has been amended in accordance with the merger agreement.

	•	performance by Alltel and Spinco, in all material respects, of all their respective obligations and compliance by Alltel and Spinco, in all material respects, with all covenants required by the merger agreement, as certified in writing by a senior officer of each of Alltel and Spinco;
	•	the accuracy of Alltel and Spinco’s representations and warranties set forth in the merger agreement (subject to certain exceptions), without any qualification as to materiality or material adverse effect set forth therein, except where the failure of such representations and warranties to be true and correct would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on Alltel and Spinco and their subsidiaries, as certified in writing by a senior officer of each of Alltel and Spinco;
	•	execution by Spinco and Alltel of the Tax Sharing Agreement, the Employee Benefits Agreement, the Shared Contracts Agreement, the Shared Assets Agreement, the Distribution Agreement and the Transition Services Agreement;
	•	the absence of any event, occurrence, development or state of circumstances or facts that has had, individually or in the aggregate, a material adverse effect on each of Alltel and Spinco, except as previously disclosed; and

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	•	delivery by Spinco of an affidavit, dated as of the closing date, in form and substance required under the Treasury Regulations issued pursuant to Section 1445(b) of the Code.

	•	the merger is not consummated by December 8, 2006 through no fault of the party seeking to terminate the merger agreement;
	•	there are final, non-appealable legal restraints preventing the merger and the party seeking to terminate the merger agreement has used all reasonable best efforts to remove such legal restraints; or
	•	the requisite Valor stockholder approval shall have failed to be obtained at the stockholders’ meeting, except that Valor will not be permitted to terminate the merger agreement because of the failure to obtain the stockholder approval if such failure was caused by (i) Valor’s actions or inactions that constitute a material breach of the merger agreement or (ii) a material breach of the voting agreement by any party thereto other than Spinco.

	•	Valor has breached or failed to perform in any material respect a representation, warranty, covenant or agreement contained in the merger agreement, resulting in a failure of a condition to Valor’s obligation to effect the merger, and such breach cannot be cured by December 8, 2006;
	•	the Board of Directors of Valor withdraws or modifies its approval or recommendation of the merger or the merger agreement or approves or recommends (or approves to recommend) to the Valor stockholders an acquisition proposal; or
	•	Valor fails to call and hold stockholders’ meeting within sixty (60) days after the effectiveness of the registration statement to which this proxy statement/ prospectus-information statement is a part.

	•	either Alltel or Spinco breached or failed to perform in any material respect a representation, warranty, covenant or agreement contained in the merger agreement, resulting in a failure of a condition to the Alltel or Spinco’s obligations to effect the merger, and such breach cannot be cured by December 8, 2006; or
	•	the Valor Board of Directors determines in good faith that an acquisition proposal constitutes a superior proposal and (i) Valor notifies Alltel of the acquisition proposal in accordance with the merger agreement, (ii) simultaneously with terminating the merger agreement Valor enters into a definitive agreement to effect the superior proposal, and (iii) Valor pays to Alltel the termination fee described below.

	•	Valor terminates the merger agreement because its Board of Directors determines in good faith that an acquisition proposal constitutes a superior proposal;
	•	Alltel and Spinco terminate the merger agreement because the Board of Directors of Valor withdraws or modifies its approval or recommendation of the merger or recommends an acquisition proposal to the Valor stockholders; or
	•	any person makes an acquisition proposal and thereafter the merger agreement is terminated (i) by Valor, Alltel or Spinco because either the merger is not consummated by December 8, 2006 or if the requisite Valor stockholder approval shall have failed to be obtained, or (ii) by Alltel or Spinco

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		because Valor fails to call and hold stockholders’ meeting within sixty (60) days after the effectiveness of the registration statement to which this proxy statement/ prospectus-information statement is a part, and, in each of the following cases, within twelve (12) months after the termination of the merger agreement:

	•	Valor is acquired by any merger, business combination or other similar transaction;
	•	Valor disposes of 15% or more of the total consolidated assets of Valor and its subsidiaries, taken as a whole, or accounting for 15% or more of the total consolidated revenues of Valor and its subsidiaries, taken as a whole;
	•	any person or entity acquires 15% or more of the outstanding shares of Valor common stock;
	•	any other substantially similar transaction that would reasonably be expected to prevent or materially impair or delay the consummation of merger is consummated; or
	•	Valor enters into a definitive agreement with respect to the foregoing.

	•	Alltel and Spinco or Valor terminates the merger agreement because the meprger is not consummated by December 8, 2006 and at the time of such termination, all of the conditions to the transactions in the merger agreement have been satisfied other than such conditions which by their terms are intended to be satisfied contemporaneously with the closing or such condition regarding the completion of the financing of the transaction; or
	•	Valor terminates the merger agreement because either Alltel or Spinco breached or failed to perform in any material respect a representation, warranty, covenant or agreement contained in the merger agreement, resulting in a failure of the conditions to the Alltel or Spinco’s obligations regarding the completion of the financing of the transaction, and such breach cannot be cured by December 8, 2006.

	•	Alltel and Spinco or Valor terminates the merger agreement because the merger is not consummated by December 8, 2006 and at the time of such termination, all of the conditions to the transactions in the merger agreement have been satisfied other than such conditions which by their terms are intended to be satisfied contemporaneously with the closing or such conditions regarding:

	•	the receipt by Alltel and Spinco (and, to the extent applicable, Valor) of the requisite Internal Revenue Service rulings relating to the spin-off and the merger and the receipt by Alltel of a legal opinion from its counsel to the effect that the spin-off will be tax-free to Alltel, Spinco and the stockholders of Alltel under Section 355 and related provisions of the Code; or
	•	the receipt by each of Alltel and Spinco, on the one hand, and Valor, on the other hand, of a legal opinion stating that the merger will constitute a reorganization under section 368(a) of the Internal Revenue Code; or

	•	Valor terminates the merger agreement because either Alltel or Spinco breached or failed to perform in any material respect a representation, warranty, covenant or agreement contained in the merger agreement, resulting in a failure of the two conditions to the Alltel or Spinco’s obligations listed immediately above, and such breach cannot be cured by December 8, 2006.

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	•	generally, not taking, or permitting any of its subsidiaries to take, any disqualifying action, provided that a disqualifying action would not include (i) an action taken pursuant to the terms of the transaction agreements, (ii) an action that would not have caused the tax-free status of the transactions to be lost, but for an action taken by Alltel or (iii) an action taken by Spinco prior to the distribution or taken solely to mitigate the adverse effects on the tax-free status of the transactions of an action taken by Spinco prior to the distribution;
	•	generally, for two years after the distribution, not taking, or permitting any of its subsidiaries to take, an action that might be a disqualifying action, without receiving the prior determination of Alltel that the action would not jeopardize the tax-free status of the transactions;

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	•	for two years after the distribution, not entering into any agreement, understanding or arrangement or engaging in any substantial negotiations with respect to any transaction involving the acquisition of Windstream stock or the issuance of shares of Windstream stock, or options to acquire or other rights in respect of such stock, in excess of a permitted basket of 71,130,989 shares (as adjusted for stock splits, stock dividends, recapitalizations, reclassifications and similar transactions), unless, generally, the shares are issued to qualifying Windstream employees or retirement plans, each in accordance with “safe harbors” under regulations issued by the IRS;
	•	for two years after the distribution, not repurchasing Windstream shares, except to the extent consistent with guidance issued by the IRS;
	•	for two years after the distribution, causing certain wholly-owned subsidiaries that were wholly-owned subsidiaries of Spinco at the time of the distribution to continue the active conduct of the Spinco business to the extent so conducted by those subsidiaries immediately prior to the distribution;
	•	for two years after the distribution, not voluntarily dissolving, liquidating, merging or consolidating with any other person, unless (i) Windstream is the survivor of the merger or consolidation or (ii) prior to undertaking such action, Alltel has delivered a written determination to Windstream that such action would not jeopardize the tax-free status of the transactions.

	•	Alltel had delivered to Windstream a written determination that a potential disqualifying action would not jeopardize the tax-free status of the transactions (except to the extent that a disqualifying action resulted from the inaccuracy, incorrectness or incompleteness of any representation provided by Windstream to Alltel in respect of that determination);
	•	the tax-related loss arose in respect of any action or transaction that was permitted to be taken without the consent of Alltel pursuant to the limitations described in the third preceding paragraph (except to the extent that, in the case of an action permitted pursuant to an IRS ruling, a disqualifying action resulted from the inaccuracy, incorrectness or incompleteness of any representation provided by Windstream to the IRS in connection with such ruling);
	•	the tax-related loss arose in respect of any item of income, gain, deduction or loss that resulted from Alltel’s preliminary internal restructuring or that was attributable, under certain provisions of the Code, to a predecessor of Alltel or Spinco; or

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	•	the tax-related loss arose from the recognition of taxable income or gain by Alltel or any Alltel affiliate on the distribution, as a result of any deemed sale of Spinco stock by Alltel attributable to such stock being treated for federal income tax purposes as not having been distributed to Alltel’s stockholders or any failure by Alltel to distribute an amount of Spinco stock constituting “control” of Spinco within the meaning of Section 368(c) of the Code as a result of such a deemed sale.

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	•	the issuance to Alltel of Spinco common stock to be distributed to the exchange agent for the benefit of Alltel’s stockholders pro rata in the spin-off,
	•	the payment of a special dividend to Alltel in an amount not to exceed Alltel’s tax basis in Spinco (which is estimated to equal approximately $2.275 billion), which Alltel will use to repurchase stock pursuant to a special stock buyback program authorized by the Alltel Board of Directors in connection with the spin-off, to repay outstanding indebtedness, or both, within one year following the spin-off, and
	•	the distribution by Spinco to Alltel of certain Spinco debt securities, which Alltel intends to exchange for outstanding Alltel debt securities or otherwise transfer to Alltel’s creditors representing approximately $1.673 billion in debt reduction to Alltel.

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	•	immediately prior to the spin-off, all material contracts, licenses, agreements, commitments and other arrangements, formal and informal, between Alltel and its subsidiaries, on the one hand, and Spinco and its subsidiaries, on the other hand, will be terminated (except as contemplated by the other agreements executed in connection with the transactions);
	•	immediately prior to the spin-off, all intercompany cash management loan balances between Alltel and its subsidiaries, on one hand, and Spinco and its subsidiaries, on the other hand, will be canceled;
	•	no longer using any material showing, or otherwise representing to any third party, any affiliation or connection between Alltel and Spinco after the spin-off, other than in filings, reports and other documents required by applicable law or regulations of securities exchanges to be filed or made publicly available; and
	•	entering into the Employee Benefits Agreement, the Merger Agreement, the Tax Sharing Agreement, the Shared Assets Agreement, the Shared Contracts Agreement, and the Transition Services Agreement (see “Additional Agreements Related To The Spin-Off And The Merger” on page [ •  ]).

	•	any liability assumed, transferred, assigned or allocated to Spinco or to Alltel in accordance with, or any other liability of either of them under, the merger agreement or any other transaction agreements or any contracts contemplated thereby;

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	•	the ability of a party to enforce its rights under the merger agreement or any other transaction agreements or any contracts contemplated thereby; or
	•	any liability the release of which would result in the release of any person other than Spinco, Alltel or their respective subsidiaries.

	•	to pay or satisfy:

	•	any liability of Alltel or any of its subsidiaries (including Spinco and its subsidiaries) primarily relating to or arising from the business of Spinco, including the liabilities set forth on the audited balance sheet of Spinco prepared in accordance with the distribution agreement or arising after the date thereof;
	•	any liability of Spinco under the transaction agreements executed in connection with the merger;
	•	any liability to be transferred to Spinco or a Spinco subsidiary in connection with a benefit and compensation plan, in accordance with the employee benefits agreement; or
	•	any liability or obligation arising in connection with or related to the assets transferred to Spinco by Alltel in accordance with the distribution agreement; or

	•	to perform any of its obligations under the distribution agreement.

	•	to pay or satisfy any liability of Alltel or any of its subsidiaries, including the liabilities of Alltel under the transaction agreements executed in connection with the merger, in each case, other than the liabilities of Spinco thereunder; or
	•	to transfer to Spinco all of the assets transferred or to be transferred to Spinco pursuant to the distribution agreement, or
	•	to perform any of its obligations under the distribution agreement.

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	•	A retirement plan and related trust substantially similar to the Alltel pension plan. The amount transferred from the Alltel pension plan to the Spinco plan will be a pro rata share of the fair market value of the Alltel pension plan assets.
	•	Plans substantially similar to the Alltel 401(k) and profit sharing plans. Any participant loan notes held by the Alltel 401(k) will be transferred in-kind.
	•	A plan substantially identical to the provisions of the Alltel comprehensive group insurance plan. The Spinco plan will recognize and maintain the current status for elections and deductible plan maximums made with respect to Spinco Employees and Spinco Individuals under the Alltel plan. No assets of the trust related to the Alltel comprehensive group insurance plan shall be transferred to Spinco or any trust established by Spinco. The Spinco plan will recognize and maintain all coverage and contribution elections made under the Alltel plan and will recognize and give credit for all deductibles and co-payments paid by, and all benefits paid to, Spinco Employees and Spinco Individuals under the Alltel plan.
	•	Plans established for Spinco Employees that are substantially similar to the Alltel long term disability plan, group accident plan, and Special Insurance Plan for Former Allied Telephone Profit Sharing. The Alltel long term disability plan, group accident plan, and Special Insurance Plan for Former Allied Telephone Profit Sharing will remain liable for obligations incurred with respect to Spinco Employees and Spinco Individuals prior to establishment of the new Spinco plans.
	•	A plan established for Spinco Individuals that is substantially similar to the provisions of Alltel’s Income Advantage Plan (POP). The Spinco plan will maintain coverage and contribution elections made under the Alltel Income Advantage Plan and recognize account balances as if participation in the Spinco plan had been since the beginning of the calendar year.
	•	Educational assistance and adoption assistance plans for Spinco Employees that are substantially similar to the Alltel plans of the same name. The obligations and liabilities with respect to Spinco Employees under the Alltel educational assistance and adoption assistance plans will be transferred to and assumed by the respective Spinco plans.
	•	A severance pay plan for Spinco Employees substantially similar to the severance pay plan of Alltel; provided, however, the spin-off, merger or both will not be an event that entitles a Spinco Employee or Spinco Individual to benefits under the Alltel severance pay plan or new Spinco severance plan. The Spinco severance plan will not be amended so as to provide decreased benefits for a period of one year after the distribution date.
	•	People practices for Spinco Employees substantially similar to the provisions of the people practices in effect at Alltel. Spinco has agreed to recognize all periods of service of Spinco Employees with Alltel under the Spinco people practices plan.
	•	A plan substantially identical to the Alltel Corporation Performance Incentive Compensation Plan for the performance period beginning the day after the distribution date and ending on December 31, 2006. Awards held by Spinco Individuals under the 2006 Alltel Corporation Performance Incentive Compensation Plan will be paid a pro rated amount if deemed earned based on a reasonable estimate of the actual performance level from January 1, 2006 to the distribution date.
	•	A plan for Spinco Employees that is substantially identical to the provisions of Alltel’s Benefit Restoration Plan.
	•	A plan for Spinco Employees and Spinco Individuals substantially similar to the provisions of Alltel’s Supplemental Medical Reimbursement Plan. The obligations and liabilities incurred under the Alltel Supplemental Medical Reimbursement Plan with respect to Spinco Employees and Spinco Individuals will be and remain the sole responsibility of the Alltel Supplemental Medical Reimbursement Plan.

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	•	For awards in effect as of the distribution date for the 2004–2006 performance measurement period, each Spinco Individual will be entitled to a pro rata amount if deemed earned based on a reasonable estimate of the actual performance level of such period.
	•	Awards in effect as of the distribution date for the 2005–2007 performance measurement period will be deemed earned at the target performance level and paid pro rata to eligible Spinco Individuals.

	•	To the extent that a Spinco Individual is holding an award consisting of an Alltel option that is vested and outstanding as of the distribution date, he or she will be treated as experiencing a separation from service from, or otherwise terminating employment with, Alltel. Any such Alltel option will expire unless it is exercised within the time provided in the option itself.
	•	To the extent that a Spinco employee is holding an award consisting of an Alltel option that is not vested as of the distribution date, that option shall be cancelled as of the distribution date and replaced by restricted shares of Windstream common stock in accordance with the terms of the Merger Agreement. The merger agreement authorizes up to 2.8 million restricted shares of Valor common stock to be awarded. The restrictions on such shares will lapse on a date to be determined by the Board of Directors of Windstream. The Windstream Board of Directors will also determine the value of the awards.

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	•	any net liability for income taxes of a member of the Spinco group attributable to the treatment of payments received from a federal or state universal services fund in respect of the Spinco business for the period from January 1, 1997 to the distribution;
	•	any non-income taxes arising prior to the spin-off and relating to Spinco and its subsidiaries or to the employees, assets or transactions of the Spinco business, except for non-income taxes arising in respect of the preliminary restructuring of the Spinco group and the distribution of the stock of Spinco to the stockholders of Alltel; and
	•	any liability for taxes arising after the spin-off attributable to Spinco and its subsidiaries or to the employees, assets or transactions of the Spinco business.

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	•	information technology systems,
	•	billing,
	•	human resources,
	•	customer service,
	•	accounting and finance,
	•	engineering and network,
	•	sales and marketing,
	•	operations,
	•	real estate,
	•	branding, and
	•	capital asset management.

	•	Spinco desires, upon 30 days prior written notice to Alltel;
	•	Spinco fails to pay for transition services within the time provided in the agreement;
	•	Either party defaults in any material respect in the performance of the agreement;
	•	Either party becomes insolvent, bankrupt or a receiver or trustee is appointed for either party; or
	•	The distribution agreement is terminated.

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	•	senior secured five-year revolving credit facility in a principal amount of $500.0 million, and
	•	senior secured term loan facilities in an aggregate amount of up to $3.7 billion consisting of sub-facilities in the following amounts:

	(i) Tranche A Term Loan Facility — up to $500.0 million;
	(ii) Tranche B Term Loan Facility — up to $2.8 billion; and
	(iii) Tranche C Term Loan Facility — up to $400.0 million.

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Description		Principal Amount to be Repaid
Valor Bank Facility — Amended and Restated Credit Facility dated as of February 14, 2005 among Valor, certain of its affiliates as guarantors and Bank of America, N.A., as Administrative Agent, and the lenders and other agents party thereto (as amended by Amendment No. 1 dated as of August 9, 2005)		Approximately $781.0 million of secured loans to be repaid in full with the proceeds of the Senior Credit Facilities and/or Refinancing Notes
Valor Bonds — 73/4 % Senior Notes due 2015 issued by Valor		$400 million Valor Bonds to be repaid with the proceeds of the Tranche C Term Loan Facility to the extent put to the issuer pursuant to a change of control offer and noteholder consent required under the indenture governing the notes (assumed to be $0)
Alltel Bonds — Various bonds issued by certain of Alltel’s wireline subsidiaries		Approximately $81.0 million, including accrued interest of Alltel wireline bonds to be repurchased with the proceeds of the Senior Credit Facilities and/or Refinancing Notes (expected total payments of approximately $90.8 million including the related make-whole premiums)

Description			Principal Amount
Senior Credit Facilities:
	Revolving Credit Facility		Aggregate commitments of $500.0 million
	Term Facilities and/or Refinancing Notes		Aggregate of $3.3 billion
Distributed Notes			$1.703 billion of senior notes, $29.8 million of which will be used to pay fees related thereto, to be issued by Spinco to Alltel as consideration for the contribution
Assumed Spinco Debt — 63/4% Notes due 2028 and 61/2 % Debentures due 2013 issued by certain wireline subsidiaries of Alltel			Approximately $180.0 million of Alltel wireline bonds to be assumed by Spinco in connection with the contribution transaction
Valor Bonds — 73/4 % Senior Notes due 2015 issued by Valor			$400.0 million of Valor Bonds assumed to remain outstanding (assuming not put to the issuer pursuant to a change of control offer required under the applicable indenture)

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	•	if the Senior Credit Facilities are rated Ba2 or higher by Moody’s and BB or higher by S&P (in each case with a stable outlook):

	•	in the case of loans under the revolving credit facility, Tranche A Term Loans and Tranche C Term Loans, 1.25% for Eurodollar Loans and 0.25% for loans based on ABR, and
	•	in the case of Tranche B Term Loans, 1.50% for Eurodollar Loans and 0.50% for loans based on ABR, or

	•	if the Senior Credit Facilities are rated lower than Ba2 by Moody’s or lower than BB by S&P:

	•	in the case of loans under the revolving credit facility, Tranche A Term Loans and Tranche C Term Loans, 1.50% for Eurodollar Loans and 0.50% for loans based on ABR, and
	•	in the case of Tranche B Term Loans, 1.75% for Eurodollar Loans and 0.75% for loans based on ABR.

	Each quarter during Year 1 — 0%
	Each quarter during Year 2 — 1.25%
	Each quarter during Year 3 — 2.5%
	Each quarter during Year 4 — 3.75%
	Each of the first 3 quarters of Year 5 — 5%
	Maturity — 55%

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	•	In its wireline business, Spinco added approximately 44,000 broadband customers, increasing Spinco’s broadband customer base over 440,000. This increase more than offset the loss of approximately 23,000 local access lines.
	•	Although revenues and sales decreased $9.6 million, primarily due to the loss of access lines discussed above, average revenue per wireline customer increased 1 percent from a year ago to $66.91 due primarily to growth in broadband revenues.
	•	Operating income increased 14 percent from a year ago, primarily reflecting a decline in depreciation and amortization resulting from our reductions in depreciable lives for certain assets associated with studies performed during 2005 and 2006.

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					Three Months Ended
					March 31,
(Millions, except per share amounts)					2006				2005
Revenues and sales:
	Service revenues				$	604.7			$	620.1
	Product sales					98.3				92.5
		Total revenues and sales				703.0				712.6
Costs and expenses:
	Cost of services					192.8				203.5
	Cost of products sold					84.3				79.1
	Selling, general, administrative and other					79.7				84.6
	Depreciation and amortization					102.6				125.7
	Royalty expense to Parent					67.2				67.4
	Restructuring and other charges					2.5				—
			Total costs and expenses			529.1				560.3
Operating income						173.9				152.3
Other income, net						1.2				(0.1	)
Intercompany interest income (expense)						14.5				(0.3	)
Interest expense						(4.5	)			(4.9	)
Income before income taxes						185.1				147.0
Income taxes						72.3				58.7
Net income					$	112.8			$	88.3

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				Three Months Ended
				March 31,
(Millions, access lines in thousands)				2006				2005
Revenues and sales:
	Local service			$	264.5			$	273.1
	Network access and long-distance				250.8				259.7
	Miscellaneous				61.3				60.1
		Total revenues and sales			576.6				592.9
Costs and expenses:
	Cost of services				175.9				180.5
	Cost of products sold				7.4				6.3
	Selling, general, administrative and other				63.5				70.2
	Depreciation and amortization				101.1				124.1
	Royalty expense to Parent				67.2				67.4
		Total costs and expenses			415.1				448.5
Segment income				$	161.5			$	144.4
Access lines in service (excludes broadband lines)					2,862.5				2,983.3
Average access lines in service					2,872.7				2,994.7
Average revenue per customer per month (a)				$	66.91			$	65.99

(a)	Average revenue per customer per month is calculated by dividing total wireline revenues by average access lines in service for the period.

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	•	Level of competition in its markets. Sources of competition to Spinco’s local exchange business include, but are not limited to, resellers of local exchange services, interexchange carriers, satellite transmission services, wireless communications providers, cable television companies, and competitive access service providers including those utilizing Unbundled Network Elements-Platform (“UNE-P”), VoIP providers and providers using other emerging technologies. Spinco’s ILEC operations have begun to experience competition in their local service areas. Through March 31, 2006, this competition has not had a material adverse effect on the results of operations of Spinco’s ILEC operations, primarily because these subsidiaries provide wireline telecommunications services in mostly rural areas. To date, ILEC subsidiaries have not been required to discount intrastate service rates in response to competitive pressures.
	•	Level of revenues and access lines currently subject to rate-of-return regulation or which could revert back to rate-of-return regulation in the future. For the ILEC subsidiaries that follow SFAS No. 71, all interstate revenues are subject to rate-of-return regulation. The majority of the ILEC subsidiaries’ remaining intrastate revenues are either subject to rate-of-return regulation or could become subject to rate-of-return regulation upon election by Spinco, subject in certain cases to approval by the state public service commissions.
	•	Level of profitability of the ILEC subsidiaries. Currently, the prices charged to customers for interstate and intrastate services continue to be sufficient to recover the specific costs of the ILEC subsidiaries in providing these services to customers.

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				Three Months
				Ended March 31,
(Millions)				2006				2005
Revenues and sales:
	Product sales			$	69.1			$	68.8
		Total revenues and sales			69.1				68.8
Costs and expenses:
	Cost of products sold				64.3				64.9
	Selling, general, administrative and other				3.2				2.5
	Depreciation and amortization				0.4				0.6
		Total costs and expenses			67.9				68.0
Segment income				$	1.2			$	0.8

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				Three Months Ended
				March 31,
(Millions, except customers in thousands)				2006				2005
Revenues and sales:
	Long-distance and network management services			$	46.3			$	43.4
	Directory publishing				26.5				26.3
	Telecommunications information services				4.0				5.2
		Total revenues and sales			76.8				74.9
Costs and expenses:
	Cost of services				29.2				34.0
	Cost of products sold				19.8				20.9
	Selling, general, administrative and other				13.0				11.9
	Depreciation and amortization				1.1				1.0
		Total costs and expenses			63.1				67.8
Segment income				$	13.7			$	7.1
Long-distance customers					1,750.6				1,793.1

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			Three Months Ended
			March 31,
(Millions, except per share amounts)			2006				2005
Cash flows from (used in):
	Operating activities		$	286.4			$	321.6
	Investing activities			(63.6	)			(74.2	)
	Financing activities			(224.8	)			(251.1	)
	Effect of exchange rate changes			—				—
Decrease in cash and short-term investments			$	(2.0	)		$	(3.7	)

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	•	Spinco added more than 154,000 high-speed data customers, increasing Spinco’s DSL customer base to almost 400,000. This increase more than offset the loss of approximately 124,000 local access lines, a year-over-year decline of 4 percent.
	•	Revenues and sales decreased by $10.0 million and operating income decreased by $33.8 million, primarily due to the loss in access lines discussed above. However, average revenue per access line (excluding revenues from the long-distance service business) increased 2 percent to $67.21, primarily due to growth in broadband revenues and selling additional services and features to existing wireline customers.
	•	During the fourth quarter of 2005, Spinco began offering DISH Network satellite television service to Spinco’s residential customers as part of a bundled service offering.

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				2005				2004				2003
				(In millions)
Revenues and sales:
	Service revenues			$	2,463.6			$	2,533.5			$	2,618.4
	Product sales				459.9				400.0				384.9
		Total revenues and sales			2,923.5				2,933.5				3,003.3
Costs and expenses:
	Cost of services				796.1				813.7				864.8
	Cost of products sold				374.8				333.8				339.0
	Selling, general, administrative and other				340.1				327.9				351.0
	Depreciation and amortization				474.2				508.5				519.4
	Royalty expense to Parent				268.8				270.2				273.0
	Restructuring and other charges				35.7				11.8				12.2
		Total costs and expenses			2,289.7				2,265.9				2,359.4
Operating income					633.8				667.6				643.9
Other income, net					11.6				13.7				5.8
Intercompany interest income (expense)					23.3				(15.2	)			(21.6	)
Interest expense					(19.1	)			(20.4	)			(27.7	)
Gain on disposal of assets and other					—				—				23.9
Income before income taxes					649.6				645.7				624.3
Income taxes					267.9				259.4				247.1
Income before cumulative effect of accounting change					381.7				386.3				377.2
Cumulative effect of accounting change, net of taxes					(7.4	)			—				15.6
Net income				$	374.3			$	386.3			$	392.8

	Revenue and Sales

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	Cost and Expenses

	Restructuring and Other Charges

			(Millions)
Severance and employee benefit costs			$	4.4
Costs associated with pending spin-off and merger of wireline operations				31.3
	Total restructuring and other charges		$	35.7

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							Product
			Wireline				Distribution				Other				Total
			(Millions)
Severance and employee benefit costs			$	11.2			$	0.1			$	0.3			$	11.6
Relocation costs				1.2				—				0.1				1.3
Lease and contract termination costs				(1.8	)			—				—				(1.8	)
Other exit costs				0.7				—				—				0.7
	Total restructuring and other charges		$	11.3			$	0.1			$	0.4			$	11.8

							Product
			Wireline				Distribution				Other				Total
			(Millions)
Severance and employee benefit costs			$	7.0			$	—			$	—			$	7.0
Lease and contract termination costs				—			$	—				(0.4	)			(0.4	)
Write-down of software development costs				1.8			$	—				3.8				5.6
	Total restructuring and other charges		$	8.8			$	—			$	3.4			$	12.2

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	Other Income, Net

	Intercompany Interest Income (Expense)

	Interest Expense

	Gain on Disposal of Assets and Other

	Income Taxes

	Income before Cumulative Effect of Accounting Change

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	Cumulative Effect of Accounting Change

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	Results of Operations By Business Segment

Wireline Operations				2005				2004				2003
				(Dollars in millions,
				except access lines in thousands)
Revenues and sales:
	Local service			$	1,081.5			$	1,115.6			$	1,135.6
	Network access and interconnection				1,034.1				1,038.3				1,049.9
	Miscellaneous				255.8				256.9				243.1
		Total revenues and sales			2,371.4				2,410.8				2,428.6
Costs and expenses:
	Cost of services				704.0				702.8				736.4
	Cost of products sold				31.7				29.4				28.0
	Selling, general, administrative and other				276.2				272.8				289.7
	Depreciation and amortization				468.2				502.2				510.2
	Royalty expense to Parent				268.8				270.2				273.0
		Total costs and expenses			1,748.9				1,777.4				1,837.3
Segment income				$	622.5			$	633.4			$	591.3
Access lines in service (excludes DSL lines)					2,885.7				3,009.4				3,095.6
Average access lines in service					2,950.0				3,061.5				3,136.8
Average revenue per access line per month(a)				$	67.21			$	65.87			$	64.72

(a)		Average revenue per access line per month is calculated by dividing total wireline revenues by average access lines in service for the period.

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			2005				2004				2003
			(Millions)
Severance and employee benefit costs			$	4.4			$	11.2			$	7.0
Relocation costs				—				1.2				—
Lease and contract termination costs				—				(1.8	)			—
Costs associated with pending spin-off and merger of wireline operations				31.3				—				—
Write-down of software development costs				—				—				1.8
Other exit costs				—				0.7				—
	Total restructuring and other charges		$	35.7			$	11.3			$	8.8

	Accounting for Regulated Entities

	Product Distribution

				2005				2004				2003
				(Millions, except customers in
				thousands)
Revenues and sales:
	Product distribution			$	307.9			$	257.5			$	278.9
		Total revenues and sales		$	307.9			$	257.5			$	278.9
Costs and expenses:
	Cost of products sold				289.2				239.5				259.5
	Selling, general, administrative and other				12.4				12.4				13.6
	Depreciation and amortization				1.9				2.5				2.4
		Total costs and expenses			303.5				254.4				275.5
Segment income					4.4				3.1				3.4

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			2005				2004				2003
			(Millions)
Severance and employee benefit costs			$	—			$	0.1			$	—
	Total restructuring and other charges		$	—			$	0.1			$	—

	Other Operations

				2005				2004				2003
				(Millions, except customers in
				thousands)
Revenues and sales:
	Long-distance			$	180.4			$	174.1			$	182.4
	Directory publishing				154.7				155.9				122.6
	Telecommunications information services				17.2				41.8				108.8
		Total revenues and sales			352.3				371.8				413.8
Costs and expenses:
	Cost of services				138.9				155.6				190.1
	Cost of products sold				114.9				126.8				107.8
	Selling, general, administrative and other				51.8				42.7				47.7
	Depreciation and amortization				4.1				3.8				6.8
		Total costs and expenses			309.7				328.9				352.4
Segment income				$	42.6			$	42.9			$	61.4
Long-distance customers					1,750.8				1,770.8				1,680.2

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			2004				2003
			(Millions)
Severance and employee benefit costs			$	0.3			$	—
Relocation costs				0.1				—
Lease and contract termination costs				—				(0.4	)
Write-down of software development costs				—				3.8
	Total restructuring and other charges		$	0.4			$	3.4

	Segment Capital Requirements

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													Software
			Capital Expenditures										Development
																	Totals
													(Millions)
Wireline			$	343.0			-		$	348.0			$	2.0			$	345.0			-		$	350.0
Product Distribution				2.0			-			2.0				—				2.0			-			2.0
Other				3.0			-			3.0				—				3.0			-			3.0
	Totals		$	348.0			-		$	353.0			$	2.0			$	350.0			-		$	355.0

				2005				2004				2003
				(Millions)
Cash flows from (used in):
	Operating activities			$	953.9			$	962.2			$	1,135.0
	Investing activities				(352.7	)			(329.7	)			(356.9	)
	Financing activities				(602.4	)			(627.1	)			(784.2	)
	Effect of exchange rate changes				—				(0.1	)			0.8
		Change in cash and short-term investments		$	(1.2	)		$	5.3			$	(5.3	)

	Cash Flows from Operations

	Cash Flows Used in Investing Activities

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	Cash Flows Used in Financing Activities

	Liquidity and Capital Resources

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	Pension Plans

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	Other Postretirement Benefits

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	Off-Balance Sheet Arrangements

	Contractual Obligations and Commitments

			Payments Due by Period
			Less												More
			Than				1-3				3-5				Than
			1 Year				Years				Years				5 Years				Total
			(Millions)
Long-term debt, including current maturities(a)			$	22.1			$	45.7			$	39.9			$	154.1			$	261.8
Interest payments on long-term debt obligations				18.8				32.5				25.4				128.0				204.7
Operating leases				5.0				6.7				3.6				2.5				17.8
Purchase obligations(b)				1.3				0.6				—				—				1.9
Other long-term liabilities(c)				32.3				98.4				99.4				607.7				837.8
	Total contractual obligations and commitments		$	79.5			$	183.9			$	168.3			$	892.3			$	1,324.0

(a)		Excludes $(1.0) million of unamortized discounts included in long-term debt at December 31, 2005.
(b)		Purchase obligations represent amounts payable under noncancellable contracts and primarily represent agreements for software licensing.
(c)		Other long-term liabilities primarily consist of deferred tax liabilities and other postretirement benefit obligations.

	Market Risk

	Critical Accounting Policies

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	In evaluating the collectibility of Spinco’s trade receivables, it assesses a number of factors including a specific customer’s ability to meet its financial obligations to it, as well as general factors, such as the length of time the receivables are past due and historical collection experience. Based on these assumptions, Spinco records an allowance for doubtful accounts to reduce the related receivables to the amount that it ultimately expects to collect from customers. If circumstances related to specific customers change or economic conditions worsen such that Spinco’s past collection experience is no longer relevant, its estimate of the recoverability of its trade receivables could be further reduced from the levels provided for in the consolidated financial statements. At December 31, 2005, Spinco’s allowance for doubtful accounts was $14.1 million. A 10 percent increase in this reserve would have increased the provision for doubtful accounts by $1.4 million for the year ended December 31, 2005.
	The annual costs of providing pension and other postretirement benefits are based on certain key actuarial assumptions as discussed above. As previously discussed, the discount rate selected is based on a review of current market interest rates on high-quality, fixed-rate debt securities adjusted to reflect Spinco’s longer duration of expected future cash outflows for benefit payments. The expected return on plan assets reflects Spinco’s view of the long-term returns available in the investment market based on historical averages and consultation with investment advisors. The healthcare cost trend rate is based on Alltel’s actual medical claims experience and future projections of medical costs. See “Pension Plans” and “Other Postretirement Benefits” for the effects on Spinco’s future benefit costs resulting from changes in these key assumptions.
	The calculation of depreciation and amortization expense is based on the estimated economic useful lives of the underlying property, plant and equipment and finite-lived intangible assets. Although Spinco believes it is unlikely that any significant changes to the useful lives of its tangible or finite-lived intangible assets will occur in the near term, rapid changes in technology or changes in market conditions could result in revisions to such estimates that could materially affect the carrying value of these assets and Spinco’s future operating results. In addition, as previously discussed, during 2005 and 2004, Spinco reduced the depreciation rates on property, plant and equipment used in certain of Spinco’s ILEC markets based on studies of the related lives. Spinco also intends to perform similar studies on the property, plant and equipment used in its remaining ILEC markets during 2006. Spinco cannot predict what impact the results of those studies will have on depreciation and amortization expense in 2006. However, an extension of the average useful life of Spinco’s property, plant and equipment and finite-lived intangible assets of one year would decrease depreciation and amortization expense by approximately $20.5 million per year, while a reduction in the average useful life of one year would increase depreciation and amortization expense by approximately $24.0 million per year.
	In accordance with SFAS No. 142, Spinco tests its goodwill and other indefinite-lived intangible assets for impairment at least annually, which requires it to determine the fair value of these intangible assets, as well as the fair value of its reporting units. For purposes of testing goodwill, fair value of the reporting units is determined utilizing a combination of the discounted cash flows of the reporting units and calculated market values of comparable public companies. Fair value of the other indefinite-lived intangible assets is determined based on the discounted cash flows of the related business segment. During 2005 and 2004, no write-downs in the carrying values of either goodwill or indefinite-lived intangible assets were required based on their calculated fair values. In addition, reducing the calculated fair values of goodwill and the other indefinite-lived intangible assets by five percent would not have resulted in an impairment of the carrying value of the related assets in either 2005 or 2004. Changes in the key assumptions used in the discounted cash flow analysis due to changes in market conditions could adversely affect the calculated fair values of goodwill and other indefinite-lived intangible assets, materially affecting the carrying value of these assets and Spinco’s future consolidated operating results.
	Spinco’s estimates of income taxes and the significant items resulting in the recognition of deferred tax assets and liabilities are disclosed in Note 10 to the consolidated financial statements and reflect its

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assessment of future tax consequences of transactions that have been reflected in its financial statements or tax returns for each taxing authority in which it operates. Actual income taxes to be paid could vary from these estimates due to future changes in income tax law or the outcome of audits completed by federal, state and foreign taxing authorities. Included in the calculation of Spinco’s annual income tax expenses are the effects of changes, if any, to its income tax contingency reserves. Spinco maintains income tax contingency reserves for potential assessments from the IRS or other taxing authorities. The reserves are determined based upon Spinco’s judgment of the probable outcome of the tax contingencies and are adjusted, from time to time, based upon changing facts and circumstances. Changes to the tax contingency reserves could materially affect its future consolidated operating results in the period of change.

	Legal Proceedings

	Recently Issued Accounting Pronouncements

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	•	Spinco’s regulated Alabama wireline subsidiary has operated since 1996 under a PSC-established alternative regulation plan. In 2005 the previous alternative regulation plan was replaced by two alternative regulation plans approved by the PSC. Spinco elected to be regulated under the price flexibility plan. Under this plan basic residential local service rates are capped for two years. Also in 2005, the legislature passed the Alabama Communications Reform Act of 2005. Under this Reform Act, only stand-alone basic service, wholesale access services and certain calling features remain regulated after February 1, 2007. Spinco has elected to be regulated under the Reform Act, effective February 2007.
	•	Spinco’s regulated Arkansas wireline subsidiary has operated since 1997 under an alternative regulation plan established by statute. Under this plan, basic local rates and access rates may be adjusted annually by up to 75 percent of the annual change in the Gross Domestic Product-Price Index (“GDP-PI”). Other local rates may be changed without PSC approval and become effective upon the filing of revised tariffs.
	•	Spinco’s regulated Florida wireline subsidiary operates under alternative regulation established by Florida statute. Under this plan, basic local rates may be increased once in any twelve-month period by an amount not to exceed the twelve month change in the GDP-PI less one percent. Spinco may increase rates for non-basic services as long as the annual increase for any category does not exceed six percent in any twelve-month period. Non-basic rates can be increased by up to 20 percent annually in exchanges where another local provider is providing service. Intrastate access rates can be increased by the annual change in GDP-PI or three percent, whichever is less, only after access rates reach parity with Spinco’s interstate rates.
	•	Spinco’s regulated Georgia wireline subsidiaries operate under an alternative regulation plan established by statute. Under this plan, basic local rates may be increased annually based on the annual change in GDP-PI. Other local rates may be increased by filing revised tariffs.

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	•	Spinco has two regulated operating subsidiaries in Kentucky. The larger subsidiary is subject to rate-of-return regulation. However, legislation was recently enacted providing electing companies with an alternative regulation option to the existing rate-of-return regulation. The alternative regulation option includes pricing flexibility and removes certain aspects from the jurisdiction of the Kentucky PSC. The Company is currently evaluating whether to elect to be regulated under this new alternative and will likely make a final determination prior to the end of the third quarter of 2006. The smaller subsidiary has operated under alternative regulation established by statute beginning in 1998. Under this plan, the subsidiary may adjust basic business and residential rates, once during any 24-month period by an amount not to exceed the sum of the annual percentage change in GDP-PI for the immediately preceding two calendar years subject to the following limitations: (1) basic business and residence rates may not exceed the average basic rates of the state’s largest telephone utility, and (2) rates may not be increased by more than 20 percent. Access charges may not be adjusted if the change would result in intrastate access rates that exceed Spinco’s interstate rates. Other local rates may be adjusted by filing tariffs.
	•	Spinco’s regulated Missouri wireline subsidiary is subject to alternative regulation election established by statute. Under Missouri’s alternative regulation, basic local service and intrastate access rates are adjusted annually based on changes to the telephone service component of the Consumer Price Index. Prices for non-basic services may be increased up to five percent per year after the initial twelve-month period.
	•	Spinco’s regulated Nebraska operations are subject to alternative regulation established by statute. In exchanges where competition exists, companies are required to file rate lists, which are effective after 10 days notice to the PSC. In exchanges where competition does not exist, companies file rate lists for all services except basic local service with 10 days notice to the PSC, and basic local rates may be increased after 90 days notice to affected subscribers. Basic local rate increases are reviewed by the PSC only if rates are increased more than 10 percent in twelve consecutive months or in response to a formal complaint signed by two percent of affected subscribers.
	•	Spinco’s regulated North Carolina subsidiary has operated since 1998 under alternative regulation plan approved by the State Utility Commission. Local rates are adjusted annually by the annual change in GDP-PI. Rate changes are effective upon 14 days notice. Spinco has recently obtained Commission approval for changes to its current price regulation plan that will allow greater pricing flexibility, shorter implementation intervals for promotional offerings and deregulation of pricing for bundled services.
	•	Spinco’s regulated Ohio wireline subsidiaries began in 2004 to operate under an alternative regulation plan established by the Ohio Public Utilities Commission. Under this plan, basic service rates have been capped. Non-basic service rates are subject to limited pricing flexibility. New rules for alternative regulatory treatment of basic service, which include competitive market tests, are pending.
	•	In 1997 Spinco’s regulated Oklahoma wireline subsidiaries began to operate under an alternative regulation plan established by statute. Under this plan, basic service rates can be increased annually as long as the increase does not exceed a pre-determined amount.
	•	In July 2005, Spinco’s regulated Pennsylvania subsidiary began operating under a new alternative regulation plan passed by the Pennsylvania General Assembly in 2004. Under this plan, Spinco is required to make broadband access to the Internet available for purchase to 100 percent of its customer base by 2013. Rates for competitive services are not regulated, but the PUC retains authority over the quality of these services. Rate increases for noncompetitive services are restricted to the GDP-PI less two percent, annually. The total amount of an increase to basic local service rates cannot exceed $3.50 annually. Revenue neutral rate rebalancing is also permitted for noncompetitive services.
	•	Spinco’s regulated South Carolina operations are subject to alternative regulation established by statute. Local rates can be adjusted pursuant to an inflation-based index. All other service rates may be increased subject to a complaint process for abuse of market position. The PSC has determined that

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		any allegations of abuse of market position will be investigated on a case-by-case basis. Rate increases become effective 14 days after filing.
	•	Spinco has two operating subsidiaries in Texas. These subsidiaries are subject to alternative regulation established by statute. All rates are capped for the duration of the plan.

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	Alltel Corporation Designees to the Board of Directors

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	Valor Designee to the Board of Directors

	Committees of the Board of Directors

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																				Long-Term Compensation
																				Awards								Payouts
								Annual Compensation												Restricted				Securities
																				Stock				Underlying				Long-Term				All Other
		Principal														Other Annual				Award				Options				Incentive Plan				Compensation
Name(a)		Position		Year				Salary ($)				Bonus ($)				Compensation ($)				($)(b)				(#)(c)				Payouts ($)				($)(d)
Jeffery R. Gardner		Chief Executive			2005				525,000				680,400				—				939,420	(b)			60,000				466,667				118,259
		Officer			2004				475,000				855,000				—				739,200				60,000				452,625				72,982
					2003				400,000				615,600				—				—				120,000				390,000				51,421
Francis X. Frantz		Chairman of the			2005				500,000				648,000				—				939,420	(b)			60,000				470,000				224,241
		Board			2004				460,000				828,000				—				739,200				60,000				514,986				104,766
					2003				450,000				692,550				—				—				120,000				472,500				70,319
Michael D. Rhoda		Senior Vice			2005				191,102				94,617				—				103,613				7,500				49,029				15,205
		President —			2004				183,752				97,538				—				43,995				3,500				62,096				13,803
		Governmental			2003				175,002				86,453				—				—				7,000				62,388				10,989
		Affairs
Brent K. Whittington		Executive Vice			2005				180,000				93,797				—				55,260				4,000				—				8,400
		President and			2004				175,000				47,211				—				22,023				1,750				—				7,120
		Chief Financial			2003				115,500				31,421				—				—				3,500				—				5,867
		Officer
Robert G. Clancy Jr.		Senior Vice			2005				168,646				68,528				—				27,630				2,000				25,720				10,771
		President			2004				162,160				59,811				—				23,280				1,850				32,596				8,939
		and Treasurer			2003				149,940				40,986				—				—				3,700				—				7,632

(a)

The listed principal position of each named executive officer is the principal position each named executive officer is expected to hold with Windstream following completion of the merger. Mr. Frantz served as the Executive Vice President and Secretary of Alltel. Mr. Gardner served as the Executive Vice President and Chief Financial Officer of Alltel. Mr. Whittington served as the Senior Vice President of Operations Support of Alltel. Mr. Rhoda served as Vice President — Regulatory and Wholesale for Alltel. Mr. Clancy served as the Vice President of Investor Relations for Alltel.

(b)		Holders of shares of Alltel restricted stock receive the same dividends as holders of Alltel common stock. On December 30, 2005, the aggregate Alltel restricted stock holdings for each of Messrs. Frantz and Gardner was 27,000 shares and for Messrs. Whittington, Rhoda and Clancy, 1,292 shares, 2,458 shares and 808 shares respectively. The respective aggregate value of the shares based upon the December 31, 2005 closing price was $1,703,700 for Messrs. Gardner and Frantz. The respective aggregate value of the shares from Messrs. Whittington, Rhoda and Clancy were $81,525, $155,100 and $50,985 respectively. The distribution agreement executed in connection with the merger of Valor and Spinco provides that each Alltel restricted share award outstanding under Alltel’s 1998 Equity Incentive Plan and held by an individual to become an employee of Windstream as of the distribution date will fully vest on the distribution date.

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(c)		The distribution agreement executed in connection with the merger of Valor and Spinco provides that all vested options held by Spinco employees will expire upon the distribution date, unless exercised within the time provided in the options. To the extent a Spinco employee is holding an award consisting of an Alltel option that is not vested as of the distribution date, that option shall be cancelled as of the distribution date and replaced by restricted shares of Windstream common stock, the value of which will be determined by the Windstream Board of Directors.
(d)		Includes the following amounts for Messrs. Frantz, Gardner, Rhoda and Clancy: allocated benefits under the Alltel Benefit Restoration Plan in the respective amounts of $65,196, $64,751, $5,881 and $2,371; aggregate employer contributions under the Alltel Profit Sharing Plan and Alltel 401(k) Plan in the amount of $8,400 for each as well as Mr. Whittington; “above-market” earnings on deferred compensation in the respective amounts of $140,169, $45,108 and $924 for Messrs. Frantz, Gardner and Rhoda (payment of which is deferred until the deferred compensation is paid); and dollar amount of premiums paid under supplemental split dollar life insurance policies in the amount of $10,476 for Mr. Frantz, which was put into place prior to the enactment of the Sarbanes-Oxley Act in 2002 and is therefore not subject to the prohibitions regarding loans to officers and directors set forth in Section 402 of the act.

																		Potential Realizable Value at
																		Assumed Annual Rates of Stock Price
		Individual Grants																Appreciation for Option Term
		Number of				% of Total
		Securities				Options												5%								10%
		Underlying				Granted to				Exercise or
		Options				Employees				Base Price				Expiration				Stock				Dollar				Stock				Dollar
Name		Granted (#)				in 2005				($/Sh)				Date				Price ($)				Gain ($)				Price ($)				Gain ($)
Jeffery R. Gardner(a)			60,000				4.46				55.26				1/19/15				90.01				2,085,163				143.33				5,284,213
Francis X. Frantz(a)			60,000				4.46				55.26				1/19/15				90.01				2,085,163				143.33				5,284,213
Michael D. Rhoda(a)			7,500				.56				55.26				1/19/15				90.01				260,645				143.33				660,527
Brent K. Whittington			4,000				.30				55.26				1/19/15				90.01				139,011				143.33				352,281
Robert G. Clancy Jr.			2,000				.15				55.26				1/19/15				90.01				69,505				143.33				176,140
Dollar Gains of All Alltel Stockholders(b)																						$	1,333,030,000							$	3,378,417,000

(a)	These options become exercisable in five equal installments beginning on the first anniversary of the date of grant or sooner in the event Alltel experiences a “change in control.”

(b)		Total dollar gains are based on the indicated assumed annual rates of appreciation in the option exercise price, calculated on the 383,605,936 shares of Alltel common stock outstanding as of December 31, 2005.

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Number of Securities

Value of Unexercised

Shares

Underlying Unexercised

In-the-Money Options at

Acquired on

Value

Options at 2005 Year-End

2005 Year-End

Name

Exercise (#)

Realized ($)

Exercisable/Unexercisable

Exercisable/Unexercisable ($)

Jeffery R. Gardner

84,754

1,470,298

553,000/262,000

776,200/2,650,920

Francis X. Frantz

-0-

-0-

603,000/262,000

1,602,280/2,650,920

Michael D. Rhoda

6,000

131,155

24,200/18,300

84,682/184,046

Brent K. Whittington

-0-

-0-

3,850/8,900

79,219/119,856

Robert G. Clancy Jr.

4,250

46,249

13,800/8,000

3,188/81,065

						Estimated Future Payouts*
		Performance Period
Name		Until Payout				Minimum ($)				Mid-Point ($)				Target ($)
Jeffery R. Gardner			3 years				262,500				525,000				787,500
Francis X. Frantz			3 years				250,000				500,000				750,000
Michael D. Rhoda			3 years				23,888				47,776				71,664
Brent K. Whittington			3 years				20,625				41,250				61,875
Robert G. Clancy Jr.			3 years				16,875				33,750				50,625

*

The Employee Benefits Agreement executed in connection with the merger of Valor and Spinco provides that the awards for the 2005-2007 performance measurement period shall be deemed earned at the target performance level. Each eligible Spinco individual shall be entitled to a pro rata award, the amount of which shall be calculated based on (i) the number of days in the period commencing on January 1, 2005 and ending on the Distribution Date out of the total number of days in the performance measurement period and (ii) his or her average base compensation during such period.

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	•	each person who will beneficially own more than 5% of the outstanding shares of Windstream common stock immediately after completion of the merger;
	•	the individuals who will be the chief executive officer and the other four most highly compensated executive officers of Windstream;
	•	the individuals who will be the directors of Windstream; and
	•	the individuals who will be the directors and executive officers of Windstream as a group.

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				Amount and
				Nature of				Percent of
				Beneficial				Class (If 1% or
		Name of Beneficial Owner		Ownership				More)
5% Beneficial Owners
		Private Capital Management, Inc. 8889 Pelican Bay Boulevard Suite 500 Naples, FL 34108-7512			39,295,807	(a)			8.3%
Directors		Dennis E. Foster			428,328	(b)
		Anthony J. de Nicola			19,617,338	(c)(d)			4.1%
Named Executive Officers		Jeffery R. Gardner			711,308	(b)
		Francis X. Frantz			845,477	(b)
		Brent K. Whittington			5,403	(b)
		Michael D. Rhoda			33,736	(b)
		Robert G. Clancy, Jr.			18,155	(b)
All Directors and Executive Officers as a Group					21,674,554	(e)			4.6%

(a)	Based upon information contained in the Schedule 13G/ A filed by Private Capital Management (“PCM”) on February 14, 2006 evidencing its ownership of Alltel common stock, it has shared voting and investment power with respect to these shares. Bruce S. Sherman, chief executive officer of PCM, has sole voting and investment power with respect to 560,595 shares of Alltel common stock and shared voting and investment power with respect to 36,503,885 shares (including the shares held by PCM’s clients and managed by PCM), and Gregg J. Powers, president of PCM, has sole voting and investment power with respect to 30,000 shares of Alltel common stock and shared voting and investment power with respect to 36,468,040 shares (including the shares held by PCM’s clients and managed by PCM).
(b)	Includes shares that the indicated persons have the right to acquire (through the exercise of options to purchase Alltel common stock) on or prior to the projected closing date (which is assumed, for purposes of this calculation only, to be July 3, 2006), as follows: Dennis E. Foster (375,656); Francis X. Frantz (731,120); Jeffery R. Gardner (679,120); Brent K. Whittington (4,368); Michael D. Rhoda (31,408); and Robert G. Clancy, Jr. (16,712). The employee matters agreement provides that to the extent that these individuals are holding an award consisting of an Alltel option that is vested and outstanding as of the distribution date, he or she will be treated as experiencing a separation from service from, or otherwise terminating employment with, Alltel. Any such Alltel option will expire unless it is exercised within the time provided in the option itself.
(c)	As a member of WCAS VIII Associates LLC and WCAS IX Associates, LLC, Mr. de Nicola may be deemed to share beneficial ownership of the 19,574,421 shares held by Welsh, Carson, Anderson Stowe. Mr. de Nicola disclaims beneficial ownership of such shares and any other shares held by affiliates of Welsh, Carson, Anderson & Stowe.
(d)	Includes 42,579 shares held directly by Mr. de Nicola, of which 6,470 represents shares of restricted stock that will vest upon closing of the merger.
(e)	Includes a total of 1,852,008 shares that members of the group have the right to acquire (through the exercise of options) on or prior to the projected closing date (which is assumed, for purposes of this calculation only, to be July 3, 2006).

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	•	in the case of an annual meeting, a stockholder’s notice must be delivered to or mailed and received at Windstream’s principal executive offices not less than 90 days nor more than 120 days before the first anniversary of the preceding year’s annual meeting; provided, however, that if the date of the annual meeting is changed by more than 30 days from such anniversary date, notice by the stockholder must be received not later than the close of business on the 10th day following the day on which notice of the date of the meeting was mailed or public disclosure of the meeting was made; and

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	•	in the case of a special meeting, a stockholder’s notice must be delivered to or mailed and received at Windstream’s principal executive offices not later than the close of business on the 10th day following the day on which notice of the date of the meeting was mailed or public disclosure of the meeting was made.

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	•	increase or decrease the aggregate number of authorized shares of such class (subject to certain exceptions);
	•	increase or decrease the par value of the shares of such class; or
	•	alter or change the powers, preferences or rights of such class so as to affect them adversely.

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							Additional				Issuance of
							Transfers of				Debt
			ALLTEL				Assets and				Securities,				Payment				ALLTEL								Pro Forma
			Holding,				Liabilities				Net of				of Dividends				Holding,				Valor				Add (Deduct)
			as reported				from Alltel				Prepayment				to Alltel				as adjusted				as Reported				Adjustments				Combined
			(Millions)
Assets
Cash and short-term investments			$	9.9			$	(5.3	)(a)			3,103.1	(b)		$	(2,275.0	)(b)		$	832.7			$	69.8			$	(783.6	)(i)		$	118.9
Other current assets				361.6				—				—				—				361.6				67.0				(14.2	)(e,i)			414.4
	Total current assets			371.5				(5.3	)			3,103.1				(2,275.0	)			1,194.3				136.8				(797.8	)			533.3
Investments				2.0				—				—				—				2.0				—				10.4(c	)			12.4
Goodwill				1,218.7				—				—				—				1,218.7				1,057.0				(99.9	)(d,i)			2,175.8
Other intangibles				315.7				—				—				—				315.7				—				675.0(i	)			990.7
Property, plant and equipment, net				2,926.8				114.1	(a)			—				—				3,040.9				707.6				—				3,748.5
Other assets				31.4				207.9	(a)			43.0	(b)			—				282.3				55.9				(48.0	)(c,d,e,g)			290.2
	Total assets		$	4,866.1			$	316.7			$	3,146.1			$	(2,275.0	)		$	6,053.9			$	1,957.3			$	(260.4	)		$	7,750.8
Liabilities and Shareholders’ Equity
Current liabilities			$	396.2			$	—	(a)		$	(12.1	)(f)		$	—			$	384.1			$	89.0			$	(14.2	)(e,i)		$	458.9
Long-term debt				238.7				—				4,869.5	(b,f)			—				5,108.2				1,180.6				(764.1	)(f,i)			5,524.7
Deferred income taxes				677.7				97.6	(a)			—				—				775.3				93.9				137.8	(j)			1,007.0
Other liabilities				184.0				(4.3	)(a)			—				—				179.7				27.7				20.2	(e,g)			227.6
Common stock				—				—				—				—				—				—				—				—
Additional paid-in capital				—				—				—				(393.4	)(b)			(393.4	)			892.7				33.7	(h,i)			533.0
Treasury stock				—				—				—				—				—				(0.4	)			—				(0.4	)
Parent company investment				1,288.4				224.9	(a)			(1,513.3	)(b)			—	(b)			—				—				—				—
Accumulated other comprehensive income				0.5				(0.5	)(a)			—				—				—				(4.9	)			4.9	(h)			—
Retained earnings (deficit)				2,080.6				(1.0	)(a)			(198.0	)(f)			(1,881.6	)(b)			—				(321.3	)			321.3	(h)			—
	Total liabilities and shareholders’ equity		$	4,866.1			$	316.7			$	3,146.1			$	(2,275.0	)		$	6,053.9			$	1,957.3			$	(260.4	)		$	7,750.8

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		ALLTEL								Pro Forma
		Holding,				Valor				Add (Deduct)
		as reported				as Reported				Adjustments				Combined
		(Millions, except per share amounts)
Revenues and sales			703.0				125.6				(4.0	)(k)		$	824.6
Costs and expenses:
Cost of services			192.8				26.7				—				219.5
Cost of products sold			84.3				—				—				84.3
Selling, general, administrative and other			79.7				32.6				(4.0	)(k)			108.3
Depreciation and amortization			102.6				22.0				7.3	(l)			131.9
Royalty expense to Parent			67.2				—				(67.2	)(m)			—
Restructuring and other charges			2.5				—				(2.5	)(n)			—
Operating income			173.9				44.3				62.4				280.6
Other income (expense), net			1.2				1.1				—				2.3
Intercompany interest income			14.5				—				(14.5	)(o)			—
Interest expense			(4.5	)			(20.6	)			(72.1	)(p)			(97.2	)
Income before income taxes			185.1				24.8				(24.2	)			185.7
Income taxes			72.3				8.8				(9.4	)(q)			71.7
Income before cumulative effect of accounting change		$	112.8			$	16.0			$	(14.8	)		$	114.0
Earnings per share:
Basic			N/A			$	.23							$	.24
Diluted			N/A			$	.23							$	.24
Average common shares outstanding:
Basic			N/A				69.8				404.8	(r)			474.6
Diluted			N/A				69.8				404.8	(r)			474.6

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										Pro Forma
		Spinco,				Valor				Add (Deduct)
		as reported				as Reported				Adjustments				Combined
		(Millions, except per share amounts)
Revenues and sales		$	2,923.5			$	505.9			$	(15.9	)(s)		$	3,413.5
Costs and expenses:
Cost of services			796.1				107.6				—				903.7
Cost of products sold			374.8				—				—				374.8
Selling, general, administrative and other			340.1				139.7				(15.9	)(s)			463.9
Depreciation and amortization			474.2				89.9				29.2	(t)			593.3
Royalty expense to Parent			268.8				—				(268.8	)(u)			—
Restructuring and other charges			35.7				1.7				(31.3	)(v)			6.1
Operating income			633.8				167.0				270.9				1,071.7
Other income (expense), net			11.6				(33.9	)			3.0	(v)			(19.3	)
Intercompany interest income			23.3				—				(23.3	)(w)			—
Interest expense			(19.1	)			(83.2	)			(288.6	)(x)			(390.9	)
Income before income taxes			649.6				49.9				(38.0	)			661.5
Income taxes			267.9				14.3				(14.3	)(v,y)			267.9
Income before cumulative effect of accounting change		$	381.7			$	35.6			$	(23.7	)		$	393.6
Earnings per share:
Basic			N/A			$	.42							$	.83
Diluted			N/A			$	.42							$	.83
Average common shares outstanding:
Basic			N/A				69.4				404.8	(r)			474.2
Diluted			N/A				69.7				404.8	(r)			474.5

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a.	Immediately prior to the effective date of the spin off, Alltel will transfer to Spinco property, plant and equipment (net book value of $114.1 million), pension assets ($207.9 million) and additional other postretirement liabilities ($7.4 million) related to the wireline operations and associated deferred income taxes ($97.6 million). In addition, Spinco will transfer to Alltel certain tax contingency reserves that will be retained by Alltel pursuant to the distribution agreement ($11.7 million), as well as certain international operations. The amounts of the transferred assets and liabilities reflected in the pro forma combined condensed balance sheet have been based upon the March 31, 2006 carrying values and are subject to change. The actual carrying values of the transferred assets and liabilities will be determined as of the date of the spin-off. As a result, those carrying amounts may change, and such changes may be material.
b.	Prior to the spin-off and merger with Valor, Spinco will borrow approximately $4.9 billion through a new senior secured credit agreement and the issuance of unsecured debt securities in a private placement and through the distribution to Alltel of certain of Spinco’s debt securities representing approximately $1.673 billion in debt reduction to Alltel. Proceeds from the debt issuance will be used to pay a special dividend to Alltel in an amount not to exceed Alltel’s tax basis in Spinco and for other purposes, including the repayment of certain debt obligations of Valor and Spinco, as further discussed in Note (f) below. Spinco expects to capitalize $43.0 million of debt issuance costs associated with the issuance of the $4.9 billion of long-term debt. Effective with the spin off, Alltel will contribute all of the assets and liabilities of its wireline business to Spinco in exchange for the issuance to Alltel of Spinco’s common stock to be distributed pro rata to Alltel’s stockholders as a tax free stock distribution, the payment of a special dividend to Alltel in an amount not to exceed Alltel’s tax basis in Spinco (estimated to be $2.275 billion), which Alltel will use to repurchase stock pursuant to a special stock buyback program authorized by the Alltel Board of Directors in connection with the spin-off, to repay outstanding indebtedness, or both, within one year following the spin-off, and the distribution by Spinco of certain debt securities (as described above) to Alltel. Immediately after the consummation of the spin off, Spinco will merge with and into Valor, with Valor continuing as the surviving corporation. As a result of the merger, all of the issued and outstanding shares of Spinco common stock will be converted into the right to receive an aggregate number of shares of common stock of Valor that will result in Alltel’s stockholders holding approximately 85 percent of the outstanding equity interests of the surviving corporation immediately after the merger and the stockholders of Valor holding the remaining approximately 15 percent of such equity interests. It is presently estimated that 1.04 shares of Valor common stock will be distributed to Alltel stockholders for each share of Spinco common stock they are entitled to receive. The final number of shares of Valor common stock issued to effect the merger will be determined based on the actual number of Valor shares outstanding as of the merger date.
c.	This adjustment is to reclassify Valor’s investments in certain wireless partnerships and RTFC equity certificates as of the merger date from other assets to investments to conform to Spinco’s financial statement presentation. Approximately $5.6 million of the RTFC equity certificates will be redeemed upon repayment of the related debt, as further discussed below in Note (f).
d.	This adjustment is to eliminate as of the merger date the recorded values of Valor’s goodwill of $1,057.0 million and customer list of $0.3 million and to write-off Valor’s remaining unamortized debt issuance costs of $29.7 million.
e.	This adjustment is to eliminate, as of the merger date, Valor’s current and long-term portion of deferred activation fees of $3.1 million and $1.9 million, respectively, and the corresponding amounts of deferred acquisition costs in accordance with Emerging Issues Task Force (“EITF”) No. 01-3, “Accounting in a Business Combination for Deferred Revenue of an Acquiree”.
f.	Immediately following the merger, the surviving corporation will repay with available cash on hand all borrowings outstanding under Valor’s existing credit facility ($780.6 million at March 31, 2006) and $80.0 million of long-term debt obligations of Spinco. In addition, the surviving company will pay

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approximately $8.1 million of early termination penalties in conjunction with repaying the long-term debt obligations of Spinco, as well as $1.9 million of accrued interest, and approximately $7.8 million of early termination penalties in conjunction with repaying borrowings outstanding under Valor’s existing credit facility. Also, certain RTFC equity certificates totaling approximately $5.6 million will be refunded in cash upon repayment of Valor’s debt, resulting in net prepayment penalties of $2.2 million. The following table presents the estimated long-term debt outstanding of the combined company immediately following the merger on a pro forma basis (amounts in millions):

Bank Debt:
	Senior secured five-year revolving credit facility			$	34.0
	Term loan A — 5 year maturity				500.0
	Term loan B — 7 year maturity				1,900.0
	Total bank debt				2,434.0
Notes:
	ALLTEL Communications Holdings of the Midwest, Inc. — 6.75%, due April 1, 2028				100.0
	ALLTEL Georgia Communications Corp. — 6.50%, due in annual installments Through November 15, 2013				80.0
	Teleview — 7.00%, due in monthly installments through January 2, 2010				1.0
	Valor — 7.75%, due November 15, 2015				416.5
	Windstream — maturity to be determined				800.0
	Windstream — 10 year fixed maturity				1,703.2
	Total notes				3,100.7
		Total bank debt and notes			5,534.7
	Current portion of long-term debt				10
		Total long-term debt		$	5,524.7

g.	This adjustment is to recognize, as of March 31, 2006, Valor’s unfunded pension and other postretirement benefits liabilities of $46.7 million and to eliminate Valor’s pension asset of $0.1 million and pension and other postretirement benefits liabilities of $24.6 million in accordance with SFAS No. 87, “Employers’ Accounting for Pensions” and SFAS No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions”.
h.	This adjustment is to eliminate Valor’s additional paid in capital, accumulated other comprehensive income and retained deficit accounts as of the merger date.

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i.	This adjustment represents the estimated purchase price allocation as of March 31, 2006. For purposes of determining the purchase price allocation, the fair market value of all tangible and intangible assets and liabilities of Valor were estimated at March 31, 2006. The allocation of purchase price was as follows:

Consideration:
	Value of Valor shares issued and outstanding at March 31, 2006 (1)		$	926.4
	Valor treasury stock			(0.4	)
	Repayment of Valor credit facility, including net prepayment penalty			782.8
	Direct costs of acquisition (2)			0.8
	Total			1,709.6
Allocated to:
	Current assets			133.7
	Property, plant and equipment			707.6
	Investments and other tangible assets			18.3
	Identifiable intangible assets (3)			675.0
	Current liabilities acquired			(85.9	)
	Long-term debt assumed (including fair value adjustment) (4)			(416.5	)
	Other long-term liabilities acquired (including deferred taxes)			(279.7	)
	Goodwill (3)		$	957.1

(1)	The value of Valor’s common stock was calculated on the basis of (1) 71,096,887 shares outstanding as of April 28, 2006 and (2) the closing price of Valor common stock on May 22, 2006 of $12.78. The final value of Valor shares will be based on the actual number of shares outstanding and the closing price of Valor stock as of the merger date.
(2)	Direct cash costs consist of estimates for professional fees (including banking fees) and other direct costs of the transaction that are expected to be incurred and capitalized as part of the merger transaction, including $11.1 million of costs incurred through March 31, 2006. Pursuant to the terms of the distribution agreement, Alltel will assume any transaction costs related to the spin off, the merger, or the issuance of debt that exceeds $115.0 million.
(3)	The identifiable intangibles consisted of (1) value assigned to the Valor customer base as of March 31, 2006 of $175.0 million and (2) value assigned to the Valor franchise rights as of March 31, 2006 of $500.0 million. For purposes of preparing the unaudited pro forma combined condensed statement of income, Spinco expects to amortize the fair value of the customer base on a straight-line basis over its average estimated life of six years. The franchise rights have been classified as indefinite-lived intangible assets and are not subject to amortization because Spinco expects both the renewal by the granting authorities and the cash flows generated from the franchise rights to continue indefinitely. Goodwill of $957.1 million represents the excess of the purchase price of the acquired business over the fair value of the underlying identifiable net tangible and intangible assets at March 31, 2006. The premium paid by Spinco in this transaction is due to the potential for greater long-term returns as the combination of Spinco and Valor will create the largest telecommunications carrier in the United States which is primarily focused on rural markets. Subsequent to this merger, due to the resulting increased size and economies of scale, the combined company should have greater financial flexibility to develop and deploy products, expand the capacity of its network, respond to competitive pressures and improve the cost structure of its operations. The preliminary allocation of value to the intangible assets was based on assumptions as to the fair value of customers and franchise rights. These values were determined by use of a market approach, which seeks to measure the value of assets as compared to similar transactions in

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the marketplace. To determine market values, Spinco utilized a third party valuation firm to derive current market values for the customer base (computed on a per customer basis) and franchise rights licenses (computed on a per access line basis) from publicly available data for similar transactions in the wireline industry. These valuations are preliminary and do not necessarily represent the ultimate fair value of such assets that will be determined by an independent valuation firm subsequent to the consummation of the merger.

(4)

Fair value adjustments of $16.5 million have been made to the carrying value of Valor’s long term debt that was outstanding as of the merger date and not immediately repaid. The effect of the fair value adjustment to Valor’s long-term debt will be amortized as a reduction to interest expense over the term of each debt issue. The effect of the fair value adjustment to long-term debt has been included in the adjustments to the unaudited pro forma combined condensed statement of income. See Note (p).

j.

This adjustment is to record the incremental deferred taxes required under SFAS No. 109, “Accounting for Income Taxes”, for the difference between the revised book basis, i.e., fair value, of Valor’s assets other than goodwill and liabilities recorded under purchase accounting and the carryover tax basis of those assets and liabilities. Because certain of the identifiable intangible assets recognized in the purchase price allocation had no tax basis at the time of the transaction, a deferred tax liability has been recognized for the difference in book and tax basis of the identifiable intangible assets. The pro forma adjustment to deferred income taxes was based on Spinco’s statutory tax rate of 38.9 percent.

Effects of pro forma adjustments on other current assets and other current liabilities:
	Eliminate current portion of Valor’s deferred activation costs/fees — Note (e)		$	(3.1	)
	Recognize payment of transaction costs and reclassification to goodwill — Note (i)(2)			(11.1	)
	Net decrease in other current assets and other current liabilities		$	(14.2	)
Effects of pro forma adjustments on goodwill:
	Eliminate carrying value of Valor’s goodwill — Note (d)		$	(1,057.0	)
	Record goodwill in connection with ALLTEL Holding’s reverse acquisition of Valor — Note (i)(3)			957.1
	Net decrease in goodwill resulting from pro forma adjustments		$	(99.9	)
Effects of pro forma adjustments on other assets:
	Eliminate carrying value of Valor’s unamortized debt issuance costs — Note (d)		$	(29.7	)
	Reclassification of Valor’s investments in wireless partnerships and RTFC equity certificates — Note (c)			(16.0	)
	Eliminate long-term portion of Valor’s deferred activation costs — Note (e)			(1.9	)
	Eliminate Valor’s pension asset and customer list — Note (d) and Note (g)			(0.4	)
	Net decrease in other assets resulting from pro forma adjustments		$	(48.0	)
Effects of pro forma adjustments on long-term debt:
	Reflect repayment of Valor long-term debt obligations — Note (f)		$	(780.6	)
	Adjust Valor bonds to fair value — Note (i)(4)			16.5
	Net decrease in long-term debt resulting from pro forma adjustments		$	(764.1	)

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Effects of pro forma adjustments on other liabilities:
	Eliminate long-term portion of Valor’s deferred activation fees — Note (e)		$	(1.9	)
	Record additional pension and other postretirement benefit liabilities — Note (g)			22.1
	Net increase in other liabilities resulting from pro forma adjustments		$	20.2
Effects of pro forma adjustments on additional paid-in capital
	Issuance of Valor common stock to effect the merger transaction — Note (i)(1)		$	926.4
	Eliminate Valor’s additional paid-in capital balance — Note (h)			(892.7	)
	Net increase in additional paid-in capital resulting from pro forma adjustments		$	33.7

k.	This adjustment is to eliminate the intercompany revenues and related expenses associated with Spinco’s agreement to provide customer billing services to Valor.
l.	This adjustment reflects the amortization of the finite-lived identifiable intangible assets recorded in this transaction as previously described in Note (i)(3) above. For purposes of determining the amount of the adjustment, the estimated life of Valor’s customer base was assumed to be six years.

m.

This adjustment is to eliminate royalty expense charged to Spinco by Alltel pursuant to a licensing agreement with an Alltel affiliate under which Spinco’s incumbent local exchange carrier subsidiaries were charged a royalty fee for the use of the Alltel brand name in marketing and distributing telecommunications products and services. Following the spin-off and merger with Valor, Spinco will no longer incur this charge as it will cease use of the Alltel brand name, and accordingly, this expense has been eliminated in the pro forma combined condensed statement of income.

n.	This adjustment is to eliminate spin-off-related costs incurred by Spinco during the first quarter of 2006 which are directly related to the transaction. Following the spin-off and merger, Spinco will not incur these charges, and accordingly, these expenses have been eliminated in the pro forma combined condensed statement of income.
o.	This adjustment is to eliminate the intercompany interest income earned by Spinco from Alltel on certain interim financing that Spinco provides to Alltel in the normal course of business. In conjunction with the spin-off, all intercompany balances between Spinco and Alltel will be settled via the special dividend discussed in Note (b). Accordingly, the intercompany interest income has been eliminated in the pro forma combined condensed statement of income.
p.	The adjustment is to record (1) the estimated quarterly interest expense recognized on newly issued debt of the combined company as calculated below, (2) the amortization of debt issuance costs capitalized associated with the newly issued debt as computed below, (3) elimination of interest expense and amortization of debt issuance costs related to pre-existing debt of Spinco and Valor that will be repaid immediately upon consummation of the merger as discussed in Note (f) above, and (4) the effects of amortizing the fair value adjustment to Valor’s long-term debt discussed in Note (i)(4) above. As of January 1, 2006, the fair value adjustment to Valor’s long-term debt was estimated to be $16.5 million.

Senior secured five-year revolving credit facility		$	0.5
Term loan A — 5 year maturity			8.0
Term loan B — 7 year maturity			31.7
Senior notes — maturity to be determined			14.5
Senior notes — 10 year fixed maturity			30.9
Total		$	85.6

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						Amortization
		Issuance				Number				Per
		Fee				of Years				Quarter
Senior secured five-year revolving credit facility		$	5.0				5.0			$	0.25
Term loan A — 5 year maturity			5.0				5.0				0.25
Term loan B — 7 year maturity			19.0				7.0				0.70
Senior notes — maturity to be determined (assumed to be 7 years)			14.0				7.0				0.50
Totals		$	43.0							$	1.70

Estimated quarterly interest expense related to newly issued debt of the combined company (per above)		$	85.6
Amortization of estimated capitalized debt issuance costs associated with the newly issued debt (per above)			1.7
Elimination of interest expense and amortization of debt issuance costs related to repayment of borrowings outstanding under Valor’s existing credit agreement and repurchase of certain debt obligations of ALLTEL Holding			(14.8	)
Reduction in interest expense due to amortizing fair value adjustment — Note (i)(4)			(0.4	)
Net increase in interest expense		$	72.1

q.	This adjustment is to reflect the tax effect of the pro forma adjustments described in Notes (k) through (o) above and was based on Spinco’s statutory tax rate of 38.9 percent.
r.	The adjustment to both the weighted average shares outstanding and the diluted weighted average shares outstanding is to reflect the additional Valor common shares of 403.0 issued to effect the merger with Spinco, as well as 1.8 million shares of unvested restricted stock issued by Valor that will vest upon consummation of the merger.
s.	This adjustment is to eliminate the intercompany revenues and related expenses associated with Spinco’s agreement to provide customer billing services to Valor.
t.	This adjustment reflects the amortization of the finite-lived identifiable intangible assets recorded in this transaction as previously described in Note (i)(3) above. For purposes of determining the amount of the adjustment, the estimated life of Valor’s customer base was assumed to be six years.
u.	This adjustment is to eliminate royalty expense charged to Spinco by Alltel pursuant to a licensing agreement with an Alltel affiliate under which Spinco’s incumbent local exchange carrier subsidiaries were charged a royalty fee for the use of the Alltel brand name in marketing and distributing telecommunications products and services. Following the spin-off and merger with Valor, Spinco will no longer incur this charge as it will cease use of the Alltel brand name, and accordingly, this expense has been eliminated in the pro forma combined condensed statement of income.
v.	This adjustment is to eliminate spin-off-related costs incurred by Spinco and merger-related costs incurred by Valor during 2005 which are directly related to the transaction. Following the spin-off and merger, neither company will incur these charges, and accordingly, these expenses have been eliminated

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	in the pro forma combined condensed statement of income. In addition, this adjustment is to eliminate the operating results of the international operations to be transferred from Spinco to Alltel upon consummation of the merger as discussed in Note (a).
w.	This adjustment is to eliminate the intercompany interest income earned by Spinco from Alltel on certain interim financing that Spinco provides to Alltel in the normal course of business. In conjunction with the spin-off, all intercompany balances between Spinco and Alltel will be settled via the special dividend discussed in Note (b). Accordingly, the intercompany interest income has been eliminated in the pro forma combined condensed statement of income.
x.	The adjustment is to record (1) the estimated annual interest expense recognized on newly issued debt of the combined company as calculated below, (2) the amortization of debt issuance costs capitalized associated with the newly issued debt as computed below, (3) elimination of interest expense and amortization of debt issuance costs related to pre-existing debt of Spinco and Valor that will be repaid immediately upon consummation of the merger as discussed in Note (f) above, and (4) the effects of amortizing the fair value adjustment to Valor’s long-term debt discussed in Note (i)(4) above. As of January 1, 2006, the fair value adjustment to Valor’s long-term debt was estimated to be $16.5 million.

Senior secured five-year revolving credit facility		$	2.2
Term loan A — 5 year maturity			32.1
Term loan B — 7 year maturity			126.8
Senior notes — maturity to be determined			58.0
Senior notes — 10 year fixed maturity			123.5
Total		$	342.6

						Amortization
		Issuance				Number				Per
		Fee				of Years				Year
Senior secured five-year revolving credit facility		$	5.0				5.0			$	1.0
Term loan A — 5 year maturity			5.0				5.0				1.0
Term loan B — 7 year maturity			19.0				7.0				2.7
Senior notes — maturity to be determined (assumed to be 7 years)			14.0				7.0				2.0
Totals		$	43.0							$	6.7

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Estimated annual interest expense related to newly issued debt of the combined company (per above)		$	342.6
Amortization of estimated capitalized debt issuance costs associated with the newly issued debt (per above)			6.7
Elimination of interest expense and amortization of debt issuance costs related to repayment of borrowings outstanding under Valor’s existing credit agreement and repurchase of certain debt obligations of ALLTEL Holding			(59.0	)
Reduction in interest expense due to amortizing fair value adjustment — Note (i)(4)			(1.7	)
Net increase in interest expense		$	288.6

			Payments Due by Period (in millions)
			Less												More
			Than				1-3								Than
			1 Year				Years				3-5 Years				5 Years				Total
Long-term debt, including current maturities (a)			$	10.2			$	133.5			$	517.3			$	4,857.2			$	5,518.2
Interest payments on long-term debt obligations (b)				385.6				763.5				740.5				1,253				3,143.3
	Total projected long-term debt and interest payments		$	395.8			$	897.0			$	1,253.7			$	6,110.9			$	8,661.5

(a)	Excludes fair value adjustment of $16.5 million related to the Valor 7.75% notes.
(b)	Excludes amortization of estimated capitalized debt issuance costs and reduction in interest expense due to amortizing fair value adjustment related to the Valor 7.75% notes.

y.	This adjustment is to reflect the tax effect of the pro forma adjustments described in Notes (s) through (x) above and was based on Spinco’s statutory tax rate of 38.9 percent.

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	1. to adopt the Agreement and Plan of Merger, dated as of December 8, 2005, as amended on May 18, 2006, as such may be further amended from time to time (the “Merger Agreement”), by and among Alltel Corporation, Alltel Holding Corp. (“Spinco”) and Valor Communications Group, Inc., pursuant to which (i) Alltel Holding Corp. will merge with and into Valor, after which Valor will survive as a stand-alone company and will hold and conduct the combined business operations of Valor and Spinco and (ii) Valor will issue an aggregate number of shares in the merger equal to 5.667 multiplied by Valor’s total number of shares of common stock outstanding on a fully-diluted basis immediately prior to the merger, which we expect to equal approximately 403,000,000 shares;
	2. To approve the amendment of the certificate of incorporation of Valor pursuant to the merger to increase the authorized number of shares of Valor common stock from 200,000,000 to 1,000,000,000;
	3. to approve the issuance of up to 405,000,000 shares of Valor common stock to Alltel stockholders in accordance with the terms of the Merger Agreement;
	4. to adopt and approve the 2006 Equity Incentive Plan, a copy of which is attached as Annex G to this proxy statement/ prospectus-information statement;
	5. to elect eleven (11) directors to serve until the 2007 Annual Meeting of Stockholders or until their successors are duly elected and qualified or until their earlier removal, resignation or death;
	6. to ratify the appointment of Deloitte & Touche LLP as Valor’s independent registered public accounting firm for the fiscal year ending December 31, 2006 or until their earlier removal or termination;
	7. to adjourn the annual meeting, if necessary, to solicit additional proxies for the adoption of the merger agreement, approval of the amendment to the certificate of incorporation and bylaws of Valor pursuant to the merger or approval of the issuance of shares of Valor common stock pursuant to the merger; and
	8. to transact any and all other business that may properly come before the annual meeting or any adjourned session of the annual meeting.

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	•	Via telephone, by calling Computershare Investor Services, LLC toll-free at 1-800-652-VOTE(8683) from the United States and Canada and following the series of voice instructions that will direct you how to grant a proxy. Have your proxy card available when you call. Telephone voting will be available 24 hours a day until 1:00 a.m., Central Standard Time, on June 27, 2006;
	•	Via the Internet, as permitted by Section 212(c) of the DGCL, by going to the website www.computershare.com/expressvote and following the on-screen instructions that will direct you how to grant a proxy. Internet proxy submission will be available 24 hours a day until 1:00 a.m., Central Standard Time, on June 27, 2006. Have your proxy card available when you access the website as it contains individual proxy access and account numbers that you will need to enter the website.
	•	Mail, by completing and returning the proxy card or voter information form in the enclosed envelope. The envelope requires no additional postage if mailed in the United States.

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	•	sending a written notice to the corporate secretary of Valor that is received prior to the annual meeting stating that you revoke your proxy;
	•	properly completing a new proxy card bearing a later date and properly submitting it so that it is received prior to the annual meeting;
	•	logging onto the Internet website specified on your proxy card in the same manner you would to submit your proxy electronically or by calling the telephone number specified on your proxy card prior to the annual meeting, in each case if you are eligible to do so and following the instructions on the proxy card; or
	•	attending the annual meeting and voting in person.

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	Introduction

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	Plan Limits

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	Administration

	Eligibility

	Option Rights

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	SARs

	Performance Shares and Performance Units

	Restricted Shares

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	Restricted Stock Units

	Other Awards

	Non-employee directors

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	Management Objectives

	Change in Control

	Transferability

	Adjustments

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	Amendments and Miscellaneous

	Compliance with Section 409A of the Internal Revenue Code

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	Termination

	Tax Consequences to Participants

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	Tax Consequences to Windstream

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	Securities Authorized for Issuance Under Equity Compensation Plans

	Equity Compensation Plan Information

Number of Securities

Remaining Available

Number of Securities

for Future Issuance

to be Issued Upon

Weighted-Average

Under Equity

Exercise of

Exercise Price of

Compensation Plans [c]

Outstanding Options,

Outstanding Options,

(Excluding Securities

Warrants and Rights

Warrants and Rights

Reflected in Column

Plan Category

[a]

[b]

[a])

Equity compensation plans not approved by security holders

2,500,000

$

0.0001

342,469

Equity compensation plans approved by security holders

Total

2,500,000

$

0.0001

342,469

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Nomination

and

Director

Audit

Compensation

Governance

Norman W. Alpert

X

Stephen B. Brodeur

X

Edward J. Heffernan

Chair

Edward L. Lujan

X

Anthony J. de Nicola

Chair

Chair

M. Ann Padilla

X

Federico Pena

X

Sanjay Swani

X

X

X

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	•	An appropriate peer group of companies for the purposes of comparing compensation levels and practices; and
	•	Key measures that the Compensation Committee will use in assessing performance for the purposes of incentive compensation awards to the chief executive officer and other members of the senior management team.

	Annual Salaries

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	Annual Incentive Compensation

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	Anthony de Nicola, Chairman
	Sanjay Swani
	Norman W. Alpert

															Long-Term
															Compensation
							Annual Compensation								Restricted
			Fiscal												Stock				All Other
			Year				Salary				Bonus(1)				Awards(2)				Compensation(3)
John J. Mueller				2005			$	500,000			$	579,800			$	9,516,300			$	84,283
	Chief Executive Officer and President			2004				469,616				1,875,000				—				46,004
Kenneth R. Cole				2005				300,000				750,000				995,482				17,197
	Vice Chairman(4)			2004				433,462				5,750,000				—				45,577
W. Grant Raney				2005				257,000				197,609				4,137,525				18,521
	Senior Vice President and Chief			2004				253,167				1,160,625				—				25,141
	Operating Officer
William M. Ojile, Jr.				2005				250,000				144,950				3,310,020				21,799
	Senior Vice President,			2004				246,692				656,250				—				21,197
	Chief Legal Officer and Secretary
Cynthia B. Nash				2005				176,346				109,758				2,234,265				37,887
	Senior Vice President and
	Chief Information Officer
Jerry E. Vaughn(5)				2005				81,250				61,718				4,927,695				33,216
	Senior Vice President and
	Chief Financial Officer

(1)	In 2004, amounts consisted of debt recapitalization bonuses and annual incentive bonuses. In 2005, amounts consisted of initial public offering bonuses and annual incentive bonuses. Annual incentive bonuses represented amounts earned by each named executive during the referenced year, although paid in the following year. In 2004, Mr. Cole’s bonus included a one-time transition bonus of $5 million.
(2)	Amounts in this column reported for 2005 represented the value of the following restricted stock awards primarily issued in February 2005, except for Mr. Vaughn, which were issued in October 2005, at $0.0001

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per share: 634,420 shares to Mr. Mueller, 67,763 shares to Mr. Cole, 275,835 shares to Mr. Raney, 220,668 shares to Mr. Ojile, 148,951 shares to Ms. Nash and 361,533 shares to Mr. Vaughn. Using the closing price of our stock as of December 30, 2005, $11.40, the number and value of the remaining vested and unvested restricted stock awards as of December 31, 2005 were as follows: 634,420 shares, $7.2 million for Mr. Mueller; 42,543 shares, $484,990 for Mr. Cole; 275,835 shares, $3.1 million for Mr. Raney; 220,668 shares, $2.5 million for Mr. Ojile; 148,951 shares, $1.7 million for Ms. Nash and 361,533 shares, $4.1 million for Mr. Vaughn. These awards vest as follows:

		Vested upon				Vests in				Vests in				Vests in				Vests in
Name		Issuance				2006				2007				2008				2009
John J. Mueller			21.74%				26.09%				26.09%				26.09%				0.00%
Kenneth R. Cole(4)			85.00%				5.00%				5.00%				5.00%				00.0%
W. Grant Raney			20.00%				26.67%				26.67%				26.67%				0.00%
William M. Ojile, Jr.			15.00%				28.33%				28.33%				28.33%				0.00%
Cynthia B. Nash			18.52%				27.16%				27.16%				27.16%				0.00%
Jerry E. Vaughn			0.00%				6.25%				25.00%				25.00%				43.75%

	Per Resolution of the Compensation Committee, dated December 8, 2005, equity grants vesting on January 1, 2007 will vest upon closing of the merger. Also, per the terms of the Long Term Incentive Plan, awards vesting in 2008 and beyond will accelerate upon closing of the merger for those employees whose employment is terminated without cause or who resign for Good Reason.
	We did not pay dividends on unvested restricted stock awards in 2005. On February 9, 2006, the Compensation Committee approved the payment of dividends on unvested restricted stock awards.

(3)	All other compensation amounts, disclosed in the table above include medical, life insurance and long-term disability premiums we pay on behalf of each named executive officer, personal travel expenses paid by the company, car allowances, our matching contributions to the 401(k) and miscellaneous other items we pay on behalf of each named executive officer, are as follows:

														Long-				Personal
										Life				Term				Travel				Car				401(k)				All other
		Year				Medical				Insurance				Disability				Expense				Allowance				Contributions				Compensation				Total
John J. Mueller			2005			$	10,003			$	3,123			$	1,044			$	7,554			$	18,731			$	9,450			$	34,378			$	84,283
			2004				9,570				4,334				7,210				7,478				8,187				9,225				—				46,004
Kenneth R. Cole			2005				6,905				9,248				1,044				—				—				—				—				17,197
			2004				9,570				14,530				4,774				7,478				—				9,225				—				45,577
W. Grant Raney			2005				6,164				1,823				1,044				—				—				9,450				40				18,521
			2004				5,369				2,025				1,044				7,478				—				9,225				—				25,141
William M. Ojile, Jr.			2005				10,004				1,261				1,044				—				—				9,450				40				21,799
			2004				8,645				1,468				1,859				—				—				9,225				—				21,197
Cynthia B. Nash			2005				9,094				1,016				870				3,777				—				3,089				20,041				37,887
Jerry E. Vaughn			2005				1,608				3,366				—				—				—				—				28,242				33,216

(4)	Mr. Cole served as our Chief Executive Officer from January 2002 through April 2004.
(5)	Mr. Vaughn became a senior vice president and Chief Financial Officer effective October 1, 2005.

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		Number				%(1)
Welsh, Carson, Anderson Stowe(2)			19,574,421				27.5	%
Vestar Capital Partners(3)			8,497,942				12	%
Kenneth R. Cole			42,543				*
John Mueller(4)			634,420				*
Jerry E. Vaughn(5)			361,533				*
Cynthia Nash(6)			137,748				*
William Ojile(7)			187,434				*
Grant Raney(8)			275,835				*
Anthony J. de Nicola(9)(10)			19,617,000				27.6	%
Sanjay Swani(9)(11)			19,585,992				27.5	%
Norman W. Alpert(12)			8,497,942				12	%
Federico Pena(12)			8,497,942				12	%
Stephen B. Brodeur(13)			9,705				*
Michael E. Donovan(13)			9,705				*
Edward J. Heffernan(13)			9,705				*
Edward L. Lujan(13)			9,705				*
M. Ann Padilla(13)			9,705				*
All directors and executive officers as a group (15 persons)			29,814,518				41.9	%

	*	Less than 1%.

(1)	The respective percentages of beneficial ownership are based on 71,096,887 shares of common stock as of April 28, 2006.
(2)	Shares are held by the following affiliates of Welsh, Carson, Anderson & Stowe: Welsh, Carson, Anderson & Stowe VIII, L.P., Welsh, Carson, Anderson & Stowe IX, L.P., WCAS Capital Partners III, L.P. Welsh, Carson, Anderson & Stowe disclaims beneficial ownership of such shares. WCAS VIII Associates, LLC, a limited liability company and affiliate of Welsh, Carson, Anderson & Stowe, exercises voting and investment control over the shares held by Welsh, Carson, Anderson & Stowe VIII, L.P. as general partner. Voting and investment decisions by WCAS VIII Associates, LLC are determined by an affirmative vote of two thirds of its managing members. WCAS IX Associates, LLC, a limited liability company and affiliate of Welsh, Carson, Anderson & Stowe, exercises voting and investment control over the shares held by Welsh, Carson, Anderson & Stowe IX, L.P. as general partner. Voting and investment decisions by WCAS IX Associates, LLC are determined by an affirmative vote of two thirds of its managing members. The address of Welsh, Carson, Anderson & Stowe is 320 Park Avenue, Suite 2500, New York, NY 10022.

	(3)	Shares are held by Vestar Capital Partners and the following affiliates of Vestar Capital Partners: Vestar Capital Partners III, L.P., Vestar Capital Partners IV, L.P. and Vestar/ Valor LLC. Vestar Capital Partners disclaims beneficial ownership of such shares. Vestar Capital Partners III, L.P. is a limited

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		partnership, the general partner of which is Vestar Associates III, L.P. As general partner of Vestar Associates III, L.P., Vestar Associates Corporation III, a corporation affiliated with Vestar Capital Partners, exercises voting and investment control over shares held by Vestar Capital Partners III, L.P. Vestar Capital Partners IV, L.P. is a limited partnership, the general partner of which is Vestar Associates IV, L.P. As general partner of Vestar Associates IV, L.P., Vestar Associates Corporation IV, a corporation and affiliate of Vestar Capital Partners, exercises voting and investment control over shares held by Vestar Capital Partners IV, L.P. Vestar/Valor LLC is a limited liability company, the managing member of which is Vestar Capital Partners IV, LP. As general partner of Vestar Associates IV, LP, Vestar Associates Corporation IV exercises voting and investment control over the shares held by Vestar/ Valor LLC. The address of Vestar Capital Partners is 245 Park Avenue, 41st Floor, New York, NY 10167.
	(4)	Includes 331,002 shares of restricted stock held by Mr. Mueller that will vest upon closing of the merger.
	(5)	Includes 338,937 shares of restricted stock held by Mr. Vaughn that will vest upon closing of the merger.
	(6)	Includes 80,912 shares of restricted stock held by Ms. Nash, of which 40,456 shares will vest upon closing of the merger and 40,456 shares will vest on January 1, 2008.
	(7)	Includes 125,045 shares of restricted stock held by Mr. Ojile that will vest upon closing of the merger.
	(8)	Includes 147,112 shares of restricted stock held by Mr. Raney, of which 73,556 shares will vest upon closing of the merger and 73,556 shares will vest on January 1, 2008.
	(9)	As members of WCAS VIII Associates LLC and WCAS IX Associates, LLC, Mr. de Nicola and Mr. Swani may be deemed to share beneficial ownership of the shares held by WCAS VIII Associates LLC and WCAS IX Associates, LLC. Mr. de Nicola and Mr. Swani disclaim beneficial ownership of such shares and any other shares held by affiliates of Welsh, Carson, Anderson & Stowe.

(10)	Includes 42,579 shares held directly by Mr. de Nicola, of which 6,470 represents shares of restricted stock that will vest upon closing of the merger.
(11)	Includes 11,571 shares held directly by Mr. Swani, of which 6,470 represents shares of restricted stock that will vest upon closing of the merger.
(12)	As managing directors of Vestar Capital Partners, Mr. Alpert and Mr. Pena may be deemed to share beneficial ownership of the shares held by Vestar Capital Partners. Mr. Alpert and Mr. Pena each disclaim beneficial ownership of such shares and any other shares held by affiliates of Vestar Capital Partners.
(13)	Includes 6,470 shares of restricted stock that will vest upon closing of the merger.

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			2/09/05					3/31/05					6/30/05					9/30/05					12/31/05
Valor Communications Group				100.00					95.65					93.64					94.92					81.87
SIC Code Index				100.00					98.04					97.83					100.41					98.56
NYSE Market Index				100.00					101.36					103.68					108.49					110.77

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	•	WCAS and Vestar have demand registration rights relating to the shares of our common stock that they received pursuant to our reorganization, subject to the requirement that the securities covered by each demand registration have an aggregate public offering price of at least $25.0 million if registered pursuant to a long-form registration statement, or $10.0 million if registered pursuant to a short-form registration statement; provided that the entities comprising WCAS and Vestar that initiate a demand for registration must hold a majority of the shares of common stock held by all such WCAS or Vestar entities, as the case may be, to initiate a demand for registration; provided, further, that WCAS or Vestar may exercise a demand right for less than an aggregate public offering price of $25.0 million if registered pursuant to a long-form registration statement, or $10.0 million if registered pursuant to a short-form registration statement, if such proposed offering is for all of the remaining shares of common stock held by WCAS or Vestar; provided, further, that WCAS can request up to three registrations that are registered pursuant to a long-form registration statement and Vestar can request up to two registrations that are registered pursuant to a long-form registration statement; and
	•	WCAS, Vestar and CVC have the right to include in our future public offerings of securities the shares of our common stock held by each of them.

	Transaction Bonuses.

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Name		Date of IPO				January 1, 2006				January 1, 2007(1)				Total
John J. Mueller		$	200,000			$	400,000			$	400,000			$	1,000,000
Kenneth R. Cole(2)			750,000				—				—				750,000
W. Grant Raney			100,000				200,000				200,000				500,000
William M. Ojile, Jr.			50,000				100,000				100,000				250,000
Cynthia Nash			30,000				60,000				60,000				150,000
Jerry E. Vaughn			—				—				—				—
Other			411,500				223,000				223,000				857,500
Total		$	1,541,500			$	983,000			$	983,000			$	3,507,500

(1)	Per Resolution of the Compensation Committee, dated December 8, 2005, cash grants scheduled to vest on January 1, 2007 will vest upon closing of the merger.
(2)	Pursuant to the terms of Amendment One to Mr. Cole’s Part-Time Employment Agreement, dated November 10, 2004.

	Edward J. Heffernan, Chairman
	Sanjay Swani
	Stephen Brodeur
	Ann Padilla
	Edward Lujan

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Type of Fees		2004				2005
Audit Fees(1)		$	512,611			$	535,000
Audit-Related Fees(2)			665,000				244,729
Tax Fees(3)			1,560,000				65,000
All Other Fees(4)			6,396				718,396
Total		$	2,744,007			$	1,563,125

(1)	Fees for the following services:

	(a)	audits of our consolidated year-end financial statements for each year;
	(b)	reviews of the unaudited quarterly financial statements for each of the first three quarters of each year;
	(c)	normally provided statutory or regulatory filings or engagements for each year; and
	(d)	estimated out-of-pocket costs Deloitte & Touche incurred in providing all of such services for which we reimburse Deloitte & Touche.

(2)	Fees for registration statements, employee benefit plan audits and services related to our internal controls over financial reporting in connection with Sarbanes-Oxley Act of 2002.
(3)	Fees for tax compliance, tax advice and tax planning services.
(4)	Fees for all services not described in the other categories. For 2004, the disclosed fees include fees for an annual on-line research tool. For 2005, the disclosed fees include due diligence services related to the pending merger with Alltel’s wireline business and fees for an annual on-line research tool.

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	•	adverse changes in economic conditions, in the regions in which Valor and Spinco operate;
	•	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;
	•	the potential for adverse changes in the ratings given to Windstream’s debt securities by nationally accredited ratings organizations;
	•	the availability and cost of financing in the corporate debt markets;
	•	the uncertainties related to Valor and Spinco’s strategic investments;
	•	the effects of work stoppages;
	•	the effects of litigation;
	•	potential outcome of income tax audits;
	•	the effects of federal and state legislation, rules, and regulations governing the communications industry;
	•	product liability and other claims asserted against Valor or Spinco; and
	•	those factors listed under the heading “Risk Factors.”

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	•	Quarterly Report on Form 10-Q for the fiscal year ended March 31, 2006;
	•	Annual Report on Form 10-K for the fiscal year ended December 31, 2005; and
	•	The description of Valor common stock (discussed above under the heading “Description Of Windstream Capital Stock”) contained in Valor’s Registration Statement on Form S-1 filed February 10, 2005.

	Valor Communications Group, Inc.
	201 E. John Carpenter Freeway, Suite 200
	Irving, Texas 75062
	Attn: William M. Ojile, Jr., Corporate Secretary
	Tel: (972) 373-1000

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Quarterly Financial Statements:
Unaudited Combined Balance Sheets as of March 31, 2006 and December 31, 2005			F-2
Unaudited Combined Statements of Operations and Comprehensive Income for the three months ended March 31, 2006 and 2005			F-3
Unaudited Combined Statements of Cash Flows for the three months ended March 31, 2006 and 2005			F-4
Notes to Unaudited Interim Combined Financial Statements			F-5
Annual Financial Statements:
Report of Independent Registered Public Accounting Firm			F-16
Combined Balance Sheets as of December 31, 2005 and 2004			F-17
Combined Statements of Operations and Comprehensive Income for the years ended December 31, 2005, 2004 and 2003			F-18
Combined Statements of Cash Flows for the years ended December 31, 2005, 2004 and 2003			F-19
Combined Statements of Equity for the years ended December 31, 2005, 2004 and 2003			F-20
Notes to Combined Financial Statements			F-21

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			Pro Forma
			March 31, 2006				March 31,				December 31,
			(Note 9)				2006				2005
Assets
Current Assets:
	Cash and short-term investments		$	9.9			$	9.9			$	11.9
	Accounts receivable (less allowance for doubtful accounts of $13.4 and $14.1, respectively)			292.5				292.5				312.8
	Inventories			34.8				34.8				36.9
	Prepaid expenses and other			34.3				34.3				33.6
	Total current assets			371.5				371.5				395.2
	Investments			2.0				2.0				2.0
	Goodwill			1,218.7				1,218.7				1,218.7
	Other intangibles			315.7				315.7				317.7
Property, Plant and Equipment:
	Land			18.3				18.3				18.3
	Buildings and improvements			309.7				309.7				310.2
	Wireline			6,677.5				6,677.5				6,634.6
	Information processing			61.8				61.8				60.7
	Other			193.3				193.3				188.9
	Under construction			128.4				128.4				131.1
	Total property, plant and equipment			7,389.0				7,389.0				7,343.8
	Less accumulated depreciation			(4,462.2	)			(4,462.2	)			(4,380.2	)
	Net property, plant and equipment			2,926.8				2,926.8				2,963.6
Other assets				31.4				31.4				32.5
Total Assets			$	4,866.1			$	4,866.1			$	4,929.7
Liabilities and Equity
Current Liabilities:
	Current maturities of long-term debt		$	22.1			$	22.1			$	22.1
	Accounts payable			146.3				146.3				145.5
	Advance payments and customer deposits			59.7				59.7				60.4
	Accrued taxes			119.5				119.5				83.1
	Accrued interest			7.9				7.9				4.2
	Dividend payable to Parent company			2,275.0				—				—
	Note payable to Parent company			1,703.2				—				—
	Other current liabilities			40.7				40.7				48.7
	Total current liabilities			4,374.4				396.2				364.0
Long-term debt				238.7				238.7				238.7
Deferred income taxes				677.7				677.7				680.6
Other liabilities				184.0				184.0				157.2
	Total liabilities			5,474,8				1,496.6				1,440.5
Commitments and Contingencies (See Note 7)
Equity (Deficit):
	Cumulative foreign currency translation adjustment			0.5				0.5				0.5
	Paid-in capital			(609.2	)			—				—
	Parent company investment			—				1,288.4				1,455.2
	Retained earnings			—				2,080.6				2,033.5
	Total equity (deficit)			(608.7	)			3,369.5				3,489.2
Total Liabilities and Equity			$	4,866.1			$	4,866.1			$	4,929.7

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				Three Months
				Ended March 31,
(Millions)				2006				2005
Revenues and sales:
	Service revenues			$	604.7			$	620.1
	Product sales				98.3				92.5
		Total revenues and sales			703.0				712.6
Costs and expenses:
	Cost of services (excluding depreciation of $85.1 and $106.5, respectively, included below)				192.8				203.5
	Cost of products sold				84.3				79.1
	Selling, general, administrative and other				79.7				84.6
	Depreciation and amortization				102.6				125.7
	Royalty expense to Parent				67.2				67.4
	Restructuring and other charges				2.5				—
		Total costs and expense			529.1				560.3
Operating income					173.9				152.3
Other income (expense), net					1.2				(0.1	)
Intercompany interest income (expense)					14.5				(0.3	)
Interest expense					(4.5	)			(4.9	)
Income before income taxes					185.1				147.0
Income taxes					72.3				58.7
Net income (See Note 9)					112.8				88.3
Foreign currency translation adjustment					—				—
Comprehensive income				$	112.8			$	88.3

F-3

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					Three Months
					Ended March 31,
(Millions)					2006				2005
Cash Provided from Operations:
	Net income				$	112.8			$	88.3
	Adjustments to reconcile net income to net cash provided from operations:
		Depreciation and amortization				102.6				125.7
		Provision for doubtful accounts				5.0				7.0
		Change in deferred income taxes				3.0				0.6
		Other, net				1.1				0.5
	Changes in operating assets and liabilities:
		Accounts receivable				15.3				31.7
		Inventories				2.1				(1.5	)
		Accounts payable				0.8				15.2
		Other current liabilities				31.4				59.7
		Other, net				12.3				(5.6	)
			Net cash provided from operations			286.4				321.6
Cash Flows from Investing Activities:
	Additions to property, plant and equipment, including software					(62.2	)			(73.3	)
	Other, net					(1.4	)			(0.9	)
			Net cash used in investing activities			(63.6	)			(74.2	)
Cash Flows from Financing Activities:
	Dividends paid to Parent Company					(65.7	)			(47.8	)
	Repayments of long-term debt					(0.1	)			(0.1	)
	Reductions in advances from Parent Company					(159.0	)			(203.2	)
			Net cash used in financing activities			(224.8	)			(251.1	)
Effect of exchange rate changes on cash and short-term investments						—				—
Decrease in cash and short-term investments						(2.0	)			(3.7	)
Cash and Short-term Investments:
	Beginning of the period					11.9				13.1
	End of the period				$	9.9			$	9.4

F-4

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F-5

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F-6

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(Millions)
Compensation expense related to stock options issued by Alltel		$	1.1
Compensation expense related to restricted stock awards			0.3
Compensation expense before income taxes			1.4
Income tax benefit			(0.5	)
Compensation expense, net of tax		$	0.9

(Millions)
Net income as reported		$	88.3
Add stock-based compensation expense included in net income, net of related tax effects			0.3
Deduct stock-based employee compensation expense determined under fair value method for all awards, net of related tax effects			(1.3	)
Pro forma net income		$	87.3

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						Product
(Millions)		Wireline				Distribution				Total
Balance at March 31, 2006 and December 31, 2005		$	1,218.4			$	0.3			$	1,218.7

		March 31, 2006
		Gross				Accumulated				Net Carrying
(Millions)		Cost				Amortization				Value
Customer lists		$	67.6			$	(22.7	)		$	44.9
Franchise rights			22.5				(16.7	)			5.8
		$	90.1			$	(39.4	)		$	50.7

		December 31, 2005
		Gross				Accumulated				Net Carrying
(Millions)		Cost				Amortization				Value
Customer lists		$	67.6			$	(21.0	)		$	46.6
Franchise rights			22.5				(16.4	)			6.1
		$	90.1			$	(37.4	)		$	52.7

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		(Thousands)
						Weighted
		Number of				Average Price
		Shares				Per Share
Outstanding at December 31, 2005			2,846.9			$	58.83
Granted			—				—
Exercised			(327.4	)		$	52.59
Forfeited			—				—
Transfers, net			(31.8	)		$	58.87
Outstanding at March 31, 2006			2,487.7			$	59.66
Exercisable at end of period			1,726.9			$	62.82

		Options Outstanding												Options Exercisable
		(Thousands)				Weighted				Weighted				(Thousands)				Weighted
						Average				Average								Average
Range of		Number of				Remaining				Exercise Price				Number of				Exercise Price
Exercise Prices		Shares				Contractual Life				Per Share				Shares				Per Share
$26.95-$32.35			13,024				1.8 years			$	31.83				13,024			$	31.83
$37.75-$46.32			93,236				6.5 years				45.84				26,091				45.05
$50.22-$56.07			1,026,930				7.2 years				53.59				333,302				54.63
$62.94-$68.25			1,354,501				4.1 years				65.47				1,354,501				65.47
			2,487,691				5.4 years			$	59.66				1,726,918			$	62.82

		(Thousands)
						Weighted
		Number of				Average Price
		Shares				Per Share
Outstanding at December 31, 2005			1,039.2			$	53.51
Granted			—				—
Vested			(247.4	)		$	54.98
Forfeited			—				—
Transfers, net			(31.0	)		$	67.05
Outstanding at March 31, 2006			760.8			$	52.48

F-9

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		Number of				Weighted Average
		Shares				Fair Value Per Share
Non-vested at December 31, 2005			68,183			$	52.52
Granted			—				—
Vested			(11,967	)			49.28
Forfeited			—				—
Non-vested at March 31, 2006			56,216			$	53.20

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(Millions)		2006				2005
Benefits earned during the year		$	—			$	—
Interest cost on benefit obligation			2.4				2.4
Amortization of transition obligation			—				—
Amortization of prior service cost			0.5				0.5
Recognized net actuarial loss			1.3				1.3
Expected return on plan assets			—				—
Net periodic benefit expense		$	4.2			$	4.2

(Millions)
Balance, beginning of period		$	—
Integration expenses and other charges recorded during the period			2.5
Cash outlays during the period			(0.5	)
Balance, end of period		$	2.0

F-11

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(Millions)			2006				2005
Revenues and Sales from External Customers:
Wireline			$	546.8			$	562.3
Product Distribution				33.8				29.9
Other Operations				71.9				70.0
	Total business segments		$	652.5			$	662.2

(Millions)			2006				2005
Intersegment Revenues and Sales:
Wireline			$	29.8			$	30.6
Product Distribution				35.3				38.9
Other Operations				4.9				4.9
	Total business segments		$	70.0			$	74.4
Total Revenues and Sales:
Wireline			$	576.6			$	592.9
Product Distribution				69.1				68.8
Other Operations				76.8				74.9
Total business segments				722.5				736.6
Less intercompany eliminations				(19.5	)			(24.0	)
Total revenues and sales			$	703.0			$	712.6
Segment Income:
Wireline			$	161.5			$	144.4
Product Distribution				1.2				0.8
Other Operations				13.7				7.1
	Total segment income			176.4				152.3
Restructuring and other charges				(2.5	)			—
Other income, net				1.2				(0.1	)
Intercompany interest income (expense)				14.5				(0.3	)
Interest expense				(4.5	)			(4.9	)
	Income from continuing operations before income taxes		$	185.1			$	147.0

F-12

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			March 31,				December 31,
(Millions)			2006				2005
Wireline			$	4,735.7			$	4,782.3
Product Distribution				46.2				51.6
Other Operations				87.2				100.9
	Total business segments			4,869.1				4,934.8
	Less elimination of intersegment receivables			(3.0	)			(5.1	)
	Total consolidated assets		$	4,866.1			$	4,929.7

(Millions)			2006				2005
Revenues and Sales from External Customers:
Long-distance			$	43.3			$	40.7
Directory publishing				24.6				24.1
Telecommunications information services				4.0				5.2
	Total		$	71.9			$	70.0
Intersegment Revenues and Sales:
Long-distance			$	3.0			$	2.7
Directory publishing				1.9				2.2
Telecommunications information services				—				—
	Total		$	4.9			$	4.9
Total Revenues and Sales:
Long-distance			$	46.3			$	43.4
Directory publishing				26.5				26.3
Telecommunications information services				4.0				5.2
	Total revenues and sales		$	76.8			$	74.9

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			(Millions)
Net income as reported			$	112.8
	Pro forma interest expense, net of related tax effects			(42.2	)
Pro forma net income			$	70.6

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			2005				2004
			(Millions)
ASSETS
Current Assets:
	Cash and short-term investments		$	11.9			$	13.1
	Accounts receivable (less allowance for doubtful accounts of $14.1 and $16.6, respectively)			312.8				339.5
	Inventories			36.9				35.4
	Prepaid expenses and other			33.6				16.2
	Total current assets			395.2				404.2
Investments				2.0				24.3
Goodwill				1,218.7				1,218.7
Other intangibles				317.7				325.9
Property, Plant and Equipment:
	Land			18.3				18.3
	Buildings and improvements			310.2				302.3
	Wireline			6,634.6				6,434.2
	Information processing			60.7				54.1
	Other			188.9				184.9
	Under construction			131.1				95.6
	Total property, plant and equipment			7,343.8				7,089.4
	Less accumulated depreciation			(4,380.2	)			(4,015.1	)
	Net property, plant and equipment			2,963.6				3,074.3
Other assets				32.5				31.8
Total Assets			$	4,929.7			$	5,079.2
LIABILITIES AND EQUITY
Current Liabilities:
	Current maturities of long-term debt		$	22.1			$	22.1
	Accounts payable			145.5				109.5
	Advance payments and customer deposits			60.4				61.3
	Accrued taxes			83.1				43.5
	Accrued interest			4.2				4.5
	Dividend payable to Parent company			—				—
	Note payable to Parent company			—				—
	Other current liabilities			48.7				51.3
	Total current liabilities			364.0				292.2
Long-term debt				238.7				260.8
Deferred income taxes				680.6				680.2
Other liabilities				157.2				139.2
	Total liabilities			1,440.5				1,372.4
Commitments and Contingencies (See Note 11)
Equity (Deficit):
	Cumulative foreign currency translation adjustment			0.5				0.5
	Paid-in capital			—				—
	Parent company investment			1,455.2				1,813.5
	Retained earnings			2,033.5				1,892.8
	Total equity (deficit)			3,489.2				3,706.8
Total Liabilities and Equity			$	4,929.7			$	5,079.2

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					2005				2004				2003
					(Millions)
Revenues and sales:
Service revenues					$	2,463.6			$	2,533.5			$	2,618.4
Product sales						459.9				400.0				384.9
	Total revenues and sales					2,923.5				2,933.5				3,003.3
Costs and expenses: (See Note 1)
Cost of services (excluding depreciation of $415.8, $445.1 and $451.9 in 2005, 2004 and 2003, respectively included below)						796.1				813.7				864.8
Cost of products sold						374.8				333.8				339.0
Selling, general, administrative and other						340.1				327.9				351.0
Depreciation and amortization						474.2				508.5				519.4
Royalty expense to Parent						268.8				270.2				273.0
Restructuring and other charges						35.7				11.8				12.2
	Total costs and expenses					2,289.7				2,265.9				2,359.4
Operating income						633.8				667.6				643.9
Other income, net						11.6				13.7				5.8
Intercompany interest income (expense)						23.3				(15.2	)			(21.6	)
Interest expense						(19.1	)			(20.4	)			(27.7	)
Gain on disposal of assets and other						—				—				23.9
Income before income taxes						649.6				645.7				624.3
Income taxes						267.9				259.4				247.1
Income before cumulative effect of accounting change						381.7				386.3				377.2
Cumulative effect of accounting change (net of income tax expense (benefit) of $(4.6) in 2005 and $10.3 in 2003)						(7.4	)			—				15.6
Net income (See Note 13)						374.3				386.3				392.8
Foreign currency translation adjustment						—				(0.1	)			0.8
Comprehensive income					$	374.3			$	386.2			$	393.6
Pro forma amounts assuming changes in accounting principles were applied retroactively:
		Net income as reported:			$	374.3			$	386.3			$	392.8
			Effect of recognition of conditional asset retirement obligations			7.4				(0.4	)			(0.4	)
			Effect of change in recognition of asset retirement obligations			—				—				(15.6	)
		Net income as adjusted			$	381.7			$	385.9			$	376.8

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				2005				2004				2003
				(Millions)
Cash Provided from Operations:
Net income				$	374.3			$	386.3			$	392.8
Adjustments to reconcile net income to net cash provided from operations:
	Cumulative effect of accounting change				7.4				—				(15.6	)
	Depreciation and amortization				474.2				508.5				519.4
	Provision for doubtful accounts				29.2				38.3				33.0
	Non-cash portion of restructuring and other charges				—				0.8				5.6
	Non-cash portion of gain on disposal of assets				—				—				(31.0	)
	Change in deferred income taxes				4.9				70.0				91.0
	Other, net				1.8				5.0				15.3
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
	Accounts receivable				(4.0	)			(23.2	)			43.2
	Inventories				(1.5	)			10.9				11.2
	Accounts payable				36.0				(5.7	)			15.8
	Other current liabilities				35.8				(16.4	)			37.4
	Other, net				(4.2	)			(12.3	)			16.9
		Net cash provided from operations			953.9				962.2				1,135.0
Cash Flows from Investing Activities:
	Additions to property, plant and equipment				(352.9	)			(333.3	)			(383.2	)
	Additions to capitalized software development costs				(4.0	)			(4.5	)			(7.6	)
	Additions to investments				—				—				(0.2	)
	Proceeds from the sale of assets				—				—				37.0
	Proceeds from the sale of investments				0.1				7.6				—
	Other, net				4.1				0.5				(2.9	)
		Net cash used in investing activities			(352.7	)			(329.7	)			(356.9	)
Cash Flows from Financing Activities:
	Dividends paid to Parent Company				(233.6	)			(239.1	)			(232.4	)
	Repayments of long-term debt				(22.1	)			(22.1	)			(282.6	)
	Reductions in advances from Parent Company				(346.7	)			(365.9	)			(269.2	)
		Net cash used in financing activities			(602.4	)			(627.1	)			(784.2	)
Effect of exchange rate changes on cash and short-term investments					—				(0.1	)			0.8
Increase (decrease) in cash and short-term investments					(1.2	)			5.3				(5.3	)
Cash and Short-term Investments:
	Beginning of the year				13.1				7.8				13.1
	End of the year			$	11.9			$	13.1			$	7.8
Supplemental Cash Flow Disclosures:
	Interest paid, net of amounts capitalized			$	17.9			$	19.2			$	26.3
	Income taxes paid			$	215.4			$	187.9			$	18.3

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		Foreign
		Currency				Parent
		Translation				Company				Retained
		Adjustment				Investment				Earnings				Totals
		(Millions)
Balance at January 1, 2003		$	(0.2	)		$	2,453.9			$	1,585.2			$	4,038.9
Net income			—				—				392.8				392.8
Dividends to Parent			—				—				(232.4	)			(232.4	)
Net transfers to Parent			—				(274.5	)			—				(274.5	)
Foreign currency translation adjustment			0.8				—				—				0.8
Balance at December 31, 2003		$	0.6			$	2,179.4			$	1,745.6			$	3,925.6
Net income			—				—				386.3				386.3
Dividends to Parent			—				—				(239.1	)			(239.1	)
Net transfers to Parent			—				(365.9	)			—				(365.9	)
Foreign currency translation adjustment			(0.1	)			—				—				(0.1	)
Balance at December 31, 2004		$	0.5			$	1,813.5			$	1,892.8			$	3,706.8
Net income			—				—				374.3				374.3
Dividends to Parent			—				—				(233.6	)			(233.6	)
Net transfers to Parent			—				(358.3	)			—				(358.3	)
Balance at December 31, 2005		$	0.5			$	1,455.2			$	2,033.5			$	3,489.2

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1.	Summary of Significant Accounting Policies:

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	•	Level of competition in its markets. To date, competition has not had a significant adverse effect on the operating results of the Company’s ILEC subsidiaries, primarily because these subsidiaries provide wireline telecommunications services in mostly rural areas. To date, ILEC subsidiaries have not been required to discount intrastate service rates in response to competitive pressures.
	•	Level of revenues and access lines currently subject to rate-of-return regulation or which could revert back to rate-of-return regulation in the future. For the ILEC subsidiaries that follow SFAS No. 71, all interstate revenues are subject to rate-of-return regulation. The majority of the ILEC subsidiaries’

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		remaining intrastate revenues are either subject to rate-of-return regulation or could become subject to rate-of-return regulation upon election by the Company, subject in certain cases to approval by the state public service commissions.
	•	Level of profitability of the ILEC subsidiaries. Currently, the prices charged to customers for interstate and intrastate services continue to be sufficient to recover the specific costs of the ILEC subsidiaries in providing these services to customers.

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		2005				2004
		(Millions)
Investments in Rural Telephone Bank Class C stock		$	—			$	22.1
Other cost investments			2.0				2.2
		$	2.0			$	24.3

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		Depreciable
		Lives
Buildings and improvements			5-50 years
Wireline			5-56 years
Information processing			3-16 years
Other			3-23 years

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			2005				2004				2003
			(Millions)
Net income as reported			$	374.3			$	386.3			$	392.8
	Deduct stock-based employee compensation expense determined under fair value method for all awards, net of related tax effects			(4.1	)			(4.8	)			(4.9	)
Pro forma net income			$	370.2			$	381.5			$	387.9

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2.	Accounting Changes:

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			(Millions)
Balance, as of:
	January 1, 2003		$	12.8
	December 31, 2003		$	13.2
	December 31, 2004		$	13.7
	December 31, 2005		$	14.0

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3.	Goodwill and Other Intangible Assets:

						Product
		Wireline				Distribution				Totals
		(Millions)
Balance at December 31, 2005 and 2004		$	1,218.4			$	0.3			$	1,218.7

		2005
										Net
		Gross				Accumulated				Carrying
		Cost				Amortization				Value
		(Millions)
Customer lists		$	67.6			$	(21.0	)		$	46.6
Franchise rights			22.5				(16.4	)			6.1
		$	90.1			$	(37.4	)		$	52.7

		2004
										Net
		Gross				Accumulated				Carrying
		Cost				Amortization				Value
		(Millions)
Customer lists		$	67.6			$	(14.3	)		$	53.3
Franchise rights			22.5				(14.9	)			7.6
		$	90.1			$	(29.2	)		$	60.9

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4.	Debt:

				2005				2004
				(Millions)
Issued by subsidiaries of the Company:
	Debentures and notes, without collateral:
		ALLTEL Communications Holdings of the Midwest, Inc. — 6.75%, due April 1, 2028		$	100.0			$	100.0
		ALLTEL Georgia Communications Corp. — 6.50%, due November 15, 2013			80.0				90.0
		ALLTEL New York, Inc. — 9.14% to 9.55%, due August 1, 2009 and October 1, 2011			10.7				13.0
		ALLTEL Pennsylvania, Inc. — 9.07%, due November 1, 2011			8.7				10.2
		Georgia ALLTEL Telecom, Inc. — 8.05% to 8.17%, due October 1, 2009 and 2014			20.5				24.1
		Teleview, Inc. — 7.00%, due January 2, 2010 and May 2, 2010			1.0				1.2
		Texas ALLTEL, Inc. — 8.11%, due March 31, 2018			15.0				15.0
		The Western Reserve Telephone Co. — 8.05% to 8.17%, due October 1, 2009 and 2014			25.9				30.5
	Discount on long-term debt				(1.0	)			(1.1	)
					260.8				282.9
	Less current maturities				(22.1	)			(22.1	)
		Total long-term debt		$	238.7			$	260.8

5.	Financial Instruments:

6.	Employee Benefit Plans and Postretirement Benefits Other Than Pensions:

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		Postretirement Benefits
		2005				2004				2003
		(Millions)
Benefits earned during the year		$	—			$	—			$	0.2
Interest cost on benefit obligation			9.6				11.2				10.2
Amortization of prior service (credit) cost			1.8				1.5				1.5
Recognized net actuarial loss			5.3				4.0				6.2
Effects of Medicare subsidy			—				(2.2	)			—
Expected return on plan assets			—				—				—
Total postretirement benefit expense		$	16.7			$	14.5			$	18.1

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		Postretirement
		Benefits
		2005				2004
		(Millions)
Fair value of plan assets at beginning of year		$	—			$	—
Employer contributions			8.2				9.6
Actual return on plan assets			—				—
Benefits paid			(8.2	)			(9.6	)
Fair value of plan assets at end of year			—				—
Projected benefit obligation at beginning of year			164.5				175.7
Benefits earned			—				—
Interest cost on projected benefit obligation			9.6				11.2
Plan amendments			—				1.7
Effects of Medicare subsidy			—				(14.2	)
Actuarial (gain) loss			5.8				(0.3	)
Benefits paid			(8.2	)			(9.6	)
Projected benefit obligation at end of year			171.7				164.5
Plan assets less than projected benefit obligation			(171.7	)			(164.5	)
Unrecognized actuarial loss			69.7				69.2
Unrecognized prior service cost			13.0				14.8
Net amount recognized		$	(89.0	)		$	(80.5	)
Amounts recognized in the consolidated balance sheet:
Prepaid benefit cost		$	—			$	—
Accrued benefit cost liability			(89.0	)			(80.5	)
Net amount recognized		$	(89.0	)		$	(80.5	)

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

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			Postretirement
			Benefits
			(Millions)
Expected employer contributions for 2006			$	9.4
Expected benefit payments:
	2006		$	9.4
	2007			10.1
	2008			10.8
	2009			11.4
	2010			11.8
	2011 — 2015			60.4
Expected subsidy:
	2006		$	0.5
	2007			0.5
	2008			0.5
	2009			0.6
	2010			0.6
	2011 — 2015			3.8

7.	Stock-Based Compensation Plans:

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		2005				2004				2003
Expected life			5.0 years				5.0 years				5.0 years
Expected volatility			27.7%				31.0%				32.5%
Dividend yield			2.8%				2.9%				2.8%
Risk-free interest rate			3.7%				3.2%				3.0%

														Weighted Average Price
		Number of Shares												per Share
		2005				2004				2003				2005				2004				2003
Outstanding at beginning of period			2,766,715				2,681,400				2,426,219			$	58.35			$	57.47			$	57.22
Granted			293,650				281,475				415,425				55.45				50.74				49.27
Exercised			(211,090	)			(196,160	)			(160,244	)			47.83				35.38				32.41
Forfeited			(2,350	)			—				—				50.97				—				—
Outstanding at end of period			2,846,925				2,766,715				2,681,400			$	58.83			$	58.35			$	57.47
Exercisable at end of period			1,807,680				1,499,010				1,183,405			$	61.89			$	61.01			$	57.11
Non-vested at end of period			1,039,245				1,267,705				1,497,995
Weighted average fair value of stock options granted during the year		$	13.48			$	13.74			$	13.94

		Options Outstanding												Options Exercisable
						Weighted				Weighted								Weighted
						Average				Average								Average
		Number of				Remaining				Exercise Price				Number of				Exercise Price
Range of Exercise Price		Shares				Contractual Life				per Share				Shares				per Share
$26.95 - $32.35			19,638				1.7 years			$	31.44				19,638			$	31.44
$37.75 - $46.32			103,893				6.4 years				45.50				42,178				44.59
$50.22 - $56.07			1,331,694				7.3 years				53.32				412,244				53.80
$62.94 - $68.25			1,391,700				4.3 years				65.50				1,333,620				65.39
			2,846,925				5.8 years			$	58.83				1,807,680			$	61.89

8.	Restructuring and Other Charges:

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							Other
			Wireline				Operations				Total
			(Millions)
Severance and employee benefit costs			$	11.2			$	0.4			$	11.6
Relocation costs				1.2				0.1				1.3
Lease and contract termination costs				(1.8	)			—				(1.8	)
Other exit costs				0.7				—				0.7
	Total restructuring and other charges		$	11.3			$	0.5			$	11.8

							Other
			Wireline				Operations				Total
			(Millions)
Severance and employee benefit costs			$	7.0			$	—			$	7.0
Lease termination costs				—				(0.4	)			(0.4	)
Write-down of software development costs				1.8				3.8				5.6
	Total restructuring and other charges		$	8.8			$	3.4			$	12.2

9.	Gain on Disposal of Assets and Other:

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10.	Income Taxes:

			2005				2004				2003
			(Millions)
Current:
	Federal		$	215.5			$	155.0			$	124.4
	State and other			55.9				37.2				30.3
				271.4				192.2				154.7
Deferred:
	Federal			11.5				57.1				76.9
	State and other			(15.0	)			10.1				15.5
				(3.5	)			67.2				92.4
			$	267.9			$	259.4			$	247.1

			2005				2004				2003
Statutory federal income tax rates				35.0	%			35.0	%			35.0	%
Increase (decrease):
	State income taxes, net of federal benefit			4.1				4.8				4.8
	Costs associated with pending spin-off of Company			1.7				—				—
	Other items, net			0.5				0.4				(0.2	)
Effective income tax rates				41.3	%			40.2	%			39.6	%

			2005				2004
			(Millions)
Property, plant and equipment			$	510.5			$	552.9
Goodwill and other intangible assets				160.4				126.1
Postretirement and other employee benefits				(21.7	)			(15.2	)
Other, net				20.8				16.4
	Deferred income taxes, net		$	670.0			$	680.2
Current deferred tax assets			$	(10.6	)		$	—
Noncurrent deferred tax liabilities				680.6				680.2
	Deferred income taxes, net		$	670.0			$	680.2

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11.	Commitments and Contingencies:

Year			(Millions)
2006			$	5.0
2007				4.2
2008				2.5
2009				2.0
2010				1.6
Thereafter				2.5
	Total		$	17.8

12.	Business Segments:

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			For the Year Ended
			December 31, 2005
							Product				Other				Total
			Wireline				Distribution				Operations				Segments
			(Millions)
Revenues and sales from unaffiliated customers:
	Domestic		$	2,236.7			$	130.9			$	333.1			$	2,700.7
	International			—				—				—				—
				2,236.7				130.9				333.1				2,700.7
Intercompany revenues and sales				134.7				177.0				19.2				330.9
	Total revenues and sales			2,371.4				307.9				352.3				3,031.6
Operating expenses				1,280.7				301.6				305.6				1,887.9
Depreciation and amortization				468.2				1.9				4.1				474.2
	Total costs and expenses			1,748.9				303.5				309.7				2,362.1
Segment income			$	622.5			$	4.4			$	42.6			$	669.5
Assets			$	4,782.3			$	51.6			$	100.9			$	4,934.8
Capital expenditures			$	351.9			$	0.2			$	0.8			$	352.9

			For the Year Ended
			December 31, 2004
							Product				Other				Total
			Wireline				Distribution				Operations				Segments
			(Millions)
Revenues and sales from unaffiliated customers:
	Domestic		$	2,281.2			$	121.6			$	344.1			$	2,746.9
	International			—				—				1.9				1.9
				2,281.2				121.6				346.0				2,748.8
Intercompany revenues and sales				129.6				135.9				25.8				291.3
	Total revenues and sales			2,410.8				257.5				371.8				3,040.1
Operating expenses				1,275.2				251.9				325.1				1,852.2
Depreciation and amortization				502.2				2.5				3.8				508.5
	Total costs and expenses			1,777.4				254.4				328.9				2,360.7
Segment income			$	633.4			$	3.1			$	42.9			$	679.4
Assets			$	4,924.7			$	43.2			$	114.6			$	5,082.5
Capital expenditures			$	332.0			$	0.4			$	0.9			$	333.3

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			For the Year Ended
			December 31, 2003
							Product				Other				Total
			Wireline				Distribution				Operations				Segments
			(Millions)
Revenues and sales from unaffiliated customers:
	Domestic		$	2,311.0			$	116.6			$	384.3			$	2,811.9
	International			—				—				4.4				4.4
				2,311.0				116.6				388.7				2,816.3
Intercompany revenues and sales				117.6				162.3				25.1				305.0
	Total revenues and sales			2,428.6				278.9				413.8				3,121.3
Operating expenses				1,327.1				273.1				345.6				1,945.8
Depreciation and amortization				510.2				2.4				6.8				519.4
	Total costs and expenses			1,837.3				275.5				352.4				2,465.2
Segment income			$	591.3			$	3.4			$	61.4			$	656.1
Assets			$	5,110.5			$	60.4			$	118.8			$	5,289.7
Capital expenditures			$	378.6			$	0.4			$	4.2			$	383.2

			2005				2004				2003
			(Millions)
Revenues and sales:
	Total business segments		$	3,031.6			$	3,040.1			$	3,121.3
	Less: intercompany eliminations(1)			(108.1	)			(106.6	)			(118.0	)
	Total revenues and sales		$	2,923.5			$	2,933.5			$	3,003.3
Income before income taxes:
	Total business segment income		$	669.5			$	679.4			$	656.1
	Restructuring and other charges			(35.7	)			(11.8	)			(12.2	)
	Other income, net			11.6				13.7				5.8
	Intercompany interest income (expense)			23.3				(15.2	)			(21.6	)
	Interest expense			(19.1	)			(20.4	)			(27.7	)
	Gain on disposal of assets and other			—				—				23.9
	Total income before income taxes		$	649.6			$	645.7			$	624.3
Assets:
	Total business segments		$	4,934.8			$	5,082.5			$	5,289.7
	Less: elimination of intercompany receivables			(5.1	)			(3.3	)			(12.8	)
	Total assets		$	4,929.7			$	5,079.2			$	5,276.9

(1)	See “Transactions with Certain Affiliates” in Note 1 for a discussion of intercompany revenues and sales not eliminated in preparing the combined financial statements.

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13.	Pending Spin-Off of Company and Merger with Valor Communications Group, Inc.:

			2005
			(Unaudited)
			(Millions)
Net income as reported			$	374.3
	Pro forma interest expense, net of related tax effects			(107.4	)
Pro forma net income			$	205.7

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						Page
ARTICLE I				Definitions			A-1-6
ARTICLE II				The Merger			A-1-15
	2	.1		The Merger			A-1-15
	2	.2		Closing			A-1-15
	2	.3		Effective Time			A-1-15
	2	.4		Effects of the Merger			A-1-15
	2	.5		Certificate of Incorporation and Bylaws of the Surviving Corporation			A-1-16
	2	.6		Directors and Officers of the Surviving Corporation			A-1-16
	2	.7		Stockholders Meeting			A-1-16
	2	.8		Potential Restructuring of Transactions			A-1-16
ARTICLE III				Conversion of Shares; Exchange of Certificates			A-1-17
	3	.1		Effect on Capital Stock			A-1-17
	3	.2		Distribution of Per Share Merger Consideration			A-1-17
ARTICLE IV				Related Transactions			A-1-19
	4	.1		Distribution			A-1-19
	4	.2		AT Co./ Spinco Transaction Agreements			A-1-19
	4	.3		Corporate Offices			A-1-19
	4	.4		Directors and Officers of Spinco			A-1-20
	4	.5		Financing Cooperation			A-1-20
ARTICLE V				Representations and Warranties of AT Co.			A-1-21
	5	.1		Organization; Qualification			A-1-21
	5	.2		Corporate Authority; No Violation			A-1-21
	5	.3		Information Supplied			A-1-22
	5	.4		AT Co. Reports and Financial Statements			A-1-22
	5	.5		Brokers or Finders			A-1-23
ARTICLE VI				Representations and Warranties of AT Co. and Spinco			A-1-24
	6	.1		Organization, Qualification			A-1-24
	6	.2		Capital Stock and Other Matters			A-1-24
	6	.3		Corporate Authority; No Violation			A-1-25
	6	.4		Financial Statements			A-1-26
	6	.5		Absence of Certain Changes or Events			A-1-26
	6	.6		Investigations; Litigation			A-1-27
	6	.7		Compliance with Laws; Permits			A-1-27
	6	.8		Proxy Statement/Prospectus; Registration Statement			A-1-27
	6	.9		Information Supplied			A-1-28
	6	.10		Environmental Matters			A-1-28
	6	.11		Tax Matters			A-1-29
	6	.12		Benefit Plans			A-1-30
	6	.13		Labor Matters			A-1-31
	6	.14		Intellectual Property Matters			A-1-31

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	6	.15		Material Contracts			A-1-32
	6	.16		Brokers or Finders			A-1-32
	6	.17		Board and Stockholder Approval			A-1-33
	6	.18		Assets			A-1-33
	6	.19		Spinco Real Property			A-1-33
	6	.20		Communications Regulatory Matters			A-1-34
	6	.21		Spinco Operations			A-1-35
	6	.22		Opinion of Spinco Financial Advisor			A-1-35
	6	.23		Company Common Stock			A-1-35
	6	.24		Affiliate Transactions			A-1-35
ARTICLE VII				Representations and Warranties of the Company			A-1-35
	7	.1		Organization, Qualification			A-1-35
	7	.2		Capital Stock and Other Matters			A-1-36
	7	.3		Corporate Authority; No Violation			A-1-36
	7	.4		Company Reports and Financial Statements			A-1-37
	7	.5		Absence of Certain Changes or Events			A-1-38
	7	.6		Investigations; Litigation			A-1-38
	7	.7		Compliance with Laws; Permits			A-1-39
	7	.8		Proxy Statement/ Prospectus; Registration Statement			A-1-39
	7	.9		Information Supplied			A-1-39
	7	.10		Environmental Matters			A-1-39
	7	.11		Tax Matters			A-1-40
	7	.12		Benefit Plans			A-1-41
	7	.13		Labor Matters			A-1-42
	7	.14		Intellectual Property Matters			A-1-43
	7	.15		Communications Regulatory Matters			A-1-43
	7	.16		Material Contracts			A-1-44
	7	.17		Company Real Property			A-1-45
	7	.18		Opinion of Company Financial Advisors			A-1-45
	7	.19		Brokers or Finders			A-1-45
	7	.20		Takeover Statutes			A-1-45
	7	.21		Certain Board Findings			A-1-46
	7	.22		Vote Required			A-1-46
	7	.23		Affiliate Transactions			A-1-46
ARTICLE VIII				Covenants and Agreements			A-1-46
	8	.1		Conduct of Business by the Company Pending the Merger			A-1-46
	8	.2		Conduct of Business by Spinco and AT Co. Pending the Merger			A-1-49
	8	.3		Tax Matters			A-1-51
	8	.4		Proxy Statement/ Prospectus			A-1-51
	8	.5		Listing			A-1-52
	8	.6		Reasonable Best Efforts; Regulatory Matters			A-1-52
	8	.7		IRS Distribution Ruling; Other IRS Rulings; Tax Opinions			A-1-53
	8	.8		Letter of Spinco’s Accountants			A-1-54

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	8	.9		Letter of the Company’s Accountants			A-1-54
	8	.10		Employee Matters			A-1-54
	8	.11		Access to Information			A-1-55
	8	.12		No Solicitation by the Company			A-1-56
	8	.13		Director and Officer Indemnification; Insurance			A-1-57
	8	.14		Rule 145 Affiliates			A-1-58
	8	.15		Public Announcements			A-1-58
	8	.16		Defense of Litigation			A-1-58
	8	.17		Notification			A-1-58
	8	.18		SEC Reports			A-1-59
	8	.19		Section 16 Matters			A-1-59
	8	.20		Control of Other Party’s Business			A-1-59
	8	.21		Dividend Policy of the Surviving Corporation			A-1-59
	8	.22		Amendment of Company Securityholders Agreement			A-1-59
	8	.23		Disclosure Controls			A-1-59
	8	.24		Corporate Name; Branding			A-1-60
ARTICLE IX				Conditions to the Merger			A-1-60
	9	.1		Conditions to the Obligations of Spinco, AT Co. and the Company to Effect the Merger			A-1-60
	9	.2		Additional Conditions to the Obligations of AT Co. and Spinco			A-1-61
	9	.3		Additional Conditions to the Obligations of the Company			A-1-62
ARTICLE X				Tax Matters			A-1-63
	10	.1		Representations			A-1-63
	10	.2		Restrictions Relating to the Distribution			A-1-63
	10	.3		Cooperation and Other Covenants			A-1-65
	10	.4		Indemnification for Disqualifying Actions			A-1-65
	10	.5		Procedure for Indemnification for Tax Liabilities			A-1-66
	10	.6		Exclusivity of Article X			A-1-67
ARTICLE XI				Termination, Amendment and Waivers			A-1-67
	11	.1		Termination			A-1-67
	11	.2		Effect of Termination			A-1-68
	11	.3		Termination Fee Payable in Certain Circumstances			A-1-69
	11	.4		Amendment			A-1-69
	11	.5		Waivers			A-1-69

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						Page
ARTICLE XII				Miscellaneous			A-1-69
	12	.1		Survival of Representations, Warranties and Agreements; Indemnification			A-1-69
	12	.2		Expenses			A-1-70
	12	.3		Notices			A-1-70
	12	.4		Interpretation			A-1-71
	12	.5		Severability			A-1-71
	12	.6		Assignment; Binding Effect			A-1-71
	12	.7		No Third Party Beneficiaries			A-1-72
	12	.8		Limited Liability			A-1-72
	12	.9		Entire Agreement			A-1-72
	12	.10		Governing Law			A-1-72
	12	.11		Counterparts			A-1-72
	12	.12		Waiver of Jury Trial			A-1-72
	12	.13		Jurisdiction; Enforcement			A-1-72

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	(a) All of the shares of Spinco Common Stock issued and outstanding immediately prior to the Effective Time (other than shares canceled in accordance with Section 3.1(b)) shall be automatically converted into the right to receive an aggregate number of duly authorized, validly issued, fully paid and nonassessable shares of Company Common Stock equal to the product of (x) 5.6667 multiplied by (y) the aggregate number of shares of Company Common Stock issued and outstanding, on a Fully Diluted Basis, immediately prior to the Effective Time (the “Aggregate Merger Consideration”), with each such share of Spinco Common Stock issued and outstanding as of the Effective Time to be converted into the right to receive a number of shares of Company Common Stock equal to (i) the Aggregate Merger Consideration divided by (ii) the aggregate number of shares of Spinco Common Stock issued and outstanding as of immediately prior to the Effective Time (other than shares canceled in accordance with Section 3.1(b)) (the “Per Share Merger Consideration”).
	(b) Each share of Spinco Common Stock held by Spinco as treasury stock and each share of Spinco Common Stock owned by the Company or any wholly owned Subsidiary of the Company or Spinco, in each case immediately prior to the Effective Time, shall be canceled and shall cease to exist and no stock or other consideration shall be issued or delivered in exchange therefor.
	(c) Each share of Spinco Common Stock issued and outstanding immediately prior to the Effective Time, when converted in accordance with this Section 3.1, shall no longer be outstanding and shall automatically be canceled and shall cease to exist. Each holder of a certificate that, immediately prior to the Effective Time, represented outstanding shares of Spinco Common Stock (collectively, the “Certificates”) shall cease to have any rights with respect thereto, except the right to receive, upon the surrender of any such Certificate, the Per Share Merger Consideration.
	(d) Each share of Company Common Stock that is issued and outstanding immediately prior to and at the Effective Time shall remain outstanding following the Effective Time.

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(a) AT Co. has the corporate power and authority to enter into this Agreement and each other Transaction Agreement to which it is a party and to carry out its obligations hereunder and thereunder. The execution, delivery and performance by AT Co. of this Agreement and each other Transaction Agreement to which it is a party and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of AT Co., except for such further action of the Board of Directors of AT Co. required to establish the Record Date and the Distribution Date, and the effectiveness of the declaration of the Distribution by the Board of Directors of AT Co. (which is subject to the satisfaction or, to the extent permitted by applicable Law, waiver of the conditions set forth in the Distribution Agreement). This Agreement has been duly executed and delivered by AT Co. and, assuming the due authorization, execution and delivery by the Company, constitutes a legal, valid and binding agreement of AT Co., enforceable against AT Co. in accordance with its terms (except insofar as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, or by principles governing

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	the availability of equitable remedies). As of the Distribution Date, each other Transaction Agreement to which AT Co. is a party will have been duly executed and delivered by AT Co. and, assuming the due authorization, execution and delivery by the other parties thereto, will constitute a legal, valid and binding agreement of AT Co., enforceable against AT Co. in accordance with its terms (except insofar as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, or by principles governing the availability of equitable remedies).
	(b) Neither the execution and delivery by AT Co. of this Agreement and other Transaction Agreements to which it is a party nor the consummation by AT Co. of the transactions contemplated hereby or thereby or compliance by AT Co. with any of the provisions hereof or thereof will (i) violate or conflict with any provisions of AT Co.’s Certificate of Incorporation or Bylaws; (ii) result in a default (or an event that, with notice or lapse of time or both, would become a default) or give rise to any right of termination by any third party, cancellation, amendment or acceleration of any obligation or the loss of any benefit under, any Contract to which AT Co. or any of its Subsidiaries is a party or by which AT Co. or any of its Subsidiaries is bound or affected; (iii) result in the creation of a Lien, pledge, security interest, claim or other encumbrance on any of the issued and outstanding shares of Spinco Common Stock, capital stock of any Spinco Subsidiary or on any of the Spinco Assets pursuant to any Contract to which AT Co. or any of its Subsidiaries (including Spinco and its Subsidiaries) is a party or by which AT Co. or its Subsidiaries is bound or affected; or (iv) assuming the consents and approvals contemplated by Section 5.2(c) below are obtained, violate or conflict with any order, writ, injunction, decree, Law, ordinance, rule or regulation applicable to AT Co. or any of its Subsidiaries (including Spinco and its Subsidiaries), or any of the properties, business or assets of any of the foregoing, other than, in the case of each of clauses (i) through (iv), any such violation, conflict, default, right, loss or Lien which would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Spinco Business.
	(c) Other than in connection with or in compliance with (i) the provisions of the DGCL, (ii) the Securities Act, (iii) the Exchange Act, (iv) the HSR Act, (v) the Communications Act and applicable rules and regulations thereunder and FCC Rules, (vi) the approvals set forth on Section 5.2(c) of the AT Co. Disclosure Letter, and (vii) the rules and regulations of the NYSE (collectively, the “AT Co. Approvals”), no authorization, consent or approval of, or filing with, any Governmental Authority is necessary for the consummation by AT Co. of the transactions contemplated by this Agreement and the other Transaction Agreements, except for such authorizations, consents, approvals or filings that, if not obtained or made, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Spinco Business.

	(a) AT Co. has previously made available to the Company complete and correct copies of:

	(i) AT Co.’s Annual Reports on Form 10-K filed with the SEC under the Exchange Act for each of the years ended December 31, 2004, 2003 and 2002;
	(ii) AT Co.’s Quarterly Reports on Form 10-Q filed with the SEC under the Exchange Act for the quarters ended March 31, 2005, June 30, 2005 and September 30, 2005;
	(iii) each definitive proxy statement filed by AT Co. with the SEC under the Exchange Act since January 1, 2003;

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	(iv) all current reports on Form 8-K filed by AT Co. with the SEC under the Exchange Act since January 1, 2003; and
	(v) each other form, report, schedule, registration statement and definitive proxy statement filed by AT Co. or any of its Subsidiaries with the SEC since January 1, 2003 and prior to the date hereof (collectively, and together with the items specified in clauses (i) through (iv) above, the “AT Co. SEC Documents”).

	(b) As of their respective dates, the AT Co. SEC Documents complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and none of such AT Co. SEC Documents when filed contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The audited consolidated financial statements and unaudited consolidated interim financial statements included in the AT Co. SEC Documents (including any related notes and schedules) fairly present in all material respects the financial position of AT Co. and its consolidated Subsidiaries as of the respective dates thereof and the results of operations and changes in cash flows, changes in stockholder’s equity or other information included therein for the periods or as of the respective dates then ended, subject, where appropriate, to normal year-end audit adjustments (none of which AT Co. management expects to be material), in each case in accordance with past practice and GAAP, consistently applied, during the periods involved (except as otherwise stated therein). Since January 1, 2002, AT Co. has timely filed all reports, registration statements and other filings required to be filed with the SEC under the rules and regulations of the SEC. Except as set forth in the AT Co. SEC Documents filed prior to the date hereof or Section 5.4 of the AT Co. Disclosure Letter or liabilities incurred in the ordinary course of business, consistent with past practice, since the Interim Balance Sheet Date, AT Co. and its Subsidiaries have not incurred any liability or obligation that is of a nature that would be required to be disclosed on a consolidated balance sheet of AT Co. and its Subsidiaries or in the notes thereto prepared in conformity with GAAP, other than liabilities or obligations that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Spinco Business.
	(c) AT Co. has designed and maintains a system of internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. AT Co. (A) has designed and maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) to ensure that material information required to be disclosed by AT Co. in the reports that it files or submits under the Exchange Act with respect to the AT Co. Business and the Spinco Business is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to AT Co.’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications of the principal executive officer and principal financial officer of AT Co. required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act and (B) has disclosed, based on its most recent evaluation of such disclosure controls and procedures prior to the date hereof to AT Co.’s auditors and the audit committee of AT Co.’s Board of Directors, (x) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect in any material respect AT Co.’s ability to record, process, summarize and report financial information with respect to the AT Co. Business and the Spinco Business and (y) any fraud, whether or not material, that involves management or other employees who have a significant role in the AT Co.’s internal controls over financial reporting with respect to the AT Co. Business and the Spinco Business. AT Co. has made available to the Company any such disclosure made by management to AT Co.’s auditors and the audit committee of AT Co.’s Board of Directors.

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	6.1     Organization, Qualification.
	(a) Spinco and each of the Spinco Subsidiaries is, or on the date of its incorporation will be a corporation duly organized, validly existing and in good standing under the Laws of its jurisdiction of incorporation, has, or will have, all requisite power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted or as proposed to be conducted, except where the failure to be so organized, existing and in good standing or to have such power and authority would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco, and is, or will be, duly qualified and licensed to do business and is, or will be, in good standing in each jurisdiction in which the ownership or leasing of its property or the conduct of its business requires such qualification, except for jurisdictions in which the failure to be so qualified or to be in good standing would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco. The copies of the Spinco Certificate of Incorporation and Bylaws and the Certificate of Incorporation and Bylaws (or analogous governing documents) of each Spinco Subsidiary that is, or upon completion of the Contribution will be, a Significant Subsidiary of Spinco previously made available to the Company are complete and correct copies of such documents as in full force and effect on the date hereof.
	(b) Section 6.1(b) of the Spinco Disclosure Letter sets forth a list of the Spinco Subsidiaries and their respective jurisdictions of incorporation, together with a designation of those Spinco Subsidiaries that upon completion of the Contribution will constitute Significant Subsidiaries of Spinco.

	(a) As of the date hereof, (i) the authorized capital stock of Spinco consists of 1,000 shares of Spinco Common Stock, (ii) 1,000 shares of Spinco Common Stock are issued and outstanding, and (iii) no shares of Spinco Common Stock are held by Spinco in its treasury. All of the issued and outstanding shares of Spinco Common Stock immediately prior to the Effective Time will be validly issued, fully paid and nonassessable and free of pre-emptive rights.
	(b) No bonds, debentures, notes or other indebtedness of Spinco or any of the Spinco Subsidiaries having the right to vote (or convertible into or exercisable for securities having the right to vote) on any matters on which holders of shares of capital stock of Spinco (including Spinco Common Stock) may vote (“Spinco Voting Debt”) are, or immediately prior to the Effective Time will be, issued or outstanding.
	(c) Except in connection with the Merger or as otherwise provided for in the Transaction Agreements, there are not, and immediately prior to the Effective Time there will not be, any outstanding, securities, options, warrants, convertible securities, calls, rights, commitments, agreements, arrangements, undertakings or Contracts of any kind to which Spinco or any Spinco Subsidiary is a party or by which any of them is bound obligating Spinco or any Spinco Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock, Spinco Voting Debt or other

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	voting securities of Spinco or any Spinco Subsidiary or obligating Spinco or any Spinco Subsidiary to issue, grant, extend, redeem, acquire or enter into any such security, option, warrant, convertible security, call, right, commitment, agreement, arrangement, undertaking or Contract.
	(d) There are not, and immediately prior to the Effective Time there will not be, any stockholder agreements, voting trusts or other Contracts (other than the Distribution Agreement) to which Spinco is a party or by which it is bound relating to voting or transfer of any shares of capital stock of Spinco.

	(a) Spinco has the corporate power and authority to enter into this Agreement and each other Transaction Agreement to which it is a party and to carry out its obligations hereunder and thereunder. The execution, delivery and performance by Spinco of this Agreement and each other Transaction Agreement to which it is a party and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of Spinco, except for such further action by the Board of Directors of Spinco required to effect the reclassification of the Spinco Common Stock, the distribution of the Spinco Exchange Notes to AT Co. and the payment of the Special Dividend, each as contemplated by the Distribution Agreement.
	(b) This Agreement has been duly executed and delivered by Spinco and, assuming the due authorization, execution and delivery by the Company and AT Co., constitutes a legal, valid and binding agreement of Spinco, enforceable against Spinco in accordance with its terms (except insofar as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, or by principles governing the availability of equitable remedies). As of immediately prior to the Effective Time, each other Transaction Agreement to which Spinco is a party will have been duly executed and delivered by Spinco and will, assuming the due authorization, execution and delivery by the other parties thereto, constitute a legal, valid and binding agreement of Spinco, enforceable against Spinco in accordance with its terms (except insofar as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, or by principles governing the availability of equitable remedies).
	(c) Neither the execution and delivery by Spinco of this Agreement and each other Transaction Agreement to which Spinco is a party, nor the consummation by Spinco of the transactions contemplated hereby or thereby, or performance by Spinco of the provisions hereof or thereof will (i) violate or conflict with any provision of Spinco’s Certificate of Incorporation or Bylaws; (ii) result in a default (or an event that, with notice or lapse of time or both, would become a default) or give rise to any right of termination or buy-out by any third party, cancellation, amendment or acceleration of any obligation or the loss of any benefit under any Contract to which Spinco or any Spinco Subsidiary is a party or by which Spinco or any Spinco Subsidiary or any of the Spinco Assets is bound or affected; (iii) result in the creation of a Lien, pledge, security interest, claim or other encumbrance on any of the issued and outstanding shares of Spinco Common Stock or capital stock of any Spinco Subsidiary or on any of the Spinco Assets pursuant to any Contract to which Spinco or any Spinco Subsidiary is a party or by which Spinco or any Spinco Subsidiary or any of the Spinco Assets is bound or affected; or (iv) assuming the consents and approvals contemplated by Section 6.3(d) below are obtained, violate or conflict with any order, writ, injunction, decree, Law, ordinance, rule or regulation applicable to Spinco or any Spinco Subsidiary, or any of the properties, businesses or assets of any of the foregoing, other than, in the case of each of clauses (i) through (iv), any such violation, conflict, default, right, loss or Lien which would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco.
	(d) Other than in connection with or in compliance with (i) the provisions of the DGCL, (ii) the Securities Act, (iii) the Exchange Act, (iv) the HSR Act, (v) the Communications Act and FCC Rules, and (vi) the approvals set forth on Section 6.3(d) of the Spinco Disclosure Letter (collectively, the “Spinco Approvals”), no authorization, consent or approval of, or filing with, any Governmental Authority is necessary for the consummation by Spinco of the transactions contemplated by this Agreement and the other Transaction Agreements to which Spinco is a party, except for such

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	authorizations, consents, approvals or filings that, if not obtained or made, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco.

	(a) AT Co. and Spinco have previously made available to the Company:

	(i) the audited combined balance sheets of Spinco and its Subsidiaries at December 31, 2002, 2003 and 2004, and the related audited combined statements of operations, cash flows and stockholder’s equity for the fiscal years ended December 31, 2002, 2003 and 2004, including the notes thereto (collectively, the “Audited Financial Statements”); and
	(ii) the unaudited interim combined balance sheet at September 30, 2005, and the related unaudited interim combined statements of operations, cash flows and stockholder’s equity for the nine months ended September 30, 2005 (collectively, the “Interim Financial Statements” and, together with the Audited Financial Statements, the “Spinco Financial Statements”).

	(b) AT Co. and Spinco will deliver to the Company promptly upon request any and all other financial other financial statements for Spinco and Spinco Subsidiaries required to be included by Regulation S-X of the Exchange Act in the Registration Statement and the Proxy Statement/ Prospectus.
	(c) The Spinco Financial Statements fairly present in all material respects, and any other financial statements prepared in accordance with Section 6.4(b) will fairly present in all material respects, the financial position of the Spinco Business as of the dates thereof, and the results of operations and changes in cash flows, changes in stockholder’s equity or other information included therein for the periods or as of the dates then ended, in each case except as otherwise noted therein and subject, where appropriate, to normal year-end audit adjustments (none of which Spinco management expects to be material). The Spinco Financial Statements and such other financial statements have been or will be prepared in accordance with GAAP, and on a consistent basis, except as otherwise noted therein.
	(d) As of the date hereof, neither Spinco nor any of the Spinco Subsidiaries is required to file any form, report, registration statement, prospectus or other document with the SEC.
	(e) Except for liabilities incurred in the ordinary course of business, consistent with past practice, since the date of the balance sheet included in the Interim Financial Statements (the “Interim Balance Sheet Date”) or as set forth in the Spinco Financial Statements or the notes thereto, since the Interim Balance Sheet Date, Spinco and the Spinco Subsidiaries have not incurred any liabilities or obligations that are of a nature that would be required to be disclosed on a consolidated balance sheet of Spinco and the Spinco Subsidiaries or in the notes thereto prepared in conformity with GAAP, other than liabilities or obligations that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco.
	(f) At or prior to the Effective Time, Spinco will have (A) designed and be maintaining a system of internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) sufficient to provide reasonable assurances regarding the reliability of financial reporting with respect to the Spinco Business and the preparation of financial statements with respect to the Spinco Business for external purposes in accordance with GAAP, and (B) designed and be maintaining disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) to ensure that material information that AT Co. is required to disclose with respect to the Spinco Business in the reports AT Co. is required to file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to AT Co.’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications of the principal executive officer and principal financial officer of AT Co. required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”).

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	(a) There is no investigation or review pending (or, to the knowledge of Spinco or AT Co., threatened) by any Governmental Authority with respect to Spinco or any of the Spinco Subsidiaries, or with respect to AT Co. or any AT Co. Subsidiary relating to the Spinco Business.
	(b) There are no actions, suits, inquiries, grievances, arbitrations, investigations or proceedings pending (or, to the knowledge of Spinco or AT Co., threatened) against or affecting Spinco or any of the Spinco Subsidiaries or any of their respective properties or otherwise affecting the Spinco Business at law or in equity and there are no orders, judgments or decrees of any Governmental Authority, in each case which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco.

	(a) Spinco and the Spinco Subsidiaries are, or on the Distribution Date will be, and have been since January 1, 2003, in compliance with all, and have received no notice of any violation (as yet unremedied) of any, Laws applicable to Spinco, such Spinco Subsidiaries or any of their respective properties or assets or otherwise affecting the Spinco Business, except where such non-compliance, default or violation has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco. Notwithstanding anything contained in this Section 6.7(a), no representation or warranty shall be deemed to be made in this Section 6.7(a) in respect of environmental, tax, employee benefits, labor or communications Laws, which are the subject of the representations and warranties made in Sections 6.10, 6.11, 6.12, 6.13 and 6.21 of this Agreement, respectively.
	(b) Spinco and the Spinco Subsidiaries are, or on the Distribution Date will be, in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Authority necessary for Spinco and the Spinco Subsidiaries to own, lease and operate the Spinco Assets or to carry on the Spinco Business as it is now conducted, or on the Distribution Date will be conducted (the “Spinco Permits”), except where the failure to have any of the Spinco Permits has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco. All Spinco Permits are in full force and effect, or immediately prior to the Effective Time will be in full force and effect, except where the failure to be in full force and effect has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco.

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	(a) Spinco and each of the Spinco Subsidiaries is, or on the Distribution Date will be, and since January 1, 2003 has been, in compliance with all applicable Environmental Laws and Spinco and the Spinco Subsidiaries possess, or on the Distribution Date will possess, all Spinco Permits that are required under applicable Environmental Laws and are, or on the Distribution Date will be, in compliance with the terms and conditions thereof;
	(b) neither Spinco nor any of the Spinco Subsidiaries has received written notice of, or is the subject of, any actions, causes of action, claims, investigations, demands or notices by any person asserting an obligation on the part of Spinco or the Spinco Subsidiaries to conduct investigations or clean-up activities under Environmental Law or alleging liability under or non-compliance with any Environmental Law (collectively, “Environmental Claims”);
	(c) neither Spinco nor any of the Spinco Subsidiaries is subject to any indemnification obligation with respect to Environmental Laws or Hazardous Materials, including such obligations regarding businesses currently or formerly owned or operated by Spinco or any of the Spinco Subsidiaries or regarding properties formerly owned or leased by Spinco or any of the Spinco Subsidiaries;
	(d) there is no condition on, at, under or related to any property (including any release of a Hazardous Material into the air, soil, surface water, sediment or ground water at, under or migrating to or from such property) including related to property currently owned, leased or used by AT Co., Spinco or any of their respective Subsidiaries or created by AT Co.’s, Spinco’s or any Spinco Subsidiary’s operations that would give rise to liability for Spinco or any of the Spinco Subsidiaries under applicable Environmental Laws, and, to AT Co.’s and Spinco’s knowledge, the foregoing representation is true and correct with regard to property formerly owned, leased or used by AT Co., Spinco or any of their respective Subsidiaries;
	(e) neither AT Co., Spinco nor any of their respective Subsidiaries has any liability with respect to asbestos in any product or within any building or structure;
	(f) AT Co. or Spinco has made available to the Company all material site assessments, environmental compliance audits, and other documents relating to environmental matters and relating to the Spinco Business, or the current or former properties or facilities of Spinco and the Spinco Subsidiaries to the extent such documents are in the possession, custody or control of AT Co., Spinco or any of their Subsidiaries, including, without limitation, such documents relating to (i) the environmental conditions on, under or about the properties or assets currently or formerly owned, leased, operated or used by Spinco, any of the Spinco Subsidiaries or any predecessor in interest thereto and (ii) any Hazardous Materials used, managed, handled, transported, treated, generated, stored, discharged, emitted, or otherwise released by Spinco, any of the Spinco Subsidiaries or any other Person on, under, about or from any of the properties currently or formerly owned or leased by, or otherwise in connection with the use or operation of any of the properties owned or leased, or otherwise in connection with the use or operation of any of the properties and assets of Spinco or any of the Spinco Subsidiaries, or their respective businesses and operations.

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	(g) This Section 6.10 contains the sole and exclusive representations and warranties of AT Co. and Spinco with respect to environmental matters, including matters relating to Environmental Laws and Hazardous Materials.

	(a) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Spinco or the Spinco Business, (i) all Tax Returns relating to AT Co. and its Subsidiaries, including Spinco and the Spinco Subsidiaries, or the Spinco Business required to be filed have been filed, (ii) all such Tax Returns are or will be true and correct in all respects, (iii) all Taxes shown as due and payable on such Tax Returns, and all Taxes (whether or not reflected on such Tax Returns) relating to AT Co. and its Subsidiaries, including Spinco and the Spinco Subsidiaries, in respect of the Spinco Business or otherwise in respect of the Spinco Business required to be paid, have been paid, (iv) all Taxes relating to AT Co. or its Subsidiaries, including Spinco and the Spinco Subsidiaries, in respect of the Spinco Business or otherwise in respect of the Spinco Business for any taxable period (or a portion thereof) beginning on or prior to the Closing Date (which are not yet due and payable) have been properly reserved for in the Spinco Financial Statements and (v) AT Co. and its Subsidiaries, including Spinco and the Spinco Subsidiaries, have duly and timely withheld all Taxes required to be withheld and such withheld Taxes have been either duly and timely paid to the proper Taxing Authority or properly set aside in accounts for such purpose and will be duly and timely paid to the proper Taxing Authority.
	(b) No written agreement or other written document waiving or extending, or having the effect of waiving or extending, the statute of limitations or the period of assessment or collection of any Taxes relating to Spinco, any Spinco Subsidiary or the Spinco Business, and no power of attorney with respect to any such Taxes has been filed or entered into with any Taxing Authority.
	(c) (i) No audits or other administrative proceedings or proceedings before any Taxing Authority are presently pending with regard to any Taxes or Tax Return of Spinco or any Spinco Subsidiary or the Spinco Business, as to which any Taxing Authority has asserted in writing any claim which, if adversely determined, would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco, any Spinco Subsidiary or the Spinco Business, and (ii) no Taxing Authority is now asserting in writing any deficiency or claim for Taxes or any adjustment to Taxes with respect to which Spinco or any Spinco Subsidiary or the Spinco Business, may be liable with respect to income or other material Taxes which has not been fully paid or finally settled.
	(d) Neither Spinco nor any Spinco Subsidiary (i) is a party to or bound by or has any obligation under any Tax separation, sharing or similar agreement or arrangement other than the Tax Sharing Agreement, and the AT Co. and Subsidiaries Tax Sharing Policy currently in effect for taxable periods ending on or after December 31, 1991 (which shall be terminated with respect to Spinco and any Spinco Subsidiary as of the Closing Date), (ii) is or has been a member of any consolidated, combined or unitary group for purposes of filing Tax Returns or paying Taxes (other than a group of which AT Co. is the common parent corporation) or (iii) has entered into a closing agreement pursuant to Section 7121 of the Code, or any predecessor provision or any similar provision of state or local law.
	(e) None of the Spinco Assets is subject to any Tax lien (other than liens for Taxes that are not yet due and payable.
	(f) Section 6.11 of the Spinco Disclosure Letter lists all foreign jurisdictions in which Spinco or any Spinco Subsidiary files a material Tax Return.
	(g) Neither Spinco nor any Spinco Subsidiary has agreed to make or is required to make any adjustment for a taxable period ending after the Effective Time under Section 481(a) of the Code by reason of a change in accounting method or otherwise, except where such adjustments have not had, and could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco or the Spinco Business.

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	(h) Neither Spinco nor any Spinco Subsidiary has constituted either a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock (other than the Distribution) qualifying for tax-free treatment under Section 355 of the Code (i) in the two years prior to the date of this Agreement or (ii) in a distribution that could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in connection with the Merger.
	(i) None of AT Co., Spinco, and their respective Subsidiaries has taken or agreed to take any action that is reasonably likely to (nor is any of them aware of any agreement, plan or other circumstance that would) prevent the Tax-Free Status of the Transactions.
	(j) None of AT Co., Spinco, and any of their Subsidiaries in respect of the Spinco Business has engaged in any listed transaction, or any reportable transaction the principal purpose of which was tax avoidance, within the meaning of Sections 6011, 6111 and 6112 of the Code.

	(a) Section 6.12(a) of the Spinco Disclosure Letter lists each “employee benefit plan” (as defined in Section 3(3) of ERISA), and all other benefit, bonus, incentive, deferred compensation, stock option (or other equity-based), severance, change in control, welfare (including post-retirement medical and life insurance) and fringe benefit plans, whether or not subject to ERISA and whether written or oral, sponsored, maintained or contributed to or required to be contributed to by Spinco or any of the Spinco Subsidiaries, to which Spinco or any of the Spinco Subsidiaries will be a party on the Distribution Date, as provided in the Employee Benefits Agreement, or in which any Person who is currently, has been or, on or prior to the Effective Time, is expected to become an employee of Spinco or any of the Spinco Subsidiaries (a “Spinco Employee”) will be a participant on the Distribution Date, or with respect to which Spinco or any of the Spinco Subsidiaries has any material liability (the “Spinco Benefit Plans”).
	(b) No material liability under Title IV (including Sections 4069 and 4212(c) of ERISA) or Section 302 of ERISA has been or as of the Effective Time will have been incurred by Spinco, any of the Spinco Subsidiaries or any ERISA Affiliate of any of them, and no condition exists that would reasonably be expected to result in Spinco or any of the Spinco Subsidiaries incurring any such liability, other than liability for premiums due the PBGC as of the Distribution Date. The present value of accrued benefits under each Spinco Benefit Plan that is subject to Title IV of ERISA, determined based upon the actuarial assumptions used for funding purposes in the most recent actuarial report prepared by such plan’s actuary with respect to such plan, will not exceed the then current value of the assets of such plan allocable to such accrued benefits.
	(c) No Spinco Benefit Plan is or will be at the Effective Time a “multiemployer plan,” as defined in Section 3(37) of ERISA and (ii) none of Spinco, any of the Spinco Subsidiaries or any ERISA Affiliate of any of them has made or suffered or will as of the Effective Time have made or suffered a “complete withdrawal” or a “partial withdrawal,” as such terms are respectively defined in Section 4203 and 4205 of ERISA, the liability for which has not been satisfied in full.
	(d) Each Spinco Benefit Plan has been or for periods on or prior to the Distribution Date will have been operated and administered in all material respects in accordance with its terms and applicable Law, including ERISA and the Code. All contributions and premium payments required to be made with respect to any Spinco Benefit Plan have now been, or on the Distribution Date will have been, timely made, except as may otherwise be specifically permitted under the terms of the Employee Benefits Agreement. There are no pending or, to the knowledge of Spinco or AT Co., threatened claims by, on behalf of or against any of the Spinco Benefit Plans in effect as of the date hereof or any assets thereof, other than routine benefit claim matters, that, if adversely determined, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco, and no matter is pending (other than routine qualification determination filings, copies of which have been furnished to the Company or will be promptly furnished to the Company when made) before the IRS, the United States Department of Labor or the PBGC with respect to any Spinco Benefit Plan.

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	(e) Subject to the initial qualification determination filings to be made to the Internal Revenue Service (copies of which will be promptly furnished to the Company when made), each Spinco Benefit Plan intended to be “qualified” within the meaning of Section 401(a) of the Code is, or on the Distribution Date will be, so qualified and the trusts maintained thereunder are, or on the Distribution Date will be, exempt from taxation under Section 501(a) of the Code, each trust maintained under any Spinco Benefit Plan intended to satisfy the requirements of Section 501(c)(9) of the Code has, or on the Distribution Date will have, satisfied such requirements and, in either such case, no event has occurred or condition is known to exist that would reasonably be expected to have a material adverse effect on such tax-qualified status for any such Spinco Benefit Plan or any such trust.
	(f) No Spinco Benefit Plan provides, or on the Distribution Date will provide, medical, surgical, hospitalization, death or similar benefits (whether or not insured) for employees or former employees of Spinco or any Spinco Subsidiary or for any other Person for periods extending beyond their retirement or other termination of service, other than (i) coverage mandated by applicable Law, (ii) death benefits under any “pension plan,” or (iii) benefits the full cost of which is borne by the current or former employee (or his beneficiary).
	(g) Except as contemplated by this Agreement and each other Transaction Agreement, no Spinco Benefit Plan or employment arrangement, no similar plan or arrangement sponsored or maintained by AT Co. in which any Spinco Employee is, or on the Distribution Date will be, a participant and no contractual arrangement between Spinco and any third party exists, or on the Distribution Date will exist, that could result in the payment to any current, former or future director, officer, stockholder or employee of Spinco or any of the Spinco Subsidiaries, or of any entity the assets or capital stock of which have been acquired by Spinco or a Spinco Subsidiary, of any money or other property or rights or accelerate or provide any other rights or benefits to any such individual as a result of the consummation of the transactions contemplated by the Transaction Agreements (including the Distribution), whether or not (a) such payment, acceleration or provision would constitute a “parachute payment” (within the meaning of Section 280G of the Code) or (b) some other subsequent action or event would be required to cause such payment, acceleration or provision to be triggered.

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	(a) Except for this Agreement, each other Transaction Agreement, the Spinco Credit Agreement, the Indenture governing the Spinco Notes, the Voting Agreement, the Spinco Benefit Plans and except as filed as an exhibit to any AT Co. SEC Document or as disclosed in Section 6.15 of the Spinco Disclosure Letter, neither AT Co. nor any of its Subsidiaries with respect to the Spinco Business is, and neither Spinco nor any Spinco Subsidiary will be immediately prior to the Effective Time a party to or bound by any “material contract” (as such term is defined in item 601(b)(10) of Regulation S-K of the SEC) (all contracts of the type described in this Section 6.15 being referred to herein as “Spinco Material Contracts”).
	(b) Neither Spinco nor any Spinco Subsidiary nor AT Co. nor any AT Co. Subsidiary is in breach of or default under the terms of any Spinco Material Contract where such breach or default has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco. To the knowledge of Spinco or AT Co. and their respective Subsidiaries, no other party to any Spinco Material Contract is in breach of or in default under the terms of any Spinco Material Contract where such breach or default has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco. Each Spinco Material Contract is a valid and binding obligation of Spinco or any Spinco Subsidiary or AT Co. or any AT Co. Subsidiary which is a party thereto and, to the knowledge of Spinco or AT Co. and their respective Subsidiaries, of each other party thereto, and is in full force and effect, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or hereafter in effect, relating to creditors’ rights generally and (ii) equitable remedies of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

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	(a) After giving effect to the Contribution and the other transactions described in or contemplated by the Distribution Agreement, Spinco, together with the Spinco Subsidiaries, will have, in all material respects, good and valid title (and, with respect to the Owned Real Property and Spinco Leasehold Improvements, good and marketable title) or, in the case of the Leased Real Property, valid leasehold interests in, all of the Spinco Assets, except where the failure to have such good and valid or marketable title, or valid leasehold interest, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco.
	(b) At the Effective Time, the Assets of Spinco and the Spinco Subsidiaries, take together with the services available from AT Co. under the Transition Services Agreement, the Assets subject to the Shared Assets Agreement and the Contracts subject to the Shared Contracts Agreement, will be sufficient for the operation of the Spinco Business in all material respects as currently conducted and as proposed to be conducted at the Effective Time.

	(a) Section 6.19(a) of the Spinco Disclosure Letter sets forth the address and description of all Real Property that is, or following the Contribution will be, Spinco Owned Real Property, the loss of which would be material and adverse to the Spinco Business as a whole. With respect to such Spinco Owned Real Property: (A) except as set forth in Section 6.19(a) of the Spinco Disclosure Letter, Spinco or Spinco Subsidiaries have not leased or otherwise granted to any Person the right to use or occupy such Spinco Owned Real Property or any material portion thereof; and (B) other than the right of the Company pursuant to this Agreement, there are no outstanding options, rights of first offer or rights of first refusal to purchase such Spinco Owned Real Property or any material portion thereof or interest therein.
	(b) Section 6.19(b) of the Spinco Disclosure Letter sets forth the address of all Spinco Leased Real Property, the loss of which would be material and adverse to the Spinco Business as a whole, and a true and complete list of all Spinco Leases for such properties (including all amendments, extensions, renewals, guaranties and other agreements with respect thereto) for each such Spinco Leased Real Property. Spinco has made available to the Company a true and complete copy of each such Spinco Lease document, and in the case of any such Lease that is an oral Lease, a written summary of the material terms of such Lease. Except as set forth in Section 6.19(b) of the Spinco Disclosure Letter, or as would not be reasonably expected to have a Material Adverse Effect on Spinco, with respect to each such Spinco Lease: (i) Spinco or Spinco’s Subsidiaries’ possession and quiet enjoyment of the Spinco Leased Real Property under such Spinco Lease has not been disturbed, and, to Spinco’s knowledge, there

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	are no disputes with respect to such Spinco Lease; (ii) neither Spinco nor Spinco Subsidiaries owe any material brokerage commissions or finder’s fees with respect to such Spinco Lease; (iii) Spinco or Spinco Subsidiaries have not subleased, licensed or otherwise granted any Person the right to use or occupy such Spinco Leased Real Property or any portion thereof; (iv) Spinco or Spinco Subsidiaries have not collaterally assigned or granted any other security interest in such Spinco Lease or any interest therein; and (v) there are no Liens on the estate or interest created by such Spinco Lease other than Permitted Encumbrances.
	(c) Except as would not be reasonably expected to have a Material Adverse Effect on Spinco, the Spinco Leasehold Improvements and all buildings, structures, improvements, fixtures, building systems and equipment, and all components thereof, included in the Spinco Owned Real Property are in good condition and repair and sufficient for the operation of the Spinco Business.

	(a) Spinco and the Spinco Subsidiaries hold, or on the Distribution Date will hold, all approvals, authorizations, certificates and licenses issued by the FCC, state public service or public utility commissions (the “State Regulators”) set forth in Section 6.19(a) of the Spinco Disclosure Letter, and all other material regulatory permits, approvals, licenses, and other authorizations, including but not limited to franchises, ordinances and other agreements granting access to public rights of way, issued or granted to Spinco or any Spinco Subsidiary by a state or federal agency or commission or other federal, state or local or foreign regulatory bodies regulating competition and telecommunications businesses (the “Spinco Licenses”) that are required for the conduct of the Spinco Business, as presently conducted and as proposed to be conducted, except such Spinco Licenses the failure of which to so hold would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco.
	(b) Each Spinco License is, or will be on the Distribution Date, valid and in full force and effect and has not been, or will not have been, suspended, revoked, cancelled or adversely modified, except where the failure to be in full force and effect, or the suspension, revocation, cancellation or modification of which has not had or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco. No Spinco License is subject to (i) any conditions or requirements that have not been imposed generally upon licenses in the same service, unless such conditions or requirements would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco, or (ii) any pending regulatory proceeding (other than those affecting the wireline industry generally) or judicial review before a Governmental Authority, unless such pending regulatory proceedings or judicial review would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco. Neither AT Co. nor Spinco has knowledge of any event, condition or circumstance that would preclude any Spinco License from being renewed in the ordinary course (to the extent that such Spinco License is renewable by its terms), except where the failure to be renewed has not had or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco.
	(c) The licensee of each Spinco License is, or on the Distribution Date will be in compliance with each Spinco License and has fulfilled and performed, or will fulfill or perform, all of its material obligations with respect thereto, including all reports, notifications and applications required by the Communications Act or the rules, regulations, policies, instructions and orders of the FCC (the “FCC Rules”) or similar rules, regulations, policies, instructions and orders of State Regulators and the payment of all regulatory fees, except (i) for exemptions, waivers or similar concessions or allowances and (ii) where such failure to be in compliance, fulfill or perform its obligations or pay such fees or contributions has not had, or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco.
	(d) Spinco or a wholly owned Spinco Subsidiary owns, or on the Distribution Date will own, one hundred percent (100%) of the equity and controls, or on the Distribution Date will control, one hundred percent (100%) of the voting power and decision-making authority of each licensee of the Spinco Licenses, except where the failure to own such equity or control such voting power and decision-making

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	authority of such licensees would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Spinco.

	(a) The Company is a corporation duly organized, validly existing and in good standing under the Laws of Delaware, has all requisite power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted, except where the failure to be so organized, existing and in good standing or to have such power and authority would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company, and is duly qualified and licensed to do business and is in good standing in each jurisdiction in which the ownership or leasing of its property or the conduct of its business requires such qualification, except for jurisdictions in which the failure to be so qualified or to be in good standing would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. The copies of the Company’s Certificate of Incorporation and Bylaws and the Certificate of Incorporation and Bylaws (or analogous governing documents) of any Company Subsidiary that is a Significant Subsidiary of the Company, previously made available to AT Co. and Spinco are complete and correct copies of such documents as in full force and effect on the date hereof.
	(b) Section 7.1(b) of the Company Disclosure Letter sets forth a list of the Company Subsidiaries and their respective jurisdictions of incorporation or organization, together with a designation of those Company Subsidiaries constituting Significant Subsidiaries of the Company.

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	(a) The authorized capital stock of the Company consists of 200,000,000 shares of Company Common Stock and 20,000,000 shares of preferred stock of the Company. At the close of business on December 6, 2005, (i) 71,130,634 shares of Company Common Stock were issued and outstanding, 342,469 shares of Company Common Stock were reserved for issuance pursuant to the Company Stock Plans; (ii) 3,400 shares of Company Common Stock were held by the Company in its treasury or by its Subsidiaries; and (iii) no shares of preferred stock of the Company were issued and outstanding. All of the issued and outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and free of preemptive rights.
	(b) No bonds, debentures, notes or other indebtedness of the Company or any of the Company Subsidiaries having the right to vote (or convertible into or exercisable for securities having the right to vote) on any matters on which holders of shares of capital stock of the Company (including Company Common Stock) may vote (“Company Voting Debt”) are, or at the Distribution Date will be, issued or outstanding.
	(c) Except as set forth in Section 7.2(a) above or as set forth in Section 7.2(c) of the Company Disclosure Letter, there are no outstanding securities, options, warrants, convertible securities, calls, rights, commitments, agreements, arrangements, undertakings or Contracts of any kind to which the Company or any of the Company Subsidiaries is a party or by which any of them is bound obligating the Company or any of the Company Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of Company Common Stock, Company Voting Debt or other voting securities of the Company or any of the Company Subsidiaries or obligating the Company or any of the Company Subsidiaries to issue, grant, extend, redeem, acquire or enter into any such security, option, warrant, convertible security, call, right, commitment, agreement, arrangement, undertaking or Contract.
	(d) Except for that certain Securityholders Agreement, dated February 14, 2005, by and among the Company and certain of its stockholders, there are no stockholder agreements, voting trusts or other Contracts to which the Company is a party or by which it is bound relating to voting or transfer of any shares of capital stock of the Company.

	(a) The Company has the corporate power and authority to enter into this Agreement, and subject to obtaining the Requisite Approval, to carry out its obligations hereunder. The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of the Company, subject to obtaining the Requisite Approval. This Agreement has been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery by AT Co., and Spinco, constitutes a legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms (except insofar as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, or by principles governing the availability of equitable remedies).
	(b) Neither the execution and delivery by the Company of this Agreement nor the consummation by the Company of the transactions contemplated hereby or compliance by the Company with any of the provisions hereof will (i) violate or conflict with any provisions of the Company’s Certificate of Incorporation or Bylaws; (ii) result in a default (or an event that, with notice or lapse of time or both, would become a default) or give rise to any right of termination by any third party, cancellation, amendment or acceleration of any obligation or the loss of any benefit under, any Contract to which the Company or any of the Company Subsidiaries is a party or by which the Company or any of the Company Subsidiaries is bound or affected; (iii) result in the creation of a Lien, pledge, security interest, claim or other encumbrance on any of the issued and outstanding shares of Company Common Stock or on any of the assets of the Company or any of the Company Subsidiaries pursuant to any Contract to which the Company or any of the Company Subsidiaries is a party or by which the Company or the Company

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	Subsidiaries is bound or affected; or (iv) assuming the consents and approvals contemplated by Section 7.3(c) below are obtained, violate or conflict with any order, writ, injunction, decree, Law, ordinance, rule or regulation applicable to the Company or any of the Company Subsidiaries, or any of the properties, business or assets of any of the foregoing, other than, in the case of each of clauses (i) through (iv), any such violation, conflict, default, right, loss or Lien which would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.
	(c) Other than in connection with or in compliance with (i) the provisions of the DGCL, (ii) the Securities Act, (iii) the Exchange Act, (iv) the HSR Act, (v) the Communications Act and applicable rules and regulations thereunder, (vi) the approvals set forth on Section 7.3(c) of the Company Disclosure Letter; (vii) the rules and regulations of the NYSE, and (viii) the Requisite Approval (collectively, the “Company Approvals”), no authorization, consent or approval of, or filing with any Governmental Authority is necessary for the consummation by the Company of the transactions contemplated by this Agreement, except for such authorizations, consents, approvals or filings that, if not obtained or made, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.

	(a) The Company has previously made available to Spinco complete and correct copies of:

	(i) Company’s Annual Reports on Form 10-K filed with the SEC under the Exchange Act for the years ended December 31, 2004, and the Company’s audited consolidated balance sheet at December 31, 2003 and 2002, and the related audited consolidated statements of operations, cash flows and stockholder’s equity for the fiscal years ended December 31, 2003 and 2002 (the “Company Pre-IPO Financial Statements”);
	(ii) Company’s Quarterly Reports on Form 10-Q filed with the SEC under the Exchange Act for the quarters ended March 31, 2005, June 30, 2005 and September 30, 2005;
	(iii) each definitive proxy statement filed by the Company with the SEC under the Exchange Act prior to the date hereof;
	(iv) all current reports on Form 8-K filed by the Company with the SEC under the Exchange Act prior to the date hereof; and
	(v) each other form, report, schedule, registration statement and definitive proxy statement filed by the Company or any of its Subsidiaries with the SEC prior to the date hereof (collectively, and together with the items specified in clauses (i) through (iv) above, the “Company SEC Documents”).

(b) As of their respective dates, the Company SEC Documents complied in all material respects, and each other form, report, schedule, registration statement and definitive proxy statement filed by the Company or any of its Subsidiaries after the date hereof and prior to the Effective Time (the “Additional Company SEC Documents”) will comply in all material respects, with the requirements of the Securities Act or the Exchange Act, as the case may be, and none of such Company SEC Documents when filed contained, or will contain, an untrue statement of a material fact or omitted, or will omit, to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The audited consolidated financial statements and unaudited consolidated interim financial statements included in the Company SEC Documents and the Additional Company SEC Documents and the Company Pre-IPO Financial Statements fairly present in all material respects, or will fairly present in all material respects, the financial position of the Company and its consolidated Subsidiaries as of the respective dates thereof and the results of operations and changes in cash flows, changes in stockholder’s equity or other information included therein for the periods or as of the respective dates then ended, subject, where appropriate, to normal year-end audit adjustments (none of which Company management expects to be material), in each case in accordance with past practice and GAAP, consistently applied, during the periods involved

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	(except as otherwise stated therein). Since its initial public offering in February 2005, the Company has timely filed all reports, registration statements and other filings required to be filed with the SEC under the rules and regulations of the SEC. Except as set forth in the Company SEC Documents filed prior to the date hereof or as set forth in Section 7.4 of the Company Disclosure Letter or liabilities incurred in the ordinary course of business, consistent with past practice, since the Interim Balance Sheet Date, the Company and its Subsidiaries have not incurred any liability or obligation that is of a nature that would be required to be disclosed on a consolidated balance sheet of the Company and its Subsidiaries or in the footnotes thereto prepared in conformity with GAAP, other than liabilities or obligations that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.
	(c) The Company and the Company Subsidiaries have designed and maintain a system of internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The Company (A) has designed and maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) to ensure that material information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications of the principal executive officer and principal financial officer of the Company required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act and (B) has disclosed, based on its most recent evaluation of such disclosure controls and procedures prior to the date hereof to the Company’s auditors and the audit committee of the Company’s Board of Directors, (x) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect in any material respect the Company’s ability to record, process, summarize and report financial information with respect to the Company and (y) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting. The Company has made available to AT Co. and Spinco any such disclosure made by management to the Company’s auditors and the audit committee of the Company’s Board of Directors.

	(a) There is no investigation or review pending (or, to the knowledge of the Company, threatened) by any Governmental Authority with respect to the Company or any of the Company Subsidiaries.
	(b) There are no actions, suits, inquiries, grievances, arbitrations, investigations or proceedings pending (or, to the knowledge of the Company, threatened) against or affecting the Company or any of the Company Subsidiaries or any of their respective properties at law or in equity before and there are no orders, judgments or decrees of or before any Governmental Authority, in each case which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.

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	(a) The Company and the Company Subsidiaries are, and since January 1, 2003 have been, in compliance with all, and have received no notice of any violation (as yet unremedied) of any, Laws, applicable to the Company, such Company Subsidiaries or any of their respective properties or assets, except where such non-compliance, default or violation has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. Notwithstanding anything contained in this Section 7.7(a), no representation or warranty shall be deemed to be made in this Section 7.7(a) in respect of environmental, tax, employee benefits, labor or communications Laws matters, which are the subject of the representations and warranties made in Sections 7.10, 7.11, 7.12, 7.13 and 7.15 of this Agreement, respectively.
	(b) The Company and the Company Subsidiaries are in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Authority necessary for the Company and the Company Subsidiaries to own, lease and operate their properties and assets or to carry on their businesses as they are now being conducted (the “Company Permits”), except where the failure to have any of the Company Permits has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. All Company Permits are in full force and effect, except where the failure to be in full force and effect has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.

	(a) The Company and each of the Company Subsidiaries is and since January 1, 2003 has been in compliance with all applicable Environmental Laws and the Company and the Company Subsidiaries possess all Company Permits that are required under applicable Environmental Laws, and are in compliance with the terms and conditions thereof;
	(b) neither the Company nor any of the Company Subsidiaries has received written notice of, or, is the subject of, any Environmental Claims;

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	(c) neither the Company nor any of the Company Subsidiaries is subject to any indemnification obligation with respect to Environmental Laws or Hazardous materials, including such obligations regarding businesses currently or formerly owned or operated by the Company or any of the Company Subsidiaries or regarding properties formerly owned or leased by the Company or any of the Company Subsidiaries;
	(d) there is no condition on, at, under or related to any property (including any release of a Hazardous Material into the air, soil, surface water, sediment or ground water at, under or migrating to or from such property), including related to property currently owned, leased or used by the Company or any of the Company Subsidiaries or created by the Company’s or any Company Subsidiary’s operations that, would give rise to liability for the Company or any of the Company Subsidiaries under applicable Environmental Laws, and, to the Company’s knowledge, the foregoing representation is true and correct with regard to property formerly owned, leased or used by the Company or any of the Company Subsidiaries; and
	(e) neither the Company nor any Company Subsidiary has any liability with respect to asbestos in any product or within any building or structure;
	(f) The Company has made available to AT Co. and Spinco all material site assessments, environmental compliance audits, and other documents relating to environmental matters, and relating to the Company or its current or former properties or facilities to the extent such documents are in the possession, custody or control of the Company or any of the Company Subsidiaries, including without limitation such documents relating to (i) the environmental conditions on, under or about the properties or assets currently or formerly owned, leased, operated or used by the Company, any of the Company Subsidiaries or any predecessor in interest thereto and (ii) any Hazardous Materials used, managed, handled, transported, treated, generated, stored, discharged, emitted, or otherwise released by the Company, any of the Company Subsidiaries or any other Person on, under, about or from any of the properties currently or formerly owned or leased by, or otherwise in connection with the use or operation of any of the properties owned or leased, or otherwise in connection with the use or operation of any of the properties and assets of the Company or any of the Company Subsidiaries, or its businesses and operations.
	(g) This Section 7.10 contains the sole and exclusive representations and warranties of AT Co. and Spinco with respect to environmental matters, including matters relating to Environmental Laws and Hazardous Materials.

	(a) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company, (i) all Tax Returns relating to the Company and the Company Subsidiaries required to be filed have been filed, (ii) all such Tax Returns are true and correct in all respects, (iii) all Taxes shown as due and payable on such Tax Returns, and all Taxes (whether or not reflected on such Tax Returns) relating to the Company or any the Company Subsidiary required to be paid, have been paid, (iv) all Taxes relating to the Company and the Company Subsidiaries for any taxable period (or a portion thereof) beginning on or prior to the Closing Date (which are not yet due and payable) have been properly reserved for in the books and records of the Company, and (v) the Company and the Company Subsidiaries have duly and timely withheld all Taxes required to be withheld and such withheld Taxes have been either duly and timely paid to the proper Taxing Authority or properly set aside in accounts for such purpose and will be duly and timely paid to the proper Taxing Authority.
	(b) No written agreement or other written document waiving or extending, or having the effect of waiving or extending, the statute of limitations or the period of assessment or collection of any Taxes relating to the Company or any Company Subsidiary and no power of attorney with respect to any such Taxes has been filed or entered into with any Taxing Authority.
	(c) No audits or other administrative proceedings or proceedings before any Taxing Authority are presently pending with regard to any Taxes or Tax Return of the Company or any Company Subsidiary,

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	as to which any Taxing Authority has asserted in writing any claim which, if adversely determined, would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company, and no Taxing Authority is now asserting in writing any deficiency or claim for Taxes or any adjustment to Taxes with respect to which the Company or any Company Subsidiary may be liable with respect to income or other material Taxes which has not been fully paid or finally settled.
	(d) Neither the Company nor any Company Subsidiary (i) is a party to or bound by or has any obligation under any Tax separation, sharing or similar agreement or arrangement, (ii) is or has been a member of any consolidated, combined or unitary group for purposes of filing Tax Returns or paying Taxes (other than a group of which the Company is the common parent corporation) or (iii) has entered into a closing agreement pursuant to Section 7121 of the Code, or any predecessor provision or any similar provision of state or local law.
	(e) None of the assets of the Company or any of the Company Subsidiaries is subject to any Tax lien (other than liens for Taxes that are not yet due and payable).
	(f) Section 7.11 of the Company Disclosure Letter lists all foreign jurisdictions in which the Company or any Company Subsidiary files a material Tax Return.
	(g) Neither the Company nor any Company Subsidiary has agreed to make or is required to make any adjustment for a taxable period ending after the Effective Time under Section 481(a) of the Code by reason of a change in accounting method or otherwise, except where such adjustments have not had, and could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.
	(h) Neither the Company nor any Company Subsidiary has constituted either a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code (I) in the two years prior to the date of this Agreement or (II) in a distribution that could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in connection with the Merger.
	(i) Neither the Company nor any of the Company Subsidiaries has taken or agreed to take any action that is reasonably likely to (nor are any of them aware of any agreement, plan or other circumstance that would) prevent the Tax-Free Status of the Transactions.
	(j) Neither the Company nor any Company Subsidiary has engaged in any listed transaction, or any reportable transaction the principal purpose of which was tax avoidance, within the meaning of Sections 6011, 6111 and 6112 of the Code.

	(a) Section 7.12(a) of the Company Disclosure Letter lists each “employee benefit plan” (as defined in Section 3(3) of ERISA), and all other benefit, bonus, incentive, deferred compensation, stock option (or other equity-based), severance, change in control, welfare (including post-retirement medical and life insurance) and fringe benefit plans, whether or not subject to ERISA and whether written or oral, sponsored, maintained or contributed to or required to be contributed to by the Company or any of the Company Subsidiaries, to which the Company or any of the Company Subsidiaries is a party or in which any Person who is currently, has been or, prior to the Effective Time, is expected to become an employee of the Company or any of the Company Subsidiaries (a “Company Employee”) is a participant (the “Company Benefit Plans”), or with respect to which the Company or any of the Company Subsidiaries has or could have any material liability.
	(b) No material liability under Title IV (including Sections 4069 and 4212(c) of ERISA) or Section 302 of ERISA has been incurred by the Company, any of the Company Subsidiaries or any ERISA Affiliate of any of them, and no condition exists that would reasonably be expected to result in the Company, any of the Company Subsidiaries or any ERISA Affiliate of any of them of incurring any such liability, other than liability for premiums due the PBGC. The present value of accrued benefits

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	under each Company Benefit Plan that is subject to Title IV of ERISA, determined based upon the actuarial assumptions used for funding purposes in the most recent actuarial report prepared by such plan’s actuary with respect to such plan, did not exceed, as of its latest valuation date, the then current value of the assets of such plan allocable to such accrued benefits.
	(c) (i) No Company Benefit Plan is a “multiemployer pension plan,” as defined in Section 3(37) of ERISA and (ii) none of the Company, any of the Company Subsidiaries or any ERISA Affiliate of any of them has made or suffered a “complete withdrawal” or a “partial withdrawal,” as such terms are respectively defined in Sections 4203 and 4205 of ERISA, which has not been satisfied in full.
	(d) Each Company Benefit Plan has been operated and administered in all material respects in accordance with its terms and applicable Law, including, ERISA and the Code. All contributions required to be made with respect to any Company Benefit Plan have been timely made, except for outstanding contributions in the ordinary course. There are no pending or, to the knowledge of the Company, threatened claims by, on behalf of or against any of the Company Benefit Plans or any assets thereof, other than routine benefit claim matters, that, if adversely determined would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company and no matter is pending (other than routine qualification determination filings, copies of which have been furnished to the AT Co. and Spinco or will be promptly furnished to the AT Co. and Spinco when made) with respect to any of the Company Benefit Plans before the IRS, the United States Department of Labor or the PBGC.
	(e) Each Company Benefit Plan intended to be “qualified” within the meaning of Section 401(a) of the Code is so qualified and the trusts maintained thereunder are exempt from taxation under Section 501(a) of the Code, each trust maintained under any Company Benefit Plan intended to satisfy the requirements of Section 501(c)(9) of the Code has satisfied such requirements and, in either such case, no event has occurred or condition is known to exist that would reasonably be expected to have a material adverse effect on such tax-qualified status for any such Company Benefit Plan or any such trust.
	(f) No Company Benefit Plan provides medical, surgical, hospitalization, death or similar benefits (whether or not insured) for employees or former employees of Company or any Company Subsidiary for periods extending beyond their retirement or other termination of service, other than (i) coverage mandated by applicable Law, (ii) death benefits under any “pension plan,” or (iii) benefits the full cost of which is borne by the current or former employee (or his beneficiary). The Company has the right, and will have the right after the Effective Time to terminate any Company Benefit Plan or to amend any such Company Benefit Plan to reduce future benefits, (including any Company Benefit Plan that provides post-retirement medical and life insurance benefits) without incurring or otherwise being responsible for any material liability with respect thereto.
	(g) No Company Benefit Plan or employment arrangement, and no contractual arrangements between the Company and any third party, exists that could result in the payment to any current, former or future director, officer, stockholder or employee of the Company or any of the Company Subsidiaries, or of any entity the assets or capital stock of which have been acquired by the Company or a Company Subsidiary, of any money or other property or rights or accelerate or provide any other rights or benefits to any such individual as a result of the consummation of the transactions contemplated by the Transaction Agreements whether or not (a) such payment, acceleration or provision would constitute a “parachute payment” (within the meaning of Section 280G of the Code) or (b) some other subsequent action or event would be required to cause such payment, acceleration or provision to be triggered.

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(a) The Company and the Company Subsidiaries hold all approvals, authorizations, certificates and licenses issued by the FCC and State Regulators set forth in Section 7.15(e) of the Company Disclosure Letter, and all other material regulatory permits, approvals, licenses, and other authorizations, including but not limited to franchises, ordinances and other agreements granting access to public rights of way, issued or granted to the Company or any Company Subsidiary by a state or federal agency or commission or other federal, state or local or foreign regulatory bodies regulating competition and telecommunications businesses (the “Company Licenses”) that are required for the Company and the Company

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	Subsidiaries to conduct its business, as presently conducted and as proposed to be conducted, except such Company Licenses the failure of which to so hold would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.
	(b) Each Company License is valid and in full force and effect and has not been suspended, revoked, cancelled or adversely modified, except where the failure to be in full force and effect, or the suspension, revocation, cancellation or modification of which has not had or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. No Company License is subject to (i) any conditions or requirements that have not been imposed generally upon licenses in the same service, unless such conditions or requirements would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company, or (ii) any pending regulatory proceeding (other than those affecting the wireless industry generally) or judicial review before a Governmental Authority, unless such pending regulatory proceedings or judicial review would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. The Company and the Company Subsidiaries have no knowledge of any event, condition or circumstance that would preclude any Company License from being renewed in the ordinary course (to the extent that such Company License is renewable by its terms), except where the failure to be renewed has not had or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.
	(c) The licensee of each Company License is in compliance with each Company License and has fulfilled and performed all of its material obligations with respect thereto, including all reports, notifications and applications required by the Communications Act or the FCC Rules or similar rules, regulations, policies, instructions and orders of State Regulators, and the payment of all regulatory fees, except (i) for exemptions, waivers or similar concessions or allowances and (ii) where such failure to be in compliance, fulfill or perform its obligations or pay such fees or contributions has not had, or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.
	(d) The Company or a Company Subsidiary owns one hundred percent (100%) of the equity and controls one hundred percent (100%) of the voting power and decision-making authority of each licensee of the Company Licenses, except where the failure to own such equity or control such voting power and decision-making authority of such licensees would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.

	(a) Except for this Agreement, each other Transaction Agreement, the Company Benefit Plans and except as filed as an exhibit to any Company SEC Document or as disclosed in Section 7.16 of the Company Disclosure Letter, as of the date hereof, neither the Company nor any of the Company Subsidiaries is a party to or bound by any “material contract” (as such term is defined in item 601(b)(10) of Regulation S-K of the SEC) (all contracts of the type described in this Section 7.16 being referred to herein as “Company Material Contracts”).
	(b) Neither the Company nor any Company Subsidiary is in breach of or default under the terms of any Company Material Contract where such breach or default has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. To the knowledge of the Company, no other party to any Company Material Contract is in breach of or in default under the terms of any Company Material Contract where such breach or default has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. Each Company Material Contract is a valid and binding obligation of the Company or any Company Subsidiary which is a party thereto and, to the knowledge of the Company, of each other party thereto, and is in full force and effect, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or hereafter in effect, relating to creditors’ rights generally and (ii) equitable remedies of specific performance and injunctive and other

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	forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

	(a) Section 7.17(a) of the Company Disclosure Letter sets forth the address and description of all Company Owned Real Property, the loss of which would be material and adverse to the business of the Company as a whole. With respect to such Company Owned Real Property: (A) except as set forth in Section 7.17(a) of the Company Disclosure Letter or as would not reasonably be expected to have a Material Adverse Effect on the Company, the Company or Company Subsidiaries have not leased or otherwise granted to any Person the right to use or occupy such Company Owned Real Property or any material portion thereof; and (B) other than the right of the Company pursuant to this Agreement, there are no outstanding options, rights of first offer or rights of first refusal to purchase such Company Owned Real Property or any material portion thereof or interest therein.
	(b) Section 7.17(b) of the Company Disclosure Letter sets forth the address of all Company Leased Real Property, the loss of which would be material and adverse to the business of the Company as a whole, and a true and complete list of all Company Leases for such property (including all amendments, extensions, renewals, guaranties and other agreements with respect thereto) for each such Company Leased Real Property. The Company has made available to AT Co. a true and complete copy of each such Company Lease document, and in the case of any such Lease that is an oral Lease, a written summary of the material terms of such Lease. Except as set forth in Section 7.17(b) of the Company Disclosure Letter or as would not reasonably be expected to have a Material Adverse Effect on the Company, with respect to each such Spinco Lease: (i) the Company’s or Company Subsidiaries’ possession and quiet enjoyment of the Company Leased Real Property under such Company Lease has not been disturbed, and to Company’s knowledge, there are no disputes with respect to such Company Lease; (ii) Company or Company Subsidiaries have not subleased, licensed or otherwise granted any Person the right to use or occupy such Company Leased Real Property or any portion thereof; (iii) the Company or Company Subsidiaries have not collaterally assigned or granted any other security interest in such Company Lease or any interest therein; and (iv) there are no Liens on the estate or interest created by such Company Lease other than Permitted Encumbrances.
	(c) Except as would not reasonably be expected to have a Material Adverse Effect on the Company, the Company Leasehold Improvements and all buildings, structures, improvements, fixtures, building systems and equipment, and all components thereof, included in the Company Owned Real Property are in good condition and repair and sufficient for the operation of the Company Business.

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(a) (i) declare or pay any dividends on or make other distributions in respect of any shares of its capital stock or partnership interests (whether in cash, securities or property), except for the declaration and payment of cash dividends or distributions paid on or with respect to a class of capital stock all of which shares of capital stock, as the case may be, of the applicable corporation are owned directly or indirectly by the Company and the payment of regular quarterly dividends each in an amount not to exceed $0.36 per share at times consistent with the past dividend payment practices of the Company (including a final partial regular quarterly dividend to be declared and paid to pre-Closing Company stockholders, pro rated for the number of days elapsed between (x) the beginning of the quarterly period

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	in which the Effective Time occurs and (y) the day immediately preceding the Effective Time); (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its capital stock; or (iii) redeem, repurchase or otherwise acquire, or permit any Subsidiary to redeem, repurchase or otherwise acquire, any shares of its capital stock (including any securities convertible or exchangeable into such capital stock), except as required by the terms of the securities outstanding on the date hereof or as required by the terms of a Company Benefit Plan;
	(b) issue, deliver or sell, or authorize any shares of its capital stock of any class, any Company Voting Debt or any securities convertible into, or any rights, warrants or options to acquire, any such shares, Company Voting Debt or convertible securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of stock options that are outstanding on the date hereof pursuant to the Company Benefit Plans; and (ii) issuances by a wholly owned Subsidiary of the Company of its capital stock to such Subsidiary’s parent or another wholly owned Subsidiary of the Company;
	(c) amend its Certificate of Incorporation or Bylaws (or other similar organizational documents) in any manner that would prevent or materially impair or delay the consummation of the transactions contemplated by this Agreement;
	(d) acquire or agree to acquire by merger or consolidation, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, limited liability entity, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any material assets, (excluding the acquisition of assets used in the operations of the business of the Company and its Subsidiaries in the ordinary course consistent with past practice, which assets do not constitute a business unit, division or all or substantially all of the assets of the transferor);
	(e) except in the ordinary course of business, consistent with past practice, sell, lease, license or otherwise encumber or subject to any Lien or otherwise dispose of, or agree to sell, lease, license or otherwise encumber or subject to any Lien or otherwise dispose of, any of its assets (including capital stock of Subsidiaries of the Company but excluding inventory and obsolete equipment, in each case, in the ordinary course of business consistent with past practice).
	(f) except in the ordinary course of business, consistent with past practice, incur any indebtedness for borrowed money or guarantee or otherwise become contingently liable for any such indebtedness or issue or sell any debt securities or warrants or rights to acquire any debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others or enter into any material lease (whether such lease is an operating or capital lease) or otherwise incur any material obligation or liability (absolute or contingent) other than (i) the incurrence of additional indebtedness under the Company Credit Agreement in an amount not to exceed $5,000,000, (ii) pursuant to any customer Contract or vendor Contract entered into in the ordinary course of business consistent with past practice, and (iii) in connection with equipment leasing in the ordinary course of business consistent with past practice;
	(g) except in the ordinary course of business, consistent with past practice, incur or commit to any individual capital expenditure or any obligation or liability in connection with any capital expenditure in excess of $2,000,000 or incur or commit to aggregate capital expenditures or obligations or liabilities in connection with any capital expenditure in excess of $5,000,000, in each case, other than capital expenditures or obligations or liabilities in connection therewith to repair or replace facilities destroyed or damaged due to casualty or accident (whether or not covered by insurance), or as contemplated by the Company’s 2005 or 2006 capital expenditure budget, copies of which have been previously provided to AT Co. and Spinco;
	(h) except to the extent provided in subsection (h) of Section 8.1 of the Company Disclosure Letter, (i) other than in the ordinary course of business, consistent with past practice, grant any material increases in the compensation of any of its directors, officers or employees, except in the ordinary course of business consistent with past practice; (ii) pay or agree to pay to any director, officer or employee,

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	whether past or present, any pension, retirement allowance or other employee benefit not required or contemplated by any of the existing benefit, severance, termination, pension or employment plans, Contracts or arrangements as in effect on the date hereof; (iii) other than in the ordinary course of business consistent with past practice, enter into any new, or materially amend any existing, employment or severance or termination, Contract with any director, officer or employee; (iv) accelerate the vesting of, or the lapsing of restrictions with respect to, any stock options or other stock-based compensation; or (v) become obligated under any new pension plan, welfare plan, multiemployer plan, employee benefit plan, severance plan, benefit arrangement or similar plan or arrangement that was not in existence on the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of materially enhancing any benefits thereunder;
	(i) establish, adopt, enter into, terminate or amend any collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers, employees or any of their beneficiaries, except, in each case, as would not result in a material increase in the cost of maintaining such collective bargaining agreement, plan, trust, fund, policy or arrangement;
	(j) authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution of the Company or any of the Company Subsidiaries;
	(k) make any material change in its methods of accounting in effect at the Interim Balance Sheet Date or change its fiscal year;
	(l) enter into or amend any agreement or arrangement with any Affiliate of the Company or any such Company Subsidiary, other than with wholly owned Company Subsidiaries, on terms less favorable to the Company or such Company Subsidiary, as the case may be, than could be reasonably expected to have been obtained with an unaffiliated third party on an arm’s-length basis;
	(m) except in the ordinary course of business, consistent with past practice, modify, amend, terminate, renew or fail to use reasonable best efforts to renew any Material Contract to which the Company or any of the Company Subsidiaries is a party or waive, release or assign any material rights or claims thereunder or enter into any Material Contract not in the ordinary course of business consistent with past practice and not terminable by the Company or the Company Subsidiary party thereto without penalty on ninety (90) days’ or less notice;
	(n) except as would not be expected to materially and adversely affect the Company or any of its Affiliates or the Surviving Corporation on a going-forward basis after the Effective Time, (i) make or rescind any material express or deemed election relating to Taxes, including elections for any and all joint ventures, partnerships, limited liability companies or other investments where the Company has the capacity to make such binding election, (ii) settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, (iii) amend any material Tax Returns or (iv) change in any material respect any of its methods of reporting income or deductions for federal income tax purposes from those expected to be employed in the preparation of its federal income tax return for the taxable year ending December 31, 2005 (unless such change is required by Law); provided, however, that the Company may make or rescind any such election, settle or compromise any such claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy, change any such method of reporting or amend any such Tax Return without AT Co.’s and Spinco’s prior written consent if the amount of Tax liabilities relating to such action does not exceed $2,000,000; and further provided that the Company may make elections under Section 754 of the Code and under IRS Notice 2003-65 in respect of its Subsidiaries;
	(o) except in the ordinary course of business, consistent with past practice, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction (which includes the payment of final and unappealable judgments) or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company’s Annual Report on Form 10-K for the fiscal year ended

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	December 31, 2004, or incurred in the ordinary course of business since the date of such financial statements;
	(p) subject to the terms and conditions of this Agreement, intentionally take or agree or commit to take any action that would result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect, or in any of the conditions set forth in Article IX not being satisfied at the Effective Time; or
	(q) agree or commit to do any of the foregoing actions.

	(a) (i) declare or pay any dividends on or make other distributions in respect of any shares of its capital stock or partnership interests (whether in cash, securities or property), except for the declaration and payment of cash dividends or distributions paid on or with respect to a class of capital stock or partnership interests all of which shares of capital stock or partnership interests, as the case may be, of the applicable corporation or partnership are owned directly or indirectly by AT Co. or Spinco or as contemplated by the Distribution Agreement or required in connection with the Contribution; (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its capital stock, except as contemplated by the Distribution Agreement; or (iii) redeem, repurchase or otherwise acquire, or permit any Subsidiary to redeem, repurchase or otherwise acquire, any shares of its capital stock (including any securities convertible or exchangeable into such capital stock), except as required by the terms of the securities of AT Co. outstanding on the date hereof or as required by any Spinco Benefit Plan.
	(b) issue, deliver or sell, or authorize any shares of Spinco’s capital stock or capital stock of any Spinco Subsidiary of any class, any Spinco Voting Debt or any securities convertible into, or any rights, warrants or options to acquire, any such shares, Spinco Voting Debt or convertible securities including additional options or other equity-based awards that could be converted into any option to acquire Spinco Common Stock pursuant to the Employee Benefits Agreement, other than (i) pursuant to this Agreement, pursuant to the Distribution Agreement and (ii) issuances by a wholly owned Subsidiary of Spinco of its capital stock to such Subsidiary’s parent or another wholly owned Subsidiary of Spinco;
	(c) acquire or agree to acquire by merger or consolidation, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, limited liability entity, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any material assets (excluding the acquisition of assets used in the operations of the business of Spinco and its Subsidiaries in the ordinary course

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	consistent with past practice, which assets do not constitute a business unit, division or all or substantially all of the assets of the transferor);
	(d) except in the ordinary course of business, consistent with past practice, sell, lease, license or otherwise encumber or subject to any Lien or otherwise dispose of, or agree to sell, lease, license or otherwise encumber or subject to any Lien or otherwise dispose of, any of its assets (including capital stock of Spinco Subsidiaries but excluding inventory and obsolete equipment, in each case, in the ordinary course of business consistent with past practice);
	(e) incur any indebtedness for borrowed money or guarantee or otherwise become contingently liable for any such indebtedness or issue or sell any debt securities or warrants or rights to acquire any debt securities of Spinco or any of its Subsidiaries or guarantee any debt securities of others or enter into any material lease (whether such lease is an operating or capital lease) or otherwise incur any material obligation or liability (absolute or contingent), other than (i) the incurrence of additional indebtedness under the Spinco Credit Agreement or other sources to fund ordinary course capital requirements of Spinco and the Spinco Subsidiaries, (ii) pursuant to any customer Contract or vendor Contract entered into in the ordinary course of business consistent with past practice, and (iii) in connection with equipment leasing in the ordinary course of business, consistent with past practice;
	(f) except in the ordinary course of business, consistent with past practice, incur or commit to any individual capital expenditure or any obligation or liability in connection with any capital expenditure, or incur or commit to aggregate capital expenditures or obligations or liabilities in connection with any capital expenditure, in each case, other than capital expenditures or obligations or liabilities in connection therewith to repair or replace facilities destroyed or damaged due to casualty or accident (whether or not covered by insurance), or as contemplated by the 2005 or 2006 capital expenditure budget of AT Co. or Spinco, copies of which have been previously provided to the Company;
	(g) authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution of Spinco or any of its Subsidiaries;
	(h) make any material change in AT Co.’s methods of accounting with respect to the Spinco Business in effect at the Interim Balance Sheet Date;
	(i) except as would not be expected to materially and adversely affect Spinco or any of its Subsidiaries or the Spinco Business, or the Surviving Corporation on a going-forward basis after the Effective Time, (i) make or rescind any material express or deemed election relating to Taxes of Spinco or any of its Subsidiaries or the Spinco Business, including elections for any and all joint ventures, partnerships, limited liability companies or other investments where AT Co. or Spinco has the capacity to make such binding election (other than any election necessary in order to obtain the IRS Contribution Ruling, the IRS Distribution Ruling, the IRS Debt Exchange Ruling, the IRS Special Dividend Ruling and/or the Distribution Tax Opinion), (ii) settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes of Spinco or any of its Subsidiaries or the Spinco Business, (iii) amend any material Tax Returns of Spinco or any of its Subsidiaries or relating to the Spinco Business or (iv) change in any material respect any method of reporting income or deductions of Spinco or any of its Subsidiaries or the Spinco Business for federal income tax purposes from those expected to be employed in the preparation of its federal income tax return for the taxable year ending December 31, 2005 (unless such change is required by Law), provided, however, that Spinco may make or rescind any such election, settle or compromise any such claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy, change any such method of reporting or amend any such Tax Return without the Company’s prior written consent if the amount of Tax liabilities relating to such action does not exceed $2,000,000;
	(j) except in the ordinary course of business, consistent with past practice, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business, consistent with past practice (which includes the payment of final and unappealable judgments) or in

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	accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the Interim Financial Statements (or the notes thereto) of Spinco included in the Spinco Financial Statements, or incurred in the ordinary course of business since the date of such financial statements;
	(k) subject to the terms and conditions of this Agreement, intentionally take or agree or commit to take any action that would result in any of its representations and warranties set forth in this Agreement or the other Transaction Agreements being or becoming untrue in any material respect, or in any of the conditions set forth in Article IX not being satisfied at the Effective Time; or
	(l) agree to commit to take any of the foregoing actions.

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	(a) Each of the Contribution, the Distribution and the Debt Exchange shall have been consummated, in each case, in accordance with the Distribution Agreement, the IRS Contribution Ruling, the IRS Distribution Ruling, the IRS Debt Exchange Ruling, the IRS Special Dividend Ruling and the Distribution Tax Opinion; provided that this Section 9.1(a) shall not be a condition to the consummation of the Merger by any party whose failure to comply with its obligations and/or covenants set forth in this Agreement or the Distribution Agreement gives rise to the failure of the Contribution, the Distribution or the Debt Exchange to have been consummated.
	(b) Any applicable waiting period under the HSR Act shall have expired or been terminated; and the other Company Approvals, AT Co. Approvals and Spinco Approvals set forth on Schedule 9.1(b) hereto shall have been obtained.
	(c) Unless waived in writing by the Company, AT Co., and Spinco, all Telecommunications Regulatory Consents other than any Telecommunications Regulatory Consents, the failure of which to be obtained would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company, AT Co. or Spinco (i) shall have been granted without the imposition of any condition that Spinco or the Company would not be required to agree to pursuant to Section 8.6, and (ii) all such Telecommunications Regulatory Consents shall be in full force and effect.
	(d) The Registration Statement shall have become effective in accordance with the Securities Act and shall not be the subject of any stop order or proceedings seeking a stop order; all necessary permits and authorizations under state securities or “blue sky” laws, the Securities Act and the Exchange Act relating to the issuance and trading of shares of Company Common Stock to be issued pursuant to the Merger shall have been obtained and shall be in effect; and such shares of Company Common Stock and such other shares required to be reserved for issuance pursuant to the Merger shall have been Approved for Listing.
	(e) The Requisite Approval shall have been obtained, in accordance with applicable Law and the rules and regulations of the NYSE.
	(f) No court of competent jurisdiction or other Governmental Authority shall have issued an Order that is still in effect restraining, enjoining or prohibiting the Contribution, the Distribution or the Merger.
	(g) No action shall have been taken, and no statute, rule, regulation or executive order shall have been enacted, entered, promulgated or enforced by any Governmental Authority with respect to the

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	Contribution, the Distribution and the Merger or the other transactions contemplated hereby or by the Distribution Agreement that, individually or in the aggregate, would (i) restrain, enjoin or prohibit the consummation of the Contribution, the Distribution or the Merger or the other transactions contemplated hereby or by the Distribution Agreement or (ii) impose any restrictions or requirements thereon or on AT Co., Spinco or the Company with respect thereto that would reasonably be expected to have a Material Adverse Effect on AT Co. or the Surviving Corporation following the Merger (collectively, a “Restraint”), and no Governmental Authority shall have instituted any proceeding seeking any such Restraint.
	(h) Spinco shall have consummated the Spinco Financing (with respect to the Spinco Credit Agreement and, if applicable, the bridge financing for the Spinco Notes, substantially on the terms set forth in the Senior Debt Commitment Letter or such other terms as are more favorable in the aggregate or not less favorable in the aggregate) and Spinco shall have received the proceeds therefrom in an amount sufficient to pay the Special Dividend and consummate the other transactions contemplated hereby and by the Distribution Agreement.
	(i) AT Co. and Spinco (and, to the extent applicable, the Company) shall have received the IRS Contribution Ruling, the IRS Distribution Ruling, the IRS Debt Exchange Ruling, the IRS Special Dividend Ruling, the IRS 357(c) Ruling and the Distribution Tax Opinion, each in form and substance reasonably satisfactory to AT Co., Spinco and the Company, and such rulings shall continue to be valid and in full force and effect.
	(j) The Company shall have received a Merger Tax Opinion from Company Tax Counsel, in form and substance reasonably satisfactory to the Company, and AT Co. and Spinco shall have received a Merger Tax Opinion from AT Co. Tax Counsel, in form and substance reasonably satisfactory to AT Co. and Spinco.
	(k) The Boards of Directors of AT Co. and Spinco shall have received customary “solvency” and “surplus” opinions of a nationally recognized investment banking or appraisal firm in form and substance reasonably satisfactory to such Boards and, to the extent relating to Spinco, reasonably satisfactory to the Company (such opinions to be dated as of the date the Board of Directors of AT Co. declares the Distribution and the Distribution Date, the date on which the Board of Directors of Spinco declares the Special Dividend, the distribution of the Spinco Exchange Notes to AT Co. for purposes of effecting the Debt Exchange and, if applicable, a dividend payable to AT Co. in shares of Spinco Common Stock pursuant to Section 3.2 of the Distribution Agreement, and the date on which each such dividend or distribution is paid).

	(a) The Company shall have performed in all material respects all obligations and complied in all material respects with all covenants required by this Agreement to be performed or complied with by it prior to the Effective Time.
	(b) Each of the representations and warranties of the Company (i) set forth in Article VII (other than Sections 7.2(a), 7.3(a) and 7.5) of this Agreement shall be true and correct as of the date of this Agreement and as of the Closing Date as though such representations and warranties were made on and as of such date, except for representations and warranties that speak as of an earlier date or period which shall be true and correct as of such date or period; provided, however, that for purposes of this clause, such representations and warranties shall be deemed to be true and correct unless the failure or failures of all such representations and warranties to be so true and correct, without giving effect to any qualification as to materiality or Material Adverse Effect set forth in such representations or warranties, would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company and (ii) set forth in Sections 7.2(a), 7.3(a) and 7.5 of this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on

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	and as of the Closing Date, except for representations and warranties that speak as of an earlier date or period which shall be true and correct as of such date or period.
	(c) The Company shall have delivered to AT Co. a certificate, dated as of the Effective Time, of a senior officer of the Company certifying the satisfaction by the Company of the conditions set forth in subsection (a) and (b) of this Section 9.2.
	(d) Except as disclosed in the Company Disclosure Letter or as expressly contemplated by this Agreement, since the Interim Balance Sheet Date, there shall have been no event, occurrence, development or state of circumstances or facts that has had, individually or in the aggregate, a Material Adverse Effect on the Company.
	(e) The Company, each of the WCAS Persons, the Vestar Persons and, if required, each of the other stockholders party thereto shall have delivered evidence, in form and substance reasonably satisfactory to AT Co. and Spinco, demonstrating that the Company Securityholders Agreement has been amended, effective as of the Effective Time, without any cost or liability to the Company, such that from and after the Effective Time, the Company Securityholders Agreement shall have substantially the terms set forth on Exhibit G hereto.

	(a) Spinco and AT Co. shall have performed in all material respects and complied in all material respects with all covenants required by this Agreement to be performed or complied with at or prior to the Effective Time.
	(b) Each of the representations and warranties of AT Co. and Spinco (i) set forth in Article V and VI (other than Sections 5.2(a), 6.3(a), 6.3(a) and 6.5) of this Agreement shall be true and correct as of the date of this Agreement and as of the Closing Date as though such representations and warranties were made on and as of such date, except for representations and warranties that speak as of an earlier date or period which shall be true and correct as of such date or period; provided, however, that for purposes of this clause, such representations and warranties shall be deemed to be true and correct unless the failure or failures of all such representations and warranties to be so true and correct, without giving effect to any qualification as to materiality or Material Adverse Effect set forth in such representations or warranties, would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on AT Co. or Spinco and (ii) set forth in Sections 5.2(a), 6.2(a), 6.3(a) and 6.5 of this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date, except for representations and warranties that speak as of an earlier date or period which shall be true and correct as of such date or period.
	(c) AT Co. and Spinco shall have delivered to the Company a certificate, dated as of the Effective Time, of a senior officer of each of AT Co. and Spinco certifying the satisfaction of the conditions set forth in subsection (a) and (b) of this Section 9.3.
	(d) Spinco and AT Co. shall have entered into the Tax Sharing Agreement, the Employee Benefits Agreement, the Shared Assets Agreement, the Shared Contracts Agreement and the Transition Services Agreement and each such agreement shall be in full force and effect.
	(e) Except as disclosed in the Spinco Disclosure Letter or as expressly contemplated by this Agreement, since the Interim Balance Sheet Date, there shall have been no event, occurrence, development or state of circumstances or facts that has or would have, individually or in the aggregate, a Material Adverse Effect on Spinco.
	(f) Spinco shall have delivered to the Company an affidavit, dated as of the Closing Date, in form and substance required under the Treasury Regulations issued pursuant to Section 1445(b) of the Code.

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	(i) the Surviving Corporation may issue additional shares of common stock of the Surviving Corporation to a person in a transaction to which Section 83 or Section 421(a) or (b) of the Code applies (or options to acquire stock in such a transaction) in connection with the person’s performance of services as an employee, director or independent contractor of AT Co., the Company, the Surviving Corporation, any of their respective Subsidiaries, or any other person that is related to AT Co., the Company or the Surviving Corporation under Section 355(d)(7)(A) of the Code or a corporation the assets of which the Surviving Corporation or Subsidiary acquires in a reorganization under Section 368 of the Code (including Spinco or any of its Subsidiaries), provided that such stock is not excessive by reference to the services performed by such person and such person or a coordinating group of which the person is a member will not be a controlling shareholder or a ten-percent shareholder of the Surviving Corporation (within the meaning of Treasury Regulations Section 1.355-7(h)(3) and (8)) immediately after the issuance of such common stock; and
	(ii) the Surviving Corporation may issue additional shares of common stock of the Surviving Corporation to a retirement plan of the Surviving Corporation or any other person that is treated as the same employer as the Surviving Corporation under Section 414(b), (c), (m), or (o) of the Code that qualifies under Section 401(a) or 403(a) of the Code, provided that the stock acquired by all of the qualified plans of the Surviving Corporation and such other persons during the four-year period beginning two years before the Distribution Date does not, in the aggregate, represent more than ten percent of the total combined voting power of all classes of stock of the Surviving Corporation entitled to vote or more than ten percent of the total value of shares of all classes of stock of the Surviving Corporation.

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	(a) by the mutual written consent of each party hereto, which consent shall be effected by action of the Board of Directors of each such party;
	(b) by any party hereto if the Effective Time shall not have occurred on or before the one year anniversary of the date of this Agreement, provided that the right to terminate this Agreement pursuant to this clause 11.1(b) shall not be available to any party whose failure to perform any of its obligations under this Agreement required to be performed by it at or prior to such date has been a substantial cause of, or substantially contributed to, the failure of the Merger to have become effective on or before such date;
	(c) by any party hereto if, (i) a statute, rule, regulation or executive order shall have been enacted, entered or promulgated prohibiting the consummation of the Merger or (ii) an Order, decree, ruling or injunction shall have been entered permanently restraining, enjoining or otherwise prohibiting the consummation of the Merger and such Order, decree, ruling or injunction shall have become final and

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	non-appealable and the party seeking to terminate this Agreement pursuant to this clause 11.1(c)(ii) shall have used all reasonable best efforts to remove such injunction, order, decree or ruling;
	(d) by the Company, if either AT Co. or Spinco shall have breached or failed to perform in any material respect any of its respective representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (i) would result in a failure of a condition set forth in Section 9.1 or 9.3 and (ii) cannot be cured by the Termination Date, provided that the Company shall have given AT Co. and Spinco written notice, delivered at least thirty (30) days prior to such termination, stating the Company’s intention to terminate this Agreement pursuant to this Section 11.1(d) and the basis for such termination;
	(e) by AT Co. and Spinco, if the Company shall have breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (i) would result in a failure of a condition set forth in Section 9.1 or 9.2 and (ii) cannot be cured by the Termination Date, provided that AT Co. and Spinco shall have given the Company written notice, delivered at least thirty (30) days prior to such termination, stating AT Co. and Spinco’s intention to terminate the Agreement pursuant to this Section 11.1(e) and the basis for such termination;
	(f) by AT Co. and Spinco or the Company if, at the Company Stockholders’ Meeting (including any adjournment, continuation or postponement thereof), the Requisite Approval shall not be obtained; except that the right to terminate this Agreement under this Section 11.1(f) shall not be available to the Company where the failure to obtain the Requisite Approval shall have been caused by the action or failure to act of the Company and such action or failure to act constitutes a material breach by the Company of this Agreement or a material breach of the Voting Agreement by any party thereto other than Spinco.
	(g) by AT Co. and Spinco, if (i) the Board of Directors of the Company (or any committee thereof), shall have withdrawn or modified its approval or recommendation of the Merger or this Agreement, approved or recommended to the Company stockholders a Company Acquisition Proposal or resolved to do any of the foregoing, or (ii) the Company fails to call and hold the Company Stockholders Meeting within sixty (60) days after the effectiveness of the Registration Statement.
	(h) by the Company if the Board of Directors of the Company determines in good faith that a Company Acquisition Proposal constitutes a Company Superior Proposal, except that the Company may not terminate this Agreement pursuant to this Section 11.1(h) unless and until (i) three business days have elapsed following delivery to AT Co. of a written notice of such determination by the Board of Directors of the Company and during such three business day period the Company (x) informs AT Co. of the terms and conditions of the Company Acquisition Proposal and identity of the person making the Company Acquisition Proposal and (y) otherwise cooperates with AT Co. with respect thereto with the intent of enabling AT Co. and Spinco to agree to a modification of the terms and conditions of this Agreement so that the transactions contemplated hereby may be effected, (ii) at the end of such three business day period the Board of Directors of the Company continues to determine in good faith that the Company Acquisition Proposal constitutes a Company Superior Proposal, (iii) simultaneously with such termination the Company enters into a definitive acquisition, merger or similar agreement to effect the Company Superior Proposal and (iv) the Company pays to AT Co. the amount specified and within the time period specified in Section 11.3.

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	If to: Spinco (prior to the Effective Time) or AT Co., to:
	ALLTEL Holding Corp.
	One Allied Drive
	Little Rock, Arkansas 72202
	Attn: Chief Executive Officer
	(With a copy to the Chairman)
	Telecopy: (501) 905-0962

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	If to the Company, to:
	Valor Communications Group, Inc.
	201 E. John Carpenter Freeway, Suite 200
	Irving, Texas 75062
	Attn: Chief Executive Officer
	(With a copy to the Corporate Secretary)
	Telecopy: (972) 373-1812

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	ALLTEL CORPORATION

	By:	/s/ Scott T. Ford

	Name: Scott T. Ford
	Title:   CEO & President
	ALLTEL HOLDING CORP.

	By:	/s/ Jeffery R. Gardner

	Name: Jeffery R. Gardner
	Title:   President
	VALOR COMMUNICATIONS GROUP, INC.

	By:	/s/ William M. Ojile, Jr.

	Name: William M. Ojile, Jr.

	Title:	Senior Vice President, Chief Legal

	Officer and Secretary

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“4.4 Directors and Officers of Spinco. AT Co. and Spinco shall take all action reasonably necessary to cause the Board of Directors of Spinco immediately prior to the Effective Time to consist of nine (9) members, one (1) of whom shall be the Chairman of the Board of Directors of Spinco, as set forth on Exhibit E hereto, one (1) of whom shall be the Chief Executive Officer of Spinco, as set forth on Exhibit E hereto, six (6) of whom shall be designated by AT Co. and one (1) of whom shall be designated by the Company. Each of the parties hereby acknowledges and agrees that the Company’s designee and at least four (4) of AT Co.’s designees shall be “independent directors” within the meaning given such term under the rules of the NYSE. At the Effective Time, Francis X. Frantz shall serve as Chairman of the Board of Directors of the Surviving Corporation. By no later than the date on which the Company commences solicitation of proxies for use at the Company Stockholders Meeting, (i) AT Co. shall give written notice to the Company setting forth AT Co.’s designees to the Spinco Board of Directors and (ii) the Company shall give written notice to AT Co. setting forth the Company’s designee to the Spinco Board of Directors and, in each case, specifying such information with respect to each such designee as is required to be disclosed in the Proxy Statement/ Prospectus. Spinco shall take all action reasonably necessary so that the officers of Spinco immediately prior to the Effective Time shall consist of the individuals set forth in Exhibit E attached hereto.”

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	ALLTEL CORPORATION

	By:	/s/ Scott T. Ford

	Name: Scott T. Ford
	Title:   President and Chief Executive Officer
	ALLTEL HOLDING CORP.

	By:	/s/ Jeffery R. Gardner

	Name: Jeffery R. Gardner
	Title:   President and Chief Executive Officer
	VALOR COMMUNICATIONS GROUP, INC.

	By:	/s/ William M. Ojile, Jr.

	Name: William M. Ojile, Jr.

	Title:	Senior Vice President,

	Chief Legal Officer & Secretary

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				Page
ARTICLE I Definitions
Section 1.1		General			B-2
Section 1.2		References to Time			B-7
ARTICLE II Preliminary Transactions
Section 2.1		Business Separation			B-8
Section 2.2		Conveyancing and Assumption Agreements			B-9
Section 2.3		Certain Resignations			B-9
Section 2.4		Other Agreements			B-9
Section 2.5		Transfers Not Effected Prior to the Distribution; Transfers Deemed Effective as of the Distribution Date			B-9
Section 2.6		Special Dividend; Spinco Financing; Debt Exchange			B-10
Section 2.7		Financial Instruments			B-11
Section 2.8		Coordination of Asset Separation Transactions			B-11
ARTICLE III The Distribution
Section 3.1		Record Date and Distribution Date			B-11
Section 3.2		Spinco Reclassification			B-12
Section 3.3		Net Spinco Indebtedness			B-12
Section 3.4		The Agent			B-12
Section 3.5		Delivery of Shares to the Agent			B-12
Section 3.6		The Distribution			B-12
ARTICLE IV Net Debt Adjustment
Section 4.1		Post-Closing Adjustment to Net Spinco Indebtedness			B-12
ARTICLE V Employee Benefit Matters
Section 5.1		Employee Benefit Matters			B-14
ARTICLE VI Tax Sharing
Section 6.1		Tax Sharing			B-14
ARTICLE VII Survival and Indemnification
Section 7.1		Survival of Agreements			B-14
Section 7.2		Mutual Release			B-14
Section 7.3		Indemnification			B-15
Section 7.4		Procedures for Indemnification for Third-Party Claims			B-15
Section 7.5		Reductions for Insurance Proceeds, Tax Benefits and Other Recoveries			B-16
Section 7.6		Consequential Damages			B-17
Section 7.7		Survival of Indemnities			B-17
ARTICLE VIII Certain Additional Covenants
Section 8.1		Notices to Third Parties			B-17
Section 8.2		Licenses and Permits			B-17

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				Page
Section 8.3		Intercompany Agreements; Intercompany Accounts			B-17
Section 8.4		Further Assurances			B-18
Section 8.5		Guarantee Obligations and Liens			B-18
Section 8.6		Insurance			B-19
Section 8.7		Use of Names			B-20
Section 8.8		Non Solicitation of Employees			B-20
Section 8.9		Subsequent Transfers			B-21
ARTICLE IX Access to Information
Section 9.1		Provision of Corporate Records			B-21
Section 9.2		Access to Information			B-21
Section 9.3		Production of Witnesses			B-22
Section 9.4		Retention of Records			B-22
Section 9.5		Confidentiality			B-22
Section 9.6		Cooperation with Respect to Government Reports and Filings			B-23
Section 9.7		Tax Sharing Agreement			B-23
ARTICLE X No Representations or Warranties
Section 10.1		No Representations or Warranties			B-23
ARTICLE XI Conditions
Section 11.1		Conditions to the Distribution			B-23
Section 11.2		Waiver of Conditions			B-24
Section 11.3		Disclosure			B-24
ARTICLE XII Miscellaneous
Section 12.1		Complete Agreement			B-24
Section 12.2		Expenses			B-24
Section 12.3		Governing Law			B-24
Section 12.4		Notices			B-24
Section 12.5		Amendment and Modification			B-25
Section 12.6		Successors and Assigns; No Third-Party Beneficiaries			B-25
Section 12.7		Counterparts			B-25
Section 12.8		Interpretation			B-25
Section 12.9		Severability			B-25
Section 12.10		References; Construction			B-25
Section 12.11		Termination			B-25
Section 12.12		Consent to Jurisdiction and Service of Process			B-25
Section 12.13		Waivers			B-26
Section 12.14		Specific Performance			B-26
Section 12.15		Waiver of Jury Trial			B-26

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	(i) AT Co. or an AT Co. Subsidiary, as appropriate, will be responsible for the Claims Administration with respect to claims of AT Co. and the AT Co. Subsidiaries under the Policies; and
	(ii) Spinco or a Spinco Subsidiary, as appropriate, will be responsible for the Claims Administration with respect to claims of Spinco and the Spinco Subsidiaries under the Policies.

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	(a) Each party hereto acknowledges that: (i) each of AT Co. and Spinco (and the members of the AT Co. Group and the Spinco Group, respectively) has or may obtain Privileged Information; (ii) there are and/or may be a number of Litigation Matters affecting each or both of AT Co. and Spinco; (iii) both AT Co. and Spinco have a common legal interest in Litigation Matters, in the Privileged Information and in the preservation of the confidential status of the Privileged Information, in each case relating to the pre-Distribution business of the AT Co. Group or the Spinco Group or relating to or arising in connection with the relationship between the Groups on or prior to the Distribution Date; and (iv) both AT Co. and Spinco intend that the transactions contemplated hereby and by the Merger Agreement and the other Transaction Agreements and any transfer of Privileged Information in connection therewith shall not operate as a waiver of any potentially applicable privilege.
	(b) Each of AT Co. and Spinco agrees, on behalf of itself and each member of the Group of which it is a member, not to disclose or otherwise waive any privilege attaching to any Privileged Information relating to the pre-Distribution business of the other Group or relating to or arising in connection with the relationship between the Groups on or prior to the Distribution Date, without providing prompt written notice to and obtaining the prior written consent of the other, which consent shall not be unreasonably

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	withheld, conditioned or delayed and shall not be withheld, conditioned or delayed if the other party certifies that such disclosure is to be made in response to a likely threat of suspension or debarment or similar action; provided, however, that AT Co. and Spinco shall not be required to give any such notice or obtain any such consent and may make such disclosure or waiver with respect to Privileged Information if such Privileged Information relates solely to the pre-Distribution business of the AT Co. Group in the case of AT Co. or the Spinco Group in the case of Spinco. In the event of a disagreement between any member of the AT Co. Group and any member of the Spinco Group concerning the reasonableness of withholding such consent, no disclosure shall be made prior to a resolution of such disagreement by a court of competent jurisdiction, provided that the limitations in this sentence shall not apply in the case of disclosure required by law and so certified as provided in the first sentence of this paragraph.
	(c) Upon any member of the AT Co. Group or any member of the Spinco Group receiving any subpoena or other compulsory disclosure notice from a court, other governmental agency or otherwise which requests disclosure of Privileged Information, in each case relating to pre-Distribution business of the Spinco Group or the AT Co. Group, respectively, or relating to or arising in connection with the relationship between the Groups on or prior to the Distribution Date, the recipient of the notice shall as promptly as practicable provide to the other Group (following the notice provisions set forth herein) a copy of such notice, the intended response, and all materials or information relating to the other Group that might be disclosed. In the event of a disagreement as to the intended response or disclosure, unless and until the disagreement is resolved as provided in paragraph (b) of this Section, the parties shall cooperate to assert all defenses to disclosure claimed by either party’s Group, and shall not disclose any disputed documents or information until all legal defenses and claims of privilege have been finally determined, except as otherwise required by a court order requiring such disclosure.

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	ALLTEL Corporation
	One Allied Drive
	Little Rock, Arkansas 72202
	Attention: Chief Executive Officer
	(with a copy to the Corporate Secretary)
	Facsimile: (501) 905-5444

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	ALLTEL Holding Corp.
	One Allied Drive
	Little Rock, Arkansas 72202
	Attention: Chief Executive Officer
	(with a copy to the Chairman)
	Facsimile: (501) 905-0962

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	ALLTEL CORPORATION

	By:	/s/ Scott T. Ford

	Name: Scott T. Ford
	Title:   CEO & President
	ALLTEL HOLDING CORP.

	By:	/s/ Jeffery R. Gardner

	Name: Jeffery R. Gardner
	Title:   President

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	1.	Warehouse facilities in Ft. Smith AR
	2.	The order and inventory management, receiving, storage, logistics and distribution of materials and electronics used in the construction, operations and maintenance of the Alltel Wireless network and AXN
	3.	Supply for wireless retail outlets and agents.

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Pre-Spin

Post-Spin

St

City

Address

Status

Disposition

Comments

NE

Lincoln

1620 M Street

WLN

WLS

Deed will be transferred.

	8.	The following table lists Contracts that currently are shared by the AT Co. Business and the Spinco Business, but will remain with the AT Co. Business following the distribution. These shared Contracts are subject to Article II of the Distribution Agreement.

System Name		Supplier		Summary Description/Functionality
Databases		Oracle		Database
		IBM		IBM Customer Agreement Number HW61660 [PARENT AGREEMENT]
Ae-forms, AEProc, APCR, TIBCO		Ariba (Purchased thru JDE in 2005)		ACI/ACP Procurement for Infrastructure and Wireline inventory; P-Card Reconciliation; e-Forms.
JD Edwards — WorldVision		JDE		Enterprise ERP (Enterprise Resource Planning) system. WorldVision is the host-centric version of JDE and is the ALLTEL Financial system.

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System Name		Supplier		Summary Description/Functionality
TMS (Trouble Management System) — Siebel plus User Licenses		Siebel		Used in the internet help desk and wireless Tech Support for trouble tickets.
PeopleSoft		Peoplesoft		Corporate HR system — receives most of its data from Payroll system & Human Resources dept.
		Syniverse		Consolidated view of all Syniverse contracts based on assessment by Cathy Arries & Sam S.
Marimba		BMC		By BMC, Marimba’s Client Management product automates the deployment and management of applications, deployment of updates and patches, migration to new operating systems, inventory scans & software usage tracking across desktops, laptops & mobile devices
		BEA systems		Weblogic and Tuxedo
BILLDATS Collection & Wireline Processing		CSG Software		Billdats Collection and Mediation platform for wireless & wireline CDR’s. Collects CDR’s from switches and reformats, duplicates, distributes to billing and Message sub-systems
		Veritas Software (Now owned by Symantec)		Backup Exec software
GEN-tran (EDI) & Connect Direct SW		Sterling Commerce		Electronic Data Interchange
MOSAIC (predictive outbound dialers)		Avaya		Outbound Phone Dialer used by Collections for Debt recovery, loads account information. may 2005 — software to be upgraded to release 11.2
		Acxiom		1/1/04 Data Usage Agreement
		Agilent		Engineering Tool
Checkfree		Checkfree		Check validation service. Also, as of late ’04 — also provides EBPP functionality for wireless and scheduled for wireline in 1Q’05
Citrix Server Farms		Citrix		Server based software that allows viewing of applications
		Fair Isaac (HNC)		License and Service Agreement between HNC Software, Inc and ALLTEL Communications, Inc. [Note: HNC was purchased by Fair Isaac). Products: 4ScoreApplication and Credit Decisioning Workflow Services, 4WARN, Analyst Workstation, 4WEB, 4PDA, 4VOICE, Risk [PARENT AGREEMENT]
MAG (Mobile Access Gateway)		Openwave		Internet access for wireless phones and devices
		Telcordia Technologies		Granite SW, Network Engineering (AXN), LERG & TPM (already have 2)
		SABA (see also Syscom)		THINQ Learning Solutions (Corp Systems)3000 = $37k..put in $200k for this one.

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System Name		Supplier		Summary Description/Functionality
CONCORD		Concord		Concord developed Data Engineering Network Performance Management Tool. Communicates with NMSs, EMSs, and Network Elements. Not a monitoring or surveillance system, but instead it is a bandwidth utilization/capacity planning tool. Captures Log informat
ASAP (The MetaSolv Solution)		MetaSolv		MetaSolv/ALLTEL developed circuit engineering/equipment, ordering (including Access Service Requests and Universal Service Orders), and Inventory solution. Handles workflow management.
		Network Associates McAfee		Virus protection
		Quest Software		Quest Toad for Oracle provides tools to create and execute queries, as well as build and manage database objects.
Hyperion Enterprise, Essbase		Hyperion		Consolidation and month-end financial reporting tool.
Consumer Point & IMARK		Claritas		Relationship Marketing SW Wireline/wireless
Information Warehouse		Informatica		Data Integration
		NetScout		Network Performance monitoring SW
Foxfire		Foxfire		Order Management Software for distribution
Mainframe in Twinsburg		Computer Associates		Multi
MOBIUS — Document Direct — a.k.a RVS (Remote Viewing System)		Mobius		On-line Bill Images for wireless & wireline. Desktop report viewing system. Bill Imaging, report archive, and distribution — using optical and magnetic storage media.
		Payformance		AP Payroll application
		AT&T		IXC/Retail/Resale services
IP Routers		Cisco
		MCI		IXC/Retail Services
		Sprint		IXC/Retail Services
IP Routers		Juniper
		Level 3		IXC/Retail Services
		InterCall		Voice Conferencing Services
		21st century SW		Mainframe SW
		AB Initio		Server software to sort large databases in parallel
		Actix
		Acxiom		12/15/04 Master Service Agreement [PARENT MSA AGREEMENT]
		Adobe		Desktop Publishing SW, Desktop applications
		Agilysys		IBM Business Partner HW, SW & Support

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System Name		Supplier		Summary Description/Functionality
FastAccess		Allen Systems Group		Mainframe SW
		Archer Technologies		Security Sw for virus and worm alerts
		Arkay		SOW — Provide project management, documentation, design, implementation, and testing for the integration of SAMBA with LDAP to be used for PDC for (1) Windows 2000 servers and (1) Windows 2003 servers.
		Ascential (Mercator)
		Bindview		Risk Mgmt console
WorkForce Management		BluePumpkin		WorkForce Management Tool for Customer Service
Remedy		BMC		Help Desk application that integrates with Marimba as an Asset Management Tool that keeps inventories and matches what the System is running to what has been contractually purchased.
Mainframe in Twinsburg- MainView Perf Assurance		BMC ELO (Enterprise License Agreement)		Monitoring software for the MainFrame
None		BMC Software License Agreement		Governs ELO
STOP-X37 for Mainframe in Twinsburg		BMC/Empact		It eliminates batch job failures on the mainframe by automatically asking for more disk space. normally the job would fail on a SB37 or SD37 abend.
Business Objects		Business Objects		Ad Hoc reporting tool.
		CCP Global		ALLTEL Master Services Agreement with SOW 1for training, migration, support [PARENT AGREEMENT]
		CCP Global		Professional Services
		Chase JPMorgan		“Best of Class” Commercial Card Program
Validator/T-Recs, SmartAnalysis+A56		Chesapeake		Validator Cash & payment reconciliation system. Processes 6.5M payments/month & 8M Billing system transactions per month
		Chicago Soft		Mainframe SW
		CommVault		Backup solution for Windows Environment
		Computer Sciences Corp (CSC)
Fileaid & Strobe		Compuware		Mainframe SW
		CONNX Solutions INC		Mainframe SW
Smart Bill Connect		CTI Billing		Bill Partner
		Current analysis		DSL, VOIP competitive response solution to enhance sales
		Customer Centrix		SW and service that allows 25 concurrent users to participate in a web based meeting room
		CustomerCentrix		LearnCentrix Services Agreement and Amendment — educational content via browser-based user interface hosted by CustomerCentrix.

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System Name		Supplier		Summary Description/Functionality
ESP by Cybermation		Cybermation		As of May 2005, this is the enterprise wide computer production scheduling tool to replace all other tools currently being used to schedule server jobs. (e.g. Maestro — Unix, Cron — Unix, Robot — AS/400, Zeke — Mainframe, Windows — NT). Software resides on Mainframe but is not licenses to schedule Mainframe jobs.
		DELL Computer Corp		PC’s & Peripherals
		Demand Management		Forecast management
		DINO		Mainframe SW
		Diversified SW		Mainframe SW
		Dun & Bradstreet		Services
		EMC Corporation		Storage, HW, SW & Support
		Evolving Systems		Phone number Provisioning SW
Hardware		Fujitsu Computer Systems		SRA Agreement — Solaris Hardware/Maintenance/Professional Services. Mstr Agreement with FNC
		Fujitsu Softek		Mainframe SW that copies files from one location to another
Gauss Imaging — View		Gauss		Imaging of all accounts payable records and workflow
Extensity		Geac		E-Expense (Extensity)
GeoTax		Group 1		Geotax (by Group 1) is used for tax jurisdiction identification. Identifies which Tax Jurisdictions applies for a given street address. Group 1 is a vendor supplying several Systems to ACI including address validation and standardization used by AOPC..
Easy View 4.0		Help Systems		Mainframe SW
Hardware		HP		Purchase Agreement — HW/SW
Exceed		Hummingbird		Emulation SW
Real Purchase		ICG		ALLTEL’s e-procurement system supplied by ICG Commerce (for office supplies) & Geiger (for ALLTEL merchandise)
		Innovation Data processing		Mainframe SW
		Interwoven		Mainframe SW
Alarm point		Invoq Systems		Automated alerting event resolution SW
Orbitz		Iona Technologies		GUI interface
JD Edwards — OneWorld XE		JDE		Enterprise ERP (Enterprise Resource Planning) system. This is used by ACP and is the “behind the scenes” system supporting the Ariba system. OneWorld XE is the client/server version of JDE
		Language Line		Agreement for Language Line Interpreter Services — Over-the-Phone Interpreter Services
HW		Lasalle Systems Leasing		3rd Party Tape Products

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System Name		Supplier		Summary Description/Functionality
RMS (Recovery Management System)		London Bridge (Now Fair Isaac)		Manages recovery of write-offs.
		MacKinney Systems		Mainframe SW
		Mapinfo		Mapping SW
		MCCR		Phone directory Enhancement Estimating and Billing Pkg
		Mercury Interactive		Testing SW/plus IT governance SW from WW
		Merrill		Mainframe SW
Select		Microsoft Corporation		SW licensing agreement
Premier		Microsoft Corporation		Support/services
Enterprise		Microsoft Corporation		SW licensing agreement Western Wireless
Microstrategy		Microstrategy		Business Intelligence reporting tool
2-Way		Modern Mind		Survey Tool
		NATCOM		Authorized Service Center Agreement — Pagers
		Neon Systems		Mainframe SW
		NetIQ		Corporate Systems — chad
		NetScout		Worldwide Master Terms and Conditions — Probing on wireline and wireless network
		Novell (thru WWT)		Master License Agreement — Network Operating System
Zenworks		Novell (thru WWT)		Desktop Server
		OCE North America		Printing Systems
MAG (Mobile Access Gateway)		OpenWave		Installation and Upgrades to the software used on the MAG
Database support		Oracle		Enhanced Oracle support of certain Alltel Platinum Systems
Paymentech		Payment Technologies		Credit Card Payment Processor — Payments entered at account level, not subscriber level.
PAWS		Pentana		Software used by ALLTEL’s Internal audit group — Internal Audit purchased Pentana Audit Work System in 2002 to automate the audit management process.
		Pepperweed Consulting		Master Maintenance Agreement
		Pink Elephant		Master Service Agreement
Disaster Recovery Services		Pitney Bowes Credit Corp		AOPC
Planview — Time Tracking		Planview		Time reporting system — used almost exclusively by AIS

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Table of Contents

System Name		Supplier		Summary Description/Functionality
InfraNet		Portal		ACI Internet provisioning and billing system — replaced older CIMS system.
		Prodco International		New Store Traffic Counting Systems
		Qpass
		Right Now Technologies		Internet based eService software solution
		Road America Motor Club		Road Side Assistance (new agreement is in AT legal)
		SAS Institute		Analytical software
		Science Application Intl Corp (SAIC)		Basic Ordering Agreement No. ALLTEL — BOA — 001, Statement of Work No. 1 (WNLP Fallout Management Services)
		Segue Software
Comparex		Serena Software		Mainframe SW
Gator		Spectra Logic Corporation		Tape Library/Storage HW
React		Spirent		Tapestry — Application that Special Circuit Testers use to access test devices in the Network to sectionalize and isolate problems
Showcase Strategy		SPSS		Query/Server/Report Writer — pulls info from JD Edwards
StorageTEK		Storage Technology Corp (bought by Sun MicroSystems)		Disc Storage
		Strategic Solutions Group (SSG)		Preferred Contractor Program Master Agreement [PARENT AGREEMENT]
		Strategic Solutions Group (SSG)		Proposal and Statement of Work — Infranet System Support. Number 2003-030R5
		Strategic Solutions Group (SSG)		Proposal and Statement of Work — Oracle Upgrade Support Benchmark Performance Testing. Number 2005-047R1
		Subex		Ranger Fraud Management System (FMS) on existing hardware infrastructure. (MISSING 1st Amendment).
Solaris		Sun MicroSystems		No active master purchase agreement — Sun products purchased through reseller
Disaster Recovery		Sungard Recovery		Disaster Recovery Twinsburg
Cash Management Module/ Cash Ledger Module/ Debt Management/ Foreign Exchange/ Combined Investment/ Debt Options		Sungard Treasury		Banking

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Table of Contents

System Name		Supplier		Summary Description/Functionality
Ghosts and Norton		Symantec Corporation		Elite Agreement — Volume Licensing Agreement
		Syniverse		Information and Network Products and Service Agreement [PARENT AGREEMENT]
		Syniverse		Toll Free Services Addendum
		Syniverse		Streamliner Systems Addendum — Billing
		Syniverse		Wireless Local Number Portability (WLNP) Inport for Wireless Interspecies and Wireline Number Porting Services Addendum — Wireline ICC (WLNP)
		Syniverse		Partnership Solutions Program Addendum
		Syniverse		LATA Link Services Addendum
		Syniverse		Addendum No 23 (Inlink)
		Syscom, Inc. (ThinQ) (see also SABA)		Training Server (Corp sys)
		Telecordia		Software License Agreement — LERG Agreement and Network Engineering
		Telecordia		License Agreement — Terms and Conditions (“Order Request Form”)
		Thomson NETg		Training Library
		Touchwood Technologies		Marketing Mass Emailing
		Verisign		Master Service Agreement (PARENT AGREEMENT). Note: Verisign purchased Illuminet.
		Verisign		Module No. 1 to Master Service Agreement for Alternate Billing Services/Line Information Database
		Verisign		Amendment One to Module No. 4 to Master Service Agreement for Calling Name Delivery Service — changes to Data Storage, Liability for Database accuracy, Initial Term and extensions
		Verisign		Standard Terms and Conditions [PARENT AGREEMENT — T&C’S]
		Verisign		LEC Trunk Signaling and TCAP service Agreement. Note: Verisign purchased Illuminet.
		Verisign		Local Number Portability Data Success Service Agreement
		Verisign		Connectivity Services Agreement. Note: Verisign purchased Illuminet.
		Verizon LiveSource		Directory Assistance Service Agreement
Vertex — Taxation		Vertex		Taxation module used by Cellware to apply tax rates (based upon Tax Jurisdictions identified by GeoTax software) for taxing wireless customers during the billing process. Vertax maintains and updates the tax rates. NEEDS to be implemented by VII who no

B-38

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Table of Contents

System Name		Supplier		Summary Description/Functionality
Businessware — a.k.a. Vitria		Vitria		Enterprise Application Integration software — a.k.a. — Vitria
Infrastructure Hardware		World Wide Technologies		Minority reseller, mostly infrastructure hardware and services
Docushare		Xerox		Document sharing system by Xerox. ALLTEL is currently utilizing DocuShare version 2.2, with 580 licenses. It is used as a document repository by many groups in ALLTEL including Contract Management, Long Distance, Publishing, Technical Services Group, and
		IBM		IBM Customer Agreement — Supplement for IBM Operational Support Services — Support Line
		IBM		IBM Customer Agreement — Addendum for Customer Transaction
		IBM		IBM Customer Agreement — Supplement for IBM Operational Support Services — Support Line
		IBM		IBM Statement of Work for Services — Relocation Services
		IBM		IBM Change of Authorization for Services — Warranty Service Upgrade
		IBM		Letter of Authorization regarding interim SOW number S04-0750
		IBM		Statement of Work Number S04-0750 for Business to Business Web Enablement Project (Websphere)
		IBM		Schedule for Services
		IBM		Statement of Work for Project Support Services — updated pricing/hour
		IBM		Statement of Work for Project Support Services — Number S04-0727 Education/Training Services
		IBM		Statement of Work Number SBAT-65WMPT for Websphere Integration Services
		IBM		Change Authorization for Consulting Services — amendment SOW # SBAT-65WMPT
		IBM		Statement of Work to provide Security Services
		IBM		Statement of Work for Services
		IBM		Statement of Work # JLAY-6B4LCP to provide Education/Training Services (Websphere)
		IBM		Statement of Work Number KWHE-6CRKZR for Production Enablement of ALLTEL B2B Infrastructure
		IBM		Statement of Work for ALLTEL Enterprise Security Foundation Project

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Table of Contents

System Name		Supplier		Summary Description/Functionality
		IBM		Statement of Work for Services
		IBM		International Program License Agreement (PARENT AGREEMENT — IPLA)
		IBM		International Passport Advantage Agreement (PARENT Agreement — PA)
		IBM		Software and Services Special Options — Tivoli/Security (Note: refers to all other Parent Agreements but terms in this agreement supersede)
		IBM		Software and Services Special Options — WebSphere and Portal. (STEP PARENT AGREEMENT — Websphere) (Note: refers to all other Parent Agreements but terms in this agreement supersede)
		IBM		IBM Software Premium Support Services
		IBM		Software and Services Special Options — Maintenance. (STEP PARENT AGREEMENT — Maintenance) (Note: refers to all other Parent Agreements but terms in this agreement supersede)
		IBM		Agreement for Early Projects
		IBM		Supplement to Attachment for Business Incentive Offering
		IBM		Special Offer Terms Appendix
		IBM		Amendment #1 to Mutual Confidentiality Agreement — updated with Information Security Requirements
		IBM		Letter of Transfer of IBM Licensed Program (AIS sale to Fidelity)
		IBM		Change Authorization for IBM Statement of Work Number: CFT1WGM
		IBM		Change Authorization for IBM Statement of Work Number: CFTK9BN
		IBM
		IBM Candle		Mainframe SW
Databases		Oracle		Database
		IBM		IBM Customer Agreement Number HW61660 [PARENT AGREEMENT]
Ae-forms, AEProc, APCR, TIBCO		Ariba (Purchased thru JDE in 2005)		ACI/ACP Procurement for Infrastructure and Wireline inventory; P-Card Reconciliation; e-Forms.
JD Edwards — WorldVision		JDE		Enterprise ERP (Enterprise Resource Planning) system. WorldVision is the host-centric version of JDE and is the ALLTEL Financial system.
TMS (Trouble Management System) — Siebel plus User Licenses		Siebel		Used in the internet help desk and wireless Tech Support for trouble tickets.
Network Infrastructure		ADTRAN, INC.		DSLAM, Microwave Radios, HDSL
Network Infrastructure		CISCO SYSTEMS		Routers, Switches

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Table of Contents

System Name		Supplier		Summary Description/Functionality
Network Infrastructure		C & D BATTERIES		Cell Site/Central Office Batteries
Network Infrastructure		JUNIPER NETWORKS, INC.		Routers, Switches
Network Infrastructure		ADC TELECOMM., INC.  — INFRSTRCTR		DSX Connectivity
Indirect Procurement		YORK INTERNATIONAL CORPORATION		Heating, Air-Conditioning, HVAC, Duct
Indirect Procurement		YORK INTERNATIONAL CORPORATION		Heating, Air-Conditioning, HVAC, Duct
Indirect Procurement		XEROX CORPORATION		Office Machines — Copier, Prin
Indirect Procurement		WHELCHEL BUILDERS INC		Building Construction, Facilities, Remodel, GC
Indirect Procurement		WESTERN EXTRALITE COMPANY		Lighting fixtures, Lights
Indirect Procurement		WESLEY CONSTRUCTION		Building Construction, Facilities, Remodel, GC
Indirect Procurement		WEBER ASSOCIATES INC		Training — Professional Offsit
Indirect Procurement		WASTE MANAGEMENT SERVICE
Indirect Procurement		VITAL RECORDS CONTROL OF AR INC		Warehousing and Storage, Mini
Indirect Procurement		GENERAL EXCAVATING		Excavation Contractors, Backho
Indirect Procurement		VENTURI TECHNOLOGY PARTNERS LLC		Professional,Scientific, Techni
Indirect Procurement		US MAINTENANCE		Janitorial, Housekeeping, Office Cleaning
Indirect Procurement		HIGH WIRE NETWORKS		Electrical Contractors
Indirect Procurement		URS CORPORATION		Site Acquisition, Management C
Indirect Procurement		TURFSCAPE INC
Indirect Procurement		TURFSCAPE INC		Landscaping, Lawn, Mowing, Sprinkler, Tree Svc
Indirect Procurement		NET LINX AMERICAS INC		Professional,Scientific, Techni
Indirect Procurement		THOMPSON ELECTRIC INC		Electrical Contractors
Indirect Procurement		EDIFY CORPORATION		Professional,Scientific, Techni
Indirect Procurement		TECH SYSTEMS INC
Indirect Procurement		SUNGARD RECOVERY SERVICES INC		Account collection, Collection
Indirect Procurement		STAR SERVICE INC OF JACKSON		Heating, Air-Conditioning, HVAC, Duct
Indirect Procurement		ALLERMUIR LIMITED
Indirect Procurement		STAPLES NATIONAL ADVANTAGE		Office Supplies, Stationery, P

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Table of Contents

System Name		Supplier		Summary Description/Functionality
Indirect Procurement		SPEELMAN ELECTRIC INC		Electrical Contractors
Indirect Procurement		SOMERS BUILDING MAINTENANCE INC		Janitorial, Housekeeping, Office Cleaning
Indirect Procurement		SIMMONS ELECTRIC		Electrical Contractors
Indirect Procurement		SIGNAL POINT SYSTEM INC		Heating, Air-Conditioning, HVAC, Duct
Indirect Procurement		SHAW INDUSTRIES INC		Flooring, Carpet, Vinyl, Tile
Indirect Procurement		SECURITAS SECURITY SYSTEMS USA INC		Security Guards, Patrol Servic
Indirect Procurement		SECURITAS SECURITY SERVICES USA INC		Security Guards, Patrol Servic
Indirect Procurement		SCIENCE APPLICATIONS INTERNATION CORP		Employment, Temporary Help, Ma
Indirect Procurement		SAVITZ RESEARCH SOLUTIONS INC		Professional,Scientific, Techni
Indirect Procurement		RODEBUSH CONSTRUCTION INC		Building Construction, Facilities, Remodel, GC
Indirect Procurement		REDLEE SCS GEORGIA INC		Janitorial, Housekeeping, Offi
Indirect Procurement		R P POWER LLC		Maintenance — Generator
Indirect Procurement		QUOTA INC		Janitorial, Housekeeping, Offi
Indirect Procurement		PITNEY BOWES MAILING SYSTEMS		Office Machines — Mailing Equi
Indirect Procurement		PITNEY BOWES		Office Machines — Mailing Equi
Indirect Procurement		PADGETT SERVICES LLC		Heating, Air-Conditioning, HVAC, Duct
Indirect Procurement		OFFICE FURNITURE SERVICE INC
Indirect Procurement		OFFICE FURNITURE SERVICE INC
Indirect Procurement		ODOM CONSTRUCTION COMPANY INC		Building Construction, Facilities, Remodel, GC
Indirect Procurement		NOE MECHANICAL CONTRACTORS INC		Heating, Air-Conditioning, HVAC, Duct
Indirect Procurement		NOE MECHANICAL CONTRACTORS INC		Heating, Air-Conditioning, HVAC, Duct
Indirect Procurement		NCR CORPORATION		Office Supplies, Stationery, P
Indirect Procurement		MUZAK LLC		Background Music, Muzak
Indirect Procurement		MILLER ELECTRIC COMPANY		Electrical Contractors
Indirect Procurement		METROPOLITAN FURNITURE GROUP
Indirect Procurement		METRO CONSTRUCTION MANAGEMENT INC		Building Construction, Facilities, Remodel, GC

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Table of Contents

System Name		Supplier		Summary Description/Functionality
Indirect Procurement		MERCATOR PARTNERS		Professional,Scientific, Techni
Indirect Procurement		MARION DIVERSIFIED ENTERPRISES LTD
Indirect Procurement		MARION DIVERSIFIED ENTERPRISES LTD
Indirect Procurement		MARION DIVERSIFIED ENTERPRISES LTD
Indirect Procurement		MARION DIVERSIFIED ENTERPRISES LTD		Account collection, Collection Agency
Indirect Procurement		MARION DIVERSIFIED ENTERPRISES LTD		Janitorial, Housekeeping, Office Cleaning
Indirect Procurement		MARION DIVERSIFIED ENTERPRISES LTD		Janitorial, Housekeeping, Office Cleaning
Indirect Procurement		MARION DIVERSIFIED ENTERPRISES LTD		Janitorial, Housekeeping, Office Cleaning
Indirect Procurement		MARION DIVERSIFIED ENTERPRISES LTD		Janitorial, Housekeeping, Office Cleaning
Indirect Procurement		MANPOWER INTERNATIONAL INC		Employment, Temporary Help, Ma
Indirect Procurement		LSI GRAPHIC SOLUTIONS PLUS (LSI Industries, Inc.)		Printing, Graphics
Indirect Procurement		KRAUTER BOSN SERVICE COMPANY
Indirect Procurement		KRAUTER BOSN SERVICE COMPANY		Heating, Air-Conditioning, HVAC, Duct
Indirect Procurement		KOSSEN EQUIPMENT INC		Maintenance — Generator
Indirect Procurement		KOSSEN EQUIPMENT INC		Maintenance — Generator
Indirect Procurement		KOSSEN EQUIPMENT INC		Maintenance — Generator
Indirect Procurement		KEILHAUER
Indirect Procurement		INSOLEXEN CORPORATION		Professional, Scientific, Techni
Indirect Procurement		IMPRESSIONS INC		Printing, Graphics
Indirect Procurement		I-K ELECTRIC COMPANY		Building Maintenance Services
Indirect Procurement		IDENTITI RESOURCES LIMITED
Indirect Procurement		HUMMEL CONSTRUCTION CO		Snow Plowing, Snow Removal, Lot Sweeping
Indirect Procurement		HRANICKY CONSTRUCTION		Building Construction, Facilities, Remodel, GC
Indirect Procurement		HOOGSTAD TIMOTHY		Armored Car Services, Cash pic
Indirect Procurement		HILL ASSOCIATES INC		Training — Professional Offsit
Indirect Procurement		HARDY BUILDING CORPORATION		Building Construction, Facilities, Remodel, GC

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Table of Contents

System Name		Supplier		Summary Description/Functionality
Indirect Procurement		H & R CONSTRUCTION COMPANY INC		Building Construction, Facilities, Remodel, GC
Indirect Procurement		GRAINGER		Hardware Stores
Indirect Procurement		GLOBAL KNOWLEDGE		Training — Professional Offsit
Indirect Procurement		FOUR CORNERS SERVICE COMPANY		Janitorial, Housekeeping, Offi
Indirect Procurement		FEDEX		Freight Transportation, Trucki
Indirect Procurement		FEDEX		Freight Transportation, Trucki
Indirect Procurement		EUREST DINING SERVICES		Food Service, Caterers, Cafete
Indirect Procurement		ETAK SYSTEMS INC		Electrical Contractors
Indirect Procurement		ERNST & YOUNG LLP		Professional,Scientific, Techni
Indirect Procurement		ENTERPRISE CORP THE		Heating, Air-Conditioning, HVAC, Duct
Indirect Procurement		ENTERPRISE CORP THE		Heating, Air-Conditioning, HVAC, Duct
Indirect Procurement		DESIGN FORUM LLC		Professional,Scientific,Techni
Indirect Procurement		CUMMINS BRIDGEWAY LLC		Maintenance — Generator
Indirect Procurement		CUMMINS BRIDGEWAY LLC		Maintenance — Generator
Indirect Procurement		CREATIVE CABINET SYSTEMS INC		Furniture
Indirect Procurement		CORPORATE EXPRESS PROMOTIONAL MARKETING		Promotional, T-Shirts, Logo Gi
Indirect Procurement		CORPORATE DYNAMICS INC		Training — Professional Offsit
Indirect Procurement		CONTRACTOR		Furniture
		MANAGEMENT GRP BRAND BUILDERS
Indirect Procurement		CONCEPTUAL DESIGN DECOR
Indirect Procurement		COMFORT SYSTEMS USA ARKANSAS INC		Heating, Air-Conditioning, HVAC, Duct
Indirect Procurement		COLONIALWEBB CONTRACTORS COMPANY		Heating, Air-Conditioning, HVAC, Duct
Indirect Procurement		COLITE INTERNATIONAL LTD		Signs and Advertising Specialt
Indirect Procurement		CLAIMS MANAGEMENT RESOURCE		Account collection, Collection
Indirect Procurement		CELERANT CONSULTING INC		Professional,Scientific, Techni
Indirect Procurement		CARRIER CORPORATION
Indirect Procurement		CARRIER CONSULTANT		Electrical Contractors

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Table of Contents

System Name		Supplier		Summary Description/Functionality
Indirect Procurement		CAHILL CORPORATION		Heating, Air-Conditioning, HVAC, Duct
Indirect Procurement		CAHILL CORPORATION		Heating, Air-Conditioning, HVAC, Duct
Indirect Procurement		BRINKS INCORPORATED		Armored Car Services, Cash pic
Indirect Procurement		BEST ACCESS		Security Systems, Alarm, Monit
Indirect Procurement		BASSETT MECHANICAL CONTRACTORS		Building Maintenance Services
Indirect Procurement		BASSETT MECHANICAL CONTRACTORS		Heating, Air-Conditioning, HVAC, Duct
Indirect Procurement		BASSETT MECHANICAL CONTRACTORS		Heating, Air-Conditioning, HVAC, Duct
Indirect Procurement		MOUNTAIN LTD		Professional,Scientific, Techni
Indirect Procurement		CONTROL SERVICES INC
Indirect Procurement		ASPEN PRINTING COMPANY		Office Machines — Copier, Prin
Indirect Procurement		ADVANCED ENVIRONMENTAL TECHNOLOGIES LLC		Environmental, Geotechnical, H

	9.	Rights of AT Co. arising under the intercompany arrangements listed on Section 8.3 of the Disclosure Letter.

	10.	All trademarks and service marks owned by AT Co. or one of its Subsidiaries and not specifically listed on Section 1.1(c) of the Disclosure Letter.
	11.	The internally developed applications listed in item 1 of Section 6.14 of the Spinco Disclosure Letter to the Merger Agreement are owned by AT Co. or a Subsidiary and used in the Spinco Business. In connection with the Distribution, AT Co. will convey or cause to be conveyed to Spinco or a Spinco Subsidiary an undivided joint ownership interest in and to the applications.

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B-46

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Table of Contents

		Pre-Spin				Post-Spin
		Owner/				Owner/
Address		Lessee				Lessee				Comments
114 E Crandall Ave, Harrison, AR			WLS				WLN			Lease will be assigned or parties will enter into a sublease.
2201 Brookwood Dr Bldg 1, Little Rock, AR			WLS				WLN			Lease will be assigned or parties will enter into a sublease.

B-47

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Table of Contents

System Name		Supplier		Summary Description/ Functionality
Transformer		Bell & Howell		Application supporting the generation of the UE (Universal Bill) formatting provides an enhanced and consolidated bill format replacing the traditional formats. Used by the AOPC output center
		BellSouth		Directory Assistance Service Agreement — Wireline operator service
		Benchmark		Equipment Maintenance Plan Administration — Wireline phone insurance
Checkfree		Checkfree		Check validation service. Also, as of late ’04 — also provides EBPP functionality for wireless and scheduled for wireline in 1Q’05
Cybermation		Cybermation		Used in the Twinsburg Data Center to schedule server jobs.
CAD-E		Intergraph		Intergraph developed application used to design and inventory facility records (Includes Fieldview, Webview, SmartSketch). FRAMME is older technology and shows OSP views by location only. Next Generation product name is G/COMMS.
SA (Service Activation)		MetaSolv		Service Activation system for a single POTS switch — was to be a replacement for SSI however its rollout has been delayed. MetaSolv product.
DSL Check Up Center		Motive		Tools for the DSL ISR to perform remote diagnostics on customer’s PC and assist them in resolving their issues. Also provides a WEB portal for self help functions. aka Motive: Tools to trouble shoot customer’s DSL
NetLinx — DSMP		NetLinx		Supports the creation, storage and transmission of yellow Page book composition and publishing.
		Network Associates McAfee		Marketing Distribution Agreement — DSL Security SPAM (Note: Wireless also has separate agreement)
		NeuStar		Neustar Care Clearinghouse Service Agreement — Customer Care Agreements (Note: Wireless also has separate agreement)
alltel.net		Openwave		Software used by Alltel’s DSL group to provide e-mail boxes to the customers with DSL accounts. Amendment #2 also includes an external SPAM Filter
		Pubtrak		Yellow Pages Publication Sw App
		Road America Motor Club		Road Side Assistance (new agreement is in AT legal)
React		Spirent		Tapestry — Application that Special Circuit Testers use to access test devices in the Network to sectionalize and isolate problems

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Table of Contents

System Name		Supplier		Summary Description/ Functionality
Tapestry		Spirent/ Wiltron		React — Application that front-ends test heads and is used by Special Circuit Testers in Nebraska to access test devices in the Network to sectionalize and isolate problems. As of Jan ’04, they will be converting to the React system for mainstream usage, leaving.
		Strategic Solutions Group (SSG)		Proposal and Statement of Work — CAMS/DCRIS Infranet Plan Synchronization. Number 2005-051
Brightmail		Symantic corporation		Anti spam/anti virus
System Fusion		System Fusion		IP Address Management for our ISP customers and internal DNS Management system.
		Tamco		Tamco Partner Agreement
		Targus		CNAM Services and Data Agreement
		TeleNetwork		Agreement for Call Center Support
IRISnGen by Teltronics		Teltronics		A sophisticated Alarm management tool providing single point visibility and control of monitored Systems (PBX, IVR, & Contact closure Systems such as door and fire alarms) Customer PBX Status/Alarm Monitoring System
4TELII/ Celerity/ VRS		Teradyne		Remote central office test system in Kentucky. Used by CTS(4TELII), testers(Celerity) and field techs(VRS).
ACR by Unitech		Unitech		Bill Verification — Commonly known by the Vendor name Unitech rather than the product name — ACR Detail & ACR Summary are the two products run at ACI. CDR trending, balancing & auditing system Trending sub-system takes in raw switch data, toll and access records processed t
		Verisign		Module No. 6 to Master Service Agreement for LNP Service Order Administration
		Verisign		Module No. 4 to Master Service Agreement for Calling Name Delivery Service
		Verisign		IS-41 Transport Service Agreement
		WebSite Pro		Referral Agreement — 3rd party vendor to develop WEB Sites for our ALLTEL customers
Clearquest		IBM Rational		Clear Quest is the defect management tool used for recording and tracking the resolution of defects that occur during the IT Systems testing process. The tool is a web based toll access via the URL — http://clearquest.alltel.com/cqweb

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Table of Contents

System Name		Supplier		Summary Description/ Functionality
Indirect		Computer Sciences Corp (CSC)
Indirect		Quebecor World Inc		Database & Directory Publishers
Indirect Procurement		Henderson Services LLC
Indirect Procurement		Henderson Services LLC		Electrical Contractors
Indirect Procurement		SSC Service Solutions
Indirect Procurement		SSC Service Solutions		Landscaping, Lawn, Mowing, Sprinkler, Tree Svc
Indirect Procurement		Progressive Communication Services Inc		Employment, Temporary Help, Ma
Indirect Procurement		Personix		Packaging and Labeling Service
Indirect Procurement		Cassidy Associates Inc		Professional, Scientific, Techni
Indirect Procurement		Transglobal Communications Inc		Electrical Contractors
Indirect Procurement		Callahan Service Co LLC		Heating, Air-Conditioning, HVAC, Duct
Indirect Procurement		Wood Electric
Indirect Procurement		Wood Electric		Snow Plowing, Snow Removal, Lot Sweeping
Indirect Procurement		Johnson Wire Contractors Inc		Electrical Contractors
Indirect Procurement		Tri State Roofing & Sheet Metal Company		Roofing, Siding, and Sheet Metal Contractors
Indirect Procurement		Tri State Roofing & Sheet Metal Company		Roofing, Siding, and Sheet Metal Contractors
Indirect Procurement		Walmart		Account collection, Collection
Indirect Procurement		T & H Janitorial Service		Landscaping, Lawn, Mowing, Sprinkler, Tree Svc
Indirect Procurement		T & H Janitorial Service		Landscaping, Lawn, Mowing, Sprinkler, Tree Svc
Network Infrastructure		3Com Corporation		IP PBX
Network Infrastructure		3M Telcomm Products Division		Closures, Connectors, etc.
Network Infrastructure		Actelis Networks, Inc.		DS3 over Copper
Network Infrastructure		Acterna		DSL Test Equipment
Network Infrastructure		ADC Telecomm., Inc. — Infrstrctr		DSX Connectivity
Network Infrastructure		Adtran, Inc.		DSLAM, Microwave Radios, HDSL
Network Infrastructure		C & D Batteries		Cell Site/Central Office Batteries
Network Infrastructure		Cablemasters		OSP Construction
Network Infrastructure		Calix		Digital Loop Carrier
Network Infrastructure		Carolina Cable		OSP Construction
Network Infrastructure		CEA Power LLC.		DLC Batteries
Network Infrastructure		CEIS		Network Installation Services
Network Infrastructure		Charles Ind./ Coil Sales, Inc.		Pedestals
Network Infrastructure		Charles Industries Ltd./Wescom		DAML, T1 Repeaters
Network Infrastructure		Ciena Communications Inc		Optical
Network Infrastructure		Cisco Systems		Routers, Switches
Network Infrastructure		CLS		Utility Location Services
Network Infrastructure		CML Technologies, Inc		Network Installation Services
Network Infrastructure		Conklin Corporation		DAML

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Table of Contents

System Name		Supplier		Summary Description/ Functionality
Network Infrastructure		Corning Cable Systems, LLC.		NID’s, Cross Connect Cabinets
Network Infrastructure		CTS		OSP Construction
Network Infrastructure		Driftwood		OSP Construction
Network Infrastructure		EA Technical		Utility Location Services
Network Infrastructure		Elite Technologies & Comm Inc		Network Installation Services
Network Infrastructure		ELM		Utility Location Services
Network Infrastructure		Falcon Comm., Inc.		Network Installation Services
Network Infrastructure		General Cable Corporation		OSP Cable
Network Infrastructure		General Excavating		OSP Construction
Network Infrastructure		Globe		OSP Construction
Network Infrastructure		Henkels		OSP Construction
Network Infrastructure		Hubbell Premise Wiring, Inc.		Premise Products
Network Infrastructure		Jim Young Construction		OSP Construction
Network Infrastructure		Juniper Networks, Inc.		Routers, Switches
Network Infrastructure		Klaasmeyer		OSP Construction
Network Infrastructure		Libla		OSP Construction
Network Infrastructure		Lucent Ins Data Products		DSLAM
Network Infrastructure		Lucent Technologies — (AGCS)		Central Office Switching Equipment
Network Infrastructure		Luffman-Byers Telecom Inc		Network Installation Services
Network Infrastructure		MNM Group		Fiber jumpers, Connectorized cables
Network Infrastructure		NEC America, Inc. (Key Systems)		Key Systems/PBX
Network Infrastructure		Nortel — Northern Telecom		Central Office Switching Equipment
Network Infrastructure		Nortel Networks (BCM/Norstar)		PBX
Network Infrastructure		Nortel Networks (Meridian 1 PBX)		PBX
Network Infrastructure		Nortel Networks Inc. — Switching Merchands		Central Office Switching Equipment
Network Infrastructure		Nortel Networks, Inc. — Ent Data		Central Office Switching Equipment
Network Infrastructure		Nortel Networks, Inc.(Switching Complex)		Central Office Switching Equipment
Network Infrastructure		North Pacific Lumber Co		Distribution Poles
Network Infrastructure		Plantronics, Inc. (Headsets)		Headsets and Accessories
Network Infrastructure		Preformed Line Products Co.		Closures
Network Infrastructure		RACO		OSP Construction
Network Infrastructure		S&S		OSP Construction
Network Infrastructure		Siemens Carrier Networks, LLC.		Central Office Switching Equipment
Network Infrastructure		Southern Installations		OSP Construction
Network Infrastructure		SS8 Networks		Voicemail — Wireline Only
Network Infrastructure		Superior Essex		OSP Cable
Network Infrastructure		Syracuse Utilities		OSP Construction
Network Infrastructure		Telect, Inc.		DSX Connectivity
Network Infrastructure		Tellabs Petaluma, Inc.		DACS, Digital Loop Carrier
Network Infrastructure		Thayer		OSP Construction
Network Infrastructure		Thomas & Betts Corp.		Cable Ties
Network Infrastructure		Trawick		OSP Construction
Network Infrastructure		Triple D		OSP Construction

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System Name		Supplier		Summary Description/ Functionality
Network Infrastructure		Tripp Lite		Surge Protection Products
Network Infrastructure		Turin Networks, Inc.		DACS
Network Infrastructure		ULMS		Utility Location Services
Network Infrastructure		Utiliquest		Utility Location Services
Network Infrastructure		Utility Services & Associates		OSP Construction
Network Infrastructure		VTEL Products Corp.		Video Conference Equipment
Network Infrastructure		Westell, Inc.		T1 Networking Products, Modems
Network Infrastructure		White Communications, Inc.		Network Installation Services

Name		Description		Status
Business Connect		Wireline ads		Registered to ALLTEL Communications, Inc. — U.S. Reg. #2,761,890
Hyperfast Always On		DSL		Registered to ALLTEL Communications, Inc. — U.S. Reg. #2,649,171
Protection Plus		Wireline inside wiring		Registered to ALLTEL Corporation — U.S. Reg. #1,513,928
ST Standard Telephone Company and Design				Registered to Standard Telephone Company — U.S. Reg. #1,294,985
Standard				Registered to Standard Telephone Company — U.S. Reg. #1,135,305

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Table of Contents

BU Selling				BU Buying		Location of Service/ Functional
Service				Service		Department		Description of Service
	WLN			WLS				T1 port fees for switch interface (SPM charges)
	WLN			WLS (AXN)				Technical support in areas not covered by AXN employees
	WLN			WLS (AXN)				Fiber repair of non-leased AXN fiber
	Wireless			ILEC				Billing/Collection of LD
	Wireless			ILEC		Overlap Markets		Wireline would sell wireless services in an MVNO arrangement
	WLN			WLS		1.d Network Maintenance		Wireline will provide maintenance as the SS7 group has done or as needed according to Wireless network needs.
	WLN			WLS		STP Platform (equipment and environments		Wireline will continue to fully support STP network as the SS7 group has done. This would include link ordering, turn-up and testing, capacity planning and platform engineering and maintenance.
	WLN			WLS		Traffic and Performance		Wireline will monitor link utilization and maintain QOS to appropriate standards.
	WLN			WLS		Support for all Alphaview servers and resources		This includes all licenses for Oracle, Ab Initio, etc. plus a supported SAN as needed and all GeoProbe functions
	WLN			WLS		Floorspace, environmentals, SS7 circuits and IP connectivity for CALEA		Wireline will maintain SS7 links and IP connectivity to these Wireless SCP’s.
	WLN			WLS		Floorspace, environmentals, SS7 circuits and IP connectivity for Casabytes		Wireline will maintain SS7 links and IP connectivity to these Wireless SCP’s.
	WLN			WLS		Connectivity and circuit ordering		Wireline will provide procedures to Wireless regarding circuit ordering, turn-up and test.

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BU Selling				BU Buying		Location of Service/ Functional
Service				Service		Department		Description of Service
	WLN			WLS		Floorspace, environmentals, SS7 circuits and IP connectivity for Comverse/ PrePay		Wireline will maintain SS7 links and IP connectivity to these Wireless SCP’s. Note: these SS7 links are over IP.
	WLN			WLS				Number Portablility
	WLN			WLS		Centralized OS and Database licenses		Alphaview and E911 MAPS leverage corporate licenses. Depending on final ownership, Wireless may need a TSA for a time. (examples: Oracle and Ab Initio)
	WLN			WLS		Floorspace, environmentals, SS7 circuits and IP connectivity for SMSC’s and their load balancers, routers and circuits		Includes all SS7 and IP connectivity for provisioning, maintenance and support.
	WLN			WLS		IP connectivity for all SCP’s and support devices		Circuits, IP address/port space, equipment used for mate-updates and other machine to machine communications supporting redundancy.
	WLN			WLS		Floorspace, environmentals, SS7 circuits and IP connectivity for SDHLR		Includes support and maintenance of all High Speed Links and the “private” IP switched network connecting all nodes. Also including equipment and circuits associated with Authentication. Also support during migration from SHLR’s and IHLR’s. Support for connectivity between production and lab environments until platforms can be established in “wireless space”.
	WLN			WLS		Floorspace, environmentals, SS7 circuits and IP connectivity for SHLR’s		Depending on timing, includes all SS7 and IP connectivity supporting provisioning (eSM), maintenance and operation of all SHLR pairs. Support for connectivity between production and lab environments.
	WLN			WLS		Floorspace, environmentals, SS7 circuits and IP connectivity for SMS gateways and their load balancers, routers and circuits		Includes all “enterprise” and “SDN” IP connectivity to external ESME’s until everything is re-established in “wireless space”.
	WLN			WLS		Floorspace, environmentals, SS7 circuits and IP connectivity for		All HVAC, fire suppression, AC/DC power backed up by batteries and generator systems, CSU/DSU’s, DACS equipment, routers and IP resources. Also, preserve secure access to all software and equipment by Wireless and vendor maintenance teams. This also includes 1B lines and modems used to support this equipment.

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BU Selling				BU Buying		Location of Service/ Functional
Service				Service		Department		Description of Service
	WLN			WLS		Floorspace, environmentals, SS7 circuits and IP connectivity for T2T		Maintain Enterprise and SDN IP connectivity for provisioning and interface to other Wireless network elements. Maintain SS7 links to all DG’s.
	WLN			WLS		ISUP and TCAP service to all traditional Wireless endpoints		Syniverse, Verisign, SNET agreements provide ALLTEL with both. Wireless will need services until future network is created.
	WLN			WLS		Floorspace, environmentals, SS7 circuits and IP connectivity for MPC/PDE’s		Also includes trunking and IP connectivity to Techoncom IOSP platform.
	WLN			WLS		Floorspace, environmentals, SS7 circuits and IP connectivity for WNP		LNP equipment and connections stay with STP’s. 60%+ of dips are Wireless. SS7 links to LSMS must be maintained as long as Wireless continues to leverage the current SPID, NPAC and MPS arrangement
	CLEC			AXN		Fidelity Contract		CLEC sold the service which includes transport
	ILEC			AXN		Fiber rings and tandem switches		AXN and ILEC share many tandem switches. Rings in the ILEC market are carrying wireless and AXN traffic.
	ILEC			AXN		Twinsburg		After a trouble is called into the Special Service Test Center the ticket is dispatched from the Canyon Falls service center
	ILEC			AXN		VPN 1.0 in KY market		AXN Transport and IP routing is part of the VPN 1.0 product. Contract is 2008 through 2010 depending on customer’s contract.
	ILEC			AXN		UK MSA		Routers and Data switches providing IP VPN services to UK are owned by AXN. Through 2010 with option of 5 yr renewals.
	ILEC			AXN		KIH2		Routers and Data switches providing IP VPN services to Commonwealth of KY Gov’t are owned by AXN. Contract through 2010 w/option of 5 year renewals.
	ILEC			AXN		IP/MPLS VPN services in NE market		AXN provided transport and IP routing is part of numerous IP/MPLS VPN contracts in NE market. Term 2007-2010 depending on customers contract.
	AXN			ILEC		ATM switches		The ATM switches that DSL customers feed through are owned by AXN. DSL leases the switch based upon ports.
	Wireless			ILEC		Advertising Agency/Sponsorship		Sponsorships in overlap markets
	Wireless			ILEC		Research Contracts		Frost and Sullivan; Raymond James

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BU Selling				BU Buying		Location of Service/ Functional
Service				Service		Department		Description of Service
	Wireless			ILEC		Cellular Service		Discounts for wireless services for new operation and employees
	Wireless			ILEC/CLEC		Consolidated billing		ILEC/CLEC customers are provided a consolidated bill (includes both Cellware and VII)
	Wireless			ILEC/CLEC		Retail Stores — Payment collections		Walk in customer bill payments, phone bank, collateral
	Wireless			ILEC/CLEC		Voice Mail Boxes — Various Exchanges		In 8 Exchanges there are shared voice mailboxes
	ILEC			Wireless		Elyria ?		Wireless customers billed in CAMS
	ILEC			Wireless		Little Rock		Domain name servers, intranet
	ILEC			Wireless		Openwave		Message register for SMS and Email for ILEC/ISP customer
	ILEC			Wireless		Local Markets — SS7		Local SS7 functionality is provided by the ILEC without compensation from the wireless entity
	ILEC (ISP	)		Wireless		Little Rock		Wireless currently reimburses Internet for internet based expenses related to Web Unwired Products (WAP)
	ILEC			Wireless/AXN		ALD Stars		Support of Wholesale services, prepaid calling cards, 800 numbers, internal calling cards, internal LD functions
	WLN			AXN				Revenue requirements contract
	WLN			AXN				Fiber maintenance contract
	Wireless			ILEC		AOPC — Little Rock		Bill Printing for Wireline and CLEC
	WLS			WLN		WLN conference calling service		WLS will own master underlying carrier agreement with InterCall for conference calling for WLN internal use and WLN external customers
	WLS			WLN		WLN long-haul for LD and internet products		WLS/AXN will own master underlying carrier relationships w/MCI, Sprint, AT&T, and Global Crossing
	WLS			WLN		WLN DA & OS for LD product		WLS will own master toll DA and toll OS carrier relationship with Sprint
	WLS			WLN		WLN providing LD service		WLS will own CICs and WLN will procure services from WLS
	WLS			WLN		WLS providing LD service		WLS will own master underlying carrier agreement with Sprint for sub-CIC traffic and WLN will have to procure this service from WLS
	WLS			WLN		WLN 800 service		WLS will own master underlying carrier agreement with AT&T for providing Megacom 800 service to both WLN call centers and WLN external customers
	WLN			WLS		WLS dial-tone service in retail stores		WLS will need to contract with WLN (CLEC) for dial-tone service in retail stores in overlap areas; not necessary for WLS retail stores in ILEC areas

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BU Selling				BU Buying		Location of Service/ Functional
Service				Service		Department		Description of Service
	WLN			WLS		WLS recip comp billing (CABS)		WLS would need to procure CABS billing services from WLN for recip comp billing (WLS has no systems in place to perform this)
	WLN			WLS		WLS SS7 services		WLN will own SS7 STPs and network and WLS will need to procure signaling services from WLN
	WLN			WLS		WLS 800 traffic termination		Several billing disputes today (ITC Deltacom, Sprint) over this traffic termination — WLN would need to be compensated by WLS for this service
	WLN			WLS		WLS 911 services		WLS will need to contract with WLN for 911 network and usage where ILEC is PSAP
	WLN			WLS		WLS ASAP circuit inventory system		WLN will own ASAP system and WLS will need to procure this service from WLN
	WLN			WLS		WLS/AXN support services		Some level of personnel would be required for a WLS/AXN entity in order to provide underlying carrier service for WLN (areas of billing support, marketing, customer service, and provisioning)
	WLN			WLS		WLS miscellaneous billing services		WLS would need to procure miscellaneous billing services from WLN for both E-911 and NMID billing (WLS has no systems in place to perform this)
	WLN			WLS		WLS campus/building voice & transport services		For the following locations, WLS would procure these services from WLN: * Alpharetta campus (Centrex) — possible regulatory issues * Charlotte call center WLS Financial Services (Centrex & transport) * Twinsburg Data Center (Centrex & transport) * Little Rock East and West campuses (Centrex)
	WLN			WLS		WLS trunking to CLEC		In CLEC/WLS overlap areas today, ICA (interconnection agreements) would need to be struck between WLN (CLEC) and WLS for trunking between CLEC C.O. and WLS MTSO
	WLN/WLS			WLS/WLN		WLS & WLN shared contracted private line services		WLN (CLEC or ILEC) leasing WLS (WLS or AXN) ring and vice versa
	WLN			WLS		Action, TX (Data — circuit)		WLS Market circuit terminations onto IP Data POPs
	WLN			WLS		Albany, GA (Data — circuit)		WLS Market circuit terminations onto IP Data POPs
	WLN			WLS		Dalton, GA (Data — circuit)		WLS Market circuit terminations onto IP Data POPs

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BU Selling				BU Buying		Location of Service/ Functional
Service				Service		Department		Description of Service
	WLN			WLS		Fordyce, AR (Data — circuit)		WLS Market circuit terminations onto IP Data POPs
	WLN			WLS		Hudson, OH (Data — circuit)		WLS Market circuit terminations onto IP Data POPs
	WLN			WLS		Live Oak, FL (Data — circuit)		WLS Market circuit terminations onto IP Data POPs
	WLN			WLS		Little Rock, AR (Data — circuit)		WLS Market circuit terminations onto IP Data POPs
	WLN			WLS		Raleigh, NC (Data — circuit)		WLS Market circuit terminations onto IP Data POPs
	WLN			WLS		Moultrie, GA (Data — ethernet)		Ethernet termination for WLS Message Register (MR)
	WLN			WLS		Greenbrier, AR (Data — ethernet)		Ethernet termination for WLS Message Register (MR)
	WLN			WLS		Little Rock, AR (Data — ethernet)		Ethernet termination for WLS Message Register (MR)
	WLN			WLS		Hudson, OH (Data — ethernet/PDSN)		Ethernet termination for PDSN
	WLN			WLS		Little Rock, AR (Data — ethernet/PDSN)		Ethernet termination for PDSN
	WLN			WLS		Atlanta, GA (Data — ethernet/PDSN)		Ethernet termination for PDSN
	WLN			WLS		Raleigh, NC (Data — ethernet/PDSN)		Ethernet termination for PDSN
	WLN			WLS		Atlanta, GA (Data — MMS)		MMS T1 Port to Ericsson
	WLN			WLS		Little Rock, AR (Data — MMS)		MMS T1 Port to Ericsson
	WLN			WLS		External VPN Connections		VPN Connectivity to 3rd party vendors for app traffic & support
	WLN			WLS		Support for Wireless Email		Current SMTP email relay/ processing wireless svcs
	WLN			WLS		DNS & IP Address Mgmt Svcs		Maintain access to existing DB tools from SystemFusion
	WLN			WLS		Openwave		Openwave Email Migration
	WLN			WLS		Network Mgmt		Network Mgmt
	WLN			WLS		Network Security		Network Security
	WLN			WLS		Interoffice MTSO (Service Delivery Network-SDN)		Interoffice MTSO (Service Delivery Network-SDN)
	WLN			WLS		Ericsson MMS VPN		Ericsson MMS VPN
	WLN			WLS		Syniverse Data Roaming VPN		Syniverse Data Roaming VPN
	WLN			WLS		Blackberry RIM VPN		Blackberry RIM VPN
	WLN			WLS		Axcess Enterprise VPN		Axcess Enterprise VPN
	WLN			WLS		CDPD/Axcess Enterprise VPN		CDPD/Axcess Enterprise VPN

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BU Selling				BU Buying		Location of Service/ Functional
Service				Service		Department		Description of Service
	WLN			WLS		Greenbrier, AR — Wireless Messaging		Wireless Messaging
	WLN			WLS		Moultrie, GA — Wireless Messaging		Wireless Messaging
	WLN			WLS		Wireless IT & Billing VPN		Wireless IT & Billing VPN
	WLN			WLS		Port Charges (Data)		Internet Transit Svcs — Port connections in 8 locations
	WLN			WLS		Bandwidth Charges		Internet Transit Svcs — Bandwidth Usage
	WLS			WLN		Fort Smith, AR (Data — internet)		Dedicated Internet Customer ports on MTSO router equipment
	WLS			WLN		Greensboro, NC (Data — internet)		Dedicated Internet Customer ports on MTSO router equipment
	WLS			WLN		Omaha, NE (Data — internet)		Dedicated Internet Customer ports on MTSO router equipment
	WLS			WLN		Raleigh, NC (Data — internet)		Dedicated Internet Customer ports on MTSO router equipment
	WLS			WLN		Springfield, MO (Data — internet)		Dedicated Internet Customer ports on MTSO router equipment
	WLS			WLN		Storage Area Network		SAN — includes port connection fee and GB fee
	WLS			WLN		Operating System Support		Operating System Support
	WLS			WLN		Database Support		Database Support
	WLS			WLN		Backup/Restore Services		Backup/Restore Services
	WLS			WLN		General App Separation Sup		General App Separation Sup
	WLS			WLN		DNS/NTP Services		DNS/NTP Services
	WLS			WLN		SSL Certificate Mgmt		SSL Certificate Mgmt
	WLS			WLN		WLN Content Migration Sup		WLN Content Migration Sup
	WLS			WLN		Core OC-12 Links		AXN Transport for Core OC-12 Links
	WLS			WLN		Access to Internet Transit		AXN Transport for Access to Internet Transit
	WLS			WLN		Backhaul to 56 WLN markets		AXN Transport for backhaul to 56 WLN markets
	ILEC			WLS		Verizon DA contract		Contract between ACI and Verizon DA. Needs to stay wireline due to commission mandated SLAs which are incorporated in contract
	ILEC			WLS		Targus		SS7 — LIDB and CNAM functionality
	ILEC			WLS		Verisign		SS7 — LIDB and CNAM functionality
	WLS			ILEC		MVNO in overlap markets		Wireline acting as an MVNO in overlap markets

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Item 13.	Other Expenses of Issuance and Distribution

			Amount to
Item			Be Paid*
Securities and Exchange Commission registration fee			$	0
Blue Sky fees and expenses				0
Legal fees and expenses				20,000
Accounting fees and expenses				0
Printing expenses				0
Miscellaneous				0
	Total		$	20,000

*

This Registration Statement is filed contemporaneously with the filing by Valor Communications Group, Inc. (“Valor”) of a Registration Statement on Form S-4 regarding the transactions contemplated by the Agreement and Plan of Merger between Valor, Alltel Corporation (“Alltel”) and Alltel Holding Corp. (“Spinco”) and the Distribution Agreement between Alltel and Spinco, each dated as of December 8, 2005. There have been no incremental expenses or fees incurred by Spinco relating solely to this Registration Statement other than the legal fees listed herein.

Item 14.	Indemnification of Directors and Officers

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Item 15.	Recent Sales of Unregistered Securities

Item 16.	Exhibits and Financial Statement Schedules

Item 17.	Undertakings

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	(i)	Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

	(ii)	Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

	(iii)	The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

	(iv)	Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

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	ALLTEL HOLDING CORP.

	By:	/s/ Jeffery R. Gardner

	Name: Jeffery R. Gardner

	Title:	President and Chief Executive Officer

Signature				Title		Date
/s/ Francis X. Frantz   Francis X. Frantz				Chairman of the Board of Directors		May 23, 2006
/s/ Jeffery R. Gardner   Jeffery R. Gardner				Director and President and Chief Executive Officer (Principal Executive Officer)		May 23, 2006
/s/ Brent K. Whittington   Brent K. Whittington				Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)		May 23, 2006

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Exhibit
Number				Description
	2	.1		Agreement and Plan of Merger, dated as of December 8, 2005, by and among Alltel Corporation, Alltel Holding Corp. and Valor Communications Group, Inc. (included as Annex A-1 to the proxy statement/ prospectus-information statement forming a part of this registration statement). Pursuant to Item 601(b)(2) of Regulation S-K, certain schedules, exhibits and similar attachments to this Agreement have not been filed with this exhibit. The schedules contain various items relating to the assets of the business being acquired and the representations and warranties made by the parties to the Agreement. The Registrant agrees to furnish supplementally any omitted schedule, exhibit or similar attachment to the SEC upon request.
	2	.2		Amendment No. 1 to the Agreement and Plan of Merger, dated May 18, 2006, by and among Alltel Corporation, Alltel Holding Corp. and Valor Communications Group, Inc. (included as Annex A-2 to the proxy statement/prospectus-information statement forming a part of this registration statement)
	2	.3		List of exhibits and schedules to Agreement and Plan of Merger*
	3	.1		Amended and Restated Certificate of Incorporation of Alltel Holding Corp.*
	3	.2		Bylaws of Alltel Holding Corp.*
	4	.1		Form of First Amendment to Securityholders’ Agreement by and among Valor Communications Group, Inc., Welsh, Carson, Anderson & Stowe and certain individuals affiliated therewith, Vestar Capital Partners and individuals affiliated therewith, and certain of other stockholders of Valor
	5	.1		Opinion of Kutak Rock LLP as to the legality of the Alltel Holding Corp. securities to be distributed in the spin-off*
	8	.1		Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding certain Federal income tax matters
	8	.2		Opinion of Kirkland & Ellis LLP regarding certain Federal income tax matters
	10	.1		Distribution Agreement, dated as of December 8, 2005, between Alltel Corporation and Alltel Holding Corp. (attached as Annex B to the proxy statement/ prospectus-information statement which is a part of this Registration Statement)
	10	.2		Employee Benefits Agreement, dated as of December 8, 2005, between Alltel Corporation and Alltel Holding Corp.*
	10	.3		Form of Tax Sharing Agreement among Alltel Corporation, Alltel Holding Corp. and Valor Communications Group, Inc.*
	10	.4		Form of Transition Services Agreement among Alltel Corporation and Alltel Holding Corp.*
	10	.5		Form of Reverse Transition Services Agreement between Alltel Corporation and Alltel Holding Corp.*
	10	.6		Commitment Letter, dated December 8, 2005, among Alltel Corporation and J.P. Morgan Securities Inc., JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Capital Corporation*
	10	.7		Amendment to Commitment Letter, dated April 12, 2006, among Alltel Corporation and J.P. Morgan Securities Inc., JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Capital Corporation*
	10	.8		Consulting Agreement, dated as of May 1, 2006, between John J. Mueller and Alltel Holding Corp.*
	10	.9		Employment Offer Letter between Grant Raney and Alltel Holding Corp. dated as of February 15, 2006*
	10	.10		Employment Offer Letter between Cindy Nash and Alltel Holding Corp. dated as of February 15, 2006*
	21	.1		Subsidiaries of the Registrant*
	23	.1		Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm of the wireline division of Alltel Corporation
	23	.2		Consent of Deloitte & Touche LLP, independent registered public accounting firm of Valor Communications Group, Inc.
	23	.3		Consent of Kutak Rock LLP (included in Exhibit 5.1)*
	23	.4		Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 8.1)

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Exhibit
Number				Description
	23	.5		Consent of Kirkland & Ellis LLP (included in Exhibit 8.2)
	99	.1		Voting Agreement, dated as of December 8, 2005, between Alltel Holding Corp. and certain stockholders of Valor Communications Group, Inc. named therein (included as Annex C to the proxy statement/ prospectus-information statement forming a part of this registration statement)
	99	.2		Consent of Wachovia Securities
	99	.3		Consent of Bear, Stearns & Co. Inc.
	99	.4		Opinion of Duff & Phelps, LLC as to the solvency and adequacy of capitalization of Windstream Corporation
	99	.5		Consent of Duff & Phelps, LLC

*	Filed with the original filing of this Registration Statement on Form S-1 (Reg No. 333-133753) on May 2, 2006