Press Release

Frontier Communications Reports Solid Fourth-Quarter and Full Year Results for 2008

2008 full year free cash flow of $493 million 2008 full year operating cash flow margin of 54% 2008 full year dividend payout ratio of 65% Continued strong operating income and cash flow margins Data and internet services revenue up 11% year over year

Company Release - 2/25/2009 7:00 AM ET

STAMFORD, Conn.--(BUSINESS WIRE)-- Frontier Communications (NYSE:FTR) today reported fourth-quarter 2008 revenue of $547.4 million, operating income of $151.9 million and net income of $34.3 million.

"Frontier delivered another solid quarter of financial and operating results," said Maggie Wilderotter, Frontier Communications Chairman and CEO. "Despite the continued economic uncertainty in our markets, our fundamental approach to how we run our business; focusing on customer revenue growth, increasing customer loyalty, delivering best in class margins, and creating long term value for shareholders has not changed. Furthermore, consistent with the guidance we gave twelve months ago, we delivered full year operating cash flow margins of 54%, free cash flow of $493 million and a comfortable dividend payout ratio of 65% which demonstrates our ability to execute on our strategy and deliver promised results. Most important, our Q1 2009 marketing promotions are delivering strong results for both video and high speed bundle sales. We are off to a solid start for the year."

Revenue for the fourth quarter of 2008 was $547.4 million compared to $577.2 million in the fourth quarter of 2007, a 5 percent decrease. Revenue declined as a result of lower access lines, partially offset by a 5 percent increase in data and internet services revenue. Despite the decline in access lines, our customer revenue, which is all revenue except switched access and subsidy, has declined by less than 3 percent. The monthly customer revenue per access line has increased approximately $2.91, or 5%, over the prior year's fourth quarter while the monthly total revenue per access line has increased $1.49, or 2%, over the same period, as the Company has continued to successfully sell additional products and services, partially offset by reductions in regulatory revenue.

Other operating expenses and network access expenses for the fourth quarter of 2008 were $256.6 million as compared to $257.2 million in the fourth quarter of 2007, a 0.2 percent decrease. Expenses in the fourth quarter of 2007 were favorably impacted by a pension curtailment gain of $14.4 million, resulting from the freeze placed on certain pension benefits of the former Commonwealth Telephone Enterprises, Inc. employees. Excluding the non-cash gain in 2007, other operating expenses and network access expenses declined $15.0 million, or 5.5%, in 2008.

Operating income for the fourth quarter of 2008 was $151.9 million and operating income margin was 27.8 percent compared to operating income of $174.9 million and operating income margin of 30.3 percent in the fourth quarter of 2007. The fourth quarter 2008 decrease of $23.0 million is primarily the result of the reduction in revenue, partially offset by lower expenses.

The Company lost approximately 42,100 access lines during the fourth quarter of 2008 and had 2,254,300 access lines at December 31, 2008.

The Company added approximately 8,500 net High-Speed Internet customers during the fourth quarter of 2008 and had 579,900 High-Speed Internet customers at December 31, 2008. The Company added approximately 7,600 video customers during the fourth quarter of 2008 and had 119,900 video customers at December 31, 2008.

Capital expenditures were $84.1 million for the fourth quarter of 2008 and $288.3 million for the full year of 2008.

Free cash flow was $109.1 million for the fourth quarter of 2008 and $493.2 million for the full year of 2008. The Company's dividend represents a payout of 65 percent of free cash flow for the full year of 2008.

During the fourth quarter of 2008, the Company repurchased 327,700 shares of its common stock for $3.8 million. The Company completed its $200 million authorized share repurchase program on October 3, 2008 through the repurchase of 17,778,000 shares of its common stock during the full year of 2008.

For the full year of 2009, the Company expects that its capital expenditures will be within a range of $250.0 million to $270.0 million and its free cash flow will be within a range of $460.0 million to $485.0 million.

The Company's next regular quarterly cash dividend of $0.25 per share of common stock will be paid on March 31, 2009 to shareholders of record on March 9, 2009. The Company expects that dividends paid to stockholders in 2009 will be treated as dividends for federal income tax purposes. Shareholders are encouraged to consult with their tax advisors.

The Company uses certain non-GAAP financial measures in evaluating its performance. These include free cash flow and operating cash flow. A reconciliation of the differences between free cash flow and operating cash flow and the most comparable financial measures calculated and presented in accordance with GAAP is included in the tables that follow. The non-GAAP financial measures are by definition not measures of financial performance under GAAP and are not alternatives to operating income or net income reflected in the statement of operations or to cash flow as reflected in the statement of cash flows and are not necessarily indicative of cash available to fund all cash flow needs. The non-GAAP financial measures used by the Company may not be comparable to similarly titled measures of other companies.

The Company believes that the presentation of non-GAAP financial measures provides useful information to investors regarding the Company's financial condition and results of operations because these measures, when used in conjunction with related GAAP financial measures, (i) together provide a more comprehensive view of the Company's core operations and ability to generate cash flow, (ii) provide investors with the financial analytical framework upon which management bases financial, operational, compensation and planning decisions and (iii) presents measurements that investors and rating agencies have indicated to management are useful to them in assessing the Company and its results of operations. Management uses these non-GAAP financial measures to plan and measure the performance of its core operations, and its divisions measure performance and report to management based upon these measures. In addition, the Company believes that free cash flow and operating cash flow, as the Company defines them, can assist in comparing performance from period to period, without taking into account factors affecting cash flow reflected in the statement of cash flows, including changes in working capital and the timing of purchases and payments. The Company has shown adjustments to its financial presentations to exclude $38.7 million in access revenue for the favorable impact of the one-time carrier dispute settlement in the full year of 2007, $14.4 million in pension curtailment gain in the fourth quarter and full year of 2007, $7.6 million and $13.9 million of severance and early retirement costs in the full years of 2008 and 2007, respectively, $4.0 million of severance and early retirement costs in the fourth quarter of 2008, $2.1 million and $0.8 million of legal settlement costs and related expenses in the full years of 2008 and 2007, respectively, and $1.2 million and $0.8 million of legal settlement costs and related expenses in the fourth quarters of 2008 and 2007, respectively, because the Company believes that the magnitude of such revenues in 2007 is unusual, and that the magnitude of such gains and costs in the fourth quarter and full year of 2007 materially exceeds the comparable gains and costs in the fourth quarter and full year of 2008.

Management uses these non-GAAP financial measures to (i) assist in analyzing the Company's underlying financial performance from period to period, (ii) evaluate the financial performance of its business units, (iii) analyze and evaluate strategic and operational decisions, (iv) establish criteria for compensation decisions, and (v) assist management in understanding the Company's ability to generate cash flow and, as a result, to plan for future capital and operational decisions. Management uses these non-GAAP financial measures in conjunction with related GAAP financial measures. The Company believes that the non-GAAP financial measures are meaningful and useful for the reasons outlined above.

While the Company utilizes these non-GAAP financial measures in managing and analyzing its business and financial condition and believes they are useful to management and to investors for the reasons described above, these non-GAAP financial measures have certain shortcomings. In particular, free cash flow does not represent the residual cash flow available for discretionary expenditures, since items such as debt repayments and dividends are not deducted in determining such measure. Operating cash flow has similar shortcomings as interest, income taxes, capital expenditures, debt repayments and dividends are not deducted in determining this measure. Management compensates for the shortcomings of these measures by utilizing them in conjunction with their comparable GAAP financial measures. The information in this press release should be read in conjunction with the financial statements and footnotes contained in our documents filed with the U.S. Securities and Exchange Commission.

About Frontier Communications

Frontier Communications Corporation (NYSE:FTR) offers telephone, video and internet services in 24 states with approximately 5,700 employees. More information is available at www.frontier.com.

This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. These statements are made on the basis of management's views and assumptions regarding future events and business performance. Words such as "believe," "anticipate," "expect" 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 are based on a number of factors, including but not limited to: reductions in the number of our access lines and High-Speed Internet subscribers; the effects of competition from cable, wireless and other wireline carriers (through voice over internet protocol (VOIP) or otherwise); reductions in switched access revenues as a result of regulation, competition and/or technology substitutions; the effects of greater than anticipated competition requiring new pricing, marketing strategies or new product offerings and the risk that we will not respond on a timely or profitable basis; the effects of changes in both general and local economic conditions on the markets we serve, which can impact demand for our products and services, customer purchasing decisions, collectability of revenue and required levels of capital expenditures related to new construction of residences and businesses; our ability to effectively manage service quality; our ability to successfully introduce new product offerings, including our ability to offer bundled service packages on terms that are both profitable to us and attractive to our customers; our ability to sell enhanced and data services in order to offset ongoing declines in revenue from local services, switched access services and subsidies; changes in accounting policies or practices adopted voluntarily or as required by generally accepted accounting principles or regulators; the effects of ongoing changes in the regulation of the communications industry as a result of federal and state legislation and regulation, including potential changes in state rate of return limitations on our earnings, access charges and subsidy payments, and regulatory network upgrade and reliability requirements; our ability to effectively manage our operations, operating expenses and capital expenditures, to pay dividends and to reduce or refinance our debt; adverse changes in the credit markets and/or in the ratings given to our debt securities by nationally accredited ratings organizations, which could limit or restrict the availability of, and/or increase the cost of financing; the effects of bankruptcies and home foreclosures, which could result in increased bad debts; the effects of technological changes and competition on our capital expenditures and product and service offerings, including the lack of assurance that our ongoing network improvements will be sufficient to meet or exceed the capabilities and quality of competing networks; the effects of increased medical, retiree and pension expenses and related funding requirements; changes in income tax rates, tax laws, regulations or rulings, and/or federal or state tax assessments; further declines in the value of our pension plan assets, which could require us to make contributions to the pension plan beginning in 2010; the effects of state regulatory cash management policies on our ability to transfer cash among our subsidiaries and to the parent company; our ability to successfully renegotiate union contracts expiring in 2009 and thereafter; our ability to pay a $1.00 per common share dividend annually, which may be affected by our cash flow from operations, amount of capital expenditures, debt service requirements, cash paid for income taxes (which will increase in 2009) and our liquidity; the effects of significantly increased cash taxes in 2009 and thereafter; the effects of any unfavorable outcome with respect to any of our current or future legal, governmental or regulatory proceedings, audits or disputes; the possible impact of adverse changes in political or other external factors over which we have no control; and the effects of hurricanes, ice storms and other severe weather. These and other uncertainties related to our business are described in greater detail in our filings with the Securities and Exchange Commission, including our reports on Forms 10-K and 10-Q, and the foregoing information should be read in conjunction with these filings. We do not intend to update or revise these forward-looking statements to reflect the occurrence of future events or circumstances.


Frontier Communications Corporation

Consolidated Financial Data(1)

              For the quarter               For the year ended
              ended

              December 31,                  December 31,

(Amounts in                         %                                       %
thousands,                          Change                                  Change
except per    2008       2007              2008            2007
share
amounts)

Income
Statement
Data

Revenue       $ 547,392  $ 577,228  -5%     $   2,237,018  $ 2,288,015 (2)  -2%

Network
access          54,988     66,601   -17%        222,013      228,242        -3%
expenses

Other
operating       201,655    190,580  6%          810,748      808,501        0%
expenses

Depreciation
and             138,815    145,156  -4%         561,801      545,856        3%
amortization

Total
operating       395,458    402,337  -2%         1,594,562    1,582,599      1%
expenses

Operating       151,934    174,891  -13%        642,456      705,416        -9%
income

Investment
and other       2,874      7,276    -61%        9,334        17,948         -48%
income, net
(3)

Interest        90,731     92,925   -2%         362,634      380,696        -5%
expense

Income
before          64,077     89,242   -28%        289,156      342,668        -16%
income taxes

Income tax      29,779     30,229   -1%         106,496      128,014        -17%
expense

Net income
available     $ 34,298   $ 59,013   -42%    $   182,660    $ 214,654        -15%
for common
shareholders

Weighted
average         309,634    327,028  -5%         317,501      331,037        -4%
shares
outstanding

Basic net
income per
share
attributable  $ 0.11     $ 0.18     -39%    $   0.58       $ 0.65      (2)  -11%
to common
shareholders
(4)

Other
Financial
Data

Capital       $ 84,065   $ 113,152  -26%    $   288,264    $ 315,793        -9%
expenditures

Operating
cash flow       295,961    306,451  -3%         1,213,967    1,212,883      0%
(5)

Free cash       109,079    104,387  4%          493,197      528,005        -7%
flow (5)

Dividends       77,835     81,941   -5%         318,437      336,025        -5%
paid

Dividend
payout ratio    71%        78%      -9%         65%          64%            2%
(6)




     On March 8, 2007, we acquired Commonwealth Telephone Enterprises, Inc.
     (CTE) for approximately $1.1 billion, and on October 31, 2007, we acquired
(1)  Global Valley Networks, Inc. and GVN Services (together GVN) for $62.0
     million, and have included the historical results of CTE and GVN from the
     dates of acquisition.

(2)  Includes the $38.7 million favorable impact of a carrier dispute
     settlement, representing $.07 per share.

     Includes premium on debt repurchases of $6.3 million and $18.2 million for
(3)  the years ended December 31, 2008 and 2007, respectively, and $4.1 million
     for bridge loan fee for the year ended December 31, 2007.

(4)  Calculated based on weighted average shares outstanding.

(5)  A reconciliation to the most comparable GAAP measure is presented at the
     end of these tables.

(6)  Represents dividends paid divided by free cash flow.




Frontier Communications Corporation

Consolidated Financial and Operating Data(1)

              For the quarter ended             For the year ended

              December 31,                      December 31,

(Amounts in                             %                                         %
thousands,                              Change                                    Change
except        2008         2007                2008              2007
operating
data)

Select
Income
Statement
Data

Revenue

Local         $ 205,783    $ 219,977    -6%     $ 848,393        $ 875,762        -3%
services

Data and
internet        153,931      147,292    5%        605,615          543,764        11%
services

Access          96,337       113,881    -15%      404,713          479,462   (2)  -16%
services

Long
distance        42,799       45,313     -6%       182,559          180,525        1%
services

Directory       27,523       28,910     -5%       113,347          114,586        -1%
services

Other           21,019       21,855     -4%       82,391           93,916         -12%

Total           547,392      577,228    -5%       2,237,018        2,288,015      -2%
revenue

Expenses

Network
access          54,988       66,601     -17%      222,013          228,242        -3%
expenses

Other
operating       201,655      190,580    6%        810,748          808,501        0%
expenses (3)

Depreciation
and             138,815      145,156    -4%       561,801          545,856        3%
amortization

Total
operating       395,458      402,337    -2%       1,594,562        1,582,599      1%
expenses

Operating     $ 151,934    $ 174,891    -13%    $ 642,456        $ 705,416        -9%
Income

Other
Financial
and
Operating
Data

Revenue:

Residential   $ 225,107    $ 240,236    -6%     $ 944,786        $ 958,453        -1%

Business        225,948      223,111    1%        887,519          850,100        4%

Total
customer        451,055      463,347    -3%       1,832,305        1,808,553      1%
revenue

Regulatory
(Access         96,337       113,881    -15%      404,713          479,462        -16%
services)

Total         $ 547,392    $ 577,228    -5%     $ 2,237,018      $ 2,288,015      -2%
revenue

Access
lines:

Residential     1,454,268    1,587,930  -8%       1,454,268        1,587,930      -8%

Business        800,065      841,212    -5%       800,065          841,212        -5%

Total access    2,254,333    2,429,142  -7%       2,254,333        2,429,142      -7%
lines

Other data:

Employees       5,671        5,939      -5%       5,671            5,939          -5%

High-Speed
Internet
(HSI)           579,943      522,845    11%       579,943          522,845        11%
subscribers
(4)

Video           119,919      93,596     28%       119,919          93,596         28%
subscribers

Switched
access
minutes of      2,365        2,605      -9%       10,027           10,592         -5%
use (in
millions)

Average
monthly
total         $ 80.19      $ 78.70      2%      $ 83.05     (5)  $ 79.94     (6)  4%
revenue per
access line

Average
monthly
customer      $ 66.08      $ 63.17      5%      $ 68.65     (5)  $ 65.00     (5)  6%
revenue per
access line




     On March 8, 2007, we acquired Commonwealth Telephone Enterprises, Inc.
     (CTE) for approximately $1.1 billion, and on October 31, 2007, we acquired
(1)  Global Valley Networks, Inc. and GVN Services (together GVN) for $62.0
     million, and have included the historical results of CTE and GVN from the
     dates of acquisition.

(2)  Includes the $38.7 million favorable impact of a carrier dispute
     settlement.

     Includes severance and early retirement costs of $4.0 million for the
     quarter ended December 31, 2008, and $7.6 million and $13.9 million for the
     years ended December 31, 2008 and 2007, respectively. Includes pension
(3)  curtailment gain of $14.4 million for the quarter and year ended December
     31, 2007. Includes legal settlement costs and related expenses of $1.2
     million and $0.8 million for the quarters ended December 31, 2008 and 2007,
     respectively, and $2.1 million and $0.8 million for the years ended
     December 31, 2008 and 2007, respectively.

(4)  High-Speed Internet subscribers as of October 1, 2008 have been revised by
     516 to 571,430, arising from the CARS billing system conversion.

(5)  For the years ended December 31, 2008 and 2007, the calculations exclude
     CTE and GVN data.

     For the year ended December 31, 2007, the calculation excludes CTE and GVN
     data and excludes the $38.7 million favorable one-time impact from the
(6)  first quarter 2007 settlement of a switched access dispute. The amount is
     $81.50 with the $38.7 million favorable one-time impact from the
     settlement.




Frontier Communications Corporation

Condensed Consolidated Balance Sheet Data(1)

(Amounts in thousands)

                                            December 31, 2008  December 31, 2007

ASSETS

Current assets:

Cash and cash equivalents                   $ 163,627          $ 226,466

Accounts receivable and other current         304,332            297,688
assets

Total current assets                          467,959            524,154

Property, plant and equipment, net            3,239,973          3,335,244

Other long-term assets                        3,180,744          3,396,671

Total assets                                $ 6,888,676        $ 7,256,069

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Long-term debt due within one year          $ 3,857            $ 2,448

Accounts payable and other current            378,918            443,443
liabilities

Total current liabilities                     382,775            445,891

Deferred income taxes and other               1,265,171          1,075,382
liabilities

Long-term debt                                4,721,685          4,736,897

Shareholders' equity                          519,045            997,899

Total liabilities and shareholders' equity  $ 6,888,676        $ 7,256,069




     On March 8, 2007, we acquired Commonwealth Telephone Enterprises, Inc.
     (CTE) for approximately $1.1 billion, and on October 31, 2007, we acquired
(1)  Global Valley Networks, Inc. and GVN Services (together GVN) for $62.0
     million, and have included the historical results of CTE and GVN from the
     dates of acquisition.




Frontier Communications Corporation

Consolidated Cash Flow Data(1)

(Amounts in thousands)

                                                 For the year ended December 31,

                                                 2008          2007

Cash flows provided by (used in) operating
activities:

Net income                                       $ 182,660     $ 214,654

Adjustments to reconcile income to net cash
provided by operating activities:

Depreciation and amortization expense              561,801       545,856

Stock based compensation expense                   7,788         9,022

Loss on extinguishment of debt                     6,290         20,186

Other non-cash adjustments                         (7,044   )    (7,598     )

Deferred income taxes                              33,967        81,011

Legal settlement                                   -             (7,905     )

Change in accounts receivable                      9,746         (4,714     )

Change in accounts payable and other               (52,047  )    (36,257    )
liabilities

Change in other current assets                     (3,895   )    7,428

Net cash provided by operating activities          739,266       821,683

Cash flows provided from (used by) investing
activities:

Capital expenditures                               (288,264 )    (315,793   )

Cash paid for acquisitions, net                    -             (725,548   )

Other assets (purchased) distributions             5,489         6,629
received, net

Net cash used by investing activities              (282,775 )    (1,034,712 )

Cash flows provided from (used by) financing
activities:

Long-term debt borrowings                          135,000       950,000

Long-term debt payments                            (142,480 )    (946,070   )

Settlement of interest rate swaps                  15,521        -

Financing costs paid                               (857     )    (12,196    )

Premium paid to retire debt                        (6,290   )    (20,186    )

Issuance of common stock                           1,398         13,808

Common stock repurchased                           (200,000 )    (250,000   )

Dividends paid                                     (318,437 )    (336,025   )

Repayment of customer advances for construction    (3,185   )    (942       )

Net cash used by financing activities              (519,330 )    (601,611   )

Decrease in cash and cash equivalents              (62,839  )    (814,640   )

Cash and cash equivalents at January 1,            226,466       1,041,106

Cash and cash equivalents at December 31,        $ 163,627     $ 226,466

Cash paid during the period for:

Interest                                         $ 365,858     $ 364,381

Income taxes                                     $ 78,878      $ 54,407




     On March 8, 2007, we acquired Commonwealth Telephone Enterprises, Inc.
     (CTE) for approximately $1.1 billion, and on October 31, 2007, we acquired
(1)  Global Valley Networks, Inc. and GVN Services (together GVN) for $62.0
     million, and have included the historical results of CTE and GVN from the
     dates of acquisition.




                                                              Schedule A

Reconciliation of Non-GAAP Financial Measures(1)

                 For the quarter ended December  For the year ended December 31,
                 31,

(Amounts in      2008         2007               2008         2007
thousands)

Net Income to
Free Cash Flow
;
Net Cash
Provided by
Operating
Activities

Net income       $ 34,298     $ 59,013           $ 182,660    $ 214,654

Add back:

Depreciation
and                138,815      145,156            561,801      545,856
amortization

Income tax         29,779       30,229             106,496      128,014
expense

Stock based        (1,423  )    1,213              7,788        9,022
compensation

Subtract:

Cash paid for      8,704        737                78,878       54,407
income taxes

Pension
curtailment        -            14,379             -            14,379
gain (non-cash)

Other income       (379    )    2,956              (1,594  )    (15,038 )
(loss), net (2)

Capital            84,065       113,152            288,264      315,793
expenditures

Free cash flow     109,079      104,387            493,197      528,005

Add back:

Deferred income    45,007       26,887             33,967       81,011
taxes

Non-cash
(gains)/losses,    (1,355  )    (18,990 )          7,034        21,610
net

Other income       (379    )    2,956              (1,594  )    (15,038 )
(loss), net (2)

Pension
curtailment        -            14,379             -            14,379
gain (non-cash)

Cash paid for      8,704        737                78,878       54,407
income taxes

Capital            84,065       113,152            288,264      315,793
expenditures

Subtract:

Changes in
current assets     (25,411 )    (56,353 )          46,196       41,448
and liabilities

Income tax         29,779       30,229             106,496      128,014
expense

Stock based        (1,423  )    1,213              7,788        9,022
compensation

Net cash
provided by      $ 242,176    $ 268,419          $ 739,266    $ 821,683
operating
activities




     On March 8, 2007, we acquired Commonwealth Telephone Enterprises, Inc.
     (CTE) for approximately $1.1 billion, and on October 31, 2007, we acquired
(1)  Global Valley Networks, Inc. and GVN Services (together GVN) for $62.0
     million, and have included the historical results of CTE and GVN from the
     dates of acquisition.

     Includes premium on debt repurchases of $6.3 million and $18.2 million for
(2)  the years ended December 31, 2008 and 2007, respectively, and $4.1 million
     for bridge loan fee for the year ended December 31, 2007.

(3)  Includes the $38.7 million favorable impact of a carrier dispute
     settlement.




                                                                                                 Schedule B

Reconciliation of Non-GAAP Financial Measures(1)

              For the quarter ended December 31, 2008                For the quarter ended December 31, 2007

(Amounts in
thousands)

Operating                    Severance
Cash Flow                      Legal
and           As             anSettlement             As             As             Pension     As
              Reported                                Adjusted       Reported       Curtailment Adjustedent
Operating                    ReCosts                                                Gain
Cash Flow
Margin                       Costs

Operating     $ 151,934      $ (4,000 )   $ (1,212 )  $ 157,146      $ 174,891      $ 14,379     $ (783    )   $ 161,295
Income

Add back:

Depreciation
and             138,815        -            -           138,815        145,156        -            -             145,156
amortization

Operating     $ 290,749      $ (4,000 )   $ (1,212 )  $ 295,961      $ 320,047      $ 14,379     $ (783    )   $ 306,451
cash flow

Revenue       $ 547,392                               $ 547,392      $ 577,228                                 $ 577,228

Operating
income
margin

(Operating
income          27.8      %                             28.7      %    30.3      %                               27.9    %
divided by
revenue)

Operating
cash flow
margin

(Operating
cash flow       53.1      %                             54.1      %    55.4      %                               53.1    %
divided by
revenue)

              For the year ended December 31, 2008                   For the year ended December 31, 2007

Operating                    Severance                                                           Severance
Cash Flow                      Legal                                                Carrier        Pension       Legal
and           As             an                       As             As                          anAs
              Reported         Settlement             Adjusted       Reported       Dispute                ent   Settlement
Operating                    Re                                                                  ReAdjusted
Cash Flow                      Costs                                                Settlement                   Costs
Margin                       Co                                                                  Co

Operating     $ 642,456      $ (7,597 )   $ (2,113 )  $ 652,166      $ 705,416      $ 38,700     $ (13,874 )   $ 14,379     $ (816 )  $ 667,027
Income

Add back:

Depreciation
and             561,801        -            -           561,801        545,856        -            -             -            -         545,856
amortization

Operating     $ 1,204,257    $ (7,597 )   $ (2,113 )  $ 1,213,967    $ 1,251,272    $ 38,700     $ (13,874 )   $ 14,379     $ (816 )  $ 1,212,883
cash flow

Revenue       $ 2,237,018                             $ 2,237,018    $ 2,288,015    $ 38,700                                          $ 2,249,315

Operating
income
margin

(Operating
income          28.7      %                             29.2      %    30.8      %                                                      29.7      %
divided by
revenue)

Operating
cash flow
margin

(Operating
cash flow       53.8      %                             54.3      %    54.7      %                                                      53.9      %
divided by
revenue)




     On March 8, 2007, we acquired Commonwealth Telephone Enterprises, Inc.
     (CTE) for approximately $1.1 billion, and on October 31, 2007, we acquired
(1)  Global Valley Networks, Inc. and GVN Services (together GVN) for $62.0
     million, and have included the historical results of CTE and GVN from the
     dates of acquisition.




    Source: Frontier Communications
Contact: Frontier Communications David Whitehouse, 203-614-5708 Senior Vice President & Treasurer david.whitehouse@frontiercorp.com