1. C ORPORATE M & A D EVELOPMENT February 11, 2011

4. - - I. Introduction to Corporate M&A

12. Introduction - - Accretion / Dilution Illustration: Dilution Assumptions: Acquirer purchases 100% of Target by issuing additional stock to purchase Target shares. No premium is offered above Target’s current share price.

13. Introduction - - Accretion / Dilution Illustration: Breakeven Assumptions: Acquirer purchases 100% of Target by issuing additional stock to purchase Target shares. No premium is offered above Target’s current share price.

14. Introduction - - Accretion / Dilution Illustration: Accretion Assumptions: Acquirer purchases 100% of Target by issuing additional stock to purchase Target shares. No premium is offered above Target’s current share price.

16. - - II. Adjustments to the Income Statement

22. - - III. Traditional Deal Structures

28. - - IV. Corporate M&A Conceptual Framework

31. Corporate M&A Conceptual Framework - - Types of Corporate Mergers Aerospace and Defense Aerospace Aftermarket Supply-chain Management Consumer Products Consumer Products Customers Suppliers Competitors No relationship Competitors No relationship Vertical Merger Horizontal Merger Conglomerate Merger

35. - - V. Acquisition Integration

36. Closing the deal is often only the first step in the battle. To capture all of the projected post-deal synergies, public companies spend significant time executing the integration of the operations. If the integration is not done correctly, the acquisition can very well be dilutive to the company. Oftentimes, it takes two to five years (or longer) for an Acquirer to realize the synergies in combining with a Target. Management, shareholders and board members recognize the difficulties involved in integration. What is acquisition integration? Why is acquisition integration so important? When does the process occur? What are the necessary steps to complete a successful integration? - - The Deal is Closed. What now? Acquisition Integration Topics

39. Acquisition Integration – When does it Occur? Announcement - - Acquisition Integration Closing Final Negotiations “ Quiet Period” Regulatory Due Diligence Post-Acquisition Execution Right Here and… Right Here Integration Planning

40. Acquisition Integration – How to Get it Right The process used for post-merger integration often differentiates experienced, successful Acquirers from value destroyers. The key is to find the right balance between speed and thoroughness. Although it is important to realize the potential synergies quickly, ideally in the first 12 to 18 months, executives often declare victory too quickly and rush to return to “business as usual,” leaving synergies unexploited. A disciplined and well-structured integration plan is vital to success. Communicate the vision and business logic of the deal – Employees and other pivotal stakeholders, including investors, must understand the strategic rationale, business objectives, and post-merger integration milestones and targets. Senior management should lead the implementation. Separate the post-merger integration from the core business – Post-merger integration needs its own organization, with a dedicated team of executives and faster than usual governance and decision-making processes. Correct allocation of resources is especially important where there are mission-critical functions. Monitor core business performance – Establish early warning systems to alert management to any falloff in revenue or profitability in the core business. - - Acquisition Integration

41. Acquisition Integration – How to Get it Right (Continued) Proactively manage the soft issues – Post-merger integration isn’t just a numbers game. The process involves complex organizational and cultural changes. Identify key staff and design strategies to keep them on board as they are the value of the franchise. Handle new appointments with care. Move before the close of the deal – There are a lot of actions that can be taken in advance (prior to the close), that enable you to realize the benefits of the transaction immediately after it is finalized. Challenge decisions and assess progress after completion – During a post-merger integration, companies often make decisions on pragmatic or political grounds, resulting in inflated costs. Revisit those decisions and question their contribution to the company’s value-creation potential. When a post-merger integration is successful, the payoff can be striking. A rigorous approach may enable an Acquirer to even exceed its synergy demands and earn the shareholder’s respect and confidence in the company. - - Acquisition Integration

42. Case Study - Introduction Consolidated Communications Acquires North Pittsburgh Systems, Inc. for $375.1 Million Announcement Date: July 1 st , 2007 183 days Closing Date: December 31 st , 2007 Acquirer: Consolidated Communications provides communications services to residential and business customers in Illinois and Texas. It offers a range of telecommunications services, including local and long distance service, custom calling features, private line services, dial-up and high-speed Internet access, digital television, carrier access services, network capacity services over its regional fiber optic network, and directory publishing. Target: North Pittsburgh Systems, Inc. is a local network services, including local dial tone service, custom calling features, and local private line services to residential and business customers; and network access services, which comprise access to its switched access facilities for the completion of interstate and intrastate long distance toll calls and extended area service calls, as well as access to private line network facilities for use in transporting voice and data services to interexchange carriers, cellular mobile radio service providers, and other local exchange carriers. - - Acquisition Integration

43. Case Study – Acquisition Rationale - - Acquisition Integration Source: Consolidated Communication 7/2/2007 8-K SEC Filing Pennsylvania market 357 employees 63,000 access lines Superior broadband technologies Video service Local brand name equity Illinois and Texas market 1,100 employees 232,000 access lines 64,000 broadband connections IPTV technology Telemarketing services Business services

45. Case Study – The Transaction - - Acquisition Integration Advisors Consolidated Communications Legal – Schiff Hardin Financial – Wells Fargo North Pittsburgh Systems, Inc. Legal – Hughes Hubbard & Reed Thomas, Thomas, Armstrong & Niesen Financial – Evercore Partners Source: Capital IQ Transaction Values Total Consideration to Shareholders ($ mm) 375.13 Total Transaction Size ($ mm) 395.38 Implied Equity Value ($ mm) 375.13 Implied Enterprise Value ($ mm) 347.97 Implied Equity Value/LTM Net Income 25.0x Implied Enterprise Value/Revenues 3.5x Implied Equity Value/Book Value 3.8x Implied Enterprise Value/EBITDA 7.6x Exchange Rate 1.000 Offer Per Share ($) 25.00 Consideration to Shareholders ($ mm) 375.13 Total Cash ($ mm) 300.10 Premium (1 week Prior) 21.1% Total Stock ($ mm) 75.03

46. Case Study – The Transaction (Cont.) - - Acquisition Integration 17.6% premium over market trading price on day of Definitive Agreement Not subject to collars $11.25 million break-up fee Source: Capital IQ North Pittsburgh 7/2/2007 8-K SEC Filing The Purchase Other Terms Financing Cash on hand and debt financing from Wachovia Synergies Operating synergies $7 million in 2008, $11 million in 2009 and beyond 6.0% accretive to cash flow after first full year of operations

49. Case Study – Stock Performance - - Acquisition Integration Consolidated Communications outperformed the S&P 500 by 50% over this time period Relative Stock Performance 1-year after Acquisition to Today (January 1, 2009 -April 23, 2010) SPX closed 34.6% higher on April 23, 2010 compared to January 1, 2009 price CNSL closed 84.6% higher than January 1, 2009 price on April 23, 2010

50. - - Appendix Note: The companies used as targets in these examples are fictitious and presented for illustrative purposes. Any resemblance to actual companies is unintended and purely coincidental.

55. Discounted Cash Flow Analysis - - Valuation Analysis

60. Accretion/Dilution Analysis – Acquirer Projections & Assumptions - - Valuation Analysis

61. - - Valuation Analysis Accretion/Dilution Analysis – Combined Company

62. - - Valuation Analysis Accretion/Dilution Analysis – Combined Company

63. - - Accretion/Dilution Analysis – Sensitivities Valuation Analysis

68. (1) Assumes 38% tax rate Valuation Analysis Historical and Projected Income Statement - -

69. - - Valuation Analysis Historical and Projected Balance Sheet

70. - - Valuation Analysis Historical and Projected Cash Flow Statement

71. - - Valuation Analysis Discounted Cash Flow Analysis

72. - - Valuation Analysis Discounted Cash Flow Analysis - Sensitivities

73. - - Valuation Analysis Leveraged Buyout Analysis – Sources & Uses

74. - - Valuation Analysis Leverage Buyout Analysis – Transaction Adjustments

75. - - Valuation Analysis Leveraged Buyout Analysis – Summary Financials

76. - - Valuation Analysis Leveraged Buyout Analysis – Debt Schedule

77. - - Valuation Analysis Leveraged Buyout Analysis – Returns Analysis

78. - - Valuation Analysis Leveraged Buyout Analysis – Equity IRR Sensitivities

79. - - Valuation Analysis Leveraged Buyout Analysis – Subordinate Debt IRR Sensitivities