(Name of Registrant as Specified In Its Charter)

2006 Notice of Annual Meeting
and Proxy Statement

Annual Financial Report

Thursday, May 11, 2006
2:00 p.m. local time
100 CenturyTel Drive
Monroe, Louisiana

March 31, 2006

Dear Shareholder:

     It is a pleasure to invite you to our 2006 Annual Meeting of Shareholders on Thursday, May 11, beginning at 2:00 p.m. local time, at our headquarters in Monroe, Louisiana. I hope you will be able to attend.

     As in the past, this booklet includes our formal notice of the meeting, our proxy statement and our annual financial report.

     Most of you have received with this booklet a proxy card that indicates the number of votes that you will be entitled to cast at the meeting according to the records of CenturyTel or your broker or other nominee. Each CenturyTel share that you have “beneficially owned” continuously since May 30, 1987 generally entitles you to ten votes; each other share entitles you to one vote. Shares held through a broker or other nominee are presumed to have one vote per share. In lieu of receiving a proxy card, participants in our benefit plans have been furnished with voting instruction cards. The reverse side of this letter describes our voting provisions in greater detail.

     Regardless of how many shares you own or whether you plan to attend the meeting in person, it is important that your shares be voted at the meeting. At your earliest convenience, please complete the enclosed proxy card (or voting instruction cards) and return it or them promptly in the enclosed return envelope.

     Thank you for your interest and continued support.

		Sincerely,
		Glen F. Post, III
		Chairman of the Board and
		Chief Executive Officer

VOTING PROVISIONS

Shareholders

     Record Shareholders. In general, shares registered in the name of any natural person or estate that are represented by certificates dated as of or prior to May 30, 1987 are presumed to have ten votes per share and all other shares are presumed to have one vote per share. However, the Company’s articles of incorporation (the relevant provisions of which are reproduced below) set forth a list of circumstances in which the foregoing presumptions may be refuted. If you believe that the voting information set forth on your proxy card is incorrect or a presumption made with respect to your shares should not apply, please send a letter to the Company briefly describing the reasons for your belief. Merely marking the proxy card will not be sufficient notification to the Company that you believe the voting information thereon is incorrect.

     Beneficial Shareholders. All shares held through a broker, bank or other nominee are presumed to have one vote per share. The Company’s articles of incorporation set forth a list of circumstances in which this presumption may be refuted by the person who has held since May 30, 1987 all of the attributes of beneficial ownership referred to in Article III(C)(2) reproduced below. If you believe that some or all of your shares are entitled to ten votes, you may follow one of two procedures. First, you may write a letter to the Company describing the reasons for your belief. The letter should contain your name (unless you prefer to remain anonymous), the name of the brokerage firm, bank or other nominee holding your shares, your account number with such nominee and the number of shares you have beneficially owned continuously since May 30, 1987. Alternatively, you may ask your broker, bank or other nominee to write a letter to the Company on your behalf stating your account number and indicating the number of shares that you have beneficially owned continuously since May 30, 1987. In either case, your letter should indicate how you wish to have your shares voted.

     Other. The Company will consider all letters received prior to the date of the Annual Meeting and, when a return address is provided in the letter, will advise the party furnishing such letter of its decision, although in many cases the Company will not have time to inform an owner or nominee of its decision prior to the time the shares are voted. In limited circumstances, the Company may require additional information before a determination will be made. If you have any questions about the Company’s voting procedures, please call the Company at (318) 388-9500.

Participants in Benefit Plans

     Participants in the Company’s Employee Stock Ownership Plan, Dollars & Sense Plan, Union Retirement Savings Plan, Union Group Incentive Plan, or Security Systems Inc. 401(k) Plan have received voting instruction cards in lieu of a proxy card. For additional information, please refer to the materials supplied by the trustee of the plans in which you participate.

* * * *

Excerpts from the Company’s Articles of Incorporation

     Paragraph C of Article III of the Company’s articles of incorporation provides as follows:

     (1) Each share of Common Stock . . . which has been beneficially owned continuously by the same person since May 30, 1987 will entitle such person to ten votes with respect to such share on each matter properly submitted to the shareholders of the Corporation for their vote, consent, waiver, release or other action . . .

(2) (a) For purposes of this paragraph C, a change in beneficial ownership of a share of the Corporation’s stock will be deemed to have occurred whenever a change occurs in any person or group of persons who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares (i) voting power, which includes the power to vote, or to direct the voting of such share; (ii) investment power, which includes the power to direct the sale or other disposition of such share; (iii) the right to receive or retain the proceeds of any sale or other disposition of such share; or (iv) the right to receive distributions, including cash dividends, in respect to such share.

     (b) In the absence of proof to the contrary provided in accordance with the procedures referred to in subparagraph (4) of this paragraph C, a change in beneficial ownership will be deemed to have occurred whenever a share of stock is transferred of record into the name of any other person.

     (c) In the case of a share of Common Stock . . . held of record in the name of a corporation, general partnership, limited partnership, voting trustee, bank, trust company, broker, nominee or clearing agency, or in any other name except a natural person, if it has not been established pursuant to the procedures referred to in subparagraph (4) that such share was beneficially owned continuously since May 30, 1987 by the person who possesses all of the attributes of beneficial ownership referred to in clauses (i) through (iv) of subparagraph (2)(a) of this paragraph C with respect to such share of Common Stock . . . then such share of Common Stock . . . will carry with it only one vote regardless of when record ownership of such share was acquired.

     (d) In the case of a share of stock held of record in the name of any person as trustee, agent, guardian or custodian under the Uniform Gifts to Minors Act, the Uniform Transfers to Minors Act or any comparable statute as in effect in any state, a change in beneficial ownership will be deemed to have occurred whenever there is a change in the beneficiary of such trust, the principal of such agent, the ward of such guardian or the minor for whom such custodian is acting.

(3) Notwithstanding anything in this paragraph C to the contrary, no change in beneficial ownership will be deemed to have occurred solely as a result of:

     (a) any event that occurred prior to May 30, 1987, including contracts providing for options, rights of first refusal and similar arrangements, in existence on such date to which any holder of shares of stock is a party;

     (b) any transfer of any interest in shares of stock pursuant to a bequest or inheritance, by operation of law upon the death of any individual, or by any other transfer without valuable consideration, including a gift that is made in good faith and not for the purpose of circumventing this paragraph C;

     (c) any change in the beneficiary of any trust, or any distribution of a share of stock from trust, by reason of the birth, death, marriage or divorce of any natural person, the adoption of any natural person prior to age 18 or the passage of a given period of time or the attainment by any natural person of a specified age, or the creation or termination of any guardianship or custodian arrangement; or

     (d) any appointment of a successor trustee, agent, guardian or custodian with respect to a share of stock.

     (4) For purposes of this paragraph C, all determinations concerning changes in beneficial ownership, or the absence of any such change, will be made by the Corporation. Written procedures designed to facilitate such determinations will be established by the Corporation and refined from time to time. Such procedures will provide, among other things, the manner of proof of facts that will be accepted and the frequency with which such proof may be required to be renewed. The Corporation and any transfer agent will be entitled to rely on all information concerning beneficial ownership of a share of stock coming to their attention from any source and in any manner reasonably deemed by them to be reliable, but neither the Corporation nor any transfer agent will be charged with any other knowledge concerning the beneficial ownership of a share of stock.

     (5) Each share of Common Stock acquired by reason of any stock split or dividend will be deemed to have been beneficially owned by the same person continuously from the same date as that on which beneficial ownership of the share of Common Stock, with respect to which such share of Common Stock was distributed, was acquired.

* * * *

     (8) Shares of Common Stock held by the Corporation’s employee benefit plans will be deemed to be beneficially owned by such plans regardless of how such shares are allocated to or voted by participants, until the shares are actually distributed to participants.

* * * *

i

Table of Contents

		Page
PROXY STATEMENT			1
ELECTION OF DIRECTORS			2
Corporate Governance			7
Governance Guidelines			7
Independence			10
Committees of the Board			10
Director Nomination Process			11
Director Compensation			12
Presiding Director			14
Access to Information			14
RATIFICATION OF THE SELECTION OF THE INDEPENDENT AUDITOR			14
REPORT OF AUDIT COMMITTEE			16
OWNERSHIP OF OUR SECURITIES			17
Principal Shareholders			17
Management and Directors			18
EXECUTIVE COMPENSATION AND RELATED INFORMATION			20
Compensation Tables			20
Compensation Committee Report			23
Compensation Committee Interlocks and Insider Participation			29
Pension Plans			29
Change-in-Control Arrangements			31
Performance Graph			32
Certain Transactions			33
Section 16(a) Beneficial Ownership Reporting Compliance			34
OTHER MATTERS			34
Quorum and Voting of Proxies			34
Shareholder Nominations and Proposals			35
Annual Financial Report			35
Appendix A — Annual Financial Report			A-1

CenturyTel, Inc.
100 CenturyTel Drive
Monroe, Louisiana 71203
(318) 388-9500

PROXY STATEMENT

March 31, 2006

     Our Board of Directors is soliciting proxies for use at the CenturyTel, Inc. Annual Meeting of Shareholders to be held at the time and place described in the accompanying notice, and at any adjournments thereof. Beginning on or about April 4, 2006, we are mailing this proxy statement to our shareholders of record as of March 17, 2006.

     As of March 17, 2006, the record date for determining shareholders entitled to notice of and to vote at the Annual Meeting, we had outstanding 115,591,380 shares of common stock and 314,000 shares of Series L preferred stock that vote together with the common stock as a single class on all matters. In this proxy statement, we refer to these shares as our “Common Shares” and “Preferred Shares,” respectively, and as our “Voting Shares,” collectively. Our restated Articles of Incorporation generally provide that holders of Common Shares that have been beneficially owned continuously since May 30, 1987 are entitled to cast ten votes per share, subject to compliance with certain procedures. Article III of our Articles and the voting procedures that we have adopted thereunder contain several provisions governing the voting power of Common Shares, including a presumption that each Common Share held by nominees or by any holder other than a natural person or estate entitles such holder to one vote, unless the holder furnishes us with proof to the contrary. Applying the presumptions described in Article III and information known to us, our records indicate that 189,746,533 votes are entitled to be cast at the Annual Meeting, of which 189,432,533 (99.9%) are attributable to the Common Shares. Unless otherwise indicated, we have calculated all percentages of voting power in this proxy statement based on this number of votes.

     If you are a participant in our Automatic Dividend Reinvestment and Stock Purchase Service or our Employee Stock Purchase Plans, our enclosed proxy card covers shares credited to your account under each plan, as well as any shares directly registered in your name. You should not, however, use the proxy card to vote any shares held for you in our Employee Stock Ownership Plan, Dollars & Sense Plan, Union Retirement Savings Plan, Union Group Incentive Plan, or Security Systems Inc. 401(k) Plan. Instead, participants in these plans will receive from the plan trustees separate voting instruction cards covering these shares. Plan participants should complete and return these voting instruction cards in the manner provided in the instructions that accompany such cards.

     We will pay all expenses of soliciting proxies for the Annual Meeting. Proxies may be solicited personally, by mail, by telephone or by facsimile by our directors, officers and employees, who will not be additionally compensated therefor. We will also request persons holding Voting Shares in their names for others, such as brokers, banks and other nominees, to

forward proxy materials to their principals and request authority for the execution of proxies, and we will reimburse them for their expenses incurred in connection therewith. We have retained Innisfree M&A Incorporated, New York, New York, to assist in the solicitation of proxies, for which we will pay Innisfree fees anticipated to be $7,500 and will reimburse Innisfree for certain of its out-of-pocket expenses.

ELECTION OF DIRECTORS
(Item 1 on Proxy or Voting Instruction Card)

     The Board of Directors has fixed the number of directors at 12 members, which are divided under our Articles of Incorporation into three classes. Members of the respective classes hold office for staggered terms of three years, with one class elected at each annual shareholders’ meeting. The shareholders will elect four Class III directors at the Annual Meeting. Acting upon the recommendation of its Nominating and Corporate Governance Committee, the Board of Directors has nominated the four individuals listed below to serve as Class III directors. Unless authority is withheld, all votes attributable to the shares represented by each duly executed and delivered proxy will be cast for the election of each of these below-named nominees. Under our bylaw nominating procedures, these nominees are the only individuals who may be elected at the Annual Meeting. For additional information on our nomination process, see “Corporate Governance - Director Nomination Process.” If for any reason any such nominee should decline or become unable to stand for election as a director, which we do not anticipate, votes will be cast instead for another candidate designated by the Board, without resoliciting proxies.

     The following provides certain information with respect to each nominee, each other director whose term will continue after the Annual Meeting, and each of our executive officers named in the compensation tables appearing elsewhere herein. Unless otherwise indicated, each person has been engaged in the principal occupation shown for more than the past five years.

Class III Directors (for terms expiring in 2009):

		Fred R. Nichols, age 59; a director since May 2003; retired in 2000 after serving as Executive Vice President of Operations of Cox Communications, Inc. from August 1999 to February 2000 and as Chairman of the Board, President and Chief Executive Officer of TCA Cable TV, Inc. from 1997 to August 1999.
		Committee Membership:		Audit; Compensation
		Harvey P. Perry, age 61; a director since 1990; non-executive Vice Chairman of the Board of Directors of CenturyTel since January 1, 2004; retired from CenturyTel on December 31, 2003 after serving as Executive Vice President and Chief Administrative Officer for almost five years, as Secretary for 18 years and as General Counsel for 20 years.
		Committee Membership:		Executive
		Jim D. Reppond, age 64; a director since 1986; retired from CenturyTel in 1996 after serving as President-Telephone Group (or a comparable predecessor position) for several years.
		Committee Memberships:		Executive; Nominating and Corporate Governance
		Joseph R. Zimmel, age 52; a director since January 2003; retired in 2002 after serving as a managing director of the investment banking division of The Goldman Sachs Group, Inc. from 1996 to 2001; a director of Digitas Inc.
		Committee Membership:		Audit

The Board unanimously recommends a vote FOR each of these nominees.

Class I Directors (term expires in 2007):

		William R. Boles, Jr., age 49; a director since 1992; an attorney with The Boles Law Firm, as to which Mr. Boles is an executive officer, director and co-owner.
		Committee Memberships:		Risk Evaluation (Chairman)
		W. Bruce Hanks, age 51; a director since 1992; a consultant with Graham, Bordelon and Co., Inc., an investment management and financial planning company, since December 1, 2005; Athletic Director of the University of Louisiana at Monroe from March 2001 to June 2004; a senior or executive officer of CenturyTel with operational or strategic development responsibilities for several years prior to such time; an advisory director of IberiaBank Corporation.
		Committee Membership:		Risk Evaluation
		C. G. Melville, Jr., age 65; a director since 1968; private investor since 1992; retired executive officer of an equipment distributor.
		Committee Memberships:		Compensation (Chairman); Nominating and Corporate Governance
		Glen F. Post, III, age 53; a director since 1985; Chairman of the Board of CenturyTel since June 2002 and Chief Executive Officer of CenturyTel since 1993. Mr. Post also served as Vice Chairman of the Board from 1993 to 2002 and President from 1990 to 2002.
		Committee Membership:		Executive (Chairman)

Class II Directors (term expires in 2008):

		Virginia Boulet, age 52; a director since 1995; Special Counsel at Adams and Reese LLP, a law firm, since March 2002; Partner, Phelps Dunbar, L.L.P., a law firm, for 10 years prior to such time; President and Chief Operating Officer of IMDiversity, Inc., an on-line recruiting company, from March 2002 to February 2004; a director of W&T Offshore, Inc.
		Committee Memberships:		Nominating and Corporate Governance (Chairperson); Audit
		Calvin Czeschin, age 70; a director since 1975; President and Chief Executive Officer of Yelcot Telephone Company and Ultimate Auto Group.
		Committee Memberships:		Executive; Risk Evaluation
		James B. Gardner, age 71; a director since 1981; Senior Managing Director of the capital markets division of Samco Capital Markets, a division of Penson Financial Services, Inc., since November 2001; Managing Director of such division for over seven years prior to such date; a director of Ennis, Inc.
		Committee Memberships:		Audit (Chairman); Executive; Compensation
		Gregory J. McCray, age 43; a director since May 2005; Chief Executive Officer of Antenova Limited, a British company which develops and markets wireless components, since January 2003; President of McCray Consulting, a technology consulting company, from March 2002 to December 2002; Chief Executive Officer of Pipinghot Networks Ltd., a wireless technology research and development company, from December 2000 to February 2002.
		Committee Memberships:		Risk Evaluation

Named Executive Officers Who Are Not Directors:

		Karen A. Puckett, age 45; President and Chief Operating Officer since August 2002; Executive Vice President and Chief Operating Officer from July 2000 to August 2002.
		R. Stewart Ewing, Jr., age 54; Executive Vice President and Chief Financial Officer.
		David D. Cole, age 48; Senior Vice President — Operations.
		Stacey W. Goff, age 40; Senior Vice President, General Counsel and Secretary since August 2003; Vice President and Assistant General Counsel from 2000 to July 2003.

CORPORATE GOVERNANCE

Governance Guidelines

     Listed below are excerpts from our corporate governance guidelines, which the Board reviews at least annually. For information on how you can obtain a complete copy of these guidelines, see “ — Access to Information” below.

1.

Director Qualifications

	•		The Board of Directors will have a majority of independent directors. The Nominating and Corporate Governance Committee is responsible for reviewing with the Board, on an annual basis, the requisite skills and characteristics of new Board members as well as the composition of the Board as a whole. This assessment will include members’ independence qualifications, as well as consideration of diversity, age, character, judgment, skills and experience in the context of the needs of the Board. It is the general sense of the Board that no more than two management directors should serve on the Board.
	•		The Board expects directors who change the job or responsibility they held when they were elected to the Board to volunteer to resign from the Board. It is not the sense of the Board that in every such instance the director should necessarily leave the Board. There should, however, be an opportunity for the Board, through the Nominating and Corporate Governance Committee, to review the continued appropriateness of Board membership under the circumstances.
	•		No director may serve on more than two other unaffiliated public company boards, unless this prohibition is waived by the Board. No director may be appointed or nominated to a new term if he or she would be age 72 or older at the time of the election or appointment.
	•		The Nominating and Corporate Governance Committee will review each director’s continuation on the Board at least once every three years.
	•		Directors will be deemed to be “independent” if (i) the Board affirmatively confirms that neither the director nor any organization with which the director is affiliated receives any payments from the Company other than Permissible Directors Compensation (as defined below) and (ii) none of the disqualifying events or conditions specified in Rule 303A(2)(b) of the NYSE Listed Company Manual apply to the director. For purposes hereof, “Permissible Directors Compensation” means (i) director and committee fees, (ii) reimbursement for an annual physical, continuing education, travel and other out-of-pocket expenses in accordance with the Company’s applicable policies and (iii) a pension or other form of deferred compensation for prior service, provided such compensation is not contingent in any way on continued service. The Board may make determinations or interpretations under this paragraph, provided that they are consistent with the foregoing standards.

•

Once the Board has determined that a director is independent, the director may not engage in any transaction with the Company, either directly or indirectly through an immediate family member or related entity, without such transaction being approved by the Board.

2.

Director Responsibilities

	•		The Chairman will establish the agenda for each Board meeting. Each Board member is free to suggest the inclusion of items on the agenda. Each Board member is free to raise at any Board meeting subjects that are not on the agenda for that meeting. The Board will review the Company’s long-term strategic plans and the principal issues that the Company will face in the future during at least one Board meeting each year.
	•		The non-management directors will meet in executive session at least quarterly. The director who presides at these meetings will be an independent director chosen annually by the non-management directors, and his or her name will be disclosed in the annual proxy statement.

3.

Board Committees

	•		The Board will have at all times an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. All of the members of these committees will be independent directors, as defined in Section 1 above.
	•		The Chair of each committee, in consultation with the committee members, will determine the frequency and length of the committee meetings consistent with any requirements set forth in the committee’s charter. The Chair of each committee, in consultation with members of the committee and others specified in the committee’s charter, will develop the committee’s agenda.
	•		The Board and each committee have the power to hire independent legal, financial or other advisors as they may deem necessary, without consulting or obtaining the approval of any officer of the Company in advance.
	•		Each committee may meet in executive session as often as it deems appropriate.

4.

Director Access to Officers and Employees

	•		Directors have full and free access to officers and employees of the Company.
	•		The Board welcomes regular attendance at each Board meeting of senior officers of the Company.

5.

Director Compensation

•

The form and amount of director compensation will be determined by the Nominating and Corporate Governance Committee on the terms and conditions

(and subject to the exceptions) set forth in its charter, and such Committee will review director compensation annually.

6.

Director Orientation and Continuing Education

	•		The Nominating and Corporate Governance Committee shall maintain an Orientation Program for new directors. All new directors must participate in the Company’s Orientation Program, which should be conducted as soon as practicable after new directors are elected or appointed.
	•		The Company will also maintain a Continuing Education Program for directors, pursuant to which it will endeavor to periodically update directors on industry, technological and regulatory developments, and to provide adequate resources to support directors in understanding the Company’s business and matters to be acted upon at board and committee meetings.

7.

CEO Evaluation and Management Succession

	•		The Nominating and Corporate Governance Committee will conduct an annual review of the CEO’s performance. The Nominating and Corporate Governance Committee will provide a report of its findings to the Board of Directors (with appropriate recusals of the CEO and other management directors, as necessary) to enable the Board to ensure that the CEO is providing the best leadership for the Company in the long- and short-term.
	•		The Nominating and Corporate Governance Committee should report periodically to the Board on succession planning. The entire Board will consult periodically with the Nominating and Corporate Governance Committee regarding potential successors to the CEO. The CEO should at all times make available his or her recommendations and evaluations of potential successors, along with a review of any development plans recommended for such individuals.

8.

Annual Evaluation

•

The Board of Directors will conduct an annual self-evaluation to determine whether it and its committees are functioning effectively. The Nominating and Corporate Governance Committee will receive comments from all directors and report annually to the Board with an assessment of the Board’s performance, which will be discussed with the full Board. The assessment will focus on the Board’s contribution to the Company and specifically focus on areas in which the Board or management believes that the Board could improve.

9.

Standards of Business Conduct and Ethics

•

All of the Company’s directors, officers and employees are required to abide by the Company’s long-standing Corporate Compliance Program, which includes standards of business conduct and ethics. The Company’s program and related procedures cover all areas of professional conduct, including employment policy,

conflicts of interests, protection of confidential information, as well as strict adherence to all laws and regulations applicable to the conduct of the Company’s business.

•

Any waiver of the Company’s policies, principles or guidelines relating to business conduct or ethics for executive officers or directors may be made only by the Audit Committee and will be promptly disclosed as required by applicable law or stock exchange regulations.

Independence

     Based on the information made available to it, the Board of Directors has affirmatively determined that Virginia Boulet, James B. Gardner, W. Bruce Hanks, C. G. Melville, Jr., Gregory J. McCray, Fred R. Nichols, Jim D. Reppond and Joseph R. Zimmel qualify as independent directors under the standards referred to above under “— Governance Guidelines.” In making these determinations, the Board, with assistance from counsel, evaluated responses to a questionnaire completed by each director regarding relationships and possible conflicts of interest. In its review of director independence, the Board considered all commercial, consulting, legal, accounting, charitable, and familial relationships any director may have with CenturyTel or its management.

Committees of the Board

     During 2005, the Board of Directors held four regular meetings and eight special meetings.

     During 2005, the Board’s Audit Committee held nine meetings. The Audit Committee’s functions are described further below under “Report of Audit Committee.”

     The Board’s Compensation Committee held four meetings during 2005. The Compensation Committee’s Incentive Awards Subcommittee met once during 2005. Both the Compensation Committee and the Subcommittee are described further below under “Executive Compensation and Related Information — Compensation Committee Report.”

     The Board’s Nominating and Corporate Governance Committee (which we refer to below as the “Nominating Committee”) met three times during 2005. The Nominating Committee is responsible for, among other things, (i) recommending to the Board nominees to serve as directors and officers, (ii) monitoring the composition and size of the Board and its committees, (iii) periodically reassessing our corporate governance guidelines described above, (iv) leading the Board in its annual review of the Board’s performance and (v) reviewing annually the Chief Executive Officer’s performance and reporting to the Board on succession planning for senior executive officers. For information on the director nomination process, see “ — Director Nomination Process” below.

     Each of the committees listed above is composed solely of independent directors under the standards referred to above under “ — Governance Guidelines.”

     If you would like additional information on the responsibilities of the committees listed above, please refer to the committees’ respective charters, which can be obtained in the manner described below under “ — Access to Information.”

     We expect all of our directors to attend our annual shareholders meetings. Each director attended the 2005 annual shareholders meeting, except for one director who was recovering from surgery.

Director Nomination Process

     Nominations for the election of directors at our annual shareholder meetings may be made by the Board (upon the receipt of recommendations of the Nominating Committee) or by any shareholder of record who complies with our bylaws. Under our bylaws, any shareholder of record interested in making a nomination generally must deliver written notice to CenturyTel’s secretary not more than 180 days and not less than 90 days in advance of the first anniversary of the preceding year’s annual shareholder’s meeting. For the Annual Meeting this year, the Board has nominated the four nominees listed above under “Election of Directors” to stand for election as Class III directors, and no shareholders submitted any nominations. For further information on deadlines for submitting nominations for our 2007 annual shareholders meeting, see “Other Matters — Shareholder Nominations and Proposals.”

     The written notice required to be sent by any nominating shareholder must include (i) the name, age, business address and residential address of the nominating shareholder and any other person acting in concert with such shareholder, (ii) a representation that the nominating shareholder is a record holder of Voting Shares, and intends to make his nomination in person, (iii) a description of all agreements among the nominating shareholder, any person acting in concert with him, each proposed nominee and any other person pursuant to which the nomination or nominations are to be made and (iv) various biographical information about each proposed nominee, including principal occupation, holdings of Voting Shares and other information required to be disclosed in our proxy statement. The notice must also be accompanied by the written consent of each proposed nominee to serve as a director if elected, and an affidavit certifying that the proposed nominee meets the qualifications for service specified in the bylaws and summarized below. We may require a proposed nominee to furnish other reasonable information or certifications. Shareholders interested in bringing before a shareholders meeting any matter other than a director nomination should consult our bylaws for additional procedures governing such requests. We may disregard any nomination or submission of any other matter that fails to comply with these bylaw procedures.

     The Nominating Committee will consider candidates nominated by shareholders in accordance with our bylaws. Upon receipt of any such nominations, the Committee will review the submission for compliance with our bylaws, including determining if the proposed nominee meets the bylaw qualifications for service as a director. These provisions disqualify any person who fails to respond satisfactorily to any inquiry for information to enable us to make certifications required by the Federal Communications Commission under the Anti-Drug Abuse Act of 1988, or who has been arrested or convicted of certain specified drug offenses or engaged in actions that could lead to such an arrest or conviction.

     In the past, the Nominating Committee has considered director candidates suggested by Committee members, other directors, senior management and shareholders. In the recent past, the Nominating Committee has retained, on an as-needed basis and at our expense, national search firms to help identify potential director candidates. Each of our three newest directors were initially identified or screened by national search firms retained by the Nominating Committee.

     Under our corporate governance guidelines, the Nominating Committee assesses director candidates based on their independence, diversity, age, character, skills and experience in the context of the needs of the Board. Although the guidelines permit the Nominating Committee to adopt additional selection guidelines or criteria, it has chosen not to do so. Instead, the Nominating Committee periodically assesses skills and characteristics then required by the Board based on its membership and needs at the time of the assessment. In evaluating the needs of the Board, the Nominating Committee considers the qualification of incumbent directors and consults with other members of the Board and senior management. The Nominating Committee believes this flexible approach enables it to respond to changes caused by director retirements and industry developments.

     Although we do not have a history of receiving director nominations from shareholders, the Nominating Committee envisions that it would evaluate any such candidate on the same terms as other proposed nominees, but would place a substantial premium on retaining incumbent directors who are familiar with our management, operations, business, industry, strategies and competitive position, and who have previously demonstrated a proven ability to provide valuable contributions to the Board and CenturyTel.

Director Compensation

     Cash and Stock Payments. Each director who is not employed (which we refer to as outside directors or non-management directors) is paid an annual fee of $50,000 plus $2,000 for attending each regular board meeting, $2,500 for attending each special board meeting and each day of the Board’s annual planning session, and $1,500 for attending each meeting of a board committee. Outside directors who attend a director education program are credited with attending an extra special board meeting (and are reimbursed for their related expenses).

     Currently the Vice Chairman of the Board is paid supplemental board fees at the rate of $100,000 per year. The Vice Chairman’s duties include (i) assisting the Chairman by facilitating communications among the directors and monitoring the activities of the Board’s committees, (ii) serving at the Chairman’s request on the board of any company in which we have an investment, (iii) monitoring our strategies and (iv) performing certain executive succession functions.

     Currently (i) the chair of the Audit Committee is paid supplemental board fees at the rate of $20,000 per year and (ii) the chair of the Compensation Committee, the chair of the Nominating Committee and the chair of the Risk Evaluation Committee are each paid supplemental board fees at the rate of $10,000 per year.

     In 2005, the shareholders approved the 2005 Directors Stock Plan, which permits us to grant to outside directors options, restricted stock and other types of equity awards. During 2005, the Compensation Committee authorized each outside director to receive $100,000 of Restricted Stock (which were valued based on the average closing price of the Common Shares on each of the 15 trading days preceding our 2005 annual meeting). This Restricted Stock will vest over a three-year period.

     In connection with a comprehensive review of all our nonqualified deferred compensation plans (which is more fully described below), in late 2005 we terminated our Outside Directors Retirement Plan, which had previously committed us to make pension payments to outside directors upon retirement. In 2002, we “froze” the plan to limit participation to outside directors as of May 31, 2002 and to limit benefits to those accrued through such date. In connection with terminating the plan, we paid participants the net present value of their accrued plan benefits plus additional amounts necessary to partially compensate each participant for his or her income taxes payable as a result thereof. Participants were offered a choice of receiving the net present value of their accrued plan benefits in the form of an annuity payable for life or a lump sum cash payment equal to the cost of the annuity.

     The table below summarizes the above-described cash and stock payments made to our outside directors in 2005:

2005 Compensation of Outside Directors

		Recurring Cash Payments																					Other Payments
																		Total									Retirement
						Board				Committee								Recurring					Restricted				Plan
Outside		Annual				Meeting				Meeting				Supplemental				Cash					Stock				Termination
Director		Retainer				Fees				Fees				Fees				Payments					Grants(1)				Payment(2)					Total
Mr. Boles		$	50,000			$	30,500			$	6,000			$	10,000			$	96,500				$	100,000			$	166,778				$	363,278
Ms. Boulet			50,000				33,000				18,000				10,000				111,000					100,000				150,395					361,395
Mr. Czeschin			50,000				45,500				7,000				—				102,500					100,000				357,129					559,629
Mr. Gardner			50,000				38,000				21,500				20,000				129,500					100,000				339,028					568,528
Mr. Hanks			50,000				43,000				6,000				—				99,000					100,000				18,443					217,443
Mr. McCray			37,500	(3)			23,500				6,000				—				67,000					100,000				—					167,000
Mr. Melville			50,000				45,500				10,500				10,000				116,000					100,000				313,641					529,641
Mr. Nichols			50,000				35,500				19,500				—				105,000					100,000				—					205,000
Mr. Perry			50,000				40,500				—				100,000				190,500					100,000				—					290,500
Mr. Reppond			50,000				35,500				1,500				—				87,000					100,000				183,442					370,422
Mr. Zimmel			50,000				33,000				12,000				—				95,000					100,000				—					195,000

(1)		As described further above, each outside director received 3,256 shares of Restricted Stock in May 2005.
(2)		Most of these non-recurring payments were funded by assets previously held by the trust for the terminated plan.
(3)		We prorated the 2005 annual retainer for Mr. McCray, who was elected in May 2005.

     Other Benefits. Each outside director is entitled to be reimbursed (i) for expenses incurred in attending board and committee meetings, (ii) for expenses incurred in attending director education programs and (iii) up to $5,000 per year for the cost of an annual physical examination, plus related travel expenses and the estimated income taxes incurred by the director in connection with receiving these medical reimbursement payments.

     Our bylaws require us to indemnify our directors and officers to the fullest extent permitted by law so that they will be free from undue concern about personal liability in connection with their service to CenturyTel. We have signed agreements with each of those individuals contractually obligating us to provide these indemnification rights. We also provide our directors with customary directors and officers liability insurance.

     Under our aircraft usage policy, neither directors nor their families may use our aircraft for personal trips (except on terms generally available to all of our employees in connection with a medical emergency). We have arranged a charter service that our outside directors can use at their cost for their personal air travel needs. Harvey P. Perry used this charter service once during 2005.

Presiding Director

     As indicated above, the non-management directors meet in executive session at least quarterly. The non-management directors have selected Fred R. Nichols to preside over such meetings during 2006. As explained further on our website, you may contact Mr. Nichols by writing a letter to the Presiding Director, c/o Post Office Box 5061, Monroe, Louisiana 71211.

Access to Information

     The following documents are filed as exhibits to our Annual Report on Form 10-K for the year ended December 31, 2005, and are posted on our website at www.centurytel.com:

	•		Corporate governance guidelines
	•		Charters of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee
	•		Corporate compliance program (which includes our code of ethics)

     We will furnish printed copies of these materials upon the request of any shareholder.

RATIFICATION OF THE SELECTION OF THE INDEPENDENT AUDITOR
(Item 2 on Proxy or Voting Instruction Card)

     The Audit Committee of the Board has appointed KPMG LLP as our independent auditor for the fiscal year ending December 31, 2006, and we are submitting that appointment to our shareholders for ratification at the Annual Meeting. Although shareholder ratification of KPMG’s appointment is not legally required, we are submitting this matter to the shareholders, as in the past, as a matter of good corporate practice.

     If the shareholders fail to vote on an advisory basis in favor of the appointment, the Audit Committee will reconsider whether to retain KPMG LLP, and may appoint that firm or another without re-submitting the matter to the shareholders. Even if the shareholders ratify the appointment, the Audit Committee may, in its discretion, select a different independent auditor at any time during the year if it determines that such a change would be in the best interests of the Company and its shareholders. In connection with selecting the independent auditor, the Audit Committee reviews the auditor’s qualifications, control procedures, cost, proposed staffing, prior performance and other relevant factors.

     In connection with the audit of the 2006 financial statements, we entered into an engagement letter with KPMG LLP which sets forth the terms by which KPMG will provide audit services to us. That agreement is subject to alternative dispute resolution procedures and excludes punitive damage claims.

     The following table lists the aggregate fees and costs billed to us by KPMG and its affiliates for the 2004 and 2005 services identified below:

		Amount Billed
		2004				2005
Audit Fees (1)		$	4,600,000			$	3,044,000
Audit-Related Fees(2)			129,000				83,000
Tax Fees(3)			1,088,000				528,000
All Other Fees			—				—
Total Fees		$	5,817,000			$	3,655,000

(1)

Includes the cost of (i) services rendered in connection with auditing our annual consolidated financial statements, (ii) auditing our internal control over financial reporting and management’s assessment of its review of internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002, (iii) reviewing our quarterly financial statements, (iv) auditing the financial statements of several of our telephone subsidiaries, and (v) services rendered in connection with reviewing our registration statements and issuing related comfort letters.

(2)

Includes the cost of auditing our benefit plans and general accounting consulting services.

(3)

Includes costs associated with (i) assistance in preparing income tax returns (which were approximately $403,000 in 2004 and $209,000 in 2005); (ii) assistance with various tax audits (which were approximately $525,000 in 2004 and $237,000 in 2005); and (iii) general income tax planning, consultation and compliance (which were approximately $143,000 in 2004 and $82,000 in 2005).

     The Audit Committee maintains written procedures that require it to annually review and pre-approve the scope of all services to be performed by our independent auditor. This review includes an evaluation of whether the provision of non-audit services by our independent auditor is compatible with maintaining the auditor’s independence in providing audit and audit-related services. The Committee’s procedures prohibit the independent auditor from providing any non-audit services unless the service is permitted under applicable law and is pre-approved by the Audit Committee or its Chairman. The Chairman is authorized to pre-approve projects expected to cost no more than $75,000, provided the total cost of all projects pre-approved by the Chairman during any fiscal quarter does not exceed $125,000. The Audit Committee has pre-approved the Company’s independent auditor to provide up to $40,000 per quarter of

miscellaneous tax services that do not constitute discrete and separate projects. The Chief Financial Officer is required periodically to advise the full Committee of the scope and cost of services not pre-approved by the full Committee. Although applicable regulations waive these pre-approval requirements in certain limited circumstances, the Audit Committee did not use these waiver provisions in either 2004 or 2005.

     KPMG has advised us that one or more of its partners will be present at the Annual Meeting. We understand that these representatives will be available to respond to appropriate questions and will have an opportunity to make a statement if they desire to do so.

     Ratification of KPMG’s appointment as our independent auditor for 2006 will require the affirmative vote of at least a majority of the voting power present or represented at the Annual Meeting.

The Board unanimously recommends a vote FOR this proposal.

REPORT OF AUDIT COMMITTEE

     The Audit Committee of the Board of Directors is currently composed of four directors, all of whom qualify as independent directors under our corporate governance guidelines. The Board has determined that James B. Gardner, Fred R. Nichols and Joseph R. Zimmel are audit committee financial experts, as defined under the federal securities laws.

     Management is responsible for our internal controls and the financial reporting process. Our independent auditor is responsible for performing an independent audit of our consolidated financial statements and the effectiveness of our internal control over financial reporting, and to issue reports thereon. The Committee’s responsibility is to monitor and oversee these processes, and, subject to shareholder ratification, to appoint the independent auditor.

     In this context, the Committee has met and held discussions with management and our internal auditors and independent auditor for 2005, KPMG LLP. Management represented to the Committee that our consolidated financial statements were prepared in accordance with generally accepted U.S. accounting principles. The Committee has reviewed and discussed with management and KPMG the consolidated financial statements, and management’s report and KPMG’s report and attestation on internal control over financing reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. The Committee also discussed with KPMG matters required to be discussed by Statements on Auditing Standards No. 61 and 90 (Communication with Audit Committees).

     KPMG also provided to the Committee the written disclosures required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees). The Committee discussed with KPMG that firm’s independence, and considered the effects that the provision of non-audit services may have on KPMG’s independence.

     Based on and in reliance upon the reviews and discussions referred to above, and subject to the limitations on the role and responsibilities of the Committee referred to in its charter, the Committee recommended that the Board of Directors include the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2005.

     If you would like additional information on the responsibilities of the Audit Committee, please refer to its charter, which you can obtain in the manner described above under “Corporate Governance — Access to Information.”

Submitted by the Audit Committee of the Board of Directors.

		James B. Gardner (Chairman)		Fred R. Nichols
		Virginia Boulet		Joseph R. Zimmel

OWNERSHIP OF OUR SECURITIES

Principal Shareholders

     The following table sets forth information regarding ownership of our Common Shares by each person known to us to have beneficially owned more than 5% of the outstanding Common Shares or to have controlled more than 5% of the total voting power on December 31, 2005.

		Amount and
		Nature of
		Beneficial				Percent of				Percent
		Ownership of				Outstanding				of Voting
Name and Address		Common Shares(1)				Common Shares(1)				Power(2)
Goldman Sachs Asset Management, L.P.			10,948,095	(3)			8.4	%			5.3	%
32 Old Slip
New York, New York 10005
Barclays Global Investors, NA			8,872,563	(4)			6.8	%			4.3	%
45 Fremont Street
San Francisco, California 94105
JPMorgan Chase & Co.			8,560,176	(5)			6.5	%			4.1	%
270 Park Avenue
New York, New York 10017
LSV Asset Management			6,698,606	(6)			5.1	%			3.2	%
1 N. Wacker Street, Suite 4000
Chicago, Illinois 60606
The Trust Company of Sterne, Agee & Leach, Inc.,			5,970,147	(7)			4.6	%			28.7	%
as trustee of the ESOP
800 Shades Creek Parkway, Suite 100
Birmingham, Alabama 35209

(1)

Determined in accordance with Rule 13d-3 of the Securities and Exchange Commission based upon information furnished by the persons listed. In addition to Common Shares, we have outstanding Preferred Shares that vote together with the Common Shares as a single class on all matters. One or more persons beneficially own more than 5% of the Preferred Shares; however, the percentage of total voting power held by such persons is immaterial. For additional information regarding the Preferred Shares, see page 1 of this proxy statement.

(2)

Based on our records and, with respect to all shares held of record by the ESOP Trustee, based on information the ESOP Trustee periodically provides to us to establish that certain of these shares entitle the ESOP Trustee to cast ten votes per share.

(3)

Based on information contained in a Schedule 13G Report dated as of January 31, 2006 that this investor filed with the Securities and Exchange Commission. In this report, the investor indicated that, as of December 31, 2005, it held sole voting power with respect to 7,814,825 of these shares.

(4)

Based on information contained in a Schedule 13G Report dated as of January 31, 2006 that this investor and three of its affiliates filed with the Securities and Exchange Commission. In this report, the investor and its affiliates indicated that, as of December 31, 2005, they held sole voting power with respect to 7,716,685 of these shares.

(5)

Based on information contained in a Schedule 13G Report dated as of February 10, 2006 that this investor filed with the Securities and Exchange Commission. In this report, the investor indicated that, as of December 31, 2005, it and its affiliates collectively held sole voting power with respect to 6,852,329 of these shares, shared voting power with respect to 1,517,116 of these shares, sole dispositive power with respect to 6,967,420 of these shares, and shared dispositive power with respect to 1,569,204 of these shares.

(6)

Based on information contained in a Schedule 13G Report dated as of February 10, 2006 that this investor filed with the Securities and Exchange Commission. In this report, the investor indicated that, as of December 31, 2005, it held sole voting power with respect to 4,681,706 of these shares and sole dispositive power with respect to 6,565,506 of these shares.

(7)

Substantially all of the voting power attributable to these shares is directed by the participants of the ESOP, each of whom is deemed, subject to certain limited exceptions, to tender such instructions as a “named fiduciary” for all shares (except for PAYSOP shares) under such plan, which requires the participants to direct their votes in a manner that they believe to be prudent and in the best interests of the participants of the ESOP.

Management and Directors

     The following table sets forth information, as of the Record Date, regarding the beneficial ownership of Common Shares by the below-named officers, each director, and the executive officers and directors as a group. Except as otherwise noted, (i) none of the persons named below beneficially owns more than 1% of the outstanding Common Shares or is entitled to cast more than 1% of the total voting power and (ii) all beneficially owned shares are held with sole voting and investment power.

		Components of Total Shares Owned
										Options
		Shares				Unvested				Exercisable				Total Shares
		Beneficially				Restricted				Within 60				Beneficially
Name		Owned (1)				Stock (2)				Days (3)				Owned
Named Officers:
Glen F. Post, III			189,459				152,100				1,640,000				1,981,559	(4)
Karen A. Puckett			13,883	(5)			61,600				369,999				445,482
R. Stewart Ewing, Jr.			70,388				51,240				453,000				574,628
David D. Cole			41,615	(6)			33,600				409,000				484,215
Stacey W. Goff			5,081				33,600				141,065				179,746
Outside Directors:
William R. Boles, Jr.			6,062				3,256				16,000				25,318
Virginia Boulet			4,561	(7)			3,256				6,000				13,817
Calvin Czeschin			321,997	(8)			3,256				16,000				341,253	(9)
James B. Gardner			3,500				3,256				16,000				22,756
W. Bruce Hanks			685				3,256				46,000				49,941
Gregory J. McCray			—				3,256				—				3,256
C.G. Melville, Jr.			8,022				3,256				—				11,278
Fred R. Nichols			2,000				3,256				12,000				17,256
Harvey P. Perry			47,678				3,256				172,000				222,934
Jim D. Reppond			57,920				3,256				16,000				77,176
Joseph R. Zimmel			5,000				3,256				13,667				21,923
All directors and executive officers as a group (17 persons)			785,236	(10)			401,556				3,517,373				4,704,165

(1)		This column includes the following number of shares allocated to the person’s account under the ESOP and 401(k) Plan: 83,148 — Mr. Post; 1,797 — Ms. Puckett; 38,398 — Mr. Ewing; 28,538 — Mr. Cole; and 2,681 — Mr. Goff. Participants in the 401(k) Plan who have attained 45 years of age or three years of service with us have investment power with respect to all shares held in their 401(k) Plan account, and participants in the ESOP who have attained 55 years of age and 10 years of participation in the plan have investment power with respect to a portion of the shares held in their ESOP accounts. Participants in both these plans are entitled to direct the voting of their plan shares, as described in greater detail elsewhere herein.
(2)		Constitutes unvested shares of Restricted Stock over which the person holds sole voting power but no investment power.
(3)		Constitutes shares that the person has the right to acquire within 60 days of the Record Date pursuant to options granted under our incentive compensation plans.
(4)		Constitutes 1.7% of the outstanding Common Shares and entitles Mr. Post to cast .5% of the total voting power.
(5)		Includes 200 shares held by Ms. Puckett as custodian for the benefit of her children.
(6)		Includes 4,927 Plan Shares beneficially held by Mr. Cole’s wife as one of our former employees in her accounts under the ESOP and 401(k) Plan, as to which he disclaims beneficial ownership.
(7)		Includes 955 shares held by Ms. Boulet as custodian for the benefit of her children.
(8)		Includes 11,997 shares owned by Mr. Czeschin’s wife, as to which he disclaims beneficial ownership; also includes 308,924 shares that are pledged pursuant to a variable share pre-paid forward sale contract that expires February 15, 2007. Mr. Czeschin holds voting but not investment power as to such pledged shares.
(9)		Constitutes .3% of the outstanding Common Shares and entitles Mr. Czeschin to cast 1.6% of the total voting power.
(10)		Includes (i) 16,923 shares held of record or beneficially by the spouses of certain of these individuals, as to which beneficial ownership is disclaimed and (ii) 1,155 shares held as custodian for the benefit of children of such individuals.

EXECUTIVE COMPENSATION AND RELATED INFORMATION

Compensation Tables

     The following table sets forth certain information regarding the compensation of (i) our Chief Executive Officer and (ii) each of our four most highly compensated executive officers other than the Chief Executive Officer. In this proxy statement, we refer to these five executive officers as the “named officers.” Following this table is additional information regarding option grants and option exercises during 2005. For additional information on the compensation summarized below and other benefits, see “ — Compensation Committee Report.”

Summary Compensation Table

																		Long-Term
																		Compensation Awards
						Annual
						Compensation												Awards								Payouts
																						No. of				Long-Term
														Other				Restricted				Securities				Incentive
Name and Current Principal														Annual				Stock				Underlying				Plan				All Other
Position		Year				Salary				Bonus				Compensation(1)				Awards(2)				Options				Payouts(3)				Compensation(4)
Glen F. Post, III Chairman of the Board			2005			$	993,269			$	774,750			$	346,066			$	1,953,900				200,000			$	0			$	150,212
and Chief Executive			2004				961,544				1,003,851				48,895				1,326,312				160,000				145,397				154,918
Officer			2003				904,846				1,064,099				37,950				0				320,000				200,466				131,463
Karen A. Puckett(5)			2005				576,696				380,619				276,573				734,800				75,000				0				82,385
President and Chief			2004				541,860				518,560				36,385				623,480				75,000				0				82,174
Operating Officer			2003				496,576				535,309				29,494				0				150,000				0				64,679
R. Stewart Ewing, Jr. Executive Vice			2005				518,012				279,726				175,773				611,220				62,500				0				67,906
President and Chief			2004				492,384				385,536				27,950				518,622				62,500				43,781				68,651
Financial Officer			2003				461,558				407,094				27,885				0				81,000				60,323				58,412
David D. Cole			2005				373,052				201,448				240,896				400,800				40,500				0				53,058
Senior Vice President—			2004				359,016				281,109				27,950				340,080				40,500				43,781				54,384
Operations Support			2003				345,734				304,938				27,885				0				81,000				60,323				46,886
Stacey W. Goff (6) Senior Vice President,			2005				336,596				181,762				113,743				400,800				40,500				0				43,140
General Counsel			2004				286,572				224,386				31,163				340,080				40,500				0				35,925
and Secretary			2003				180,423				159,403				25,038				0				79,000				0				23,131

(1)

The amounts shown in this column are comprised of (i) the payment of cash in lieu of previously-offered perquisites, (ii) reimbursements for the cost of an annual physical examination and related travel expenses, (iii) personal use of our aircraft and (iv) non-recurring reimbursements for a portion of the taxes associated with one-time accelerated lump-sum payments made in connection with the restructuring of our nonqualified deferred compensation plans described under “ — Compensation Committee Report — Restructuring of Nonqualified Plans,” in each case for and on behalf of the named officers as follows:

						Cash				Physical								Tax
Name		Year				Allowance				Exam				Aircraft Use				Reimbursements
Mr. Post			2005			$	34,320			$	—			$	9,070			$	302,676
			2004				34,320				1,975				12,600				—
			2003				34,320				1,710				1,920				—
Ms. Puckett			2005				27,950				1,842				4,225				242,556
			2004				27,950				—				8,435				—
			2003				27,885				1,609				—				—
Mr. Ewing			2005				27,950				2,697				—				145,126
			2004				27,950				—				—				—
			2003				27,885				—				—				—
Mr. Cole			2005				27,950				2,552				6,890				203,504
			2004				27,950				—				—				—
			2003				27,885				—				—				—
Mr. Goff			2005				27,950				—				1,170				84,623
			2004				27,950				2,303				910				—
			2003				23,958				—				1,080				—

(2)

The Restricted Stock shown for 2004 and 2005 was issued as a portion of the officers’ long-term incentive compensation awarded in the first quarter of each such year. All of the Restricted Stock shown for 2004 will vest on March 15, 2009, subject to accelerated vesting in certain events, including CenturyTel attaining certain targets relating to its 2006 financial performance. The Restricted Stock shown for 2005 will vest in equal installments over five years, with one-fifth of the shares vesting on March 15, 2006, 2007, 2008, 2009 and 2010. The chart below sets forth information as of December 31, 2005 regarding the named officers’ holdings of Restricted Stock (excluding for these purposes Restricted Stock outstanding on December 31, 2005 that vested in early 2006).

						Aggregate
		Shares of				Value at
		Restricted				December 31,
Name		Stock				2005
Mr. Post			93,600			$	3,103,776
Ms. Puckett			39,600				1,313,136
Mr. Ewing			32,940				1,092,290
Mr. Cole			21,600				716,256
Mr. Goff			21,600				716,256

Dividends are paid currently with respect to all shares of Restricted Stock described above. For additional information regarding the foregoing, see “ — Compensation Committee Report.”

(3)

Reflects the value of Common Shares released or issued as a result of performance-based Restricted Stock and performance shares awarded to officers in 1998 and 1999 becoming vested or earned in early 2003 and 2004, respectively, based on the appreciation in the market value of the Common Shares during the preceding five-year period.

(4)

The amounts shown in this column are comprised of our (i) matching contributions to the 401(k) Plan, as supplemented by matching contributions under our Supplemental Dollars & Sense Plan, and (ii) contributions pursuant to the ESOP, valued as of December 31 of each respective year (as supplemented by contributions under a supplemental defined contribution plan that we recently terminated), in each case for and on behalf of the named officers as follows:

						401(k) Plan				ESOP
Name		Year				Contributions				Contributions
Mr. Post			2005			$	70,327			$	79,885
			2004				73,892				81,026
			2003				62,758				68,705
Ms. Puckett			2005				38,575				43,810
			2004				39,087				43,087
			2003				30,730				33,949
Mr. Ewing			2005				31,764				36,142
			2004				32,672				35,979
			2003				28,981				29,431
Mr. Cole			2005				26,892				26,166
			2004				27,826				26,558
			2003				24,051				22,835
Mr. Goff			2005				20,701				22,439
			2004				18,086				17,839
			2003				12,550				10,581

(5)

Ms. Puckett’s employment with us commenced on July 24, 2000.

(6)

We hired Mr. Goff in January 1998 and initially elected him as an officer in 2000.

Option Grants in Last Fiscal Year

																		Potential Realizable Value of
																		Options at Assumed Annual
																		Rates of Stock Price
																		Appreciation over Ten-Year
		Individual Grants																Option Term(2)
		Number of				% of Total
		Securities				Options
		Underlying				Granted to
		Options				Employees				Exercise				Expiration
Name		Granted (1)				in 2005				Price				Date				(5%)				(10%)
Glen F. Post, III			200,000				20	%		$	33.40				2/17/15			$	4,202,000			$	10,646,000
Karen A. Puckett			75,000				7	%			33.40				2/17/15				1,575,750				3,992,250
R. Stewart Ewing, Jr.			62,500				6	%			33.40				2/17/15				1,313,125				3,326,875
David D. Cole			40,500				4	%			33.40				2/17/15				850,905				2,155,815
Stacey W. Goff			40,500				4	%			33.40				2/17/15				850,905				2,155,815
All Shareholders(3)			131,074,399				—				33.69				—			$	2,777,466,515			$	7,037,384,482

(1)

One-third of these options became exercisable on February 17, 2005, one-third became exercisable on February 17, 2006, and one-third will become exercisable on February 17, 2007.

(2)

Based on the Black-Scholes valuation methodology, we have established the fair value of these grants on February 17, 2005, the date of grant, to be $2,518,000 for Mr. Post’s options, $944,250 for Ms. Puckett’s options, $786,875 for Mr. Ewing’s options, $509,895 for Mr. Cole’s options and $509,895 for Mr. Goff’s options.

(3)

The amounts shown as potential realizable value for all shareholders, which are presented for comparison purposes only, represent the aggregate net gain for all holders of Common Shares, as of December 31, 2005, assuming a hypothetical option to acquire 131,074,399 Common Shares (the number of such shares outstanding as of such date) granted at $33.69 per share (the weighted average exercise price of all options granted in 2005) on February 17, 2005 and expiring on February 17, 2015, if the price of Common Shares appreciates at the rates shown in the table. We cannot assure you that the potential realizable values shown in the table will be achieved. We neither make nor endorse any prediction as to future stock performance.

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values

		No. of
		Shares								Number of Securities								Value of Unexercised
		Acquired								Underlying Unexercised								in-the-Money Options at
		on				Value				Options at December 31, 2005								December 31, 2005
Name		Exercise				Realized				Exercisable				Unexercisable				Exercisable				Unexercisable
Glen F. Post, III			199,229			$	3,571,681				1,737,983				0			$	6,211,146				0
Karen A. Puckett			120,001				978,014				469,999				0				1,319,644				0
R. Stewart Ewing, Jr.			59,616				1,323,529				453,000				0				1,190,630				0
David D. Cole			32,757				689,425				443,616				0				1,765,141				0
Stacey W. Goff			59,335				455,502				141,065				0				128,151				0

Compensation Committee Report

     General. The Board’s Compensation Committee monitors and approves the compensation of our executive officers, administers our incentive compensation programs, and performs other related tasks. The Committee is composed entirely of Board members who qualify as independent directors under our corporate governance guidelines and “non-employee directors” under Rule 16b-3 promulgated under the Securities Exchange Act of 1934. Through May 12, 2005, the Committee maintained an Incentive Awards Subcommittee composed entirely of Committee members who also qualify as “outside directors” under Section 162(m) of the Internal Revenue Code. If you would like additional information on the responsibilities of the Compensation Committee, please refer to its charter, which can be obtained in the manner described above under “Corporate Governance — Access to Information.”

     Compensation Objectives. During 2005, the Committee applied the following compensation objectives in connection with its deliberations:

	•		compensating the executive officers with base salaries that are higher than those of similarly-situated executives at comparable companies, if justified by corporate and individual performance
	•		providing a substantial portion of the executives’ compensation in the form of incentive compensation based principally upon our performance and secondarily upon the executives’ individual performance
	•		encouraging team orientation, and
	•		providing sufficient benefit levels for executives and their families in the event of disability, illness or retirement.

     In addition, to the extent that it is practicable and consistent with our executive compensation objectives, the Committee seeks to comply with Section 162(m) of the Internal Revenue Code and the regulations adopted thereunder in order to preserve the tax deductibility of performance-based compensation in excess of $1 million per taxable year to each of our officers. If compliance with Section 162(m) conflicts with the Committee’s compensation objectives or is contrary to the best interests of the shareholders, the Committee will pursue its objectives, regardless of the attendant tax implications. In 2004 and 2005, the Subcommittee granted Restricted Stock that does not qualify as performance-based compensation under Section 162(m).

     Overview of 2005 Compensation. As described further below, in 2005 we compensated our executives with:

	•		salary
	•		an annual cash incentive bonus
	•		long-term incentive compensation in the form of grants of restricted stock and stock options, and
	•		other benefits typically provided to executives of comparable companies, all as described further below.

For each such component of compensation, our compensation levels were compared with those of comparable companies.

     Over the past decade, the Committee has retained independent consulting firms every three years to conduct a detailed review of compensation philosophy, practices and programs, including the structure of our annual and long-term incentive compensation programs. During these triennial reviews, the Committee has typically sought to confirm that its philosophy and practices are comparable to those of similar companies and to establish the target amount of long-term incentive compensation to be granted to each executive officer during the upcoming three-year period. The Committee and its consultants have typically designed these long-term grants to have a value, determined under commonly-used valuation methodologies, commensurate with long-term incentive awards to similarly-situated executives at comparable companies. During the second and third year of each of these three-year periods, the Committee consults with its independent consultants to determine if changes to the Company’s three-year program are necessary or appropriate, and to establish the salary and annual incentive compensation payable to the executives for the upcoming year. Following deliberations with its independent consultants, the Committee approved a three-year officer compensation program in early 2005 covering 2005, 2006 and 2007.

     In connection with this triennial review, the Committee and its consulting firm compared our officer compensation to that of a national group of companies. This group included a number of telecommunications companies (including several of the peer companies referred to in our stock performance graph appearing elsewhere herein), but also included other companies similar to us.

     At least once a year, the Committee reviews all components of the executive officers’ compensation, including

	•		current salary, bonus and long-term incentive compensation
	•		realized and unrealized benefits from prior grants of stock options and restricted stock
	•		the value of all perquisites and other personal benefits
	•		accumulated benefits under our non-qualified deferred compensation programs
	•		projected benefits under our defined benefits plans (including our supplemental executive retirement plan)
	•		potential benefits under our change-in-control agreements.

The Committee also reviews the “internal pay equity” of our compensation among the executive officers, and between senior management and lower levels of management.

     Salary. The salary of the Chief Executive Officer and each other executive officer is based primarily on the officer’s level of responsibility and comparisons to prevailing salary levels for similar officers at comparable companies. Based upon survey data, recommendations of the Committee’s independent consulting firm and the Chief Executive Officer, and other considerations, the Committee in February 2005 increased the salary of the Chief Executive Officer by 2.6% to $1,000,000, and the salaries of each of the other named officers by between 4.0% to 5.7% (other than the General Counsel, whose salary was increased 16.7% to raise it to an amount closer to his peers at comparable companies). The Committee believes these 2005 raises were consistent with its primary objective of ensuring that the executive officers receive salaries in excess of median salaries of similarly-situated executives when warranted by corporate and individual performance. In early 2006, the Committee elected to hold the annual salary of the Chief Executive Officer at $1,000,000, and increased the annual salaries of the other named officers an additional 4.0% (other than the General Counsel, whose salary was increased 7.0%).

     Annual Incentive Bonus Programs. We maintain (i) a shareholder-approved short-term incentive program for certain of the executive officers and (ii) an annual incentive bonus program for other officers and managers. In connection with both of these bonus programs, the Compensation Committee, either directly or through its Incentive Awards Subcommittee, annually establishes target performance levels and the amount of bonus payable if these targets are met, which typically is defined in terms of a percentage of each officer’s salary. For 2005, the Committee recommended target bonuses ranging from 40% to 65% of each executive officer’s salary if the targets were met, with up to triple these amounts if the targets were substantially exceeded and no bonuses if certain minimum target performance levels were not attained. The target bonus payable to the Chief Executive Officer for 2005 performance was based solely upon CenturyTel attaining targeted levels of operating cash flow (weighted 50%), revenue (weighted 40%) and improved survey scores measuring our residential customers’ satisfaction with our services in 2005 (weighted 10%), subject to the “negative discretion” of the Committee to reduce the bonus payment. The bonuses payable to each other executive officer were based upon the same corporate performance goals established for the Chief Executive Officer, subject to the “negative discretion” of the Chief Executive Officer to reduce the bonus payment based on his assessment of the officer’s performance during 2005, including an assessment of the degree to which such officer attained his or her individual performance goals for 2005.

     Based on the Company’s 2005 performance, the Chief Executive Officer received a bonus equal to 78% of his 2005 salary. Applying the standards described above, each other named officer received a bonus between 54% and 66% of his or her 2005 salary. The Committee elected to pay these 2005 incentive bonuses in cash.

     Long-Term Equity Incentive Programs. Our current long-term incentive compensation programs authorize the Incentive Awards Subcommittee to grant stock options and various other stock-based incentives to key personnel. Among the Subcommittee’s central goals with respect

to stock incentive awards is to strengthen the relationship between compensation and growth in the market price of the Common Shares and thereby align the executive officers’ financial interests with those of the shareholders and to attract and retain executive talent.

     Incentives granted under these programs become exercisable based upon criteria established by the Subcommittee. The Subcommittee generally determines the size of option grants based on the recipient’s responsibilities and duties, and on information furnished by the Subcommittee’s consultants regarding equity incentive practices among comparable companies. The Committee’s general philosophy is to provide long-term incentive compensation at the 50^th percentile of that paid to similarly-situated officers at comparable companies. Since 2001, the Committee or Subcommittee has elected to award annual incentive grants as opposed to larger, multi-year grants.

     In early 2005, the Subcommittee awarded equity incentive grants for the first year of the three-year program developed and approved by the Committee and its independent advisors in 2005. Based on data compiled by the Committee’s consulting firm, the Subcommittee determined that the target amount of long-term compensation established during the 2005 triennial review process was consistent with its goal of granting long-term incentive awards commensurate with those paid to similarly-situated executives at comparable companies. The Subcommittee elected to pay these long-term incentive grants half in stock options and half in restricted stock, the terms of which are further described elsewhere herein.

     On December 14, 2005, the Compensation Committee accelerated the vesting of approximately 1.475 million unvested stock options outstanding under our management incentive compensation plans, effective as of December 31, 2005. The 709,646 unvested options held by our six executive officers had a weighted average exercise price of $30.35, and the closing price per Common Share on December 14, 2005 was $34.25. The Committee accelerated the vesting periods to eliminate our recognition of compensation expense under new accounting standards which took effect beginning in the first quarter of 2006. To offset unintended personal benefit to the executive officers, Common Shares received upon exercise of an accelerated option by an executive officer may not be sold or otherwise transferred prior to the expiration of the option’s original vesting period. For additional information, please see the Current Report on Form 8-K that we filed with the Securities and Exchange Commission on December 20, 2005.

     Restructuring of Nonqualified Plans. In 2004 Congress adopted Section 409A of the Internal Revenue Code, which significantly changed the taxation of nonqualified deferred compensation. During 2005 we undertook a comprehensive review of the impact of Section 409A on our nonqualified plans. Based on this review, in November 2005 the Compensation Committee approved a series of actions relating to our benefit plans, including amending several nonqualified plans to comply with Section 409A and transferring, or offering active participants the right to transfer, some or all of their accrued benefits under various nonqualified plans to qualified plans with similar purposes. The Compensation Committee also authorized the following:

•

Our Supplemental Defined Contribution Plan was terminated and the account balance of each participant was paid to him or her in cash, plus an additional amount

calculated to place the participant in the same after-tax position as if the plan remained in effect and paid benefits as scheduled (which we sometimes refer to as a “tax assistance payment”).

	•		With respect to our Supplemental Executive Retirement Plan, (i) active participants with accrued benefits eligible for transfer to a qualified plan were given the choice of transferring such benefits to a qualified plan or to a new 409A compliant nonqualified plan and (ii) participants with accrued benefits ineligible for transfer to a qualified plan were given the choice of retaining such benefits in the new 409A compliant plan or receiving a lump sum cash payment equal to the present value of the accrued benefit.
	•		With respect to our Supplemental Dollars and Sense Plan, (i) active participants with balances eligible for transfer to a qualified plan were given the choice of receiving a cash payment of their account balance or transferring such balance to a qualified plan or to a new 409A compliant nonqualified plan and (ii) participants with account balances ineligible for transfer to a qualified plan were given the choice of transferring their account balances to the new 409A compliant plan or receiving a cash payment of their account balance, plus a tax assistance payment.
	•		Our Outside Directors Retirement Plan was terminated and each participant received the cash payments described above under “Corporate Governance — Director Compensation.”

For information on tax assistance payments made in 2005 to our named officers in connection with these plan restructuring payments, please see the Summary Compensation Table appearing above.

     Perquisites. Since 1999, we have made cash payments to our officers in lieu of previously-offered perquisites.

     The officers are entitled to be reimbursed for the cost of an annual physical examination, plus related travel expenses.

     Under our aircraft usage policy, our Chief Executive Officer may use our aircraft for personal travel without reimbursing us, and each other executive officer may use our aircraft for up to $10,000 per year in personal travel without reimbursing us (calculated in accordance with applicable guidelines of the Securities and Exchange Commission). In all such cases, personal travel is permitted only if aircraft is available and not needed for superseding business purposes.

     For more information on each of the items under this heading, see footnote 1 to the Summary Compensation Report appearing above.

     Other Benefits. We maintain certain broad-based employee benefit plans in which the executive officers are generally permitted to participate on terms substantially similar to those relating to all other participants, subject to certain legal limitations on the compensation on which benefits and contributions may be based. The Board has determined to have CenturyTel’s

matching contribution under the 401(k) Plan invested in Common Shares so as to further align employees’ and shareholders’ financial interests. We also maintain the ESOP, which serves to further align employees’ and shareholders’ interests.

     Prior to the Sarbanes-Oxley Act of 2002, we funded supplemental life insurance benefits to our officers in excess of those generally afforded to employees. These benefits were provided pursuant to endorsement “split-dollar” insurance agreements between us and our officers. Under each of these agreements, CenturyTel and the officer’s beneficiaries shared the death benefits payable upon the officer’s death under a life insurance policy procured by us, with the beneficiaries receiving pre-retirement death benefits of four times the officer’s annual salary less group life insurance benefits (or post-retirement death benefits of two times the officer’s annual salary less group life insurance benefits), and CenturyTel receiving all remaining death benefits. In response to uncertainties as to whether these arrangements with executive officers violated the Sarbanes-Oxley Act, in mid-2002 we suspended the payment of further premiums under the “split-dollar” policies insuring the lives of its executive officers. In November 2003, the Compensation Committee approved restructured arrangements with the executive officers in order to alleviate such uncertainties, as well as potential adverse tax consequences of new tax regulations adopted in 2003. Under these restructured arrangements with each executive officer, we are authorized to (i) surrender the insurance policy insuring such officer in exchange for cash from the policy equal to the aggregate premiums we had previously paid to fund such policy, (ii) terminate our prior “split-dollar” insurance agreement with such officer and transfer ownership of the related policy to such officer, (iii) forfeit our right to receive death benefits under such related policy and (iv) adopt a new plan providing substitute supplemental life insurance benefits for the executive officers. This new plan, among other things, would obligate us to pay premiums on the executive officers’ respective insurance policies sufficient to provide the same death benefits available under the prior agreements, and entitle the executive officers to purchase additional post-retirement coverage at their cost and to receive related tax gross-up cash payments in amounts sufficient to compensate them for income and employment taxes incurred as a result of our premium payments. Implementation of these restructured arrangements was deferred principally to enable the officers to complete estate planning. Now that this is complete, we expect to implement these restructured arrangements and re-commence paying premiums in 2006.

     Additionally, we make available to our officers various defined benefit retirement plans (which are described below under “ – Pension Plans”), various nonqualified supplemental benefit plans (several of which we recently restructured as discussed under “- Restructuring of Nonqualified Plans”), and a disability salary continuation plan.

     Compensation of Chief Executive Officer. The criteria, standards and methodology used by the Committee and Subcommittee in reviewing and establishing the Chief Executive Officer’s salary, bonus and other compensation are the same as those used with respect to all other executive officers, as described above. As discussed above under “— Salary,” based on its review of data compiled by the Committee’s independent consulting firm and other information, the Committee raised the annual salary of the Chief Executive Officer by 2.6% during 2005 to $1,000,000. The Chief Executive Officer also received a cash bonus of $774,750 for 2005 performance under the Company’s shareholder-approved short-term incentive plan. In addition, during 2005 the Chief Executive Officer was granted options to purchase 200,000 shares and

58,500 shares of Restricted Stock, as described further herein. As indicated above, the Committee elected in early 2006 to hold the salary of the Chief Executive Officer at $1,000,000.

Submitted by the Compensation Committee of the Board of Directors.

C. G. Melville, Jr. (Chairman) James B. Gardner Fred R. Nichols Jim D. Reppond*

Compensation Committee Interlocks and Insider Participation

     Jim D. Reppond served on the Compensation Committee through May 12, 2005. Mr. Reppond was an officer of CenturyTel prior to his retirement in 1996. Mr. Reppond did not serve as a member of the Committee’s Incentive Awards Subcommittee, which through May 12, 2005 administered our incentive compensation plans and programs and was comprised solely of Committee members who qualified as “outside directors” under Section 162(m) of the Internal Revenue Code (which we discuss above).

Pension Plans

     Supplemental Executive Retirement Plan. We maintain a Supplemental Executive Retirement Plan pursuant to which certain officers who have completed at least five years of service are generally entitled to receive a monthly payment upon attaining early or normal retirement age under the plan. The following table reflects the approximate annual retirement benefits that a participant with the indicated years of service and compensation level may expect to receive under the Supplemental Executive Retirement Plan assuming retirement at age 65. Early retirement may be taken at age 55 by any participant with ten or more years of service, with reduced benefits.

		Years of Service
Compensation		5				10				15				20				25
$400,000		$	60,000			$	120,000			$	140,000			$	160,000			$	180,000
600,000			90,000				180,000				210,000				240,000				270,000
800,000			120,000				240,000				280,000				320,000				360,000
1,000,000			150,000				300,000				350,000				400,000				450,000
1,200,000			180,000				360,000				420,000				480,000				540,000
1,400,000			210,000				420,000				490,000				560,000				630,000
1,600,000			240,000				480,000				560,000				640,000				720,000
1,800,000			270,000				540,000				630,000				720,000				810,000
2,000,000			300,000				600,000				700,000				800,000				900,000

     The above table reflects the annual benefits payable upon normal retirement under the Supplemental Executive Retirement Plan assuming such benefits will be paid in the form of a monthly lifetime annuity and before reductions relating to the receipt of Social Security benefits

as described below. The actual amount of an officer’s monthly payment under the Supplemental Executive Retirement Plan is equal to (i) 3% of the officer’s “average monthly compensation” (defined below) times the officer’s years of service during his first ten years with us plus (ii) 1% of the officer’s “average monthly compensation” times his years of service after his first ten years with us (up to a maximum of 15 additional years), minus (iii) 4% of his estimated monthly Social Security benefits times his years of service with us (up to a maximum of 25 years). Payments to retired officers under this formula are increased by 3% per year to reflect cost of living increases. “Average monthly compensation” means the officer’s average monthly compensation during the 36 consecutive month period within his last ten years of employment in which he received his highest compensation. Participants added to the plan after January 1, 2000 receive credit only for service while a plan participant.

     Under the Supplemental Executive Retirement Plan, the number of credited years of service at December 31, 2005 was 25 years for Mr. Post, five years for Ms. Puckett, 23 years for Mr. Ewing, 23 years for Mr. Cole and three years for Mr. Goff. The compensation upon which benefits are based under such plan is the aggregate amount of compensation reported for 2005 for each respective officer under the columns in the Summary Compensation Table appearing above that are entitled “Salary” and “Bonus.”

     In connection with the 2005 restructuring of our nonqualified plans, the Compensation Committee (i) authorized management to redesign the Supplemental Executive Retirement Plan during 2006 to integrate it with other qualified and nonqualified pension plans and (ii) authorized accelerated lump-sum payments of accrued benefits under this plan to our named officers in late 2005. For additional information, see “ — Compensation Committee Report — Restructuring of Nonqualified Plans” and the Summary Compensation Table appearing above.

     Broad-Based Defined Benefit Plan. We also maintain a qualified defined benefit plan pursuant to which most of our employees (including officers) who have completed at least five years of service are generally entitled to receive payments upon attaining early or normal retirement age under the plan. We also maintain a non-qualified defined benefit plan designed to pay supplemental retirement benefits to officers in amounts equal to the benefits that such officers would otherwise forego under our qualified defined benefit plan due to federal limitations or the amount of benefits payable to highly compensated participants of qualified plans.

     The following table reflects the approximate total annual retirement benefits that a participant with the indicated years of service and annual compensation level may expect to receive in the aggregate under our qualified and nonqualified defined benefit plans assuming retirement at age 65 during 2006. Upon attaining age 55, participants with at least five years of service may elect to receive reduced early retirement benefits.

		Years of Service
Compensation		5				10				15				20				25				30
$400,000		$	19,000			$	38,000			$	56,000			$	75,000			$	94,000			$	113,000
600,000			29,000				58,000				86,000				115,000				144,000				173,000
800,000			39,000				78,000				116,000				155,000				194,000				233,000
1,000,000			49,000				98,000				146,000				195,000				244,000				293,000
1,200,000			59,000				118,000				176,000				235,000				294,000				353,000
1,400,000			69,000				138,000				206,000				275,000				344,000				413,000
1,600,000			79,000				158,000				236,000				315,000				394,000				473,000
1,800,000			89,000				178,000				266,000				355,000				444,000				533,000
2,000,000			99,000				198,000				296,000				395,000				494,000				593,000

     The above table approximates the aggregate annual benefits payable under our qualified and nonqualified defined benefit plans assuming (in addition to the assumptions stated above) that such benefits will be paid in the form of a monthly lifetime annuity. The actual amount of a participant’s total monthly payment is equal to the sum of (i) the participant’s number of years of service under the qualified plan (up to a maximum of 30 years) multiplied by 0.5% of his final average pay plus (ii) the participant’s number of years of service under the nonqualified plan (up to a maximum of 30 years) multiplied by 0.5% of his final average pay in excess of his compensation subject to Social Security taxes (as determined by reference to tables published annually by the Internal Revenue Service). For these purposes, “final average pay” means the participant’s average monthly compensation during the 60 consecutive month period within his last ten years of employment in which he received his highest compensation.

     Under our qualified and non-qualified defined benefit plans, each named officer other than Ms. Puckett began to receive credit for years of service on January 1, 1999. Ms. Puckett began receiving credit for years of service on July 24, 2000.

     Under our qualified and non-qualified defined benefit plans, the compensation upon which benefits are based is the aggregate amount reported for 2005 for each such officer under the columns in the Summary Compensation Table appearing above that are entitled “Salary” and “Bonus.”

     In connection with our 2005 restructuring of our nonqualified plans, we amended our nonqualified defined benefit plan to comply prospectively with Section 409A of the Internal Revenue Code and transferred accrued benefits for active participants of such nonqualified plan to our qualified defined benefit plan. For additional information, see “- Compensation Committee Report - Restructuring of Nonqualified Plans.”

Change-in-Control Arrangements

     We have agreements with each of our executive officers which entitle any such officer who is terminated without cause or resigns under certain specified circumstances within three years of any change in control of CenturyTel to (i) receive a lump sum cash severance payment equal to three times the sum of such officer’s annual salary and bonus, (ii) receive any such additional tax gross-up cash payments as may be necessary to compensate him or her for any

federal excise taxes imposed upon contingent change in control payments and (iii) continue to receive certain welfare benefits for three years.

     Under the above-referenced agreements, a “change in control” of CenturyTel would be deemed to occur upon (i) any person (as defined in the Securities Exchange Act of 1934) becoming the beneficial owner of 30% or more of the outstanding Common Shares or 30% or more of combined voting power of our voting securities, (ii) a majority of our directors being replaced, (iii) consummation of certain mergers, substantial asset sales or similar business combinations, or (iv) approval by the shareholders of a liquidation or dissolution of CenturyTel.

     In the event of a change in control of CenturyTel, our benefit plans provide, among other things, that all restrictions on outstanding restricted stock will lapse, all outstanding stock options will become fully exercisable, and post-retirement health and life insurance benefits will vest with respect to certain current and former employees. In addition, participants in the Supplemental Executive Retirement Plan who are terminated without cause or resign under certain specified circumstances within three years of the change in control will receive a cash payment equal to the present value of their plan benefits (after providing age and service credits of up to three years), determined in accordance with actuarial assumptions specified in the plan.

     The graph below compares the cumulative total shareholder return on the Common Shares with the cumulative total return of the S&P 500 Index and the S&P Integrated Telecommunications Index for the period from December 31, 2000 to December 31, 2005, in each case assuming (i) the investment of $100 on January 1, 2001 at closing prices on December 31, 2000, and (ii) reinvestment of dividends.

		December 31,
		2000				2001				2002				2003				2004								2005
CenturyTel, Inc.		$	100.00			$	92.34			$	83.31			$	93.13			$	102.02							$	97.62
S&P500 Index			100.00				88.12				68.66				88.34				97.94								102.74
S&P Telecom Index(1)			100.00				90.58				63.05				62.96				71.61								63.37

Certain Transactions

     In exchange for legal services rendered to us in 2005, we paid fees of $737,905 to The Boles Law Firm, a law firm co-owned by William R. Boles, Jr. and his sister. Mr. Boles, a director of CenturyTel since 1992, is President and a director and practicing attorney with such firm, which has provided legal services to us since 1968.

     During 2005, we purchased $1,141,266 of electrical contracting services from a firm owned by Johnny Hebert, who served as a director of CenturyTel through May 12, 2005.

     During 2005, we paid $121,001 to a real estate firm owned by the brother of Harvey P. Perry, a director of CenturyTel. In exchange for such payments, such firm provided a variety of services with respect to numerous real estate transactions in several states, including locating and analyzing properties suitable for purchase or lease and negotiating purchase or lease terms with the land owners.

     During 2005, we paid Rhonda Woodard $107,949 in salary and bonus for serving as Director of Customer Service Centers. Ms. Woodard is the sister-in-law of David Cole, an executive officer of CenturyTel, and has been employed by us since 1991.

     During 2005, we paid Rickey Lowery approximately $83,802 in salary and bonus for serving as a lead database analyst technician. Mr. Lowery has been employed by us since 1989 and has been the son-in-law of Harvey P. Perry, a director of CenturyTel, since 1990.

     During 2005, we paid Martha Amman $87,885 in salary and bonus for serving as Manager, Employment and Staffing. Ms. Amman is the sister of Harvey P. Perry, a director of CenturyTel, and has been employed by us since 1998.

     During 2005, we paid H. Parnell Perry, Jr. $70,202 in salary and bonus for serving as a technician. Mr. Perry is the son of Harvey P. Perry, a director of CenturyTel, and has been employed by us since 1988.

     During 2005, we paid Dale Shields $64,610 in salary and bonus for serving as Manager of Risk and Safety. Mr. Shields is the son-in-law of R. L. Hargrove, Jr., who served as a director of CenturyTel through May 12, 2005. Mr. Shields has been employed by us since 1983.

Section 16(a) Beneficial Ownership Reporting Compliance

     The Securities Exchange Act of 1934 requires our executive officers and directors, among others, to file certain beneficial ownership reports with the Securities and Exchange Commission. During 2005, William R. Boles, Jr., filed late six Form 4 reports that disclosed total purchases of less than 50 Common Shares under the voluntary purchase program of our dividend reinvestment plan. In addition, Calvin Czeschin was delinquent in filing one Form 4 report reporting the cancellation of a forward sales contract and the creation of a replacement forward sales contract.

OTHER MATTERS

Quorum and Voting of Proxies

     The presence, in person or by proxy, of a majority of the total voting power of the Voting Shares is necessary to constitute a quorum to organize the Annual Meeting. Shareholders voting or abstaining from voting on any issue will be counted as present for purposes of constituting a quorum to organize the Annual Meeting.

     If a quorum to organize the Annual Meeting is present, directors will be elected by plurality vote and, as such, withholding authority to vote in the election of directors will not affect whether the nominees named herein are elected. Assuming a quorum to organize the Annual Meeting is present, the affirmative vote of the holders of a majority of the voting power present or represented at the Annual Meeting will be required to ratify the appointment of KPMG as our independent auditor for 2006. Shares as to which the proxy holders have been instructed to abstain from voting will be treated under the Company’s bylaws as not being present or represented for purposes of such vote, and will therefore not affect the outcome of the vote.

     Under the rules of the New York Stock Exchange, brokers who hold shares in street name for customers may, subject to certain exceptions, vote in their discretion on matters when they have not received voting instructions from beneficial owners. Under these rules, brokers who do not receive such instructions will be entitled to vote in their discretion with respect to the election of directors and the ratification of the appointment of the independent auditor. If brokers who do not receive voting instructions do not exercise discretionary voting power (a “broker non-vote”) with respect to any matter to be considered at the Annual Meeting, shares that are not voted will be treated as present for purposes of constituting a quorum to organize the Annual Meeting but not present or cast with respect to considering such matter. Because the election of directors must be approved by plurality vote and ratification of the independent auditor must be approved by a majority of the voting power present or represented at the Annual Meeting, broker non-votes with respect to these matters will not affect the outcome of the voting.

     Voting Shares represented by all properly executed proxies received in time for the Annual Meeting will be voted at the Annual Meeting. You may revoke your proxy at any time before it is exercised by filing with our Secretary a written revocation or a duly executed proxy bearing a later date, or by attending the Annual Meeting and voting in person. Unless revoked, all properly executed proxies will be voted as specified and, if no specifications are made, will be voted in favor of the nominees and the ratification of the independent auditor.

     Management has not timely received any notice that a shareholder desires to present any matter for action at the Annual Meeting in accordance with our bylaws (which are described below), and is otherwise unaware of any matter for action by shareholders at the Annual Meeting other than the election of directors and the ratification of the appointment of the independent auditor. The enclosed proxy and voting instruction cards, however, will confer discretionary voting authority with respect to any other matter that may properly come before the Annual Meeting. It is the intention of the persons named therein to vote in accordance with their best judgment on any such matter.

Shareholder Nominations and Proposals

     In order to be eligible for inclusion in our 2007 proxy materials pursuant to the federal proxy rules, any shareholder proposal to take action at such meeting must be received at our principal executive offices by December 1, 2006, and must comply with applicable federal proxy rules. In addition, our bylaws require shareholders to furnish timely written notice of their intent to nominate a director or bring any other matter before a shareholders’ meeting, whether or not they wish to include their proposal in our proxy materials. In general, notice must be received by our Secretary between November 12, 2006 and February 10, 2007 and must contain specified information concerning, among other things, the matters to be brought before such meeting and concerning the shareholder proposing such matters. (If the date of the 2007 annual meeting is more than 30 days earlier or later than May 11, 2007, notice must be received by our Secretary within 15 days of the earlier of the date on which notice of such meeting is first mailed to shareholders or public disclosure of the meeting date is made.) For additional information on these procedures, see “Corporate Governance — Director Nomination Process.”

Annual Financial Report

     Appendix A includes our Annual Financial Report, which is excerpted from portions of our Annual Report on Form 10-K for the year ended December 31, 2005 that we filed with the Securities and Exchange Commission on March 16, 2006. We expect to mail a copy of our summary annual report for the year ended December 31, 2005 on or about the date that we mail this Proxy Statement to our shareholders.

     In connection with filing our Form 10-K report for the year ended December 31, 2005, our chief executive officer and chief financial officer made the certifications regarding our financial disclosures required under the Sarbanes-Oxley Act of 2002, and the regulations promulgated thereunder. In addition, during 2005 our chief executive officer certified to the New York Stock Exchange that he was unaware of any violation by us of the New York Stock Exchange’s corporate governance listing standards.

     You may obtain a copy of our Form 10-K report without charge by writing to Stacey W. Goff, Secretary, CenturyTel, Inc., 100 CenturyTel Drive, Monroe, LA 71203, or by visiting our website at www.centurytel.com.

     Neither Appendix A nor our summary annual review is to be regarded as proxy soliciting material.

		By Order of the Board of Directors
		Stacey W. Goff
		Secretary

Dated: March 31, 2006

APPENDIX A
to Proxy Statement

CenturyTel, Inc.

ANNUAL FINANCIAL STATEMENTS

And

REVIEW OF OPERATIONS

INDEX TO FINANCIAL INFORMATION
December 31, 2005

     The materials included in this Appendix A are excerpted from Items 7 and 8 of our Annual Report on Form 10-K for the year ended December 31, 2005, which we filed with the Securities and Exchange Commission on March 16, 2006. Please see the Form 10-K for additional information about our business and operations.

		Page
Management’s Discussion and Analysis of Financial Condition and Results of Operations			A-3
Financial Statements and Supplementary Data:
Report of Management			A-23
Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements			A-24
Report of Independent Registered Public Accounting Firm on Management’s Assessment of, and the Effective Operation of, Internal Controls over Financial Reporting			A-25
Consolidated Statements of Income			A-27
Consolidated Statements of Comprehensive Income			A-28
Consolidated Balance Sheets			A-29
Consolidated Statements of Cash Flows			A-30
Consolidated Statements of Stockholders’ Equity			A-31
Notes to Consolidated Financial Statements			A-32
Consolidated Quarterly Income Statement Information			A-56

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

RESULTS OF OPERATIONS

Overview

     CenturyTel, Inc., together with its subsidiaries, is an integrated communications company engaged primarily in providing local exchange, long distance, Internet access and broadband services to customers in 26 states. We currently derive our revenues from providing (i) local exchange telephone services, (ii) network access services, (iii) long distance services, (iv) data services, which includes both digital subscriber line (“DSL”) and dial-up Internet services, as well as special access and private line services, (v) fiber transport, competitive local exchange and security monitoring services and (vi) other related services.

     We strive to maintain our customer relationships by, among other things, bundling our service offerings to provide our customers with a complete offering of integrated communications services. Effective in the first quarter of 2004, as a result of our increased focus on integrated bundle offerings and the varied discount structures associated with such offerings, we determined that our results of operations would be more appropriately reported as a single reportable segment under the provisions of Statement of Financial Accounting Standards No. 131, “Disclosures about Segments of an Enterprise and Related Information.” Therefore, the results of operations for 2005 and 2004 reflect the presentation of a single reportable segment. Results of operations for 2003 have been conformed to this presentation of a single reportable segment.

     During 2005, we acquired fiber assets in 16 metropolitan markets from KMC Telecom Holdings, Inc. (“KMC”) for approximately $75.5 million cash. During 2003, we also acquired fiber transport assets in five central U.S. states (which we operate under the name LightCore) for $55.2 million cash.

     Our results of operations in 2005 were adversely impacted as a result of (i) lower Universal Service Fund and intrastate access revenues, (ii) declines in access lines, (iii) incremental amortization and operating expenses related to our billing and customer care system and (iv) expenses associated with expanding our new satellite video and wireless service offerings. See below for additional information.

     Our net income for 2005 was $334.5 million, compared to $337.2 million during 2004 and $344.7 million during 2003. Diluted earnings per share for 2005 was $2.49 compared to $2.41 in 2004 and $2.35 in 2003. The increase in diluted earnings per share is attributable to lower average shares outstanding in 2005 compared to 2004 due to share repurchases that have occurred during the past two years. The diluted earnings per share calculation reflects the application of Emerging Issues Task Force No. 04-8 to all periods presented. See Note 12 of Notes to Consolidated Financial Statements for additional information.

Year ended December 31,		2005				2004				2003
		(Dollars, except per share amounts,
		and shares in thousands)
Operating income		$	736,403				753,953				750,396
Interest expense			(201,801	)			(211,051	)			(226,751	)
Income from unconsolidated cellular entity			4,910				7,067				6,160
Other income (expense)			(1,742	)			(2,597	)			2,154
Income tax expense			(203,291	)			(210,128	)			(187,252	)
Net income		$	334,479				337,244				344,707
Basic earnings per share		$	2.55				2.45				2.40
Diluted earnings per share		$	2.49				2.41				2.35
Average basic shares outstanding			130,841				137,215				143,583
Average diluted shares outstanding			136,087				142,144				148,779

     Operating income decreased $17.6 million in 2005 as a $71.9 million increase in operating revenues was more than offset by an $89.4 million increase in operating expenses. Operating income increased $3.6 million in 2004 as a $39.8 million increase in operating revenues was substantially offset by a $36.2 million increase in operating expenses.

     In addition to historical information, this management’s discussion and analysis includes certain forward-looking statements that are based on current expectations only, and are subject to a number of risks, uncertainties and assumptions, many of which are beyond our control. Actual events and results may differ materially from those anticipated, estimated or projected if one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect. Factors that could affect actual results include but are not limited to: the timing, success and overall effects of competition from a wide variety of competitive providers; the risks inherent in rapid technological change; the effects of ongoing changes in the regulation of the communications industry; our ability to effectively manage our growth, including integrating newly-acquired businesses into our operations and hiring adequate numbers of qualified staff; possible changes in the demand for, or pricing of, our products and services; our ability to successfully introduce new product or service offerings on a timely and cost-effective basis; our ability to collect our receivables from financially troubled communications companies; our ability to successfully negotiate collective bargaining agreements on reasonable terms without work stoppages; the effects of adverse weather; other risks referenced from time to time in this report or other of our filings with the Securities and Exchange Commission; and the effects of more general factors such as changes in interest rates, in tax rates, in accounting policies or practices, in operating, medical or administrative costs, in general market, labor or economic conditions, or in legislation, regulation or public policy. These and other uncertainties related to our business are described in greater detail in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2005. You should be aware that new factors may emerge from time to time and it is not possible for us to identify all such factors nor can we predict the impact of each such factor on the business or the extent to which any one or more factors may cause actual results to differ from those reflected in any forward-looking statements. You are further cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of filing

of our Annual Report on Form 10-K for the year ended December 31, 2005. We undertake no obligation to update any of our forward-looking statements for any reason.

Operating Revenues

Year ended December 31,		2005				2004				2003
		(Dollars in thousands)
Local service		$	702,400				716,028				712,565
Network access			959,838				966,011				1,001,462
Long distance			189,872				186,997				173,884
Data			318,770				275,777				244,998
Fiber transport and CLEC			115,454				74,409				43,041
Other			192,918				188,150				191,660
Operating revenues		$	2,479,252				2,407,372				2,367,610

     Local service revenues. We derive local service revenues by providing local exchange telephone services in our service areas. The $13.6 million (1.9%) decrease in local service revenues in 2005 is primarily due to (i) a $16.1 million decrease due a 3.3% decline in the average number of access lines served and (ii) a $7.5 million decline as a result of a decrease in minutes of use in extended area calling plans in certain areas. Such decreases were partially offset by (i) an $8.7 million increase due to our providing custom calling features to more customers and (ii) a $4.2 million increase due to the mandated implementation of extended area calling plans in certain areas. Of the $3.5 million (.5%) increase in local service revenues in 2004, $12.6 million was due to the provision of custom calling features to more customers, which was partially offset by an $8.4 million decrease due to a 2.2% decline in the average number of access lines served.

     Access lines declined 99,500 (4.3%) during 2005 compared to a decline of 62,500 (2.6%) in 2004. We believe the decline in the number of access lines during 2005 and 2004 is primarily due to the displacement of traditional wireline telephone services by other competitive services. Based on current conditions, we expect access lines to decline between 4.5% and 5.5% during 2006.

     Network access revenues. We derive our network access revenues primarily from (i) providing services to various carriers and customers in connection with the use of our facilities to originate and terminate their interstate and intrastate voice and data transmissions and (ii) receiving universal support funds which allows us to recover a portion of our costs under federal and state cost recovery mechanisms. Certain of our interstate network access revenues are based on tariffed access charges filed directly with the Federal Communications Commission (“FCC”); the remainder of such revenues are derived under revenue sharing arrangements with other local exchange carriers (“LECs”) administered by the National Exchange Carrier Association. Intrastate network access revenues are based on tariffed access charges filed with state regulatory agencies or are derived under revenue sharing arrangements with other LECs.

     Network access revenues decreased $6.2 million (0.6%) in 2005 and decreased $35.5 million (3.5%) in 2004 due to the following factors:

		2005				2004
		increase				increase
		(decrease)				(decrease)
		(Dollars in thousands)
Recovery from the federal Universal Service High Cost Loop support program		$	(13,065	)			(11,311	)
Intrastate revenues due to decreased minutes of use and decreased access rates in certain states, net of increased recovery from state support funds			(13,392	)			(26,798	)
Partial recovery of increased operating costs through revenue sharing arrangements with other telephone companies, interstate access revenues and return on rate base			6,819				3,980
Rate changes in certain jurisdictions			(3,457	)			5,052
Revision of prior year revenue settlement agreements			15,947				(3,690	)
Other, net			975				(2,684	)
		$	(6,173	)			(35,451	)