David Whitehouse – SVP, Treasurer Maggie Wilderotter – Chairman, Chief Executive Officer Donald Shassian – Chief Financial Officer

Michael McCormack – J.P. Morgan Chris King – Stifel Nicolaus Frank Louthan – Raymond James Simon Flannery – Morgan Stanley David Barden – Banc of America Jason Armstrong – Goldman Sachs Chris Larson – Piper Jaffray [Anna Gushko – Banc of America]

Welcome to the Frontier Communications second quarter 2009 results conference call. This call is being recorded. At this time I would like to turn the call over to Mr. David Whitehouse.

Good morning everyone. The purpose of this call is to discuss 2009 second quarter results for Frontier Communications which were released this morning. If anyone needs a copy of the materials, please contact Lisa Lombardo at 203-614-5064. We anticipate that Form 10-Q will be filed later this week. On today's call are Maggie Wilderotter, Chairman and Chief Executive Officer and Don Shassian, Chief Financial Officer. During the call we will be making certain forward-looking statements, in particular on matters related to 2009 results and estimates. Please review the Safe Harbor language found in our press release and SEC filings. On this call we will be discussing GAAP and non-GAAP financial measures as defined under SEC rules. In our earnings release and on our web site, frontier.com, we have provided a reconciliation of non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP. Please refer to this material during our discussion. I will now turn the call over to Maggie.

Good morning everyone. We appreciate you joining us today as we discuss the second quarter 2009 results for Frontier Communications Corporation. I'd like to focus my comments on two key areas. First I will provide an overview of our operating results for the second quarter of 2009, and second I am excited to provide you with an update on the pending acquisition from Verizon of access lines located in 14 states announced in May of this year. On the operating front, Frontier communications had a very solid second quarter of 2009. Revenues were $532 million with adjusted operating cash flow, or EBITDA of $288 million. The company generated adjusted free cash flow of $98 million for the quarter and had a comfortable dividend payout ratio of 64% for the first half of 2009. Our operating metrics were also very solid for the quarter. Some of this strength is the result of the halo effect from our Q1 Rolling Thunder promotional campaign which we extended through the end of April. In Q2, 2009 we added 11,400 new dish customers, our second largest quarterly increase ever, topped only by last quarter which had the full force of the Rolling Thunder campaign behind it. Our total dish subscriber count at the end of the quarter was 157,400, an increase of 46% year over year. Our video penetration of residential access lines increased from 8.9% in Q4 2008 to 12.1% at the end of Q2 2009. During the quarter, our high speed data net adds increased by 13,800, resulting in a total of 614,000 customers. This is a 9.7% increase over Q2 2008. Our monthly revenue for high speed customer is best in class at over $40.00 with residential broadband penetration increasing to 42%. Quarterly access line losses were at their lowest level in over two years. Our net line losses of 27,700 represents a 6.5% annual decline. The absolute number of line losses decreased 39% as compared to Q2 2008. We have now seen steady access loss improvement for the past four quarters thanks in part to increased bundled sales, price protection plans and less residential lose out of territory. Digital voice product bundles continued to gain strength during the quarter. We have rolled out new packages, pricing and features in our voice bundles to further promote long distance usage. We now have approximately 623,500 customers on digital voice bundles which is a 3.2% quarterly increase and a 48% penetration of primary residential access lines. Our Q2 average monthly customer revenue per access line increased from $60.10 to $67.29 year over year, a 3.4% improvement. We also increased the penetration of our residential access line customers on price protection plans to 50% and bundled customers on price protection plans to over 75%. Peace of Mind customers expanded to 28,050 on our computer assistance and hard drive backup bundles at monthly re-occurring revenue price points ranging from $4.99 to $12.99. This is an 11% increase over last quarter. Incremental revenue per residential customer is averaging $10.43 per month. Quarterly internet revenues which include our Peace of Mind product suite, internet advertising and security software for our high speed customers grew 8% over the first quarter. Wireless data revenues also grew in the quarter. Our 19 municipal WiFi networks now have 297,000 anchor tenants and hot spots. In addition, we have 13,000 monthly re-occurring revenue licenses with colleges, hotels and municipalities. Our proactive expense management during the second quarter contributed to EBITDA margins of 54.2% adjusted for severance, acquisition related costs and non cash pension expense. Our Q2 margin is well without our target range of 53% to 56%. I'd now like to switch gears and give you an update on the activities taking place with respect to our acquisition of Verizon access lines in 14 states. Overall, the transaction is progressing as planned on all key fronts. As it relates to shareholder approval, we completed the first step with an initial filing of our S-4 registration statement on July 24. On the regulatory front we completed and filed all applications with the SEC and required State Public Utility Commissions. We are responding to interrogatory questions in a timely fashion in order to keep the state approval process moving forward. This process also involves receiving approval from 41 separate local video franchise areas. We have already received two early local franchise area approvals and are expecting more in the near future. Frontier has established a full time dedicated integration team comprised of experienced internal senior managers to coordinate the overall pre and post merger integration process. Each functional area had dedicated Frontier integration leadership who have access to additional resources and expertise as necessary. Frontier and Verizon have been working diligently on the conversion of the West Virginia property which will be completed by closing. A cut over planning committee which has been in place for several weeks, is finalizing the detailed work plan of milestones necessary for completion of this critical project. Execution on the plan is well underway. Finally, as it relates to the financing of the transaction, we have been in active discussions with our bankers to develop funding strategies for the necessary $3.3 billion of Spinco financing. Our strategy has multiple contingency paths to account for various market conditions, giving us the ability to optimize the cost and certainty of financing at the time of funding. We will look to do some level of pre-funding before closing. The closing date is still targeted at second quarter 2010. Overall, Frontier and Verizon are working well on all fronts. Both of us have committed the necessary resources to ensure a successful closing and integration. In summary, we are very pleased with the results of the second quarter of 2009. We recognize the formidable task of continuing to focus on delivering results in our core business while simultaneously driving our organization toward the successful close and integration of the Verizon property. As we have said, and prove before with previous acquisitions, our management team has the skills, experience and know how to deliver on this challenge. The merger will accrue many benefits to our shareholders including greater scale, reduced leverage, an improved platform for revenue growth, greater free cash flow generation capabilities and an attractive and sustainable dividend. These are all the key elements that driver shareholder value. I also want to thank the Frontier employees for their hard work, dedication and customer focus. They are doing a great job delivering on the key initiatives for our business in very tough economic times. Here now is Don Shassian, our Chief Financial Officer to give you the financial overview for the second quarter of 2009.

Thank you Maggie and thank you everybody for joining us this morning. The second quarter was a very exciting period for Frontier. Not only did Frontier deliver on our operating objectives, posting strong metrics for the quarter, we also delivered on our long standing goal of adding scale and scope to our core business with the announcement of the pending acquisition for Verizon for over four million access lines in 14 states. Before I get into the financial details for the quarters, I would like to point out that earnings per share of $0.09 for the quarter would have been $0.13 if not for transaction costs of $0.02 and higher interest expense of $0.02 arising from the negative carry from our $600 million high yield offering in April. I will cover both of these matters in a few minutes. Our operating cash flow, or EBITDA margin in Q2 was 50.6% and when adjusted to exclude acquisition related costs, severance charges and non cash pension expense, was 54.2% comfortably within our stated quarterly target as adjusted of $53% to 56%. Free cash flow for the quarter was $98 million. We continue to experience strength in data and non squished access revenues offset by reductions in Federal and State subsidies and local services revenue. Customer revenue for the quarter was $445 million, a .7% decline sequentially compared to first quarter 2009. Our average revenue per access line for the quarter was $80.52 which is up slightly versus the first quarter of 2009 and up 1.5% of our last year's second quarter. Most noticeable is that our customer revenue ARPU is up 3.4% over last year's second quarter which demonstrates our consistent growth in customer wallet share. Our second quarter data and internet revenues of $160.6 million increased $4.2 million or 2.7% compared to first quarter '09 and increased $8.9 million or 5.9% compared to last year's second quarter driven by additional sales of high capacity internet and Ethernet circuits. We added approximately 13,800 net high speed customers in the second quarter. Local enhanced service revenues declined $2.6 million or 1.3% compared to the first quarter of '09. Our total access lines declined by approximately 27,700 during the quarter. I'd like to make some very specific comments on the access line transactions affecting our business. First, as Maggie mentioned, this represents the fourth sequential quarter of declining access line losses. Secondly, this quarter's access line losses were the lowest line losses we have seen in over two years. Third, the Rochester market residential access line losses this quarter were the lowest we have seen in four years. Lastly, our residential line losses in the second quarter were 21,900 and our business line losses were 5,800 for the same period. Business line losses were less than half the levels we saw in Q3 and Q4 of '08. Access service revenue was down 2.9% of our first quarter of '09. Access revenues were down 13.4% from second quarter '08 due primarily to lower switch and end to use. On the expense side, we continue to demonstrate effective cost management. Our reported operating cash flow or EBITDA margin for the second quarter was 50.6% and after excluding a $10.8 million charge for acquisition related costs incurred in connection with the Verizon transaction, and an $8.2 million non cash pension charge, our operating cash flow or EBITDA margin was 54.2%. I would like to make clear that we do not expect any cash contributions to our pension fund until 2011, although pension asset volatility could result in some funding in 2010 at the earliest. As a result of a number of revenue expense initiatives that we have implemented, we continue to view 53% to 56% as our quarterly target EBITDA margin level, excluding any integration expenses. Our capital expenditures were $55.8 million for the second quarter. We maintain our previously reported expectations for capital expenditures to be within our range of $250 million to $270 million in 2009 excluding any and all capital expenditures in connection with the Verizon transaction. Our net debt to adjusted EBITDA ratio at quarter end was 3.8 times. Our liquidity position is very strong. Frontier's $250 million revolving credit facility is fully available and our quarter end cash balance stands at $454 million. Furthermore, we have no material debt maturities until May, 2011. On April 9 we issued $600 million in aggregate amount of senior secured notes in a five year high yield offering with net proceeds to the company of $539 million. To date we have used a portion of the proceeds to repurchase existing debt in the open market. As of today, we have used approximately $340 million of the proceeds to repurchase $348 million of principal amounts of existing debt in varying maturities. $268 million of those repurchased were made to reduce the 9.25% notes of 2011. In doing so, we have made significant progress in addressing the refinancing of our 2011 debt well in advance of its maturity. As of today, our 2011 maturities are $853 million made up of $653 million of 2011 senior notes and $200 million of the RTFC term loan. We'll continue to proactively address this 2011 maturity in the coming quarters. As for 2009 expectations, we reiterate our free cash flow excluding expense and capital expenditures incurred in connection with the Verizon transaction, will be between $460 million and $485 million. We're estimating cash taxes to be between $90 million and $100 million which reflects the benefits we anticipate as a result of bonus appreciation with the part of American Recovery and Re-investment Act of 2009. I would now like to switch gears to give a brief financial update as it relates to the pending Verizon transaction. As mentioned by Maggie, an S-4 registration statement was filed on July 24 which includes financial and operating metrics for December 31, 2008 as well as March 31, 2009. Since the time of that filing, we have also received June 30, 2009 operating results from Verizon which I'd like to share with you. Please note that we have not received the June 30, 2009 financial statements, thus I will limit my discussion to the key operating metrics only at this time. Let me start by saying that the access line high speed internet VIOS TV and VIOS data results were in line or better than we anticipated. Access lines as of June 30, 2009 were 4,492,000, down 136,100. This represents a 2.9% sequential decline and an 11.2% decline year over year. High speed internet subscribers representing DSL and VIOS technologies were 1,048,000 with net adds for Q2 of 18,700. This represents a 1.8% quarterly increase and an 8.8% increase year over year. VIOS TV subscribers were 102,800 with net adds of 15,800 for Q2. This represents an 18% quarterly increase and a 120% increase year over year. We see tremendous opportunities to further improve these metrics post closing as we implement Frontier's local go-to-market strategy. As we press forward in '09, our objectives are twofold; first we will continue to drive operating results in this business. Secondly, strategically ramping up the organization in anticipation of the closing of the Verizon transaction, something every leader in Frontier is focused on, methodically building out our organization in order to execute on critical milestones necessary to close, integrate and deliver long term value for our shareholders. We have very exiting times ahead of us. We're very proud of our accomplishments year to date and look forward to furnishing further updates throughout 2009 as we make progress on both our operating goals and our Verizon acquisition goals. With that, we'll open up the call to questions.

(Operator Instructions) Your first question comes from Michael McCormack – J.P. Morgan. Michael McCormack – J.P. Morgan: The line loss in those regions, are you going to do anything different than you've done historically in the Frontier territories and then secondly, broadband penetration in those markets, is this still an area where you're still seeing a lot of dial up or is the loss share to cable or do you think there's still some green field opportunity there?

Can you repeat the first part of your question, because it was cut off from our phone? We did not hear the first part. We only heard the part about broadband. Michael McCormack – J.P. Morgan: On the territories line loss in the Roslyn territories, will you do anything different than you've done historically in the legacy Frontier markets?

Let me start by saying we think there are a number of things that we're doing in our legacy properties that we can overlay onto those new Verizon markets that can change the paradigm on losses. I think we watched that change happen in our business. We talked about price protection plans. We talked about bundles. Definitely the acceleration of broadband to extend reach in those markets so we can have double and triple play offers to compete with are huge opportunities for us. And we do see our digital phone family of packages. We've had great results with that with our customers and we also think by combining local free long distance or long distance packages along with features and price protection plans, it can make a big difference. Last but certainly not least, we're going to overlay our local engagement and market strategy where we will take those properties and align them with local and general managers who will have P&L ownership with the employees in those markets. And again, that community involvement, that personal touch really does make a big difference. On the broadband penetration side, we have continued to see strong broadband. We do believe that a lot of it has to do with taking share away from cable, in addition to some green field. We've been pretty targeted on the green field opportunities of continued to extend our reach. There is some dial up in there, but its really a mix of all three. Michael McCormack – J.P. Morgan: What about the free TV and the free PC deals you've offered in Frontier territories? Is that something you might entertain in the Verizon properties as well?

Absolutely. I think as you know, in the last three years we've given away about 90,000 PC's in our markets, and it's made a huge difference. We still have markets where there are some that are north of 30% of customers don't own PC's and the demographics in the Verizon markets that we're purchasing are very similar to the demographics that we have in our markets today.

Your next question comes from Chris King – Stifel Nicolaus. Chris King – Stifel Nicolaus: I was wondering if you could give us some sense of what you're going to be looking at for acquisition related costs in the second half of the year related to the Verizon acquisition. And also, I know you mentioned some of the approvals that you've gotten and some of the paperwork that's been filed already, just was wondering if you could give us your latest sense of the approval process and it's probably too early for you to comment on whether any time frames have changed or anything, but wanted to get a sense of your initial impression in terms of the state regulators that you have spoken to and anything that's been accomplished so far at the federal level.

On the first question, for 2009 we are estimating that we will have integration acquisition related expenses of $35 million, and we've incurred $10.8 million in Q2 so in total for the year, $35 million and capital expenditures of approximately $25 million for the year.

On the regulatory process, just from a color perspective, we have not just put all our filings in, but even prior to doing that, we have been in front of many of these public utility commissions. We've spoken with the Governor's in these states. We've talked to a number of the key influencers on the regulatory front and we still feel very good about the time frame for regulatory approval at the state level. At the FCC, we're pleased that we now have basically a full slate of commissioners which we think will help keep the deal on tract at the FCC as well. I know I'm going to be going down to the FCC in the next couple of weeks and meeting with some of the new commissioners. But again, we don't see any show stoppers at this point, and right now it's really just about the states going through process.

Your next question comes from Frank Louthan – Raymond James. Frank Louthan – Raymond James: Can you give us an idea on the revenue mix of the Verizon lines? You were saying a percentage of revenue from residential and business and special access and switch to access revenue relative to the legacy Frontier properties.

I don't have good detail. Some of that I can provide you right now. The one item I do have available at my disposal is the amount of regulatory revenue in terms of switch and subsidy which was disclosed in the S-4 which is substantially below our exposure. The subsidy is much lower and the switch is much lower. Their interest rates are very much closer to Inter State and their magnitude of Inter State switch to access as you recall from the GT properties, is much lower. So they've got much less exposure there. The percentage of mix, I don't have it at my disposal right in front of me. We'll try to get something available. I don't recall us having it in the S-$ but I don't have anything available with me right now. Frank Louthan – Raymond James: What do you see as you continue to do the due diligence, what do you see as the biggest challenge in converting those properties from an operational standpoint, and obviously there's the systems conversions over time, but from a marketing customer standpoint, what do you see as the biggest challenge for you once you take those properties over?

I think you have to look at probably from two different perspectives. First is West Virginia which will be converted immediately onto our systems at close, which gives us I think the freedom and flexibility and we can quickly overlay our products, our pricing, our service model to the West Virginia customer base very quickly at close. We do believe with the GTE properties, since we will be getting all of the systems associated with that, what we're going to try to do is pre-close, populate that billing system and financial systems with our packages, again so we can hit the ground running. But I think one of the big differences is we run the business very locally. We take things down to the exchange level and we actually monitor and manage the business on a day to day basis. We know every sale, every de-act basically to the exchange level in every single market on a daily basis. Verizon does not account for their properties that way. They look at things from a state or region perspective. So I think one of the biggest transformations that we'll make with the employee base and our focus on the customer is really unleashing data and information from a local perspective that can be acted on locally. And we think that's huge, and a huge benefit to be able to compete at a local level with different cable operators and different competitors in every single market. Frank Louthan – Raymond James: What sort of testing have you done to ensure that you can put your packages within their systems and do you foresee any issues with that and what happens if that's delayed? Is that going to push out, how will that continue to push out synergies until you can get those marketing packages in place?

We don't believe that there's going to be any delays for that. The GTE systems we're very familiar with. We've actually converted a number of GTE systems in the past onto our systems through acquisitions we've done previously with Verizon. We know that system capability is ratings based and packaged base, so we don't foresee any issues with setting up our packages on those systems. And again, on West Virginia, it will be a moot point because in the conversion planning which we're already well underway, we have a good sense of what we have to do to map over to get those systems onto our DPI system at close.

Your next question comes from Simon Flannery – Morgan Stanley. Simon Flannery – Morgan Stanley: You mentioned that you do not yet have the Spinco financial results. Is that something you'll be able to share with us either through the 10-Q or an 8-K or something when they do come out? And impressive results on the line loss and this is something that we're seeing at some of the other carriers as well. Perhaps you can dive a little bit deeper into what you're seeing. Is it inwards, outwards and churn, what are the drivers of that and in Rochester in particular, it seems like an impressive performance. Is there something going on with the cable companies? Are they being less aggressive or is it because of your pricing actions? What do you think the key things are, because I think the cable companies are certainly being suffering a little bit on telephony, but some feel that it's because the housing market is so sluggish that there's fewer moves and that when housing recovers, their adds will recover as well. So any thoughts on that would be appreciated.

Your first question on Q2 results, I'm not exactly sure how the information will get out. The worst case bases when we have to file the next amendment, hopefully the effective amendment on the S-4, that will clearly have second quarter results for both us and them, so I would expect the Verizon financial results for these properties to be in the S-4 whether it's done in another mechanism, I'm not sure, but my guess is that it would probably be part of the next filing on the S-4.

With regard to the access line losses, I would say that there are a couple of things that have happened that I think have really helped improve our performance. I wish with deactivations you could just point to one silver bullet, but it doesn't work that way. I do think it's a combination of what we've done over time moving customers to multiple products. We do see when we have a voice customer that takes a bundle from us, it reduces churn substantially, and if they take high speed and also video, we see churn cut in half. So when we came out of the gate in the first quarter, we made a conscious decision to go straight against the cable operators in our market. I think as you know, part of Rolling Thunder was a $9.99 dish offer for 250 channels, and we led with video for the first time in any of our promotions. All of our promotions in the past, video has been included, but we always led with high speed. We went right after video with this promotion and I think as you know, we put on more video customers in the first quarter than we did all of last year, and the momentum has continued. So what we've taught our customer service reps to do is how to sell video. And at the end of the day, it's a killer application I think as we all know, and dish has a great set of packages for the markets where we do business. So part of it is getting more and more customers on video and with that video pull through, we're getting high speed and we're also getting telephony. And I think, we looked at the first quarter and said, you know with the economy the way it is, here's a tipping point here, where in the past, if you put an aggressive price point out there, it didn't necessarily mean you were going to pull customers over to our products and services from the cable guys. But I think because everybody's watching every penny, it made a huge difference and we saw no response to that in our market. And in Rochester, there was always this thought that oh, we'll never be able to sell dish against Time Warner in Rochester. And it was astounding, the video results we got in Rochester. And that's continued too, so we think a lot of it has to do with this paradigm shift in us taking a first mover advantage in these markets.

Your next question comes from David Barden – Banc of America. David Barden – Banc of America: Just along those same lines, could you share if you've seen any competitive behavioral changes in the Verizon properties subsequent to the deal announcement? Not drawing too many lines but when we had the FairPoint announcement, we saw guys like Time Warner cable especially; kind of ratchet up their competitive profile in the market and any comments there would be helpful. And then the second question would be on the West Virginia property state which I think is the largest overlapping state between the two of you and it's the one where you need to do kind of a full systems conversion. Again going back to the FairPoint example, it actually took them close to two years to get the independent monitor to give them the green light to execute the cut over and you're trying to get this done before the close of the deal itself, and that's obviously about a year. Could you talk about how, what is the mechanism, the game plan for getting that done and has the West Virginia PUC asked for cut over monitors, some kind of independent process and could that impact the timing of the close of the deal?

On the competitive issues in the markets, I don't think we can really respond to what is going in the markets in the Verizon territories. You'd have to ask Verizon. I think we've seen some cable players make some noise that they're going to increase their competitive responses, but we don't really have any good information. I think you'd have to talk to Verizon on that. Secondly on West Virginia, I do not see a parallel to the FairPoint transaction. I'm going to repeat myself and I apologize if this sounds redundant from other conversations we've had, but we do not have to build a whole suite of systems to do this conversion. We have a set of systems both operating, from ordering, provisioning, dispatch assignment, rating and billing on a retail basis, rating and billing on a wholesale basis, we have systems that work, an accounting system. Everything works and we're looking to move West Virginia operations and processes onto our platforms and we think we can do that in a time frame that is allotted. It is quite different that FairPoint that had to build new systems from scratch. West Virginia Commission is obviously going through their process evaluating what this transaction and do their due diligence and discharge their responsibility, and we're going forward aggressively trying to make this conversion happen as cleanly and quickly as possible working with Verizon and are moving forthright to get that done.

The only thing I would add is if you recall, we did the Commonwealth telephone conversion in about a six to nine month window. These West Virginia properties are only a couple hundred thousand customers more than Commonwealth. So the complexity of this conversion is very similar to what we've done in the past. In addition, over the last three and a half years, we've done five billing conversions in consolidating all of our billing onto one platform. We have a lot of experience in our company doing this. So because we're not building any systems, there's no need for someone to cut over checks in order to make sure systems work. We already know that they do. So we're just full speed ahead getting the conversion planning done and we'll be ready to implement and cut this over when we close. David Barden – Banc of America: Obviously the second quarter line loss was really good relative to where you trend rate had been and you gave us some color around that, but especially interesting given the seasonal forces that would probably have been working against you, it seems to encourage us to maybe increase our expectations for performance for the back part of the year. Is there any reason to maybe contain that enthusiasm or optimism about the back half of the year? Is there any other forces that you see that might reverse our, like the lack of the Rolling Thunder in the third quarter, other things that we should consider for the back half of the year?

I would say our third quarter is usually our most seasonal quarter, so the summer time is definitely slower for our business than any of the other quarters, and the fourth quarter I think as you know, is usually a quarter that we look to do promotions in. Sometimes we do them in the later part of the quarter as they bleed over into the first quarter and similar to this year, we hit the ground running with some very aggressive promotions in the beginning of the year. Our goal is to keep as many customers as we can. That's the number one priority in our company and we are continuing to push all efforts in order to do so. I will also say that we have 80 general managers and local managers in place today. That was a decision we made about two years ago and the seasoned leadership that is in these markets now, and has really gotten their arms around these markets to really own the markets, has really I think, made a material difference from a results perspective. But you know, the economy is still a wild card. I'm still worried about recovery. We have not seen recovery in our markets, really in any of our markets today, and I think that's still a wild card that we all have to keep in mind based upon results.

Your next question comes from Jason Armstrong – Goldman Sachs. Jason Armstrong – Goldman Sachs: A couple of questions both focused on the line trends. Obviously good improvement so I really want to have a full understanding of what's driving. If you talk anecdotally about Rochester, maybe a broader view similar to what you did last quarter in terms of the geographical trends, it would be helpful, and I guess specifically would you say some of the markets that may be harder hit initially that are really leading the improvement at this point. And then the second question just on the business line trends because those were better as well, just maybe some color behind what you think is going on there. Is this sort of the end of downsizing in your footprint and is this competitive share gains?

Geographical, we are as we've mentioned in the past two quarters, we are seeing housing moves, purchasing of homes out in the California market, the prices there have obviously come down to a level that's attractive to people buying back into it, so we're continuing to see purchases there which is great. We're not seeing any further deterioration anywhere else in the west. We're not seeing a huge pick up of housing, but nothing is getting worse. Central region, I think it's stabilized. As Maggie mentioned, we haven't seen any pick up or improvements, but we don't see it getting worse, and the same thing in the eastern Rochester. On the residential side access lines, you have the housing phenomenon where people are not really moving for the most part. We had a very strong promotion in the quarter Q1 through April which has been very helpful. I think it has some carry over effect to that. The local market managers Maggie just mentioned are really playing a very big part in our markets and there may be some stabilization that's occurring in some of these markets vis a vis competition. We're not seeing any increased VOIP deployments of any significance, so I think things have really stabilized. On the business side, you may recall last year we had some sizeable business line losses, University down in Georgia, we had some business in Rochester, and there were I think three very significant businesses that accounted for a lot of our business line losses in Q2, Q3 and Q4 of last year, and those have not continued this year. That's helped a little bit as well.

Your next question comes from Chris Larson – Piper Jaffray. Chris Larson – Piper Jaffray: Just a quick clarification, the margin guidance you gave, does that exclude pensions? And secondly, as I was looking through the results, the access revenues were down 15%, a lot of that the regulatory stuff there, but your network access costs were actually up sequentially. I wondered if you could just help me understand what happened there. And then where do you stand in terms of the stimulus funding and are you willing to accept those requirements that may be given to you and can you file for the Verizon markets prior to that purchase considering that the deadline I believe is November for a lot of the filings.

Guidance on margin does exclude non cash pension, number one. Number two, access revenues are down on a drop switch use. Also during the quarter there is a true up on local switching support of a sizeable amount in the quarter which in the second quarter that also had an impact on access revenue. Access costs are up during the quarter, as you're looking quarter to quarter but also in cost of goods which is where you're looking. In Q1 and Q2, we did have a cost in there for our promos so you do have some costs on the PC's that are in there. That does inflate those numbers in Q1 and Q2 which obviously could fall off and do not occur into Q3. Chris Larson – Piper Jaffray: And the network access expenses include the PC's?

They do.

With regards to the stimulus funding, it's been interesting. We've been sort of following the rules and it's a little bit like we learn something new every single day. We have looked within our company at different projects that we could apply for. I think as you know, we're pretty well built out. We're at 92% reach in our markets today. So there's less than 200,000 customers that we don't reach today from a high speed perspective, so we have looked and are continuing to evaluate what the terms and conditions are of getting any funding. Right now we think that the reporting requirements are pretty onerous and pretty bureaucratic and we're not sure that it's worth it for us to apply for funds when it will probably cost us a substantial amount of money to provide for audits and for information and reporting for a very small dollar amount. So we're still looking at it. We haven't made any final decisions, but we're not very optimistic based upon the terms and conditions that we've seen come out that are attached to the stimulus. With regard to the Verizon markets, it's very difficult for us to look to apply for stimulus funding when we don't own those properties. We don't know what Verizon's plans are with regard to stimulus money, but we are hopeful that if there are different rounds, we do know that there's a deadline for November, but we also think there might even be one more tranche that they would do in 2010 and if that is simultaneous with when we own the properties, we would again evaluate and look at that. We are not counting on it. When we did our analysis and evaluation of purchasing these markets and accelerating high speed broadband reach over the next several years, we did that based upon how we do business today, and that would be allocation of capital at about 12% and maybe some incremental capital that we would spend in certain locations. So we're not counting on stimulus or waiting for it, and right now we're still evaluating, but are not very optimistic about going after funds.

Your next question comes from [Anna Gushko – Banc of America] [Anna Gushko – Banc of America]: A question on financing actually in two areas; one on your goal of achieving the investment grade rating and secondly on your comments on the pre funding. On the first part, I know achieving an investment grade rating is one of the key goals and attributes of a transaction that you laid out, so wondering in your discussions with the rating agencies and the bankers that you've had, what's you expectation for a time line on that? Do you believe that at the time of the transaction close you'll be able to finance all or in part with investment grade rating on that financing? Secondly, on your comments on pre funding, I wasn't clear what you meant by that. I know that the financing is supposed to be done at Spinco, so are you referring to a bridge loan that would bridge to the permanent financing out of Spinco and then secondly, you still have the $650 million left on the 2011 maturity, so do you plan to wrap that refinancing into the transaction financing or might you address that before the transaction close?

First on the investment grade rating, we do not expect that the rating agencies will mark us as investment grade by closing. We do think that they give us an upward notch by then, but not all the way to investment grade. I believe that we're going to have to deliver the results for a quarter or two that we have projected and they see we do as we say we're going to do, and I think we'll get that recognition. So I don't expect us to have that by closing. If we do that would be great, but I do think the environment today, they're going to be a little bit more deliberate and make that final move once the results are all delivered. But we do believe that the properties, the enterprise, the strength of the enterprise is going to demonstrate a very strong characteristic that will have investment grade statistics and we do think from marketing and offering whatever the different tranche's are will be very attractive to both investment grade and non investment grade investors and we expect that hopefully we will have a good push into the market for that. The second question on pre funding, our intention as we think about this is we're looking to do a portion if not all as much as we can before closing, go all the way to let's say closing is April 30, to try to come down to closing and have to do a financing of $3.3 billion in a one, two, three week period is kind of crazy. To the extent that we can do a good portion of that or all of that before that, is a smart thing to do and we think the markets will enable us to do that. I will be done within Spinco. We will obviously be working with Verizon to do the marketing. It's dependent upon all the legal set up being done, but we've had discussions in the negotiations before we signed the transaction with Verizon about doing funding and doing it before hand within Spinco, so we would look to do something before hand within the entity and have to get that done as cleanly as we can. Our thinking would be some time after New Year's as we get a better handle on the regulatory approval process. It does look like we'll have something in March or April. We'd be able to look at doing some financing after New Year's. That would be a nice target to have, but we'll see how the markets hold. We'll look at other regulatory approval processes as well as our integration planning. The third question was on the $650 million. We look at that as separate and distinct. It is not a part of the financing of this transaction. We are looking at that separate. We continue to look at the open market and to the extent that we're able to find ways to continue to take some of the ones off the table that are there, and potentially to another high yield offering in the later part of this year, then maybe to find another way to take some more off, there could be another option of just some exchanges we could do if some of that paper is some longer dated paper. A number of different options we'll look at to try to go after that, but our intention is to get it done before we have to go to market on the Spinco as much as we can. [Anna Gushko – Banc of America]: On the pre financing, where the high yield on market has been particularly strong, it's been strong generally, but has been in senior secured bonds. So are you looking at that option?

Yes. Senior secured notes, let me clarify. We're not looking at, there's no collateral here of assets if that's what you were directing towards. The intent here is the senior unsecured, not senior secured. Our goal would be to maintain as much operational financial flexibility as possible so if I answered that too quickly on your question, it's really unsecured as much as we can. If the markets do not enable us, then maybe we'd look at secured. But we don't want to have to put any of our unsecured holders today who have been very loyal and supportive of us, putting them behind somebody else in the tree of hierarchy of debt here.

Thanks everybody for joining us for this call. We did have a very solid quarter. We feel very good about that. Our heads are down on two fronts; delivering on the results of our basic business and continuing to move forward to work the integration and the approval for the Verizon transaction. So thanks again for being with us. We look forward to talking with you again for our third quarter results.