[LETTER TO STOCKHOLDERS]

I am pleased to be reporting good news in my first annual letter as Chief Executive Officer. Despite a challenging economic environment, 2002 was a solid year for ALLTEL. Revenues and fully diluted earnings per share from current businesses were up 6 percent and 14 percent over 2001, totaling nearly $8 billion and $3.24, respectively. Our results under Generally Accepted Accounting Principles (GAAP) included fully diluted earnings per share of $2.96. This represents a 13 percent decrease from 2001, due largely to gains on the sale of PCS licenses recorded in 2001. In 2002, our communications business generated $7.1 billion in revenues - an increase of 8 percent. The Board of Directors approved a dividend increase for the 42nd consecutive year, raising the indicated annual rate by 3 percent to $1.40 per common share. This success was a direct result of our ability to adhere to the management principles established by ALLTEL's former CEO and current Chairman, Joe Ford. I am fortunate to have been handed the reins of a company founded on honesty, integrity and respect, one where we work very hard to maintain a balance between growth and the protection of our financial strength.

[2002 Highlights] Last summer we completed the acquisition of Verizon's Kentucky wireline properties and CenturyTel's wireless properties, adding about 1.35 million customers to our communications operations with little additional overhead. We employed our financial strength to raise nearly $3 billion in financing for these transactions, which increased our wireline access lines by 23 percent and our wireless subscribers by 10 percent. We were able to assimilate these new customers very quickly, and their acceptance of our product offerings has already exceeded our expectations. For example, in Kentucky we reached 20 percent penetration of ALLTEL long- distance across our wireline customer base in only five months. Our success in this regard illustrates the merit of ALLTEL's business approach: by maintaining our focus on the customer access relationship and playing to our strengths as a reliable provider of total communications services, ALLTEL can generate profits in areas undervalued by our competitors. This same fundamental strategy is also reflected in the sale of the financial services division of our Information Services subsidiary to Fidelity National Financial, Inc., which we announced on January 29, 2003. When this transaction closes later this year, ALLTEL will receive $1.05 billion, payable as $775 million cash and $275 million in Fidelity National common stock. This will enhance our financial flexibility and allow us to focus on our core communications business. The telecom division of our Information Services business will remain part of ALLTEL and will be integrated into our communications operations, where we expect it to continue to contribute to our success. [Looking Ahead] In the years ahead, we will continue to follow our proven business approach, with a special emphasis on extending its core principles to our customer relationships, beginning with a detailed examination of the entire customer experience. This will include a look at how we interact with customers at the point of sale, how we care for them once they have purchased services from us, and the quality of calls and other services delivered through our networks. [Industry & Regulatory Issues] Although I am excited about our plans for the future, we continue to face industry and regulatory challenges. The competitive field remains uneven because of differences between the intent and implementation of the 1996 Telecommunications Act. Additionally, the capital structure of our industry is still unsustainably skewed from the effects of the 1990s bull market. On the wireless front, our task continues to be attracting high-quality customers in a cost-effective manner, despite an increasingly saturated market. We believe an emphasis on total service quality will allow us to expand our wireless base and likewise grow our top line. On the wireline side, we must grow revenues in a sector experiencing access line declines from both slowing demand and wireline replacement with wireless service and alternative broadband providers. Again, our customer focus and cost discipline should allow ALLTEL to maintain solid profit margins in our wireline business in the years ahead. From a regulatory standpoint, we are preparing for what may be the greatest wave of change in our industry since adoption of the 1996 Telecommunications Act. Several important federal and state regulatory issues are currently pending, including wireless number portability and rules governing wholesale pricing of local wireline access, which could have a significant future impact on our business. Until the outcome of these issues becomes clear, we will evaluate any new investments or changes in our operations very carefully before committing to them. In the meantime, we will actively work to shape an enlightened regulatory environment to the extent we are able. We have endured similar uncertain regulatory periods many times before. We intend to face today's challenges by doing what we have always done - following a set of fundamentally sound management principles and paying close attention to our business priorities.

[In the years ahead, we will continue to follow our proven business approach, with a special emphasis on extending its core principles to our customer relationships.]

[A Final Thank You] In closing, I would like to thank the employees of ALLTEL for all of their hard work during 2002. Thanks to their dedication and efforts, we found a way to prosper in a year that can only be described as challenging.

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