Consolidated Communications Reports Third Quarter 2012 Results

  • Completed the acquisition of SureWest on July 2nd
  • Achieved significant synergies at close and during the quarter
  • Grew net new broadband additions by 6,501
  • Increased revenue by 0.8% year-over-year on a pro forma basis

MATTOON, Ill., Nov. 1, 2012 (GLOBE NEWSWIRE) -- Consolidated Communications Holdings, Inc. (Nasdaq:CNSL) reported results for the third quarter 2012, which included results from SureWest Communications.

Third quarter financial summary:

  • Revenue was $157.0 million
  • Net cash from operations was $20.4 million
  • Adjusted EBITDA was $70.9 million

"We are excited about the first full quarter of combined operations with SureWest and are pleased with the strong results we delivered," said Bob Currey, President and Chief Executive Officer. "The legacy business continued to perform well, while the results from the newly acquired SureWest assets were better than expected. I'm proud of these results and very appreciative of the efforts from those employees who are driving the significant progress we are making on integration."

"Financially, we delivered increases to both revenue and adjusted EBITDA year-over-year on a pro forma basis. We also produced a comfortable dividend payout ratio of 67.2%. We are on plan with our synergy targets of a $20 million operating expense savings run-rate at the end of year one and $25 million run-rate at the end of year two. At the close, we achieved $10 million in annualized synergies and another $2 million throughout the quarter."

"Operationally, we had another solid quarter. We grew data connections by 4,136 and video connections by 2,365 for a total broadband growth of 6,501. Despite the stagnant macro economy, we are well diversified across our markets and continue to invest to capitalize on the growth opportunities," Currey concluded.

Operating Statistics at September 30, 2012, Compared to pro forma September 30, 2011

  Period Ended September 30,  
  2012 2011 Increase/(decrease) %
     
Data connections 246,817 233,146 13,671 5.9%
Video connections 105,202 98,058 7,144 7.3%
ILEC access lines 270,960 284,565 (13,605) (4.8%)
Voice connections (non-ILEC) 131,457 136,465 (5,008) (3.7%)
Total connections 754,436 752,234 2,202 0.3%

Operating metrics presented in the above table and at the end of the press release are presented for all periods on a pro forma basis for the SureWest acquisition. 

Cash Available to Pay Dividends

For the quarter, cash available to pay dividends, or CAPD, was $23.0 million, and the dividend payout ratio was 67.2 %. The Company made capital expenditures of $28.3 million.  

Financial Highlights for the Third Quarter Ended September 30, 2012 

  • Revenues were $157.0 million in the third quarter compared to $92.5 million for the same period of 2011. On a pro forma basis, revenues were $157.0 million, compared to $155.7 million in the same period of 2011 resulting in an increase of $1.3 million, or 0.8%. Increases in data, video and backhaul revenues more than offset the declines in voice related services.      
  • Income from operations was $10.1 million, compared to $15.2 million in the third quarter of 2011. The decrease is primarily attributable to $14.5 million in severance and integration related costs, which were partially offset by expense reductions tied to our synergy efforts.
  • Interest expense, net was $20.6 million, compared to $13.4 million in the same quarter last year. The increase is mainly due to the expense related to our Senior Notes offering for the SureWest acquisition totaling $8.4 million in the quarter, which was partially offset by lower costs from our interest rate swap agreements.   
  • Other income, net was $8.5 million, compared to $6.9 million for same period in 2011.  Cash distributions from our Verizon wireless partnerships were $7.7 million for the third quarter of 2012 compared to $6.9 million for the same quarter of 2011.  
  • Net loss attributable to common stockholders was $0.3 million, compared to net income of $5.8 million in the third quarter of 2011. "Adjusted net income attributable to common stockholders" excludes certain items in the manner described in the table provided in this release. On that basis, "adjusted net income attributable to common stockholders" was $11.2 million, compared to $6.1 million in the same quarter of 2011. 
  • Diluted net loss per common share was $0.01. "Adjusted diluted net income per share" excludes certain items in the manner described in the table provided in this release. On that basis, "adjusted diluted net income per share" for the current quarter was $0.28.
  • Net cash provided from operating activities was $20.4 million, compared to $32.1 million for the third quarter in 2011. The decline was driven primarily due to severance and integration costs related to the SureWest acquisition.
  • Adjusted EBITDA was $70.9 million, compared to $46.3 million for the same period in 2011. On a pro forma basis, adjusted EBITDA increased by $4.3 million, or 6.5% from $66.6 million in the third quarter of 2011. 
  • The total net debt to last twelve month pro forma adjusted EBITDA coverage ratio was 4.38 times to one. As we deliver on the $25 million in synergies and the benefits flow through to adjusted EBITDA while continuing to amortize our debt, we expect to drive net leverage lower.  

Financial Highlights for the Nine Months Ended September 30, 2012

  • Revenues were $343.4 million, compared to $280.6 million in the same period of 2011.  On a pro forma basis, revenues were $471.3 million, compared to $466.3 million in the same period of 2011 resulting in a $5.0 million increase, or 1.1%. Increases in data, video and backhaul revenues more than offset the declines in voice related services.
  • Net income attributable to common stockholders was $4.2 million, compared to $18.5 million in the prior year period. The decline is primarily due to costs related to the SureWest acquisition and associated financing, which were partially offset by higher revenues.
  • Net cash provided from operating activities was $71.9 million, compared to $93.3 million for the nine months ended September 30, 2011. The decline is primarily due to costs related to the SureWest acquisition and associated financing, which were partially offset by higher revenues.
  • Adjusted EBITDA, on a pro forma basis, was $201.3 million, compared to $203.8 million for the prior year period. 

Financial Guidance

The Company is reiterating its guidance. The table below reflects pro forma guidance for 2012, which includes a full year of SureWest for both periods presented.

 2011 Pro Forma Results 2012 Pro Forma Guidance
   
Cash Interest Expense $59.7 million $63.0 million to $67.0 million
Cash Income Taxes $7.8 million $5.0 million to $6.0 million
Capital Expenditures $115.1 million $110.0 million to $115.0 million

Dividend Payments

On October 29, 2012, the Company's board of directors declared its next quarterly dividend of $0.38738 per common share, which is payable on February 1, 2013 to stockholders of record at the close of business on January 15, 2013. 

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 third 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 39670134. 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 November 8, 2012 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.  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. EBITDA is defined as net earnings before interest expense, income taxes, depreciation and amortization on a historical basis. We believe net cash provided by operating activities is the GAAP financial measure most directly comparable to EBITDA.

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 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 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 agreements governing our debt 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 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 

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 and SureWest's filings with the Securities and Exchange Commission, including our respective 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.

 
 
Consolidated Communications Holdings, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands, except par value)
   
  September 30,  December 31, 
  2012  2011 
 (Unaudited) 
ASSETS   
Current assets:   
Cash and cash equivalents  $ 24,775 $ 105,704
Accounts receivable, net  60,661 35,492
Prepaid expenses and other current assets  31,011 19,983
Total current assets  116,447 161,179
   
Property, plant and equipment, net  876,115 339,197
Intangibles, net and other assets  810,168 693,693
Total assets  $ 1,802,730 $ 1,194,069
   
LIABILITIES AND STOCKHOLDERS' EQUITY   
Current liabilities:   
Current portion of long-term debt  $ 8,800 $ 8,800
Current portion of capital lease obligation  229 192
Accounts payable  19,732 13,673
Accrued expenses and other current liabilities  127,482 62,625
Total current liabilities  156,243 85,290
   
Capital lease obligation less current portion  4,342 4,519
Long-term debt  1,197,717 871,200
Other long-term liabilities  280,661 185,248
Total liabilities  1,638,963 1,146,257
   
Stockholders' equity:   
Common stock, $0.01 par value  399 299
Paid in capital  191,223 79,852
Accumulated other comprehensive loss  (33,715) (37,833)
   
Total Consolidated Communications Holdings, Inc. stockholders' equity 157,907 42,318
Noncontrolling interest 5,860 5,494
Total stockholders' equity 163,767 47,812
Total liabilities and stockholders' equity $ 1,802,730 $ 1,194,069
 
 
Consolidated Communications Holdings, Inc.
Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
 (Unaudited) 
     
  Three Months Ended  Nine Months Ended 
  September 30,  September 30, 
  2012  2011  2012  2011 
     
     
Revenues  $ 157,012 $ 92,548 $ 343,381 $ 280,612
Operating expenses:     
Cost of services and products  59,589 33,913 131,979 103,864
Selling, general and administrative expenses  35,568 21,148 75,092 60,994
Financing and other transaction costs  14,525 109 19,909 2,649
Depreciation and amortization  37,252 22,161 81,258 66,306
Income from operations  10,078 15,217 35,143 46,799
Other income (expense):     
Interest expense, net  (20,624) (13,447) (52,117) (37,783)
Other income, net  8,461 6,919 21,888 20,370
Income (loss) before income taxes  (2,085) 8,689 4,914 29,386
Income tax expense (benefit)  (1,895) 2,723 314 10,410
Net income (loss)  (190) 5,966 4,600 18,976
Less: Net income attributable to noncontrolling interest  121 148 366 442
Net income (loss) attributable to Consolidated Communications Holdings, Inc.  $ (311) $ 5,818 $ 4,234 $ 18,534
     
Diluted net income (loss) attributable to Consolidated Communications Holdings, Inc. per common share $ (0.01) $ 0.19 $ 0.12 $ 0.61
 
 
Consolidated Communications Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
 (Unaudited) 
     
  Three Months Ended  Nine Months Ended 
  September 30,  September 30, 
  2012  2011  2012  2011 
     
OPERATING ACTIVITIES    
Net cash provided by operating activities 20,421 32,106 71,900 93,309
INVESTING ACTIVITIES    
Business acquisition, net of cash acquired (78,986) --  (377,021) -- 
Purchase of property, plant and equipment, net (28,269) (10,542) (50,420) (31,246)
Proceeds from sale of assets 387 31 415 427
Other --  103 (314) 159
Net cash used in investing activities (106,868) (10,408) (427,340) (30,660)
FINANCING ACTIVITIES    
Proceeds on bond offering --  --  298,035 -- 
Proceeds on issuance of revolving debt 35,000 --  35,000 -- 
Payment of capital lease obligation (48) (37) (140) (108)
Payment on long-term debt (2,200) --  (6,600) -- 
Payment of financing costs (8,077) (72) (13,147) (3,471)
Restricted cash for bond offering 17,047 --  --  -- 
Dividends on common stock  (15,464) (11,591) (38,637) (34,719)
Net cash provided by (used in) financing activities 26,258 (11,700) 274,511 (38,298)
Net change in cash and cash equivalents (60,189) 9,998 (80,929) 24,351
Cash and cash equivalents at beginning of period 84,964 82,007 105,704 67,654
Cash and cash equivalents at end of period $ 24,775 $ 92,005 $ 24,775 $ 92,005
 
 
Consolidated Communications Holdings, Inc.
Consolidated Revenue by Category
(Dollars in thousands)
 (Unaudited) 
     
  Three Months Ended  Nine Months Ended 
  September 30,  September 30, 
  Actuals  Pro Forma  Pro Forma  Pro Forma 
  2012  2011  2012  2011 
     
Telephone Operations    
Local calling services $ 27,076 $ 29,429 $ 84,075 $ 90,085
Network access services 29,461 30,254 90,846 87,972
Subsidies 12,675 12,961 37,248 38,244
Long distance services 5,380 6,123 16,486 19,037
Data, Video and Internet services 64,995 59,632 189,832 178,465
Other services 9,836 9,517 28,933 28,828
Total Telephone Operations 149,423 147,916 447,420 442,631
Other Operations 7,589 7,784 23,863 23,645
Total operating revenues $ 157,012 $ 155,700 $ 471,283 $ 466,276
 
 
Consolidated Communications Holdings, Inc.
Schedule of Adjusted EBITDA Calculation
(Dollars in thousands)
(Unaudited)
     
     
  Three Months Ended  Nine Months Ended 
  September 30,  September 30, 
  Actuals  Pro Forma  Pro Forma  Pro Forma 
  2012  2011  2012  2011 
Net income (loss) $ (190) $ 2,476 $ 1,522 $ 7,213
Add (subtract):    
Income tax expense (benefit) (1,895) 479 (548) 3,217
Interest expense 20,624 21,813 61,260 64,902
Depreciation and amortization 37,252 38,767 114,470 116,124
EBITDA (1) 55,791 63,535 176,704 191,456
     
Adjustments to EBITDA (2):    
Other, net (3) 6,840 (5,191) (1,011) (12,627)
Investment distributions (4) 7,723 6,948 19,835 19,691
Non-cash compensation (5) 595 1,330 5,725 5,247
     
Adjusted EBITDA $ 70,949 $ 66,622 $ 201,253 $ 203,767
     
Footnotes for Adjusted EBITDA:
(1) EBITDA is defined as net earnings before income taxes, interest expense, and 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) 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.
(4) For purposes of calculating adjusted EBITDA, we include all cash dividends and other cash distributions received from our investments.
(5) 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 Holdings, Inc.
Cash Available to Pay Dividends
(Dollars in thousands)
(Unaudited)
  
 Three Months Ended September 30, 2012
Adjusted EBITDA $ 70,949
  
 - Cash interest expense  (19,681)
 - Capital expenditures (28,269)
 - Cash income taxes --
  
Cash available to pay dividends $ 22,999
  
Dividends Paid $ 15,464
Payout Ratio 67.2%
  
* 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 debt $ 873,400 
Senior unsecured notes 300,000 
Drawn on revolver 35,000 
Capital leases 4,571 
Total debt as of September 30, 2012 $ 1,212,971 
Less cash on hand (24,775) 
Total net debt as of September 30, 2012 $ 1,188,196 
   
Adjusted EBITDA, pro forma, for the last twelve months ended September 30, 2012 $ 271,368 
   
Total Net Debt to last twelve months  
Adjusted EBITDA, pro forma 4.38 x 
 
 
Consolidated Communications Holdings, Inc.
Adjusted Net Income and Per Share Attributable to Common Stockholders
(in thousands, except per share amounts)
(Unaudited)
     
  Three Months Ended  Nine Months Ended 
  September 30,  September 30,  September 30,  September 30, 
  2012  2011  2012  2011 
Reported net income attributable to common stockholders  $ (311) $ 5,818 $ 4,234 $ 18,534
Change in uncertain tax liabilities -- (251) -- (251)
Interest reversal on reduction in uncertain tax positions -- (35) -- (35)
Acquisition related tax adjustments 831 -- 883 --
Acquisition and financing related costs, net of tax 10,282 -- 17,244 --
Severance, net of tax  -- 132 -- 433
Refinancing charges, net of tax -- 75 -- 1,711
Non-cash stock compensation, net of tax 421 401 1,136 1,081
Adjusted net income attributable to common stockholders $ 11,223 $ 6,140 $ 23,497 $ 21,473
     
Weighted average number of shares outstanding 39,439 29,593 32,963 29,593
Adjusted diluted net income per share $ 0.28 $ 0.21 $ 0.71 $ 0.73
     
Calculations above assume a 29.2 and 31.3 percent effective tax rate for the three months ended September 30, 2012 and 2011, respectively. The assumed effective tax rates for the nine months ended September 30, 2012 and 2011 are 32.6 and 35.4 percent, respectively.
 
Consolidated Communications Holdings, Inc.
Key Operating Statistics
 (Unaudited)
      
  Actuals Pro Forma Pro Forma Pro Forma Pro Forma
 September 30,June 30,March 31,December 31,September 30,
  2012  2012  2012  2011  2011 
ILEC access lines     
Residential 155,274 157,293 159,141 161,080 163,346
Business 115,686 117,070 117,910 119,628 121,219
Total local access lines  270,960 274,363 277,051 280,708 284,565
Quarterly change  (1.2%) (1.0%) (1.3%) (1.4%) (1.3%)
      
Voice Connections (exc. ILEC access lines) [1]     
Residential 80,097 81,190 82,850 83,793 83,797
Business 51,360 51,852 52,232 52,424 52,668
Total voice connections 131,457 133,042 135,082 136,217 136,465
Quarterly change  (1.2%) (1.5%) (0.8%) (0.2%) (0.2%)
      
Data and Internet Connections [2] 246,817 242,681 238,562 236,554 233,146
Quarterly change  1.7% 1.7% 0.8% 1.5% 2.3%
Res. penetration of marketable homes 30.2% 30.1% 30.3% 30.2% 30.2%
      
Video Connections [2] 105,202 102,837 102,006 100,753 98,058
Quarterly change  2.3% 0.8% 1.2% 2.7% 2.9%
Res. penetration of marketable homes 20.2% 19.9% 20.0% 19.9% 19.7%
      
Total Connections 754,436 752,923 752,701 754,232 752,234
Quarterly change  0.2% 0.0% (0.2%) 0.3% 0.5%
      
Network Stats - Marketable Homes     
Fiber homes 192,475 187,591 182,639 180,257 173,204
HFC homes 94,272 94,258 94,251 94,022 93,950
Copper homes 399,547 399,547 399,547 399,547 399,547
Total 686,294 681,396 676,437 673,826 666,701
      
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
         Treasurer & Investor Relations
         217-258-2959
         matthew.smith@consolidated.com