Press Release

Frontier Communications Reports Strong 2009 First-Quarter Results

20,100 High-Speed Internet Additions 26,100 DISH Network Video Customer Additions First Quarter Free Cash Flow of $146 Million First Quarter Operating Cash Flow Margin of 54%, as Adjusted First Quarter Dividend Payout Ratio of 53% Data and Internet Services Revenue up 7% Year over Year

Company Release - 5/7/2009 7:00 AM ET

STAMFORD, Conn.--(BUSINESS WIRE)-- Frontier Communications (NYSE:FTR) today reported first-quarter 2009 revenue of $538.0 million, operating income of $139.5 million and net income attributable to common shareholders of Frontier of $36.3 million.

"I am very pleased with Frontier Communication's 2009 first quarter results bolstered by our "Rolling Thunder" promotional campaign," said Maggie Wilderotter, Frontier Communications Chairman and CEO. "Frontier surpassed 600,000 High-Speed Internet customers and as of today has surpassed 150,000 DISH Network video customers. Our first quarter High-Speed growth was the best since the first quarter of 2008 and our first quarter DISH video growth was equal to all video subscribers added during the entire year of 2008. We took market share from our cable competition and we improved our customer churn. Access line losses improved for the third consecutive quarter."

Revenue for the first quarter of 2009 was $538.0 million compared to $569.2 million in the first quarter of 2008, a 5 percent decrease. Revenue declined as a result of lower access lines and reduced switched access and subsidy revenue, partially offset by a 7 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 $2.90, or 5%, over the prior year's first quarter while the monthly total revenue per access line has increased $1.40, 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 first quarter of 2009 were $260.9 million as compared to $263.8 million in the first quarter of 2008, a 1 percent decrease. Expenses in the first quarter of 2009 include non-cash pension costs of $8.2 million, as compared to $(0.5) million in the first quarter of 2008. Excluding these costs, other operating expenses and network access expenses declined $11.6 million, or 4%, in 2009.

Operating income for the first quarter of 2009 was $139.5 million and operating income margin was 25.9 percent compared to operating income of $164.3 million and operating income margin of 28.9 percent in the first quarter of 2008. The first quarter 2009 decrease of $24.8 million is primarily the result of the reduction in revenue, partially offset by lower expenses.

Investment and other income (loss), net for the first quarter of 2008 reflects the premium paid of $6.3 million to repurchase a portion of the Company's 9.25% Senior Notes due 2011.

The Company lost approximately 37,500 access lines during the first quarter of 2009 and had 2,216,800 access lines at March 31, 2009.

The Company added approximately 20,100 net High-Speed Internet customers during the first quarter of 2009 and had 600,000 High-Speed Internet customers at March 31, 2009. The Company added approximately 26,100 video customers during the first quarter of 2009 and had 146,000 video customers at March 31, 2009.

Capital expenditures were $54.6 million for the first quarter of 2009.

Operating cash flow, as adjusted, was $287.9 million for the first quarter of 2009 resulting in an operating cash flow margin of 53.5 percent. Operating cash flow, as reported, of $277.1 million has been adjusted to exclude $2.6 million of severance and early retirement costs and $8.2 million of non-cash pension costs for the first quarter of 2009.

Free cash flow was $146.1 million for the first quarter of 2009. The Company's dividend represents a payout of 53 percent of free cash flow for the first quarter of 2009.

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

In April 2009, we completed a registered offering of $600.0 million aggregate principal amount of 8.25% senior unsecured notes due 2014. We received net proceeds of approximately $539.0 million from the offering which we intend to use to reduce, repurchase or refinance our indebtedness. As of May 7, 2009 we have used $206.7 million of the proceeds to repurchase $214.4 million principal amount of debt.

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 $8.2 million and $(0.5) million of non-cash pension costs in the first quarters of 2009 and 2008, respectively, because the Company believes that such costs in the first quarters of 2009 and 2008 are unusual, and that the magnitude of such costs in the first quarter of 2009 materially exceed the comparable costs in the first quarter of 2008. In addition, the Company has shown adjustments to its financial presentations to exclude $2.6 million and $2.9 million of severance and early retirement costs in the first quarters of 2009 and 2008, respectively, and $0.8 million of legal settlement costs and related expenses in the first quarter of 2008 because investors have indicated to management that such adjustments are useful to them in assessing the Company and its results of operations.

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 5,600 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, at the earliest; 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 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

                                                  For the quarter ended

                                                  March 31,               %

(Amounts in thousands, except per share             2009       2008       Change
amounts)

Income Statement Data

Revenue                                           $ 537,956  $ 569,205    -5   %

Network access expenses                             60,684     60,549     0    %

Other operating expenses                            200,204    203,264    -2   %

Depreciation and amortization                       137,558    141,080    -2   %

Total operating expenses                            398,446    404,893    -2   %

Operating income                                    139,510    164,312    -15  %

Investment and other income (loss), net (1)         8,247      (907    )  1009 %

Interest expense                                    88,749     90,860     -2   %

Income before income taxes                          59,008     72,545     -19  %

Income tax expense                                  22,053     26,628     -17  %

Net income                                          36,955     45,917     -20  %

Less: Income attributable to the
noncontrolling interest in a                        652        328        99   %
partnership

Net income attributable to common shareholders    $ 36,303   $ 45,589     -20  %
of Frontier

Weighted average shares outstanding                 309,826    326,173    -5   %

Basic net income per share attributable to        $ 0.12     $ 0.14       -14  %

common shareholders of Frontier(2)

Other Financial Data

Capital expenditures                              $ 54,572   $ 47,986     14   %

Operating cash flow, as adjusted (3)                287,870    308,575    -7   %

Free cash flow (3)                                  146,148    172,280    -15  %

Dividends paid                                      78,085     82,103     -5   %

Dividend payout ratio (4)                           53%        48%        10   %




(1)  Includes premium on debt repurchases of $6.3 million for the quarter ended
     March 31, 2008.

(2)  Calculated based on weighted average shares outstanding. FSP EITF No.
     03-6-1, "Determining

     Whether Instruments Granted in Share-Based Payment Transactions are
     Participating Securities" was

     adopted in the first quarter of 2009.

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

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




Frontier Communications Corporation

Consolidated Financial and Operating Data

                                           For the quarter ended

                                           March 31,                  %

(Amounts in thousands, except operating      2009          2008       Change
data)

Select Income Statement Data

Revenue

Local services                             $ 200,896     $ 217,158    -7  %

Data and internet services                   156,393       145,982    7   %

Access services                              90,065        107,818    -16 %

Long distance services                       41,412        46,453     -11 %

Directory services                           27,705        28,628     -3  %

Other                                        21,485        23,166     -7  %

Total revenue                                537,956       569,205    -5  %

Expenses

Network access expenses                      60,684        60,549     0   %

Other operating expenses (1)                 200,204       203,264    -2  %

Depreciation and amortization                137,558       141,080    -2  %

Total operating expenses                     398,446       404,893    -2  %

Operating Income                           $ 139,510     $ 164,312    -15 %

Other Financial and Operating Data

Revenue:

Residential                                $ 230,466     $ 241,362    -5  %

Business                                     217,425       220,025    -1  %

Total customer revenue                       447,891       461,387    -3  %

Regulatory (Access services)                 90,065        107,818    -16 %

Total revenue                              $ 537,956     $ 569,205    -5  %

Access lines:

Residential                                  1,427,149     1,553,094  -8  %

Business                                     789,654       832,979    -5  %

Total access lines                           2,216,803     2,386,073  -7  %

Other data:

Employees                                    5,628         5,828      -3  %

High-Speed Internet (HSI) subscribers        600,047       543,020    11  %

Video subscribers                            146,010       101,410    44  %

Switched access minutes of use (in           2,377         2,602      -9  %
millions)

Average monthly total revenue per

access line                                $ 80.21       $ 78.81      2   %

Average monthly customer revenue per

access line                                $ 66.78       $ 63.88      5   %




(1)  Includes severance and early retirement costs of $2.6 million and $2.9
     million for the quarters ended

     March 31, 2009 and 2008, respectively. Includes non-cash pension costs of
     $8.2 million and

     $(0.5) million for the quarters ended March 31, 2009 and 2008,
     respectively. Includes legal

     settlement costs of $0.8 million for the quarter ended March 31, 2008.




Frontier Communications Corporation

Condensed Consolidated Balance Sheet Data

(Amounts in thousands)

                                         March 31, 2009   December 31, 2008

ASSETS

Current assets:

Cash and cash equivalents                $ 177,431        $ 163,627

Accounts receivable and other current      287,690          304,332
assets

Total current assets                       465,121          467,959

Property, plant and equipment, net         3,201,965        3,239,973

Other long-term assets                     3,133,199        3,180,744

Total assets                             $ 6,800,285      $ 6,888,676

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Long-term debt due within one year       $ 3,872          $ 3,857

Accounts payable and other current         321,885          378,918
liabilities

Total current liabilities                  325,757          382,775

Deferred income taxes and other            1,260,630        1,254,610
liabilities

Long-term debt                             4,720,713        4,721,685

Shareholders' equity                       493,185          529,606

Total liabilities and equity             $ 6,800,285      $ 6,888,676




Frontier Communications Corporation

Consolidated Cash Flow Data

(Amounts in thousands)

                                           For the three months ended March 31,

                                             2009          2008

Cash flows provided by (used in)
operating activities:

Net income                                 $ 36,955      $ 45,917

Adjustments to reconcile net income to
net cash provided

by operating activities:

Depreciation and amortization expense        137,558       141,080

Stock based compensation expense             2,122         3,019

Pension expense                              8,246         (530     )

Loss on extinguishment of debt               -             6,290

Other non-cash adjustments                   (3,759  )     (1,741   )

Deferred income taxes                        4,125         (282     )

Change in accounts receivable                9,211         19,057

Change in accounts payable and other         (47,409 )     (69,731  )
liabilities

Change in other current assets               26            (1,568   )

Net cash provided by operating               147,075       141,511
activities

Cash flows provided from (used by)
investing activities:

Capital expenditures                         (54,572 )     (47,986  )

Other assets (purchased) distributions       158           654
received, net

Net cash used by investing activities        (54,414 )     (47,332  )

Cash flows provided from (used by)
financing activities:

Long-term debt borrowings                    -             135,000

Long-term debt payments                      (962    )     (129,332 )

Settlement of interest rate swaps            -             15,521

Financing costs paid                         -             (857     )

Premium paid to retire debt                  -             (6,290   )

Issuance of common stock                     680           591

Common stock repurchased                     -             (24,784  )

Dividends paid                               (78,085 )     (82,103  )

Repayment of customer advances for           (490    )     (757     )
construction

Net cash used by financing activities        (78,857 )     (93,011  )

Increase in cash and cash equivalents        13,804        1,168

Cash and cash equivalents at January 1,      163,627       226,466

Cash and cash equivalents at March 31,     $ 177,431     $ 227,634

Cash paid during the period for:

Interest                                   $ 116,408     $ 121,396

Income taxes                               $ 1,255       $ 1,859




Schedule A

Reconciliation of Non-GAAP Financial Measures

                                             For the quarter ended March 31,

(Amounts in thousands)                         2009        2008

Net Income to Free Cash Flow ;

Net Cash Provided by Operating Activities

Net income                                   $ 36,955    $ 45,917

Add back:

Depreciation and amortization                  137,558     141,080

Income tax expense                             22,053      26,628

Pension expense (non-cash) (1)                 8,246       (530    )

Stock based compensation                       2,122       3,019

Subtract:

Cash paid for income taxes                     1,255       1,859

Other income (loss), net (2)                   4,959       (6,011  )

Capital expenditures                           54,572      47,986

Free cash flow                                 146,148     172,280

Add back:

Deferred income taxes                          4,125       (282    )

Non-cash (gains)/losses, net                   6,609       7,038

Other income (loss), net (2)                   4,959       (6,011  )

Cash paid for income taxes                     1,255       1,859

Capital expenditures                           54,572      47,986

Subtract:

Changes in current assets and liabilities      38,172      52,242

Income tax expense                             22,053      26,628

Pension expense (non-cash)(1)                  8,246       (530    )

Stock based compensation                       2,122       3,019

Net cash provided by operating activities    $ 147,075   $ 141,511




(1)  Includes pension expense of $10.2 million and $(0.7) million, less amounts
     capitalized into the cost of capital

     expenditures of $2.0 million and $(0.2) million, for the quarters ended
     March 31, 2009 and 2008, respectively.

(2)  Includes premium on debt repurchases of $6.3 million for the quarter ended
     March 31, 2008.




Schedule B

Reconciliation of Non-GAAP Financial Measures

               For the quarter ended March 31, 2009          For the quarter ended March 31, 2008

(Amounts in
thousands)

                          Severance                                     Severance

                          and Early    Non-cash                         and Early    Non-cash   Legal

Operating
Cash Flow      As         Retirement   Pension    As         As         Retirement   Pension    Settlement   As
and

Operating
Cash Flow      Reported   Costs        Costs(1)   Adjusted   Reported   Costs        Costs(1)   Costs        Adjusted
Margin

Operating      $          $ (2,556)    $          $          $          $ (2,891)    $ 530      $ (822)      $
Income         139,510                 (8,246)    150,312    164,312                                         167,495

Add back:

Depreciation
and

amortization   137,558    -            -          137,558    141,080    -            -          -            141,080

Operating      $          $ (2,556)    $          $          $          $ (2,891)    $ 530      $ (822)      $
cash flow      277,068                 (8,246)    287,870    305,392                                         308,575

Revenue        $                                  $          $                                               $
               537,956                            537,956    569,205                                         569,205

Operating
income
margin

(Operating
income
divided

by revenue)    25.9%                              27.9%      28.9%                                           29.4%

Operating
cash flow
margin

(Operating
cash flow
divided

by revenue)    51.5%                              53.5%      53.7%                                           54.2%




(1)  Includes pension expense of $10.2 million and $(0.7) million, less amounts
     capitalized into the cost of capital

     expenditures of $2.0 million and $(0.2) million, for the quarters ended
     March 31, 2009 and 2008, respectively.




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