Madison River Communications

Revenues in the third quarter of 2000 were a record $45.5 million. This represented an increase of 186% from $15.9 million reported in the same period one year ago. The inclusion of two acquired companies, Coastal Communications (acquired in March 2000) and Gulf Coast Services (acquired in September 1999), was the primary reason for the increase in revenues. EBITDA (operating income before depreciation and amortization) increased 264% to $12.3 million in the third quarter of 2000 from $3.4 million in the same period of 1999, again as a result of the acquisitions. Excluding the effect of these acquisitions, the Company's revenues increased 27%, or $4.3 million, and EBITDA decreased 15%, or $0.5 million, from the third quarter of 1999. The decrease in EBITDA is a result of the Company's expenditures towards its expansion operations.

On a sequential quarter basis, comparing the results for the third quarter of 2000 to the results for the second quarter of 2000, EBITDA decreased 11%, or $1.6 million, on an increase in revenues of 9%, or $3.9 million. The decrease in EBITDA is a result of the increased expenses in the expansion operations.

We continued to meet our operational and financial goals during the third quarter. Most notably, we lit the remaining portion of our fiber network as planned," commented J. Stephen Vanderwoude, Chairman and Chief Executive Officer. "In lighting the network end-to-end, we have passed a critical milestone in our plan to offer high-speed, quality-of-services managed Internet access on our own network. We are now able to enter our target markets earlier than originally planned, and to do so capital efficiently."

As of September 30, 2000, the Company reported that it now operated 2,847 sheath miles of fiber. The majority of the fiber, approximately 2,163 sheath miles, form the southeastern portion of the long-haul network running from Atlanta to Houston and Dallas. The remaining portions of the fiber network serve the Company's expansion operations in North Carolina and Illinois.

In addition, during the third quarter, the Company recorded initial revenues of $23.3 thousand related to its fiber transport business. With the remaining portion of its long-haul fiber network lit, the Company anticipates significant growth from this revenue stream going forward.

2000 Nine Month Highlights

Revenues for the first nine months of 2000 grew to $118.8 million, or 142%, from $49.1 million in the same period of 1999. The increase is primarily attributed to the results of operations from the two acquisitions included in the 2000 operating results. EBITDA increased 114% to $35.4 million in the first nine months of 2000 from $16.5 million in the same period of 1999. Excluding the effect of the acquisitions, the Company's revenues increased 14%, or $6.9 million, and EBITDA decreased 31%, or $5.1 million, from the first nine months of 1999. The decrease in EBITDA is a result of the Company's expenditures for the ramp-up of its expansion operations.

The Rural Local Exchange Carrier Division (RLEC) reported revenues of $116.6 million for the nine months ended September 30, 2000 and EBITDA of $48.7 million, an EBITDA margin of 42%. The LTD reported access and DSL lines in service in the third quarter of 197,585. This represents an increase of 7,386 lines, or 4%, from December 31, 1999 on a pro forma basis and an increase of 152 lines, or 0.1%, from the second quarter of 2000. Of the 197,585 total lines, 138,176 are residential, 56,682 are business lines and 2,727 are DSL lines. In addition, the Company has approximately 58,900 long distance accounts and 28,100 dial-up Internet subscribers at September 30, 2000. Penetration rates for vertical services such as voice mail, caller ID, call waiting and call forwarding continued to increase in the third quarter.

The Integrated Communications Division (ICD) reported nine month revenues of $2.2 million and an EBITDA loss of $13.3 million. As of September 30, 2000, the ICD had sold a total of 10,821 lines consisting of 7,509 voice and data lines and 3,312 PRI channels. Of these lines, 2,676 voice and data lines and 2,553 PRI channels are in service with the remaining lines in provisioning. The ICD currently serves three markets - two in North Carolina (the Research Triangle area including Raleigh, Durham and Chapel Hill and the Triad area including Greensboro and Winston-Salem) and Peoria, Illinois. The ICD anticipates serving 11 markets by the end of 2000, with the addition of Atlanta, Biloxi, Dallas, Houston, Mobile, Montgomery, New Orleans and Pensacola. To support this growth, the ICD anticipates that its current quota-carrying salesforce of 25 people will expand to approximately 58 people by the end of the second quarter of 2001.

At the end of the third quarter, the Company had $53.1 million in cash on hand. In addition, the Company also has a $24.0 million commitment from its equity investors and $38.8 million in unused credit facilities with the RTFC. Cash expended for capital additions for the nine months was approximately $48 million. For the year, the Company expects to spend approximately $65 million for capital additions.

2000 Nine Month Highlights - Pro Forma (** see Note below)

On a pro forma basis, the Company reported revenues of $127.9 million in the first nine months of 2000. This is a 2% increase from pro forma revenues of $125.0 million for the first nine months of 1999. Excluding the effects of $5.3 million in fiber construction revenue reported in the 1999 results for which no comparable revenues were earned for 2000, pro forma revenues increased 7%.

For the first nine months of 2000, the Company reported pro forma EBITDA of $42.2 million as compared to $47.0 million in the same period for 1999, a decrease of 10%. Pro forma EBITDA in the first nine months of 2000 was lower by $12.3 million as a result of the Company's expenditures towards its expansion operations compared to a $2.5 million EBITDA loss from its expansion operations in the first nine months of 1999. A $0.1 million pro forma EBITDA loss from fiber construction operations reported in the 1999 results for which no comparable operations were reported for 2000 had no impact on the percentage change in EBITDA.

Third Quarter Operational Highlights

Data continues to be an expanding line of business for Madison River Communications. The Company's revenues for LTD's high speed special access services increased 44.6% from approximately $388 thousand at December 31, 1999 to $561 thousand to date. In addition, LTD reported that it reached a 1.4% penetration in installed DSL lines in its service areas.

The Company announced that as of 2:00 AM CDT, on October 1, 2000, it completed and lit the entire 2,163 sheath mile fiber network running along the Gulf Coast. The fiber route runs from Dallas, Texas; through Houston, Texas; New Orleans, Louisiana; Mobile, Alabama; Pensacola, Florida; and terminates in Atlanta, Georgia. The hyper dense wave division multiplexing (HDWDM) system is capable of providing sixteen OC-48 channels per fiber pair. The Company will install a robust ATM platform along the fiber route by the end of 2000. The Company is already providing point-to-point services along the network.

The Company also announced an agreement with MCI/WorldCom to interconnect with other Tier 1 Internet carriers in Dallas and Atlanta. Multi-homed in two major Network Access Points, MAE Central and Atlanta NAP, Madison River will offer its Internet customers a fully meshed OC-48 (4.5 gigabyte) Asynchronous Transfer Mode (ATM) network architecture. The two network access points also enhance the reliability and flexibility of the Company's self-healing, HDWDM SONET network that encompasses the Southeastern US.

Madison River Communications announced the successful closing on the sale of certain construction equipment and assets and the transfer of 52 employees from Gulf Telephone Company, in Foley, Alabama, to Trawick Construction, Chipley, Florida, a subsidiary of Quanta Services, Inc. The scope and breadth of the Company's construction requirements had changed with the completion of its fiber network and the sale resulted in significant cost savings on a go-forward basis.

The Company commenced an exchange offer on June 27, 2000 to exchange its $200.0 million in 13¼% senior notes due in 2010 sold in a private placement in February 2000 with publicly registered notes. The publicly registered notes contain terms that are substantially identical to the private placement notes except that the transfer restrictions, registration rights and liquidated damage provisions relating to the private placement notes do not apply to the publicly registered notes. The exchange offer expired on July 28, 2000 with the entire $200.0 million in notes being exchanged.

Unaudited Selected Financial Results and Operating Data

Unaudited selected historical financial and operating results for the third quarter of 2000 and 1999 and unaudited selected historical and pro forma financial results for the nine month period ended September 30, 2000 and 1999 were (dollars in millions):

** The unaudited pro forma results for the nine month period ended September 30, 2000 assume that the Coastal Communications acquisition in March 2000 and the senior notes offering in February 2000 each occurred as of January 1, 2000. The unaudited pro forma results for the nine month period ended September 30, 1999 assume that the acquisitions of Gulf Coast Services in September 1999 and Coastal Communications in March 2000 and the senior notes offering in February 2000, each occurred as of January 1, 1999 and reflects pro forma adjustments related to one-time charges incurred by Gulf Coast Services. In addition, the pro forma EBITDA results exclude non-cash charges for the Company's Long-Term Incentive Plan expenses. The pro forma information is not intended to be indicative of the actual results that would have been achieved had the transactions occurred at the beginning of 2000 or 1999, respectively, nor does it purport to be indicative of the future consolidated operating results of the Company.

The statements, other than statements of historical fact, included in this press release are forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as ''may,'' ''will,'' ''expect,'' ''intend,'' ''estimate,'' ''anticipate,'' ''plan,'' ''seek'' or ''believe.'' We believe that the expectations reflected in such forward-looking statements are accurate. However, we cannot assure you that such expectations will occur. Our actual future performance could differ materially from such statements. Factors that could cause or contribute to such differences include, but are not limited to, the following:

For more information, see the "Risk Factors" section beginning on page 11 of our Registration Statement on Form S-4 (Registration No. 333-36804) filed with the Securities and Exchange Commission.

You should not unduly rely on these forward-looking statements, which speak only as of the date of this press release. Except as required by law, we are not obligated to publicly release any revisions to these forward-looking statements to reflect events or circumstances occurring after the date of this press release or to reflect the occurrence of unanticipated events.

Madison River Capital, LLC operates as Madison River Communications and is a wholly owned subsidiary of Madison River Telephone Company, LLC. Madison River Communications operates and enhances rural telephone companies and uses advanced technology to provide competitive communications services in nearby markets. Madison River Telephone Company, LLC is owned by affiliates of Madison Dearborn Partners Inc., Goldman, Sachs & Co., Providence Equity Partners and members of management.