Consolidated Communications Holdings
Nov 8, 2006

Consolidated Communications Holdings Reports Third Quarter 2006 Results

MATTOON, Ill., Nov. 8 /PRNewswire-FirstCall/ -- Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) today announced results for the third quarter and nine months ended September 30, 2006. The company reported revenues of $80.3 million for the quarter and $239.1 million for the nine- month period. Adjusted EBITDA including the effect of a $500,000 litigation settlement and net cash provided by operating activities for the quarter were $34.8 million and $26.2 million, respectively, and were $104.1 million and $59.6 million for the nine-month period, respectively.

"By consistently executing on our plan, we continue to deliver strong operational and financial results," said Bob Currey, Consolidated's president and chief executive officer. "I am very pleased that we successfully completed phase two of billing integration, the call center consolidation, and launched our IPTV product in Texas, all while delivering strong results. We grew total connections by approximately 1,600 in the quarter, are up over 7,600 for the year and now surpass 290,000 total connections. Eighty nine percent of our over 5,500 IPTV customers in Illinois take our triple play of voice, video and data, which has contributed to a 19.7 percent year-over-year increase in service bundles."

"Our strategic DSL and IPTV products continue to do very well. This was an outstanding quarter for DSL, with the number of subscribers increasing 37.0 percent year-over-year and 7.4 percent from second quarter 2006. We gained more than 3,400 new DSL subscribers during the quarter. DSL penetration exceeds 28.7 percent of primary residential lines. Our IPTV subscriber base in Illinois grew by over 1,000 or 22 percent, bringing the total subscriber count to over 5,500. Additionally, we increased the size of the market we serve. In Illinois, we added 8,000 homes passed, bringing the total to over 35,000. In Texas, we are excited about the launch of our IPTV product at the end of August, and we now pass approximately 37,000 homes," commented Currey.

Currey added, "We have successfully completed Phase II of the billing integration project, finishing on-time, on-budget and with the desired customer enhancements. As originally planned we expect to complete the third and final phase, the transition of the Illinois customer base to the enhanced billing software, by mid-2007."

    Operating Statistics at September 30, 2006, Compared to June 30, 2006
    -- Total connections were 290,981, an increase of 1,613, or 0.6 percent.
    -- Total local access lines were 235,983, a decrease of 2,921, or 1.2
       percent.  Excluding the impact of non-recurring items, access lines
       decreased by 2,141 or 0.9 percent.
    -- DSL subscribers were 49,360, an increase of 3,412, or 7.4 percent.
    -- Total IPTV subscribers were 5,638, an increase of 1,122, or 24.8
       percent.
    -- Long distance lines were 147,177, an increase of 1,060, or 0.7 percent.
    -- Total service bundles were 42,100, an increase of 1,199, or 2.9
       percent.

Access line loss continues to show year-over-year improvement. Third quarter 2006 line loss of 2,921 includes 780 lines that were reclassified as part of a company-initiated review associated with the billing integration project. This adjustment was non-recurring in nature. It did not impact current, nor will it impact future, revenue. Excluding the effect of this adjustment, the company's line loss for the quarter was 2,141. This reflects an approximate 9 percent decrease in line loss compared to the third quarter of 2005. On an annualized basis, year-to-date line loss, excluding the one- time reclassification, is 2.9 percent.

Steve Childers, Consolidated's chief financial officer, said, "During the quarter we continued to improve our cost structure. Compared to the third quarter of 2005, we have reduced headcount by over 100 and lowered our operating costs. Total company Adjusted EBITDA margin, the ratio of Adjusted EBITDA to total revenue, was 43.3 percent for the quarter, compared to 40.2 percent for the same period last year. After adjusting for the impact of prior period subsidy receipts and litigation costs, Adjusted EBITDA margins were 44.8 percent and 42.5 percent for the third quarter of 2006 and the third quarter of 2005, respectively."

Childers continued, "In addition, we consolidated three call centers. This action has resulted in a more consistent and efficient service delivery, with a net workforce reduction of 24 and an anticipated annual cost savings of approximately $1.0 million."

Cash Available to Pay Dividends

For the quarter, cash available to pay dividends, or CAPD, was $15.2 million and the dividend payout ratio was 75.9 percent. As of September 30, 2006, cumulative available cash, which is defined in the dividend restriction covenants in the credit facility as the difference between CAPD and dividends paid for the period since September 30, 2005, was approximately $21.2 million. At September 30, 2006, cash and cash equivalents were $19.9 million. Consolidated made capital expenditures of $7.8 million during the second quarter, bringing the year-to-date total to $25.0 million.

Stock Repurchase

On July 28th, the company completed its previously announced share repurchase of approximately 3.8 million shares of common stock from Providence Equity for approximately $56.7 million, or $15.00 per share. This transaction removed the market overhang related to this large position, improved cash flow by decreasing the annual dividend obligation by 12.8 percent and improved the company's dividend payout ratio. The transaction was financed with $17.7 million of cash from the balance sheet and $39.0 million in additional term loan borrowings. After accounting for the additional after-tax interest charges, this transaction will generate an approximate $3.0 million annual net increase in cash and cash equivalents. Beginning with the fourth quarter of 2006, the dividend will decrease to approximately $10.0 million as a result of the repurchase.

    Financial Highlights for the Third Quarter Ended September 30, 2006
    -- Revenues were $80.3 million, compared to $82.2 million in the third
       quarter of 2005.  The decline was driven by a $3.7 million decrease in
       Subsidies revenue and a $700,000 reduction in Local Calling Service
       revenue.  The reduction in Subsidies revenue was primarily attributable
       to a $2.7 million reduction in prior period subsidy receipts.  In the
       third quarter of 2005 the company received $1.5 million in prior period
       receipts and in the third quarter of 2006 it refunded $1.2 million.
       The reduction in Local Calling Service revenue was primarily
       attributable to the decline in access lines.  These reductions were
       partially offset by increases in Network Access Services revenue of
       $1.0 million driven by increased demand for special access circuits and
       back billings associated with the completion of an internal circuit
       audit, and an additional $1.5 million in Data and Internet Services
       revenue attributable to the growth in both the DSL and IPTV products.
    -- Income from operations was $15.5 million, compared to $6.9 million in
       the third quarter of 2005.  The increase was attributable to the
       company's ongoing cost reduction initiatives and the recognition in
       2005 of $6.6 million in additional non-cash compensation expense and
       $2.7 million in litigation costs attributable to a settlement.
       Offsetting these improvements were $500,000 in litigation costs in the
       current quarter and the $2.7 million dollar reduction in prior period
       subsidy receipts.
    -- Interest expense, net was $11.2 million, compared to $19.8 million in
       the same quarter last year.  The decrease was primarily driven by the
       redemption of $65.0 million of senior notes in the third quarter of
       2005.  In connection with the 2005 note redemption the company incurred
       a bond redemption premium of $6.3 million and the write-off of deferred
       financing costs totaling $2.3 million.
    -- Income tax expense was $3.9 million, compared to a benefit of $1.3
       million in the third quarter of 2005.  The increase was primarily due
       to the change in pre-tax income.  In addition, the company recognized
       approximately $800,000 in incremental tax expense in the current
       quarter associated with finalizing and filing its 2005 federal tax
       return and amending its 2003 and 2004 returns.
    -- Net income was $2.0 million, compared to a net loss of $10.2 million in
       the third quarter of 2005.
    -- Net income per common share was $0.07.  Adjusted net income per common
       share, which is calculated after excluding the effect of non-cash
       compensation charges, the aforementioned tax adjustment, and the after-
       tax impact of the litigation settlement, severance, billing integration
       and Sarbanes-Oxley start-up costs, was $0.15.
    -- Adjusted EBITDA was $34.8 million and net cash provided by operating
       activities was $26.2 million compared to $33.1 million and $17.8
       million, respectively, for the third quarter of 2005. The increase in
       Adjusted EBITDA was primarily attributable to the improvements in
       operating efficiencies, incremental cash distributions from the
       cellular partnership investments, and the $2.7 million litigation
       settlement in the third quarter of 2005.  Total net debt to last twelve
       month Adjusted EBITDA coverage ratio was 4.1 times to one, with the
       increase compared to the second quarter of 2006 being attributable to
       the increase in term borrowings associated with the previously
       described share repurchase.

    Financial Highlights for the Nine Months Ended September 30, 2006
    -- Revenues were $239.1 million, compared to $240.2 million for the prior
       year period. The reduction reflects decreases in Subsidies and Local
       Calling Services revenues, partially offset by increases in Network
       Access Services revenue associated with increased demand for special
       access circuits and back billings associated with the completion of an
       internal circuit audit, increased Data and Internet Services revenue
       driven by growth in both DSL and IPTV revenue, and increased Other
       Operations revenue.
    -- Net income was $13.8 million, compared to a net loss of $2.4 million
       for the prior year period.  The year-over-year increase was due to
       operating efficiency improvements, a one-time deferred tax benefit
       attributable to the changes in the methodology required for calculating
       Texas franchise tax, lower non-cash compensation expense, and lower
       interest expense.
    -- Net income per common share was $0.48.  Adjusted net income per common
       share, which is calculated after excluding the effect of non-cash
       compensation charges, the deferred tax benefit attributable to the
       changes in the methodology required for calculating Texas franchise
       tax, adjustments associated with filing the 2005 and amending the 2003
       and 2004 tax returns, and the after-tax impact of the third quarter
       litigation settlement, severance, billing integration and Sarbanes-
       Oxley start-up costs, was $0.47.
    -- Adjusted EBITDA was $104.1 million and net cash provided by operating
       activities was $59.6 million, compared to $101.2 million and $47.1
       million, respectively.  The increase in Adjusted EBITDA was primarily
       due to operating efficiency improvements and increased cash
       distributions from cellular partnership investments, partially offset
       by a $3.4 million decrease in prior period subsidy receipts.

    Financial Guidance

The company reiterates the following guidance: Capital expenditures are not expected to exceed $33.0 million for 2006; full year 2006 cash interest expense is expected to be in the range of $40.0 to $41.0 million; and full year 2006 cash income taxes are expected to be in the range of $7.0 to $8.0 million.

Dividend Payments

The company paid its latest quarterly dividend of $0.38738 per common share on November 1, 2006 to stockholders of record on October 15, 2006. On November 6, 2006, the company's board of directors declared its next quarterly dividend of $0.38738 per common share, which is payable on February 1, 2007 to stockholders of record at the close of business on January 15, 2007.

Conference Call Information

The company will host a conference call today at 11:00 a.m. Eastern Time / 10:00 a.m. Central Time. The call is being webcast and can be accessed from the "Investor Relations" section of the company's website at http://www.consolidated.com. The webcast will also be archived on the company's website. If you do not have internet access, the conference call dial-in number is 1-800-642-1783. International parties can access the call by dialing 1-706-679-5600. A telephonic replay of the conference call will also be available starting two hours after completion of the call until November 10, 2006 at midnight Eastern Time. To hear the replay, parties in the United States and Canada should call 1-800-642-1687 and international parties should call 1-706-645-9291 and enter pass code 2613076.

Use of Non-GAAP Financial Measures

This press release, as well as the conference call, includes disclosures regarding "Adjusted EBITDA", "Adjusted EBITDA margin", "cash available to pay dividends", "cumulative available cash", "total net debt to last twelve month Adjusted EBITDA coverage ratio", and "adjusted net income per share", all of which are non-GAAP financial measures. Accordingly, they should not be construed as alternatives to net cash from operating or investing activities, cash and cash equivalents, cash flows from operations or net income (loss) as defined by GAAP and are not, on their own, necessarily indicative of cash available to fund cash needs as determined in accordance with GAAP. In addition, not all companies use identical calculations, and these non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. A reconciliation of the differences between these non-GAAP financial measures and the most directly comparable financial measures presented in accordance with GAAP is included in the tables that follow.

Adjusted EBITDA, which corresponds to pro forma Bank EBITDA as used and defined in the prospectus dated July 21, 2005 filed in connection with the IPO, is comprised of historical EBITDA, as adjusted for certain adjustments permitted and contemplated by our credit facility.

EBITDA is defined as net earnings (loss) before interest expenses, income taxes, depreciation and amortization on an historical basis. We believe net cash provided by operating activities is the most directly comparable financial measure to EBITDA under GAAP. EBITDA is a non-GAAP financial measure.

Cash available to pay dividends represents Adjusted EBITDA plus cash interest income less (1) cash interest expense (after giving pro forma effect to the IPO as if it had been completed on July 1, 2005), (2) capital expenditures and (3) cash taxes.

We present Adjusted EBITDA and cash available to pay dividends for several reasons. Management believes Adjusted EBITDA and cash available to pay dividends are useful as a means to evaluate our ability to fund our estimated uses of cash (including interest on our debt) and pay dividends. In addition, we have presented Adjusted EBITDA and cash available to pay dividends to investors in the past because they are frequently used by investors, securities analysts and other interested parties in the evaluation of companies in our industry, and management believes presenting them here provides a measure of consistency in our financial reporting. Adjusted EBITDA and cash available to pay dividends, referred to as Available Cash in our credit agreement, and cumulative available cash are also components of the restrictive covenants and financial ratios contained in the agreements governing our debt that require us to maintain compliance with these covenants and limit certain activities, such as our ability to incur debt and to pay dividends. The definitions in these covenants and ratios are based on Adjusted EBITDA, cash available to pay dividends and cumulative available cash after giving effect to specified charges. As a result, management believes the presentation of Adjusted EBITDA and cash available to pay dividends, as supplemented by these other items, provide important additional information to investors. In addition, Adjusted EBITDA and cash available to pay dividends provide our board of directors with meaningful information to determine, with other data, assumptions and considerations, our dividend policy and our ability to pay dividends under the restrictive covenants in the agreements governing our debt and to measure our ability to service and repay debt.

These non-GAAP financial measures have certain shortcomings. In particular, Adjusted EBITDA does not represent the residual cash flows available for discretionary expenditures, since items such as debt repayment and interest payments are not deducted from such measure. Similarly, while we may generate cash available to pay dividends, we are not required to use any such cash to pay dividends, and the payment of any dividends is subject to declaration by our board of directors, compliance with applicable law and the terms of our credit agreement and the indenture governing our senior notes.

Because Adjusted EBITDA is a component of Dividend Payout Ratio, EBITDA Margin and the ratio of total net debt to last twelve-month Adjusted EBITDA, these measures are also subject to the material limitations discussed above. In addition, the ratio of total net debt to last twelve month Adjusted EBITDA is subject to the risk that we may not be able to use the cash on the balance sheet to reduce our debt on a dollar-for-dollar basis. Management believes these ratios are useful as a means to evaluate our ability to incur additional indebtedness in the future and, together with adjusted net income per share, assist investors, securities analysts and other interested parties in evaluating the companies in our industry.

For a more detailed discussion of these and other limitations on the use of these non-GAAP financial measures, please see the section entitled "Dividend Policy and Restrictions" in our prospectus dated July 21, 2005. The prospectus is not incorporated by reference in this release.

About Consolidated

Consolidated Communications Holdings, Inc. is an established rural local exchange company (RLEC) providing voice, data and video services to residential and business customers in Illinois and Texas. Each of the operating companies has been operating in its local market for over 100 years. With approximately 239,000 local access lines, 49,000 DSL subscribers and 5,600 IPTV subscribers, Consolidated Communications offers a wide range of telecommunications services, including local and long distance service, custom calling features, private line services, dial-up and high-speed Internet access, digital TV, carrier access services, and directory publishing. Consolidated Communications is the 16th largest local telephone company in the United States.

Safe Harbor

Any statements contained in this press release that are not statements of historical fact, including statements about management's beliefs and expectations, are forward-looking statements and should be evaluated as such. The words "anticipates", "believes", "expects", "intends", "plans", "estimates", "targets", "projects", "should", "may", "will" and similar words and expressions are intended to identify forward-looking statements. Such forward-looking statements reflect, among other things, the company's current expectations, plans, strategies and anticipated financial results and involve a number of known and unknown risks, uncertainties and factors that may cause the actual results to differ materially from those expressed or implied by these forward-looking statements. These risks include, but are not limited to the following: various risks to stockholders of not receiving dividends and risks to the company's ability to pursue growth opportunities if the company continues to pay dividends according to the current dividend policy; various risks to the price and volatility of the common stock; the substantial amount of debt and the company's ability to incur additional debt in the future; the company's need for a significant amount of cash to service and repay the debt and to pay dividends on the common stock; restrictions contained in the debt agreements that limit the discretion of management in operating the business; the ability to refinance the existing debt as necessary; regulatory changes, rapid development and introduction of new technologies and intense competition in the telecommunications industry; risks associated with the company's possible pursuit of acquisitions; economic conditions in the company's service areas in Illinois and Texas; system failures; losses of large customers or government contracts; risks associated with the rights-of-way for the network; disruptions in the relationship with third party vendors; losses of key management personnel and the inability to attract and retain highly qualified management and personnel in the future; changes in the extensive governmental legislation and regulations governing telecommunications providers and the provision of telecommunications services; telecommunications carriers disputing and/or avoiding their obligations to pay network access charges for use of the company's network; high costs of regulatory compliance; the competitive impact of legislation and regulatory changes in the telecommunications industry; liability and compliance costs regarding environmental regulations, and the other risks identified in the section entitled "Risk Factors" in the company's Annual Report on Form 10-K for the year ended December 31, 2005, as well as in the other documents that we file from time to time with the Securities and Exchange Commission.

Many of these risks are beyond management's ability to control or predict. All forward-looking statements attributable to the company or persons acting on the company's behalf are expressly qualified in their entirety by the cautionary statements and risk factors contained in this press release and the company's filings with the Securities and Exchange Commission. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the Securities and Exchange Commission, the company does not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.


                         Consolidated Communications
                    Condensed Consolidated Balance Sheets
                            (Dollars in thousands)

                                                 September 30,   December 31,
                                                      2006           2005
    ASSETS                                        (Unaudited)
    Current assets:
     Cash and cash equivalents                      $19,898        $31,409
     Accounts receivable, net                        37,017         35,503
     Prepaid expenses and other current assets       15,700         12,123
    Total current assets                             72,615         79,035

    Property, plant and equipment, net              319,287        335,088
    Intangibles and other assets                    515,824        531,827
    Total assets                                   $907,726       $945,950

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
     Accounts payable                                $7,774        $11,743
     Accrued expenses and other current
      liabilities                                    56,563         56,116
    Total current liabilities                        64,337         67,859

    Long-term debt                                  594,000        555,000
    Other long-term liabilities                     120,926        120,889
    Total liabilities                               779,263        743,748

    Minority interests                                3,473          2,974
    Stockholders' equity:
     Common stock, $0.01 par value                      260            297
     Paid in capital                                199,338        254,162
     Accumulated deficit                            (76,796)       (57,533)
     Accumulated other comprehensive income           2,188          2,302
    Total stockholders' equity                      124,990        199,228
    Total liabilities and stockholders' equity     $907,726       $945,950



                         Consolidated Communications
               Condensed Consolidated Statements of Operations
                            (Dollars in thousands)
                                 (Unaudited)

                                  Three Months Ended     Nine Months Ended
                                     September 30,          September 30,
                                    2006       2005       2006        2005
    Revenues                      $80,323    $82,168    $239,089    $240,204
    Operating expenses:
     Cost of services and
      products                     24,140     25,953      72,764      74,723
     Selling, general and
      administrative expenses      23,764     32,419      70,947      75,517
     Depreciation and
      amortization                 16,961     16,920      50,876      50,852
    Income from operations         15,458      6,876      44,502      39,112
    Other income (expense):
     Interest expense, net        (11,175)   (19,814)    (31,341)    (42,812)
     Other income, net              1,645      1,443       4,379       5,036
    Income (loss) before
     income taxes                   5,928    (11,495)     17,540       1,336
    Income tax (benefit)
     expense                        3,913     (1,270)      3,752       3,701

    Net income (loss)               2,015    (10,225)     13,788      (2,365)
    Dividends on redeemable
     preferred shares                 -       (1,142)        -       (10,263)
    Net income (loss) applicable
     to common stockholders        $2,015   $(11,367)    $13,788    $(12,628)

    Net income (loss)
     per common share               $0.07     $(0.49)      $0.48      $(0.90)



                         Consolidated Communications
               Condensed Consolidated Statements of Cash Flows
                            (Dollars in thousands)
                                 (Unaudited)

                                   Three Months Ended     Nine Months Ended
                                      September 30,          September 30,
                                    2006       2005       2006        2005
    OPERATING ACTIVITIES
    Net Income (loss)               $2,015  $(10,225)   $13,788     $(2,365)
    Adjustments to reconcile
     net income (loss) to cash
     provided by operating
     activities:
      Depreciation and
       amortization                 16,961    16,920     50,876      50,852
      Non-cash stock compensation      625     7,244      1,875       7,244
      Other adjustments, net         1,651     2,999      1,550       3,633
    Changes in operating assets
     and liabilities, net            4,932       866     (8,526)    (12,293)
      Net cash provided by
       operating activities         26,184    17,804     59,563      47,071
    INVESTING ACTIVITIES
     Proceeds from sale
      of investments                   -         -        5,921         -
     Proceeds from sale of land        590       -          590         -
     Capital expenditures           (7,816)   (6,766)   (25,037)    (21,596)
      Net cash used in
       investing activities         (7,226)   (6,766)   (18,526)    (21,596)
    FINANCING ACTIVITIES
     Proceeds from issuance
      of stock                         -      67,798        -        67,798
     Proceeds from issuance of
      long-term obligations         39,000     5,688     39,000       5,688
     Payments made on
      long-term obligations            -     (65,000)       -       (75,109)
     Payment of deferred
      financing costs                 (262)   (3,982)      (262)     (4,737)
     Purchase of treasury
      shares                       (56,736)      -      (56,736)        (12)
     Distribution to preferred
      shareholders                     -         -          -       (37,500)
     Dividends on common stock     (11,504)      -      (34,550)        -
       Net cash provided by
        (used in) financing
        activities                 (29,502)    4,504    (52,548)    (43,872)
    Net increase (decrease) in
     cash and cash equivalents     (10,544)   15,542    (11,511)    (18,397)
    Cash and cash equivalents at
     beginning of period            30,442    18,145     31,409      52,084
    Cash and cash equivalents at
     end of period                 $19,898   $33,687    $19,898     $33,687



                         Consolidated Communications
                       Consolidated Revenue by Category
                            (Dollars in thousands)
                                 (Unaudited)

                                     Three Months Ended     Nine Months Ended
                                        September 30,          September 30,
                                       2006       2005       2006        2005
    Telephone Operations
     Local calling services          $21,335    $22,051    $64,184     $67,088
     Network access services          17,326     16,300     51,276      47,974
     Subsidies                        11,015     14,739     34,965      40,530
     Long distance services            4,103      4,156     11,627      12,314
     Data and Internet services        7,894      6,368     22,532      19,174
     Other services                    8,458      8,427     24,577      24,524
    Total Telephone Operations        70,131     72,041    209,161     211,604
    Other Operations                  10,192     10,127     29,928      28,600
    Total operating revenues         $80,323    $82,168   $239,089     240,204



                         Consolidated Communications
                        Schedule of ARPU Calculations
                            (Dollars in thousands)
                                 (Unaudited)

                               Three Months Ended        Nine Months Ended
                                 September 30,             September 30,
                               2006         2005         2006         2005

    Ending Access Lines       235,983      244,902      235,983      244,902
    Average Access Lines      237,630      245,969      239,605      249,700


    Telephone Operations
     Revenue                  $70,131      $72,041      $209,161    $211,604
    Prior period subsidy
     settlements              $(1,213)      $1,462       $(1,793)     $1,621

    Telephone Operations,
     excluding prior period
     subsidy settlements      $71,344      $70,579      $210,954    $209,983

    Monthly Telephone
     Operations ARPU           $98.38       $97.63        $96.99      $94.16
    Monthly Telephone
     Operations ARPU,
     excluding prior period
     subsidy settlements      $100.08       $95.65        $97.82      $93.44


    ARPU, or average revenue per user, reflects revenue per average access
line.



                         Consolidated Communications
                   Schedule of Adjusted EBITDA Calculation
                            (Dollars in thousands)
                                 (Unaudited)

                                                                  Last Twelve
                               Three Months        Nine Months    Months Ended
                                   Ended              Ended        September
                               September 30,       September 30,      30,
                              2006      2005      2006      2005     2006
    Historical EBITDA:
    Net cash provided by
     operating activities   $26,184   $17,804   $59,563   $47,071  $84,967
    Adjustments:
      Compensation from
       restricted share plan   (625)   (7,244)   (1,875)   (7,244)  (3,221)
      Other adjustments, net (1,651)   (2,999)   (1,550)   (3,633)  (9,105)
    Changes in operating
     assets and liabilities  (4,932)     (866)    8,526    12,293    6,453
    Interest expense, net    11,175    19,814    31,341    42,812   41,972
    Income taxes              3,913    (1,270)    3,752     3,701   10,986
    Historical EBITDA(1)     34,064    25,239    99,757    95,000  132,052

    Adjustments to EBITDA:
      Integration,
       restructuring and
       Sarbanes-Oxley(2)        394       831     3,083     5,406    5,077
      Professional service
       fees(3)                  -         367       -       2,867      -
      Other, net(4)          (1,528)   (1,443)   (4,262)   (2,256)  (5,042)
      Investment
       distributions(5)       1,263       819     3,667       819    4,438
      Pension curtailment
       gain(6)                  -         -         -      (7,880)     -
      Non-cash
       compensation(7)          625     7,244     1,875     7,244    3,221

    Adjusted EBITDA         $34,818   $33,057  $104,120  $101,200 $139,746


    Footnotes for Adjusted EBITDA:
    (1) Historical EBITDA is defined as net earnings (loss) before interest
        expense, income taxes, depreciation and amortization on a historical
        basis.
    (2) Represents certain expenses associated with integrating and
        restructuring the Texas and Illinois businesses and Sarbanes-Oxley
        start-up costs. For the third quarter 2006, this is comprised of $0.1M
        in Sarbanes-Oxley start-up costs and $0.3M in billing integration
        costs. For YET 2006, this is comprised of $1.6M in severance, $0.7M in
        Sarbanes-Oxley start-up costs and $0.8M in billing integration costs.
    (3) Represents the aggregate professional service fees paid to certain
        large equity investors prior to our initial public offering. Upon
        closing of the initial public offering, these agreements terminated.
    (4) Other, net includes the equity earnings from our investments, dividend
        income and certain other miscellaneous non-operating items Key man
        life insurance proceeds of $2.8 million received in June 2005 are not
        deducted to arrive at Adjusted EBITDA.
    (5) For purposes of calculating Adjusted EBITDA, we include all cash
        dividends and other cash distributions received from our investments.
    (6) Represents a one-time $7.9 million curtailment gain associated with
        the amendment of our Texas pension plan. The gain was recorded in
        general and administrative expenses. However, because the gain is non-
        cash and non-recurring, it is excluded from Adjusted EBITDA.
    (7) Represents compensation expenses in connection with our Restricted
        Share Plan, which because of the non-cash nature of the expenses are
        being excluded from Adjusted EBITDA.


                         Consolidated Communications
                            Adjusted EBITDA Margin
                            (Dollars in thousands)
                                 (Unaudited)

                               Three Months Ended     Three Months Ended
                                 September 30,          September 30,
                                 2006        Margin      2005       Margin
    Revenue                    $80,323                 $82,168
    Prior Period Subsidy
     Settlements                 1,213                  (1,462)
    Net Total                  $81,536                 $80,706

    Adjusted EBITDA            $34,818       43.3%     $33,057      40.2%

    Litigation Settlement          500                   2,700
    Prior Period Subsidy
     Settlements                 1,213                  (1,462)
    Net Total                  $36,531       44.8%     $34,295      42.5%

    Net Cash Provided by
     Operating Activities      $26,184                 $17,804



                           Consolidated Communications
                         Cash Available to Pay Dividends
                              (Dollars in thousands)
                                   (Unaudited)

                                      Three Months  Nine Months   Three Months
                                          Ended         Ended        Ended
                                      September 30, September 30, December 31,
                                          2006          2006         2005
    Adjusted EBITDA                     $34,818      $104,120      $35,626

     - Cash interest expense            (10,596)      (29,758)      (9,384)
     - Capital Expenditures              (7,816)      (25,037)      (9,498)
     + Proceeds from asset sales(1)         590         6,594          -
     - Cash income taxes                 (2,000)       (6,074)        (172)
     + Cash interest income                 174           650          174

    Cash available to pay dividends     $15,170       $50,495      $16,746

    Quarterly Dividend                  $11,506       $34,552      $11,537
    Payout Ratio                           75.9%         68.4%        68.9%
    Payout Ratio without Proceeds
     from Asset Sales                      78.9%         78.7%        68.9%


    (1) Represents $590 and $83 of proceeds from the sale of idle property
        during the three months ended September 30, 2006 and March 31, 2006,
        respectively; and $5,921 of proceeds from the redemption of class C
        shares of RTB stock in the three months ended June 30, 2006.



                           Consolidated Communications
                   Total Net Debt to LTM Adjusted EBITDA Ratio
                              (Dollars in thousands)
                                   (Unaudited)


    Summary of Outstanding Debt
    Senior Notes                                          $130,000
    Term loan D                                            464,000
    Total debt as of September 30, 2006                   $594,000
    Less cash on hand                                      (19,898)
    Total net debt as of September 30, 2006               $574,102

    Adjusted EBITDA for the last twelve months ended
     September 30, 2006                                   $139,746

    Total Net Debt to last twelve months
     Adjusted EBITDA                                           4.1



                           Consolidated Communications
                          Adjusted Net Income Per Share
                             (Dollars in thousands)
                                   (Unaudited)

                                         Three Months Ended  Nine Months Ended
                                            September 30,      September 30,
                                                2006               2006
    Reported net income applicable to
     common stockholders                       $2,015            $13,788
    Deferred tax adjustment                        14             (5,168)
    Returns to provision tax true-up              807                807
    Third Quarter 2006 Litigation Settlement,
     net of tax                                   300                300
    Severance, net of tax                          (4)               934
    Billing integration, net of tax               164                466
    Sarbanes Oxley start-up costs, net of tax      76                450
    Non-cash compensation                         625              1,875
    Adjusted income applicable to common
     stockholders                              $3,997            $13,452

    Weighted average number of shares
     outstanding                           27,157,631         28,900,902
    Adjusted net income per share               $0.15              $0.47

    Calculations above assume a 40 percent effective tax rate.



                       Consolidated Communications
                        Key Operating Statistics


                                      September    June    December  September
                                         30,        30,       31,        30,
                                        2006       2006      2005       2005
    Local access lines in service
       Residential                    157,609    159,295    162,231    164,042
       Business(1)                     78,374     79,609     79,793     80,860
       Total local access lines(1)    235,983    238,904    242,024    244,902
    DVS subscribers
       Illinois                         5,522      4,516      2,146      1,053
       Texas                              116        -          -          -
       Total DVS subscribers            5,638      4,516      2,146      1,053
    DSL subscribers                    49,360     45,948     39,192     36,051
    Total connections(1)              290,981    289,368    283,362    282,006

    Long distance lines               147,177    146,117    143,882    142,311
    Dial-up subscribers                11,740     13,731     15,971     16,708
    Service bundles                    42,100     40,901     36,627     35,163


    (1) Reflects cumulative line loss associated with MCIMetro's ISP
        regrooming of 4,708, 5,332 and 5,380, for quarters ended 9/30/05,
        12/31/05 and all quarters in 2006, respectively.


                           Consolidated Communications
                                 Access Line Loss

                                      September 30,
                                         2006
    Access Line Loss                     2,921
    Non-Recurring Adjustments(1)          (780)
    Net Total                            2,141


    (1) Related to company initiated review associated with completion of
        Phase II of billing integration.

SOURCE Consolidated Communications Holdings, Inc.
11/08/2006

CONTACT: Stephen Jones, Vice President - Investor Relations, of Consolidated Communications Holdings, Inc., +1-217-258-9522, investor.relations@consolidated.com; Investor Relations: Kirsten Chapman of Lippert/Heilshorn & Associates for Consolidated Communications Holdings, Inc., +1-415-433-3777, kchapman@lhai.com

0943 11/08/2006 07:00 EST http://www.prnewswire.com