Highlights     --  Successfully completed an exchange offer for nearly 83 percent of       outstanding senior notes enabling the Company to reduce cash interest       expense for the second quarter of 2009 by approximately $14.4 million.   --  After giving effect to the conversion of a portion of the Company's       cash interest expense to non-cash as a result of the exchange offer,       the Company maintained compliance with all financial covenants       contained in the Company's senior secured credit facility.   --  Access line equivalents declined by 3.0 percent during the second       quarter of 2009 to 1,650,372 compared to 1,700,673 at March 31, 2009.   --  Revenue totaled $299.6 million for the second quarter of 2009, a 3.9       percent decline compared with $311.6 million in the first quarter of       2009.   --  Operating expenses, excluding depreciation, declined by $16.9 million,       or 7.1 percent, to $220.7 million during the second quarter of 2009       compared to the first quarter of this year.    --  Adjusted EBITDA (a non-GAAP financial measure as defined herein)       totaled $99.9 million for the second quarter of 2009, compared with       $123.2 million in the first quarter of 2009.    

"Operationally, we continued to make steady progress during the second quarter," stated David Hauser, Chairman and CEO of FairPoint. "The issues experienced with the systems cutover are continuing to improve and most of them are behind us. Going forward, we will be focusing on three primary areas: improving customer service, growing business and broadband revenue and reducing costs."

"Financially, while we were pleased with the successful completion of the exchange offer with our bondholders in July, this represented only the first step in a more comprehensive debt restructuring. While the exchange offer provides us with additional time, we remain fully committed to permanently deleveraging our current capital structure. Once completed, we will be able to focus all of our attention toward profitably growing the business," concluded Hauser.

Second Quarter Results

Revenue for the second quarter of 2009 totaled $299.6 million, a decline of $12.0 million, or 3.9%, compared to the first quarter of 2009 reflecting the continued decrease in access line equivalents and the weak economic environment. Operating expenses, excluding depreciation, for the second quarter of 2009 totaled $220.7 million, a decline of $16.9 million, or 7.1%, compared to the first quarter of 2009. Cutover related costs totaled $8.7 million in the second quarter of 2009, a decline of $26.6 million from the first quarter which included costs under the transition services agreement with Verizon. Excluding cutover related costs, operating expenses increased by $9.7 million in the second quarter of 2009.

Adjusted EBITDA totaled $99.9 million for the three months ended June 30, 2009, compared with $123.2 million for the first quarter of 2009. The decline in Adjusted EBITDA primarily reflects the reduced level of revenue and higher operating expenses incurred for services that were previously covered under the transition services agreement with Verizon, as well as higher bad debt expenses and costs related to the exchange offer.

Operating Metrics

Total access line equivalents were 1,650,372 at June 30, 2009, compared with 1,820,307 at June 30, 2008, a decline of 9.3%. During the second quarter, total access line equivalents declined by 3.0% compared with a decline of 1.6% during the first quarter of 2009 (normalizing for a previously reported one-time first quarter adjustment to access lines identified during the systems cutover).

HSD subscribers totaled 296,107 as of June 30, 2009, a decrease of 1.6% compared with 300,882 at March 31, 2009 and an increase of 0.6% compared with 294,412 at June 30, 2008. HSD subscribers increased by 3.4% in Legacy FairPoint during the second quarter, while declining by 3.3% in the northern New England operations. We believe the decline in northern New England reflects the absence of promotional activity during the first half of 2009 as a result of cutover related issues. Total HSD penetration was 21.9% as of June 30, 2009, compared with 21.5% at March 31, 2009 and 19.3% at June 30, 2008.

Long distance subscribers totaled 605,468 at June 30, 2009, down 2.9% from 623,497 as of March 31, 2009 and down 7.8% compared with a year ago. Long distance penetration was 44.7% at June 30, 2009, compared with 44.5% as of March 31, 2009 and 43.0% a year ago.

   Access Line Equivalents                                                       % change  % change                                                      6/30/08 to 3/31/09 to                        6/30/2009 3/31/2009 6/30/2008  6/30/09    6/30/09                        --------- --------- --------- ---------- ---------    Residential access     lines    ------------------    Legacy FairPoint      160,065   162,059   176,891     (9.5%)    (1.2%)    Northern New England  709,633   741,906   819,640    (13.4%)    (4.4%)                        --------- --------- ---------                          869,698   903,965   996,531    (12.7%)    (3.8%)    Business access     lines    ------------------    Legacy FairPoint       51,235    51,344    54,619     (6.2%)    (0.2%)    Northern New England  331,169   339,074   358,014     (7.5%)    (2.3%)                        --------- --------- ---------                          382,404   390,418   412,633     (7.3%)    (2.1%)     Wholesale access     lines                102,163   105,408   116,731    (12.5%)    (3.1%)       Total voice       access lines     1,354,265 1,399,791 1,525,895    (11.2%)    (3.3%)                        --------- --------- ---------     HSD subscribers    ---------------    Legacy FairPoint       79,210    76,619    73,326      8.0%      3.4%    Northern New     England              216,897   224,263   221,086     (1.9%)    (3.3%)                        --------- --------- ---------    Total HSD      subscribers         296,107   300,882   294,412       0.6%    (1.6%)     Total access line     equivalents        1,650,372  1,700,673 1,820,307     (9.3%)    (3.0%)                        ========= ========== =========     Long distance     subscribers          605,468    623,497   656,599     (7.8%)    (2.9%)                        ========= ========== =========    Cash Flow and Liquidity   

For the six months ended June 30, 2009, operating cash flow totaled $28.1 million. Cash flow from operations for the first six months of 2009 was negatively impacted by $43.9 million of expenses related to the systems cutover activities and an increase in accounts receivable, before allowance for uncollectibles, of $29.1 million, largely resulting from cutover related issues. Excluding the impact of these cutover related items, cash flow from operations would have been $101.1 million. The Company also made cash interest payments totaling $107.3 million during the six months ended June 30, 2009 which reduced cash flow from operations. Capital expenditures totaled $90.5 million for the first half of 2009.

During the second quarter, the Company repurchased $12.0 million aggregate principal amount of its senior notes for $4.2 million in cash.

The Company has a highly leveraged capital structure and has essentially fully drawn all borrowings available under its credit facility. In the future, the Company expects that the primary sources of liquidity will be cash flow from operations and cash on hand. Because of systems cutover issues that have prevented the Company from executing fully on its operating plan for 2009, revenue has continued to decline. In addition, cash collections have remained below pre-cutover levels and the Company has incurred significant incremental costs as a result of the cutover issues in its northern New England operations, causing further stress on the Company's liquidity position.

Cash and cash equivalents at June 30, 2009 totaled $81.0 million and $2.4 million remained available under the Company's revolving credit facility. As of June 30, 2009, after giving effect to the conversion of a portion of the Company's cash interest expense to non-cash as a result of the exchange offer, the Company was in compliance with all of the financial covenants contained in its credit facility.

The Company currently believes that the reduction in its cash interest expense resulting from the consummation of the exchange offer may not be sufficient to prevent a breach of the interest coverage ratio maintenance covenant for the measurement period ending September 30, 2009. In addition, the Company currently expects that it may exceed the leverage ratio maintenance covenant limit contained in its credit facility as early as the measurement period ending September 30, 2009. As a result, the Company has initiated discussions with its bondholders regarding a more comprehensive and permanent restructuring of its current capital structure to reduce its indebtedness and debt service obligations.

Conference Call and Webcast

As previously announced, FairPoint will host a conference call and simultaneous webcast to discuss its second quarter results at 8:30 a.m. (EDT) on August 6, 2009. Participants should call (888) 562-3356 (US/Canada) or (973) 582-2700 (international) at 8:20 a.m. (EDT) and request the FairPoint Communications Second Quarter 2009 Earnings Call or Conference ID# 22824129. A telephonic replay will be available for anyone unable to participate in the live call. To access the replay, call (800) 642-1687 (US/Canada) or (706) 645-9291 (international) and enter confirmation code 22824129. The recording will be available from Thursday, August 6, 2009 at 11:30 a.m. (EDT) through Thursday, August 13, 2009 at 11:59 p.m. (EDT).

A live broadcast of the earnings conference call will be available via the Internet at http://www.fairpoint.com/ under the Investors section. An online replay will be available beginning later in the morning on August 6, 2009 and will remain available for one year.

During the conference call, representatives of the Company may discuss and answer one or more questions concerning the Company's business and financial matters. The responses to these questions may contain information that has not been previously disclosed.

The information in this press release should be read in conjunction with the financial statements and footnotes contained in FairPoint's Quarterly Report on Form 10-Q which will be filed with the Securities and Exchange Commission ("SEC"). FairPoint's results for the quarter ended June 30, 2009 are subject to the completion and filing with the SEC of its Quarterly Report on Form 10-Q.

Non-GAAP Financial Measures

Adjusted EBITDA (including Adjusted EBITDA as calculated under FairPoint's credit facility) is a non-GAAP financial measure (i.e., it is not a measure of financial performance under generally accepted accounting principles) and should not be considered in isolation or as a substitute for consolidated statements of operations and cash flow data prepared in accordance with GAAP. In addition, the non-GAAP financial measures used by FairPoint may not be comparable to similarly titled measures of other companies. For a definition of and additional information regarding Adjusted EBITDA, and a reconciliation of such measure to the most comparable financial measure calculated in accordance with GAAP, please see the attachments to this press release.

FairPoint believes Adjusted EBITDA is useful to investors because Adjusted EBITDA is commonly used in the communications industry to analyze companies on the basis of operating performance, liquidity and leverage. FairPoint believes Adjusted EBITDA allows a standardized comparison between companies in the industry, while minimizing the differences from depreciation policies, financial leverage and tax strategies. In addition, certain covenants in FairPoint's credit facility and the indenture governing its senior notes as well as the regulatory orders issued in connection with the acquisition of the Northern New England business contain ratios based on Adjusted EBITDA. The restricted payment covenants in such agreements and orders regulating the payment of dividends on FairPoint's common stock are also based on Adjusted EBITDA. If FairPoint's Adjusted EBITDA were to decline below certain levels, covenants in FairPoint's credit facility that are based on Adjusted EBITDA may be violated and could cause, among other things, a default under such credit facility.

While FairPoint uses Adjusted EBITDA in managing and analyzing its business and financial condition and believes it is useful to its management and investors for the reasons described above, Adjusted EBITDA has 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. FairPoint's management compensates for the shortcomings of Adjusted EBITDA by utilizing it in conjunction with its comparable GAAP financial measures.

About FairPoint

FairPoint Communications, Inc. is an industry leading provider of communications services to communities across the country. Today, FairPoint owns and operates local exchange companies in 18 states offering advanced communications with a personal touch, including local and long distance voice, data, Internet, television and broadband services.