Consolidated Communications Holdings
Jul 31, 2014

Consolidated Communications Reports Second Quarter 2014 Results

MATTOON, Ill., July 31, 2014 (GLOBE NEWSWIRE) -- Consolidated Communications Holdings, Inc. (Nasdaq:CNSL) reported results for the second quarter 2014.

Second quarter financial summary:

"I'm pleased with the overall results in the quarter and the continued success in transforming the business away from declining legacy revenues and into a growing broadband company," said Bob Currey, Chairman and Chief Executive Officer. "We delivered solid cash flows in support of the dividend and made significant capital investments for long-term growth opportunities. We continued our focus on delivering strong results, while completing the due diligence, negotiations, bridge financing and execution of the agreement for the acquisition of Enventis which we announced on June 30, 2014."

"The acquisition strengthens the diversification of our markets and fiber driven strategy, and positions us well for the future with an attractive dividend and an improved capital structure," Currey concluded.

Operating Statistics at June 30, 2014, Compared to June 30, 2013.

  Period Ended June 30,    
  2014 2013 Increase/(decrease) %
         
Data connections 259,225 251,294 7,931 3.2%
Video connections 111,211 109,095 2,116 1.9%
ILEC access lines 249,986 262,581 (12,595) (4.8%)
Voice connections (non-ILEC) 120,549 126,114 (5,565) (4.4%)
Total connections 740,971 749,084 (8,113) (1.1%)

Cash Available to Pay Dividends

For the quarter, cash available to pay dividends, or CAPD, was $23.6 million, and the dividend payout ratio was 66.2%. At June 30, 2014, cash and cash equivalents were $4.9 million. The Company made capital expenditures of $25.0 million during the quarter.  

Financial Highlights for the Second Quarter Ended June 30, 2014 

Financial Highlights for the Six Months Ended June 30, 2014 

Note: Financial highlights for the quarter and six months ended for 2013 are based on continuing operations.

Financial Guidance

The Company is reiterating its full year guidance (excluding impacts from the Enventis transaction):

($ in millions)2014 Updated Guidance2013 Results
     
Cash Interest Expense $75.0 to $78.0 $81.9
Cash Income Taxes $10.0 to $15.0 $1.0
Capital Expenditures $97.0 to $103.0 $107.4

Dividend Payments

On July 28, 2014, the Company's board of directors declared its next quarterly dividend of $0.38738 per common share, which is payable on November 1, 2014 to stockholders of record at the close of business on October 15, 2014. This will represent the 37th 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 second quarter 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 72732430. 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 August 7, 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 our credit agreement 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 our 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 our 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 our 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 certain 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.

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 

The Securities and Exchange Commission ("SEC") encourages companies to disclose forward-looking information so that investors can better understand a company's future prospects and make informed investment decisions.  Certain statements in this press release are forward-looking statements and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995.  These forward-looking statements reflect, among other things, our current expectations, plans, strategies, and anticipated financial results.  There are a number of risks, uncertainties, and conditions that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements.  These risks and uncertainties include our ability to complete the acquisition of Enventis and successfully integrate Enventis' operations and realize the synergies from the acquisition, as well as a number of factors related to our business and that of Enventis, including economic and financial market conditions generally and economic conditions in Consolidated's and Enventis' service areas; 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; changes in the valuation of pension plan assets; the substantial amount of debt and Consolidated's ability to repay or refinance it or 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; regulatory changes, including changes to subsidies, rapid development and introduction of new technologies and intense competition in the telecommunications industry; risks associated with Consolidated's possible pursuit of acquisitions; 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 and Enventis' 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. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements are discussed in more detail in Consolidated's and Enventis' filings with the Securities and Exchange Commission, including their reports on Form 10-K and Form 10-Q. Many of these circumstances are beyond our ability to control or predict.  Moreover, forward-looking statements necessarily involve assumptions on our part.  These forward-looking statements generally are identified by the words "believe", "expect", "anticipate", "estimate", "project", "intend", "plan", "should", "may", "will", "would", "will be", "will continue" or similar expressions.  Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Consolidated Communications Holdings, Inc. and its subsidiaries to be different from those expressed or implied in the forward-looking statements.  All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements that appear throughout this press release.  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 disclaim any intention or obligation to update or revise publicly any forward-looking statements.  You should not place undue reliance on forward-looking statements.

Prospectus/Proxy Statement 

This material is not a substitute for the prospectus/proxy statement Consolidated and Enventis will file with the Securities and Exchange Commission. Investors are urged to read the prospectus/proxy statement, which will contain important information, including detailed risk factors, when it becomes available. The prospectus/proxy statement and other documents which will be filed by Consolidated and Enventis with the Securities and Exchange Commission will be available free of charge at the SEC's website, www.sec.gov, or by directing a request when such a filing is made to Consolidated Communications, 121 South 17th Street, Mattoon, IL 61938, Attention: Investor Relations; or to Enventis Corporation, P.O. Box 3248, Mankato, MN 56002, Attention: Investor Relations. A final proxy statement or proxy/prospectus statement will be mailed to shareholders of Consolidated and Enventis.

This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

Proxy Solicitation

Consolidated and Enventis, and certain of their respective directors, executive officers and other members of management and employees are participants in the solicitation of proxies in connection with the proposed transactions. Information about the directors and executive officers of Consolidated is set forth in the proxy statement for its 2014 annual meeting of shareholders. Information about the directors and executive officers of Enventis is set forth in its proxy statement for its 2014 annual meeting of shareholders. Investors may obtain additional information regarding the interests of such participants in the proposed transactions by reading the prospectus/proxy statement for such proposed transactions when it becomes available.

- Tables Follow -

Consolidated Communications Holdings, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands, except par value)
(Unaudited)
  June 30,  December 31, 
  2014  2013 
     
 ASSETS     
 Current assets:     
 Cash and cash equivalents   $ 4,882  $ 5,551
 Accounts receivable, net   51,079  52,033
 Income tax receivable   2,968  9,796
 Deferred income taxes   7,960  7,960
 Prepaid expenses and other current assets   14,413  12,380
 Total current assets   81,302  87,720
     
 Property, plant and equipment, net   866,982  885,362
 Investments   112,852  113,099
 Goodwill   603,446  603,446
 Other intangible assets   35,248  40,084
 Deferred debt issuance costs, net and other assets   20,687  17,667
 Total assets   $ 1,720,517  $ 1,747,378
     
 LIABILITIES AND SHAREHOLDERS' EQUITY     
 Current liabilities:     
 Accounts payable   $ 9,644  $ 4,885
 Advance billings and customer deposits   23,153  25,934
 Dividends payable   15,607  15,520
 Accrued compensation   19,016  22,252
 Accrued expense   36,189  38,697
 Current portion of long-term debt and capital lease obligations   9,796  9,751
 Current portion of derivative liability   1,299  660
 Total current liabilities   114,704  117,699
     
 Long-term debt and capital lease obligations   1,207,609  1,212,134
 Deferred income taxes   179,589  179,859
 Pension and other post-retirement obligations   65,885  75,754
 Other long-term liabilities   11,133  9,593
 Total liabilities   1,578,920  1,595,039
     
Shareholders' equity:     
Common stock, par value $0.01 per share; 100,000,000 shares authorized, 40,289,154 and 40,065,246, shares outstanding as of June 30, 2014 and December 31, 2013, respectively   403  401
Additional paid in capital   137,072  148,433
Accumulated other comprehensive loss, net   (561)  (1,000)
Noncontrolling interest  4,683  4,505
Total shareholders' equity  141,597  152,339
Total liabilities and shareholders' equity  $ 1,720,517  $ 1,747,378
 
Consolidated Communications Holdings, Inc.
Condensed Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
         
  Three Months Ended  Six Months Ended 
  June 30,  June 30, 
  2014  2013  2014  2013 
         
         
Net revenues   $ 151,036  $ 151,320  $ 300,684  $ 302,848
Operating expenses:         
Cost of services and products   55,918  55,942  111,218  110,994
Selling, general and administrative expenses   32,711  33,544  65,286  66,670
Financing and other transaction costs   977  178  1,266  357
Depreciation and amortization   36,005  34,709  71,547  69,550
Income from operations   25,425  26,947  51,367  55,277
Other income (expense):         
Interest expense, net of interest income   (19,728)  (20,697)  (39,559)  (45,297)
Other income, net   9,061  8,775  16,494  17,452
Income from continuing operations before income taxes   14,758  15,025  28,302  27,432
Income tax expense   4,871  5,465  9,993  11,014
Income from continuing operations   9,887  9,560  18,309  16,418
         
Loss from discontinued operations, net of tax   --   (272)  --   (248)
         
Net income   9,887  9,288  18,309  16,170
Less: net income attributable to noncontrolling interest   80  94  178  193
         
Net income attributable to common shareholders   $ 9,807  $ 9,194  $ 18,131  $ 15,977
         
Net income per common share - basic and diluted         
Income from continuing operations  $ 0.24  $ 0.23  $ 0.45  $ 0.40
Loss from discontinued operations, net of tax  --   (0.01)  --   (0.01)
Net income per basic and diluted common share attributable to common shareholders  $ 0.24  $ 0.22  $ 0.45  $ 0.39
 
Consolidated Communications Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited) 
         
  Three Months Ended  Six Months Ended 
  June 30,  June 30, 
  2014  2013  2014  2013 
OPERATING ACTIVITIES        
Net income  $ 9,887  $ 9,288  $ 18,309  $ 16,170
Loss from discontinued operations, net of tax  --  272  --  248
Net income from continuing operations  9,887  9,560  18,309  16,418
Adjustments to reconcile net income to cash provided by operating activities:        
Depreciation and amortization  36,005  34,709  71,547  69,550
Deferred income taxes  (535)  --   (535)  (124)
Cash distributions from wireless partnerships in excess of/(less than) earnings  (706)  (1,074)  23  (1,844)
Non- cash stock-based compensation  940  784  1,724  1,440
Amortization of deferred financing  711  575  1,341  1,119
Other adjustments, net  512  150  1,903  2,669
Changes in operating assets and liabilities, net  (8,163)  (15,081)  (7,267)  (21,882)
Net cash provided by continuing operations  38,651  29,623  87,045  67,346
Net cash used in discontinued operations  --   (1,566)  --   (3,097)
Net cash provided by operating activities  38,651  28,057  87,045  64,249
INVESTING ACTIVITIES        
Purchase of property, plant and equipment, net  (25,041)  (25,117)  (50,446)  (52,623)
Purchases of investments  --   (47)  --   (131)
Proceeds from sale of assets  9  29  1,250  50
Net cash used by continuing operations  (25,032)  (25,135)  (49,196)  (52,704)
Net cash used in discontinued operations  --   (37)  --   (48)
Net cash used in investing activities  (25,032)  (25,172)  (49,196)  (52,752)
FINANCING ACTIVITIES        
Proceeds on issuance of long-term debt  16,000  36,000  26,000  49,000
Payment of capital lease obligation  (160)  (139)  (317)  (224)
Payment on long-term debt  (13,275)  (28,310)  (30,550)  (43,620)
Payment on financing costs  (2,524)  --   (2,524)  -- 
Dividends on common stock  (15,607)  (15,540)  (31,127)  (30,987)
Net cash used in financing activities  (15,566)  (7,989)  (38,518)  (25,831)
Net change in cash and cash equivalents  (1,947)  (5,104)  (669)  (14,334)
Cash and cash equivalents at beginning of period  6,829  8,624  5,551  17,854
Cash and cash equivalents at end of period  $ 4,882  $ 3,520  $ 4,882  $ 3,520
         
Consolidated Communications Holdings, Inc.
Consolidated Revenue by Category
(Dollars in thousands)
(Unaudited) 
         
  Three Months Ended  Six Months Ended 
  June 30,  June 30, 
  2014  2013  2014  2013 
         
Operating Revenues        
Local calling services  $ 26,715  $ 26,277  $ 52,924  $ 52,857
Network access services  26,174  28,891  53,014  58,545
Subsidies  13,332  13,481  26,411  26,927
Long distance services  4,770  4,835  9,540  9,826
Data, video and internet services  69,592  67,605  137,781  133,917
Other services  10,453  10,231  21,014  20,776
Total operating revenue  $ 151,036  $ 151,320  $ 300,684  $ 302,848
         
Consolidated Communications Holdings, Inc.
Schedule of Adjusted EBITDA Calculation
(Dollars in thousands)
(Unaudited)
         
         
  Three Months Ended  Six Months Ended 
  June 30,  June 30, 
  2014  2013  2014  2013 
Net income from continuing operations  $ 9,887  $ 9,560  $ 18,309  $ 16,418
Add (subtract):        
Income tax expense  4,871  5,465  9,993  11,014
Interest expense, net  19,728  20,697  39,559  45,297
Depreciation and amortization  36,005  34,709  71,547  69,550
EBITDA  70,491  70,431  139,408  142,279
         
Adjustments to EBITDA (1):        
Other, net (2)  (8,770)  (7,066)  (16,487)  (14,150)
Investment distributions (3)  8,706  7,660  17,792  15,761
Non-cash compensation (4)  940  784  1,724  1,440
         
Adjusted EBITDA  $ 71,367  $ 71,809  $ 142,437  $ 145,330
         
Footnotes for Adjusted EBITDA:
(1) These adjustments reflect those required or permitted by the lenders under our 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 June 30, 2014Six Months Ended June 30, 2014
Adjusted EBITDA  $ 71,367  $ 142,437
     
- Cash interest expense  (19,048)  (37,441)
- Capital expenditures  (25,041)  (50,446)
- Cash income taxes  (3,685)  (3,700)
     
Cash available to pay dividends  $ 23,593  $ 50,850
     
Dividends Paid  $ 15,607  $ 31,127
Payout Ratio 66.2% 61.2%
     
* 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 $4,244  $ 901,206
Revolving loan  13,000
Senior unsecured notes, net of discount of $1,606  298,394
Capital leases  4,805
Total debt as of June 30, 2014  $ 1,217,405
Less cash on hand  (4,882)
Total net debt as of June 30, 2014  $ 1,212,523
   
Adjusted EBITDA for the last twelve months ended June 30, 2014  $ 283,613
   
Total Net Debt to last twelve months  
Adjusted EBITDA  4.28x
         
Consolidated Communications Holdings, Inc.
Adjusted Net Income and Per Share Attributable to Common Stockholders
(in thousands, except per share amounts)
(Unaudited)
         
  Three Months Ended  Six Months Ended 
  June 30,  June 30,  June 30,  June 30, 
  2014  2013  2014  2013 
Net income attributable to common shareholders  $ 9,807  $ 9,194  $ 18,131  $ 15,977
Transaction and severance related costs, net of tax  1,028  974  1,789  1,883
Loss related to sale of building, net of tax  --  --  478  --
Non-cash stock compensation, net of tax 630 499 1,115 861
Adjusted net income attributable to common stockholders  $ 11,466  $ 10,667  $ 21,515  $ 18,721
         
Weighted average number of shares outstanding  39,877  39,755  39,877  39,755
Adjusted diluted net income per share  $ 0.29  $ 0.27  $ 0.54  $ 0.47
         
* Calculations above assume a 33.0 and 36.4 percent effective tax rate for the three months ended June 30, 2014 and 2013, respectively and 35.3 and 40.2 percent for the six months ended June 30, 2014 and 2013, respectively.
 
Consolidated Communications Holdings, Inc.
Key Operating Statistics
(Unaudited)
           
 June 30,March 31,December 31,September 30,June 30,
  2014  2014  2013  2013  2013 
ILEC access lines          
Residential 143,060 145,814 147,247 148,811 150,711
Business 106,926 108,247 109,558 110,794 111,870
Total local access lines  249,986 254,061 256,805 259,605 262,581
Quarterly change  (1.6%) (1.1%) (1.1%) (1.1%) (1.2%)
           
Voice Connections [1,2]          
Residential 70,276 72,080 73,219 74,588 76,101
Business 50,273 50,092 50,214 49,830 50,013
Total voice connections 120,549 122,172 123,433 124,418 126,114
Quarterly change  (1.3%) (1.0%) (0.8%) (1.3%) (1.4%)
           
Data and Internet Connections [2] 259,225 258,244 255,231 252,506 251,294
 Quarterly change  0.4% 1.2% 1.1% 0.5% 0.4%
 Res. penetration of marketable homes 30.4% 30.5% 30.3% 30.2% 30.3%
           
Video Connections [2] 111,211 110,805 110,621 109,892 109,095
 Quarterly change  0.4% 0.2% 0.7% 0.7% 1.5%
 Res. penetration of marketable homes 20.4% 20.5% 20.5% 20.5% 20.7%
           
Total Connections 740,971 745,282 746,090 746,421 749,084
 Quarterly change  (0.6%) (0.1%) (0.0%) (0.4%) (0.3%)
           
Network Stats - Marketable Homes          
Fiber homes 205,545 203,273 201,720 199,826 197,355
HFC homes 94,598 94,568 94,559 94,540 94,534
Copper homes 399,547 399,547 399,547 399,547 399,547
Total 699,690 697,388 695,826 693,913 691,436
           
Data marketable homes 687,262 684,960 683,398 681,485 679,008
% of total marketable homes 98% 98% 98% 98% 98%
Video marketable homes 535,167 532,853 530,834 528,921 526,444
% of total marketable homes 76% 76% 76% 76% 76%
           
Note: The figures in the table, excluding ILEC access lines, do not entirely 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 Finance & Treasurer

         217-258-2959

         matthew.smith@consolidated.com