Consolidated Communications Holdings
Mar 6, 2008

Consolidated Communications Holdings Reports Fourth Quarter and Full Year 2007 Results

MATTOON, Ill., March 6 /PRNewswire-FirstCall/ -- Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) today announced results for the fourth quarter and year ended December 31, 2007. These results reflect our Texas and Illinois operations, since the North Pittsburgh Systems, Inc. was completed on December 31. The company reported:

    -- Revenues of $85.0 million for the quarter and $329.2 million for the
       year.
    -- Adjusted EBITDA of $37.0 million for the quarter and $143.8 million for
       the year.
    -- Net cash provided by operations of $29.3 million for the quarter and
       $82.1 million for the year.
    -- Dividend payout ratio of 71.0 percent for the quarter and 75.9 percent
       for the year.

"We had a very successful quarter, and the business performed well from both an operational and financial perspective," said Bob Currey, Consolidated's president and chief executive officer. "Additionally, on December 31, 2007, we closed and funded the acquisition of North Pittsburgh Systems, Inc. The integration efforts are progressing rapidly, and we are excited with the opportunities that lie ahead in Pennsylvania."

"Operating metrics for Illinois and Texas continue to be solid, with total connections again increasing sequentially in the fourth quarter to over 302,000. Growth was led by our strategic broadband products, as DSL increased by over 4,000 net new subscribers in the quarter, bringing the total DSL subscriber count to over 66,000. With the addition of about 1,200 IPTV customers in the fourth quarter, the total IPTV subscriber base grew to over 12,000. In 2007, we grew DSL subscribers over 26.0 percent and IPTV subscribers by 76.0 percent. In summary, regarding our overall performance, the fourth quarter was our strongest quarter, in a very strong year," Currey concluded.

    Operating Statistics at December 31, 2007, Compared to December 31, 2006

    -- Total connections were 302,652, an increase of 9,277, or 3.2 percent.
    -- Total local access lines were 223,787, a decrease of 9,902, or 4.2
       percent.
    -- Broadband connections were 78,865, an increase of 19,179 or 32.1
       percent.
           -- DSL subscribers were 66,624, an increase of 13,892 or 26.3
              percent.
           -- IPTV subscribers were 12,241, an increase of 5,287, or 76.0
              percent.

Steve Childers, Consolidated's chief financial officer, stated, "In conjunction with our acquisition, we entered into a new $760.0 million term loan facility, and our new financing arrangements include an option for an additional $140.0 million delayed draw term loan facility. As announced on February 26, 2008, we will redeem our 9.75 % Senior Notes due April 1, 2012, on April 1, 2008. We intend to utilize cash off the balance sheet plus $120.0 million of proceeds from the delayed term loan to redeem the Senior Notes and project to save approximately $4.0 million in annualized cash interest costs as a result of this transaction."

Cash Available to Pay Dividends

For the quarter and full year 2007, cash available to pay dividends, or CAPD, was $14.2 million and $53.0 million, respectively, and the dividend payout ratios were 71.0 percent and 75.9 percent, respectively. At December 31, 2007, cash and cash equivalents were $37.3 million. The company made capital expenditures of $8.8 million during the fourth quarter and $33.5 million for the full year.

    Financial Highlights for the Fourth Quarter Ended December 31, 2007

    -- Revenues were $85.0 million, compared to $81.7 million in the fourth
       quarter of 2006.  Increases in Data and Internet revenue, Other
       Operations revenue, and Subsidies were partially offset by a decline in
       Local Calling Service revenues.  The growth in Data and Internet
       Services revenue was driven primarily by increased DSL and IPTV
       subscribers. The increase in Subsidies revenue was largely attributable
       to prior period settlements.
    -- Income from operations was $17.5 million, compared to $4.8 million in
       the fourth quarter of 2006.  The increase was primarily attributable to
       a fourth quarter 2006 impairment charge of $11.2 million for which
       there was not a comparable charge in 2007.
    -- Net interest expense was $22.1 million, compared to $11.6 million in
       the same quarter last year.  The increase was primarily driven by the
       write-off of deferred financing costs associated with the termination
       of the company's previous credit facility.
    -- Income tax benefit was $2.1 million, compared to $3.3 million in 2006.
       The decrease was primarily driven by changes in state deferred taxes
       associated with purchase accounting for the North Pittsburgh
       transaction.
    -- Net loss was $1.0 million, compared to $0.5 million in the fourth
       quarter of 2006.
    -- Net loss per common share was $0.04, compared to $0.02 per common share
       in the fourth quarter of 2006.  "Adjusted net income per share"
       excludes certain items in the manner described in the table provided in
       this release. On that basis, "adjusted net income per share" for the
       quarter ended December 31, 2007 was $0.20, compared to $0.21 in the
       fourth quarter of 2006.
    -- Adjusted EBITDA was $37.0 million and net cash from operations was
       $29.3 million, compared to $35.7 million and $25.0 million,
       respectively, in the fourth quarter of 2006.


    Financial Highlights for the Year Ended December 31, 2007

    -- Revenues were $329.2 million, compared to $320.8 million for the prior
       year. This reflects increases in Data and Internet Services, Other
       Operations and Network Access Services, partially offset by declines in
       Subsidies and Local Calling Services.
    -- Net income was $11.4 million, compared to $13.3 million in net income
       for the prior year period.  The year-over-year decrease was primarily
       due to the impact of the Texas tax law changes and increased interest
       expense driven by the write-off of deferred financing costs and
       additional borrowings associated with the July 2006 share repurchase,
       partially offset by greater income from operations.
    -- Net income per common share was $0.44.  "Adjusted net income per share"
       excludes certain items in the manner described in the table provided in
       this release. On that basis, "adjusted net income per share" for the
       twelve months ended December 31, 2007 was $0.74, compared to $0.67 in
       the same period last year.
    -- Adjusted EBITDA was $143.8 million and net cash provided by operating
       activities was $82.1 million, compared to $139.8 million and $84.6
       million, respectively for 2006.  The increase in adjusted EBITDA was
       primarily due to revenue growth, operating efficiency improvements and
       increased cash distributions from cellular partnership investments.


    Pennsylvania Update

    -- On December 31, 2007, the company completed its previously announced
       acquisition of North Pittsburgh Systems, Inc. for approximately $362.6
       million in cash and stock, based upon the closing price of
       Consolidated's common stock on December 28, 2007.
    -- Operating revenue for the fourth quarter and full year 2007 for North
       Pittsburgh Systems, Inc. and its subsidiaries was $23.3 million and
       $95.7 million, respectively.  Adjusted EBITDA for the fourth quarter
       and full year 2007 for North Pittsburgh Systems, Inc. and its
       subsidiaries was $11.3 million and $43.2 million, respectively.  These
       results reflect pre-acquisition operations, and are not necessarily
       indicative of what the business will achieve as part of Consolidated.
    -- On December 31, 2007, ILEC access lines, CLEC access line equivalents
       and total ILEC and CLEC DSL subscribers were 58,241, 68,874 and 16,897,
       respectively.
    -- Under our new credit facility, the total net debt to last twelve month
       adjusted EBITDA coverage ratio reflects adjusted EBITDA that includes
       North Pittsburgh's results for the fourth quarter and an agreed upon,
       combined adjusted EBITDA for the first three quarters of 2007 of $138.7
       million.  On this basis, the coverage ratio was 4.6 times to one and
       all other ratios were within the compliance levels of the new facility.

    Financial Guidance

For 2008, the company provides the following full year guidance, including the Pennsylvania operations: Capital expenditures are expected to be in the range of $46.5 million to $49.5 million, including $2.0 million associated with integration related capital expenditures; cash interest expense is expected to be in the range of $64.0 million to $67.0 million; and cash income taxes are expected to be in the range of $15.0 million to $18.0 million.

Dividend Payments

On March 4, 2008, the company's board of directors declared its next quarterly dividend of $0.38738 per common share, which is payable on May 1, 2008 to stockholders of record at the close of business on April 15, 2008. The board of directors has indicated its intention for 2008 to continue paying the quarterly dividend at the current level.

For 2007, approximately 19.0 percent of the company's distributions were classified as non-dividend distribution, or return of capital, with the remainder being classified as ordinary dividends.

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 March 10, 2008 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 33852828.

Use of Non-GAAP Financial Measures

This press release, as well as the conference call, includes disclosures regarding "adjusted EBITDA", "cash available to pay dividends", "cumulative available cash", "payout ratio excluding subsidy settlements", "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 is comprised of historical EBITDA, as adjusted for certain items permitted or required by the lenders under the credit facility in place at the end of each quarter in the periods presented. The tables that follow include an explanation of how adjusted EBITDA is calculated for each of the periods presented.

EBITDA is defined as net earnings (loss) before interest expense, 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, (2) capital expenditures, (3) cash taxes and (4) stock repurchases.

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. Other information related to these three non-GAAP financial measures, specifically "total net debt to last twelve month Adjusted EBITDA coverage ratio", help put these three measures in context. As a result, management believes the presentation of Adjusted EBITDA and cash available to pay dividends, as supplemented by these other items, provides 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 the Dividend Payout Ratio 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 both our company over time and the relative performance of the companies in our industry.

About Consolidated

Consolidated Communications Holdings, Inc. is an established rural local exchange company providing voice, data and video services to residential and business customers in Illinois, Texas and Pennsylvania. Each of the operating companies has been operating in its local market for over 100 years. With approximately 282,028 ILEC access lines, 68,874 Competitive Local Exchange Carrier (CLEC) access line equivalents (including 41,951 access lines and 2,184 DSL subscribers), 83,521 DSL subscribers across all subsidiaries, and 12,241 IPTV subscribers, Consolidated Communications offers a wide range of telecommunications services, including local and long distance service, custom calling features, private line services, high-speed Internet access, digital TV, carrier access services, and directory publishing. Consolidated Communications is the 12th largest local telephone company in the United States.

Safe Harbor

Any statements contained in this press release other than statements of historical fact, including statements about management's beliefs and expectations, are forward-looking statements and should be evaluated as such. These statements are made on the basis of management's views and assumptions regarding future events and business performance. Words such as "estimate," "believe," "anticipate," "expect," "intend," "plan," "target," "project," "should," "may," "will" and similar expressions are intended to identify forward-looking statements. Forward-looking statements (including oral representations) involve risks and uncertainties that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. These risks and uncertainties include our ability to successfully integrate North Pittsburgh's operations and realize the synergies from the acquisition, as well as a number of other factors related to our business, including various risks to shareholders of not receiving dividends and risks to Consolidated's ability to pursue growth opportunities if Consolidated continues to pay dividends according to the current dividend policy; various risks to the price and volatility of Consolidated's common stock; the substantial amount of debt and Consolidated's ability to incur additional debt in the future; Consolidated'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 Consolidated's possible pursuit of acquisitions; economic conditions in the Consolidated service areas in Illinois, Texas and Pennsylvania; 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 Consolidated's network; high costs of regulatory compliance; the competitive impact of legislation and regulatory changes in the telecommunications industry; and liability and compliance costs regarding environmental regulations. These and other risks and uncertainties are discussed in more detail in Consolidated's filings with the Securities and Exchange Commission, including our reports on Form 10-K and Form 10-Q. Many of these risks are beyond management's ability to control or predict. All forward-looking statements attributable to Consolidated or persons acting on behalf of us are expressly qualified in their entirety by the cautionary statements and risk factors contained in this press release and Consolidated'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, Consolidated does not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.

                              - Tables Follow -



                         Consolidated Communications
                    Condensed Consolidated Balance Sheets
                            (Dollars in thousands)
                                 (Unaudited)

                                                 December 31,     December 31,
                                                     2007              2006
     ASSETS
     Current assets:
       Cash and cash equivalents                    $37,297          $26,672
       Accounts receivable, net                      44,001           34,396
       Prepaid expenses and other current assets     16,834           13,149
     Total current assets                            98,132           74,217

     Property, plant and equipment, net             411,647          314,381
     Intangibles and other assets                   789,054          500,981
     Total assets                                $1,298,833         $889,579

     LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
       Current portion of capital lease obligation   $1,010             $-
       Accounts payable                              17,386           11,004
       Accrued expenses and other current
        liabilities                                  58,991           54,742
     Total current liabilities                       77,387           65,746

     Capital lease obligation less current portion    1,636              -
     Long-term debt                                 890,000          594,000
     Other long-term liabilities                    170,122          111,180
     Total liabilities                            1,139,145          770,926

     Minority interests                               4,322            3,695
     Stockholders' equity:
       Common stock, $0.01 par value                    294              260
       Paid in capital                              278,175          199,858
       Accumulated deficit                         (117,452)         (87,362)
       Accumulated other comprehensive
        income (loss)                                (5,651)           2,202
    Total stockholders' equity                      155,366          114,958
    Total liabilities and stockholders'
     equity                                      $1,298,833         $889,579



                         Consolidated Communications
               Condensed Consolidated Statements of Operations
               (Dollars in thousands, except per share amounts)
                                 (Unaudited)

                                       Three Months Ended  Twelve Months Ended
                                           December 31,       December 31,
                                          2007     2006      2007      2006
     Revenues                            $85,004  $81,678  $329,248  $320,767
     Operating expenses:
       Cost of services and products      28,175   25,329   107,290    98,093
       Selling, general and
        administrative expenses           23,267   23,746    89,662    94,693
       Intangible assets impairment          -     11,240       -      11,240
       Depreciation and amortization      16,074   16,554    65,659    67,430
     Income from operations               17,488    4,809    66,637    49,311
     Other income (expense):
       Interest expense, net             (22,054) (11,558)  (56,780)  (42,899)
       Other income, net                   1,454    2,881     6,240     7,260
     Income before income taxes           (3,112)  (3,868)   16,097    13,672
     Income tax (benefit) expense         (2,082)  (3,347)    4,674       405

     Net (loss) income                    (1,030)    (521)   11,423    13,267

     Net (loss) income per common share   $(0.04)  $(0.02)    $0.44     $0.48



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

                                    Three Months Ended        Year Ended
                                        December 31,          December 31,
                                      2007       2006       2007       2006
    OPERATING ACTIVITIES
    Net Income (loss)               $(1,030)     $(521)    $11,423   $13,267
    Adjustments to reconcile
     net income to cash provided
     by operating activities:
      Depreciation and amortization  16,074     16,554      65,659    67,430
      Non-cash stock compensation     1,092        607       4,034     2,482
      Other adjustments, net          3,320      6,533       3,781     8,083
    Changes in operating assets
     and liabilities, net             9,834      1,857      (2,828)   (6,669)
        Net cash provided by
         operating activities        29,290     25,030      82,069    84,593
    INVESTING ACTIVITIES
      Securities purchased              -          -       (10,625)      -
      Proceeds from sale of
       investments and securities       -          225      10,625     6,736
      Acquisitions, net of cash
       acquired                    (268,824)       -      (268,824)      -
      Capital expenditures           (8,847)    (8,351)    (33,495)  (33,388)
        Net cash used for
         investing activities      (277,671)    (8,126)   (302,319)  (26,652)
    FINANCING ACTIVITIES
      Proceeds from issuance
       of stock                         -          -            12       -
      Proceeds from issuance
       of long-term obligations     760,000        -       760,000    39,000
      Payments made on long-term
       obligations                 (479,426)       -      (479,426)      -
      Costs paid to issued
       common stock                    (400)       -          (400)      -
      Payment of deferred
       financing costs               (8,668)       -        (8,988)     (262)
      Purchase of treasury shares      (131)       (87)       (131)  (56,823)
      Dividends on common stock     (10,052)   (10,043)    (40,192)  (44,593)
        Net cash provided (used)
         in financing activities    261,323    (10,130)    230,875   (62,678)
    Net increase (decrease) in cash
     and cash equivalents            12,942      6,774      10,625    (4,737)
    Cash and cash equivalents
     at beginning of period          24,355     19,898      26,672    31,409
    Cash and cash equivalents
     at end of period               $37,297    $26,672     $37,297   $26,672



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

                                        Three months ended Twelve Months Ended
                                           December 31,       December 31,
                                          2007     2006      2007      2006
    Telephone Operations
      Local calling services             $20,041  $20,947   $82,830   $85,131
      Network access services             17,276   16,859    70,169    68,135
      Subsidies                           13,229   12,623    45,981    47,588
      Long distance services               3,174    3,551    13,963    15,178
      Data and Internet services          10,386    8,385    38,017    30,917
      Other services                       9,099    8,808    35,814    33,385
    Total Telephone Operations            73,205   71,173   286,774   280,334
    Other Operations                      11,799   10,505    42,474    40,433
    Total operating revenues             $85,004  $81,678  $329,248  $320,767



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

                                       Three Months Ended  Twelve Months Ended
                                           December 31,       December 31,
                                          2007     2006      2007      2006

    Ending Access Lines                  223,787  233,689   223,787   233,689
    Average Access Lines                 225,482  234,783   228,714   238,399


    Telephone Operations Revenue         $73,205  $71,173  $286,774  $280,334
    Prior period subsidy settlements        $842     $481   $(1,887)  $(1,313)
    Telephone Operations, excluding
     prior period subsidy settlements    $72,363  $70,692  $288,661  $281,647

    Monthly Telephone Operations ARPU    $108.22  $101.05   $104.49    $97.99
    Monthly Telephone Operations ARPU,
     excluding prior period subsidy
     settlements                         $106.98  $100.37   $105.18    $98.45



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

                                        Three Months Ended     Year Ended
                                           December 31,       December 31,
                                          2007     2006      2007      2006
    Historical EBITDA:
    Net cash provided by operating
     activities                          $29,290  $25,030   $82,069   $84,593
    Adjustments:
      Compensation from restricted share
       plan                               (1,092)    (607)   (4,034)   (2,482)
      Other adjustments, net              (3,320)  (6,533)   (3,781)   (8,083)
    Changes in operating assets and
     liabilities                          (9,834)  (1,857)    2,828     6,669
    Interest expense, net                 22,054   11,558    56,780    42,899
    Income taxes                          (2,082)  (3,347)    4,674       405
    Historical EBITDA (1)                 35,016   24,244   138,536   124,001

    Adjustments to EBITDA (2):
      Integration, restructuring and
       Sarbanes-Oxley (3)                    533      601     1,187     3,684
      Other, net (4)                      (1,540)  (2,881)   (6,567)   (7,143)
      Investment distributions (5)         1,935    1,849     6,586     5,516
      Intangible assets impairment (6)       -     11,240       -      11,240
      Non-cash compensation (7)            1,092      607     4,034     2,482

    Adjusted EBITDA                      $37,036  $35,660  $143,776  $139,780

    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)  These adjustments reflect those required or permitted by the lenders
    under the credit facility in place at the end of each of the quarters
    included in the periods presented.
    (3)  Represents certain expenses associated with integrating and
    restructuring the Texas and Illinois businesses and Sarbanes-Oxley
    start-up costs. For the three months and year ended December 31, 2007,
    this is comprised of $0.0 M and $0.5 M, respectively in billing
    integration costs and $0.5 M and $0.7 M, respectively in severance costs.
    For the three months and year December 31, 2006, this is comprised of
    $0.1 M and $0.9 M, respectively, of billing integration costs, $0.5 M and
    $2.0 M, respectively, in severance costs and $0.0 M and $0.8 M,
    respectively in Sarbanes-Oxley start-up costs.
    (4)  Other, net includes the equity earnings from our investments,
    dividend income and certain other miscellaneous non-operating items. Life
    insurance proceeds of $0.3 M received in the second quarter of 2007
    are not deducted in arriving at Adjusted EBITDA.
    (5)  For purposes of calculating Adjusted EBITDA, we include all cash
    dividends and other cash distributions received from our investments.
    (6) Upon completion of our annual impairment review and as a result of a
    decline in estimated future cash flows in the telemarketing and operator
    services business, we determined that the value of the customer lists
    associated with these businesses was impaired.
    (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
                       Cash Available to Pay Dividends
                            (Dollars in thousands)
                                 (Unaudited)

                                         Three Months Ended     Year Ended
                                          December 31, 2007  December 31, 2007
    Adjusted EBITDA                           $37,036           $143,776

    - Cash interest expense                   (11,224)           (44,222)
    - Capital Expenditures                     (8,847)           (33,495)
    - Cash income taxes                        (3,016)           (13,976)
    + Cash interest income                        199                893

    Cash available to pay dividends           $14,148            $52,976

    Quarterly Dividend                        $10,052            $40,192
    Payout Ratio                                 71.0%              75.9%



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

                                   Three Months Ended     Twelve Months Ended
                                  December     December   December    December
                                     31,          31,        31,         31,
                                    2007         2006       2007        2006
    Reported net income
     applicable to common
     stockholders                 $(1,030)      $(521)    $11,423     $13,267
    Deferred tax adjustment          (862)       (811)     (2,593)     (5,979)
    Returns to provision tax
     true-up                          -          (408)        -           399
    Third quarter 2006
     litigation settlement,
     net of tax                       -            -          -           280
    Impairment, net of tax            -         6,294         -         6,294
    Deferred financing cost
     write-off, net of tax          5,781          -        5,781          -
    Severance, net of tax             298         243         385       1,115
    Billing integration, net
     of tax                           -            94         280         528
    Sarbanes-Oxley start-up
     costs, net of tax                -            -          -           420
    Non-cash compensation           1,092         607       4,034       2,482
    Adjusted income applicable
     to common stockholders        $5,279      $5,498     $19,310     $18,806

    Weighted average number of
     shares outstanding        26,183,209  26,003,117  26,122,484  28,170,501
    Adjusted net income per
     share                          $0.20       $0.21       $0.74       $0.67

    Calculations above assume a 44.0 percent and 40.0 percent effective tax
    rate for the three months ended December 31, 2007 and 2006, respectively,
    and 44.0 percent and 44.0 percent effective rate for the twelve months
    ended December 31, 2007 and 2006, respectively, instead of the actual
    effective tax rate for each period.



                         Consolidated Communications
                           Key Operating Statistics

                                       December 31, September 30, December 31,
                                           2007          2007        2006
    Local access lines in service
        Residential                      146,659       149,735     155,354
        Business                          77,128        77,451      78,335
        Total local access lines         223,787       227,186     233,689

    Total IPTV subscribers                12,241        11,063       6,954

    DSL subscribers                       66,624        62,546      52,732
    Broadband Connections                 78,865        73,609      59,686

    Total connections                    302,652       300,795     293,375

    Long distance lines (1)              150,754       151,320     148,181
    Dial-up subscribers                    6,734         8,858      11,942
    VoIP subscribers                       2,378         2,172

    IPTV Homes passed                    107,631       107,631      89,972

    (1) Reflects the inclusion of long distance service provided as part of
        the VoIP offering



                        North Pittsburgh Systems, Inc.
               Condensed Consolidated Statements of Operations
               (Dollars in thousands, except per share amounts)
                                 (Unaudited)

                                                 Three Months         Year
                                                    Ended             Ended
                                                 December 31,     December 31,
                                                     2007              2007
     Revenues                                      $23,283           $95,669
     Operating expenses:
       Network and other operating expenses         22,750            66,232
       Operating taxes                                 716             3,158
       Strategic alternative expenses                3,525             5,714
       Curtailment and special termination
        benefit expenses                             3,318             9,786
       Depreciation and amortization                 3,543            14,214
     Income from operations                        (10,569)           (3,435)
     Other income (expense):
       Interest income, net                            243             1,146
       Other income, net                             2,684             9,973
     Income before income taxes                     (7,642)            7,684
     Income tax (benefit) expense                     (749)            5,352

     Net (loss) income                              (6,893)            2,332



                        North Pittsburgh Systems, Inc.
               Condensed Consolidated Statements of Cash Flows
                            (Dollars in thousands)
                                 (Unaudited)

                                                 Three Months         Year
                                                    Ended             Ended
                                                 December 31,     December 31,
                                                     2007              2007
    OPERATING ACTIVITIES
    Net Income                                    $(6,893)           $2,332
    Adjustments to reconcile net income
     to cash provided by operating activities:
      Depreciation and amortization                 3,543            14,214
      Curtailment and special
       termination benefits                         3,318             9,786
      Equity income of affiliated
       companies                                   (2,589)           (9,944)
      Other adjustments, net                          (89)              (89)
    Changes in operating assets and
     liabilities, net                                 752            (6,528)
        Net cash provided by operating
         activities                                (1,958)            9,771
    INVESTING ACTIVITIES
      Distributions from affiliated
       companies                                    3,533             8,972
      Capital expenditures                         (8,684)          (16,716)
      Proceeds from sale of marketable
       securities                                     511               511
        Net cash (used in) investing
         activities                                (4,640)           (7,233)
    FINANCING ACTIVITIES
      Retirement of debt                             (771)           (3,085)
      Payment of capital lease obligation            (401)           (1,109)
      Dividends on common stock                    (3,001)          (12,004)
        Net cash used in financing
         activities                                (4,173)          (16,198)
    Net increase (decrease) in cash and
     cash equivalents                             (10,771)          (13,660)
    Cash and cash equivalents at
     beginning of period                           46,629            49,518
    Cash and cash equivalents at end of
     period                                       $35,858           $35,858



                        North Pittsburgh Systems, Inc.
                   Schedule of Adjusted EBITDA Calculation
                            (Dollars in thousands)
                                 (Unaudited)

                                                  Three Months        Year
                                                      Ended           Ended
                                                  December 31,    December 31,
                                                      2007            2007
    Historical EBITDA:
    Net cash provided by operating
     activities                                    $(1,958)           $9,771
    Adjustments:
      Curtailment and special termination
       benefits                                      3,318)           (9,786)
      Equity income of affiliated companies          2,589             9,944
      Other adjustments, net                            89                89
      Changes in operating assets and
       liabilities, net                               (752)            6,528
    Interest expense, net                             (243)           (1,146)
    Income taxes                                      (749)            5,352
    Historical EBITDA (1)                           (4,342)           20,752

    Adjustments to EBITDA (2):
      Merger costs (3)                               3,627             5,817
      Curtailment expense (4)                        3,318             9,786
      Other, net (5)                                (2,354)           (9,644)
      Investment distributions (6)                   3,533             8,972
      Change of control, retention,
       severance and other merger
       related payments (7)                          7,482             7,482

    Adjusted EBITDA                                $11,264           $43,165

    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) These adjustments reflect those that are required or permitted by the
    lenders under new credit facility entered into on December 31, 2007.
    (3) Represents investment banking, legal, proxy preparation, special
    board meetings and other fees incurred in consummating the merger with
    Consolidated Communications Holdings, Inc.
    (4) In the first quarter, 45 employees accepted and early retirement
    package resulting in a non-cash charge of $6.5 million for the income
    restoration plan.  In the fourth quarter the income restoration plan was
    curtailed resulting in an additional non-cash charge of $3.3 million.
    (5) Other, net includes the equity earnings from affiliate investments,
    equipment write-downs and certain other miscellaneous non-operating items.
    (6) For purposes of calculating Adjusted EBITDA, we include all cash
    dividends and other cash distributions received from our investments.
    (7) Includes $6.8 million of change in control payments made to key
    executives, $0.3 million of severance payments made at closing, $0.3
    million of retention bonuses and $0.1 million of other transaction
    bonuses.



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

    Summary of Outstanding Debt
    Senior Notes                                                   $130,000
    Term loan                                                       760,000
    Capital Leases                                                    2,646
    Total debt as of December 31, 2007                             $892,646
    Less cash on hand                                               (37,297)
    Total net debt as of December 31, 2007                         $855,349

    Adjusted EBITDA for the last twelve
     months ended December 31, 2007 (1)                            $187,000

    Total Net Debt to last twelve months
     Adjusted EBITDA                                                  4.6 x

    (1)  Per the new credit facility adjusted EBITDA has been agreed upon for
    the first three quarters of 2007 at $138,700 and reflects a combined pro
    forma number for the fourth quarter 2007.  Adjusted EBITDA for the fourth
    quarter 2007 is the sum of  $11,264 for the Pennsylvania operations and
    $37,036 for the Illinois and Texas operations.

SOURCE
Consolidated Communications Holdings, Inc.

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