----

----

| x      | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES |
|--------|-----------------------------------------------------------------|
|   | EXCHANGE ACT OF 1934                                            |
|   | For the fiscal period ending December 31, 2010                  |

| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934            |
|--------|-----------------------------------------------------------------------------------------------------|
|   | For the transition period from     to      . |

| Minnesota                       | 41-1524393          |
|---------------------------------|---------------------|
| (State or other jurisdiction of | (I.R.S. Employer    |
| incorporation or organization)  | Identification No.) |

|   | Title of Class             |   | Name of Exchange on Which Registered |   |
|--------|----------------------------|--------|--------------------------------------|--------|
|   | Common Stock, no par value |   | NASDAQ Global Select Market          |   |

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TABLE OF CONTENTS

|  PART I |
|--------------|

| Item 1.       | Business                  |  3 |
|---------------|---------------------------|---------|
| Item 1A.      | Risk Factors              | 13      |
| Item 1B.      | Unresolved Staff Comments | 21      |
| Item 2.       | Properties                | 21      |
| Item 3.       | Legal Proceedings         | 22      |
| Item 4.  | Reserved             | 22      |

PART II

| Item 5.  | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 23 |
|----------|--------------------------------------------------------------------------------------------------------------|----|
| Item 6.  | Selected Financial Data                                                                                      | 26 |
| Item 7.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations                  | 27 |
| Item 7A. | Quantitative and Qualitative Disclosures about Market Risk                                                   | 43 |
| Item 8.  | Financial Statements and Supplementary Data                                                                  | 46 |
| Item 9.  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                         | 69 |
| Item 9A. | Controls and Procedures                                                                                      | 69 |
| Item 9B. | Other Information                                                                                            | 70 |

PART III

| Item 10. | Directors, Executive Officers and Corporate Governance                                         | 70 |
|----------|------------------------------------------------------------------------------------------------|----|
| Item 11. | Executive Compensation                                                                         | 71 |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 71 |
| Item 13. | Certain Relationships and Related Transactions and Director Independence                       | 71 |
| Item 14. | Principal Accountant Fees and Services                                                         | 71 |

PART IV

| Item 15. | Exhibits and Financial Statement Schedules | 71 |
|----------|--------------------------------------------|----|

SIGNATURES

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PART I

Item 1

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| ·   |  Enventis Telecom, Inc. (“Enventis”) |
|--------------------|-------------------------------------------------------|

| ·   |  CP Telecom, Inc. (“CP Telecom”) |
|--------------------|---------------------------------------------------|

| ·   | Mankato Citizens Telephone Company (“MCTC”) |
|--------------------|---------------------------------------------------------|

| ·   | Mid-Communications, Inc. (“Mid-Com”) |
|--------------------|--------------------------------------------------|

| ·   | Heartland Telecommunications Company of Iowa, Inc. (“Heartland”) |
|--------------------|------------------------------------------------------------------------------|

| ·   | Cable Network, Inc. (“CNI”) |
|--------------------|-----------------------------------------|

| ·   | Crystal Communications, Inc. (“Crystal”) |
|--------------------|------------------------------------------------------|

| ·   | National Independent Billing, Inc. (“NIBI”) |
|--------------------|---------------------------------------------------------|

| ·   | Fiber, data and internet |
|--------------------|--------------------------|

| ·   | Voice and VoIP |
|--------------------|----------------|

| ·   | Managed and hosted services |
|--------------------|-----------------------------|

| ·   | Data center services |
|--------------------|----------------------|

| ·   | Equipment Solutions |
|--------------------|---------------------|

| ·   | Total care support and monitoring |
|--------------------|-----------------------------------|

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| ·   | Execute on our local market strategy. We will continue to leverage the HickoryTech brand and its strong reputation in our legacy Telecom markets and offer a competitive, multi-service bundle of voice, high-speed Internet and digital TV in many markets. We will manage the decline in Telecom network access and local service revenue by offering value-added services such as higher Internet speeds and localized content along with unparalleled customer service as a competitive differentiator. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Deploy advanced communications technologies. We have and will continue to upgrade our networks to take advantage of the fastest growing areas of technology including advanced high-bandwidth capabilities and services, expansion of our network for wholesale and retail customers, Fiber-to-the-Tower (“FTTT”) services for wireless carriers and last mile fiber builds to data centers and business customer premises. We believe our technical capabilities and the use of VoIP technologies combined with our Total Care Support offering will allow us to attract and maintain clients by providing proactive monitoring and deployment of these services. Our enhanced SingleLink product, which provides customers with a single, centrally managed and hosted VoIP-based communications system, allows businesses to leverage the powerful benefits of integrated IP communications without the time and capital necessary for on-premise solutions. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| ·   | Grow monthly recurring revenue services through business-to-business sales. Our focus remains on supporting business customers ranging in size from small to large enterprise businesses. We offer integrated communication solutions which include IP telephony, unified computing, transport and data and network integration services that combine voice and data into a single platform. The integration of CP Telecom into our Company has broadened our product and service offerings for the SMB marketplace. We believe we have created a competitive advantage by utilizing a consultative sales approach and developing innovative and flexible solutions for our customers. We will further expand our SMB focus through the expansion of our local fiber network into cities in which we believe we can offer competitive services and take market share. We are able to do this by utilizing our IP expertise, leveraging our extensive fiber network and offering a full complement of high-quality products and services.  |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | Maintain stable cash flows from operations and disciplined capital spending. Our current customer base provides a recurring revenue stream generating stable cash flow. Our focus remains on growing our services and support product lines that will over time generate cash flow well in excess of capital expenditure needs. We have allocated resources to maintain and upgrade our network while focusing on optimizing returns by completing strategic capital outlays that will make our network more efficient and cost effective while bringing a richer product and services portfolio to the markets we serve. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Grow through select strategic growth initiatives that fit our current strategic initiatives. We will continue to invest in organic growth opportunities to expand our network to new markets and customers and develop new products which are complementary to our business portfolio. We also intend to pursue a disciplined process of evaluating select acquisitions of businesses. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| For Year Ended December 31         |   | 2010   |    |   | 2009    |   |   | 2008   |   |
|------------------------------------|--------|--------|---------|--------|---------|--------|--------|--------|--------|
|                               |   | Amount |    |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |
| Business:                          |   |   |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Equipment        |   | $      | 39,406  |   |    |   | 24     | %      |   | $ | 27,857 |   |   |   | 20 | % |   | $ | 43,514 |   |   |   | 28 | % |
|    Support Services |   |   | 8,138   |   |    |   | 5      | %      |   |   | 9,579 |   |   |   | 7 | % |   |   | 12,387 |   |   |   | 8 | % |
|    Fiber and Data   |   |   | 44,685  |   |    |   | 28     | %      |   |   | 31,247 |   |   |   | 22 | % |   |   | 24,075 |   |   |   | 16 | % |
| Telecom:                           |   |   |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Local Service    |   |   | 15,288  |   |    |   | 9      | %      |   |   | 16,163 |   |   |   | 12 | % |   |   | 17,096 |   |   |   | 11 | % |
|    Network Access   |   |   | 23,150  |   |    |   | 14     | %      |   |   | 24,157 |   |   |   | 17 | % |   |   | 25,859 |   |   |   | 17 | % |
|    Broadband        |   |   | 18,832  |   |    |   | 12     | %      |   |   | 17,028 |   |   |   | 12 | % |   |   | 15,638 |   |   |   | 10 | % |
|    Long Distance    |   |   | 3,185   |   |    |   | 2      | %      |   |   | 3,791 |   |   |   | 3 | % |   |   | 4,563 |   |   |   | 3 | % |
|    Other            |   |   | 9,563   |   |    |   | 6      | %      |   |   | 9,280 |   |   |   | 7 | % |   |   | 10,043 |   |   |   | 7 | % |
| Total Revenue                      |   | $      | 162,247 |   |    |   | 100    | %      |   | $ | 139,102 |   |   |   | 100 | % |   | $ | 153,175 |   |   |   | 100 | % |

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| ·   | High-Cost program, which subsidizes local carriers operating in high-cost regions of the country to ensure reasonably based telephone rates. This program has the most direct impact on our operating companies, |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Low-Income Subscribers program, which includes the Link Up and Lifeline programs that provide subsidies for service initiation and monthly fees, respectively, with eligibility based on subscriber income, |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Rural Health Care Providers program, which subsidizes telecommunications services used by rural health care providers and provides them with toll free access to an Internet service provider, and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Schools and Libraries program, also called the E-Rate program, which provides support funding to schools and libraries for telecommunications services, Internet access and internal connections. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | To interconnect directly or indirectly with other carriers, |
|--------------------|-------------------------------------------------------------|

| ·   | To allow others to resell their services, |
|--------------------|-------------------------------------------|

| ·   | To provide for number portability, which allows end-users to retain their telephone number when changing providers, |
|--------------------|---------------------------------------------------------------------------------------------------------------------|

| ·   | To ensure dialing parity, |
|--------------------|---------------------------|

| ·   | To ensure that competitor’s customers have nondiscriminatory access to telephone numbers, operator services, directory assistance and directory listing services, and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | To allow competitors access to telephone poles, ducts, conduits and rights-of-way, and to establish reciprocal compensation arrangements for the transport and termination of telecommunications traffic. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Provide non-discriminatory access to discrete parts of the network, such as local loops and transport facilities. These are referred to as unbundled network elements, and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Provide at rates, terms and conditions that are just, reasonable and non-discriminatory, physical co-location of equipment necessary for interconnection or access to unbundled network elements. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Item 1A. 

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| ·   | our ability to offer services on terms attractive to our customers, |
|--------------------|---------------------------------------------------------------------|

| ·   | our ability to expand our broadband offerings, |
|--------------------|------------------------------------------------|

| ·   | our ability to introduce and distribute the equipment and systems of manufacturers of switching equipment and the suppliers of communications technology compared to the competitive alternatives of other suppliers, |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our ability to provide fiber and data solutions and competitive IP services, including communications and network solutions, and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|

| ·   | our ability to provide competitive services. |
|--------------------|----------------------------------------------|

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| ·   | Under certain environmental laws, we could be held liable, jointly and severely and without regard to fault, for the costs of investigating and the remediation of any actual or threatened environmental contamination at currently and formerly owned or operated properties, and those of our predecessors, and for contamination associated with disposal by us or our predecessors of hazardous materials at third party disposal sites, |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The presence of contamination can adversely affect the value of our properties and our ability to sell any such affected property or to use it as collateral, |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We could be held responsible for third party property damage claims, personal injury claims or natural resource damage claims relating to any such contamination, |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The cost of complying with existing environmental requirements could be significant, |
|--------------------|--------------------------------------------------------------------------------------|

| ·   | Adoption of new environmental laws, regulations or changes in existing laws or regulations or their interpretations could result in significant compliance costs or as yet identified environmental liabilities, |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Future acquisition of businesses or properties subject to environmental requirements or affected by environmental contamination could require us to incur substantial costs relating to such matters, and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In addition, environmental laws regulating wetland, endangered species and other land use and natural resource issues may increase costs associated with future business or expansion opportunities, delay, alter or interfere with such plans, or otherwise adversely affect such plans. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Requiring us to dedicate a substantial portion of our cash flow from operations to make principal and interest payments on our debt, |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate, |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|

| ·   | Limiting our ability to borrow additional funds, or to sell assets to raise funds, if needed, for working capital, capital expenditures, acquisitions or other purposes, |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Increasing our vulnerability to general adverse economic and industry conditions, including changes in interest rates, and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| ·   | Placing us at a competitive disadvantage compared to our competitors that have less debt. |
|--------------------|-------------------------------------------------------------------------------------------|

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| ·   | Incur additional debt and issue preferred stock, |
|--------------------|--------------------------------------------------|

| ·   | The payment of dividends on, and purchase or redemption of, capital stock, |
|--------------------|----------------------------------------------------------------------------|

| ·   | Make investments in excess of a threshold, |
|--------------------|--------------------------------------------|

| ·   | Make capital expenditures in excess of a threshold, |
|--------------------|-----------------------------------------------------|

| ·   | Create liens on our assets, |
|--------------------|-----------------------------|

| ·   | Sell certain assets, |
|--------------------|----------------------|

| ·   | Engage in some transactions with affiliates, |
|--------------------|----------------------------------------------|

| ·   | Engage in business other than communications businesses, and |
|--------------------|--------------------------------------------------------------|

| ·   | Make other restricted payments, including payments in connection with investments and acquisitions in excess of a threshold. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

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| ·   | The state of our business, the environment in which we operate and the various risk factors we face, including, but not limited to competition, technological change, industry change, regulatory and other risks summarized in this Annual Report on Form 10-K, |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our future results of operations, financial condition, liquidity needs and capital resources, |
|--------------------|-----------------------------------------------------------------------------------------------|

| ·   | Our cash needs, including interest and any future principal payments on our indebtedness, capital expenditures, taxes, pension and other post-retirement contributions and certain other costs, and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Potential sources of liquidity, including borrowing under our revolving credit facility or possible asset sales. |
|--------------------|------------------------------------------------------------------------------------------------------------------|

| ·   | Either reduce or eliminate dividends, |
|--------------------|---------------------------------------|

| ·   | Fund dividends by incurring additional debt (to the extent we were permitted to do so under agreements governing our then existing debt), which would increase our leverage, debt repayment obligations and interest expense and decrease our interest coverage, resulting in, among other things, reduced capacity to incur debt for other purposes, including to fund future dividend payments, |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Amend the terms of our credit agreement, if our lenders agreed, to permit us to pay dividends or make other payments if we are otherwise not permitted to do so, |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Fund dividends from future issuances of equity securities, which could be dilutive to our stockholders and negatively affect the price of our common stock, |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Fund dividends from other sources, such as by asset sales or by working capital, which would leave us with less cash available for other purposes, and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Reduce other expected uses of cash, such as capital expenditures. |
|--------------------|-------------------------------------------------------------------|

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| ·   | Authorization for our Board of Directors to issue preferred stock without shareholder approval, |
|--------------------|-------------------------------------------------------------------------------------------------|

| ·   | Limitations on business combinations with interested shareholders, and |
|--------------------|------------------------------------------------------------------------|

| ·   | Advance notice requirements for shareholders proposals. |
|--------------------|---------------------------------------------------------|

| ·   | Due to our low liquidity of stock trading volume, any imbalance between period supply and demand in shares offered, |
|--------------------|---------------------------------------------------------------------------------------------------------------------|

| ·   | General economic conditions in the United States or internationally, |
|--------------------|----------------------------------------------------------------------|

| ·   | Our financial health and the financial health of our competitors or our customers, |
|--------------------|------------------------------------------------------------------------------------|

| ·   | Trend in stock market trading of our peer companies, |
|--------------------|------------------------------------------------------|

| ·   | Developments in telecommunications regulations, |
|--------------------|-------------------------------------------------|

| ·   | Consolidation among our competitors or customers, |
|--------------------|---------------------------------------------------|

| ·   | Rumors or speculation regarding our future business results and actions, |
|--------------------|--------------------------------------------------------------------------|

| ·   | Increased competition with our competitors or among our customers, |
|--------------------|--------------------------------------------------------------------|

| ·   | Quarterly fluctuations in our financial results or the financial results of our competitors or customers, |
|--------------------|-----------------------------------------------------------------------------------------------------------|

| ·   | Announcements of new products and services by us or our competitors, and |
|--------------------|--------------------------------------------------------------------------|

| ·   | Disputes concerning intellectual property rights. |
|--------------------|---------------------------------------------------|

Item 1B.

Item 2. 

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| 1.   | Lease approximately 16,000 square feet of office space in Plymouth, Minnesota for general offices, technology services and system support. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | Lease approximately 9,300 square feet in Duluth, Minnesota for general offices. |
|----------------|---------------------------------------------------------------------------------|

| 3.   | Lease approximately 5,550 square feet in Minneapolis, Minnesota for general offices. |
|----------------|--------------------------------------------------------------------------------------|

| 4.   | Lease approximately 2,200 square feet in Des Moines, Iowa for a network equipment facility. |
|----------------|---------------------------------------------------------------------------------------------|

| 5.   | License approximately 2,200 square feet in Edina, Minnesota for a data center. |
|----------------|--------------------------------------------------------------------------------|

| 6.   | Utilize approximately 2,200 square feet of secured space within our headquarters building in Mankato, Minnesota for a data center. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------|

| 7.   | Lease approximately 1,700 square feet in Rochester, Minnesota for general offices and a network equipment facility. |
|----------------|---------------------------------------------------------------------------------------------------------------------|

| 8.   | License approximately 400 square feet in Duluth, Minnesota for a data center. |
|----------------|-------------------------------------------------------------------------------|

| 1.   | General offices and our principal central office exchange building are located in downtown Mankato, Minnesota. This facility, built in 1963, is owned and is a three-level brick and stone building containing approximately 60,000 square feet of floor space. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | Our main operations center, built in 1996, is owned and located in Mankato, Minnesota. This operations center is a two-story concrete building containing approximately 48,000 square feet. The warehouse portion of the building is used to store vehicles and supplies and is also used as office space for engineers and technicians. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | Own a four-story building in Mankato, Minnesota containing approximately 17,000 square feet used as office space for the data processing services of our company. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.   | Lease office space of approximately 6,000 square feet in Urbandale, Iowa. This location is also used for office space by the Business Sector. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| 5.   | Central office equipment is located in a one-story brick structure in Rock Rapids, Iowa containing approximately 1,500 square feet of space. We also lease approximately 2,000 square feet of general office space in Rock Valley, Iowa. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Item 3.

Item 4.

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PART II

| Item 5.   Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
|---------------------------------------------------------------------------------------------------------------------------------------|

| 2010   |   |        |   | High   |   |   | Low    |   |   | End of Qtr. |   |
|--------|--------|-------------|--------|--------|--------|--------|--------|--------|--------|-------------|--------|
|   |   | 4th Quarter |   | $      | 9.74   |   |   | $      | 8.50   |        |   | $ | 9.56 |   |
|   |   | 3rd Quarter |   | $      | 8.53   |   |   | $      | 6.65   |        |   | $ | 8.53 |   |
|   |   | 2nd Quarter |   | $      | 8.99   |   |   | $      | 6.74   |        |   | $ | 6.75 |   |
|   |   | 1st Quarter |   | $      | 9.25   |   |   | $      | 8.13   |        |   | $ | 8.83 |   |
|   |   |        |   |   |   |   |   |   |   |        |   |   |   |   |
| 2009   |   |        |   | High   |   |   | Low    |   |   | End of Qtr. |   |
|   |   | 4th Quarter |   | $      | 9.29   |   |   | $      | 7.80   |        |   | $ | 8.83 |   |
|   |   | 3rd Quarter |   | $      | 9.15   |   |   | $      | 7.93   |        |   | $ | 8.55 |   |
|   |   | 2nd Quarter |   | $      | 8.46   |   |   | $      | 5.28   |        |   | $ | 7.68 |   |
|   |   | 1st Quarter |   | $      | 6.60   |   |   | $      | 4.91   |        |   | $ | 5.38 |   |

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|              |   | Total Number of  |    |   | Average Price Paid |   |   | Brokerage   |   |   | Total Transaction |   |
|-------------------|--------|------------------|---------|--------|--------------------|--------|--------|-------------|--------|--------|-------------------|--------|
| Purchase Date     |   | Shares Purchased |    |   | per Share          |   |   | Commissions |   |   | Cost              |   |
| October 31, 2008  |   |             | 300,000 |   |               | $      | 6.10   |        |   | $      | 13,500            |   |   | $ | 1,843,500 |   |
| November 20, 2008 |   |             | 93,000  |   |               | $      | 5.55   |        |   | $      | 3,300             |   |   | $ | 519,450 |   |

| Plan Category                                               |   | Number of securities to be issued upon exercise of outstanding options, warrants and rights |    |   | Weighted-average exercise price of outstanding options, warrants and rights |   |   | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column A) |   |
|-------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|---------|--------|-----------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                        |   |                                                                                        | A       |   |                                                                        |   | B      |                                                                                                                                      |   |   | C |   |
|                                                        |   |                                                                                        |    |   |                                                                        |   |   |                                                                                                                                      |   |   |   |   |
| Equity compensation plans approved by security holders (1): |   |                                                                                        | 343,250 |   |                                                                        | $      | 12.45  |                                                                                                                                      |   |   | 1,607,196 |   |
|                                                        |   |                                                                                        |    |   |                                                                        |   |   |                                                                                                                                      |   |   |   |   |
| Equity compensation plans not approved by security holders: |   |                                                                                        | -       |   |                                                                        |   | -      |                                                                                                                                      |   |   | - |   |
|                                                        |   |                                                                                        |    |   |                                                                        |   |   |                                                                                                                                      |   |   |   |   |
| Total                                                       |   |                                                                                        | 343,250 |   |                                                                        | $      | 12.45  |                                                                                                                                      |   |   | 1,607,196 |   |

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| ANNUAL RETURN PERCENTAGE  |   |
|---------------------------|--------|
| Years Ended               |   |
|                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                      |   |   | 12/06 |   |   |   | 12/07 |   |   |   | 12/08 |   |   |   | 12/09 |   |   |   | 12/10 |   |
|                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hickory Tech Corporation  |   |   | -3.59 | % |   |   | 38.17 | % |   |   | -37.69 | % |   |   | 74.09 | % |   |   | 15.14 | % |
| Russell 2000              |   |   | 18.37 | % |   |   | -1.57 | % |   |   | -33.79 | % |   |   | 27.17 | % |   |   | 26.86 | % |
| NASDAQ Telecommunications |   |   | 26.60 | % |   |   | 11.21 | % |   |   | -41.61 | % |   |   | 38.51 | % |   |   | 10.03 | % |

| INDEXED RETURNS           |
|---------------------------|
| Years Ended               |
|                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                      |   |   | Base |   |   |   |   |   |   |   |   |   |   |
|                      |   |   | Period |   |   |   |   |   |   |   |   |   |   |
|                      |   |   | 12/05 |   | 12/06 |   | 12/07 |   | 12/08 |   | 12/09 |   | 12/10 |
|                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hickory Tech Corporation  |   |   | 100.00 |   | 96.41 |   | 133.21 |   | 83.00 |   | 144.50 |   | 166.38 |
| Russell 2000              |   |   | 100.00 |   | 118.37 |   | 116.51 |   | 77.15 |   | 98.11 |   | 124.46 |
| NASDAQ Telecommunications |   |   | 100.00 |   | 126.60 |   | 140.79 |   | 82.20 |   | 113.86 |   | 125.28 |

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Item 6.

| (Dollars in thousands except share and per share amounts)          |   |   |       |   |   |   |       |   |   |   |
|--------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|--------|
|                                                               |   |   |       |   |   |   |       |   |   |   |   |   |   |   |   |
| Statement of Operations Data:                                      |   | 2010   |       |   | 2009   |   |       | 2008   |   |   | 2007 |   |   | 2006 |   |
| Operating revenue                                                  |   |   |       |   |   |   |       |   |   |   |   |   |   |   |   |
| Business Sector                                                    |   |   |       |   |   |   |       |   |   |   |   |   |   |   |   |
|     Equipment                                  |   | $      | 39,406     |   |   | $      | 27,857     |   |   | $      | 43,514 |   |   | $ | 51,046 |   |   | $ | 36,191 |   |
|     Support services                           |   |   | 8,138      |   |   |   | 9,579      |   |   |   | 12,387 |   |   |   | 8,292 |   |   |   | 4,582 |   |
|     Fiber and Data                             |   |   | 44,685     |   |   |   | 31,247     |   |   |   | 24,075 |   |   |   | 20,464 |   |   |   | 17,232 |   |
|   Total Business Sector                                  |   |   | 92,229     |   |   |   | 68,683     |   |   |   | 79,976 |   |   |   | 79,802 |   |   |   | 58,005 |   |
|   Telecom Sector                                         |   |   | 70,018     |   |   |   | 70,419     |   |   |   | 73,199 |   |   |   | 76,847 |   |   |   | 74,896 |   |
| Total revenue (A)                                                  |   | $      | 162,247    |   |   | $      | 139,102    |   |   | $      | 153,175 |   |   | $ | 156,649 |   |   | $ | 132,901 |   |
|                                                               |   |   |       |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income from continuing operations                                  |   | $      | 12,094     |   |   | $      | 11,273     |   |   | $      | 8,029 |   |   | $ | 8,635 |   |   | $ | 5,235 |   |
|                                                               |   |   |       |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| EBITDA from continuing operations (A)(B)                           |   | $      | 43,063     |   |   | $      | 39,867     |   |   | $      | 40,925 |   |   | $ | 42,471 |   |   | $ | 34,090 |   |
|                                                               |   |   |       |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Per Share Data:                                                    |   |   |       |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Basic EPS - continuing operations                      |   | $      | 0.91       |   |   | $      | 0.86       |   |   | $      | 0.61 |   |   | $ | 0.65 |   |   | $ | 0.40 |   |
|   Basic EPS - discontinued operations                    |   |   | -          |   |   |   | -          |   |   |   | - |   |   |   | - |   |   |   | (0.23 | ) |
|                                                               |   | $      | 0.91       |   |   | $      | 0.86       |   |   | $      | 0.61 |   |   | $ | 0.65 |   |   | $ | 0.17 |   |
|                                                               |   |   |       |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Diluted EPS - continuing operations                    |   | $      | 0.91       |   |   | $      | 0.86       |   |   | $      | 0.61 |   |   | $ | 0.65 |   |   | $ | 0.40 |   |
|   Diluted EPS - discontinued operations                  |   |   | -          |   |   |   | -          |   |   |   | - |   |   |   | - |   |   |   | (0.23 | ) |
|                                                               |   | $      | 0.91       |   |   | $      | 0.86       |   |   | $      | 0.61 |   |   | $ | 0.65 |   |   | $ | 0.17 |   |
|                                                               |   |   |       |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Dividends per share                                    |   | $      | 0.525      |   |   | $      | 0.52       |   |   | $      | 0.49 |   |   | $ | 0.48 |   |   | $ | 0.48 |   |
|                                                               |   |   |       |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance Sheet Data:                                                |   |   |       |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Total assets (A)                                       |   | $      | 230,188    |   |   | $      | 222,483    |   |   | $      | 225,508 |   |   | $ | 227,495 |   |   | $ | 226,900 |   |
|   Shareholders’ equity                             |   | $      | 41,304     |   |   | $      | 34,546     |   |   | $      | 29,749 |   |   | $ | 31,932 |   |   | $ | 30,086 |   |
|   Current maturites of long-term obligations             |   | $      | 4,892      |   |   | $      | 620        |   |   | $      | 1,621 |   |   | $ | 731 |   |   | $ | 1,560 |   |
|   Long-term debt                                         |   |   | 114,067    |   |   |   | 119,871    |   |   |   | 125,384 |   |   |   | 128,475 |   |   |   | 141,529 |   |
|   Total debt, long-term and current                      |   | $      | 118,959    |   |   | $      | 120,491    |   |   | $      | 127,005 |   |   | $ | 129,206 |   |   | $ | 143,089 |   |
|                                                               |   |   |       |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Debt ratio  (C)                              |   |   | 74         | %      |   |   | 78         | %      |   |   | 81 | % |   |   | 80 | % |   |   | 83 | % |
|                                                               |   |   |       |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Telecom Sector Customer Data:                                      |   |   |       |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        Business access lines    |   |   | 24,043     |   |   |   | 25,133     |   |   |   | 25,274 |   |   |   | 27,403 |   |   |   | 27,014 |   |
|        Residential access lines |   |   | 27,199     |   |   |   | 30,197     |   |   |   | 33,757 |   |   |   | 37,428 |   |   |   | 41,029 |   |
|    Total access lines                               |   |   | 51,242     |   |   |   | 55,330     |   |   |   | 59,031 |   |   |   | 64,831 |   |   |   | 68,043 |   |
|    Long distance subscribers                        |   |   | 33,854     |   |   |   | 36,107     |   |   |   | 38,458 |   |   |   | 40,956 |   |   |   | 41,196 |   |
|    DSL customers                                    |   |   | 19,667     |   |   |   | 19,346     |   |   |   | 18,696 |   |   |   | 17,427 |   |   |   | 15,724 |   |
|    Digital TV customers                             |   |   | 10,562     |   |   |   | 9,663      |   |   |   | 8,368 |   |   |   | 6,487 |   |   |   | 4,632 |   |
|                                                               |   |   |       |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Data:                                                        |   |   |       |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Employees (year end) (D)                               |   |   | 463        |   |   |   | 448        |   |   |   | 433 |   |   |   | 400 |   |   |   | 399 |   |
|   Capital expenditures (A)                               |   | $      | 22,888     |   |   | $      | 17,893     |   |   | $      | 17,691 |   |   | $ | 17,500 |   |   | $ | 21,058 |   |
|   Shares outstanding (year end)                          |   |   | 13,298,626 |   |   |   | 13,100,568 |   |   |   | 12,992,376 |   |   |   | 13,284,903 |   |   |   | 13,207,970 |   |
|   Share price (E) (year end)                             |   | $      | 9.56       |   |   | $      | 8.83       |   |   | $      | 5.44 |   |   | $ | 9.32 |   |   | $ | 7.15 |   |
|   Shareholders                                           |   |   |       |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Registered                                 |   |   | 1,330      |   |   |   | 1,345      |   |   |   | 1,394 |   |   |   | 1,430 |   |   |   | 1,470 |   |
|     Beneficial owners (F)                      |   |   | 2,172      |   |   |   | 1,925      |   |   |   | 1,834 |   |   |   | 1,778 |   |   |   | 1,792 |   |
|   Total shareholders                                     |   |   | 3,502      |   |   |   | 3,270      |   |   |   | 3,228 |   |   |   | 3,208 |   |   |   | 3,262 |   |

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| (A)   | We sold Collins Communications, Inc. on December 31, 2006. Operating results which had previously been reported in the Enterprise Solutions Sector and the effect of the sale transaction are reflected as “discontinued operations.” Revenue, EBITDA, total assets and capital expenditures do not include Enterprise Solutions operations. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (B)   | Management believes that Earnings before Interest, Taxes, Depreciation and Amortization as defined in our debt agreement (“EBITDA”), a non-GAAP financial measure, is an important financial metric as it represents our ability to generate cash flow and is helpful when evaluating our performance. A reconciliation of net income to EBITDA from continuing operations is found in the table below. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C)   | Debt Ratio = Total Debt / (Total Debt + Shareholders’ Equity as of December 31). |
|-----------------|----------------------------------------------------------------------------------------|

| (D)   | All employee counts reflect actual employee counts at year-end. The Enterprise Solutions sale in 2006 reduced employee counts by 64 employees. Our CP Telecom acquisition in 2009 added 35 employees. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (E)   | Share price is the last day closing price. |
|-----------------|--------------------------------------------|

| (F)   | The number of beneficial shareholders is the approximate number of registrations in street company accounts. |
|-----------------|--------------------------------------------------------------------------------------------------------------|

| (Dollars in thousands)                              |   | 2010   |   |   | 2009   |   |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|-----------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Net Income                                          |   | $      | 12,094 |   |   | $      | 11,273 |   |   | $      | 8,029  |   |   | $      | 8,611  |   |   | $ | 2,268 |   |
| Add:                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Income tax                  |   |   | 4,033  |   |   |   | 499    |   |   |   | 5,420  |   |   |   | 6,711  |   |   |   | 3,372 |   |
|     Interest expense            |   |   | 4,914  |   |   |   | 6,918  |   |   |   | 6,870  |   |   |   | 8,121  |   |   |   | 7,362 |   |
|     Depreciation                |   |   | 21,665 |   |   |   | 20,176 |   |   |   | 19,479 |   |   |   | 17,847 |   |   |   | 16,949 |   |
|     Amortization                |   |   | 357    |   |   |   | 1,001  |   |   |   | 1,127  |   |   |   | 1,157  |   |   |   | 1,172 |   |
|     Discontinued operations (A) |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 24     |   |   |   | 2,967 |   |
| EBITDA from continuing operations                   |   | $      | 43,063 |   |   | $      | 39,867 |   |   | $      | 40,925 |   |   | $      | 42,471 |   |   | $ | 34,090 |   |

Item 7. 

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| ·   | Net income was $12,094,000 in 2010 and was net of $4,033,000 in income tax expense. The 2010 taxes were reduced $2,726,000 by the release of income tax reserves relating to the expiration of statutes of limitations. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Pre-tax net income increased $4,355,000 or 37% in 2010 compared to a year ago due to operational success and a decrease in interest expense. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Business Sector fiber and data revenue increased $13,438,000 or 43% in 2010, the result of strong growth in fiber services, a full year of CP Telecom operations and revenue from a joint fiber construction project. Revenue increased 27% excluding the impact of the joint fiber construction project. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Equipment revenue increased $10,108,000 or 27% in 2010 compared to 2009 led by strong sales. Higher revenue and reductions in operating costs led to this product line contributing $1,348,000 to net income in 2010 compared to $122,000 in 2009. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Telecom Sector broadband revenue totaled $18,832,000, a 11% increase year-over-year. Broadband revenue includes DSL, data, Internet and digital TV services. Digital TV subscribers increased 9% to 10,562 during the past year. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Capital expenditures totaled $22,888,000 in 2010, $4,995,000 higher than in 2009. This increase is due to our strategic growth initiatives, primarily the expansion of our fiber network. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In 2010, our primary source of liquidity has been from the internal operations of our business. We have invested in capital expenditures and paid interest, taxes, dividends and other obligations. Our long-term and current debt balance total $118,959,000, down $1,532,000 from the December 31, 2009 balance of $120,491,000. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Net income in 2009 increased $3,244,000 or 40% compared to 2008. A reduction of accrued income taxes, which related to the expiration of a statute of limitations, added $4,454,000 to net income in 2009.  Without the benefit of this income tax reduction, net income would have been $6,819,000, down $1,210,000 or 15% in 2009 compared to 2008. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We realized 30% growth in our Business Sector fiber and data services revenue in 2009 continuing the double-digit revenue growth that we have experienced within this product line during the past three years. CP Telecom operations have been integrated into this product line and caused 16% of the revenue growth.  Organic revenue growth for this product line was 14% in 2009 compared to 2008. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Operating results from our equipment product line were adversely impacted by the nationwide economic conditions in 2009. Revenue from this product line declined by $18,465,000 or 33% in 2009. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Telecom Sector operating income increased by 4% in 2009 compared to 2008. Broadband growth and the positive impact of cost-reduction initiatives helped offset our continued and expected decline in local service and access revenue providing stable cash flows for our company. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our cash position remained strong. Despite fully funding our CP Telecom acquisition, reducing our long-term and current portions of our debt balance by $6,514,000, maintaining capital expenditure levels and supporting new growth initiatives, our year-end cash balance increased by $794,000 or 49% from 2008 to 2009. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| BUSINESS SECTOR                                                       |   |
|-----------------------------------------------------------------------|--------|
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   | For Year Ended December 31 |   |
| (Dollars in thousands)                                                |   | 2010 |   |   | % Change |   |   | 2009 |   |   | % Change |   |   | 2008 |   |
| Operating revenue before intersegment eliminations:                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equipment                                                             |   | $ | 39,406 |   |   |   | 41 | % |   | $ | 27,857 |   |   |   | -36 | % |   | $ | 43,514 |   |
| Support Services                                                      |   |   | 8,138 |   |   |   | -15 | % |   |   | 9,579 |   |   |   | -23 | % |   |   | 12,387 |   |
|    Equipment                                           |   |   | 47,544 |   |   |   | 27 | % |   |   | 37,436 |   |   |   | -33 | % |   |   | 55,901 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiber and Data                                                        |   |   | 44,685 |   |   |   | 43 | % |   |   | 31,247 |   |   |   | 30 | % |   |   | 24,075 |   |
| Intersegment                                                          |   |   | 542 |   |   |   | 8 | % |   |   | 500 |   |   |   | -3 | % |   |   | 515 |   |
| Total operating revenue                                               |   | $ | 92,771 |   |   |   | 34 | % |   | $ | 69,183 |   |   |   | -14 | % |   | $ | 80,491 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Business revenue before intersegment eliminations:              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Unaffiliated customers                              |   | $ | 92,229 |   |   |   |   |   |   | $ | 68,683 |   |   |   |   |   |   | $ | 79,976 |   |
|    Intersegment                                        |   |   | 542 |   |   |   |   |   |   |   | 500 |   |   |   |   |   |   |   | 515 |   |
|                                                                  |   |   | 92,771 |   |   |   |   |   |   |   | 69,183 |   |   |   |   |   |   |   | 80,491 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of sales  (excluding depreciation and amortization)    |   |   | 33,300 |   |   |   | 34 | % |   |   | 24,869 |   |   |   | -33 | % |   |   | 37,355 |   |
| Cost of services  (excluding depreciation and amortization) |   |   | 30,683 |   |   |   | 33 | % |   |   | 23,050 |   |   |   | 5 | % |   |   | 21,894 |   |
| Selling, general and administrative expenses                          |   |   | 12,612 |   |   |   | 23 | % |   |   | 10,224 |   |   |   | 4 | % |   |   | 9,801 |   |
| Depreciation and amortization                                         |   |   | 6,170 |   |   |   | 14 | % |   |   | 5,413 |   |   |   | 23 | % |   |   | 4,417 |   |
| Total Business expenses and costs                                     |   |   | 82,765 |   |   |   | 30 | % |   |   | 63,556 |   |   |   | -13 | % |   |   | 73,467 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating income                                                      |   | $ | 10,006 |   |   |   | 78 | % |   | $ | 5,627 |   |   |   | -20 | % |   | $ | 7,024 |   |
| Net income                                                            |   | $ | 5,951 |   |   |   | 77 | % |   | $ | 3,362 |   |   |   | -23 | % |   | $ | 4,369 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital expenditures                                                  |   | $ | 14,464 |   |   |   | 66 | % |   | $ | 8,738 |   |   |   | 36 | % |   | $ | 6,408 |   |

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| EQUIPMENT PRODUCT LINE REPORTING                                      |   |
|-----------------------------------------------------------------------|--------|
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   | For Year Ended December 31 |   |
| (Dollars in thousands)                                                |   | 2010 |   |   | % Change |   |   | 2009 |   |   | % Change |   |   | 2008 |   |
| Operating revenue before intersegment eliminations:                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equipment                                                             |   | $ | 39,406 |   |   |   | 41 | % |   | $ | 27,857 |   |   |   | -36 | % |   | $ | 43,514 |   |
| Support Services                                                      |   |   | 8,138 |   |   |   | -15 | % |   |   | 9,579 |   |   |   | -23 | % |   |   | 12,387 |   |
| Total operating revenue                                               |   | $ | 47,544 |   |   |   | 27 | % |   | $ | 37,436 |   |   |   | -33 | % |   | $ | 55,901 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of sales  (excluding depreciation and amortization)    |   |   | 33,300 |   |   |   | 34 | % |   |   | 24,923 |   |   |   | -33 | % |   |   | 37,342 |   |
| Cost of services  (excluding depreciation and amortization) |   |   | 6,957 |   |   |   | -2 | % |   |   | 7,082 |   |   |   | -30 | % |   |   | 10,102 |   |
| Selling, general and administrative expenses                          |   |   | 4,660 |   |   |   | -4 | % |   |   | 4,848 |   |   |   | -8 | % |   |   | 5,264 |   |
| Depreciation and amortization                                         |   |   | 392 |   |   |   | -5 | % |   |   | 414 |   |   |   | -20 | % |   |   | 515 |   |
| Total costs and expenses                                              |   |   | 45,309 |   |   |   | 22 | % |   |   | 37,267 |   |   |   | -30 | % |   |   | 53,223 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating income                                                      |   | $ | 2,235 |   |   |   | 1222 | % |   | $ | 169 |   |   |   | -94 | % |   | $ | 2,678 |   |
| Net income                                                            |   | $ | 1,348 |   |   |   | 1005 | % |   | $ | 122 |   |   |   | -93 | % |   | $ | 1,670 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital expenditures                                                  |   | $ | 217 |   |   |   | -59 | % |   | $ | 528 |   |   |   | 13 | % |   | $ | 468 |   |

| FIBER AND DATA PRODUCT LINE REPORTING                                 |   |
|-----------------------------------------------------------------------|--------|
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   | For Year Ended December 31 |   |
| (Dollars in thousands)                                                |   | 2010 |   |   | % Change |   |   | 2009 |   |   | % Change |   |   | 2008 |   |
| Operating revenue before intersegment eliminations:                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Services                                                              |   | $  | 44,685 |   |   |   | 43 | % |   | $  | 31,247 |   |   |   | 30 | % |   | $  | 24,075 |   |
| Intersegment                                                          |   |   | 542 |   |   |   | 8 | % |   |   | 500 |   |   |   | -3 | % |   |   | 515 |   |
| Total operating revenue                                               |   | $ | 45,227 |   |   |   | 42 | % |   | $ | 31,747 |   |   |   | 29 | % |   | $ | 24,590 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of sales  (excluding depreciation and amortization)    |   |   | - |   |   |   | N/A |   |   |   | (54 | ) |   |   | N/A |   |   |   | 13 |   |
| Cost of services  (excluding depreciation and amortization) |   |   | 23,726 |   |   |   | 49 | % |   |   | 15,968 |   |   |   | 35 | % |   |   | 11,792 |   |
| Selling, general and administrative expenses                          |   |   | 7,952 |   |   |   | 48 | % |   |   | 5,376 |   |   |   | 18 | % |   |   | 4,537 |   |
| Depreciation and amortization                                         |   |   | 5,778 |   |   |   | 16 | % |   |   | 4,999 |   |   |   | 28 | % |   |   | 3,902 |   |
| Total costs and expenses                                              |   |   | 37,456 |   |   |   | 42 | % |   |   | 26,289 |   |   |   | 30 | % |   |   | 20,244 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating income                                                      |   | $ | 7,771 |   |   |   | 42 | % |   | $ | 5,458 |   |   |   | 26 | % |   | $ | 4,346 |   |
| Net income                                                            |   | $ | 4,603 |   |   |   | 42 | % |   | $ | 3,240 |   |   |   | 20 | % |   | $ | 2,699 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital expenditures                                                  |   | $ | 14,247 |   |   |   | 74 | % |   | $ | 8,210 |   |   |   | 38 | % |   | $ | 5,940 |   |

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| TELECOM SECTOR                                                   |   |
|-----------------------------------------------------------------------|--------|
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   | For Year Ended December 31 |   |
| (Dollars in thousands)                                                |   | 2010 |   |   | % Change |   |   | 2009 |   |   | % Change |   |   | 2008 |   |
| Operating revenue before intersegment eliminations                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Local Service                                 |   | $ | 15,288 |   |   |   | -5 | % |   | $ | 16,163 |   |   |   | -5 | % |   | $ | 17,096 |   |
|     Network Access                                |   |   | 23,150 |   |   |   | -4 | % |   |   | 24,157 |   |   |   | -7 | % |   |   | 25,859 |   |
|     Long Distance                                 |   |   | 3,185 |   |   |   | -16 | % |   |   | 3,791 |   |   |   | -17 | % |   |   | 4,563 |   |
|     Broadband                                     |   |   | 18,832 |   |   |   | 11 | % |   |   | 17,028 |   |   |   | 9 | % |   |   | 15,638 |   |
|     Directory                                     |   |   | 3,627 |   |   |   | -9 | % |   |   | 4,000 |   |   |   | -3 | % |   |   | 4,119 |   |
|     Bill Processing                               |   |   | 3,808 |   |   |   | 14 | % |   |   | 3,351 |   |   |   | 1 | % |   |   | 3,325 |   |
|     Intersegment                                  |   |   | 1,976 |   |   |   | 62 | % |   |   | 1,217 |   |   |   | 89 | % |   |   | 644 |   |
|     Other                                         |   |   | 2,128 |   |   |   | 10 | % |   |   | 1,929 |   |   |   | -26 | % |   |   | 2,599 |   |
| Total Telecom operating revenue                                       |   | $ | 71,994 |   |   |   | 0 | % |   | $ | 71,636 |   |   |   | -3 | % |   | $ | 73,843 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Telecom revenue before intersegment eliminations                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Unaffiliated customers                              |   | $ | 70,018 |   |   |   |   |   |   | $ | 70,419 |   |   |   |   |   |   | $ | 73,199 |   |
|    Intersegment                                        |   |   | 1,976 |   |   |   |   |   |   |   | 1,217 |   |   |   |   |   |   |   | 644 |   |
|                                                                  |   |   | 71,994 |   |   |   |   |   |   |   | 71,636 |   |   |   |   |   |   |   | 73,843 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of services (excluding depreciation and  amortization) |   |   | 32,578 |   |   |   | 6 | % |   |   | 30,730 |   |   |   | -1 | % |   |   | 31,141 |   |
| Selling, general and administrative expenses                          |   |   | 12,154 |   |   |   | 4 | % |   |   | 11,639 |   |   |   | -14 | % |   |   | 13,521 |   |
| Depreciation and amortization                                         |   |   | 15,737 |   |   |   | 0 | % |   |   | 15,680 |   |   |   | -3 | % |   |   | 16,136 |   |
|    Total Telecom costs and expenses                    |   |   | 60,469 |   |   |   | 4 | % |   |   | 58,049 |   |   |   | -5 | % |   |   | 60,798 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating income                                                      |   | $ | 11,525 |   |   |   | -15 | % |   | $ | 13,587 |   |   |   | 4 | % |   | $ | 13,045 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                            |   | $ | 6,652 |   |   |   | -18 | % |   | $ | 8,068 |   |   |   | 0 | % |   | $ | 8,104 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital expenditures                                                  |   | $ | 8,424 |   |   |   | -7 | % |   | $ | 9,068 |   |   |   | -18 | % |   | $ | 11,102 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Key metrics                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Business access lines                         |   |   | 24,043 |   |   |   | -4 | % |   |   | 25,133 |   |   |   | -1 | % |   |   | 25,274 |   |
|     Residential access lines                      |   |   | 27,199 |   |   |   | -10 | % |   |   | 30,197 |   |   |   | -11 | % |   |   | 33,757 |   |
| Total access lines                                                    |   |   | 51,242 |   |   |   | -7 | % |   |   | 55,330 |   |   |   | -6 | % |   |   | 59,031 |   |
| Long distance customers                                               |   |   | 33,854 |   |   |   | -6 | % |   |   | 36,107 |   |   |   | -6 | % |   |   | 38,458 |   |
| Digital Subscriber Line customers                                     |   |   | 19,667 |   |   |   | 2 | % |   |   | 19,346 |   |   |   | 3 | % |   |   | 18,696 |   |
| Digital TV customers                                                  |   |   | 10,562 |   |   |   | 9 | % |   |   | 9,663 |   |   |   | 15 | % |   |   | 8,368 |   |

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| ·   | We enhance our customer experience with more features and value by providing customizable value bundles, offering competitive discounts on services, such as DSL or digital TV with a combination of local service and customer calling features; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We seek to distinguish ourselves through our excellent customer service and express our commitment through innovations such as a variety of  customer loyalty programs; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We maintain an active and visible presence in the communities we serve. |
|--------------------|-------------------------------------------------------------------------|

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|                      |   | As of December 31 |    |
|---------------------------|--------|-------------------|---------|
| (Dollars in thousands)    |   | 2010              |    |   | 2009 |   |   | 2008 |   |
|                      |   |              |    |   |   |   |   |   |   |
| Cash and cash equivalents |   | $                 | 73      |   |   | $ | 2,420 |   |   | $ | 1,626 |   |
| Working capital (A)       |   | $            | 8,731   |   |   | $  | 7,373 |   |   | $  | 12,015 |   |
| Current ratio (B)         |   |              | 1.29    |   |   |   | 1.30 |   |   |   | 1.41 |   |
| Total debt (C)            |   | $            | 118,959 |   |   | $  | 120,491 |   |   | $  | 127,005 |   |

| A.   | Working capital=current assets minus current liabilities which measures our short-term financial health. |
|----------------|----------------------------------------------------------------------------------------------------------|

| B.   | Current ratio=current assets/current liabilities which measures our ability to pay short-term obligations. |
|----------------|------------------------------------------------------------------------------------------------------------|

| C.   | Includes our long-term and current maturities of long-term debt obligations for our senior debt agreement. |
|----------------|------------------------------------------------------------------------------------------------------------|

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| (Dollars in thousands)                |   |   |        |   |   |   |      |         |   |   |         |   |   |           |      |
|---------------------------------------|--------|--------|-------------|--------|--------|--------|-----------|--------------|--------|--------|--------------|--------|--------|----------------|-----------|
| Contractual Obligations               |   | Total  |        |   | 2011   |   |      | 2012 to 2013 |   |   | 2014 to 2015 |   |   | 2016 and after |      |
| Long-term debt                        |   | $      | 118,150     |   |   | $      | 4,550     |         |   | $      | 113,600      |   |   | $              | -         |   |   | $ | - |   |
| Interest on long-term debt (A)        |   |   | 6,396       |   |   |   | 4,074     |         |   |   | 2,320        |   |   |           | 2         |   |   |   | - |   |
| Capital lease obligations             |   |   | 809         |   |   |   | 342       |         |   |   | 323          |   |   |           | 144       |   |   |   | - |   |
| Interest on capital leases            |   |   | 107         |   |   |   | 53        |         |   |   | 48           |   |   |           | 6         |   |   |   | - |   |
| Purchase obligations (B)              |   |   | 2,796       |   |   |   | 2,796     |         |   |   | -            |   |   |           | -         |   |   |   | - |   |
| Pension benefit obligations (C)  |   |   |  2,618 |   |   |   |  256 |         |   |   |  527    |   |   |           |  535 |   |   |   |  1,300 |   |
| Operating leases                      |   |   | 6,361       |   |   |   | 1,606     |         |   |   | 2,171        |   |   |           | 1,854     |   |   |   | 730 |   |
| Total contractual cash obligations    |   | $      | 137,237     |   |   | $      | 13,677    |         |   | $      | 118,989      |   |   | $              | 2,541     |   |   | $ | 2,030 |   |

| (A)   | Interest on long-term debt is estimated using rates in effect as of December 31, 2010. We use interest rate swap agreements to manage our exposure to interest rate movements on a portion of our variable rate debt obligations (see Note 12 to the Notes to the Consolidated Financial Statements). |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (B)   | Purchase obligations consist primarily of commitments incurred for equipment purchases. |
|-----------------|-----------------------------------------------------------------------------------------|

| (C)   | Pension benefit obligations consist of the expected net premium payment for healthcare and life insurance benefits to be paid relative to our post-retirement benefit plan. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Item 7A

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Item 8.

| HICKORY TECH CORPORATION                                                              |   |
|---------------------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF OPERATIONS                                                 |   |
| Years Ended December 31                                                               |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Dollars in thousands, except share and per share amounts)                            |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                  |   | 2010 |   |   |   |   |   | 2009 |   |   |   |   |   | 2008 |   |
| Operating Revenue:                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Business Sector                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equipment                                                                             |   | $ | 39,406 |   |   |   |   |   | $ | 27,857 |   |   |   |   |   | $ | 43,514 |   |
|     Support Services                                                   |   |   | 8,138 |   |   |   |   |   |   | 9,579 |   |   |   |   |   |   | 12,387 |   |
|    Equipment                                                                |   |   | 47,544 |   |   |   |   |   |   | 37,436 |   |   |   |   |   |   | 55,901 |   |
|      Fiber and Data                                               |   |   | 44,685 |   |   |   |   |   |   | 31,247 |   |   |   |   |   |   | 24,075 |   |
|  Total Business Sector                                                           |   |   | 92,229 |   |   |   |   |   |   | 68,683 |   |   |   |   |   |   | 79,976 |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Telecom Sector                                               |   |   | 70,018 |   |   |   |   |   |   | 70,419 |   |   |   |   |   |   | 73,199 |   |
| Total operating revenue                                                               |   |   | 162,247 |   |   |   |   |   |   |   | 139,102 |   |   |   |   |   |   |   | 153,175 |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs and expenses:                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Cost of sales, excluding depreciation and amortization       |   |   | 33,300 |   |   |   |   |   |   |   | 24,869 |   |   |   |   |   |   |   | 37,355 |   |
|      Cost of services, excluding depreciation and amortization    |   |   | 60,897 |   |   |   |   |   |   |   | 52,211 |   |   |   |   |   |   |   | 52,004 |   |
|  Selling, general and administrative expenses                                    |   |   | 25,060 |   |   |   |   |   |   |   | 22,260 |   |   |   |   |   |   |   | 22,984 |   |
|      Depreciation                                                 |   |   | 21,665 |   |   |   |   |   |   |   | 20,176 |   |   |   |   |   |   |   | 19,479 |   |
|  Amortization of intangibles                                                     |   |   | 357 |   |   |   |   |   |   |   | 1,001 |   |   |   |   |   |   |   | 1,127 |   |
| Total costs and expenses                                                              |   |   | 141,279 |   |   |   |   |   |   |   | 120,517 |   |   |   |   |   |   |   | 132,949 |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating income                                                                      |   |   | 20,968 |   |   |   |   |   |   |   | 18,585 |   |   |   |   |   |   |   | 20,226 |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other income and expense:                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Interest and other income                                                       |   |   | 73 |   |   |   |   |   |   |   | 105 |   |   |   |   |   |   |   | 93 |   |
|  Interest expense                                                                |   |   | (4,914 | ) |   |   |   |   |   |   | (6,918 | ) |   |   |   |   |   |   | (6,870 | ) |
|  Total other (expense)                                                           |   |   | (4,841 | ) |   |   |   |   |   |   | (6,813 | ) |   |   |   |   |   |   | (6,777 | ) |
|                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income from continuing operations before income taxes                       |   |   | 16,127 |   |   |   |   |   |   |   | 11,772 |   |   |   |   |   |   |   | 13,449 |   |
| Income tax provision                                                                  |   |   | 4,033 |   |   |   |   |   |   |   | 499 |   |   |   |   |   |   |   | 5,420 |   |
| Net income                                                                            |   | $  | 12,094 |   |   |   |   |   |   | $  | 11,273 |   |   |   |   |   |   | $  | 8,029 |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic earnings per share                                                              |   | $ | 0.91 |   |   |   |   |   |   | $ | 0.86 |   |   |   |   |   |   | $ | 0.61 |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average common shares outstanding                                            |   |   | 13,233,874 |   |   |   |   |   |   |   | 13,061,266 |   |   |   |   |   |   |   | 13,248,731 |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted earnings per share                                                            |   | $ | 0.91 |   |   |   |   |   |   | $ | 0.86 |   |   |   |   |   |   | $ | 0.61 |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average common and equivalent shares outstanding                             |   |   | 13,237,195 |   |   |   |   |   |   |   | 13,061,861 |   |   |   |   |   |   |   | 13,259,933 |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends per share                                                                   |   | $ | 0.525 |   |   |   |   |   |   | $ | 0.52 |   |   |   |   |   |   | $ | 0.49 |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The accompanying notes are an integral part of the consolidated financial statements. |   |

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| HICKORY TECH CORPORATION                                                                                                              |   |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED BALANCE SHEETS                                                                                                           |   |
| As of December 31                                                                                                                     |   |
|                                                                                                                                  |   |   |   |   |   |   |
| (Dollars in thousands except share and per share amounts)                                                                             |   | 2010 |   |   | 2009 |   |
|                                                                                                                                  |   |   |   |   |   |   |
| ASSETS                                                                                                                                |   |
| Current assets:                                                                                                                       |   |   |   |   |   |   |
|      Cash and cash equivalents                                                                                    |   | $ | 73 |   |   | $ | 2,420 |   |
|      Receivables, net of allowance for doubtful accounts of $570 and $643                                         |   |   | 24,642 |   |   |   | 19,729 |   |
|      Inventories                                                                                                  |   |   | 5,205 |   |   |   | 4,752 |   |
|      Income taxes receivable                                                                                      |   |   | 3,814 |   |   |   | - |   |
|      Deferred income taxes, net                                                                                   |   |   | 2,008 |   |   |   | 2,423 |   |
|      Prepaid expenses                                                                                             |   |   | 2,026 |   |   |   | 1,751 |   |
|      Other                                                                                                        |   |   | 1,030 |   |   |   | 1,039 |   |
|            Total current assets                                                     |   |   | 38,798 |   |   |   | 32,114 |   |
|                                                                                                                                  |   |   |   |   |   |   |   |   |
| Investments                                                                                                                           |   |   | 4,512 |   |   |   | 4,306 |   |
|                                                                                                                                  |   |   |   |   |   |   |   |   |
| Property, plant and equipment                                                                                                         |   |   | 379,433 |   |   |   | 357,607 |   |
|      Accumulated depreciation and amortization                                                                    |   |   | (224,356 | ) |   |   | (204,129 | ) |
|             Property, plant and equipment, net                            |   |   | 155,077 |   |   |   | 153,478 |   |
|                                                                                                                                  |   |   |   |   |   |   |   |   |
| Other assets:                                                                                                                         |   |   |   |   |   |   |   |   |
|      Goodwill                                                                                                     |   |   | 27,303 |   |   |   | 27,423 |   |
|      Intangible assets, net                                                                                       |   |   | 2,668 |   |   |   | 3,025 |   |
|      Deferred costs and other                                                                                     |   |   | 1,830 |   |   |   | 2,137 |   |
|             Total other assets                                            |   |   | 31,801 |   |   |   | 32,585 |   |
|                                                                                                                                  |   |   |   |   |   |   |   |   |
| Total assets                                                                                                                          |   | $ | 230,188 |   |   | $ | 222,483 |   |
|                                                                                                                                  |   |   |   |   |   |   |   |   |
| LIABILITIES & SHAREHOLDERS' EQUITY                                                                                                |   |
| Current liabilities:                                                                                                                  |   |   |   |   |   |   |   |   |
|      Extended term payable                                                                                        |   | $ | 8,254 |   |   | $ | 6,788 |   |
|      Accounts payable                                                                                             |   |   | 2,840 |   |   |   | 2,883 |   |
|      Accrued expenses and other                                                                                   |   |   | 7,929 |   |   |   | 7,792 |   |
|      Accrued income taxes                                                                                         |   |   | - |   |   |   | 642 |   |
|      Financial derivative instruments                                                                             |   |   | 1,079 |   |   |   | - |   |
|      Deferred revenue                                                                                             |   |   | 5,073 |   |   |   | 6,016 |   |
|      Current maturities of long-term obligations                                                                  |   |   | 4,892 |   |   |   | 620 |   |
|            Total current liabilities                                                |   |   | 30,067 |   |   |   | 24,741 |   |
|                                                                                                                                  |   |   |   |   |   |   |   |   |
| Long-term liabilities:                                                                                                                |   |   |   |   |   |   |   |   |
|      Debt obligations, net of current maturities                                                                  |   |   | 114,067 |   |   |   | 119,871 |   |
|      Financial derivative instruments                                                                             |   |   | - |   |   |   | 1,908 |   |
|      Accrued income taxes                                                                                         |   |   | 562 |   |   |   | 3,218 |   |
|      Deferred income taxes                                                                                        |   |   | 26,868 |   |   |   | 21,895 |   |
|      Deferred revenue                                                                                             |   |   | 1,397 |   |   |   | 2,095 |   |
|      Accrued employee benefits and deferred compensation                                                          |   |   | 15,923 |   |   |   | 14,209 |   |
|            Total long-term liabilities                                              |   |   | 158,817 |   |   |   | 163,196 |   |
|                                                                                                                                  |   |   |   |   |   |   |   |   |
|            Total liabilities                                                   |   |   | 188,884 |   |   |   | 187,937 |   |
|                                                                                                                                  |   |   |   |   |   |   |   |   |
| Commitments and contingencies                                                                                                         |   |   |   |   |   |   |   |   |
|                                                                                                                                  |   |   |   |   |   |   |   |   |
| Shareholders' equity:                                                                                                                 |   |   |   |   |   |   |   |   |
|      Common stock, no par value, $.10 stated value                                                                |   |   |   |   |   |   |   |   |
|            Shares authorized: 100,000,000                                           |   |   |   |   |   |   |   |   |
|            Shares issued and outstanding: 13,298,626 in 2010 and 13,100,568 in 2009 |   |   | 1,330 |   |   |   | 1,310 |   |
|      Additional paid-in capital                                                                                   |   |   | 14,328 |   |   |   | 12,975 |   |
|      Retained earnings                                                                                            |   |   | 29,841 |   |   |   | 24,687 |   |
|      Accumulated other comprehensive (loss)                                                                       |   |   | (4,195 | ) |   |   | (4,426 | ) |
|             Total shareholders' equity                                         |   |   | 41,304 |   |   |   | 34,546 |   |
|                                                                                                                                  |   |   |   |   |   |   |   |   |
| Total liabilities and shareholders' equity                                                                                            |   | $ | 230,188 |   |   | $ | 222,483 |   |
|                                                                                                                                  |   |   |   |   |   |   |   |   |
| The accompanying notes are an integral part of the consolidated financial statements.                                                 |   |

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| HICKORY TECH CORPORATION                                                                                                                             |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                                                |   |
| Years Ended December 31                                                                                                                              |   |
|                                                                                                                                                 |   |   |   |   |   |   |   |   |   |
| (Dollars in thousands)                                                                                                                               |   | 2010 |   |   | 2009 |   |   | 2008 |   |
| OPERATING ACTIVITIES:                                                                                                                                |   |   |   |   |   |   |   |   |   |
|       Net income                                                                                                            |   | $ | 12,094 |   |   | $ | 11,273 |   |   | $ | 8,029 |   |
|       Adjustments to reconcile net income to net cash provided by operating activities:                                     |   |   |   |   |   |   |   |   |   |   |   |   |
|                Depreciation and amortization                                   |   |   | 22,022 |   |   |   | 21,177 |   |   |   | 20,606 |   |
|                Deferred income tax provision                                        |   |   | 5,237 |   |   |   | 1,968 |   |   |   | 3,660 |   |
|                Employee retirement benefits and deferred compensation          |   |   | 1,248 |   |   |   | 744 |   |   |   | 652 |   |
|                Provision for losses on accounts receivable                     |   |   | 1,010 |   |   |   | 128 |   |   |   | 286 |   |
|                Stock-based compensation                                        |   |   | 951 |   |   |   | 1,021 |   |   |   | 415 |   |
|                (Gain)/Loss on sale of assets, retirements and disposals        |   |   | (977 | ) |   |   | (5 | ) |   |   | (207 | ) |
|                Accrued patronage refunds                                       |   |   | (525 | ) |   |   | (512 | ) |   |   | (563 | ) |
|                Amortization of gain on sale of financial derivative instrument |   |   | - |   |   |   | - |   |   |   | (664 | ) |
|       Changes in operating assets and liabilities net of effects of acquisition:                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|                    Receivables                             |   |   | (5,922 | ) |   |   | 6,779 |   |   |   | 1,780 |   |
|                    Prepaids                                |   |   | (275 | ) |   |   | (125 | ) |   |   | 304 |   |
|                    Inventories                             |   |   | (453 | ) |   |   | 3,922 |   |   |   | (1,324 | ) |
|                    Accounts payable and accrued expenses   |   |   | (126 | ) |   |   | (1,696 | ) |   |   | (1,135 | ) |
|                    Deferred revenue, billings and deposits |   |   | (1,640 | ) |   |   | 195 |   |   |   | 1,165 |   |
|                    Income taxes                            |   |   | (7,112 | ) |   |   | (3,091 | ) |   |   | 218 |   |
|                    Other                                   |   |   | 656 |   |   |   | 476 |   |   |   | 548 |   |
|       Net cash provided by operating activities                                                                             |   |   | 26,188 |   |   |   | 42,254 |   |   |   | 33,770 |   |
|                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| INVESTING ACTIVITIES:                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
|       Additions to property, plant and equipment                                                                            |   |   | (22,888 | ) |   |   | (17,893 | ) |   |   | (17,691 | ) |
|       Proceeds from sale of assets                                                                                          |   |   | 1,261 |   |   |   | - |   |   |   | 420 |       |
|       Acquisition, net of cash acquired                                                                                     |   |   | 120 |   |   |   | (6,625 | ) |   |   | - |   |
|       Other                                                                                                                 |   |   | (20 | ) |   |   | - |   |   |   | - |   |
|       Net cash (used in) investing activities                                                                               |   |   | (21,527 | ) |   |   | (24,518 | ) |   |   | (17,271 | ) |
|                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| FINANCING ACTIVITIES:                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
|       Borrowings on extended term payable arrangement                                                                       |   |   | 54,507 |   |   |   | 40,446 |   |   |   | 63,356 |   |
|       Payments on extended term payable arrangement                                                                         |   |   | (53,041 | ) |   |   | (44,133 | ) |   |   | (67,325 | ) |
|       Borrowings on credit facility                                                                                         |   |   | 24,400 |   |   |   | - |   |   |   | 34,500 |   |
|       Payments on credit facility and capital lease obligations                                                             |   |   | (26,593 | ) |   |   | (6,930 | ) |   |   | (37,132 | ) |
|       Proceeds from issuance of common stock                                                                                |   |   | 421 |   |   |   | 460 |   |   |   | 412 |   |
|       Change in cash overdraft                                                                                              |   |   | 238 |   |   |   | - |   |   |   | - |   |
|       Stock repurchase                                                                                                      |   |   | - |   |   |   | - |   |   |   | (2,363 | ) |
|       Dividends paid                                                                                                        |   |   | (6,940 | ) |   |   | (6,785 | ) |   |   | (6,492 | ) |
|       Net cash (used in) financing activities                                                                               |   |   | (7,008 | ) |   |   | (16,942 | ) |   |   | (15,044 | ) |
|                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                                                                                                 |   |   | (2,347 | ) |   |   | 794 |   |   |   | 1,455 |   |
| Cash and cash equivalents at beginning of the year                                                                                                   |   |   | 2,420 |   |   |   | 1,626 |   |   |   | 171 |   |
| Cash and cash equivalents at the end of the year                                                                                                     |   | $ | 73 |   |   | $ | 2,420 |   |   | $ | 1,626 |   |
|                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental disclosure of cash flow information:                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
|       Cash paid for interest                                                                                                |   | $ | 5,224 |   |   | $ | 7,094 |   |   | $ | 7,962 |   |
|       Net cash paid for income taxes                                                                                        |   | $ | 5,908 |   |   | $ | 1,622 |   |   | $ | 1,542 |   |
| Non-cash investing activities:                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|       Property, plant and equipment acquired with capital leases                                                            |   | $ | 660 |   |   | $ | 417 |   |   | $ | 433 |   |
|       Change in other comprehensive income from financial derivatives and post-retirement benefits                          |   | $ | (231 | ) |   | $ | 1,173 |   |   | $ | 2,186 |   |
|                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| The accompanying notes are an integral part of the consolidated financial statements.                                                                |   |

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| HICKORY TECH CORPORATION                                                                    |   |
|---------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME                    |   |
| Years Ended December 31                                                                     |   |
| (Dollars in thousands)                                                                      |   |
|                                                                                        |   | Common Stock |   |   |   | Additional Paid-In |   |   |   | Retained |   |   |   | Accumulated Other Comprehensive |   |   |   | Total Shareholders' |   |   | Total Comprehensive |   |
|                                                                                        |   | Shares |   |   |   | Amount |   |   |   | Capital |   |   |   | Earnings |   |   |   | Income (Loss) |   |   |   | Equity |   |   | Income |   |
|                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2007                                                                  |   |   | 13,284,903 |   |   |   | $  | 1,329 |   |   |   | $  | 11,031 |   |   |   | $  | 20,639 |   |   |   | $  | (1,067 | ) |   |   | $  | 31,932 |   |   |   |   |
|                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock Award Plan                                                                            |   |   | 10,493 |   |   |   |   | 1 |   |   |   |   | 110 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 111 |   |   |   |   |
| Employee Stock Purchase Plan                                                                |   |   | 23,992 |   |   |   |   | 2 |   |   |   |   | 268 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 270 |   |   |   |   |
| Directors’ Stock Retainer Plan                                                        |   |   | 13,803 |   |   |   |   | 1 |   |   |   |   | 22 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 23 |   |   |   |   |
| Directors' Incentive Stock Plan                                                             |   |   | 18,000 |   |   |   |   | 2 |   |   |   |   | 166 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 168 |   |   |   |   |
| Dividend Reinvestment Plan                                                                  |   |   | 34,185 |   |   |   |   | 3 |   |   |   |   | 241 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 244 |   |   |   |   |
| Stock Repurchase                                                                            |   |   | (393,000 | ) |   |   |   | (39 | ) |   |   |   | (347 | ) |   |   |   | (1,977 | ) |   |   |   |   |   |   |   |   | (2,363 | ) |   |   |   |
| Stock based compensation                                                                    |   |   |   |   |   |   |   |   |   |   |   |   | 13 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 13 |   |   |   |   |
| Net Income                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 8,029 |   |   |   |   |   |   |   |   |   | 8,029 |   |   | $ | 8,029 |   |
| Dividends Paid                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (6,492 | ) |   |   |   |   |   |   |   |   | (6,492 | ) |   |   |   |   |
| Other Comprehensive Loss,                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
|     Net of Income Taxes                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (2,186 | ) |   |   |   | (2,186 | ) |   |   | (2,186 | ) |
| Total Comprehensive Income                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 5,843 |   |
| Balance, December 31, 2008                                                                  |   |   | 12,992,376 |   |   |   |   | 1,299 |   |   |   |   | 11,504 |   |   |   |   | 20,199 |   |   |   |   | (3,253 | ) |   |   |   | 29,749 |   |   |   |   |   |
|                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock Award Plan                                                                            |   |   | 16,303 |   |   |   |   | 2 |   |   |   |   | 914 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 916 |   |   |   |   |   |
| Employee Stock Purchase Plan                                                                |   |   | 20,561 |   |   |   |   | 2 |   |   |   |   | 183 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 185 |   |   |   |   |   |
| Directors’ Stock Retainer Plan                                                        |   |   | 13,121 |   |   |   |   | 1 |   |   |   |   | - |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1 |   |   |   |   |   |
| Directors' Incentive Stock Plan                                                             |   |   | 20,000 |   |   |   |   | 2 |   |   |   |   | 101 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 103 |   |   |   |   |   |
| Dividend Reinvestment Plan                                                                  |   |   | 38,207 |   |   |   |   | 4 |   |   |   |   | 269 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 273 |   |   |   |   |   |
| Stock based compensation                                                                    |   |   |   |   |   |   |   |   |   |   |   |   | 4 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 4 |   |   |   |   |   |
| Net Income                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 11,273 |   |   |   |   |   |   |   |   |   | 11,273 |   |   | $ | 11,273 |   |
| Dividends Paid                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (6,785 | ) |   |   |   |   |   |   |   |   | (6,785 | ) |   |   |   |   |
| Other Comprehensive Loss,                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Net of Income Taxes                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (1,173 | ) |   |   |   | (1,173 | ) |   |   | (1,173 | ) |
| Total Comprehensive Income                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 10,100 |   |
| Balance, December 31, 2009                                                                  |   |   | 13,100,568 |   |   |   |   | 1,310 |   |   |   |   | 12,975 |   |   |   |   | 24,687 |   |   |   |   | (4,426 | ) |   |   |   | 34,546 |   |   |   |   |   |
|                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock Award Plan                                                                            |   |   | 113,859 |   |   |   |   | 12 |   |   |   |   | 678 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 690 |   |   |   |   |   |
| Employee Stock Purchase Plan                                                                |   |   | 22,390 |   |   |   |   | 2 |   |   |   |   | 173 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 175 |   |   |   |   |   |
| Directors’ Stock Retainer Plan                                                        |   |   | 31,855 |   |   |   |   | 3 |   |   |   |   | 259 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 262 |   |   |   |   |   |
| Dividend Reinvestment Plan                                                                  |   |   | 29,954 |   |   |   |   | 3 |   |   |   |   | 243 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 246 |   |   |   |   |   |
| Net Income                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 12,094 |   |   |   |   |   |   |   |   |   | 12,094 |   |   | $ | 12,094 |   |
| Dividends Paid                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (6,940 | ) |   |   |   |   |   |   |   |   | (6,940 | ) |   |   |   |   |
| Other Comprehensive Loss,                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Net of Income Taxes                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 231 |   |   |   |   | 231 |   |   |   | 231 |   |
| Total Comprehensive Income                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 12,325 |   |
| Balance, December 31, 2010                                                                  |   |   | 13,298,626 |   |   |   | $  | 1,330 |   |   |   | $  | 14,328 |   |   |   | $  | 29,841 |   |   |   | $  | (4,195 | ) |   |   | $  | 41,304 |   |   |   |   |   |
|  The accompanying notes are an integral part of the consolidated financial statements. |   |

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| ·   | In instances where we sell Cisco voice and data communications equipment with no installation obligations (equipment only sales), all warranty obligations reside with Cisco. Therefore, revenue is recognized when the equipment is delivered to the customer site. In instances where we sell Cisco voice and data communications equipment with installation obligations, terms of the agreements typically provide for installation services without customer-specific acceptance provisions, but sometimes may provide customer-specific acceptance provisions. For arrangements with no customer-specific acceptance arrangements, we recognize revenue when title passes to the customer. For contracts with customer specific acceptance provisions, we defer revenue recognition until the receipt of formal customer acceptance, assuming that all other revenue recognition criteria have been met. When a sale involves multiple elements, revenue is allocated to each respective element. In the event that we enter into a multiple element arrangement and there are undeliverable elements as of the balance sheet date, we assess whether the elements are separable and have determinable fair values in assessing the amount of revenue to record. Allocation of revenue to elements of the arrangement is based on fair value of the element being sold on a stand-alone basis. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | When we sell equipment to customers, we also typically sell Cisco support contracts (“SmartNet” contracts). These support contracts state that Cisco will provide all support services, product warranty and updates directly to the customer. Because we have no service obligations under these types of contracts, the earnings process has culminated for us upon the sale of the contract and therefore revenue is recognized immediately. Further, we are serving in an agency relationship to the customer for the sale of the contract and therefore the revenue is recorded net of the cost that we pay Cisco for the contract. Support services also include “24x7” support of a customer’s voice and data systems. Most of these contracts are billed on a time and materials basis and revenue is recognized either as services are provided or over the term of the contract. Support services also include professional support services, which are typically sold on a time and materials basis, but may be sold as a pre-paid block of time. This revenue is recognized as the services are provided (deferred and recognized as utilized if pre-paid). In the event that these services are part of a multiple element arrangement, the fair value of the services are measured and deferred. Allocation of revenue to elements of the arrangement is based on fair value of the element being sold on a stand-alone basis. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Fiber and data services are sold primarily through a contractual flat monthly fee. Monthly billings for our SMB customer base also include charges for voice and long distance services. The revenue generated by these services is typically billed at the beginning of the month for the coming month’s services. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We manage customer voice and/or data services. Under these arrangements, we bill either a flat monthly fee or a fee that is variable based on the number of “seats” that the customer has. This revenue is recognized on a monthly basis as the services are provided. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (Dollars in thousands)                    |   | 2010   |     |   | 2009   |   |
|-------------------------------------------|--------|--------|----------|--------|--------|--------|
| Business property and equipment           |   | $      | 67,261   |   |   | $      | 53,942 |   |
| Business indefeasable rights of use       |   |   | 6,552    |   |   |   | 5,394 |   |
| Telecom property and equipment            |   |   | 289,993  |   |   |   | 283,770 |   |
| Other property and equipment              |   |   | 15,627   |   |   |   | 14,501 |   |
|    Total                   |   |   | 379,433  |   |   |   | 357,607 |   |
| Accumulated depreciation and amortization |   |   | (224,356 | )      |   |   | (204,129 | ) |
| Property, plant, and equipment, net       |   | $      | 155,077  |   |   | $      | 153,478 |   |

| (Dollars in thousands)                |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|---------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Capitalized software for internal use |   | $      | 8,731  |   |   | $      | 8,686  |   |   | $ | 8,237 |   |
| Accumulated amortization              |   |   | 6,541  |   |   |   | 5,980  |   |   |   | 5,321 |   |
| Capitalized software for internal use |   | $      | 2,190  |   |   | $      | 2,706  |   |   | $ | 2,916 |   |

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| (Dollars in thousands, except share and earnings per share amounts) |   | 2010   |       |   | 2009   |   |       | 2008   |   |
|---------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
|                                                                |   |   |       |   |   |   |       |   |   |
| Net Income                                                          |   | $      | 12,094     |   |   | $      | 11,273     |   |   | $ | 8,029 |   |
|                                                                |   |   |       |   |   |   |       |   |   |   |   |   |
| Weighted average shares outstanding                                 |   |   | 13,233,874 |   |   |   | 13,061,266 |   |   |   | 13,248,731 |   |
| Stock options (dilutive only)                                       |   |   | 3,321      |   |   |   | 595        |   |   |   | 958 |   |
| Stock subscribed (ESPP)                                             |   |   | -          |   |   |   | -          |   |   |   | 10,244 |   |
| Total dilutive shares outstanding                                   |   |   | 13,237,195 |   |   |   | 13,061,861 |   |   |   | 13,259,933 |   |
|                                                                |   |   |       |   |   |   |       |   |   |   |   |   |
| Earnings per share:                                                 |   |   |       |   |   |   |       |   |   |   |   |   |
|     Basic                                       |   | $      | 0.91       |   |   | $      | 0.86       |   |   | $ | 0.61 |   |
|     Diluted                                     |   | $      | 0.91       |   |   | $      | 0.86       |   |   | $ | 0.61 |   |
|                                                                |   |   |       |   |   |   |       |   |   |   |   |   |
| Dividends per share                                                 |   | $      | 0.525      |   |   | $      | 0.52       |   |   | $ | 0.49 |   |

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| (Dollars in thousands)                                          |   | 2010   |   |
|-----------------------------------------------------------------|--------|--------|--------|
| Goodwill as of December 31, 2009                                |   | $      | 27,423 |   |
| Goodwill adjustments associated with the purchase of CP Telecom |   |   | (120   | ) |
| Goodwill as of December 31, 2010                                |   | $      | 27,303 |   |

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|                             |   |         |   | As of December 31, 2010 |   |   | As of December 31, 2009 |   |
|----------------------------------|--------|--------------|--------|------------------------------|--------|--------|-------------------------|--------|
|                             |   |         |   | Gross Carrying               |   |   | Accumulated             |   |   | Gross Carrying |   |   | Accumulated |   |
| (Dollars in thousands)           |   | Useful Lives |   | Amount                       |   |   | Amortization            |   |   | Amount |   |   | Amortization |   |
| Definite-lived intangible assets |   |         |   |                         |   |   |                    |   |   |   |   |   |   |   |
| Customer relationships           |   | 1 - 8 years  |   | $                            | 5,299  |   |                    | $      | 4,532 |   |   | $ | 5,299 |   |   | $ | 4,318 |   |
| Other intangibles                |   | 1 - 5 years  |   |                         | 2,830  |   |                    |   | 929 |   |   |   | 2,830 |   |   |   | 786 |   |
| Total                            |   |         |   | $                            | 8,129  |   |                    | $      | 5,461 |   |   | $ | 8,129 |   |   | $ | 5,104 |   |

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| (Dollars in thousands)                                        |   | 2010   |   |
|---------------------------------------------------------------|--------|--------|--------|
| Property and equipment                                        |   | $      | 3,986  |   |
| Identifiable intangible assets:                               |   |   |   |   |
|      Customer relationships and contracts |   |   |   |  1,070 |   |
|      Supplier relationship                |   |   |   | 2,100 |   |
| Goodwill                                                      |   |   |   | 2,064 |   |
| Other assets and liabilities                                  |   |   | (653   | ) |
| Deferred income tax                                           |   |   | (2,062 | ) |
| Allocation of purchase consideration                          |   | $      | 6,505  |   |

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|                                                      |   | Unrecognized  |   |   | Unrecognized  |   |   | Unrecognized |   |   | Unrealized     |   |   | Accumulated Other |   |
|-----------------------------------------------------------|--------|---------------|--------|--------|---------------|--------|--------|--------------|--------|--------|----------------|--------|--------|-------------------|--------|
|                                                      |   | Net Actuarial |   |   | Prior Service |   |   | Transition   |   |   | Gain/(Loss)    |   |   | Comprehensive     |   |
| (Dollars in thousands)                                    |   | Loss (1)      |   |   | Credit (1)    |   |   | Asset (1)    |   |   | on Derivatives |   |   | Income/(Loss)     |   |
| December 31, 2007                                         |   | $             | (954   | )      |          | $      | 279    |         |   | $      | (181           | )      |   | $                 | (211   |   |   | $ | (1,067 | ) |
| 2008 Activity                                             |   |          | (421   | )      |          |   | (33    | )            |   |   | 36             |   |   |              | (1,768 |   |   |   | (2,186 | ) |
| December 31, 2008                                         |   |          | (1,375 | )      |          |   | 246    |         |   |   | (145           | )      |   |              | (1,979 |   |   |   | (3,253 | ) |
| 2009 Activity                                             |   |          | (2,005 | )      |          |   | (33    | )            |   |   | 36             |   |   |              | 829    |   |   |   | (1,173 | ) |
| December 31, 2009                                         |   |          | (3,380 | )      |          |   | 213    |         |   |   | (109           | )      |   |              | (1,150 |   |   |   | (4,426 | ) |
| 2010 Activity                                             |   |          | (271   | )      |          |   | (33    | )            |   |   | 36             |   |   |              | 499    |   |   |   | 231 |   |
| December 31, 2010                                         |   | $             | (3,651 | )      |          | $      | 180    |         |   | $      | (73            | )      |   | $                 | (651   |   |   | $ | (4,195 | ) |
|                                                      |   |          |   |   |          |   |   |         |   |   |           |   |   |              |   |   |   |   |   |   |
| (1) Amounts pertain to our post-retirement benefit plans. |   |          |   |   |          |   |   |         |   |   |           |   |   |

| (Dollars in thousands)                                                       |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Income tax related to OCI components beginning of year                       |   | $      | 2,926  |   |   | $      | 2,150  |   |   | $ | 1,141 |   |
| Income tax (liability) changes related to:                                   |   |   |   |   |   |   |   |   |   |   |   |   |
|        Unrecognized net actuarial loss         |   |   | 180    |   |   |   | 1,327  |   |   |   | 281 |   |
|        Unrecognized prior service credit       |   |   | 21     |   |   |   | 21     |   |   |   | 21 |   |
|        Unrecognized transition asset           |   |   | (24    | )      |   |   | (24    | )      |   |   | (24 | ) |
|        Unrecognized gain (loss) on derivatives |   |   | (327   | )      |   |   | (548   | )      |   |   | 731 |   |
| Income tax related to OCI components end of year                             |   | $      | 2,776  |   |   | $      | 2,926  |   |   | $ | 2,150 |   |

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| For Year Ended December 31                 |   |     |   |   |    |   |    |          |   |   |         |   |
|--------------------------------------------|--------|----------|--------|--------|---------|--------|---------|---------------|--------|--------|--------------|--------|
| (Dollars in thousands)                     |   |     |   |   |    |   |    | Corporate and |   |   |         |   |
| 2010                                       |   | Business |   |   | Telecom |   |    | Eliminations  |   |   | Consolidated |   |
| Revenue from unaffiliated customers        |   | $        | 92,229 |   |    | $      | 70,018  |          |   | $      | -            |   |   | $ | 162,247 |   |
| Intersegment revenue                       |   |     | 542    |   |    |   | 1,976   |          |   |   | (2,518       | )      |   |   | - |   |
|    Total operating revenue  |   |     | 92,771 |   |    |   | 71,994  |          |   |   | (2,518       | )      |   |   | 162,247 |   |
|                                       |   |     |   |   |    |   |    |          |   |   |         |   |   |   |   |   |
| Depreciation and amortization              |   |     | 6,170  |   |    |   | 15,737  |          |   |   | 115          |   |   |   | 22,022 |   |
| Operating income (loss)                    |   |     | 10,006 |   |    |   | 11,525  |          |   |   | (563         | )      |   |   | 20,968 |   |
| Interest expense                           |   |     | -      |   |    |   | 58      |          |   |   | 4,856        |   |   |   | 4,914 |   |
| Income taxes                               |   |     | 4,082  |   |    |   | 4,832   |          |   |   | (4,881       | )      |   |   | 4,033 |   |
| Net Income (loss)                          |   |     | 5,951  |   |    |   | 6,652   |          |   |   | (509         | )      |   |   | 12,094 |   |
| Total assets                               |   |     | 87,868 |   |    |   | 132,381 |          |   |   | 9,939        |   |   |   | 230,188 |   |
| Property, plant and equipment, net         |   |     | 55,872 |   |    |   | 99,037  |          |   |   | 168          |   |   |   | 155,077 |   |
| Additions to property, plant and equipment |   |     | 14,464 |   |    |   | 8,424   |          |   |   | -            |   |   |   | 22,888 |   |

|                                       |   |     |   |   |    |   |    | Corporate and |   |          |         |   |
|--------------------------------------------|--------|----------|--------|--------|---------|--------|---------|---------------|--------|---------------|--------------|--------|
| 2009                                       |   | Business |   |   | Telecom |   |    | Eliminations  |   |          | Consolidated |   |
| Revenue from unaffiliated customers        |   | $        | 68,683 |   |    | $      | 70,419  |          |   | $             | -            |   |   | $ | 139,102 |   |
| Intersegment revenue                       |   |     | 500    |   |    |   | 1,217   |          |   |          | (1,717       | )      |   |   | - |   |
|    Total operating revenue  |   |     | 69,183 |   |    |   | 71,636  |          |   |          | (1,717       | )      |   |   | 139,102 |   |
|                                       |   |     |   |   |    |   |    |          |   |          |         |   |   |   |   |   |
| Depreciation and amortization              |   |     | 5,413  |   |    |   | 15,680  |          |   |          | 84           |   |   |   | 21,177 |   |
| Operating income (loss)                    |   |     | 5,627  |   |    |   | 13,587  |          |   |          | (629         | )      |   |   | 18,585 |   |
| Interest expense                           |   |     | 2      |   |    |   | 95      |          |   |          | 6,821        |   |   |   | 6,918 |   |
| Income taxes                               |   |     | 2,299  |   |    |   | 5,451   |          |   |          | (7,251       | )      |   |   | 499 |   |
| Net Income (loss)                          |   |     | 3,362  |   |    |   | 8,068   |          |   |          | (157         | )      |   |   | 11,273 |   |
| Total assets                               |   |     | 72,856 |   |    |   | 140,494 |          |   |          | 9,133        |   |   |   | 222,483 |   |
| Property, plant and equipment, net         |   |     | 46,867 |   |    |   | 106,328 |          |   |          | 283          |   |   |   | 153,478 |   |
| Additions to property, plant and equipment |   |     | 8,738  |   |    |   | 9,068   |          |   |          | 87           |   |   |   | 17,893 |   |
|                                       |   |     |   |   |    |   |    |          |   |          |         |   |   |   |   |   |
|                                       |   |     |   |   |    |   |    |          |   | Corporate and |         |   |   |   |   |
| 2008                                       |   | Business |   |   | Telecom |   |    | Eliminations  |   |          | Consolidated |   |
| Revenue from unaffiliated customers        |   | $        | 79,976 |   |    | $      | 73,199  |          |   | $             | -            |   |   | $ | 153,175 |   |
| Intersegment revenue                       |   |     | 515    |   |    |   | 644     |          |   |          | (1,159       | )      |   |   | - |   |
|    Total operating revenue  |   |     | 80,491 |   |    |   | 73,843  |          |   |          | (1,159       | )      |   |   | 153,175 |   |
|                                       |   |     |   |   |    |   |    |          |   |          |         |   |   |   |   |   |
| Depreciation and amortization              |   |     | 4,417  |   |    |   | 16,136  |          |   |          | 53           |   |   |   | 20,606 |   |
| Operating income                           |   |     | 7,024  |   |    |   | 13,045  |          |   |          | 157          |   |   |   | 20,226 |   |
| Interest expense                           |   |     | -      |   |    |   | 85      |          |   |          | 6,785        |   |   |   | 6,870 |   |
| Income taxes                               |   |     | 2,660  |   |    |   | 4,879   |          |   |          | (2,119       | )      |   |   | 5,420 |   |
| Net Income (loss)                          |   |     | 4,369  |   |    |   | 8,104   |          |   |          | (4,444       | )      |   |   | 8,029 |   |
| Total assets                               |   |     | 68,481 |   |    |   | 148,238 |          |   |          | 8,789        |   |   |   | 225,508 |   |
| Property, plant and equipment, net         |   |     | 38,575 |   |    |   | 112,497 |          |   |          | 281          |   |   |   | 151,353 |   |
| Additions to property, plant and equipment |   |     | 6,408  |   |    |   | 11,102  |          |   |          | 181          |   |   |   | 17,691 |   |

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|                                                            |   | Options |    |   | Weighted Average Exercise Price |   |
|-----------------------------------------------------------------|--------|---------|---------|--------|---------------------------------|--------|
|                                                            |   | 2010    |    |   | 2009                            |   |   | 2008 |   |   | 2010 |   |   | 2009 |   |   | 2008 |   |
| Outstanding at Beginning of Year                                |   |    | 430,950 |   |                            |   | 471,200 |   |   |   | 476,000 |   |   | $ | 12.87 |   |   | $ | 12.79 |   |   | $ | 12.79 |   |
| Granted                                                         |   |    | -       |   |                            |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Exercised                                                       |   |    | -       |   |                            |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Forfeited                                                       |   |    | -       |   |                            |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Expired                                                         |   |    | (87,700 | )      |                            |   | (40,250 | ) |   |   | (4,800 | ) |   |   | 14.52 |   |   |   | 11.87 |   |   |   | 13.38 |   |
| Outstanding at End of Year                                      |   |    | 343,250 |   |                            |   | 430,950 |   |   |   | 471,200 |   |   | $ | 12.45 |   |   | $ | 12.87 |   |   | $ | 12.79 |   |
|                                                            |   |    |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercisable at End of Year                                      |   |    | 343,250 |   |                            |   | 430,950 |   |   |   | 466,200 |   |   | $ | 12.45 |   |   | $ | 12.87 |   |   | $ | 12.85 |   |
|                                                            |   |    |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair Value of Options Vesting  During the Year   |   | $       | -       |   |                            | $      | 7,000 |   |   | $ | 41,000 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                            |   |    |    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Intrinsic Value of Options  Exercised During the Year |   | $       | -       |   |                            | $      | - |   |   | $ | - |   |   |   |   |   |   |   |   |   |   |   |   |   |

| Range of                  |            |   | Stock Options |   |    | Stock Options |   |   |  Weighted Average |   |   | Weighted Average Remaining |   |
|---------------------------|-----------------|--------|---------------|--------|---------|---------------|--------|--------|------------------------|--------|--------|----------------------------|--------|
| Exercise Prices           |            |   | Outstanding   |   |    | Exercisable   |   |   | Exercise Price         |   |   | Contractual Life (Years)   |   |
|                      | $6.00 - $8.00   |   |          |   | 15,000  |          |   |   | 15,000                 |   |   | $                          | 6.95   |   |   |   | 5.7 |   |
|                      | $8.00 - $12.00  |   |          |   | 156,950 |          |   |   | 156,950                |   |   |                       | 10.22  |   |   |   | 2.9 |   |
|                      | $12.00 - $16.00 |   |          |   | 126,000 |          |   |   | 126,000                |   |   |                       | 13.97  |   |   |   | 1.0 |   |
|                      | $16.00 - $21.00 |   |          |   | 45,300  |          |   |   | 45,300                 |   |   |                       | 17.82  |   |   |   | 0.3 |   |
|                      |            |   |          |   | 343,250 |          |   |   | 343,250                |   |   | $                          | 12.45  |   |   |   | 2.0 |   |
|                      |            |   |          |   |    |          |   |   |                   |   |   |                       |   |   |   |   |   |   |
| Aggregate Intrinsic Value |            |   |          |   |    |          |   |   |                   |   | $      | 92,000                     |   |   |   |   |   |

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|                                                                                     |   | As of December 31 |    |
|------------------------------------------------------------------------------------------|--------|-------------------|---------|
| (Dollars in thousands)                                                                   |   | 2010              |    |   | 2009 |   |
| Credit facility, average interest at 4.1%, maturing in varying amounts through 2013 |   | $                 | 118,150 |   |   | $ | 119,900 |   |
| Capitalized lease obligations, average interest at 8.6%, maturing November 2014     |   |              | 809     |   |   |   | 591 |   |
|     Total                                                            |   |              | 118,959 |   |   |   | 120,491 |   |
| Less current maturities                                                                  |   |              | 4,892   |   |   |   | 620 |   |
| Long-term obligations                                                                    |   | $                 | 114,067 |   |   | $ | 119,871 |   |

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| (Dollars in thousands)                  |   | 2010   |   |   | 2009   |   |
|-----------------------------------------|--------|--------|--------|--------|--------|--------|
| Change in benefit obligation            |   |   |   |   |   |   |
| Benefit obligation at beginning of year |   | $      | 13,270 |   |   | $      | 9,225 |   |
| Service cost                            |   |   | 452    |   |   |   | 309 |   |
| Interest cost                           |   |   | 723    |   |   |   | 547 |   |
| Actuarial loss                          |   |   | 844    |   |   |   | 3,466 |   |
| Benefits paid                           |   |   | (318   | )      |   |   | (277 | ) |
| Benefit obligation at end of year       |   | $      | 14,971 |   |   | $      | 13,270 |   |

|                                                                  |   | As of December 31 |   |
|-----------------------------------------------------------------------|--------|-------------------|--------|
| (Dollars in thousands)                                                |   | 2010              |   |   | 2009 |   |   | 2008 |   |
| Components of net periodic benefit cost                               |   |              |   |   |   |   |   |   |   |
| Service cost                                                          |   | $                 | 452    |   |   | $ | 309 |   |   | $ | 254 |   |
| Interest cost                                                         |   |              | 723    |   |   |   | 547 |   |   |   | 487 |   |
| Expected return on plan assets                                        |   |              | -      |   |   |   | - |   |   |   | - |   |
| Amortization of transition obligation                                 |   |              | 60     |   |   |   | 60 |   |   |   | 60 |   |
| Amortization of prior service cost                                    |   |              | (55    | ) |   |   | (55 | ) |   |   | (55 | ) |
| Recognized net actuarial loss                                         |   |              | 391    |   |   |   | 134 |   |   |   | 79 |   |
| Net periodic benefit cost                                             |   | $                 | 1,571  |   |   | $ | 995 |   |   | $ | 825 |   |
|                                                                  |   |              |   |   |   |   |   |   |   |   |   |   |
| Discount rate used to determine benefit obligation as of December 31: |   |              | 5.4    | % |   |   | 5.5 | % |   |   | 6.0 | % |

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| Health Care Trend Rates for the Year Ending December 31, 2010  |   | Year  |   | Trend Rate  |
|---------------------------------------------------------------------|--------|------------|--------|------------------|
|                                                                |   | 2011-2012  |   | 7.5%             |
|                                                                |   | 2012-2013  |   | 7.0%             |
|                                                                |   | 2013-2014  |   | 6.8%             |
|                                                                |   | 2014-2015  |   | 6.5%             |
|                                                                |   | 2015-2016  |   | 6.3%             |
|                                                                |   | 2016-2017  |   | 6.3%             |
|                                                                |   | 2017-2018  |   | 6.2%             |
|                                                                |   | 2018-2019  |   | 6.2%             |
|                                                                |   | 2019-2082  |   | 6.2%-4.7%        |
|                                                                |   | 2082       |   | 4.7%             |

| (Dollars in thousands)                                                 |   |        |        |   |        |    |
|------------------------------------------------------------------------|--------|-------------|-------------|--------|-------------|---------|
| Effect of 1% Increase and 1% Decrease in Trend Rate                    |   | 1% Increase |        |   | 1% Decrease |    |
| Accumulated post-retirement benefit obligation as of December 31, 2010 |   |        |        |   |        |    |
| Dollar                                                            |   | $      |  2,426 |   |        | $  |  (1,925 | )  |
| Percentage change in retiree medical costs                             |   |        | 19          | %      |        |    | (15 | %) |
|                                                                   |   |        |        |   |        |    |   |   |
| Service cost and interest cost for fiscal 2010                         |   |        |        |   |        |    |   |   |
| Dollar                                                            |   | $      |  249   |   |        | $  |  (194 | )  |
| Percentage change in retiree medical costs                             |   |        | 22          | %      |        |    | (17 | %) |

| (Dollars in thousands)            |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|-----------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Current income taxes (benefits):  |   |   |   |   |   |   |   |   |   |
| Federal                           |   | $      | (937   | )      |   | $      | (1,144 | )      |   | $ | 1,370 |   |
| State                             |   |   | (267   | )      |   |   | (325   | )      |   |   | 390 |   |
| Deferred income taxes (benefits): |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal                           |   |   | 5,106  |   |   |   | 2,020  |   |   |   | 3,356 |   |
| State                             |   |   | 131    |   |   |   | (52    | )      |   |   | 304 |   |
| Total income tax provision        |   | $      | 4,033  |   |   | $      | 499    |   |   | $ | 5,420 |   |

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| (Dollars in thousands)                 |                                               | 2010   |   |   | 2009   |   |
|----------------------------------------|----------------------------------------------------|--------|--------|--------|--------|--------|
| Tax liabilities:                       |                                               |   |   |   |   |   |
|                                   | Depreciation and fixed assets                      |   | $      | 25,699 |   |   | $ | 21,445 |   |
|                                   | Intangible assets                                  |   |   | 8,238  |   |   |   | 7,475 |   |
| Gross deferred tax liability           |                                               | $      | 33,937 |   |   | $      | 28,920 |   |
|                                   |                                               |   |   |   |   |   |   |   |   |
| Tax Assets:                            |                                               |   |   |   |   |   |   |   |
|                                   | Deferred compensation and post-retirement benefits |   | $      | 6,939  |   |   | $ | 6,534 |   |
|                                   | Receivables and inventories                        |   |   | 349    |   |   |   | 501 |   |
|                                   | Accrued liabilities                                |   |   | 777    |   |   |   | 1,112 |   |
|                                   | Derivatives                                        |   |   | 430    |   |   |   | 760 |   |
|                                   | State net operating loss                           |   |   | 1,764  |   |   |   | 1,767 |   |
|                                   | Other                                              |   |   | 542    |   |   |   | 469 |   |
| Gross deferred tax asset               |                                               |   | 10,801 |   |   |   | 11,143 |   |
| Valuation allowance                    |                                               |   | (1,724 | )      |   |   | (1,695 | ) |
| Net deferred tax liability             |                                               |   | 24,860 |   |   |   | 19,472 |   |
| Current deferred tax asset             |                                               |   | 2,008  |   |   |   | 2,423 |   |
| Net non-current deferred tax liability |                                               | $      | 26,868 |   |   | $      | 21,895 |   |

|                                                          |   | For Year Ended December 31 |   |
|---------------------------------------------------------------|--------|----------------------------|--------|
|                                                          |   | 2010                       |   |   | 2009 |   |   | 2008 |   |
| Statutory tax rate                                            |   |                       | 35.0   | % |   |   | 35.0 | % |   |   | 35.0 | % |
| Effect of:                                                    |   |                       |   |   |   |   |   |   |   |   |   |   |
| State income taxes net of federal tax benefit                 |   |                       | 6.1    |   |   |   | 6.2 |   |   |   | 6.0 |   |
| Release of income tax reserve and prior year adjustments |   |                       | (17.1  | ) |   |   | (37.5 | ) |   |   | (7.8 | ) |
| Medicare part D subsidy                                       |   |                       | 1.6    |   |   |   | (0.6 | ) |   |   | (0.4 | ) |
| Uncertain tax positions                                       |   |                       | 0.4    |   |   |   | 1.5 |   |   |   | 3.2 |   |
| Acquisition costs                                             |   |                       | -      |   |   |   | 0.8 |   |   |   | - |   |
| Expiration of capital loss                                    |   |                       | -      |   |   |   | - |   |   |   | 5.2 |   |
| Other, net                                                    |   |                       | (1.0   | ) |   |   | (1.2 | ) |   |   | (0.9 | ) |
| Effective tax rate                                            |   |                       | 25.0   | % |   |   | 4.2 | % |   |   | 40.3 | % |

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| (Dollars in thousands)                                         |   | 2010   |   |   | 2009   |   |
|----------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Unrecognized tax benefits opening balance (excluding interest) |   | $      | 3,215  |   |   | $      | 7,239 |   |
| Increases:                                                     |   |   |   |   |   |   |   |   |
|   Tax positions taken in current period              |   |   | 17     |   |   |   | 23 |   |
|   Tax position taken in prior periods                |   |   | -      |   |   |   | 3 |   |
| Settlements                                                    |   |   | -      |   |   |   | (48 | ) |
| Lapse of statute limitations                                   |   |   | (2,535 | )      |   |   | (4,002 | ) |
| Ending balance (excluding interest)                            |   | $      | 697    |   |   | $      | 3,215 |   |

| ·   | Level 1– quoted prices in active markets for identical assets and liabilities. |
|--------------------|--------------------------------------------------------------------------------------|

| ·   | Level 2– observable inputs other than quoted prices in active markets for identical assets and liabilities. |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

| ·   | Level 3– unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (Dollars in thousands)          |   | Gain/(Loss) Reported in Accumulated |   |                                        |   | Amount of Gain/Proceeds            |
|---------------------------------|--------|-------------------------------------|--------|---------------------------------------------|--------|------------------------------------|
| Derivatives Instruments in      |   | Other Comprehensive Loss            |   | Location of Gain/Proceeds Reclassified from |   | Recognized in Income on Derivative |
| Cash Flow Hedging Relationships |   | 2010                                |   | 2009                                        |   | 2008                               |   | Accumulated Other Comprehensive Income into Income |   | 2010 |   | 2009 |   | 2008 |
|                            |   |                                |   |                                        |   |                               |   |   |   |   |   |   |   |   |
| Interest Rate Contracts         |   |  $499                          |   |  $829                                  |   |  $(1,768)                     |   | Interest Expense |   |  $- |   |  $- |   |  $664 |

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| (Dollars in thousands except per share amounts) |   | 2010       |   |
|-------------------------------------------------|--------|------------|--------|
|                                            |   | 4th        |   |   | 3rd |   |   | 2nd |   |   | 1st |   |
| Operating revenue                               |   | $          | 41,779 |   |   | $ | 43,480 |   |   | $ | 38,268 |   |   | $ | 38,720 |   |
| Operating income                                |   | $          | 4,463  |   |   | $ | 6,388 |   |   | $ | 5,657 |   |   | $ | 4,460 |   |
| Net income                                      |   | $          | 2,114  |   |   | $ | 5,043 |   |   | $ | 3,510 |   |   | $ | 1,427 |   |
| Basic earnings per share                        |   | $          | 0.16   |   |   | $ | 0.38 |   |   | $ | 0.27 |   |   | $ | 0.11 |   |
| Fully diluted earnings per share                |   | $          | 0.16   |   |   | $ | 0.38 |   |   | $ | 0.27 |   |   | $ | 0.11 |   |
|                                            |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends per share                             |   | $          | 0.135  |   |   | $ | 0.13 |   |   | $ | 0.13 |   |   | $ | 0.13 |   |
|                                            |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                            |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                            |   |  2009 |   |
|                                            |   | 4th        |   |   | 3rd |   |   | 2nd |   |   | 1st |   |
| Operating revenue                               |   | $          | 38,330 |   |   | $ | 34,908 |   |   | $ | 32,403 |   |   | $ | 33,461 |   |
| Operating income                                |   | $          | 4,044  |   |   | $ | 4,694 |   |   | $ | 5,289 |   |   | $ | 4,558 |   |
| Net income                                      |   | $          | 1,424  |   |   | $ | 6,106 |   |   | $ | 2,117 |   |   | $ | 1,626 |   |
| Basic earnings per share                        |   | $          | 0.11   |   |   | $ | 0.47 |   |   | $ | 0.16 |   |   | $ | 0.12 |   |
| Fully diluted earnings per share                |   | $          | 0.11   |   |   | $ | 0.47 |   |   | $ | 0.16 |   |   | $ | 0.12 |   |
|                                            |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends per share                             |   | $          | 0.13   |   |   | $ | 0.13 |   |   | $ | 0.13 |   |   | $ | 0.13 |   |

Item 9.

Item 9A

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Item 9B

PART III

Item 10.

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Item 11.

Item 12.

Item 13.

Item 14.

PART IV

Item 15. 

|                                                                           |   | Page   |   |
|--------------------------------------------------------------------------------|--------|--------|--------|
| Reports of Independent Registered Public Accounting Firm                       |   |   | 44     |   |
| Consolidated Statements of Operations                                          |   |   | 46     |   |
| Consolidated Balance Sheets                                                    |   |   | 47     |   |
| Consolidated Statements of Cash Flows                                          |   |   | 48     |   |
| Consolidated Statements of Shareholder’s Equity and Comprehensive Income |   |   | 49     |   |
| Notes to Consolidated Financial Statements                                     |   |   | 50     |   |

|                                                  |   | Page   |   |
|-------------------------------------------------------|--------|--------|--------|
| Schedule II – Valuation and Qualifying Accounts |   |   | 74     |   |

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| Exhibit     | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|-------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3(a)        | Restated Articles of Incorporation (Incorporated by reference to Exhibit 3 to the Registrant’s Form 10-Q filed May 7, 1999)                                                                                                                                                                                                                                                                                                                                                |
| 3(b)        | Amended and Restated By-Laws (Incorporated by reference to Exhibit 3.1 to the Registrant’s Form 10-Q filed May 3, 2007)                                                                                                                                                                                                                                                                                                                                                    |
| 3(c)        | Certificate of Designations of Series A Junior Participating Preferred Stock of HickoryTech Corporation (Incorporated by reference to Exhibit 3(c) to the Registrant’s Form 10-K filed March 29, 2000)                                                                                                                                                                                                                                                                     |
| 4(a)        | Amended and Restated Shareholder Rights Agreement (Incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-A filed March 17, 2009)                                                                                                                                                                                                                                                                                                                             |
| 4(b)        | Third Amended and Restated Credit Agreement dated as of December 30, 2005, by and among HickoryTech Corporation, as Borrower, the Lenders referred to therein and Wachovia Bank, National Association, as Administrative Agent (Incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-K filed January 4, 2006)                                                                                                                                               |
| 10.1+       | Supplemental Retirement Agreement dated January 31, 1984, between registrant’s subsidiary, Mankato Citizens Telephone Company, and David A. Christensen (Incorporated by reference to Exhibit 10(b) to the Registrant’s Form S-8 filed June 22, 1993)                                                                                                                                                                                                                |
| 10.2+  | HickoryTech Corporation Directors’ Stock Option Plan Amended and Restated February 5, 2003 (Incorporated by reference to Exhibit 10(g) to the Registrant’s Form 10-K filed March 9, 2004)                                                                                                                                                                                                                                                                                 |
| 10.3+  | HickoryTech Corporation Retainer Stock Plan for Directors Restated and Amended effective September 1, 1996 (Incorporated by reference to Exhibit 10(m) to the Registrant’s Form 10-Q filed August 14, 1996)                                                                                                                                                                                                                                                                     |
| 10.4+       | HickoryTech Corporation 1993 Stock Award Plan (Amended and Restated effective September 26, 2001) (Incorporated by reference to Exhibit 10(l) to the Registrant’s Form 10-K dated March 26, 1997)                                                                                                                                                                                                                                                                          |
| 10.5+       | Form of Non-Incentive Stock Option Agreement used in connection with grants under the 1993 Stock Award Plan (Incorporated by reference to Exhibit 10(r) to the Registrant’s Form 10-K filed March 4, 2005)                                                                                                                                                                                                                                                                 |
| 10.6+       | HickoryTech Corporation 2005 Directors’ Incentive Plan (Incorporated by reference to Exhibit 10(s) to the Registrant’s Form 8-K filed May 12, 2005)                                                                                                                                                                                                                                                                                                                  |
| 10.7        | Stock Purchase Agreement by and between HickoryTech Corporation and Minnesota Power Enterprises, Inc. dated November 9, 2005 (Incorporated by reference from Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on November 10, 2005)                                                                                                                                                                                                                        |
| 10.8        | First Amendment to Stock Purchase Agreement by and between HickoryTech Corporation and Minnesota Power Enterprises, Inc., dated December 30, 2005 (Incorporated by reference to Exhibit 2.1A to the Registrant’s Current Report on Form 8-K filed on January 15, 2006)                                                                                                                                                                                                     |
| 10.9        | Agreement for Wholesale Financing between Enventis Telecom, Inc., a wholly-owned subsidiary of HickoryTech Corporation and GE Commercial Distribution Finance Corporation dated February 23, 2006, as amended (Incorporated by reference to Exhibits 99.1 and 99.2 to the Registrant’s Current Report on Form 8-K filed April 7, 2006)                                                                                                                                     |
| 10.10+      | HickoryTech Corporation Employee Stock Purchase Plan, Amended and Restated August 1, 2006 (Incorporated by reference to Exhibit 10.14 to the Registrants Form 10-K dated February 29, 2008)                                                                                                                                                                                                                                                                                      |
| 10.11+      | Employment Agreement between HickoryTech and John W. Finke, President and Chief Executive Officer of the Company, dated August 1, 2006, which includes a Supplemental Retirement Agreement (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed August 16, 2006); Amendment to Employment Agreement dated November 29, 2007 (Incorporated by reference to Exhibit 10.21 to the Registrant’s Form 10-K dated February 29, 2008) |

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| Exhibit | Description                                                                                                                                                                                                   |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.12+  | HickoryTech Corporation Executive Incentive Plan Amended and Restated January 1, 2010 (Incorporated by reference to Exhibit 10.2 to the Registrant’s Form 10-Q filed July 29, 2010)                |
| 10.13+  | HickoryTech Corporation Long-Term Executive Incentive Program Amended and Restated January 1, 2010 (Incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q filed April 27, 2010)  |
| 10.14+* | Amended and Restated Change of Control Agreement dated December 10, 2010 between HickoryTech Corporation and Walter A. Prahl                                                                             |
| 10.15+* | Amended and Restated Change of Control Agreement dated December 10, 2010 between HickoryTech Corporation and John W. Finke                                                                               |
| 10.16+* | Amended and Restated Change of Control Agreement dated December 10, 2010 between HickoryTech Corporation and David A. Christensen                                                                        |
| 10.17+* | Amended and Restated Change of Control Agreement dated December 10, 2010 between HickoryTech Corporation and Lane C. Nordquist                                                                           |
| 10.18+* | Amended and Restated Change of Control Agreement dated December 10, 2010 between HickoryTech Corporation and Mary T. Jacobs                                                                              |
| 10.19+* | Amended and Restated Change of Control Agreement dated December 10, 2010 between HickoryTech Corporation and Damon D. Dutz                                                                               |
| 14      | HickoryTech Corporation Code of Ethics (Incorporated by reference to Exhibit 14 to the registrant’s Form 10-K filed March 9, 2004)                                                                 |
| 21*     | Subsidiaries of HickoryTech Corporation                                                                                                                                                                  |
| 23.1*   | Consent of Independent Registered Public Accounting Firm                                                                                                                                                 |
| 31(a)*  | Certification of Chief Executive Officer Under Rule 13a-14(a) Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                          |
| 31(b)*  | Certification of Chief Financial Officer Under Rule 13a-14(a) Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                          |
| 32(a)*  | Certification of Chief Executive Officer Under 18 U.S.C. Section 1350 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                          |
| 32(b)*  | Certification of Chief Financial Officer Under 18 U.S.C. Section 1350 Pursuant to  Section 906 of the Sarbanes-Oxley Act of 2002                                                                    |

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| SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS                |   |
|----------------------------------------------------------------|--------|
| HickoryTech Corporation                                        |   |
| (Dollars in thousands)                                         |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |   |   |   | Additions |   |   |   |   |   |   |   |
|                                                           |   | Balance at |   |   | Charged to |   |   | Charged to |   |   |   |   |   | Balance at |   |
|                                                           |   | Beginning of |   |   | Costs and |   |   | Other |   |   |   |   |   | End of |   |
| Description                                                    |   | Period |   |   | Expenses |   |   | Accounts |   |   | Deductions |   |   | Period |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Year ended December 31, 2008                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Allowance for doubtful accounts        |   | $ | 1,184 |   |   | $ | 286 |   |   | $ | - |   |   | $ | (565 | ) |   | $ | 905 |   |
|     Inventory valuation reserve            |   |   | 398 |   |   |   | 184 |   |   |   | - |   |   |   | (333 | ) |   |   | 249 |   |
|     Deferred tax asset valuation allowance |   |   | 1,550 |   |   |   | 137 |   |   |   | - |   |   |   | - |   |   |   | 1,687 |   |
| Total                                                          |   | $ | 3,132 |   |   | $ | 607 |   |   | $ | - |   |   | $ | (898 | ) |   | $ | 2,841 |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Year ended December 31, 2009                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Allowance for doubtful accounts        |   | $ | 905 |   |   | $ | 128 |   |   | $ | - |   |   | $ | (390 | ) |   | $ | 643 |   |
|     Inventory valuation reserve            |   |   | 249 |   |   |   | 110 |   |   |   | - |   |   |   | (104 | ) |   |   | 255 |   |
|     Deferred tax asset valuation allowance |   |   | 1,687 |   |   |   | 8 |   |   |   | - |   |   |   | - |   |   |   | 1,695 |   |
| Total                                                          |   | $ | 2,841 |   |   | $ | 246 |   |   | $ | - |   |   | $ | (494 | ) |   | $ | 2,593 |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Year ended December 31, 2010                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Allowance for doubtful accounts        |   | $ | 643 |   |   | $ | 1,010 |   |   | $ | - |   |   | $ | (1,083 | ) |   | $ | 570 |   |
|     Inventory valuation reserve            |   |   | 255 |   |   |   | 171 |   |   |   | - |   |   |   | (121 | ) |   |   | 305 |   |
|     Deferred tax asset valuation allowance |   |   | 1,695 |   |   |   | 29 |   |   |   | - |   |   |   | - |   |   |   | 1,724 |   |
| Total                                                          |   | $ | 2,593 |   |   | $ | 1,210 |   |   | $ | - |   |   | $ | (1,204 | ) |   | $ | 2,599 |   |

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SIGNATURES

| Dated:  March 1, 2011 | HICKORYTECH CORPORATION                                                           |
|---------------------------------|-----------------------------------------------------------------------------------|
|                            | By:    /s/ David A. Christensen                               |
|                            |         David A. Christensen, Secretary        |
|                            |         Senior Vice President, Chief Financial |
|                            |         Officer and Treasurer                  |

| /s/ Dale E. ParkerDale E. Parker, Chair                                                                                                                                               | March 1, 2011  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------|
| /s/ John W. FinkeJohn W. FinkePresident, Chief Executive Officer and Director(principal executive officer)                                                                            | March 1, 2011  |
| /s/ David A. ChristensenDavid A. Christensen, Secretary, Senior Vice President, Chief Financial Officer and Treasurer (principal financial officer and principal accounting officer)  | March 1, 2011  |
| /s/ R. Wynn Kearney, Jr.R. Wynn Kearney, Jr., Director                                                                                                                                | March 1, 2011  |
| /s/ Robert D. AltonRobert D. Alton, Director                                                                                                                                          | March 1, 2011  |
| /s/ Lyle T. BosackerLyle T. Bosacker, Director                                                                                                                                             | March 1, 2011  |

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