AlltelAlltelTerrell WilliamsTerrell Williams

ACG2021 SECTION 003 ACG2021 SECTION 003   

Executive SummaryExecutive Summary

Alltel had a great year in 2005. They grew Alltel had a great year in 2005. They grew tremendously, due to the acquisition and tremendously, due to the acquisition and merger of other major and minor wireless merger of other major and minor wireless

companies, such as US Cellular and Cingular companies, such as US Cellular and Cingular wireless. Money was spent on replacing wireless. Money was spent on replacing

damaged networks and facilities after damaged networks and facilities after hurricane Katrina, but they helped their hurricane Katrina, but they helped their

employees during the disaster.employees during the disaster.

http://phx.corporate-ir.net/phoenix.zhtml?http://phx.corporate-ir.net/phoenix.zhtml?c=74159&p=irol-reportsAnnualc=74159&p=irol-reportsAnnual

Part A. IntroductionPart A. Introduction

Scott T. Ford is the CEOScott T. Ford is the CEO Little Rock, Arkansas is Little Rock, Arkansas is

the location of the home the location of the home officeoffice

Ending date of latest fiscal Ending date of latest fiscal year was 12-31-05year was 12-31-05

Alltel provides multiple Alltel provides multiple services (television, services (television, satellite, mobile phone, satellite, mobile phone, wireless headphones, wireless headphones, etc.). etc.).

The blue areas are Alltel’s The blue areas are Alltel’s main coverage areas.main coverage areas.

Part A. Audit ReportPart A. Audit Report

Thomson Financial is the independent Thomson Financial is the independent auditor for Alltel. auditor for Alltel.

Alltel is in great financial standing. They Alltel is in great financial standing. They have a lot of different resources that is have a lot of different resources that is providing the corporation with income. If providing the corporation with income. If they lose money in one area the other areas they lose money in one area the other areas of business make up for that small portion of of business make up for that small portion of loss.loss.

Part A. Stock Market InformationPart A. Stock Market Information

$56.97 is the recent stock price$56.97 is the recent stock price $57.55 is the high for the year$57.55 is the high for the year $47.48 is the low for the year$47.48 is the low for the year Dividend per shareDividend per share The information was given on 10/ 7/06The information was given on 10/ 7/06 Alltel is in very good standing and seems that it will stay that way or get Alltel is in very good standing and seems that it will stay that way or get

stronger.stronger.

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http://www.alltel.com/corporate/media/history_detail.htmlhttp://www.alltel.com/corporate/media/history_detail.html

Part B. Industry Situation and Part B. Industry Situation and Company PlansCompany Plans

Alltel is a very strong corporation. The business is only Alltel is a very strong corporation. The business is only becoming stronger, due to the acquiring of US Cellular and becoming stronger, due to the acquiring of US Cellular and the agreement between them and two of the most the agreement between them and two of the most recognizable wireless companies in Sprint and Cingular.recognizable wireless companies in Sprint and Cingular.

In the last few years, Alltel has more than tripled their In the last few years, Alltel has more than tripled their revenues and operating income. Not to mention, their revenues and operating income. Not to mention, their customer base has grown tremendously.customer base has grown tremendously.

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http://www.alltel.com/corporate/media/history_detail.htmlhttp://www.alltel.com/corporate/media/history_detail.html

Part C. Income StatementPart C. Income Statement The format is that of a multistep format.The format is that of a multistep format. 2004 20052004 2005

charts in millionscharts in millions Gross profit it increasing which means that Alltel is growing and earning more revenue.Gross profit it increasing which means that Alltel is growing and earning more revenue.

Gross ProfitGross Profit 4,796.404,796.40 5,427.905,427.90

Net Income Net Income OperationsOperations

2,466.802,466.80 2,6972,697

Net IncomeNet Income 1,046.201,046.20 1,331.401,331.40

Part C. Balance SheetPart C. Balance Sheet

charts in millionscharts in millionsThe assets account has changed the most The assets account has changed the most with the companies outstanding growth. The with the companies outstanding growth. The liabilities are decreasing.liabilities are decreasing.

20042004 20052005

Total Total liabilitiesliabilities

10,998.610,998.6 9475.009475.00

StockholdStockholder’s equityer’s equity

13,015.513,015.5 7,128.77,128.7

Total Total assetsassets

24,013.1024,013.10 16,603.716,603.7

Part C. Statement of Cash Part C. Statement of Cash FlowsFlows

Cash flows from operations are more than Cash flows from operations are more than the net income for the past two yearsthe net income for the past two yearsThe Alltel corporation is growing through The Alltel corporation is growing through many long lived assets. The company is many long lived assets. The company is buying property and investing in itself.buying property and investing in itself.The primary source of the companies The primary source of the companies financing is through their stock sales.financing is through their stock sales.Overall, the cash has increased a great deal Overall, the cash has increased a great deal over the past two years.over the past two years.

Part D. Accounting PoliciesPart D. Accounting Policies

Alltel’s accounting policies are the Alltel’s accounting policies are the general accepted policies.general accepted policies.Alltel offers retirement plans, stock Alltel offers retirement plans, stock option plans, debt, supplemental cash option plans, debt, supplemental cash flow information, income taxes, flow information, income taxes, contingencies, preferred and common contingencies, preferred and common stock, employee stock ownership plans, stock, employee stock ownership plans, quarterly financial data, and business quarterly financial data, and business segments.segments.

Part E. Financial Analysis Part E. Financial Analysis Liquidity RatiosLiquidity Ratios

2004 20052004 2005

Working Capital 1560.5 2960.6 Working Capital 1560.5 2960.6

Current Ratio 1.82 2.36Current Ratio 1.82 2.36

Working capitol increased which allowed the Working capitol increased which allowed the

current ratio to increase.current ratio to increase.

Part E. Financial AnalysisPart E. Financial AnalysisProfitability RatiosProfitability Ratios

2004 2005 2004 2005

Profit margin 12.69% 14%Profit margin 12.69% 14% Asset turnover .50 .40Asset turnover .50 .40 Return on assets 6.30% 7.62%Return on assets 6.30% 7.62% Return on equity 14.7 13.2%Return on equity 14.7 13.2%

The return on assets has increased, which means that The return on assets has increased, which means that income is on the rise.income is on the rise.

Part E. Financial AnalysisPart E. Financial AnalysisSolvency RatioSolvency Ratio

Debt to equityDebt to equity

2004 20052004 2005

1.32 .841.32 .84

Debt to Equity ratio is greatly improving and Alltel Debt to Equity ratio is greatly improving and Alltel is starting to be owned by its stockholders.is starting to be owned by its stockholders.

Part E. Financial AnalysisPart E. Financial AnalysisMarket Strength RatiosMarket Strength Ratios

2004 20052004 2005 Price/earnings per share 17.5 15.9Price/earnings per share 17.5 15.9

Dividend yield .85% .88%Dividend yield .85% .88%

The price/earnings ratio per share has increased The price/earnings ratio per share has increased for 2005. This is a good sign for the stockholders.for 2005. This is a good sign for the stockholders.