CTE Reports 2006 Fourth Quarter Results:.

CTE Reports Fourth Quarter Diluted Earnings Per Share of $0.65

DSL Subscribers Increase 55% versus Year Ago Quarter

DALLAS, Pa. -- Commonwealth Telephone Enterprises, Inc. ("CTE") (Nasdaq: CTCO), today announced financial results for the 2006 fourth quarter.

CTE 2006 Fourth Quarter Consolidated Results

For the 2006 fourth quarter, CTE reported diluted earnings per share ("EPS") of $0.65, versus reported diluted EPS of $0.77 in the 2005 fourth quarter.

CTE's 2006 fourth quarter reported diluted EPS of $0.65 includes a $0.07 unfavorable effect related to advisory, legal and other fees in connection with the September 18, 2006, announcement of CTE's agreement to be acquired by Citizens Communications Company ("Citizens") (NYSE: CZN).

CTE's 2006 fourth quarter reported diluted EPS, versus last year's fourth quarter, also includes the effect of including additional shares in the diluted EPS calculation due to the conversion rate adjustments made under CTE's Convertible Notes in connection with CTE's dividend strategy. Specifically, the 2006 fourth quarter average fully diluted share count includes an additional 0.4 million shares in connection with the payment of our dividends and their effect on our convertible debt, versus the prior year's comparable period. The additional shares had a $0.01 unfavorable impact on CTE's 2006 fourth quarter reported diluted EPS.

Including the $0.08 unfavorable effect of the items discussed above, CTE's 2006 fourth quarter reported diluted EPS was above the high end of its previous guidance, and above the First Call mean of $0.64.

Included in CTE's 2005 fourth quarter reported diluted EPS was a $0.02 favorable effect resulting from certain non-cash access revenue settlements and non-cash network costs settlements included in the CTSI, LLC ("CTSI"), results; a $0.06 per share favorable effect resulting from a sales and use tax settlement in the Commonwealth Telephone Company ("CT") results; and, a $0.07 per share favorable effect resulting from a true-up of deferred income tax liability.

For the 2006 full year, CTE reported diluted EPS of $3.16, versus reported diluted EPS of $2.71 for the 2005 full year. A summary of certain items that are reflected in the 2006 full year and 2005 full year reported diluted EPS figures is detailed on an accompanying schedule.

CTE ended the 2006 fourth quarter with a total of 451,892 switched access lines in service, reflecting a reduction of 2% versus the end of the 2005 fourth quarter. Over the same period, CTE added a record 16,202 net new DSL subscribers, which reflected a growth rate of 55%. In the 2006 fourth quarter, CTE installed 4,365 net new DSL subscribers and ended the quarter with 45,464 consolidated DSL subscribers.

CTE's reported consolidated revenues in the 2006 fourth quarter were $83.2 million, versus 2005 fourth quarter reported revenues of $83.5 million. As noted above, CTE's 2005 fourth quarter revenues included a favorable effect of $0.9 million resulting from certain access revenue settlements reported in CTSI's results.

CTE's reported consolidated operating income in the 2006 fourth quarter was $30.4 million, versus reported consolidated operating income of $30.6 million in the 2005 fourth quarter. CTE's 2006 fourth quarter reported operating income includes $1.0 million of expenses related to advisory, legal and other fees in connection with CTE's agreement to be acquired by Citizens. Excluding the effect of these expenses, CTE's 2006 fourth quarter operating income would have been $31.4 million. CTE's 2005 fourth quarter reported operating income included a $1.2 million favorable effect resulting from the aforementioned $0.9 million of favorable access revenue settlements, and a favorable $0.3 million effect resulting from certain network costs settlements, both items reported in CTSI's results.

For the 2006 fourth quarter, CTE reported net income of $16.8 million, versus reported net income of $20.7 million in the 2005 fourth quarter. CTE's 2006 fourth quarter reported net income includes an unfavorable effect of $2.0 million related to the after-tax effect of the advisory, legal and other fees in connection with CTE's agreement to be acquired by Citizens, as well as the true-up of the non-deductible portion of these expenses incurred to date. Included in CTE's 2005 fourth quarter reported net income was a favorable $0.7 million effect resulting from certain non-cash access revenue settlements and non-cash network costs settlements included in the CTSI results; a favorable $1.7 million effect resulting from a sales and use tax settlement in the CT results; and, a favorable $1.9 million effect resulting from a true-up of deferred income tax liability.

Consolidated capital expenditures ("CAPEX") were $12.2 million in the 2006 fourth quarter, versus CAPEX of $14.0 million in the year ago quarter.

The table below sets forth highlights of CTE's 2006 fourth quarter reported consolidated results, versus the 2005 fourth quarter:

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"We ended 2006 on a positive note with the completion of another solid quarter," said Michael J. Mahoney, CTE's president and chief executive officer. "I am particularly pleased with our continued strong DSL performance, where we added a record 16,202 net new subscribers since the end of last year's fourth quarter, reflecting a growth rate of 55%. CTSI continued its solid trend by growing its base of general business lines by 7% year-over-year. We ended the year with a continued strong balance sheet and cash position."

CTE's reported consolidated revenues for the 2006 full year were $330.6 million, a decline of 1% versus the 2005 full year reported revenues of $333.9 million. Consolidated reported operating income was $113.5 million, versus $112.1 million for the 2005 full year, reflecting an increase of 1%. Consolidated capital expenditures were $47.2 million, versus $43.9 million for the 2005 full year, reflecting an increase of 8%, which was largely in support of the expansion of CTE's broadband network and product offerings.

The table below sets forth highlights of CTE's 2006 full year reported consolidated results, versus the 2005 full year consolidated results:

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Commonwealth Telephone Company Results

Commonwealth Telephone Company had a total of 309,279 switched access lines in service at the end of the 2006 fourth quarter - reflecting a reduction of 4% versus last year's fourth quarter. CT's primary residential access lines in service declined 2% versus the end of the 2005 fourth quarter. CT's residential additional line penetration was 30% at the end of the quarter, down from 33% in the year ago quarter, and just below the 31% penetration level at the end of the 2006 third quarter.

In the 2006 fourth quarter, CT installed 3,788 net new DSL subscribers. CT had 39,890 DSL subscribers in service at the end of the 2006 fourth quarter, having added a record total of 14,292 net new subscribers over the past four quarters, which reflected a growth rate of 56% versus the end of last year's fourth quarter.

CT's 2006 fourth quarter reported revenues were $57.0 million, reflecting a 1% decrease versus CT's reported revenues of $57.8 million in the 2005 fourth quarter. For the 2006 full year, CT's reported revenues were $228.9 million, versus reported revenues of $228.5 million in the prior year.

CT's 2006 fourth quarter reported operating income was $30.9 million, versus $31.4 million in the 2005 fourth quarter. CT's reported expenses in the 2005 fourth quarter included the previously mentioned favorable non-cash sales and use tax settlement, which was $2.8 million. For the 2006 full year, CT's reported operating income was $122.1 million, versus 2005 full year reported operating income of $111.9 million.

CT's 2006 fourth quarter CAPEX were $8.0 million, versus $8.6 million in the 2005 fourth quarter. For the 2006 full year, CT's CAPEX were $30.7 million, versus 2005 full year CAPEX of $27.2 million.

CTSI Results

CTSI had a total of 142,613 switched access lines in service at the end of the 2006 fourth quarter - reflecting a 4% increase versus the 137,696 switched access lines in service at the end of the 2005 fourth quarter. CTSI's general business access lines in service increased 7% over the past year, while CTSI's access lines in service to ISP customers continued to decline, as the dial-up ISP business continued to weaken. At the end of the 2006 fourth quarter, 99% of CTSI's access lines were "on-switch," and 52% were "on-net" (defined as 100% on CTSI's owned network). CTSI's business/residential line split at the end of the 2006 fourth quarter was 92%/8%, reflecting a slightly higher business component versus the end of the 2005 fourth quarter.

In the 2006 fourth quarter, CTSI installed 577 net new DSL subscribers. CTSI had 5,574 DSL subscribers in service at the end of the 2006 fourth quarter, having added a record total of 1,910 net new subscribers over the past four quarters, which reflected a growth rate of 52% versus the end of last year's fourth quarter.

CTSI's 2006 fourth quarter reported revenues were $21.3 million, versus reported revenues of $21.6 million in the 2005 fourth quarter. CTSI's 2005 fourth quarter revenues included a favorable effect of $0.9 million resulting from certain access revenue settlements. For the 2006 full year, CTSI's reported revenues were $82.9 million, versus 2005 full year reported revenues of $86.5 million. CTSI's 2005 full year reported revenues included the favorable effect of $2.6 million resulting from certain access revenue settlements.

CTSI's reported operating income in the 2006 fourth quarter was $2.7 million, versus reported operating income of $2.9 million in the 2005 fourth quarter. CTSI's 2005 fourth quarter reported operating income included a $1.2 million favorable effect resulting from the aforementioned $0.9 million of favorable access revenue settlements, and a favorable $0.3 million effect resulting from certain network costs settlements. For the 2006 full year, CTSI's reported operating income was $9.2 million, versus 2005 full year reported operating income of $12.9 million. CTSI's 2005 full year reported operating income included a $4.3 million favorable effect resulting from the aforementioned $2.6 million of favorable access revenue settlements, and a favorable $1.7 million effect resulting from certain network costs settlements.

CTSI's 2006 fourth quarter capital expenditures were $3.6 million, versus $4.8 million in the year ago quarter. For the 2006 full year, CTSI's CAPEX were $14.6 million, versus 2005 full year CAPEX of $15.3 million.

About CTE

Headquartered in Dallas, PA, Commonwealth Telephone Enterprises, Inc., serves business and residential customers with a full array of technologically advanced data and voice telecommunications products and services, including broadband data services and high-speed Internet access, delivered over its 100% digitally switched, fiber-rich network.

CTE's primary operating segments are: Commonwealth Telephone Company ("CT"), a local exchange carrier that has been operating in various rural Pennsylvania markets since 1897; and, CTSI, LLC ("CTSI"), a local exchange carrier operating in competitive markets outside CT's territory, which formally commenced operations in 1997. CTE deploys broadband DSL technology to offer high-speed Internet access in the CT and CTSI service territories. CTE's support businesses include epix[R] Internet Services (www.epix.net), a rural dial-up Internet service provider ("ISP"), and Commonwealth Communications, a provider of telecommunications equipment and facilities management services.

A web site featuring current information regarding Commonwealth Telephone Enterprises, Inc., can be found on the Internet at www.ct-enterprises.com. However, the information on this web site does not form a part of this release.

Cautionary Statement Regarding Forward-Looking Statements 

This document contains certain "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "anticipate," "may," "can," "believe," "expect," "project," "intend," "likely," similar expressions and any other statements that predict or indicate future events or trends or that are not statements of historical facts. These forward-looking statements are subject to numerous risks and uncertainties. There are various important factors that could cause actual outcomes and results to differ materially from those in any such forward-looking statements. These factors include, but are not limited to, the following: failure to obtain, delays in obtaining or adverse conditions contained in any required regulatory approvals; failure to consummate or delay in consummating the merger for other reasons; changes in laws or regulations; and changes in general economic conditions. CTE and Citizens undertake no obligation (and expressly disclaim any such obligation) to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. For additional information concerning factors that could cause actual results to materially differ from those projected herein, please refer to CTE's and Citizens' most recent Form 10-K, 10-Q and 8-K reports.

Important Information for Investors and Stockholders

In connection with the proposed merger, on December 19, 2006, CTE filed with the SEC the definitive proxy statement/prospectus, and Citizens filed with the SEC a registration statement on Form S-4, of which the definitive proxy statement/prospectus forms a part. On December 20, 2006, CTE filed with the SEC a revised definitive proxy statement/prospectus, which includes a form of proxy but is otherwise the same as the definitive proxy statement/prospectus filed on December 19, 2006. Investors and stockholders of CTE and Citizens are urged to read the definitive proxy statement/prospectus and any other relevant documents filed with the SEC because they contain important information about the proposed merger. Investors and stockholders may obtain these documents free of charge at the web site maintained by the SEC at www.sec.gov. In addition, documents filed with the SEC by CTE are available free of charge by directing a request to Commonwealth Telephone Enterprises, Inc., 100 CTE Drive, Dallas, Pennsylvania 18612, Attention: Investor Relations, and documents filed with the SEC by Citizens are available free of charge by directing a request to Citizens Communications Company, 3 High Ridge Park, Stamford, CT 06905, Attention: Investor Relations.

This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

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