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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>/in/edgar/work/20000811/0000018926-00-000010/0000018926-00-000010.txt : 20000921
<SEC-HEADER>0000018926-00-000010.hdr.sgml : 20000921
ACCESSION NUMBER:		0000018926-00-000010
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20000630
FILED AS OF DATE:		20000811

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CENTURYTEL INC
		CENTRAL INDEX KEY:			0000018926
		STANDARD INDUSTRIAL CLASSIFICATION:	 [4813
]		IRS NUMBER:				720651161
		STATE OF INCORPORATION:			LA
		FISCAL YEAR END:			1231
</COMPANY-DATA>

		FILING VALUES:
			FORM TYPE:		10-Q
			SEC ACT:		
			SEC FILE NUMBER:	001-07784
			FILM NUMBER:		694530
</FILING-VALUES>

			BUSINESS ADDRESS:	
				STREET 1:		P O BOX 4065
				STREET 2:		100 CENTURY PARK DR
				CITY:			MONROE
				STATE:			LA
				ZIP:			71203
				BUSINESS PHONE:		3183889000
</BUSINESS-ADDRESS>

				MAIL ADDRESS:	
					STREET 1:		100 CENTURY PARK DR
					STREET 2:		P O BOX 4065
					CITY:			MONROE
					STATE:			LA
					ZIP:			71203
</MAIL-ADDRESS>

					FORMER COMPANY:	
						FORMER CONFORMED NAME:	CENTURY TELEPHONE ENTERPRISES INC
						DATE OF NAME CHANGE:	19920703
</FORMER-COMPANY>

						FORMER COMPANY:	
							FORMER CONFORMED NAME:	CENTRAL TELEPHONE & ELECTRONICS CORP
							DATE OF NAME CHANGE:	19720512
</FORMER-COMPANY>
</FILER>
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>FORM 10-Q
<TEXT>




                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q


[X]    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934

                  For the quarterly period ended June 30, 2000

                                       or

[  ]   Transition Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934

                         Commission File Number: 1-7784


                                CENTURYTEL, INC.
             (Exact name of registrant as specified in its charter)



             Louisiana                                         72-0651161
  (State or other jurisdiction of                           (I.R.S. Employer
  incorporation or organization)                           Identification No.)

                 100 Century Park Drive, Monroe, Louisiana 71203
               (Address of principal executive offices) (Zip Code)


       Registrant's telephone number, including area code: (318) 388-9000

       Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                            [X] Yes           [  ] No

       As of July 31, 2000, there were 140,548,972 shares of common stock
outstanding.

<PAGE>


                                CenturyTel, Inc.


                                TABLE OF CONTENTS



                                                                        Page No.

Part I.      Financial Information:

   Item 1.    Financial Statements

        Consolidated Statements of Income--Three Months and
           Six Months Ended June 30, 2000 and 1999                           3

        Consolidated Statements of Comprehensive Income --
           Three Months and Six Months Ended June 30, 2000 and 1999          4

        Consolidated Balance Sheets--June 30, 2000 and
           December 31, 1999                                                 5

        Consolidated Statements of Stockholders' Equity--
           Six Months Ended June 30, 2000 and 1999                           6

        Consolidated Statements of Cash Flows--
           Six Months Ended June 30, 2000 and 1999                           7

        Notes to Consolidated Financial Statements                        8-10

   Item 2.    Management's Discussion and Analysis of
                Financial Condition and Results of Operations            11-24

   Item 3.    Quantitative and Qualitative Disclosures
                About Market Risk                                           25

Part II.        Other Information:

   Item 4.    Submission of Matters To a Vote of Security Holders        25-26

   Item 6.    Exhibits and Reports on Form 8-K                              26

Signature                                                                   26

<PAGE>


                          PART I. FINANCIAL INFORMATION

                                CenturyTel, Inc.
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                   Three months                  Six months
                                                  ended June 30,               ended June 30,
- -----------------------------------------------------------------------------------------------
                                               2000           1999           2000          1999
- -----------------------------------------------------------------------------------------------
                                                      (Dollars, except per share amounts,
                                                       and shares expressed in thousands)
<S>                                      <C>               <C>            <C>           <C>
OPERATING REVENUES
    Telephone                            $  276,088        274,897        553,014       563,170
    Wireless                                111,142        110,032        211,546       208,593
    Other                                    35,926         31,821         71,552        59,243
- -----------------------------------------------------------------------------------------------
       Total operating revenues             423,156        416,750        836,112       831,006
- -----------------------------------------------------------------------------------------------

OPERATING EXPENSES
    Cost of sales and operating
      expenses                              212,495        200,113        429,218       393,765
    Depreciation and amortization            85,769         86,012        170,580       175,993
- -----------------------------------------------------------------------------------------------
       Total operating expenses             298,264        286,125        599,798       569,758
- ----------------------------------------------------------------------------------------------

OPERATING INCOME                            124,892        130,625        236,314       261,248
- -----------------------------------------------------------------------------------------------

OTHER INCOME (EXPENSE)
    Interest expense                        (35,267)       (37,487)       (71,309)      (79,728)
    Income from unconsolidated
      cellular entities                       9,475          9,267          8,016        16,112
    Minority interest                        (2,871)       (18,790)        (5,163)      (22,100)
    Gain on sale of assets                        -         39,601          9,910        49,959
    Other income and expense                  2,384          3,434          6,613         5,614
- -----------------------------------------------------------------------------------------------
       Total other income (expense)         (26,279)        (3,975)       (51,933)      (30,143)
- -----------------------------------------------------------------------------------------------

INCOME BEFORE INCOME TAX EXPENSE             98,613        126,650        184,381       231,105

    Income tax expense                       40,768         73,188         77,252       116,538
- -----------------------------------------------------------------------------------------------

NET INCOME                               $   57,845         53,462        107,129       114,567
===============================================================================================

BASIC EARNINGS PER SHARE                 $      .41            .38            .76           .83
===============================================================================================

DILUTED EARNINGS PER SHARE               $      .41            .38            .76           .81
===============================================================================================

DIVIDENDS PER COMMON SHARE               $    .0475           .045           .095           .09
===============================================================================================

AVERAGE BASIC SHARES
  OUTSTANDING                               139,995        138,852        139,874       138,455
===============================================================================================

AVERAGE DILUTED SHARES
  OUTSTANDING                               141,732        141,461        141,729       141,245
===============================================================================================

See accompanying notes to consolidated financial statements.
</TABLE>

                                CenturyTel, Inc.
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                   Three months                  Six months
                                                  ended June 30,               ended June 30,
- -----------------------------------------------------------------------------------------------
                                               2000           1999           2000          1999
- -----------------------------------------------------------------------------------------------
                                                            (Dollars in thousands)

<S>                                        <C>              <C>           <C>           <C>
Net income                                 $ 57,845         53,462        107,129       114,567
- -----------------------------------------------------------------------------------------------

Other comprehensive income, net of tax:
  Unrealized holding gains (losses)
    arising during period, net of
    $1,072, $1,313, ($2,693) and
    $2,430 tax                                1,990          2,439         (5,003)        4,512
  Reclassification adjustment for
    gains included in net income,
    net of $-, $-, $- and $3,625 tax              -              -             -         (6,733)
- -----------------------------------------------------------------------------------------------
  Other comprehensive income,
    net of $1,072, $1,313,
    ($2,693), and ($1,195) tax                1,990          2,439         (5,003)       (2,221)
- -----------------------------------------------------------------------------------------------

Comprehensive income                       $ 59,835         55,901        102,126       112,346
===============================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.




                                CenturyTel, Inc.
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                         June 30,     December 31,
                                                                           2000           1999
- -------------------------------------------------------------------------------------------------
                                                                          (Dollars in thousands)
ASSETS

<S>                                                                  <C>               <C>
CURRENT ASSETS
    Cash and cash equivalents                                        $    49,685          56,640
    Accounts receivable, less allowance of
      $5,132 and $4,150                                                  207,733         193,057
    Materials and supplies, at average cost                               24,699          28,769
    Other                                                                 10,484           7,607
- ------------------------------------------------------------------------------------------------
        Total current assets                                             292,601         286,073
- ------------------------------------------------------------------------------------------------

NET PROPERTY, PLANT AND EQUIPMENT                                      2,235,891       2,256,458
- ------------------------------------------------------------------------------------------------

INVESTMENTS AND OTHER ASSETS
    Excess cost of net assets acquired, less accumulated
      amortization of $184,626 and $165,327                            1,621,491       1,644,884
    Other                                                                571,884         517,992
- ------------------------------------------------------------------------------------------------
        Total investments and other assets                             2,193,375       2,162,876
- ------------------------------------------------------------------------------------------------
TOTAL ASSETS                                                         $ 4,721,867       4,705,407
================================================================================================

LIABILITIES AND EQUITY

CURRENT LIABILITIES
    Current maturities of long-term debt                             $    75,022          62,098
    Accounts payable                                                     110,186          78,450
    Accrued expenses and other liabilities
       Salaries and benefits                                              33,202          34,570
       Taxes                                                              29,063          40,999
       Interest                                                           37,595          37,232
       Other                                                              17,409          22,172
    Advance billings and customer deposits                                34,235          33,656
- ------------------------------------------------------------------------------------------------
        Total current liabilities                                        336,712         309,177
- ------------------------------------------------------------------------------------------------

LONG-TERM DEBT                                                         1,953,844       2,078,311
- ------------------------------------------------------------------------------------------------

DEFERRED CREDITS AND OTHER LIABILITIES                                   483,760         469,927
- ------------------------------------------------------------------------------------------------

STOCKHOLDERS' EQUITY
    Common stock, $1.00 par value, authorized 350,000,000
      shares, issued and outstanding 140,539,960 and
      139,945,920 shares                                                 140,540         139,946
    Paid-in capital                                                      502,971         493,432
    Unrealized holding gain on investments, net of taxes                  59,359          64,362
    Retained earnings                                                  1,240,706       1,146,967
    Unearned ESOP shares                                                  (4,000)         (4,690)
    Preferred stock - non-redeemable                                       7,975           7,975
- ------------------------------------------------------------------------------------------------
        Total stockholders' equity                                     1,947,551       1,847,992
- ------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND EQUITY                                         $ 4,721,867       4,705,407
================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.


                                CenturyTel, Inc.
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                   (UNAUDITED)
                                   Six months
<TABLE>
<CAPTION>
                                                                               ended June 30,
- ------------------------------------------------------------------------------------------------
                                                                            2000            1999
- ------------------------------------------------------------------------------------------------
                                                                           (Dollars in thousands)
<S>                                                                  <C>               <C>
COMMON STOCK
    Balance at beginning of period                                   $   139,946         138,083
    Conversion of convertible securities into common stock                   254             254
    Issuance of common stock through dividend
      reinvestment, incentive and benefit plans                              340           1,026
- ------------------------------------------------------------------------------------------------

    Balance at end of period                                             140,540         139,363
- ------------------------------------------------------------------------------------------------

PAID-IN CAPITAL
    Balance at beginning of period                                       493,432         451,535
    Conversion of convertible securities into common stock                 3,046           3,046
    Issuance of common stock through dividend
      reinvestment, incentive and benefit plans                            5,840          11,475
    Amortization of unearned compensation and other                          653           1,505
- ------------------------------------------------------------------------------------------------

    Balance at end of period                                             502,971         467,561
- ------------------------------------------------------------------------------------------------

UNREALIZED HOLDING GAIN ON INVESTMENTS, NET OF TAXES
    Balance at beginning of period                                        64,362           7,217
    Change in unrealized holding gain on investments,
      net of reclassification adjustment                                  (5,003)         (2,221)
- ------------------------------------------------------------------------------------------------

    Balance at end of period                                              59,359           4,996
- ------------------------------------------------------------------------------------------------

RETAINED EARNINGS
    Balance at beginning of period                                     1,146,967         932,611
    Net income                                                           107,129         114,567
    Cash dividends declared
       Common stock-$.095 and $.09 per share, respectively               (13,190)        (12,469)
       Preferred stock                                                      (200)           (204)
- ------------------------------------------------------------------------------------------------

    Balance at end of period                                           1,240,706       1,034,505
- ------------------------------------------------------------------------------------------------

UNEARNED ESOP SHARES
    Balance at beginning of period                                        (4,690)         (6,070)
    Release of ESOP shares                                                   690             690
- ------------------------------------------------------------------------------------------------

    Balance at end of period                                              (4,000)         (5,380)
- ------------------------------------------------------------------------------------------------

PREFERRED STOCK - NON-REDEEMABLE
    Balance at beginning and end of period                                 7,975           8,106
- ------------------------------------------------------------------------------------------------

TOTAL STOCKHOLDERS' EQUITY                                           $ 1,947,551       1,649,151
================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.


<PAGE>


                                CenturyTel, Inc.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                   (UNAUDITED)
                                                                                 Six months
                                                                               ended June 30,
- ------------------------------------------------------------------------------------------------
                                                                            2000            1999
- ------------------------------------------------------------------------------------------------
                                                                           (Dollars in thousands)
<S>                                                                  <C>                <C>
OPERATING ACTIVITIES
   Net income                                                        $   107,129         114,567
   Adjustments to reconcile net income to
     net cash provided by operating activities:
       Depreciation and amortization                                     170,580         175,993
       Deferred income taxes                                               5,471           4,345
       Income from unconsolidated cellular entities                       (8,016)        (16,112)
       Minority interest                                                   5,163          22,100
       Gain on sale of assets                                             (9,910)        (49,959)
       Changes in current assets and current liabilities:
          Accounts receivable                                            (14,699)        (16,392)
          Accounts payable                                                31,716           8,927
          Accrued taxes                                                  (11,927)         30,701
          Other current assets and other current
            liabilities, net                                              (2,932)         14,118
       Increase in other non-current assets                              (32,485)        (23,016)
       Change in other non-current liabilities                             6,347            (586)
       Other, net                                                         11,396          10,073
- ------------------------------------------------------------------------------------------------
          Net cash provided by operating activities                      257,833         274,759
- ------------------------------------------------------------------------------------------------

INVESTING ACTIVITIES
   Payments for property, plant and equipment                           (139,407)       (149,128)
   Purchase of minority investment in other entities                     (33,153)              -
   Proceeds from sales of assets                                          15,849         465,784
   Distributions from unconsolidated cellular entities                    12,413          10,109
   Acquisitions, net of cash acquired                                          -         (17,614)
   Purchase of life insurance investment                                  (3,303)         (4,405)
   Other, net                                                             (1,996)          1,511
- ------------------------------------------------------------------------------------------------
          Net cash provided by (used in) investing activities           (149,597)        306,257
- ------------------------------------------------------------------------------------------------

FINANCING ACTIVITIES
   Proceeds from issuance of long-term debt                                3,111           7,954
   Payments of long-term debt                                           (110,664)       (501,087)
   Proceeds from issuance of common stock                                  5,220          11,947
   Cash dividends                                                        (13,390)        (12,673)
   Other, net                                                                532             994
- ------------------------------------------------------------------------------------------------
          Net cash used in financing activities                         (115,191)       (492,865)
- ------------------------------------------------------------------------------------------------

Net increase (decrease) in cash and cash equivalents                      (6,955)         88,151

Cash and cash equivalents at beginning of period                          56,640           5,742
- ------------------------------------------------------------------------------------------------

Cash and cash equivalents at end of period                           $    49,685          93,893
================================================================================================

Supplemental cash flow information:
    Income taxes paid                                                $    85,624          79,497
    Interest paid (net of capitalized interest of $1,698
      and $1,339)                                                    $    69,248          79,220
- ------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.



                           CenturyTel, Inc.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            JUNE 30, 2000
                             (UNAUDITED)

(1)    Basis of Financial Reporting

       The  consolidated  financial  statements  of  CenturyTel,  Inc.  and  its
subsidiaries   (the  "Company")   include  the  accounts  of  CenturyTel,   Inc.
("CenturyTel")  and its  majority-owned  subsidiaries and partnerships.  Certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance with generally accepted  accounting  principles have been
condensed or omitted  pursuant to rules and  regulations  of the  Securities and
Exchange  Commission;  however,  the Company believes the disclosures  which are
made  are  adequate  to make  the  information  presented  not  misleading.  The
consolidated  financial  statements  and  footnotes  included  in this Form 10-Q
should be read in conjunction  with the  consolidated  financial  statements and
notes thereto  included in the Company's annual report on Form 10-K for the year
ended  December 31, 1999.  Certain  1999  amounts have been  reclassified  to be
consistent with the Company's 2000 presentation,  including the reclassification
of  the  Company's  personal   communication   services  operations  from  other
operations  to the wireless  segment and the  reclassification  of the Company's
Internet operations from the telephone segment to other operations.

       The unaudited  financial  information for the three months and six months
ended  June  30,  2000  and 1999 has not  been  audited  by  independent  public
accountants;  however,  in the opinion of  management,  all  adjustments  (which
include  only normal  recurring  adjustments)  necessary  to present  fairly the
results of  operations  for the  three-month  and  six-month  periods  have been
included therein. The results of operations for the first six months of the year
are not  necessarily  indicative  of the  results of  operations  which might be
expected for the entire year.

(2)    Net Property, Plant and Equipment

       Net property, plant and equipment is composed of the following:
<TABLE>
<CAPTION>

                                                          June 30,   December 31,
                                                            2000         1999
- --------------------------------------------------------------------------------
                                                          (Dollars in thousands)

<S>                                                   <C>             <C>
Telephone, at original cost                           $  3,510,277     3,439,469
Accumulated depreciation                                (1,718,670)   (1,605,553)
- --------------------------------------------------------------------------------
                                                         1,791,607     1,833,916
- --------------------------------------------------------------------------------

Wireless, at cost                                          479,469       472,725
Accumulated depreciation                                  (237,892)     (217,056)
- --------------------------------------------------------------------------------
                                                           241,577       255,669
- --------------------------------------------------------------------------------

Other, at cost                                             328,961       281,713
Accumulated depreciation                                  (126,254)     (114,840)
- --------------------------------------------------------------------------------
                                                           202,707       166,873
- --------------------------------------------------------------------------------

                                                     $   2,235,891     2,256,458
================================================================================
</TABLE>

(3)    Income from Unconsolidated Cellular Entities

       The following summarizes the unaudited combined results of operations of
the cellular  entities in which the Company's  investments  (as of June 30, 2000
and 1999) were accounted for by the equity method.

<PAGE>
<TABLE>
<CAPTION>
                                                                 Six months
                                                               ended June 30,
- --------------------------------------------------------------------------------
                                                             2000          1999
- --------------------------------------------------------------------------------
                                                           (Dollars in thousands)

<S>                                                    <C>               <C>
Results of operations
    Revenues                                           $   747,131       642,489
    Operating income                                   $   241,507       195,574
    Net income                                         $   234,853       194,937
- --------------------------------------------------------------------------------
</TABLE>

(4)    Sales of Assets

       In the first quarter  of  2000  the  Company  recorded  a  pre-tax  gain
aggregating $9.9 million ($5.2 million after-tax; $.04 per diluted share) due to
the sale of the assets of its remaining Alaska cellular operations.

       In the  first  quarter  of  1999  the Company recorded  a  pre-tax  gain
aggregating $10.4 million ($6.7 million  after-tax;  $.04 per diluted share) due
to the sale of its remaining common shares of MCIWorldCom, Inc.

       In May  1999,  the  Company  sold the  stock of substantially all of its
Alaska-based  operations in exchange for approximately $300 million in after-tax
cash. No gain or loss was recorded upon the disposition of these properties.

       In June 1999,  the Company sold the assets of its cellular operations in
Brownsville and McAllen, Texas for approximately $96 million cash. In connection
therewith,  the Company recorded a pre-tax gain of approximately  $39.6 million,
and an after-tax loss of approximately $7.8 million (($.05) per diluted share.)

(5)    Recently Completed and Pending Acquisitions

       Pursuant  to asset  purchase  agreements dated June 29, 1999 and July 8,
1999, on July 31, 2000,  affiliates of CenturyTel  acquired  certain assets from
affiliates of Verizon Communications  (successor to GTE Corporation) ("Verizon")
in two separate  transactions in exchange for an aggregate of approximately $1.1
billion cash. Under these  transactions (i) the Company purchased  approximately
231,000  telephone access lines and related local exchange assets comprising 106
exchanges  throughout  Arkansas  for  approximately  $824  million cash and (ii)
Spectra  Communications Group, LLC ("Spectra")  purchased  approximately 127,000
telephone  access  lines  and  related  local  exchange  assets  comprising  107
exchanges  throughout  Missouri for approximately $290 million cash. The Company
owns 57.1% of Spectra, which was organized to acquire and operate these Missouri
properties.  At closing,  the  Company  made a preferred  equity  investment  in
Spectra of  approximately  $55 million  and  financed  substantially  all of the
remainder of the purchase price.  To finance these  acquisitions on a short-term
basis, the Company borrowed $1.1 billion under new and existing senior unsecured
credit facilities.

       In August 1999, the Company acquired an 89% interest in a newly-organized
joint  venture  company  which has  entered  into a  definitive  asset  purchase
agreement  with a Verizon  affiliate to purchase  telephone  access lines (which
numbered  approximately  61,700  as of  December  31,  1999) and  related  local
exchange  assets in Wisconsin for  approximately  $170 million cash,  subject to
certain adjustments.  The Company has agreed to make an equity investment in the
newly  organized  company of  approximately  $37.8 million and it is anticipated
that the Company will loan the new entity approximately $130 million. In October
1999,  the Company also entered into a definitive  asset  purchase  agreement to
purchase additional telephone access lines (which numbered  approximately 68,200
as of December 31, 1999) and related local  exchange  assets in Wisconsin from a
Verizon  affiliate  for  approximately  $195  million  cash,  subject to certain
adjustments.  The  Wisconsin  transactions  are expected to close  September 30,
2000, pending regulatory approvals and certain other closing conditions.

(6)    Business Segments

       The Company has two separately reportable business segments:telephone and
wireless.  The operating  income of these  segments is reviewed by the Company's
chief  operating   decision  maker  to  assess  performance  and  make  business
decisions.  Other  operations  include  but are  not  limited  to the  Company's
non-regulated  long  distance  operations,   Internet  operations,  call  center
operations and security monitoring operations.
<TABLE>
<CAPTION>
                                                  Three months                  Six months
                                                 ended June 30,               ended June 30,
- -----------------------------------------------------------------------------------------------
                                              2000           1999          2000           1999
- -----------------------------------------------------------------------------------------------
                                                           (Dollars in thousands)
<S>                                      <C>               <C>           <C>            <C>
Operating revenues
     Telephone segment                   $  276,088        274,897       553,014        563,170
     Wireless segment                       111,142        110,032       211,546        208,593
     Other operations                        35,926         31,821        71,552         59,243
- -----------------------------------------------------------------------------------------------
Total operating revenues                 $  423,156        416,750       836,112        831,006
===============================================================================================

Operating income
     Telephone segment                   $   82,849         83,994       167,346        178,667
     Wireless segment                        32,812         41,439        52,703         71,092
     Other operations                         9,231          5,192        16,265         11,489
- -----------------------------------------------------------------------------------------------
Total operating income                   $  124,892        130,625       236,314        261,248
===============================================================================================

Operating income                         $  124,892        130,625       236,314        261,248
Interest expense                            (35,267)       (37,487)      (71,309)       (79,728)
Income from unconsolidated
  cellular entities                           9,475          9,267         8,016         16,112
Minority interest                            (2,871)       (18,790)       (5,163)       (22,100)
Gain on sale of assets                            -         39,601         9,910         49,959
Other income and expense                      2,384          3,434         6,613          5,614
- -----------------------------------------------------------------------------------------------
Income before income tax expense         $   98,613        126,650       184,381        231,105
===============================================================================================
</TABLE>

<TABLE>
<CAPTION>

                                                    June 30,         December 31,
                                                      2000               1999
- --------------------------------------------------------------------------------
                                                      (Dollars in thousands)
<S>                                              <C>                   <C>
Assets
     Telephone segment                           $ 3,198,947           3,246,290
     Wireless segment                              1,195,295           1,184,129
     Other operations                                327,625             274,988
- --------------------------------------------------------------------------------
Total assets                                     $ 4,721,867           4,705,407
================================================================================
</TABLE>
<PAGE>


                                CenturyTel, Inc.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


      Management's Discussion and Analysis of Financial Condition and Results of
Operations  ("MD&A") included herein should be read in conjunction with MD&A and
the other  information  included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1999. The results of operations for the three months
and six months ended June 30, 2000 are not necessarily indicative of the results
of operations which might be expected for the entire year.

      CenturyTel,  Inc.  and its  subsidiaries  (the  "Company")  is a  regional
diversified  communications company that is primarily engaged in providing local
telephone services and wireless telephone  communications  services. At June 30,
2000, the Company's local exchange  telephone  subsidiaries  operated nearly 1.3
million  telephone  access lines  primarily  in rural,  suburban and small urban
areas in 20 states,  and the  Company's  majority-owned  and  operated  wireless
entities had more than 749,000  subscribers.  On May 14, 1999,  the Company sold
substantially all of its Alaska-based  operations serving  approximately 134,900
telephone  access lines and 3,000  cellular  subscribers.  On June 1, 1999,  the
Company  sold  the  assets  of  its  Brownsville  and  McAllen,  Texas  cellular
operations serving approximately 7,500 cellular  subscribers.  In February 2000,
the Company sold the assets of its remaining Alaskan cellular operations serving
approximately  10,600  cellular  subscribers.  The  operations of these disposed
properties  are  included  in the  Company's  results  of  operations  up to the
respective dates of disposition.

      In  addition  to  historical  information,   management's  discussion  and
analysis  includes  certain  forward-looking  statements  regarding  events  and
financial  trends that may affect the  Company's  future  operating  results and
financial position. Such forward-looking statements are subject to uncertainties
that could cause the Company's  actual  results to differ  materially  from such
statements.  Such  uncertainties  include but are not limited to: the effects of
ongoing deregulation in the  telecommunications  industry; the Company's ability
to timely consummate its pending acquisitions and effectively manage its growth,
including   obtaining  adequate  financing  on  attractive  terms,   integrating
newly-acquired properties into the Company's operations, hiring adequate numbers
of qualified staff and successfully  upgrading its billing and other information
systems;  the risks  inherent  in rapid  technological  change;  the  effects of
greater than anticipated competition in the Company's markets;  possible changes
in the demand for the Company's products and services;  the Company's ability to
successfully  introduce  new  product  or  service  offerings  on a  timely  and
cost-effective basis; and the effects of more general factors such as changes in
general market or economic  conditions or in  legislation,  regulation or public
policy.  These and other uncertainties  related to the business are described in
greater  detail in Item 1 to the  Company's  Annual  Report on Form 10-K for the
year ended  December 31, 1999.  You are cautioned not to place undue reliance on
these  forward-looking  statements,  which speak only as of the date hereof. The
Company undertakes no obligation to update any of its forward-looking statements
for any reason.


                              RESULTS OF OPERATIONS

                    Three Months Ended June 30, 2000 Compared
                       to Three Months Ended June 30, 1999

      Net income  (excluding  after-tax effect of sale of assets) for the second
quarter of 2000 was $57.8 million  compared to $61.2  million  during the second
quarter of 1999. Diluted earnings per share (excluding  after-tax effect of sale
of assets)  decreased  to $.41 during the three  months ended June 30, 2000 from
$.43 during the three months ended June 30, 1999, a 4.7% decrease.

<PAGE>
<TABLE>
<CAPTION>
                                                                 Three months
                                                                ended June 30,
- --------------------------------------------------------------------------------
                                                              2000          1999
- --------------------------------------------------------------------------------
                                                            (Dollars, except per
                                                             share amounts, and
                                                             shares in thousands)
<S>                                                      <C>             <C>
Operating income
   Telephone                                             $  82,849        83,994
   Wireless                                                 32,812        41,439
   Other                                                     9,231         5,192
- --------------------------------------------------------------------------------
                                                           124,892       130,625
Interest expense                                           (35,267)      (37,487)
Income from unconsolidated cellular entities                 9,475         9,267
Minority interest                                           (2,871)      (18,790)
Gain on sale of assets                                           -        39,601
Other income and expense                                     2,384         3,434
Income tax expense                                         (40,768)      (73,188)
- --------------------------------------------------------------------------------
Net income                                               $  57,845        53,462
================================================================================
Basic earnings per share                                 $     .41           .38
================================================================================
Diluted earnings per share                               $     .41           .38
================================================================================
Average basic shares outstanding                           139,995       138,852
================================================================================
Average diluted shares outstanding                         141,732       141,461
================================================================================

</TABLE>

      Contributions to operating  revenues and operating income by the Company's
telephone,  wireless,  and other  operations for the three months ended June 30,
2000 and 1999 were as follows:

<TABLE>
<CAPTION>
                                                                 Three months
                                                                ended June 30,
- --------------------------------------------------------------------------------
                                                              2000          1999
- --------------------------------------------------------------------------------
<S>                                                           <C>           <C>
Operating revenues
   Telephone operations                                       65.2%         66.0
   Wireless operations                                        26.3%         26.4
   Other operations                                            8.5%          7.6

Operating income
   Telephone operations                                       66.3%         64.3
   Wireless operations                                        26.3%         31.7
   Other operations                                            7.4%          4.0
- --------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

Telephone Operations
                                                                Three months
                                                               ended June 30,
- ---------------------------------------------------------------------------------
                                                             2000          1999
- --------------------------------------------------------------------------------
                                                           (Dollars in thousands)
<S>                                                     <C>              <C>
Operating revenues
   Local service                                        $   90,527        89,452
   Network access                                          160,933       155,789
   Other                                                    24,628        29,656
- --------------------------------------------------------------------------------
                                                           276,088       274,897
- --------------------------------------------------------------------------------

Operating expenses
   Plant operations                                         59,763        60,213
   Customer operations                                      25,509        23,284
   Corporate and other                                      40,336        38,878
   Depreciation and amortization                            67,631        68,528
- --------------------------------------------------------------------------------
                                                           193,239       190,903
- --------------------------------------------------------------------------------

Operating income                                        $   82,849        83,994
================================================================================
</TABLE>

      Telephone  operating  income  decreased  $1.1  million  (1.4%)  due  to an
increase in operating revenues of $1.2 million (.4%), which was more than offset
by an increase in operating expenses of $2.3 million (1.2%).

      The $1.2 million  increase in operating  revenues was  partially  due to a
$4.4 million increase in local service revenues  primarily due to an increase in
the number of customer  access  lines in incumbent  markets;  a $7.7 million net
increase  due to the  partial  recovery of  increased  operating  costs  through
revenue sharing arrangements with other telephone  companies,  increased minutes
of use,  increased  recovery from state support funds and return on rate base; a
$4.0 million  increase in amounts  received from the federal  Universal  Service
Fund;  and a $1.4  million  increase  due to the  increased  provision of custom
calling features.  Such increases were  substantially  offset by a $14.4 million
decrease attributable to the 1999 sale of the Company's Alaska based operations,
which contributed revenues to the Company for a portion of the second quarter of
1999 and a $2.4  million  decrease  in  revenues  related to  leasing,  selling,
installing,   maintaining  and  repairing  customer  premise  telecommunications
equipment and wiring.  Annualized  internal access line growth during the second
quarter of 2000 and 1999 was 4.3% and 5.1%, respectively.

      During  the  second  quarter  of  2000,  the  Company  incurred  aggregate
operating expenses of approximately $9.5 million associated with pending Verizon
acquisitions, two of which were closed on July 31, 2000 and the remaining two of
which are expected to be closed September 30, 2000. These expenses  consisted of
(i)   approximately   $3.5  million  of  variable   overhead   costs  that  were
intentionally  not  eliminated  subsequent  to the  disposition  of  the  Alaska
properties due to the pending Verizon  acquisitions and (ii)  approximately $6.0
million of expenses  associated with readying the Company's systems and staff to
integrate the Verizon operations into the Company's operations  immediately upon
closing each  transaction.  The Company expects that its aggregate third quarter
2000 operating  expenses  associated with pending Verizon  transactions  will be
less than the expenses incurred during the first or second quarter.

      Plant operations  expenses decreased $450,000 (.7%), of which $4.2 million
was attributable to the 1999 sale of the Alaska  properties.  The remaining $3.8
million  increase  was  primarily  due to a $900,000  increase in  salaries  and
benefits (excluding  information technology charges); a $1.1 million increase in
information  technology  expenses  primarily due to increases in contract labor;
and a $1.9  million  increase  in access  expenses  primarily  due to changes in
revenue settlement methods of certain telephone subsidiaries in a limited number
of states.

      During the second quarter of 2000,  customer operations expenses increased
$2.2  million  (9.6%)  primarily  due  to a  $900,000  increase  in  information
technology  expenses  primarily  due to increases  in contract  labor and a $1.9
million increase in salaries and benefits.  Such increases were partially offset
by a  $1.5  million  decrease  attributable  to the  1999  sale  of  the  Alaska
properties.

      Corporate and other expenses  increased $1.5 million (3.8%)  primarily due
to  a  $7.1  million  increase  in  expenses  associated  with  pending  Verizon
acquisitions;  a $1.5 million  increase in the provision for doubtful  accounts;
and a $900,000  increase  in expenses  related to  implementing  new  accounting
information  systems.  Such increases  were  partially  offset by a $2.6 million
decrease due to the 1999 sale of the Alaska properties;  a $2.2 million decrease
in operating taxes; a $1.6 million decrease in expenses associated with readying
the Company's systems to be year 2000 compliant;  and a $1.8 million decrease in
information technology expenses.

      Depreciation and  amortization  decreased  $897,000 (1.3%),  of which $3.3
million  was  attributable  to the  1999  sale  of the  Alaska  properties.  The
remaining  $2.4 million  increase was primarily due to higher levels of plant in
service.

Wireless Operations and Income From Unconsolidated Cellular Entities
<TABLE>
<CAPTION>
                                                                Three months
                                                               ended June 30,
- --------------------------------------------------------------------------------
                                                             2000          1999
- --------------------------------------------------------------------------------
                                                           (Dollars in thousands)

<S>                                                     <C>               <C>
Operating income - wireless operations                  $   32,812        41,439
Minority interest, exclusive of the
  effect of asset sales in 1999                             (2,842)       (3,864)
Income from unconsolidated cellular entities                 9,475         9,267
- --------------------------------------------------------------------------------
                                                        $   39,445        46,842
================================================================================
</TABLE>

      The Company's  wireless  operations  (discussed below) reflect 100% of the
results of  operations  of the  wireless  entities  in which the  Company  has a
majority ownership  interest.  The minority interest owners' share of the income
of such entities is reflected in the Company's Consolidated Statements of Income
as an expense in  "Minority  interest."  See Minority  Interest  for  additional
information. The Company's share of earnings from the cellular entities in which
it has less than a majority  interest is accounted  for using the equity  method
and is reflected in the Company's  Consolidated  Statements of Income as "Income
from unconsolidated cellular entities."

Wireless Operations
<TABLE>
<CAPTION>
                                                                 Three months
                                                                ended June 30,
- --------------------------------------------------------------------------------
                                                             2000          1999
- --------------------------------------------------------------------------------
                                                           (Dollars in thousands)
<S>                                                      <C>             <C>
Operating revenues
   Service revenues                                      $ 107,351       107,495
   Equipment sales                                           3,791         2,537
- --------------------------------------------------------------------------------
                                                           111,142       110,032
- --------------------------------------------------------------------------------

Operating expenses
   Cost of equipment sold                                    6,356         5,263
   System operations                                        16,380        14,894
   General, administrative and customer service             19,421        18,656
   Sales and marketing                                      19,431        13,423
   Depreciation and amortization                            16,742        16,357
- --------------------------------------------------------------------------------
                                                            78,330        68,593
- --------------------------------------------------------------------------------

Operating income                                         $  32,812        41,439
================================================================================
</TABLE>

      Wireless  operating income decreased $8.6 million (20.8%) to $32.8 million
in the second  quarter of 2000 from $41.4 million in the second quarter of 1999.
Wireless  operating  revenues  increased  $1.1 million  (1.0%)  while  operating
expenses increased $9.7 million (14.2%).

      The $144,000  decrease in service revenues was primarily due to (i) a $4.1
million  decrease  due to the sale of the  Company's  Texas and Alaska  cellular
properties  and  (ii) a $3.9  million  decrease  in  roaming  revenues  due to a
reduction in roaming rates (which was partially offset by an increase in roaming
minutes of use), a downward trend that the Company  anticipates will continue in
the near future.  These decreases were largely offset by a $7.9 million increase
in local  service  revenues due to a growth in number of customers and increased
minutes of use, (both of which were partially offset by reduced rates).

      The following table illustrates the growth in the Company's wireless
customer base in its majority-owned markets:
<TABLE>
<CAPTION>
                                                               Three months
                                                              ended June 30,
- --------------------------------------------------------------------------------
                                                            2000          1999
- --------------------------------------------------------------------------------

<S>                                                       <C>           <C>
Customers at beginning of period                          727,507       638,992
Gross units added internally                               78,667        45,949
Disconnects                                                56,774        33,623
Net units added internally                                 21,893        12,326
Net effect of property dispositions                             -       (10,563)
Customers at end of period                                749,400       640,755
Average monthly postpaid churn rate                           1.7%          1.8
- --------------------------------------------------------------------------------
</TABLE>

      The average monthly  service  revenue per customer  declined to $48 during
the second  quarter  of 2000 from $56  during the second  quarter of 1999 due to
price  reductions  and the  continued  trend  that a  higher  percentage  of new
subscribers  tend to be lower  usage  customers.  The  average  monthly  service
revenue per customer may further decline (i) as market penetration increases and
additional lower usage customers are activated; (ii) as the Company continues to
receive pressure from other cellular operators to reduce roaming rates and (iii)
as  competitive  pressures  from  current  and  future  wireless  communications
providers intensify. The Company is responding to such competitive pressures by,
among  other  things,  modifying  certain  of its price  plans and  implementing
certain other plans and promotions,  most of which are likely to result in lower
average revenue per customer.

      Cost of equipment sold increased $1.1 million (20.8%) substantially due to
an increase in units sold.

      System operations expenses increased $1.5 million (10.0%) primarily due to
a $900,000 increase associated with operating a greater number of cell sites and
an $800,000  increase in the net amounts  paid to other  carriers  for  cellular
service  provided to the  Company's  customers  who roam in the other  carriers'
service areas primarily due to an increase in minutes of use.

      Sales and marketing  expenses increased $6.0 million (44.8%) primarily due
to a $2.2  million  increase  in  sales  commissions  paid to  agents  due to an
increase in the number of units sold; a $2.0 million  increase in costs incurred
in  selling  products  and  services  in retail  locations  primarily  due to an
increase  in the number of retail  locations;  and a $1.0  million  increase  in
advertising expenses.



<PAGE>


Other Operations
<TABLE>
<CAPTION>
                                                              Three months
                                                             ended June 30,
- -----------------------------------------------------------------------------
                                                          2000          1999
- -----------------------------------------------------------------------------
                                                        (Dollars in thousands)
<S>                                                   <C>              <C>
Operating revenues
     Long distance                                    $  25,099        19,411
     Internet                                             5,272         4,216
     Call center                                          1,102         3,103
     Other                                                4,453         5,091
- -----------------------------------------------------------------------------
                                                         35,926        31,821
- -----------------------------------------------------------------------------

Operating expenses
     Cost of sales and operating expenses                25,299        25,502
     Depreciation and amortization                        1,396         1,127
- -----------------------------------------------------------------------------
                                                         26,695        26,629
- -----------------------------------------------------------------------------

Operating income                                      $   9,231         5,192
=============================================================================
</TABLE>

      Other  operations  include the results of  operations of the Company which
are not  included in the  telephone  or wireless  segments,  including,  but not
limited to, the  Company's  non-regulated  long  distance  operations,  Internet
operations,  call center operations and security monitoring operations. The $5.7
million  increase in long distance  revenues was primarily  attributable  to the
growth in the number of customers and increased minutes of use per customer. The
number of long  distance  customers as of June 30, 2000 and 1999 was 326,400 and
259,800, respectively. Internet revenues increased $1.1 million due primarily to
a $1.9  million  increase  due to growth in the number of  customers,  which was
partially  offset by an $800,000  decrease due to the 1999 sale of the Company's
Alaska Internet  operations.  The $2.0 million  decrease in call center revenues
was due to the  planned  phase-out  of the  Company's  third  party call  center
operations during 2000.

      Cost of sales and operating  expenses decreased $203,000 in second quarter
of 2000 compared to second  quarter 1999.  Cost of sales and operating  expenses
increased  $4.3 million in the Company's  long distance and Internet  operations
due to the  increase in the number of  customers.  Such  increase  was more than
offset by (i) a $1.2  million  decrease in expenses  due to the 1999 sale of the
Company's Alaska Internet  operations;(ii) a $1.7 million  reduction in expenses
due to the winding down of the Company's call center operations and (iii) a $1.9
million favorable non-recurring rate adjustment in the second quarter of 2000 in
the Company's long distance operations.

      The Company  anticipates that the growth of operating income for its other
operations will slow in future periods as it incurs increasingly larger expenses
in connection  with expanding its emerging fiber network and  competitive  local
exchange carrier businesses.

Interest Expense

      Interest  expense  decreased  $2.2  million in the second  quarter of 2000
compared  to  the  second  quarter  of  1999  primarily  due to a  reduction  in
outstanding  indebtedness  which was  partially  offset by  increased  borrowing
rates.

Minority Interest

      Minority  interest is the  expense  recorded by the Company to reflect the
minority  interest  owners'  share  of the  earnings  or loss  of the  Company's
majority-owned and operated cellular entities and  majority-owned  subsidiaries.
Minority  interest  decreased  $15.9 million  during the second  quarter of 2000
primarily due to the expense  recorded in the second  quarter of 1999 related to
the minority  partners'  share of the gain on sale of assets of the  Brownsville
and  McAllen,  Texas  cellular  properties.  Excluding  the effect of this gain,
minority interest  decreased $1.0 million due to the decreased  profitability of
the Company's majority-owned and operated cellular entities.

<PAGE>
Gain on Sale of Assets

      In the second  quarter of 1999,  the  Company  recorded a pre-tax  gain of
approximately  $39.6  million  as a  result  of the  sale of the  assets  of the
Brownsville  and  McAllen,  Texas  cellular  properties.  See Note 4 of Notes to
Consolidated   Financial   Statements  and  Minority   Interest  for  additional
information.

Other Income and Expense

      Other income and expense  decreased  $1.1 million in the second quarter of
2000 compared to the second quarter of 1999,  substantially all of which relates
to favorable non-recurring items recorded in 1999.

Income Tax Expense

      Income tax expense  decreased  $32.4 million in the second quarter of 2000
compared to the second  quarter of 1999  primarily due to the income tax expense
recorded in the second quarter of 1999 associated with the sale of the assets of
the Brownsville and McAllen, Texas cellular properties. Exclusive of the effects
of income tax expense on asset sales,  the  effective  income tax rate was 41.3%
and 40.0% in the three months ended June 30, 2000 and 1999, respectively.


                     Six Months Ended June 30, 2000 Compared
                        to Six Months Ended June 30, 1999

      Net income (excluding after-tax effect of sale of assets and certain first
quarter 2000 non-recurring  charges) for the first six months of 2000 was $105.7
million compared to $115.6 million during the first six months of 1999.  Diluted
earnings  per share  (excluding  after-tax  effect of sale of assets and certain
first  quarter  2000  non-recurring  charges)  decreased  to $.75 during the six
months  ended June 30, 2000 from $.82 during the six months ended June 30, 1999,
an 8.5% decrease.  Substantially all of the  non-recurring  charges in the first
six months of 2000 relate to the Company's proportionate share ($5.3 million) of
non-cash  charges  that were  recorded  by two  cellular  entities  in which the
Company owns a minority interest and is reflected in "Income from unconsolidated
cellular entities."

<TABLE>
<CAPTION>
                                                                 Six months
                                                               ended June 30,
- --------------------------------------------------------------------------------
                                                           2000             1999
- --------------------------------------------------------------------------------
                                                           (Dollars, except per
                                                             share amounts,and
                                                            shares in thousands)
<S>                                                  <C>                <C>
Operating income
   Telephone                                         $  167,346          178,667
   Wireless                                              52,703           71,092
   Other                                                 16,265           11,489
- ---------------------------------------------------------------------------------
                                                        236,314          261,248
Interest expense                                        (71,309)         (79,728)
Income from unconsolidated cellular entities              8,016           16,112
Minority interest                                        (5,163)         (22,100)
Gain on sale of assets                                    9,910           49,959
Other income and expense                                  6,613            5,614
Income tax expense                                      (77,252)        (116,538)
- ----------------------------------------------------------------------------------

Net income                                           $  107,129          114,567
=================================================================================

Basic earnings per share                             $      .76              .83
=================================================================================

Diluted earnings per share                           $      .76              .81
=================================================================================

Average basic shares outstanding                        139,874          138,455
=================================================================================

Average diluted shares outstanding                      141,729          141,245
=================================================================================
</TABLE>

      Contributions to operating  revenues and operating income by the Company's
telephone, wireless, and other operations for the six months ended June 30, 2000
and 1999 were as follows:
<TABLE>
<CAPTION>
                                                                   Six months
                                                                 ended June 30,
- --------------------------------------------------------------------------------
                                                              2000          1999
- --------------------------------------------------------------------------------
<S>                                                           <C>           <C>
Operating revenues
   Telephone operations                                       66.1%         67.8
   Wireless operations                                        25.3%         25.1
   Other operations                                            8.6%          7.1

Operating income
   Telephone operations                                       70.8%         68.4
   Wireless operations                                        22.3%         27.2
   Other operations                                            6.9%          4.4
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>

Telephone Operations
                                                                  Six months
                                                                ended June 30,
- --------------------------------------------------------------------------------
                                                             2000          1999
- --------------------------------------------------------------------------------
                                                           (Dollars in thousands)
<S>                                                     <C>              <C>
Operating revenues
   Local service                                        $  178,592       180,109
   Network access                                          323,186       322,944
   Other                                                    51,236        60,117
- --------------------------------------------------------------------------------
                                                           553,014       563,170
- --------------------------------------------------------------------------------

Operating expenses
   Plant operations                                        122,539       124,150
   Customer operations                                      48,270        44,641
   Corporate and other                                      79,868        75,757
   Depreciation and amortization                           134,991       139,955
- --------------------------------------------------------------------------------
                                                           385,668       384,503
- --------------------------------------------------------------------------------

Operating income                                        $  167,346       178,667
================================================================================
</TABLE>

      Telephone  operating  income  decreased  $11.3  million  (6.3%)  due  to a
decrease  in  operating  revenues  of $10.2  million  (1.8%) and an  increase in
operating expenses of $1.2 million (.3%).

      Of the $10.2  million  decrease in operating  revenues,  $44.2 million was
attributable to the May 1999 sale of the Company's Alaska based operations.  The
remaining  $34.0  million  increase in  revenues  was  partially  due to a $15.2
million net increase due to the partial  recovery of increased  operating  costs
through revenue sharing arrangements with other telephone  companies,  increased
minutes of use,  increased  recovery from state support funds and return on rate
base; a $10.1  million  increase in local service  revenues  primarily due to an
increase in the number of customer  access lines in incumbent  markets;  an $8.1
million  increase in amounts received from the federal  Universal  Service Fund;
and a $2.8 million  increase due to the  increased  provision of custom  calling
features.  Annualized internal access line growth during the first six months of
2000 and 1999 was 3.6% and 5.3%, respectively.

      During  the  first six  months of 2000,  the  Company  incurred  aggregate
operating  expenses of  approximately  $15.5  million  associated  with  pending
Verizon  acquisitions,  two of  which  were  closed  on July  31,  2000  and the
remaining  two of which are  expected to be closed  September  30,  2000.  These
expenses  consisted of (i) approximately $7.0 million of variable overhead costs
that were  intentionally  not  eliminated  subsequent to the  disposition of the
Alaska properties due to the pending Verizon acquisitions and (ii) approximately
$8.5 million of expenses  associated  with  readying the  Company's  systems and
staff  to  integrate  the  Verizon  operations  into  the  Company's  operations
immediately  upon  closing  each  transaction.  The  Company  expects  that  its
aggregate third quarter 2000 operating expenses  associated with pending Verizon
transactions  will be less than the expenses incurred during the first or second
quarter.

      Plant operations  expenses  decreased $1.6 million (1.3%),  of which $13.0
million  was  attributable  to the  1999  sale  of the  Alaska  properties.  The
remaining $11.4 million increase was primarily due to a $4.2 million increase in
salaries and benefits (excluding information technology charges); a $2.4 million
increase in network operations  expenses; a $1.5 million increase in information
technology  expenses  primarily due to increases in contract  labor;  and a $3.2
million  increase  in  access  expenses  primarily  due to  changes  in  revenue
settlement  methods of certain  telephone  subsidiaries  in a limited  number of
states.

      During  the  first  six  months  of  2000,  customer  operations  expenses
increased  $3.6  million  (8.1%)  primarily  due to a $3.0  million  increase in
information  technology expenses primarily due to increases in contract labor; a
$2.6 million  increase in salaries and benefits;  and a $1.8 million increase in
marketing and customer service expenses. Such increases were partially offset by
a $4.2 million decrease attributable to the 1999 sale of the Alaska properties.

      Corporate and other expenses  increased $4.1 million (5.4%)  primarily due
to an $11.6  million  increase  in  expenses  associated  with  pending  Verizon
acquisitions; a $2.1 million increase in the provision for doubtful accounts and
a $1.9  million  increase in expenses  related to  implementing  new  accounting
information  systems.  Such increases  were  partially  offset by a $7.2 million
decrease due to the 1999 sale of the Alaska properties;  a $3.9 million decrease
in operating  taxes;  and a $1.4 million  decrease in expenses  associated  with
readying the Company's systems to be year 2000 compliant.

      Depreciation  and  amortization  decreased  $5.0  million,  of which $10.5
million was  attributable  to the sale of the Alaska  properties.  The remaining
$5.5 million increase was primarily due to higher levels of plant in service.

Wireless Operations and Income From Unconsolidated Cellular Entities
<TABLE>
<CAPTION>

                                                                 Six months
                                                               ended June 30,
- --------------------------------------------------------------------------------
                                                             2000          1999
- --------------------------------------------------------------------------------
                                                           (Dollars in thousands)

<S>                                                      <C>              <C>
Operating income - wireless operations                   $  52,703        71,092
Minority interest, exclusive of the effect
  of asset sales in 1999                                    (5,126)       (7,162)
Income from unconsolidated cellular entities                 8,016        16,112
- --------------------------------------------------------------------------------
                                                         $  55,593        80,042
================================================================================
</TABLE>

      The Company's  wireless  operations  (discussed below) reflect 100% of the
results of  operations  of the  wireless  entities  in which the  Company  has a
majority ownership  interest.  The minority interest owners' share of the income
of such entities is reflected in the Company's Consolidated Statements of Income
as an expense in  "Minority  interest."  See Minority  Interest  for  additional
information. The Company's share of earnings from the cellular entities in which
it has less than a majority  interest is accounted  for using the equity  method
and is reflected in the Company's  Consolidated  Statements of Income as "Income
from unconsolidated  cellular entities." See Income from Unconsolidated Cellular
Entities for additional information.

<PAGE>

Wireless Operations
<TABLE>
<CAPTION>
                                                                  Six months
                                                                ended June 30,
- --------------------------------------------------------------------------------
                                                             2000          1999
- --------------------------------------------------------------------------------
                                                          (Dollars in thousands)
<S>                                                     <C>              <C>
Operating revenues
   Service revenues                                     $  203,974       203,555
   Equipment sales                                           7,572         5,038
- --------------------------------------------------------------------------------
                                                           211,546       208,593
- --------------------------------------------------------------------------------

Operating expenses
   Cost of equipment sold                                   14,536         9,648
   System operations                                        32,033        28,530
   General, administrative and customer service             37,627        37,985
   Sales and marketing                                      41,556        27,542
   Depreciation and amortization                            33,091        33,796
- --------------------------------------------------------------------------------
                                                           158,843       137,501
- --------------------------------------------------------------------------------

Operating income                                        $   52,703        71,092
================================================================================
</TABLE>

      Wireless operating income decreased $18.4 million (25.9%) to $52.7 million
in the first six  months of 2000 from  $71.1  million in the first six months of
1999. Wireless operating revenues increased $3.0 million (1.4%), while operating
expenses increased $21.3 million (15.5%).

      The $419,000  increase in service  revenues was  primarily  due to a $13.9
million  increase  in local  service  revenues  due to growth  in the  number of
customers  and  increased  minutes  of use  per  customer,  both of  which  were
partially offset by reduced rates. Such increase was substantially offset by (i)
a $9.7  million  decrease  due to the sale of the  Company's  Texas  and  Alaska
cellular properties and (ii) a $3.8 million decrease in roaming revenue due to a
reduction in roaming rates (which was partially offset by an increase in roaming
minutes of use), a downward trend that the Company  anticipates will continue in
the near future.

      The following table illustrates the growth in the Company's wireless
customer base in its majority-owned markets:
<TABLE>
<CAPTION>
                                                                 Six months
                                                               ended June 30,
- --------------------------------------------------------------------------------
                                                             2000          1999
- --------------------------------------------------------------------------------

<S>                                                        <C>           <C>
Customers at beginning of period                           707,486       624,119
Gross units added internally                               171,668        98,931
Disconnects                                                119,101        71,732
Net units added internally                                  52,567        27,199
Net effect of dispositions                                 (10,653)      (10,563)
Customers at end of period                                 749,400       640,755
Average monthly postpaid churn rate                            1.9%          2.0
- --------------------------------------------------------------------------------
</TABLE>

      The average monthly  service  revenue per customer  declined to $47 during
the first six months of 2000 from $53 during the first six months of 1999 due to
price  reductions  and the  continued  trend  that a  higher  percentage  of new
subscribers  tend to be lower  usage  customers.  The  average  monthly  service
revenue per customer may further decline (i) as market penetration increases and
additional lower usage customers are activated; (ii) as the Company continues to
receive pressure from other cellular operators to reduce roaming rates and (iii)
as  competitive  pressures  from  current  and  future  wireless  communications
providers intensify. The Company is responding to such competitive pressures by,
among  other  things,  modifying  certain  of its price  plans and  implementing
certain other plans and promotions,  most of which are likely to result in lower
average revenue per customer.

      Cost of equipment sold increased $4.9 million (50.7%) substantially due to
an increase in units sold.

      System operations expenses increased $3.5 million (12.3%) in the first six
months  of  2000  primarily  due  to a $4.6  million  increase  associated  with
operating a greater number of cell sites.  Such increase was partially offset by
a $1.7  million  decrease  due to the sale of the  Company's  Texas  and  Alaska
cellular properties.

      Sales and marketing expenses increased $14.0 million (50.9%) due primarily
to a  $6.5  million  increase  in  advertising  and  sales  promotions  expenses
associated  with the  introduction of new rate plans during the first six months
of 2000; a $4.1 million  increase in sales  commissions paid to agents due to an
increase  in the number of units  sold;  and a $2.6  million  increase  in costs
incurred in selling products and services in retail  locations  primarily due to
an increase in the number of retail locations.

Other Operations
<TABLE>
<CAPTION>
                                                                 Six months
                                                               ended June 30,
- --------------------------------------------------------------------------------
                                                             2000          1999
- --------------------------------------------------------------------------------
                                                           (Dollars in thousands)
<S>                                                      <C>              <C>
Operating revenues
     Long distance                                       $  49,926        36,441
     Internet                                               10,285         8,904
     Call center                                             3,192         5,547
     Other                                                   8,149         8,351
- --------------------------------------------------------------------------------
                                                            71,552        59,243
- --------------------------------------------------------------------------------

Operating expenses
     Cost of sales and operating expenses                   52,789        45,512
     Depreciation and amortization                           2,498         2,242
- --------------------------------------------------------------------------------
                                                            55,287        47,754
- --------------------------------------------------------------------------------

Operating income                                         $  16,265        11,489
================================================================================
</TABLE>

      Other  operations  include the results of  operations of the Company which
are not  included in the  telephone  or wireless  segments,  including,  but not
limited to, the  Company's  non-regulated  long  distance  operations,  Internet
operations, call center operations and security monitoring operations. The $13.5
million increase in long distance revenues was attributable to the growth in the
number of customers and increased minutes of use per customer. Internet revenues
increased $1.4 million due primarily to a $3.7 million increase due to growth in
number of customers,  which was partially  offset by a $2.3 million decrease due
to the sale of the  Company's  Alaska  Internet  operations.  The  $2.4  million
decrease  in  call  center  revenues  was due to the  planned  phase-out  of the
Company's third party call center operations during 2000.

      Operating  expenses increased $7.5 million primarily due to an increase of
$7.4 million in expenses of the Company's long distance operations due primarily
to an increase in customers and a $3.2 million  increase in expenses  related to
the provision of Internet access. Such increases were partially offset by a $2.6
million  decrease  due  to  the  1999  sale  of the  Company's  Alaska  Internet
operations.

      The Company  anticipates that the growth of operating income for its other
operations will slow in future periods as it incurs increasingly larger expenses
in connection  with expanding its emerging fiber network and  competitive  local
exchange carrier businesses.

Interest Expense

      Interest  expense  decreased  $8.4 million in the first six months of 2000
compared  to the  first six  months  of 1999  primarily  due to a  reduction  in
outstanding  indebtedness  which was  partially  offset by  increased  borrowing
rates.

<PAGE>

Income from Unconsolidated Cellular Entities

      Earnings from unconsolidated cellular entities, net of the amortization of
associated  goodwill,  decreased  $8.1  million  in the first six months of 2000
primarily due to the Company's  proportionate  share ($5.3  million) of non-cash
charges that were recorded in the first quarter of 2000 by two cellular entities
in which the  Company  owns a minority  interest.  The  remaining  decrease  was
primarily due to decreased  earnings of certain  cellular  entities in which the
Company owns a minority interest.

Minority Interest

      Minority  interest is the  expense  recorded by the Company to reflect the
minority  interest  owners'  share  of the  earnings  or loss  of the  Company's
majority-owned and operated cellular entities and  majority-owned  subsidiaries.
Minority interest  decreased $16.9 million primarily due to the expense recorded
in 1999 related to the minority partners' share of the gain on sale of assets of
the Brownsville and McAllen, Texas cellular properties recorded in the first six
months of 1999.  Excluding the effect of this gain,  minority interest decreased
$2.0 million due to the decreased profitability of the Company's  majority-owned
and operated cellular entities.

Gain on Sale of Assets

      In the first six months of 2000,  the Company  recorded a pre-tax  gain of
approximately $9.9 million ($5.2 million after-tax;  $.04 per diluted share) due
to the sale of its remaining Alaska cellular operations.

      In the first six  months  of 1999,  the  Company  recorded  pre-tax  gains
aggregating  $50.0  million.  Approximately  $10.4  million of the pre-tax gains
($6.7  million  after-tax;  $.04 per  diluted  share) was due to the sale of the
Company's  remaining  common shares of  MCIWorldCom,  Inc. The  remaining  $39.6
million of the pre-tax  gains ($7.8 million loss  after-tax;  ($.05) per diluted
share)  was due to the sale of the  Company's  Brownsville  and  McAllen,  Texas
cellular  properties.  See Note 4 of Notes to Consolidated  Financial Statements
for additional information and Minority Interest.

Income Tax Expense

      Income tax expense decreased $39.3 million in the first six months of 2000
compared to the first six months of 1999 primarily due to the income tax expense
recorded in the first six months of 1999  associated with the sale of the assets
of the  Brownsville  and McAllen,  Texas cellular  properties.  Exclusive of the
effects of income tax expense on asset sales,  the effective income tax rate was
41.6% and 41.0% in the six months ended June 30, 2000 and 1999, respectively.

<PAGE>
                         LIQUIDITY AND CAPITAL RESOURCES


     Excluding cash used for  acquisitions,  the Company relies on cash provided
by operations to provide a substantial  portion of its cash needs. The Company's
operations  have  historically  provided a stable  source of cash flow which has
helped the Company continue its long-term program of capital improvements.

     Net cash provided by operating  activities  was $257.8  million  during the
first six months of 2000 compared to $274.8  million during the first six months
of 1999.  The  Company's  accompanying  consolidated  statements  of cash  flows
identify major differences between net income and net cash provided by operating
activities for each of these periods. For additional information relating to the
telephone operations,  wireless operations, and other operations of the Company,
see Results of Operations.

     Net cash used in investing activities was $149.6 million for the six months
ended June 30,  2000.  Net cash  provided  by  investing  activities  was $306.3
million  for the six months  ended  June 30,  1999.  Proceeds  from the sales of
assets  were $15.8  million in the first six months of 2000  compared  to $465.8
million  in the  first six  months of 1999.  Payments  for  property,  plant and
equipment  were $9.7  million  less in the first six  months of 2000 than in the
comparable  period during 1999.  Capital  expenditures  for the six months ended
June 30, 2000 were $75.4  million for  telephone  operations,  $14.7 million for
wireless operations and $49.3 million for other operations.

     Net cash used in financing  activities  was $115.2 million during the first
six months of 2000  compared  to $492.9  million  during the first six months of
1999.  Net payments of long-term  debt were $385.6 million less during the first
six months of 2000  compared to the first six months of 1999,  primarily  due to
utilization of proceeds received from the sales of assets during 1999.

     Budgeted  capital  expenditures  for 2000 total $250 million for  telephone
operations,  $100  million  for  wireless  operations  and $95 million for other
operations.

     On July 31, 2000,  affiliates of CenturyTel  acquired  certain  assets from
affiliates of Verizon in two separate  transactions in exchange for an aggregate
of  approximately  $1.1 billion cash.  Under these  transactions (i) the Company
purchased  approximately  231,000  telephone  access  lines  and  related  local
exchange assets comprising 106 exchanges  throughout  Arkansas for approximately
$824  million  cash and  (ii)  Spectra  Communications  Group,  LLC  ("Spectra")
purchased  approximately  127,000  telephone  access  lines  and  related  local
exchange assets comprising 107 exchanges  throughout  Missouri for approximately
$290 million  cash.  The Company owns 57.1% of Spectra,  which was  organized to
acquire and operate these Missouri  properties.  At closing,  the Company made a
preferred equity investment in Spectra of approximately $55 million and financed
substantially all of the remainder of the purchase price.

     To finance these  acquisitions on a short-term  basis, the Company borrowed
$800  million on a  floating-rate  basis under a $1.5 billion  Revolving  Credit
Facility  Agreement  dated July 31, 2000 with Bank of America,  N.A.,  Citibank,
N.A.,  Banc of America  Securities  LLC and  Salomon  Smith  Barney,  Inc.,  and
borrowed  $300  million  on a  floating-rate  basis  under its  existing  senior
unsecured  credit  facility  with Bank of America,  N.A.  Depending  upon market
conditions and other factors,  the Company  expects to ultimately  finance these
transactions, along with two other pending acquisitions of local exchange assets
in Wisconsin,  by either issuing  commercial  paper,  long-term debt,  equity or
equity-linked  securities,  by selling or monetizing  non-core assets or by some
combination thereof.

     Following  completion of these  transactions  on July 31, 2000, the Company
had $705  million of  undrawn  committed  bank lines of credit and  CenturyTel's
telephone  subsidiaries  had available for use $129.5 million of commitments for
long-term financing from the Rural Utilities Service.

     In August 1999, the Company  acquired an 89% interest in a  newly-organized
joint  venture  company  which has  entered  into a  definitive  asset  purchase
agreement  to purchase  telephone  access lines  (which  numbered  approximately
61,700 as of December 31, 1999) and related local  exchange  assets in Wisconsin
from a Verizon affiliate for approximately $170 million cash, subject to certain
adjustments.  At closing the Company has agreed to make an equity  investment in
the newly organized company of approximately $37.8 million and it is anticipated
that the Company will loan the new entity approximately $130 million. In October
1999,  the Company also entered into a definitive  asset  purchase  agreement to
purchase additional telephone access lines (which numbered  approximately 68,200
as of December 31, 1999) and related local  exchange  assets in Wisconsin from a
Verizon  affiliate  for  approximately  $195  million  cash,  subject to certain
adjustments.  The  Wisconsin  transactions  are expected to close  September 30,
2000, pending regulatory approvals and certain other closing conditions.

     Currently, the Company's senior unsecured debt is rated Baa1 by Moody's and
BBB+ by Standard & Poor's. However, as a result of the Company's announcement of
its Verizon  acquisitions,  in July 1999 Moody's placed its ratings under review
for possible  downgrade and Standard & Poor's placed its ratings on  CreditWatch
with  negative  implications.  There can be no  assurance  that the Company will
maintain its investment grade ratings.

                                  OTHER MATTERS

Accounting for the Effects of Regulation

     The Company currently  accounts for its regulated  telephone  operations in
accordance  with the provisions of Statement of Financial  Accounting  Standards
No. 71 ("SFAS 71"), "Accounting for the Effects of Certain Types of Regulation."
While the ongoing applicability of SFAS 71 to the Company's telephone operations
is being monitored due to the changing  regulatory,  competitive and legislative
environments,  the Company believes that SFAS 71 still applies.  However,  it is
possible that changes in regulation or  legislation  or  anticipated  changes in
competition or in the demand for regulated  services or products could result in
the  Company's  telephone  operations  not being  subject to SFAS 71 in the near
future.  In that event,  implementation  of Statement  of  Financial  Accounting
Standards No. 101 ("SFAS  101"),  "Regulated  Enterprises  - Accounting  for the
Discontinuance  of  Application  of FASB  Statement  No. 71," would  require the
write-off of previously  established  regulatory  assets and liabilities,  along
with an adjustment of certain accumulated  depreciation  accounts to reflect the
difference  between recorded  depreciation  and the amount of depreciation  that
would have been recorded had the Company's telephone operations not been subject
to rate  regulation.  Such  discontinuance  of the  application of SFAS 71 would
result in a material, noncash charge against earnings which would be reported as
an  extraordinary  item.  While the  effect of  implementing  SFAS 101 cannot be
precisely  estimated  at  this  time,  management  believes  that  the  noncash,
after-tax, extraordinary charge would be between $300 million and $350 million.

<PAGE>


                                CENTURYTEL, INC.
                          QUANTITATIVE AND QUALITATIVE
                          DISCLOSURES ABOUT MARKET RISK

Market Risk

     The  Company  is not  exposed  to  material  future  earnings  or cash flow
exposures from changes in interest rates on long-term debt obligations since the
majority of the Company's long-term debt obligations are fixed rate. At June 30,
2000,  the fair value of the Company's  long-term  debt was estimated to be $2.0
billion based on the overall  weighted  average rate of the Company's  long-term
debt of 7.1% and an overall weighted  maturity of 12 years compared to terms and
rates currently available in long-term  financing markets.  For purposes hereof,
market  risk  is  estimated  as the  potential  decrease  in fair  value  of the
Company's  long-term debt  resulting  from a  hypothetical  increase of 71 basis
points in interest rates (which  represents ten percent of the Company's overall
weighted  average  borrowing  rate).  Such an increase  in interest  rates would
result in approximately an $83.7 million decrease in fair value of the Company's
long-term debt.

     In the first quarter of 2000, the Company  entered into interest rate hedge
contracts designed to reduce its interest rate risk with respect to $500 million
of long-term public debt that it ultimately  expects to incur in connection with
providing long-term financing for its Verizon  acquisitions.  See "Liquidity and
Capital  Resources"  above.  It is  possible  that the  Company  will enter into
additional  interest  rate  hedges for the same  purpose  over the next  several
months.


                           PART II. OTHER INFORMATION

                                CENTURYTEL, INC.


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

       At the Company's  annual  meeting of  shareholders  on May 11, 2000,  the
shareholders  elected  four Class III  directors  to serve until the 2003 annual
meeting  of  shareholders  and  until  their  successors  are duly  elected  and
qualified and approved the proposals set forth in the Company's  proxy statement
dated March 20, 2000.

       The  following  number of votes were cast for or were  withheld  from the
following nominees:

        Class III Nominees                  For                    Withheld
      ---------------------            -------------              ------------

       Calvin Czeschin                  221,344,846                8,143,254
       F. Earl Hogan                    220,971,252                8,516,848
       Harvey P. Perry                  220,895,813                8,592,287
       Jim D. Reppond                   221,332,298                8,155,802


       The  Class I and  Class II  directors  whose  terms  continued  after the
meeting are:

             Class I                                Class II
       ---------------------                     ---------------

       William R. Boles, Jr.                     Virginia Boulet
       W. Bruce Hanks                            Ernest Butler, Jr.
       C. G. Melville, Jr.                       James B. Gardner
       Glen F. Post, III                         R. L. Hargrove, Jr.
       Clarke M. Williams                        Johnny Hebert


       The  following  number of votes were cast in the manner  indicated  below
with  respect  to  the  proposal  to  approve  the  Company's   2000   Incentive
Compensation Plan:

         For              Against               Abstain          Broker No-Votes
    --------------      ------------        --------------       ---------------
    206,822,756         20,631,548             2,033,796               -0-

Item 6.       Exhibits and Reports on Form 8-K
- -------       --------------------------------

     A.       Exhibits
              --------

              10.1     Form of Change of  Control  Agreement,  dated July 24,
                       2000,  by and  between  the  Registrant  and  Karen A.
                       Puckett  (incorporated by reference to Exhibit 10.1(c)
                       of Registrant's  Quarterly Report on Form 10-Q for the
                       period ended March 31, 2000).

              10.2     Amended and Restated Registrant's 2000 Incentive
                       Compensation Plan, as amended through May 23, 2000.

              11       Computations of Earnings Per Share.

              27.1     Financial Data Schedule as of and for the six months
                       ended June 30, 2000.


     B.      Reports on Form 8-K
             -------------------

              (i)     The following item was reported in the Form 8-K filed
                      April 28, 2000:

                      Item 5.  Other events - News release announcing first
                               quarter results of operations.



                                    SIGNATURE


       Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the registrant has duly caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                                   CenturyTel, Inc.



Date: August 11, 2000                          /s/ Neil A. Sweasy
                                               -----------------------------
                                               Neil A. Sweasy
                                               Vice President and Controller
                                               (Principal Accounting Officer)
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>COMPENSATION AGREEMENT
<TEXT>

                                                                    Exhibit 10.2
As amended through May 23, 2000
                              AMENDED AND RESTATED
                                CENTURYTEL, INC.
                        2000 INCENTIVE COMPENSATION PLAN

         WHEREAS,  the  CenturyTel,  Inc.  2000  Incentive  Compensation  Plan
(the  "Plan") was adopted by the Board of  Directors of  CenturyTel,  Inc.  (the
"Company") on February 22, 2000 and approved by the  shareholders of the Company
on May 11, 2000; and

         WHEREAS,  the Board of Directors now wishes to amend Section 7.2 of the
Plan that provides for the grant of  performance-based  Other Stock-Based Awards
to provide  minimum vesting  periods for awards granted  thereunder,  except for
grants that relate in the  aggregate to a  relatively  small number of shares of
Company common stock.

         NOW  THEREFORE,  Section  7.2 of the Plan is hereby  amended to read as
provided herein and the Plan is hereby restated in its entirety  reflecting such
amendment to read as follows:

         1.   Purpose. The purpose of the 2000 Incentive Compensation Plan (this
"Plan") of CenturyTel,  Inc. ("CenturyTel") is to increase shareholder value and
to advance the interests of CenturyTel and its subsidiaries  (collectively,  the
"Company")  by  furnishing  a variety of equity  incentives  (the  "Incentives")
designed to attract,  retain and motivate officers,  key employees,  consultants
and advisors and to strengthen  the mutuality of interests  between such persons
and  CenturyTel's  shareholders.  Incentives  may consist of options to purchase
shares of  CenturyTel's  common  stock,  $1.00 par value per share (the  "Common
Stock"),  shares of restricted  stock or other  stock-based  awards the value of
which is based upon the value of the Common Stock, all on terms determined under
this Plan. As used in this Plan, the term  "subsidiary"  means any  corporation,
limited  liability company or other entity of which CenturyTel owns (directly or
indirectly) within the meaning of Section 425(f) of the Internal Revenue Code of
1986, as amended (the "Code"), 50% or more of the total combined voting power of
all classes of stock,  membership  interests  or other equity  interests  issued
thereby.

         2.   Administration.

                  2.1  Composition.  This  Plan  shall  be  administered  by the
         compensation committee of the Board of Directors of CenturyTel, or by a
         subcommittee   of  the   compensation   committee.   The  committee  or
         subcommittee  that administers this Plan shall  hereinafter be referred
         to as the  "Committee."  The Committee  shall consist of not fewer than
         two members of the Board of  Directors,  each of whom shall (a) qualify
         as a  "non-employee  director"  under Rule 16b-3  under the  Securities
         Exchange Act of 1934 (the "1934 Act"),  or any successor  rule, and (b)
         qualify as an "outside  director"  under Section 162(m) of the Code and
         the regulations thereunder (collectively, "Section 162(m)").

                  2.2  Authority.  The Committee  shall have  authority to award
         Incentives  under this Plan,  to interpret  this Plan, to establish any
         rules or  regulations  relating to this Plan that it  determines  to be
         appropriate,  to enter  into  agreements  with or  provide  notices  to
         participants  as  to  the  terms  of  the  Incentives  (the  "Incentive
         Agreements")  and to make  any  other  determination  that it  believes
         necessary or advisable for the proper  administration of this Plan. Its
         decisions  concerning  matters  relating  to this Plan  shall be final,
         conclusive and binding on the Company and  participants.  The Committee
         may delegate its authority  hereunder to the extent provided in Section
         3 hereof.  The Committee  shall not have authority to award  Incentives
         under this Plan to directors in their capacities as such.

         3.   Eligible  Participants. Key employees and officers of the Company
(including  officers who also serve as directors of the Company) and consultants
and advisors to the Company shall become  eligible to receive  Incentives  under
this  Plan  when  designated  by the  Committee.  Employees  may  be  designated
individually  or by groups or categories,  as the Committee  deems  appropriate.
With  respect  to  participants  not  subject  to  Section 16 of the 1934 Act or
Section  162(m),  the  Committee  may delegate to  appropriate  personnel of the
Company its authority to designate participants, to determine the size, type and
terms of the  Incentives to be received by those  participants  and to determine
any performance  objectives for those  participants.  Any such delegation by the
Committee  shall not  include the  authority  to change or modify in any way the
terms of a previously  granted  Incentive or to take any other action authorized
herein  to be  taken  by the  Committee  and not  specifically  permitted  to be
delegated in this Section 3.

         4.   Shares Subject to this Plan.  The shares of Common Stock with
respect to which Incentives may be granted under this Plan shall be subject to
the following:

                  4.1 Type of Common  Stock.  The  shares of Common  Stock  with
         respect to which  Incentives  may be  granted  under this Plan shall be
         currently  authorized but unissued  shares or shares  currently held or
         subsequently  acquired  by the Company as  treasury  shares,  including
         shares purchased in the open market or in private transactions.

                  4.2  Maximum Number of Shares. Subject to the other provisions
         of this  Section 4, the maximum  number of shares of Common  Stock that
         may be delivered to  participants  and their  beneficiaries  under this
         Plan shall be 4,000,000 shares of Common Stock.

                  4.3  Share Counting.  To the extent any shares of Common Stock
         covered  by  an  Incentive  are  not  delivered  to  a  participant  or
         beneficiary  because the  Incentive is  forfeited  or canceled,  or the
         shares of Common Stock are not delivered  because the Incentive is paid
         or settled in cash or used to satisfy the  applicable  tax  withholding
         obligation,  such shares shall not be deemed to have been delivered for
         purposes of  determining  the maximum  number of shares of Common Stock
         available  for  delivery  under this Plan.  In the event that shares of
         Common Stock are issued as Incentives  and  thereafter are forfeited or
         reacquired  by the Company  pursuant to rights  reserved  upon issuance
         thereof, such forfeited and reacquired Shares may again be issued under
         this Plan. If the exercise price of any stock option granted under this
         Plan is satisfied  by  tendering  shares of Common Stock to the Company
         (by  either  actual  delivery  or by  attestation),  only the number of
         shares of  Common  Stock  issued  net of the  shares  of  Common  Stock
         tendered  shall be deemed  delivered  for purposes of  determining  the
         maximum  number of shares of Common Stock  available for delivery under
         this Plan.

                  4.4  Limitations on Number of Shares. Subject to Section 4.5,
         the following  additional  limitations are imposed under this Plan:

                           (a) The maximum number of shares of Common Stock that
                  may be issued  upon  exercise  of stock  options  intended  to
                  qualify as incentive  stock  options  under Section 422 of the
                  Code  shall be  4,000,000  shares.  Notwithstanding  any other
                  provision  herein to the  contrary,  (i) all  shares  issuable
                  under  incentive  stock options shall be counted  against this
                  limit and (ii) shares that are issued and are later forfeited,
                  cancelled or  reacquired  by the Company,  shares  withheld to
                  satisfy  withholding tax  obligations and shares  delivered in
                  payment of the  Incentive  price  shall have no effect on this
                  limitation.

                           (b) The maximum number of shares of Common Stock that
                  may be covered by  Incentives  granted  under this Plan to any
                  one individual  during any one  calendar-year  period shall be
                  600,000.

                           (c) The maximum number of shares of Common Stock that
                  may be issued as restricted stock or Other Stock-Based  Awards
                  (as defined below) shall be 500,000 shares.

                           (d) If,  after  shares  have  been  earned  under  an
                  Incentive,  the delivery is deferred,  any  additional  shares
                  attributable  to  dividends  paid during the  deferral  period
                  shall be disregarded  for purposes of the  limitations of this
                  Section 4.

                  4.5  Adjustment.   In  the  event  of  any   recapitalization,
         reclassification, stock dividend, stock split, combination of shares or
         other change in the Common Stock,  all limitations on numbers of shares
         of Common Stock  provided in this Section 4 and the number of shares of
         Common Stock  subject to  outstanding  Incentives  shall be adjusted in
         proportion  to the change in  outstanding  shares of Common  Stock.  In
         addition,  in the event of any such  change in the  Common  Stock,  the
         Committee  shall make any other  adjustment  that it  determines  to be
         equitable,  including  without  limitation  adjustments to the exercise
         price of any option  and any per share  performance  objectives  of any
         Incentive  in  order to  provide  participants  with the same  relative
         rights before and after such adjustment.

         5.   Stock Options. The Committee may grant incentive stock options (as
such term is defined in Section 422 of the Code) or non-qualified stock options.
Any option that is  designated  as a  non-qualified  stock  option  shall not be
treated as an incentive stock option. Each stock option granted by the Committee
under this Plan shall be subject to the following terms and conditions:

                  5.1  Price. The exercise price per share shall be determined
         by the Committee,subject to adjustment under Section 4.5; provided that
         in no event shall the exercise price be less than the Fair Market Value
         (as  defined  below) of a share of  Common  Stock on the date of grant,
         except in the case of a stock  option  granted in  assumption  of or in
         substitution  for an  outstanding  award of a company  acquired  by the
         Company or with which the Company combines.

                  5.2  Number. The number of shares of Common  Stock  subject to
         the  option  shall  be  determined  by the  Committee,  subject  to the
         limitations and adjustments provided in Section 4 hereof.

                  5.3  Duration and Time for Exercise.  Subject  to  earlier
         termination as provided in Section 8.4 and 8.13, the term of each stock
         option shall be  determined by the  Committee.  Each stock option shall
         become  exercisable  at such time or times  during its term as shall be
         determined  by  the   Committee.   The  Committee  may  accelerate  the
         exercisability of any stock option at any time.

                  5.4  Repurchase.  Upon approval of the Committee,  the Company
         may  repurchase  all or a portion of a previously  granted stock option
         from a  participant  by mutual  agreement  before  such option has been
         exercised  by payment to the  participant  of cash or Common Stock or a
         combination  thereof  with a value  equal to the  amount  per  share by
         which:  (a) the Fair Market  Value of the Common  Stock  subject to the
         option on the business day  immediately  preceding the date of purchase
         exceeds (b) the exercise price.

                  5.5  Manner of Exercise.  A stock option may be  exercised, in
         whole or in part, by giving written  notice to the Company,  specifying
         the  number of shares of Common  Stock to be  purchased.  The  exercise
         notice shall be  accompanied  by tender of the full purchase  price for
         such shares, which may be paid or satisfied by (a) cash; (b) check; (c)
         delivery of shares of Common  Stock,  which  shares shall be valued for
         this purpose at the Fair Market  Value on the business day  immediately
         preceding  the date such  option is  exercised  and,  unless  otherwise
         determined by the  Committee,  shall have been held by the optionee for
         at least six months; (d) delivery of irrevocable  written  instructions
         to a broker  approved  by the Company  (with a copy to the  Company) to
         immediately  sell a portion of the shares issuable under the option and
         to deliver promptly to the Company the amount of sale proceeds (or loan
         proceeds if the broker lends funds to the  participant  for delivery to
         the Company) to pay the exercise  price; or (e) in such other manner as
         may be authorized from time to time by the Committee, provided that all
         such payments shall be made or denominated in United States dollars. In
         the case of delivery of an uncertified check, no shares shall be issued
         until  the  check has been  paid in full.  In the case of  delivery  of
         irrevocable  instructions  to a broker as permitted  above,  any shares
         sold in order to finance  the  payment of the  exercise  price shall be
         deemed  to be  validly  issued  in  exchange  for  services  previously
         rendered.  Prior to the  issuance  of shares of Common  Stock  upon the
         exercise of a stock  option,  a  participant  shall have no rights as a
         shareholder.

                  5.6  Repricing. Except for adjustments pursuant to Section 4.5
         unless approved by the shareholders of the Company,  the exercise price
         for any outstanding option granted under this Plan may not be decreased
         after the date of grant nor may an  outstanding  option  granted  under
         this Plan be surrendered to the Company as consideration  for the grant
         of a new option with a lower exercise price.

                  5.7  Incentive Stock Options.  Notwithstanding anything in
         this Plan to the contrary, the following additional provisions shall
         apply to the grant of stock options that are intended to qualify as
         incentive stock options.

                           (a) Any incentive stock option  authorized under this
                  Plan shall  contain  such other  provisions  as the  Committee
                  shall deem  advisable,  but shall in all events be  consistent
                  with and  contain  or be  deemed  to  contain  all  provisions
                  required in order to qualify the  options as  incentive  stock
                  options;

                           (b) All incentive stock options must be granted
                  within ten years from the date on which this Plan was adopted
                  by the Board of Directors;

                           (c) Unless sooner exercised, all incentive stock
                  options shall expire no later than ten years after the date
                  of grant;

                           (d) No incentive stock option shall be granted to any
                  participant who, at the time such option is granted, would own
                  (within  the  meaning  of  Section  422  of  the  Code)  stock
                  possessing more than 10% of the total combined voting power of
                  all  classes of stock of the  employer  corporation  or of its
                  parent or subsidiary corporation; and

                           (e) The aggregate Fair Market Value  (determined with
                  respect  to each  incentive  stock  option as of the time such
                  incentive  stock  option is granted) of the Common  Stock with
                  respect to which  incentive  stock options are exercisable for
                  the first  time by a  participant  during  any  calendar  year
                  (under this Plan or any other plan of the  Company)  shall not
                  exceed  $100,000.  To  the  extent  that  such  limitation  is
                  exceeded,  such  options  shall not be  treated,  for  federal
                  income tax purposes, as incentive stock options.

                  5.8  Equity Maintenance. If a participant  exercises an option
         during  the  term of his  employment  with  the  Company,  and pays the
         exercise price (or any portion thereof) through the surrender of shares
         of  outstanding  Common Stock owned by the  participant,  the Committee
         may, in its discretion,  grant to such participant an additional option
         to purchase the number of shares of Common Stock equal to the shares of
         Common Stock so surrendered by such  participant.  Any such  additional
         options  granted  by the  Committee  shall be  exercisable  at the Fair
         Market  Value of the Common  Stock  determined  as of the  business day
         immediately  preceding the respective dates such additional options may
         be granted. The grant of such additional options under this Section 5.8
         shall be made upon such other terms and conditions as the Committee may
         from time to time determine.

         6.   Restricted Stock.

                  6.1  Grant of Restricted Stock. An award of restricted  stock
         may be subject to the  attainment  of  specified  performance  goals or
         targets,  restrictions on transfer,  forfeitability provisions and such
         other terms and conditions as the Committee may  determine,  subject to
         the provisions of this Plan. To the extent restricted stock is intended
         to qualify as performance based  compensation  under Section 162(m), it
         must meet the additional requirements imposed thereby.

                  6.2  The Restricted Period. At the time an award of restricted
         stock is made,  the Committee  shall  establish a period of time during
         which  the  transfer  of  the  shares  of  restricted  stock  shall  be
         restricted (the  "Restricted  Period").  Each award of restricted stock
         may have a different Restricted Period. A Restricted Period of at least
         three  years is  required,  except  that if  vesting  of the  shares is
         subject to the attainment of specified  performance goals, a Restricted
         Period of one year or more is permitted.  Unless otherwise  provided in
         the Incentive  Agreement,  the Committee may in its discretion  declare
         the  Restricted   Period   terminated  upon  a   participant's   death,
         disability,  retirement or other  termination by the Company and permit
         the sale or transfer of the  restricted  stock.  The  expiration of the
         Restricted  Period shall also occur as provided under Section 8.13 upon
         a Change of Control of the Company.

                  6.3  Escrow. The participant receiving restricted stock shall
         enter into an Incentive  Agreement with the Company  setting forth the
         conditions of the grant. Certificates representing shares of restricted
         stock shall be registered in the name of the  participant and deposited
         with the Company,  together with a stock power endorsed in blank by the
         participant. Each such certificate shall bear a legend in substantially
         the following form:

                  The  transferability  of this  certificate  and the  shares of
                  Common  Stock  represented  by it is  subject to the terms and
                  conditions  (including  conditions of forfeiture) contained in
                  the  CenturyTel,  Inc. 2000 Incentive  Compensation  Plan (the
                  "Plan") and an agreement  entered into between the  registered
                  owner and CenturyTel, Inc. thereunder. Copies of this Plan and
                  the agreement are on file and available for  inspection at the
                  principal office of the Company.

                  6.4  Dividends on Restricted Stock. Any and all cash and stock
         dividends paid with respect to the shares of restricted  stock shall be
         subject to any restrictions on transfer,  forfeitability  provisions or
         reinvestment  requirements  as the  Committee  may, in its  discretion,
         prescribe in the Incentive Agreement.

                  6.5  Forfeiture.  In the event of the forfeiture of any shares
         of restricted stock under the terms provided in the Incentive Agreement
         (including  any additional  shares of restricted  stock that may result
         from the  reinvestment of cash and stock  dividends,  if so provided in
         the Incentive  Agreement),  such forfeited  shares shall be surrendered
         and the certificates  cancelled.  The participants  shall have the same
         rights  and   privileges,   and  be  subject  to  the  same  forfeiture
         provisions,  with respect to any additional shares received pursuant to
         Section 4.5 due to a  recapitalization,  stock split or other change in
         capitalization.

                  6.6  Expiration of Restricted Period.  Upon the expiration or
         termination of the Restricted  Period and the satisfaction of any other
         conditions  prescribed  by the  Committee  or at such  earlier  time as
         provided  for in  Section  6.2  and in the  Incentive  Agreement  or an
         amendment thereto, the restrictions  applicable to the restricted stock
         shall  lapse  and a stock  certificate  for the  number  of  shares  of
         restricted  stock with  respect to which the  restrictions  have lapsed
         shall be  delivered,  free of all such  restrictions  and legends other
         than those  required by law, to the  participant  or the  participant's
         estate, as the case may be.

                  6.7  Rights  as a  Shareholder.  Subject  to the  restrictions
         imposed under the terms and  conditions of this Plan and subject to any
         other restrictions that may be imposed in the Incentive Agreement, each
         participant  receiving  restricted stock shall have all the rights of a
         shareholder with respect to shares of Common Stock during any period in
         which  such  shares are  subject  to  forfeiture  and  restrictions  on
         transfer, including without limitation, the right to vote such shares.

                  6.8  Performance-Based  Restricted   Stock.   Any  grant  of
         restricted  stock that is  intended  to  qualify as  "performance-based
         compensation"   under  Section  162(m)  shall  be  conditioned  on  the
         achievement  of one  or  more  performance  measures.  The  performance
         measures pursuant to which the restricted stock shall vest shall be any
         or a combination of the following  measures  applied to the Company,  a
         subsidiary  or a division:  earnings  per share,  return on assets,  an
         economic value added measure,  shareholder return, earnings,  return on
         equity,  return on investment,  cash provided by operating  activities,
         increase in cash flow, increase in revenues or customer growth. For any
         performance period,  such performance  objectives may be measured on an
         absolute basis or relative to a group of peer companies selected by the
         Committee, relative to internal goals or relative to levels attained in
         prior  years.  For grants of  restricted  stock  intended to qualify as
         "performance-based  compensation,"  the grants of restricted  stock and
         the  establishment  of  performance  measures  shall be made during the
         period required under Section 162(m).

         7.    Other Stock-Based Awards.

                  7.1 Grant of Other Stock-Based Awards. The Committee may grant
         to  eligible  participants  "Other  Stock-Based  Awards,"  which  shall
         consist of awards,  other than options or restricted stock provided for
         in Sections 5 and 6, the value of which is based in whole or in part on
         the value of shares of Common Stock.  Other  Stock-Based  Awards may be
         awards of shares of Common Stock or may be  denominated  or payable in,
         valued in whole or in part by reference  to, or  otherwise  based on or
         related to,  shares of, or  appreciation  in the value of, Common Stock
         (including, without limitation,  securities convertible or exchangeable
         into or  exercisable  for  shares  of Common  Stock),  as deemed by the
         Committee  consistent  with the  purposes of this Plan.  The  Committee
         shall determine the terms and conditions of any Other Stock-Based Award
         (including  which rights of a shareholder,  if any, the recipient shall
         have with respect to Common Stock  associated  with any such award) and
         may provide that such award is payable in whole or in part in cash.  An
         Other  Stock-Based  Award  may be  subject  to the  attainment  of such
         specified  performance goals or targets as the Committee may determine,
         subject to the  provisions  of this Plan.  To the extent  that an Other
         Stock-Based   Award  is  intended  to  qualify  as   "performance-based
         compensation"  under  Section  162(m),  it  must  meet  the  additional
         requirements imposed thereby.

                  7.2  Performance-Based  Other Stock-Based Awards. Any grant of
         an  Other   Stock-Based   Award   that  is   intended   to  qualify  as
         "performance-based   compensation"   under  Section   162(m)  shall  be
         conditioned on the achievement of one or more performance measures. The
         performance  measures  pursuant  to which the Other  Stock-Based  Award
         shall  vest shall be any or a  combination  of the  following  measures
         applied to the Company, a subsidiary or a division: earnings per share,
         return on assets, an economic value added measure,  stockholder return,
         earnings,  return on equity,  return on  investment,  cash  provided by
         operating  activities,  increase in cash flow,  increase in revenues or
         customer  growth.   For  any  performance   period,   such  performance
         objectives  may be measured on an absolute basis or relative to a group
         of peer companies selected by the Committee, relative to internal goals
         or relative  to levels  attained  in prior  years.  For grants of Other
         Stock-Based   Awards   intended   to  qualify   as   "performance-based
         compensation,"   the  grants  of  Other  Stock-Based   Awards  and  the
         establishment  of performance  measures shall be made during the period
         required under Section 162(m).  Other Stock-Based  Awards granted under
         this  Section  7.2  shall  be  subject  to  vesting  periods  that  are
         equivalent in length to the  Restricted  Periods for  restricted  stock
         described  in Section 6.2 hereof,  except that the  Committee  may make
         special  awards  under this Section 7.2 with respect to an aggregate of
         no more than 200,000 shares of Common Stock,  as adjusted under Section
         4.5, which special  awards shall not be subject to the minimum  vesting
         period requirements described herein.

         8.   General.

                  8.1  Duration. Subject to Section 8.10, this Plan shall remain
         in effect until all Incentives granted under this Plan have either been
         satisfied  by the  issuance of shares of Common Stock or the payment of
         cash or been terminated  under the terms of this Plan or the applicable
         Incentive  Agreement and all  restrictions  imposed on shares of Common
         Stock in connection with their issuance under this Plan have lapsed.

                  8.2  Transferability of Incentives. No Incentive granted
         hereunder may be transferred, pledged, assigned or otherwise encumbered
         by the holder thereof except:

                           (a)  by will;

                           (b)  by the laws of descent and distribution;

                           (c)  pursuant to a domestic relations order, as
                  defined in the Code; or

                           (d)  in the case of stock options only, if permitted
                  by the Committee and so provided in the Incentive Agreement or
                  an amendment thereto, (i) to Immediate Family Members, (ii) to
                  a partnership in which Immediate  Family Members,  or entities
                  in which Immediate Family Members are the sole owners, members
                  or beneficiaries, as appropriate, are the only partners, (iii)
                  to a  limited  liability  company  in which  Immediate  Family
                  Members, or entities in which Immediate Family Members are the
                  sole owners, members or beneficiaries, as appropriate, are the
                  only  members,  or (iv) to a trust  for the  sole  benefit  of
                  Immediate Family Members. "Immediate Family Members" means the
                  spouse and natural or adopted children or grandchildren of the
                  participant and their respective  spouses.  To the extent that
                  an  incentive  stock  option is  permitted  to be  transferred
                  during the  lifetime of the  participant,  it shall be treated
                  thereafter as a non-qualified stock option.

         Any attempted  assignment,  transfer,  pledge,  hypothecation  or other
         disposition of an Incentive,  or levy of attachment or similar  process
         upon the Incentive not specifically permitted herein, shall be null and
         void and without effect.

                  8.3  Dividend Equivalents. In the sole and complete discretion
         of the  Committee,  an  Incentive  may provide the holder  thereof with
         dividends  or  dividend  equivalents,  payable in cash,  shares,  other
         securities or other property on a current or deferred basis.

                  8.4  Effect of Termination of Employment or Death.In the event
         that a  participant  ceases to be an  employee  of the  Company for any
         reason,  including  death,  disability,   early  retirement  or  normal
         retirement, any Incentives may be exercised, shall vest or shall expire
         at such times as may be  determined  by the  Committee and set forth in
         the Incentive Agreement.

                  8.5  Additional  Condition.  Anything  in  this  Plan  to  the
         contrary notwithstanding: (a) the Company may, if it shall determine it
         necessary  or  desirable  for any  reason,  at the time of award of any
         Incentive or the issuance of any shares of Common Stock pursuant to any
         Incentive,  require the recipient of the  Incentive,  as a condition to
         the receipt  thereof or to the receipt of shares of Common Stock issued
         pursuant thereto, to deliver to the Company a written representation of
         present  intention  to acquire  the  Incentive  or the shares of Common
         Stock issued  pursuant  thereto for his own account for  investment and
         not  for  distribution;  and (b) if at any  time  the  Company  further
         determines, in its sole discretion,  that the listing,  registration or
         qualification  (or any updating of any such  document) of any Incentive
         or the shares of Common Stock issuable pursuant thereto is necessary on
         any  securities  exchange or under any federal or state  securities  or
         blue sky law,  or that the  consent  or  approval  of any  governmental
         regulatory  body is necessary  or  desirable  as a condition  of, or in
         connection  with the award of any Incentive,  the issuance of shares of
         Common  Stock  pursuant  thereto,  or the  removal of any  restrictions
         imposed on such  shares,  such  Incentive  shall not be awarded or such
         shares of Common Stock shall not be issued or such  restrictions  shall
         not be  removed,  as the case may be, in whole or in part,  unless such
         listing,  registration,  qualification,  consent or approval shall have
         been effected or obtained free of any  conditions not acceptable to the
         Company.

                  8.6  Incentive Agreements.  An Incentive under this Plan shall
         be subject to such terms and  conditions,  not  inconsistent  with this
         Plan, as the Committee may, in its sole  discretion,  prescribe and set
         forth in the Incentive Agreement. Such terms and conditions may provide
         for the  forfeiture  of an  Incentive  or the gain  associated  with an
         Incentive under certain  circumstances to be set forth in the Incentive
         Agreement,  including if the  participant  competes with the Company or
         engages in other activities that are harmful to the Company.  All terms
         and  conditions  of any  Incentive  shall be  reflected in such form of
         Incentive  Agreement as is determined by the Committee.  A copy of such
         document shall be provided to the  participant,  and the Committee may,
         but  need  not,  require  that  the  participant  sign a copy  of  such
         document.  Such  document is referred to in this Plan as an  "Incentive
         Agreement" regardless of whether a participant's signature is required.

                  8.7  Withholding.

                           (a) The Company shall have the right to withhold from
                  any payments or stock issuances under this Plan, or to collect
                  as a  condition  of payment,  any taxes  required by law to be
                  withheld.

                           (b) Any  participant  may,  but is not  required  to,
                  satisfy his or her  withholding  tax obligation in whole or in
                  part by electing (the "Election") to have the Company withhold
                  from the shares the participant otherwise would receive shares
                  of Common  Stock  having a value equal to the  minimum  amount
                  required  to be  withheld.  The  value  of  the  shares  to be
                  withheld shall be based on the Fair Market Value of the Common
                  Stock on the date that the amount of tax to be withheld  shall
                  be  determined  (the "Tax Date").  Each  Election must be made
                  prior to the Tax Date.  The  Committee  may  disapprove of any
                  Election,   may  suspend  or  terminate   the  right  to  make
                  Elections,  or may provide with respect to any Incentive  that
                  the right to make Elections shall not apply to such Incentive.

                  8.8  No Continued Employment.  No participant under this Plan
         shall have any right, because of his or her participation,  to continue
         in the employ of the  Company for any period of time or to any right to
         continue his or her present or any other rate of compensation.

                  8.9  Deferral Permitted. Payment of cash or distribution of
         any shares of Common Stock to which a participant is entitled under
         any Incentive shall be made as provided in the Incentive  Agreement.
         Payment may be deferred at the option of the participant if provided
         in the Incentive Agreement.

                 8.10  Amendment or Discontinuance of this Plan. The Board may
         amend or discontinue this Plan at any time; provided,  however, that no
         such amendment may:

                           (a)  without the approval  of the  shareholders, (i)
                  increase, subject to adjustments permitted herein, the maximum
                  number of shares of Common  Stock  that may be issued  through
                  this Plan, (ii) materially  increase the benefits  accruing to
                  participants  under this  Plan,  (iii)  materially  expand the
                  classes of persons  eligible to  participate  in this Plan, or
                  (iv) amend Section 5.6 to permit repricing of options, or

                           (b)  materially impair,  without  the consent of the
                  recipient,  an Incentive  previously granted,  except that the
                  Company retains all rights under Section 8.13 hereof.

                 8.11  Definition of Fair  Market  Value.  Whenever  the "Fair
         Market Value" of Common Stock or some other specified  security must be
         determined  for  purposes  of this  Plan,  it  shall be  determined  as
         follows:  (i) if the  Common  Stock or other  security  is listed on an
         established  stock  exchange  or any  automated  quotation  system that
         provides sale quotations, the closing sale price for a share thereof on
         such exchange or quotation  system on the applicable date and if shares
         are not traded on such day, on the next preceding trading date, (ii) if
         the Common  Stock or other  security  is not listed on any  exchange or
         quotation  system,  but bid and asked prices are quoted and  published,
         the mean between the quoted bid and asked prices on the applicable date
         and if bid and asked prices are not  available on such day, on the next
         preceding  day on which such  prices were  available;  and (iii) if the
         Common Stock or other security is not regularly quoted, the fair market
         value of a share thereof on the  applicable  date as established by the
         Committee in good faith.

                 8.12  Loans.  In order to assist a  participant  in  acquiring
         shares of Common  Stock  pursuant to an  Incentive  granted  under this
         Plan, the Committee may  authorize,  at either the time of the grant of
         the Incentive,  at the time of the acquisition of Common Stock pursuant
         to the Incentive, or at the time of the lapse of restrictions on shares
         of restricted stock granted under this Plan, the extension of a loan to
         the participant by the Company.  The terms of any loans,  including the
         interest rate,  collateral  and terms of repayment,  will be subject to
         the discretion of the Committee. The maximum credit available hereunder
         shall be equal to the aggregate  purchase price of the shares of Common
         Stock to be  acquired  pursuant to the  Incentive  plus the maximum tax
         liability that may be incurred in connection with the Incentive.

                 8.13  Change of Control.

                           (a)   A Change of Control shall mean:

                                    (i)   the acquisition by  any  person  of
                           beneficial   ownership   of  30%  or   more   of  the
                           outstanding shares of the Common Stock or 30% or more
                           of the  combined  voting power of  CenturyTel's  then
                           outstanding  securities entitled to vote generally in
                           the election of directors;  provided,  however,  that
                           for purposes of this  subsection  (i), the  following
                           acquisitions  shall  not   constitute  a  Change  of
                           Control:

                                            (A) any  acquisition  (other  than a
                                    Business   Combination  (as  defined  below)
                                    which  constitutes a Change of Control under
                                    Section 8.13(a)(iii) hereof) of Common Stock
                                    directly from the Company,

                                            (B) any acquisition of Common Stock
                                    by the Company,

                                            (C) any  acquisition of Common Stock
                                    by any  employee  benefit  plan (or  related
                                    trust)   sponsored  or   maintained  by  the
                                    Company or any corporation controlled by the
                                    Company, or

                                            (D) any  acquisition of Common Stock
                                    by any  corporation  pursuant  to a Business
                                    Combination   that  does  not  constitute  a
                                    Change of Control under Section 8.13(a)(iii)
                                    hereof; or

                                    (ii)  individuals who, as of January 1, 2000
                           constituted the Board of Directors of CenturyTel (the
                           "Incumbent Board") cease for any reason to constitute
                           at  least  a  majority  of the  Board  of  Directors;
                           provided,  however,  that any  individual  becoming a
                           director  subsequent to such date whose election,  or
                           nomination for election by CenturyTel's shareholders,
                           was approved by a vote of at least  two-thirds of the
                           directors then  comprising the Incumbent  Board shall
                           be considered a member of the Incumbent Board, unless
                           such individual's initial assumption of office occurs
                           as a  result  of an  actual  or  threatened  election
                           contest  with  respect to the  election or removal of
                           directors or other actual or threatened  solicitation
                           of  proxies or  consents  by or on behalf of a person
                           other than the Incumbent Board; or

                                    (iii) consummation  of  a  reorganization,
                           share exchange,  merger or  consolidation  (including
                           any such transaction involving any direct or indirect
                           subsidiary   of   CenturyTel)   or  sale   or   other
                           disposition of all or substantially all of the assets
                           of the Company (a "Business Combination");  provided,
                           however,   that  in  no  such  case  shall  any  such
                           transaction   constitute   a  Change  of  Control  if
                           immediately following such Business Combination:

                                            (A) the individuals and entities who
                                    were the beneficial  owners of  CenturyTel's
                                    outstanding  Common  Stock and  CenturyTel's
                                    voting securities entitled to vote generally
                                    in the  election  of  directors  immediately
                                    prior  to  such  Business  Combination  have
                                    direct  or  indirect  beneficial  ownership,
                                    respectively,  of more  than 50% of the then
                                    outstanding shares of common stock, and more
                                    than 50% of the combined voting power of the
                                    then outstanding voting securities  entitled
                                    to  vote   generally   in  the  election  of
                                    directors  of  the  surviving  or  successor
                                    corporation, or, if applicable, the ultimate
                                    parent       company       thereof      (the
                                    "Post-Transaction Corporation"), and

                                            (B) except to the  extent  that such
                                    ownership  existed  prior  to  the  Business
                                    Combination,   no  person   (excluding   the
                                    Post-Transaction    Corporation    and   any
                                    employee  benefit  plan or related  trust of
                                    either  CenturyTel,   the   Post-Transaction
                                    Corporation  or  any  subsidiary  of  either
                                    corporation)  beneficially owns, directly or
                                    indirectly,   20%  or  more   of  the   then
                                    outstanding  shares of  common  stock of the
                                    corporation  resulting  from  such  Business
                                    Combination  or 20% or more of the  combined
                                    voting power of the then outstanding  voting
                                    securities of such corporation, and

                                            (C)  at least a  majority  of  the
                                    members  of the  board of  directors  of the
                                    Post-Transaction Corporation were members of
                                    the  Incumbent  Board  at  the  time  of the
                                    execution  of the initial  agreement,  or of
                                    the  action  of  the  Board  of   Directors,
                                    providing for such Business Combination; or

                                    (iv)  approval by the shareholders of
                           CenturyTel of a complete liquidation or dissolution
                           of CenturyTel.

                  For purposes of this Section  8.13,  the term  "person"  shall
                  mean a natural person or entity, and shall also mean the group
                  or  syndicate  created  when  two  or  more  persons  act as a
                  syndicate or other group  (including,  without  limitation,  a
                  partnership  or  limited   partnership)  for  the  purpose  of
                  acquiring,  holding,  or disposing of a security,  except that
                  "person" shall not include an underwriter  temporarily holding
                  a security pursuant to an offering of the security.

                           (b)  Upon a Change of Control of the type described
                  in clause (a)(i) or (a)(ii) of this Section  8.13 or upon the
                  approval by the Board of Directors of CenturyTel of any Change
                  of Control of the type described in clause (a)(iii) or (a)(iv)
                  of this  Section  8.13,  all  outstanding  Incentives  granted
                  pursuant to this Plan shall automatically  become fully vested
                  and  exercisable,  all  restrictions  or  limitations  on  any
                  Incentives  shall  automatically  lapse and, unless  otherwise
                  provided   in  the   applicable   Incentive   Agreement,   all
                  performance  criteria  and other  conditions  relating  to the
                  payment of Incentives shall be deemed to be achieved or waived
                  by CenturyTel without the necessity of action by any person.

                           (c)  No later than 30 days  after a Change of Control
                  of the type described in subsections (a)(i) or (a)(ii) of this
                  Section  8.13 and no later than 30 days after the  approval by
                  the  Board of a Change of  Control  of the type  described  in
                  subsections  (a)(iii)  or (a)(iv) of this  Section  8.13,  the
                  Committee,  acting in its sole discretion  without the consent
                  or  approval  of  any  participant  (and  notwithstanding  any
                  removal or  attempted  removal  of some or all of the  members
                  thereof as directors or Committee members),  may act to effect
                  one or more of the alternatives  listed below,  which may vary
                  among  individual   participants  and  which  may  vary  among
                  Incentives held by any individual participant:

                                    (i)   require that all outstanding options
                           or Other Stock-Based Awards be exercised on or before
                           a specified date (before or after  such  Change  of
                           Control)   fixed  by  the   Committee,   after  which
                           specified  date all  unexercised  options  and  Other
                           Stock-Based  Awards  and all  rights of  participants
                           thereunder shall terminate,

                                    (ii)  make  such  equitable  adjustments  to
                           Incentives  then  outstanding as the Committee  deems
                           appropriate   to  reflect   such  Change  of  Control
                           (provided,  however, that the Committee may determine
                           in  its  sole   discretion   that  no  adjustment  is
                           necessary),

                                    (iii) provide for  mandatory  conversion of
                           some  or all  of the  outstanding  options  or  Other
                           Stock-Based  Awards held by some or all  participants
                           as of a date, before or after such Change of Control,
                           specified  by the  Committee,  in  which  event  such
                           options and Other Stock-Based  Awards shall be deemed
                           automatically cancelled and the Company shall pay, or
                           cause to be paid, to each such  participant an amount
                           of cash per share equal to the excess, if any, of the
                           Change of Control Value of the shares subject to such
                           option or Other  Stock-Based  Award,  as defined  and
                           calculated  below,  over the  exercise  price of such
                           options or the  exercise  or base price of such Other
                           Stock-Based  Awards or, in lieu of such cash payment,
                           the  issuance  of Common  Stock or  securities  of an
                           acquiring  entity having a Fair Market Value equal to
                           such excess, or

                                    (iv)  provide  that  thereafter,  upon  any
                           exercise of an option or Other Stock-Based Award that
                           entitles  the holder to  receive  Common  Stock,  the
                           holder shall be entitled to purchase or receive under
                           such option or Other  Stock-Based  Award,  in lieu of
                           the number of shares of Common  Stock then covered by
                           such option or Other  Stock-Based  Award,  the number
                           and class of shares of stock or other  securities  or
                           property  (including,  without  limitation,  cash) to
                           which the holder would have been entitled pursuant to
                           the  terms  of  the   agreement   providing  for  the
                           reorganization, share exchange, merger, consolidation
                           or asset sale, if,  immediately  prior to such Change
                           of Control,  the holder had been the record  owner of
                           the number of shares of Common  Stock then covered by
                           such option or Other Stock-Based Award.

                           (d)  For the purposes of  paragraph (iii) of Section
                  8.13(c),  the "Change of Control Value" shall equal the amount
                  determined by whichever of the following items is applicable:

                                    (i)   the per share price to be paid to
                           shareholders of CenturyTel in any such merger,
                           consolidation or other reorganization,

                                    (ii)  the  price  per  share  offered  to
                           shareholders  of  CenturyTel  in any tender  offer or
                           exchange  offer  whereby  a Change of  Control  takes
                           place,

                                    (iii) in all other  events,  the fair market
                           value per  share of  Common  Stock  into  which  such
                           options   being   converted   are   exercisable,   as
                           determined by the Committee as of the date determined
                           by the Committee to be the date of conversion of such
                           options, or

                                    (iv)  in the  event that the  consideration
                           offered  to   shareholders   of   CenturyTel  in  any
                           transaction  described in this Section 8.13  consists
                           of  anything  other than cash,  the  Committee  shall
                           determine the fair cash  equivalent of the portion of
                           the consideration offered that is other than cash.

                               * * * * * * * * * *

Approved by the Board of Directors:  February 22, 2000

Approved by the Shareholders:  May 11, 2000

Amended and Restated by the Board of Directors:  May 23, 2000

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-11
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>COMPUTATIONS OF EARNINGS PER SHARE
<TEXT>

                                                                     EXHIBIT 11
                                CENTURYTEL, INC.
                       COMPUTATIONS OF EARNINGS PER SHARE
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                          Three months             Six months
                                                         ended June 30,          ended June 30,
- -------------------------------------------------------------------------------------------------
                                                        2000        1999        2000        1999
- -------------------------------------------------------------------------------------------------
                                                          (Dollars, except per share amounts,
                                                                and shares in thousands)

<S>                                                 <C>          <C>          <C>         <C>
Income (Numerator):
Net income                                          $  57,845     53,462      107,129     114,567
Dividends applicable to preferred stock                   (99)      (102)        (199)       (204)
- -------------------------------------------------------------------------------------------------

Net income applicable to common stock                  57,746     53,360      106,930     114,363
Dividends applicable to preferred stock                    99        102          199         204
Interest on convertible securities, net of taxes           33         63           66         126
- -------------------------------------------------------------------------------------------------

Net income as adjusted for purposes of computing
  diluted earnings per share                        $  57,878     53,525      107,195     114,693
=================================================================================================

Shares (Denominator):
Weighted average number of shares:
     Outstanding during period                        140,370    139,321      140,269     138,944
     Employee Stock Ownership Plan shares not
       committed to be released                          (375)      (469)        (395)       (489)
- -------------------------------------------------------------------------------------------------

Number of shares for computing basic
  earnings per share                                  139,995    138,852      139,874     138,455

Incremental common shares attributable to
  dilutive securities:
     Conversion of convertible securities                 707      1,019          707       1,019
     Shares issuable under stock option plan            1,030      1,590        1,148       1,771
- -------------------------------------------------------------------------------------------------

Number of shares as adjusted for purposes of
  Computing diluted earnings per share                141,732    141,461      141,729     141,245
=================================================================================================

Basic earnings per share                            $     .41        .38          .76         .83
=================================================================================================

Diluted earnings per share                          $     .41        .38          .76         .81
=================================================================================================

</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-27
<SEQUENCE>4
<FILENAME>0004.txt
<DESCRIPTION>FDS
<TEXT>

<TABLE> <S> <C>

<ARTICLE>                        5
<LEGEND>
THIS  SCHEDULE  CONTAINS  SUMMARY  FINANCIAL   INFORMATION  EXTRACTED  FROM  THE
UNAUDITED CONSOLIDATED BALANCE SHEET OF CENTURYTEL,  INC. AND SUBSIDIARIES AS OF
JUNE 30, 2000 AND THE RELATED UNAUDITED CONSOLIDATED STATEMENT OF INCOME FOR THE
SIX MONTH  PERIOD THEN ENDED AND IS  QUALIFIED  IN ITS  ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER>                                    1,000

<S>                                       <C>
<PERIOD-TYPE>                                   6-MOS
<FISCAL-YEAR-END>                         DEC-31-2000
<PERIOD-START>                            JAN-01-2000
<PERIOD-END>                              JUN-30-2000
<CASH>                                         49,685
<SECURITIES>                                        0
<RECEIVABLES>                                 212,865
<ALLOWANCES>                                    5,132
<INVENTORY>                                    24,699
<CURRENT-ASSETS>                              292,601
<PP&E>                                      4,318,707
<DEPRECIATION>                              2,082,816
<TOTAL-ASSETS>                              4,721,867
<CURRENT-LIABILITIES>                         336,712
<BONDS>                                     1,953,844
<PREFERRED-MANDATORY>                               0
<PREFERRED>                                     7,975
<COMMON>                                      140,540
<OTHER-SE>                                  1,799,036
<TOTAL-LIABILITY-AND-EQUITY>                4,721,867
<SALES>                                             0
<TOTAL-REVENUES>                              836,112
<CGS>                                               0
<TOTAL-COSTS>                                 599,798
<OTHER-EXPENSES>                                    0
<LOSS-PROVISION>                                    0
<INTEREST-EXPENSE>                             71,309
<INCOME-PRETAX>                               184,381
<INCOME-TAX>                                   77,252
<INCOME-CONTINUING>                           107,129
<DISCONTINUED>                                      0
<EXTRAORDINARY>                                     0
<CHANGES>                                           0
<NET-INCOME>                                  107,129
<EPS-BASIC>                                       .76
<EPS-DILUTED>                                     .76


</TABLE>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
