8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): December 18, 2006

CITIZENS COMMUNICATIONS COMPANY

(Exact name of registrant as specified in its charter)

Delaware	001-11001	06-0619596
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3 High Ridge Park, Stamford, Connecticut	06905
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (203) 614-5600

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 7.01. REGULATION FD DISCLOSURE.

On December 18, 2006, Citizens Communications Company (the “Company”) issued a press release announcing that it has commenced an offering of $250 million of senior unsecured notes due 2027 pursuant to Rule 144A and Regulation S under the Securities Act of 1933 (the “Securities Act”). The press release is attached hereto as Exhibit 99.1.

As part of the offering materials prepared in connection with this private offering, the Company has disclosed certain information relating to risk factors, its outstanding indebtedness (which describes certain debt for debt exchanges that took place in the fourth quarter of 2006) and its pro forma capitalization. Copies of these disclosures are attached hereto as Exhibits 99.2, 99.3 and 99.4.

The information furnished in this Form 8-K and the exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits:

Exhibit No.	Description
99.1	Press Release dated as of December 18, 2006.
99.2	Risk Factors.
99.3	Description of Indebtedness.
99.4	Capitalization.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CITIZENS COMMUNICATIONS COMPANY
Date: December 18, 2006	By:	/s/ Donald R. Shassian
	Name:	Donald R. Shassian
	Title:	Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated as of December 18, 2006.
99.2	Risk Factors.
99.3	Description of Indebtedness.
99.4	Capitalization.

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Contact:

Brigid M. Smith

203.614.5042

bsmith@czn.com

Citizens Communications Announces Proposed Private Placement of $250 Million in Senior Notes

STAMFORD, CONN – Citizens Communications Company (NYSE: CZN) announced today that it has commenced a private offering of $250 million of senior unsecured notes due 2027. Citizens intends to use the net proceeds from the offering to finance, in part, the acquisition of Commonwealth Telephone Enterprises, Inc. (NASDAQ: CTCO), announced on September 18, 2006. Consummation of the acquisition is subject to certain conditions, and the offering is not conditioned on the acquisition. If the acquisition is not consummated, Citizens will use the net proceeds to repurchase, redeem or otherwise retire for value a portion of its outstanding debt.

The notes will be senior unsecured obligations and will rank equally with all other existing and future senior unsecured indebtedness. The notes will be offered in the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and outside the United States pursuant to Regulation S under the Securities Act. The notes will not be registered under the Securities Act and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements.

This announcement is neither an offer to sell nor the solicitation of an offer to buy the notes or any other securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which, or to any persons to whom, such an offer, solicitation or sale is unlawful. Any offers of the notes will be made only by means of a private offering memorandum. This announcement is being issued pursuant to and in accordance with Rule 135c under the Securities Act.

About Citizens Communications Company

Citizens Communications Company (NYSE: CZN) is a full-service communications provider and one of the largest local exchange telephone companies in the country. Under the Frontier brand name, the company offers telephone, television and internet services, as well as bundled offerings, ESPN360 streaming video, residential security solutions and specialized bundles for small businesses and home offices.

Forward-Looking Statements

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: our ability to complete the acquisition of Commonwealth Telephone Enterprises, Inc., to successfully integrate their operations and to realize the synergies from the acquisition; our ability to refinance any short-term loan that will be used to finance the cash portion of the merger consideration with long-term debt; changes in the number of our revenue generating units; greater than anticipated competition from wireless or wireline carriers; the effects of ongoing changes in the regulation of the communications industry; our ability to successfully introduce new product offerings, including bundled service packages; our ability to sell enhanced services; our ability to comply with federal and state regulations; our ability to effectively manage our operations, costs and capital spending; our ability to successfully renegotiate expiring union contracts; overall changes in the telecommunications market and general and local economic and employment conditions. 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.

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EX-99.2

Exhibit 99.2

RISK FACTORS

You should carefully consider the risks described below and the risks described under the caption “Risk Factors” in our 2005 Form 10-K/A and in Commonwealth’s 2005 Form 10-K before making an investment decision. The risks described below and in our 2005 Form 10-K/A, Commonwealth’s 2005 Form 10-K and other risks and uncertainties not currently known to us or those that we deem immaterial may also materially and adversely affect our business, results of operations and financial condition. In such an event, you may lose all or part of your investment.

Risks Related to Competition and Our Industry

We face intense competition, which could adversely affect us.

The telecommunications industry is extremely competitive and competition is increasing. The traditional dividing lines between long distance, local, wireless, cable and internet services are becoming increasingly blurred. Through mergers and various service expansion strategies, services providers are striving to provide integrated solutions both within and across geographic markets. Our competitors include CLECs and other providers (or potential providers) of services, such as internet service providers, or ISPs, wireless companies, neighboring incumbents, voice over internet protocol, or VOIP, providers such as Vonage and cable companies that may provide services competitive with ours or services that we intend to introduce. Competition is intense and increasing and we cannot assure you that we will be able to compete effectively. For example, at September 30, 2006, we had 85,700 fewer access lines than we had at December 31, 2005, and we believe wireless and cable telephony providers have increased their market share in our markets. We expect to continue to lose access lines and that competition with respect to all our products and services will increase.

We expect competition to intensify as a result of the entrance of new competitors and the development of new technologies, products and services. We cannot predict which of the many possible future technologies, products or services will be important to maintain our competitive position or what expenditures will be required to develop and provide these technologies, products or services. Our ability to compete successfully will depend on marketing and on our ability to anticipate and respond to various competitive factors affecting the industry, including a changing regulatory environment that may affect our competitors and us differently, new services that may be introduced, changes in consumer preferences, demographic trends, economic conditions and pricing strategies by competitors. Increasing competition may reduce our revenues and increase our costs as well as require us to increase our capital expenditures and thereby decrease our cash flow.

Some of our competitors have superior resources, which may place us at a cost and price disadvantage.

Some of our current and potential competitors have market presence, engineering, technical and marketing capabilities, and financial, personnel and other resources substantially greater than ours. In addition, some of our competitors can raise capital at a lower cost than we can. Consequently, some competitors may be able to develop and expand their communications and network infrastructures more quickly, adapt more swiftly to new or emerging technologies and changes in customer requirements, take advantage of acquisition and other opportunities more readily and devote greater resources to the marketing and sale of their products and services than we can. Additionally, the greater brand name recognition of some competitors may require us to price our services at lower levels or increase our marketing expenditures in order to retain or obtain customers. Finally, the cost advantages of some competitors may give them the ability to reduce their prices for an extended period of time, if they so choose.

Risks Related to Our Business

Decreases in certain types of our revenues will impact our profitability.

Our Frontier business has been experiencing declining access lines, switched access minutes of use, long distance prices and related revenues because of economic conditions, increasing competition, changing consumer behavior (such as wireless displacement of wireline use, email use, instant messaging and increasing use of VOIP), technology changes and regulatory

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constraints. These factors are likely to cause our local network service, switched network access, long distance and subsidy revenues to continue to decline, and these factors, together with our increasing employee costs, and the potential need to increase our capital spending, may cause our cash generated by operations to decrease.

We may be unable to grow our revenue and cash flow despite the initiatives we have implemented.

We must produce adequate cash flow that, when combined with funds available under our credit facility, will be sufficient to service our debt, fund our capital expenditures, pay our taxes and maintain our current dividend policy. We have implemented several growth initiatives, including launching new products and services with a focus on areas that are growing or demonstrate meaningful demand such as high-speed internet. There is no assurance that these initiatives will result in an improvement in our financial position or our results of operations.

We may complete transactions that could increase our shares outstanding, affect our debt, result in a change in control, or all of the above.

From time to time we evaluate potential acquisitions and other arrangements, such as the Merger, that would extend our geographic markets, expand our services, enlarge the capacity of our networks or increase the types of services provided through our networks. If we complete any acquisition or other arrangement, we may require additional financing that could result in an increase in our outstanding shares and/or debt, result in a change in control, or both. There can be no assurance that we will enter into any transaction.

Our business is sensitive to the creditworthiness of our wholesale customers.

We have substantial business relationships with other telecommunications carriers for whom we provide service. During the past few years, several of our customers have filed for bankruptcy. While these bankruptcies have not had a material adverse effect on our business to date, future bankruptcies in our industry could result in our loss of significant customers, more price competition and uncollectible accounts receivable. As a result, our revenues and results of operations could be materially and adversely affected.

Risks Related to Liquidity, Financial Resources and Capitalization

Substantial debt and debt service obligations may adversely affect us.

Assuming the Merger is consummated, as of September 30, 2006, after giving pro forma effect to the Merger and this offering, the outstanding principal amount of our indebtedness would have been approximately $5.0 billion. Assuming the Merger is not consummated, then as of September 30, 2006, after giving pro forma effect to this offering and the application of the net proceeds thereof to repurchase, redeem or retire other debt, the outstanding principal amount of our indebtedness would have been approximately $4.0 billion. We may also obtain additional long-term debt and working capital lines of credit to meet future financing needs, subject to certain restrictions under our existing indebtedness, which would increase our total debt.

The significant negative consequences on our financial condition and results of operations that could result from our substantial debt include:

• limitations on our ability to obtain additional debt or equity financing;

• instances in which we are unable to meet the financial covenants contained in our debt agreements or to generate cash sufficient to make required debt payments, which circumstances have the potential of accelerating the maturity of some or all of our outstanding indebtedness;

• the allocation of a substantial portion of our cash flow from operations to service our debt, thus reducing the amount of our cash flow available for other purposes, including operating costs, dividends and capital expenditures, that could improve our competitive position or results of operations;

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• requiring us to sell debt or equity securities or to sell some of our core assets, possibly on unfavorable terms, to meet payment obligations;

• compromising our flexibility to plan for, or react to, competitive challenges in our business and the communications industry; and

• the possibility of our being put at a competitive disadvantage with competitors who do not have as much debt as us, and competitors who may be in a more favorable position to access additional capital resources.

We will require substantial capital to upgrade and enhance our operations.

Replacing or upgrading our infrastructure will result in significant capital expenditures. If this capital is not available when needed, our business will be adversely affected. Increasing competition, offering new services, improving the capabilities or reducing the maintenance costs of our plant may cause our capital expenditures to increase in the future. In addition, our ongoing annual dividend of $1.00 per share under our current policy utilizes a significant portion of our cash generated by operations and therefore limits our operating and financial flexibility and our ability to significantly increase capital expenditures. While we believe that the amount of our dividend will allow for adequate amounts of cash flow for capital spending and other purposes, any material reduction in cash generated by operations and any increases in capital expenditures, interest expense or cash taxes would reduce the amount of cash generated in excess of dividends. Losses of access lines, increases in competition, lower subsidy and access revenues and the other factors described above may reduce our cash generated by operations and may require us to increase capital expenditures. In addition, we expect our cash paid for taxes to increase significantly over the next several years.

Risks Related to Regulation

The access charge revenues we receive may be reduced at any time.

A significant portion of our revenues is derived from access charges paid by interexchange carriers, or IXCs’, for services we provide in originating and terminating intrastate and interstate traffic. The amount of access charge revenues we receive for these services is regulated by the FCC, and state regulatory agencies. Recent rulings regarding access charges have lowered the amount of revenue we receive from this source. Additional actions by these agencies could further reduce the amount of access revenues we receive. In addition, a portion of our access revenues is received from state and federal universal service funds based upon the high cost of providing telephone service to certain rural areas. FCC and state regulators are currently considering a number of proposals for changing the manner in which eligibility for federal subsidies is determined as well as the amounts of such subsidies. We cannot predict when or how these matters will be decided nor the effect on our subsidy or access revenues. In the future, there may be proposals by state or federal regulatory agencies to eliminate or reduce these revenues. A material reduction in the revenues we receive from these funds would adversely affect our financial results.

We are reliant on support funds provided under federal and state laws.

We receive a portion of our revenues (8% in 2005) from federal and state subsidies, including the high cost fund, local switching support fund and various state funds. FCC and state regulators are currently considering a number of proposals for changing the manner in which eligibility for federal subsidies is determined as well as the amounts of such subsidies. The FCC is also reviewing the mechanism by which subsidies are funded. Additionally, the FCC has an open proceeding to address reform to access charges and other intercarrier compensation. We cannot predict when or how these matters will be decided nor the effect on our subsidy or access revenues.

The federal high cost fund is our largest source of subsidy revenue. We currently expect that as a result of both an increase in the national average cost per loop and a decrease in our cost structure as well as potentially other factors, there is likely to be a decrease in the subsidy revenue earned in 2007 through the federal high cost support fund and such decrease may be significant in relation to the total amount of our subsidy revenue.

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Our company and industry are highly regulated, imposing substantial compliance costs and restricting our ability to compete in our target markets.

As an incumbent, we are subject to significant regulation from federal, state and local authorities. This regulation restricts our ability to change our rates, especially on our basic services, and imposes substantial compliance costs on us. Regulation restricts our ability to compete and, in some jurisdictions, it may restrict how we are able to expand our service offerings. In addition, changes to the regulations that govern us may have an adverse effect upon our business by reducing the allowable fees that we may charge, imposing additional compliance costs, or otherwise changing the nature of our operations and the competition in our industry.

Customers are now allowed to retain their wireline number when switching to another service provider. This is likely to increase the number of our customers who decide to disconnect their service from us. Other pending rulemakings, including those relating to intercarrier compensation, universal service and VOIP regulations, could have a substantial adverse impact on our operations.

Risks Related to Technology

In the future as competition intensifies within our markets, we may be unable to meet the technological needs or expectations of our customers, and may lose customers as a result.

The telecommunications industry is subject to significant changes in technology. If we do not replace or upgrade technology and equipment, we will be unable to compete effectively because we will not be able to meet the needs or expectations of our customers. Replacing or upgrading our infrastructure could result in significant capital expenditures.

In addition, rapidly changing technology in the telecommunications industry may influence our customers to consider other service providers. For example, we may be unable to retain customers who decide to replace their wireline telephone service with wireless telephone service. In addition, VOIP technology, which operates on broadband technology, now provides our competitors with a low-cost alternative to provide voice services to our customers.

Risks Related to the Acquisition of Commonwealth

There is no assurance that the acquisition of Commonwealth will occur.

The acquisition of Commonwealth is subject to a number of conditions, including approval by a majority of the votes cast by the holders of common shares of Commonwealth at the special meeting to be held to consider approving the merger agreement, approvals of the FCC and the Pennsylvania Public Utilities Commission, or Pennsylvania PUC, and certain other conditions. There is no assurance that the acquisition will occur. This offering is not conditioned on the closing of the acquisition. In the event the acquisition does not occur, we intend to use the net proceeds of this offering to repurchase, redeem or otherwise retire for value, a portion of our outstanding debt.

Our pro forma condensed combined financial information may not be representative of our results as a combined company.

The pro forma condensed combined financial information included in this offering memorandum is based in part on certain assumptions regarding the acquisition that we believe are reasonable. We cannot assure you that our assumptions will prove to be accurate over time. Accordingly, the pro forma condensed combined financial information included in this offering memorandum may not reflect what our results of operations and financial condition would have been had we actually acquired Commonwealth as of the dates presented, or what our results of operations and financial condition will be in the future.

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The integration of Commonwealth following the Merger may present significant challenges.

We may face significant challenges in combining Commonwealth’s operations into our operations in a timely and efficient manner and in retaining key Commonwealth personnel. The failure to integrate successfully and to manage successfully the challenges presented by the integration process may result in us not achieving the anticipated benefits of the Merger. In addition, we and Commonwealth expect to incur costs associated with transaction fees and other costs related to the Merger. We will also incur integration and restructuring costs following the completion of the Merger as we integrate the businesses of Commonwealth with those of ours. Although we expect that the realization of efficiencies related to the integration of the business will offset incremental transaction, integration and restructuring costs over time, we cannot give any assurance that this net benefit will be achieved.

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EX-99.3

Exhibit 99.3

DESCRIPTION OF OTHER INDEBTEDNESS

The following is a summary of certain of our indebtedness that will be outstanding following the consummation of this offering. To the extent this summary contains descriptions of our credit facilities, our senior notes and debentures and the indentures governing them, the descriptions do not purport to be complete and are qualified in their entirety by reference to those and related documents, copies of which we will provide you upon request.

Our Credit Facilities

In connection with the Merger, we obtained a commitment letter dated November 3, 2006 from the initial purchasers and/or their affiliates to provide a $990 million senior unsecured bridge loan for financing necessary to complete the Merger. This would finance the cash portion of the Merger consideration (including cash payable upon the assumed conversion of $300 million of Commonwealth convertible notes) and amounts required to cash out restricted shares, options and other equity awards, to repay certain Commonwealth indebtedness and to pay fees and expenses. The initial purchasers’ and/or their affiliates’ respective commitments to provide the bridge loan are subject to certain conditions precedent including maintenance of a leverage ratio. The bridge loan will mature in one year and will bear interest at a rate equal to either the base rate or LIBOR (each as described in the commitment letter), plus a margin based on our leverage ratio. We expect to refinance amounts drawn under this bridge loan with long-term debt prior to the maturity thereof. This offering will have the effect of reducing the $990 million commitment.

In December 2006, we borrowed $150 million under a senior unsecured term loan agreement with CoBank, ACB, as administrative agent, lead arranger and lender, and the other lenders from time to time party thereto. The loan matures in 2012 and bears interest based on an average prime rate or LIBOR, at our election. We intend to use the proceeds to repurchase a portion of our outstanding debt. This credit agreement contains customary representations and warranties, affirmative and negative covenants, a financial covenant that requires compliance with a leverage ratio and customary events of default. Upon proper notice and subject to certain limitations, we may repay the facility without premium or penalty. Amounts prepaid may not be reborrowed.

On October 29, 2004, we entered into a competitive advance and revolving credit facility agreement for up to $250 million (the “Revolving Credit Agreement”) with a consortium of financial institutions (the “Lenders”). The expiration date for the facility is October 29, 2009. As of September 30, 2006, there were no borrowings outstanding under the facility and outstanding standby letters of credit issued under the facility were $0.9 million. Certain borrowings under the facility bear interest at LIBOR plus an applicable rate determined by reference to a leverage ratio or a margin. Other borrowings under the facility bear interest at a fixed rate or at a rate equal to the higher of the federal funds effective rate plus 1/2 of 1% and Bank of America’s prime rate. The proceeds of this revolving credit facility can be used only for general corporate purposes and not to make any payment of dividend, nor in connection with any hostile acquisition. Although the credit facility is unsecured, it will be equally and ratably secured by certain liens and equally and ratably guaranteed by certain of our subsidiaries if we issue debt that is secured or guaranteed. We are in compliance with all of the credit facility covenants. The Revolving Credit Agreement contains customary representations and warranties, affirmative and negative covenants, a financial covenant that requires compliance with a leverage ratio and customary events of default.

On October 24, 2001, we borrowed $200 million under a senior unsecured term loan agreement with the Rural Telephone Finance Cooperative. The loan matures in 2011 and has a fixed interest rate of 6.27%.

Our Notes and Debentures

At September 30, 2006, our notes and debentures represented $3.8 billion of our approximately $4.0 billion of indebtedness. At such date, we had outstanding $1.05 billion in principal amount of 9.25% Notes due 2011, $652.5 million in principal amount of 7.625% Senior Notes due 2008, $795.4 million in principal amount of 9.00% Senior Notes due 2031, $700 million in principal

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amount of 6.25% Senior Notes due 2013, $19.4 million in principal amount of 5.00% Convertible Subordinated Debentures due 2036, $0.6 million in principal amount of 7.68% Debentures due 2034, $125 million in principal amount of 7.45% Debentures due 2035, $138 million in principal amount of 7.00% Debentures due 2025, $11.6 million in principal amount of 6.80% Debentures due 2026 and $193.5 million in principal amount of 7.05% Debentures due 2046. There are no scheduled principal payments required on any of these notes or debentures until their final maturities.

During the fourth quarter of 2006, we entered into four debt-for-debt exchanges pursuant to which we issued an aggregate principal amount of $149.9 million of our 9.00% Senior Notes due 2031 in exchange for an aggregate principal amount of $157.2 million of our outstanding 7.625% Senior Notes due 2008. No cash was exchanged in these transactions.

Our outstanding senior notes and debentures are senior unsecured obligations that rank pari passu in right of payment with all of our existing and future senior indebtedness and rank senior in right of payment to all of our existing and future subordinated indebtedness. None of our outstanding senior notes or debentures are guaranteed by our subsidiaries. Our outstanding senior notes are, and the notes offered hereby will be, structurally subordinated to our outstanding subsidiary senior notes.

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EX-99.4

Exhibit 99.4

CAPITALIZATION

The following table sets forth our cash and capitalization as of September 30, 2006:

• on a historical basis;

• assuming the Merger is not consummated, on a pro forma basis to reflect this offering and the application of the net proceeds thereof to repurchase, redeem or retire outstanding debt; and

• assuming the Merger is consummated, on a pro forma basis to reflect the Merger and this offering and the application of the net proceeds of this offering, to finance, in part, the cash portion of the Merger consideration as well as related transactions and the payment of fees and expenses.

This table is unaudited and should be read in conjunction with our consolidated financial statements incorporated by reference herein and our unaudited pro forma condensed combined financial information included in this offering memorandum. Other than as disclosed in this offering memorandum, there has been no material change in our capitalization and indebtedness since September 30, 2006.

	As of September 30, 2006
	Actual		Pro forma for this offering (assuming no Merger)			Pro forma for this offering and the Merger
	(in thousands of dollars)
Cash and cash equivalents	$	417,105	$	417,105		$	517,200
Long-term debt, net of current portion and debt discount
Senior notes offered hereby(1)		—		250,000			250,000
Additional Merger financing(2)		—		—			740,000
Senior notes, debentures and other debt(3)		3,947,664		3,701,844	(4)		3,947,664
Total long-term debt	$	3,947,664	$	3,951,844		$	4,937,664
Total stockholders’ equity	$	983,276	$	983,276		$	1,262,896
Total capitalization	$	4,930,940	$	4,935,120		$	6,200,560

(1) Principal amount shown; amount net of discounts and expenses is estimated to be $245.8 million.

(2) Reflects additional amount currently expected to be borrowed under the $990 million bridge loan commitment to finance the Merger and related transactions and to pay fees and expenses. Citizens expects to refinance amounts borrowed under this bridge loan, which matures within one year, with long-term debt prior to the maturity thereof. Accordingly, the financing to be incurred has been classified as long-term debt. If a long-term financing arrangement is not in place at the time of closing of the Merger, this bridge loan will be classified as current debt.

(3) Pro forma amounts include $150 million borrowed in December 2006 under a term loan agreement with CoBank, ACB, which will be used to repurchase, redeem or retire other existing debt. It is assumed that such debt is repurchased, redeemed or retired at par value.

(4) Reflects the application of the net proceeds from the offering to repurchase, redeem or otherwise retire for value, a portion of our outstanding debt. It is assumed that such debt is repurchased, redeemed or retired at the par value thereof. We have not yet identified which of our outstanding debt will be repurchased, redeemed or otherwise retired by an application of the net proceeds from this offering, but we expect all such net proceeds to be so applied by not later than August 2008, the maturity date of certain of our outstanding senior notes.

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