Consolidated Communications Holdings
Feb 27, 2014

Consolidated Communications Reports Fourth Quarter 2013 Results

MATTOON, Ill., Feb. 27, 2014 (GLOBE NEWSWIRE) -- Consolidated Communications Holdings, Inc. (Nasdaq:CNSL) reported results for the fourth quarter and full year 2013.

Fourth quarter financial summary, including the impact of a net $2.2 million unfavorable subsidy adjustment as described below:

"The fourth quarter capped off another strong year for the Company," said Bob Currey, Chairman and Chief Executive Officer. "We delivered a comfortable payout ratio and increased our broadband subscribers by 3,454 for the quarter and 12,082 for the year. Growth in Metro Ethernet and wireless backhaul continues to be solid. We installed fiber to 96 new wireless tower sites bringing the total for the year to 210."

"We generated solid financial results, which included a record distribution from our wireless partnerships totaling $10.5 million and the achievement of another $0.8 million in annualized synergies from the SureWest acquisition. Our integration continues to go well and we are on schedule to complete the final phase of billing in the third quarter of 2014," Currey concluded.

During the quarter, the Company recognized a net $2.2 million unfavorable subsidy adjustment to both revenue and adjusted EBITDA primarily related to the universal service fund for the California market. A new annual certification for high cost support that should have been filed by SureWest in 2012 did not get completed until early 2013. The FCC took the unprecedented action to not provide any of the funding versus simply issuing a late filing fee. The Company has appealed the decision and remains optimistic the decision will be reversed in 2014.

Operating Statistics at December 31, 2013, Compared to December 31, 2012.

  Period Ended December 31,    
  2013 2012 Increase/(decrease) %
         
Data connections 255,239 247,633  7,606 3.1%
Video connections 110,613 106,137  4,476 4.2%
ILEC access lines 256,805 268,597 (11,792) (4.4%)
Voice connections (non-ILEC) 123,433 129,729  (6,296) (4.9%)
Total connections 746,090 752,096 (6,006) (0.8%)

"On December 23, 2013, we closed a successful refinancing of our $910.0 million of term debt," said Steve Childers, Chief Financial Officer. "The terms of the deal resulted in approximately $5 million in annual interest savings, extended our maturities out to December of 2020 and increased our revolver capacity to $75.0 million from $50.0 million."

Cash Available to Pay Dividends

For the quarter, cash available to pay dividends, or CAPD, was $24.1 million, and the dividend payout ratio was 64.4%. At December 31, 2013, cash and cash equivalents were $5.6 million. The Company made capital expenditures of $26.8 million during the quarter.  

Financial Highlights for the Fourth Quarter Ended December 31, 2013 

Financial Highlights for the Twelve Months Ended December 31, 2013

Financial Guidance

The Company is providing the following full year guidance:

 2014 Guidance  2013 Results 
   
Cash Interest Expense $75.0 million to $78.0 million  $81.9 million 
Cash Income Taxes $10.0 million to $15.0 million  $1.0 million
Capital Expenditures $97.0 million to $103.0 million $107.4 million

Dividend Payments

On February 21, 2014, the Company's board of directors declared its next quarterly dividend of $0.38738 per common share, which is payable on May 1, 2014 to stockholders of record at the close of business on April 15, 2014. This will represent the 35th consecutive quarterly dividend paid by the Company. 

Conference Call Information 

The Company will host a conference call today at 11:00 a.m. Eastern Time / 10:00 a.m. Central Time to discuss fourth quarter and full year earnings and developments with respect to the Company. The call is being webcast and archived on the "Investor Relations" section of the Company's website at http://www.consolidated.com. If you do not have internet access, the conference call dial-in number is 1-877-374-3981 with pass code 42290476. International parties can access the call by dialing 1-253-237-1158. A telephonic replay of the conference call will also be available starting three hours after completion of the call until March 6, 2014 at midnight Eastern Time. To hear the replay, parties in the United States and Canada should call 1-855-859-2056 and international parties should call 1-404-537-3406. 

Use of Non-GAAP Financial Measures

This press release, as well as the conference call, includes disclosures regarding "EBITDA", "adjusted EBITDA", "cash available to pay dividends" and the related "dividend payout ratio", "total net debt to last twelve month adjusted EBITDA coverage ratio", "adjusted diluted net income per share" and "adjusted net income attributable to common stockholders", all of which are non-GAAP financial measures and described in this section as not being in compliance with Regulation S-X. Accordingly, they should not be construed as alternatives to net cash from operating or investing activities, cash and cash equivalents, cash flows from operations, net income or net income per share 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 the 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 EBITDA, adjusted for certain items as 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 with the reconciliation to net income. EBITDA is defined as net earnings before interest expense, income taxes, depreciation and amortization on a historical basis.   

Cash available to pay dividends represents adjusted EBITDA plus cash interest income less (1) cash interest expense, (2) capital expenditures and (3) cash income taxes; this calculation differs in certain respects from the similar calculation used in the credit agreement. 

We present adjusted EBITDA, cash available to pay dividends and the related dividend payout ratio for several reasons. Management believes adjusted EBITDA, cash available to pay dividends and the dividend payout ratio 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, cash available to pay dividends and the dividend payout ratio 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, are also components of the restrictive covenants and financial ratios contained in the credit agreement that requires 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 and cash available to pay dividends after giving effect to specified charges. In addition, adjusted EBITDA, cash available to pay dividends and the dividend payout ratio 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 credit agreement and to measure our ability to service and repay debt.  We present the related "total net debt to last twelve month adjusted EBITDA coverage ratio" principally to put other non-GAAP measures in context and facilitate comparisons by investors, security analysts and others; this ratio differs in certain respects from the similar ratio used in our credit agreement. These measures differ in material respects from the ratios used in our Senior Notes indenture. 

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. 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. 

We present the non-GAAP measures adjusted diluted net income per share and adjusted diluted net income attributable to common stockholders because our net income and net income per share are regularly affected by items that occur at irregular intervals or are non-cash items. We believe that disclosing these measures assists investors, securities analysts and other interested parties in evaluating both our company over time and the relative performance of the companies in our industry.

Certain prior year GAAP amounts have been modified to give effect to pro forma events that are directly attributable to the acquisition of SureWest Communications (the "Acquisition") and factually supportable and are expected to have a continuing impact. The unaudited Pro forma financial information, which has been prepared for the periods presented, gives effect to the Acquisition as if it had occurred on January 1, 2012. 

We have also presented various Adjusted Pro Forma financial information as if the acquisition had occurred as of January 1, 2012 in order to provide a better view of the combined Company's period over period performance. In calculating the unaudited Adjusted Pro Forma financial information, we did not adjust certain items to give effect to the Acquisition as if it had occurred on January 1, 2012, as required by Rule 3-05 of Regulation S-X.

About Consolidated

Consolidated Communications Holdings, Inc. is a leading communications provider within its six state operations of California, Illinois, Kansas, Missouri, Pennsylvania and Texas. Headquartered in Mattoon, IL, the Company has been providing services in many of its markets for over a century. With one of the highest quality networks in the industry, the Company offers a wide range of communications services, including IP-based digital and high definition television, high speed internet, Voice over IP, carrier access, directory publishing and local and long distance service.

Safe Harbor 

Any statements other than statements of historical facts, 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 the ability of Consolidated Communications Holdings, Inc. (the "Company") to successfully integrate the operations of  SureWest Communications ("SureWest") and realize the synergies from the acquisition, as well as a number of other factors related to the businesses of the Company, including 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 Company's common stock; the substantial amount of debt and the Company's ability to repay or refinance it or 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 Company's common stock; changes in the valuation of pension plan assets; restrictions contained in the Company's debt agreements that limit the discretion of management in operating the business; regulatory changes, including changes to subsidies, rapid development and introduction of new technologies and intense competition in the telecommunications industry; changes in content costs, which have been substantial and continue to increase; risks associated with the Company's possible pursuit of acquisitions; economic conditions in the Company's service areas; 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 on the telecommunications industry; and liability and compliance costs regarding environmental regulations. These and other risks and uncertainties are discussed in more detail in the Company'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 the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements and risk factors contained in this communication 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, we do 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 Holdings, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands, except par value)
(Unaudited)
  December 31,  December 31, 
  2013  2012 
ASSETS     
Current assets:     
Cash and cash equivalents   $ 5,551  $ 17,854
Accounts receivable, net   52,033  57,957
Income tax receivable   9,796  12,020
Deferred income taxes   7,960  9,000
Prepaid expenses and other current assets   12,380  11,269
Assets of discontinued operations   --   1,189
Total current assets   87,720  109,289
Property, plant and equipment, net   885,362  907,672
Investments   113,099  109,750
Goodwill   603,446  603,446
Other intangible assets   40,084  49,530
Deferred debt issuance costs, net and other assets   17,667  13,800
Total assets   $ 1,747,378  $ 1,793,487
     
LIABILITIES AND STOCKHOLDERS' EQUITY     
Current liabilities:     
Accounts payable   $ 4,885  $ 14,954
Advance billings and customer deposits   25,934  27,654
Dividends payable   15,520  15,463
Accrued compensation   22,252  21,912
Accrued expense   38,697  47,225
Current portion of long-term debt and capital lease obligations   9,751  9,596
Current portion of derivative liability   660  3,164
Liabilities of discontinued operations   --   4,209
Total current liabilities   117,699  144,177
Long-term debt and capital lease obligations   1,212,134  1,208,248
Deferred income taxes   179,859  137,501
Pension and other post-retirement obligations   75,754  156,710
Other long-term liabilities   9,593  10,746
Total liabilities   1,595,039  1,657,382
     
Shareholders' equity:     
Common stock, par value $0.01 per share; 100,000,000
shares authorized, 40,065,246 and 39,877,998,
shares outstanding as of December 31, 2013 and
2012, respectively 
 401  399
Additional paid in capital   148,433  177,315
Accumulated other comprehensive loss, net   (1,000)  (45,784)
Noncontrolling interest  4,505  4,175
Total shareholders' equity  152,339  136,105
Total liabilities and shareholders' equity  $ 1,747,378  $ 1,793,487
 
 
Consolidated Communications Holdings, Inc.
Condensed Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
     
  Three Months Ended  Twelve Months Ended 
  December 31,  December 31, 
  2013  2012  2013  2012 
     
 Net revenues   $ 147,956  $ 153,844  $ 601,577  $ 477,877
 Operating expenses:         
 Cost of services and products   55,678  57,414  222,452  175,929
 Selling, general and administrative expenses   35,029  35,626  135,414  108,163
 Financing and other transaction costs   64  891  776  20,800
 Impairment of intangible assets   --   1,236  --   1,236
 Depreciation and amortization   34,968  38,510  139,274  120,332
 Income from operations   22,217  20,167  103,661  51,417
 Other income (expense):         
 Interest expense, net of interest income   (19,838)  (20,487)  (85,767)  (72,604)
 Loss on extinguishment of debt   (7,657)  (4,455)  (7,657)  (4,455)
 Other income, net   10,787  9,380  37,239  31,268
 Income from continuing operations before income taxes   5,509  4,605  47,476  5,626
 Income tax expense   2,293  1,827  17,512  661
 Income from continuing operations   3,216  2,778  29,964  4,965
 Discontinued operations, net of tax:         
 Income (loss) from discontinued operations, net of tax   --   (553)  (156)  1,206
 Gain on sale of discontinued operations, net of tax   --   --   1,333  -- 
   --   (553)  1,177  1,206
         
 Net income   3,216  2,225  31,141  6,171
 Less: net income attributable to noncontrolling interest   76  165  330  531
         
 Net income attributable to common shareholders   $ 3,140  $ 2,060  $ 30,811  $ 5,640
         
Net income per common share - basic and diluted         
Income from continuing operations  $ 0.08  $ 0.07  $ 0.73  $ 0.12
Discontinued operations, net of tax  --   (0.02)  0.03  0.03
Net income per basic and diluted common share attributable to common shareholders  $ 0.08  $ 0.05  $ 0.76  $ 0.15
 
 
Consolidated Communications Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited) 
        
  Three Months Ended  Twelve Months Ended 
  December 31,  December 31, 
  2013  2012  2013  2012 
OPERATING ACTIVITIES    
Net income   $ 3,216  $ 2,225  $ 31,141  $ 6,171
Income from discontinued operations, net of tax  --  553  (1,177)  (1,206)
Net income from continuing operations  3,216  2,778  29,964  4,965
Adjustments to reconcile net income to cash provided by operating activities:        
Depreciation and amortization  34,968  38,510  139,274  120,332
Intangible asset impairment  --   1,236  --   1,236
Deferred income taxes  15,791  1,414  16,045  (757)
Cash distributions from wireless partnerships in excess of/(less than) earnings  47  365  (2,949)  (1,309)
Non- cash stock-based compensation  794  664  3,028  2,348
Amortization of deferred financing  506  488  2,209  6,360
Loss on extinguishment of debt  7,657  4,455  7,657  4,455
Other adjustments, net  179  (548)  1,788  (332)
Changes in operating assets and liabilities, net  (19,264)  (330)  (28,486)  (17,566)
Net cash provided by continuing operations  43,894  49,032  168,530  119,732
Net cash provided by (used in) discontinued operations  (179)  2,283  (4,174)  3,483
Net cash provided by operating activities  43,715  51,315  164,356  123,215
INVESTING ACTIVITIES        
Business acquisition, net of cash acquired  --   (8,325)  --   (385,346)
Purchase of property, plant and equipment, net  (26,779)  (26,675)  (107,363)  (76,998)
Purchase of investments  (165)  (6,728)  (403)  (6,728)
Proceeds from sale of assets  219  509  330  924
Other  --   --   --   (314)
Net cash used by continuing operations  (26,725)  (41,219)  (107,436)  (468,462)
Net cash provided by (used in) discontinued operations  --   --   2,331  (97)
Net cash used in investing activities  (26,725)  (41,219)  (105,105)  (468,559)
FINANCING ACTIVITIES        
Proceeds on bond offering  --   --   --   298,035
Proceeds on issuance of long-term debt  932,450  509,850  989,450  544,850
Payment of capital lease obligation  (148)  (88)  (516)  (228)
Payment on long-term debt  (927,031)  (503,438)  (990,961)  (510,038)
Payment of financing costs  (6,576)  (5,469)  (6,576)  (18,616)
Distribution to noncontrolling interest  --   (1,850)  --   (1,850)
Repurchase and retirement of common stock  (887)  (559)  (887)  (559)
Dividends on common stock   (15,538)  (15,463)  (62,064)  (54,100)
Net cash provided by (used in) financing activities  (17,730)  (17,017)  (71,554)  257,494
Net change in cash and cash equivalents  (740)  (6,921)  (12,303)  (87,850)
Cash and cash equivalents at beginning of period  6,291  24,775  17,854  105,704
Cash and cash equivalents at end of period  $ 5,551  $ 17,854  $ 5,551  $ 17,854
 
 
Consolidated Communications Holdings, Inc.
Consolidated Revenue by Category
(Dollars in thousands)
(Unaudited) 
     
  Three Months Ended  Twelve Months Ended 
  December 31,  December 31, 
     Adjusted
Pro Forma 
  2013  2012  2013  2012 
     
Operating Revenues        
Local calling services  $ 26,568  $ 26,751  $ 106,491  $ 110,468
Network access services  26,974  29,780  112,448  120,983
Subsidies  11,418  13,875  52,002  51,122
Long distance services  4,679  4,995  19,315  21,481
Data, video and internet services  67,951  66,929  270,014  256,761
Other services  10,366  11,514  41,307  44,964
Total operating revenue  $ 147,956  $ 153,844  $ 601,577  $ 605,779
 
 
Consolidated Communications Holdings, Inc.
Schedule of Adjusted EBITDA Calculation
(Dollars in thousands)
(Unaudited)
         
  Three Months Ended  Twelve Months Ended 
  December 31,  December 31, 
     Adjusted
Pro Forma 
  2013  2012  2013  2012 
Net income from continuing operations  $ 3,216  $ 2,778  $ 29,964  $ 706
Add (subtract):        
Income tax expense (benefit)  2,293  1,827  17,512  (1,222)
Interest expense, net  19,838  20,487  85,767  81,747
Depreciation and amortization  34,968  38,510  139,274  155,746
EBITDA  60,315  63,602  272,517  236,977
         
Adjustments to EBITDA (1):        
Other, net (2)  (1,652)  (442)  (23,872)  (1,452)
Investment distributions (3)  10,517  9,382  34,833  29,217
Non-cash compensation (4)  794  663  3,028  6,387
Adjusted EBITDA  $ 69,974  $ 73,205  $ 286,506  $ 271,129
         
Footnotes for Adjusted EBITDA:
(1) These adjustments reflect those required or permitted by the lenders under the credit agreement.
(2) Other, net includes the equity earnings from our investments, dividend income, income attributable to noncontrolling interests in subsidiaries, transaction related costs and certain miscellaneous items. 
(3) Includes all cash dividends and other cash distributions received from our investments.
(4) Represents compensation expenses in connection with our Restricted Share Plan, which because of the non-cash nature of the expenses are excluded from adjusted EBITDA. 
 
 
Consolidated Communications Holdings, Inc.
Cash Available to Pay Dividends
(Dollars in thousands)
(Unaudited)
    
 Three Months Ended
December 31, 2013
Twelve Months Ended
December 31, 2013
Adjusted EBITDA  $ 69,974  $ 286,506
     
 - Cash interest expense   (19,094)  (81,908)
 - Capital expenditures  (26,779)  (107,363)
 - Cash income taxes  16  (960)
Cash available to pay dividends  $ 24,117  $ 96,275
     
Dividends Paid  $ 15,538  $ 62,064
Payout Ratio 64.4% 64.5%
     
* The above calculation excludes the principal payments on the amortization of our debt. 
     
 
Consolidated Communications Holdings, Inc.
Total Net Debt to LTM Adjusted EBITDA Ratio
(Dollars in thousands)
(Unaudited)
  
Summary of Outstanding Debt 
Term loan, net of discount $4,537  $ 905,463
Drawn on $75.0 million revolver  13,000
Senior unsecured notes, net of discount of $1,699  298,301
Capital leases  5,121
Total debt as of December 31, 2013  $ 1,221,885
Less cash on hand  (5,551)
Total net debt as of December 31, 2013  $ 1,216,334
   
Adjusted EBITDA for the last    
twelve months ended December 31, 2013   $ 286,506
   
Total Net Debt to last twelve months  
Adjusted EBITDA  4.25x
 
 
Consolidated Communications Holdings, Inc.
Adjusted Net Income and Per Share Attributable to Common Stockholders
(in thousands, except per share amounts)
(Unaudited)
         
  Three Months Ended  Twelve Months Ended 
  December 31,  December 31,  December 31,  December 31, 
  2013  2012  2013  2012 
Net income attributable to common shareholders  $ 3,140  $ 2,060  $ 30,811  $ 5,640
Transaction and severance related costs, net of tax  636  1,024  3,454  22,135
Acquisition related tax adjustments  --  --  --  883
Impairment, net of tax  --  1,738  --  2,371
Loss on extinguishment of debt, net of tax  4,472  2,649  4,832  3,614
Gain on the sale of discontinued operations, net of tax  --  --  (1,333)  --
Refinancing fee charges, net of tax  510  165  551  226
Non-cash stock compensation, net of tax 464 394 1,911 1,904
Adjusted net income attributable to common stockholders  $ 9,222  $ 8,030  $ 40,226  $ 36,773
         
Weighted average number of shares outstanding  39,790  39,684  39,764  34,652
Adjusted diluted net income per share  $ 0.23  $ 0.20  $ 1.01  $ 1.06
         
Calculations above assume a 41.6 and 40.5 percent effective tax rate for the three months ended December 31, 2013 and 2012, respectively.
The assumed effective tax rates for the twelve months ended December 31, 2013 and 2012, are 36.9 and 18.9 percent, respectively.
The gain on the sale of discontinued operations had an effective tax rate of 39.9% for the twelve months ended December 31, 2013.
 
 
Consolidated Communications Holdings, Inc.
Key Operating Statistics
(Unaudited)
           
 December 31,September 30,June 30,March 31,December 31,
  2013  2013  2013  2013  2012 
ILEC access lines          
Residential 147,247 148,811 150,711 152,644 153,855
Business 109,558 110,794 111,870 113,211 114,742
Total local access lines  256,805 259,605 262,581 265,855 268,597
Quarterly change  (1.1%) (1.1%) (1.2%) (1.0%) (0.9%)
           
Voice Connections [1]          
Residential 73,219 74,588 76,101 77,515 78,811
Business 50,214 49,830 50,013 50,351 50,918
Total voice connections 123,433 124,418 126,114 127,866 129,729
Quarterly change  (0.8%) (1.3%) (1.4%) (1.4%) (1.3%)
           
Data and Internet Connections [2] 255,239 252,516 251,306 250,350 247,633
Quarterly change  1.1% 0.5% 0.4% 1.1% 0.3%
Res. penetration of marketable homes 30.3% 30.2% 30.3% 30.3% 30.2%
           
Video Connections [2] 110,613 109,882 109,083 107,475 106,137
Quarterly change  0.7% 0.7% 1.5% 1.3% 0.9%
Res. penetration of marketable homes 20.5% 20.5% 20.7% 20.5% 20.3%
           
Total Connections 746,090 746,421 749,084 751,546 752,096
Quarterly change  (0.0%) (0.4%) (0.3%) (0.1%) (0.3%)
           
Network Stats - Marketable Homes          
Fiber homes 201,720 199,826 197,355 195,962 194,895
HFC homes 94,559 94,540 94,534 94,433 94,418
Copper homes 399,547 399,547 399,547 399,547 399,547
Total 695,826 693,913 691,436 689,942 688,860
           
Data marketable homes 683,398 681,485 679,008 677,514 676,432
% of total marketable homes 98% 98% 98% 98% 98%
Video marketable homes 530,834 528,921 526,444 524,950 524,019
% of total marketable homes 76% 76% 76% 76% 76%
           
Note: The figures in the table, excluding ILEC access lines, do not include SureWest business subscribers. 
           
[1] These include voice lines outside the ILECs and Voice-over-IP inside the ILECs.
[2] These connections are both residential and business (excluding SureWest business subscribers). They include services both inside and outside the ILECs. 
CONTACT: Company Contact:

         Matt Smith

         VP of Investor Relations & Treasurer

         217-258-2959

         matthew.smith@consolidated.com