CITIZENS COMMUNICATIONS COMPANY


                                    FORM 10-Q


                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)


                     OF THE SECURITIES EXCHANGE ACT OF 1934


                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2005








<PAGE>





                UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2005
                                               ------------------

                                       or

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

              For the transition period from _________to__________

                        Commission file number: 001-11001
                                                ---------

                         CITIZENS COMMUNICATIONS COMPANY
                         -------------------------------
             (Exact name of registrant as specified in its charter)

          Delaware                                06-0619596
-------------------------------           -------------------------------------
(State or other jurisdiction of           (I.R.S. Employer Indentification No.)
incorporation or organization)



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

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

                                       N/A
            --------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                    Yes  X   No
                                        ---     ---

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).

                                    Yes  X   No
                                        ---     ---

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

                                    Yes      No  X
                                        ---     ---

The number of shares outstanding of the registrant's  Common Stock as of October
31, 2005 was 333,897,838.

<PAGE>
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                CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES

                                      Index




                                                                                                        Page No.
                                                                                                        --------
   Part I.  Financial Information (Unaudited)

    Financial Statements

       <S>                                                                                                 <C>
       Consolidated Balance Sheets at September 30, 2005 and December 31, 2004                              2

       Consolidated Statements of Operations for the three months ended September 30, 2005 and 2004         3

       Consolidated Statements of Operations for the nine months ended September 30, 2005 and 2004          4

       Consolidated Statements of Shareholders' Equity for the year ended
       December 31, 2004 and the nine months ended September 30, 2005                                       5

       Consolidated Statements of Comprehensive Income for the three and nine
       months ended September 30, 2005 and 2004                                                             5

       Consolidated Statements of Cash Flows for the nine months ended September 30, 2005 and 2004          6

       Notes to Consolidated Financial Statements                                                           7

     Management's Discussion and Analysis of Financial Condition and Results of Operations                 22

     Quantitative and Qualitative Disclosures about Market Risk                                            33

     Controls and Procedures                                                                               34

   Part II.  Other Information

     Legal Proceedings                                                                                     35

     Unregistered Sales of Equity Securities and Use of Proceeds, Issuer Purchases of Equity Securities    35

     Exhibits                                                                                              35

     Signature                                                                                             37


</TABLE>

                                       1

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<TABLE>
<CAPTION>


                          PART I. FINANCIAL INFORMATION

Item 1.    Financial Statements
           --------------------



                CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                     ($ in thousands, except share amounts)


                                                                                (Unaudited)
                                                                             September 30, 2005  December 31, 2004
                                                                             ------------------  -----------------
ASSETS
Current assets:
<S>                                                                                  <C>                <C>
    Cash and cash equivalents                                                       $  286,609         $  167,463
    Accounts receivable, less allowances of $31,947 and $35,996, respectively          207,925            233,690
    Other current assets                                                                41,701             45,605
    Assets of discontinued operations                                                        -             24,122
                                                                             ------------------  -----------------
      Total current assets                                                             536,235            470,880

Property, plant and equipment, net                                                   3,192,090          3,335,850
Goodwill, net                                                                        1,921,465          1,921,465
Other intangibles, net                                                                 590,327            685,111
Investments                                                                             20,121             23,062
Other assets                                                                           195,179            232,051
                                                                             ------------------  -----------------
          Total assets                                                              $6,455,417         $6,668,419
                                                                             ==================  =================

LIABILITIES AND EQUITY
Current liabilities:
    Long-term debt due within one year                                              $  227,762         $    6,380
    Accounts payable and other current liabilities                                     375,844            410,405
    Liabilities of discontinued operations                                                   -                735
                                                                             ------------------  -----------------
      Total current liabilities                                                        603,606            417,520

Deferred income taxes                                                                  311,836            232,766
Customer advances for construction and contributions in aid of construction             92,389             94,601
Other liabilities                                                                      288,985            294,294
Long-term debt                                                                       4,006,967          4,266,998

Shareholders' equity:
    Common stock, $0.25 par value (600,000,000 authorized shares; 334,637,000
      and 339,633,000 outstanding and 343,956,000 and 339,635,000 issued at
      September 30, 2005 and December 31, 2004, respectively)                           85,989             84,909
    Additional paid-in capital                                                       1,455,795          1,664,627
    Accumulated deficit                                                               (162,125)          (287,719)
    Accumulated other comprehensive loss, net of tax                                  (100,663)           (99,569)
    Treasury stock                                                                    (127,362)                (8)
                                                                             ------------------  -----------------
      Total shareholders' equity                                                     1,151,634          1,362,240
                                                                             ------------------  -----------------
          Total liabilities and equity                                              $6,455,417         $6,668,419
                                                                             ==================  =================

</TABLE>

              The accompanying Notes are an integral part of these
                       Consolidated Financial Statements.

                                       2
<PAGE>
<TABLE>
<CAPTION>


                    PART I. FINANCIAL INFORMATION (Continued)

                CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
                   ($ in thousands, except per-share amounts)
                                   (Unaudited)


                                                                                           2005            2004
                                                                                      ---------------  --------------
<S>                                                                                        <C>             <C>
Revenue                                                                                    $ 537,346       $ 539,188

Operating expenses:
     Cost of services (exclusive of depreciation and amortization)                            51,050          49,655
     Other operating expenses                                                                210,352         202,680
     Management succession and strategic alternatives expenses (see Note 12)                       -          75,858
     Depreciation and amortization                                                           134,327         140,908
                                                                                      ---------------  --------------
Total operating expenses                                                                     395,729         469,101
                                                                                      ---------------  --------------

Operating income                                                                             141,617          70,087

Investment and other income (loss)                                                             6,768         (13,654)
Interest expense                                                                              85,228          90,863
                                                                                      ---------------  --------------

     Income (loss) from continuing operations before income taxes                             63,157         (34,430)
Income tax expense (benefit)                                                                  24,781         (21,934)
                                                                                      ---------------  --------------

     Income (loss) from continuing operations                                                 38,376         (12,496)

Discontinued operations (see Note 5):
     Income from operations of discontinued conferencing business                                  -           1,869
     Income tax expense                                                                            -             663
                                                                                      ---------------  --------------

     Income from discontinued operations                                                           -           1,206
                                                                                      ---------------  --------------

Net income (loss) available to common shareholders                                         $  38,376       $ (11,290)
                                                                                      ===============  ==============

Basic income (loss) per common share:
     Income (loss) from continuing operations                                              $    0.11       $   (0.04)
     Income from discontinued operations                                                           -               -
                                                                                      ---------------  --------------
     Net income (loss) available to common shareholders                                    $    0.11       $   (0.04)
                                                                                      ===============  ==============

Diluted income (loss) per common share:
     Income (loss) from continuing operations                                              $    0.11       $   (0.04)
     Income from discontinued operations                                                           -               -
                                                                                      ---------------  --------------
     Net income (loss) available to common shareholders                                    $    0.11       $   (0.04)
                                                                                      ===============  ==============

</TABLE>

              The accompanying Notes are an integral part of these
                       Consolidated Financial Statements.

                                       3
<PAGE>
<TABLE>
<CAPTION>


                    PART I. FINANCIAL INFORMATION (Continued)

                CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
                   ($ in thousands, except per-share amounts)
                                   (Unaudited)


                                                                                           2005            2004
                                                                                      ---------------  --------------
<S>                                                                                       <C>             <C>
Revenue                                                                                   $1,606,367      $1,629,295
                                                                                                   -
Operating expenses:
     Cost of services (exclusive of depreciation and amortization)                           145,766         151,915
     Other operating expenses                                                                614,985         624,858
     Management succession and strategic alternatives expenses (see Note 12)                       -          90,632
     Depreciation and amortization                                                           411,990         428,191
                                                                                      ---------------  --------------
Total operating expenses                                                                   1,172,741       1,295,596
                                                                                      ---------------  --------------

Operating income                                                                             433,626         333,699

Investment and other income                                                                   12,749          16,849
Interest expense                                                                             253,096         286,296
                                                                                      ---------------  --------------

     Income from continuing operations before income taxes                                   193,279          64,252
Income tax expense                                                                            69,892          12,869
                                                                                      ---------------  --------------

     Income from continuing operations                                                       123,387          51,383

Discontinued operations (see Note 5):
     Income from operations of discontinued conferencing business
        (including gain on disposal of $14,061)                                               15,550           6,241
     Income tax expense                                                                       13,343           2,254
                                                                                      ---------------  --------------

     Income from discontinued operations                                                       2,207           3,987
                                                                                      ---------------  --------------

Net income available to common shareholders                                               $  125,594      $   55,370
                                                                                      ===============  ==============

Basic income per common share:
     Income from continuing operations                                                    $     0.36      $     0.18
     Income from discontinued operations                                                        0.01            0.01
                                                                                      ---------------  --------------
     Net income available to common shareholders                                          $     0.37      $     0.19
                                                                                      ===============  ==============

Diluted income per common share:
     Income from continuing operations                                                    $     0.36      $     0.17
     Income from discontinued operations                                                        0.01            0.01
                                                                                      ---------------  --------------
     Net income available to common shareholders                                          $     0.37      $     0.18
                                                                                      ===============  ==============

</TABLE>

              The accompanying Notes are an integral part of these
                       Consolidated Financial Statements.

                                       4
<PAGE>
<TABLE>
<CAPTION>


                    PART I. FINANCIAL INFORMATION (Continued)

                CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
 FOR THE YEAR ENDED DECEMBER 31, 2004 AND THE NINE MONTHS ENDED SEPTEMBER 30, 2005
                                ($ in thousands)
                                   (Unaudited)

                                                                               Accumulated
                                                      Additional                  Other                            Total
                                     Common Stock      Paid-In    Accumulated  Comprehensive  Treasury Stock     Shareholders'
                                   ------------------                                       --------------------
                                   Shares    Amount    Capital      Deficit       Loss      Shares     Amount      Equity
                                   -------- --------- ----------- ------------ ------------ -------- ----------- -----------

<S>             <C>                <C>       <C>      <C>          <C>           <C>        <C>      <C>         <C>
Balance January 1, 2004            295,434   $73,858  $1,953,317   $ (365,181)   $ (71,676) (10,725) $ (175,135) $1,415,183
   Stock plans                       4,821     1,206      14,236            -            -    6,407     106,823     122,265
   Conversion of EPPICS             10,897     2,724     133,621            -            -      725      11,646     147,991
   Conversion of Equity Units       28,483     7,121     396,221            -            -    3,591      56,658     460,000
   Dividends on common stock of
     $2.50  per share                    -         -    (832,768)           -            -        -           -    (832,768)
   Net income                            -         -           -       72,150            -        -           -      72,150
   Tax benefit on equity forward
     contract                            -         -           -        5,312            -        -           -       5,312
   Other comprehensive loss, net
     of tax and reclassifications
     adjustment                          -         -           -            -      (27,893)       -           -     (27,893)
                                   -------- --------- ----------- ------------ ------------ -------- ----------- -----------
Balance December 31, 2004          339,635    84,909   1,664,627     (287,719)     (99,569)      (2)         (8)  1,362,240
   Stock plans                       2,097       524      21,673            -            -    2,532      33,768      55,965
   Conversion of EPPICS              2,224       556      24,822            -            -       57         776      26,154
   Dividends on common stock of
     $0.75  per share                    -         -    (255,327)           -            -        -           -    (255,327)
   Shares repurchased                    -         -           -            -            -  (11,906)   (161,898)   (161,898)
   Net income                            -         -           -      125,594            -        -           -     125,594
   Other comprehensive loss, net
     of tax and reclassifications
     adjustment                          -         -           -            -       (1,094)       -           -      (1,094)
                                   -------- --------- ----------- ------------ ------------ -------- ----------- -----------
Balance September 30, 2005         343,956   $85,989  $1,455,795   $ (162,125)   $(100,663)  (9,319) $ (127,362) $1,151,634
                                   ======== ========= =========== ============ ============ ======== =========== ===========

</TABLE>


                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
         FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
                                ($ in thousands)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                           For the three months ended September 30,        For the nine months ended September 30,
                                          --------------------------------------------  --------------------------------------------
                                                  2005                   2004                   2005                   2004
                                          ---------------------  ---------------------  ---------------------  ---------------------

<S>                                                   <C>                   <C>                     <C>                     <C>
Net income (loss)                                     $ 38,376              $ (11,290)             $ 125,594               $ 55,370
Other comprehensive loss, net of tax
  and reclassifications adjustments*                       (19)               (16,652)                (1,094)               (17,692)
                                          ---------------------  ---------------------  ---------------------  ---------------------
  Total comprehensive income (loss)                   $ 38,357              $ (27,942)             $ 124,500               $ 37,678
                                          =====================  =====================  =====================  =====================



     * Consists of unrealized  holding  (losses)/gains of marketable  securities
and realized gains taken to income as a result of the sale of securities.

              The accompanying Notes are an integral part of these
                       Consolidated Financial Statements.

</TABLE>

                                       5
<PAGE>


                    PART I. FINANCIAL INFORMATION (Continued)

                CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
                                ($ in thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                               2005              2004
                                                                          ----------------  ---------------

<S>                                                                          <C>               <C>
Income from continuing operations                                            $ 123,387         $   51,383
Adjustments to reconcile income from continuing operations
   to net cash provided by operating activities:
       Depreciation and amortization                                           411,990            428,191
       Gain on expiration/settlement of customer advances                         (492)           (25,345)
       Stock based compensation expense                                          6,433             44,212
       Loss on debt exchange                                                     3,175                  -
       Loss on extinguishment of debt                                                -             20,368
       Investment gain                                                            (493)                 -
       (Gain)/loss on sale of assets                                                 -             (9,365)
       Other non-cash adjustments                                                7,848             14,709
       Deferred income taxes                                                    56,231             15,123
       Change in accounts receivable                                            25,765             18,354
       Change in accounts payable and other liabilities                        (28,506)           (25,808)
       Change in other current assets                                             (993)             5,076
                                                                          ----------------  ---------------
Net cash provided by continuing operating activities                           604,345            536,898

Cash flows from (used by) investing activities:
       Proceeds from sale of assets, net of selling expenses                    24,195             59,045
       Securities sold                                                           1,112                  -
       Capital expenditures                                                   (175,460)          (200,180)
       Other assets (purchased) distributions received, net                       (803)           (26,715)
                                                                          ----------------  ---------------
Net cash used by investing activities                                         (150,956)          (167,850)

Cash flows from (used by) financing activities:
       Repayment of customer advances for
         construction and contributions in aid of construction                  (1,720)            (2,092)
       Long-term debt payments                                                  (6,173)          (513,795)
       Premiums paid to retire debt                                                  -            (20,368)
       Issuance of common stock                                                 46,739            530,197
       Dividends paid                                                         (255,327)          (747,937)
       Shares repurchased                                                     (161,898)                 -
                                                                          ----------------  ---------------
Net cash used by financing activities                                         (378,379)          (753,995)

Cash provided by discontinued operations
       Proceeds from sale of discontinued operations                            43,565                  -
       Net cash provided by discontinued operations                                571                303
                                                                          ----------------  ---------------
                                                                                44,136                303

Increase (decrease) in cash and cash equivalents                               119,146           (384,644)
Cash and cash equivalents at January 1,                                        167,463            583,671
                                                                          ----------------  ---------------

Cash and cash equivalents at September 30,                                   $ 286,609         $  199,027
                                                                          ================  ===============

Cash paid during the period for:
       Interest                                                              $ 244,395         $  264,174
       Income taxes                                                          $   2,235         $    2,196

Non-cash investing and financing activities:
       Change in fair value of interest rate swaps                           $  (9,298)        $      973
       Conversion of EPPICS                                                  $  26,154         $  111,378
       Debt-for-debt exchange                                                $   2,171         $        -
       Investment writedowns                                                 $       -         $    5,286

</TABLE>


              The accompanying Notes are an integral part of these
                       Consolidated Financial Statements.

                                       6
<PAGE>
                    PART I. FINANCIAL INFORMATION (Continued)

                CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES

(1) Summary of Significant Accounting Policies:
    -------------------------------------------

     (a)  Basis of Presentation and Use of Estimates:
          -------------------------------------------
          Citizens  Communications  Company and its subsidiaries are referred to
          as "we," "us," "our" or the  "Company" in this report.  Our  unaudited
          consolidated  financial  statements  have been  prepared in accordance
          with accounting  principles generally accepted in the United States of
          America (GAAP) and should be read in conjunction with the consolidated
          financial  statements  and notes included in our 2004 Annual Report on
          Form 10-K. Certain  reclassifications  of balances previously reported
          have been made to conform to the current presentation. All significant
          intercompany   balances  and  transactions  have  been  eliminated  in
          consolidation.   These  unaudited  consolidated  financial  statements
          include all adjustments,  which consist of normal  recurring  accruals
          necessary to present fairly the results for the interim periods shown.

          The  preparation  of  financial  statements  in  conformity  with GAAP
          requires management to make estimates and assumptions which affect the
          amounts of assets, liabilities,  revenue and expenses we have reported
          and our disclosure of contingent assets and liabilities at the date of
          the  financial  statements.  Actual  results  may  differ  from  those
          estimates.  We believe that our critical  estimates are accounting for
          allowance for doubtful  accounts,  impairment  of  long-lived  assets,
          intangible  assets,  depreciation and  amortization,  employee benefit
          plans,  income taxes,  contingencies,  and pension and  postretirement
          benefits expenses among others.

          Certain information and footnote disclosures have been excluded and/or
          condensed  pursuant to Securities  and Exchange  Commission  rules and
          regulations.  The results of the interim  periods are not  necessarily
          indicative of the results for the full year.

     (b)  Cash Equivalents:
          -----------------
          We consider all highly liquid investments with an original maturity of
          three months or less to be cash equivalents.

     (c)  Revenue Recognition:
          --------------------
          Incumbent  Local Exchange  Carrier (ILEC) - Revenue is recognized when
          services are provided or when  products  are  delivered to  customers.
          Revenue that is billed in advance includes:  monthly recurring network
          access services,  special access services and monthly  recurring local
          line  charges.  The  unearned  portion of this  revenue  is  initially
          deferred  as a  component  of other  liabilities  on our  consolidated
          balance  sheet and  recognized  in revenue  over the  period  that the
          services are  provided.  Revenue  that is billed in arrears  includes:
          non-recurring  network  access  services,  switched  access  services,
          non-recurring  local services and long-distance  services.  The earned
          but unbilled  portion of this revenue is  recognized in revenue in our
          statement  of  operations  and accrued in accounts  receivable  in the
          period that the services are provided.  Excise taxes are recognized as
          a liability  when billed.  Installation  fees and their related direct
          and incremental costs are initially deferred and recognized as revenue
          and  expense  over the  average  term of a customer  relationship.  We
          recognize as current period expense the portion of installation  costs
          that exceeds installation fee revenue.

          Electric  Lightwave,  LLC  (ELI) -  Revenue  is  recognized  when  the
          services are provided. Revenue from long-term prepaid network services
          agreements,  including  Indefeasible Rights to Use (IRU), are deferred
          and recognized on a straight-line  basis over the terms of the related
          agreements. Installation fees and their related direct and incremental
          costs are  initially  deferred and  recognized  as revenue and expense
          over the average  term of a customer  relationship.  We  recognize  as
          current period expense the portion of installation  costs that exceeds
          installation fee revenue.

     (d)  Property, Plant and Equipment:
          ------------------------------
          Property,  plant and  equipment  are stated at  original  cost or fair
          market  value  for  our  acquired  properties,  including  capitalized
          interest. Maintenance and repairs are charged to operating expenses as
          incurred.  The  gross  book  value  of  routine  property,  plant  and
          equipment retired is charged against accumulated depreciation.

     (e)  Goodwill and Other Intangibles:
          -------------------------------
          Intangibles represent the excess of purchase price over the fair value
          of identifiable  tangible  assets  acquired.  We undertake  studies to
          determine  the fair  values of assets  and  liabilities  acquired  and
          allocate   purchase  prices  to  assets  and  liabilities,   including

                                       7
<PAGE>
          intangibles.  On January 1, 2002,  we adopted  Statement  of Financial
          Accounting  Standards  (SFAS) No. 142,  "Goodwill and Other Intangible
          Assets,"  which  applies to all goodwill and other  intangible  assets
          recognized  in the  statement  of  financial  position  at that  date,
          regardless  of  when  the  assets  were  initially  recognized.   This
          statement  requires  that  goodwill and other  intangibles  (primarily
          trade name) with  indefinite  useful  lives no longer be  amortized to
          earnings, but instead be tested for impairment,  at least annually. In
          performing  this test, the Company first compares the carrying  amount
          of its  reporting  units  to  their  respective  fair  values.  If the
          carrying  amount of any  reporting  unit  exceeds its fair value,  the
          Company is  required  to perform  step two of the  impairment  test by
          comparing the implied fair value of the reporting unit's goodwill with
          its  carrying   amount.   The   amortization  of  goodwill  and  other
          intangibles  with indefinite  useful lives ceased upon adoption of the
          statement on January 1, 2002. We annually  (during the fourth quarter)
          examine the carrying value of our goodwill and trade name to determine
          whether there are any impairment losses.

          SFAS No. 142 also requires that intangible assets (primarily  customer
          base) with estimated useful lives be amortized over those lives and be
          reviewed for impairment in accordance  with SFAS No. 144,  "Accounting
          for Impairment or Disposal of Long-Lived  Assets" to determine whether
          any changes to these lives are required.  We periodically reassess the
          useful life of our intangible  assets with  estimated  useful lives to
          determine whether any changes to those lives are required.

     (f)  Impairment of Long-Lived Assets and  Long-Lived  Assets to Be Disposed
          ----------------------------------------------------------------------
          of:
          ---
          We review  long-lived assets to be held and used and long-lived assets
          to be disposed of, including  intangible  assets with estimated useful
          lives,  for  impairment  whenever  events or changes in  circumstances
          indicate  that  the  carrying   amount  of  such  assets  may  not  be
          recoverable.  Recoverability of assets to be held and used is measured
          by  comparing  the  carrying   amount  of  the  asset  to  the  future
          undiscounted  net cash flows  expected to be  generated  by the asset.
          Recoverability  of assets held for sale is measured by  comparing  the
          carrying amount of the assets to their estimated fair market value. If
          any assets are  considered to be impaired,  the impairment is measured
          by the amount by which the carrying  amount of the assets  exceeds the
          estimated fair value.

     (g)  Derivative Instruments and Hedging Activities:
          ----------------------------------------------
          We account  for  derivative  instruments  and  hedging  activities  in
          accordance  with  SFAS  No.  149,   "Amendment  of  Statement  133  on
          Accounting  for  Derivative  Instruments  and  Hedging."  SFAS No. 149
          requires that all derivative instruments, such as interest rate swaps,
          be recognized in the financial  statements  and measured at fair value
          regardless of the purpose or intent of holding them.

          We have  interest rate swap  arrangements  related to a portion of our
          fixed rate debt. These hedge strategies satisfy the fair value hedging
          requirements  of SFAS No.  149.  As a  result,  the fair  value of the
          hedges is carried on the balance sheet in other assets and the related
          underlying  liabilities  are also  adjusted  to fair value by the same
          amount.

          During the third  quarter of 2005 we entered  into a series of forward
          rate  agreements.  These  agreements  protect  us from a rapid rise in
          short-term  interest rates,  which would negatively impact some of our
          interest rate swap arrangements. These forward rate agreements did not
          qualify  for  hedge  accounting.  As a result,  the fair  value of the
          agreements is recorded on our balance  sheet in other current  assets.
          Changes in fair value are recognized in current earnings.

     (h)  Stock Plans:
          ------------
          We have various employee stock-based  compensation plans. Awards under
          these plans are granted to eligible  officers,  management  employees,
          non-management  employees and  non-employee  directors.  Awards may be
          made in the  form of  incentive  stock  options,  non-qualified  stock
          options,  stock appreciation  rights,  restricted stock or other stock
          based  awards.  As permitted  by current  accounting  rules,  we apply
          Accounting   Principles  Board  Opinions  (APB)  No.  25  and  related
          interpretations  in accounting for the employee stock plans  resulting
          in the use of the intrinsic value to value the stock.

          SFAS No. 123,  "Accounting for Stock-Based  Compensation" and SFAS No.
          148,  "Accounting  for  Stock-Based   Compensation  -  Transition  and
          Disclosure,  an amendment of SFAS No. 123," established accounting and
          disclosure  requirements using a fair-value-based method of accounting
          for stock-based employee  compensation plans. As permitted by existing
          accounting standards, the Company has elected to continue to apply the
          intrinsic-valued-based  method of accounting  described above, and has
          adopted only the disclosure requirements of SFAS No. 123, as amended.

                                       8
<PAGE>

          In  December  2004,  the FASB  issued  SFAS No.  123  (revised  2004),
          "Share-Based  Payment,"  ("SFAS No.  123R").  SFAS 123R  requires that
          stock-based employee compensation be recorded as a charge to earnings.
          In April 2005,  the Securities  and Exchange  Commission  required the
          adoption of SFAS No. 123R for annual periods  beginning after June 15,
          2005. Accordingly,  we will adopt SFAS 123R commencing January 1, 2006
          and expect to recognize  approximately  $2,800,000  of expense for the
          year ended December 31, 2006.

          We provide pro forma net income (loss) and pro forma net income (loss)
          per common share  disclosures for employee and  non-employee  director
          stock option grants based on the fair value of the options at the date
          of grant. For purposes of presenting pro forma  information,  the fair
          value  of  options   granted  is  computed  using  the  Black  Scholes
          option-pricing model.

          Had we  determined  compensation  cost  based on the fair value at the
          grant date for the Management  Equity  Incentive  Plan (MEIP),  Equity
          Incentive Plan (EIP) and Directors'  Deferred Fee Equity Plan, our pro
          forma net income and net income per common share  available for common
          shareholders would have been as follows:
<TABLE>
<CAPTION>


                                                  Three Months Ended September 30,       Nine Months Ended September 30,
                                                  --------------------------------       -------------------------------
                                                       2005                 2004              2005                 2004
                                                  ------------         ------------      -------------        -----------

        ($ in thousands)

        Net income (loss) available
        for common shareholders
<S>                                                  <C>                  <C>             <C>                  <C>
                                      As reported    $  38,376           $(11,290)        $ 125,594            $ 55,370

        Add: Stock-based employee
        compensation expense
        included in reported net
        income, net of related tax
        effects                                          1,283             23,681             4,021              27,509


        Deduct: Total stock-based
        employee compensation
        expense determined under
        fair value based method for
        all awards, net of related
        tax effects                                     (2,109)           (27,430)           (6,640)            (35,126)
                                                     ---------           --------         ---------            --------

                                      Pro forma      $  37,550           $(15,039)        $ 122,975            $ 47,753
                                                     =========           ========         =========            ========

        Net income (loss) per
        common share available for
        common shareholders           As reported:
                                         Basic       $    0.11           $  (0.04)        $    0.37            $   0.19

                                         Diluted     $    0.11           $  (0.04)        $    0.37            $   0.18


                                      Pro forma:
                                         Basic       $    0.11           $  (0.05)        $    0.36            $   0.16

                                         Diluted     $    0.11           $  (0.05)        $    0.36            $   0.16

</TABLE>

     (i)  Net Income (Loss) Per Common Share Available for Common Shareholders:
          ---------------------------------------------------------------------
          Basic  net  income  (loss)  per  common  share is  computed  using the
          weighted average number of common shares outstanding during the period
          being  reported  on.  Except  when the effect  would be  antidilutive,
          diluted  net income  (loss) per common  share  reflects  the  dilutive
          effect of the assumed  exercise of stock  options  using the  treasury
          stock method at the beginning of the period being  reported on as well
          as common shares that would result from the  conversion of convertible
          debt (EPPICS).  In addition,  the related interest on the debt (net of
          tax) is added  back to  income  since it would not be paid if the debt
          was converted to common stock.

                                       9
<PAGE>

(2)  Recent Accounting Literature and Changes in Accounting Principles:
     ------------------------------------------------------------------

     Variable Interest Entities
     --------------------------
     In  December  2003,  the FASB issued  FASB  Interpretation  No. 46 (revised
     December 2003) ("FIN 46R"),  "Consolidation of Variable Interest Entities,"
     which addresses how a business  enterprise should evaluate whether it has a
     controlling financial interest in an entity through means other than voting
     rights and accordingly should consolidate the entity. FIN 46R replaces FASB
     Interpretation No. 46, "Consolidation of Variable Interest Entities," which
     was issued in January  2003.  We are  required to apply FIN 46R to variable
     interests in variable  interest entities or VIEs created after December 31,
     2003.  For any VIEs  that  must be  consolidated  under  FIN 46R that  were
     created before January 1, 2004, the assets,  liabilities and noncontrolling
     interests of the VIE initially would be measured at their carrying  amounts
     with any  difference  between the net amount added to the balance sheet and
     any  previously  recognized  interest  being  recognized as the  cumulative
     effect of an accounting  change. If determining the carrying amounts is not
     practicable,  fair value at the date FIN 46R first  applies  may be used to
     measure the assets,  liabilities and noncontrolling interest of the VIE. We
     reviewed all of our investments  and determined that the EPPICS,  issued by
     our consolidated wholly-owned subsidiary,  Citizens Utilities Trust and the
     related Citizens  Utilities  Capital L.P., were our only VIEs. The adoption
     of FIN 46R on  January  1,  2004 did not have any  material  impact  on our
     financial position or results of operations (see Note 14).

     Exchanges of Productive Assets
     ------------------------------
     In December 2004,  the FASB issued SFAS No. 153,  "Exchanges of Nonmonetary
     Assets," an  amendment  of APB Opinion No. 29. SFAS No. 153  addresses  the
     measurement of exchanges of certain non-monetary assets (except for certain
     exchanges of products or property  held for sale in the ordinary  course of
     business).  The Statement requires that non-monetary exchanges be accounted
     for at the fair value of the assets  exchanged,  with gains or losses being
     recognized,  if the fair value is determinable within reasonable limits and
     the  transaction  has commercial  substance.  SFAS No. 153 is effective for
     nonmonetary  exchanges occurring in fiscal periods beginning after June 15,
     2005.  The Company does not expect the adoption of the new standard to have
     a  material  impact  on  the  Company's  financial  position,   results  of
     operations and cash flows.

     Accounting for Conditional Asset Retirement Obligations
     -------------------------------------------------------
     In March 2005, the FASB issued FIN 47,  "Accounting for  Conditional  Asset
     Retirement  Obligations,"  an  interpretation  of  FASB  No.  143.  FIN  47
     clarifies that the term conditional asset retirement  obligation as used in
     FASB No. 143 refers to a legal  obligation  to perform an asset  retirement
     activity in which the timing or method of settlement  are  conditional on a
     future  event that may or may not be within the control of the entity.  FIN
     47 also  clarifies  when an entity  would have  sufficient  information  to
     reasonably estimate the fair value of an asset retirement  obligation.  FIN
     47 is effective for the year ended December 31, 2005. Accordingly,  we will
     adopt FIN 47 during the fourth quarter of 2005. The Company does not expect
     the  implementation  of FIN 47 to have a material  effect on the  Company's
     financial position, results of operations or cash flows.

     Accounting Changes and Error Corrections
     ----------------------------------------
     In May 2005,  the FASB issued SFAS No. 154,  "Accounting  Changes and Error
     Corrections," a replacement of APB Opinion No. 20 and FASB Statement No. 3.
     SFAS No. 154 changes the  accounting  for,  and  reporting  of, a change in
     accounting principle.  SFAS No. 154 requires  retrospective  application to
     prior  period's  financial  statements  of voluntary  changes in accounting
     principle,  and  changes  required  by new  accounting  standards  when the
     standard  does not include  specific  transition  provisions,  unless it is
     impracticable  to do so. SFAS No. 154 is effective for  accounting  changes
     and corrections of errors made in fiscal years beginning after December 15,
     2005.

     Partnerships
     ------------
     In June 2005, the FASB issued EITF No. 04-5, "Determining Whether a General
     Partner, or the General Partners as a Group, Controls a Limited Partnership
     or Similar  Entity When the Limited  Partners Have Certain  Rights,"  which
     provides  new  guidance  on how general  partners in a limited  partnership
     should determine whether they control a limited partnership.  EITF No. 04-5
     is effective for fiscal  periods  beginning  after  December 15, 2005.  The
     Company  does not expect the  adoption  of EITF No. 04-5 to have a material
     impact on the Company's financial  position,  results of operations or cash
     flows.



                                       10
<PAGE>


(3)  Accounts Receivable:
     --------------------
     The  components  of accounts  receivable at September 30, 2005 and December
     31, 2004 are as follows:
<TABLE>
<CAPTION>

     ($ in thousands)                              September 30, 2005     December 31, 2004
                                                 ---------------------  --------------------

<S>                                                        <C>                   <C>
     Customers                                             $ 209,756             $ 227,385
     Other                                                    30,116                42,301
     Less:  Allowance for doubtful accounts                  (31,947)              (35,996)
                                                 ---------------------  --------------------
       Accounts receivable, net                            $ 207,925             $ 233,690
                                                 =====================  ====================
</TABLE>

     The Company  maintains an allowance  for  estimated  bad debts based on its
     estimate of collectibility of its accounts  receivables.  Bad debt expense,
     which is recorded as a reduction of revenue,  was  $990,000 and  $7,196,000
     for the three months ended September 30, 2005 and 2004,  respectively,  and
     $9,133,000 and $13,665,000 for the nine months ended September 30, 2005 and
     2004, respectively. In addition, additional reserves are provided for known
     or impending telecommunications bankruptcies, disputes or other significant
     collection issues.

(4)  Property, Plant and Equipment, Net:
     -----------------------------------
     Property,  plant and  equipment at September 30, 2005 and December 31, 2004
     is as follows:
<TABLE>
<CAPTION>

     ($ in thousands)                         September 30, 2005      December 31, 2004
                                            ---------------------   ---------------------

<S>                                                 <C>                     <C>
     Property, plant and equipment                  $ 6,579,972             $ 6,428,364
     Less: accumulated depreciation                  (3,387,882)             (3,092,514)
                                            ---------------------   ---------------------
       Property, plant and equipment, net           $ 3,192,090             $ 3,335,850
                                            =====================   =====================
</TABLE>

     Depreciation  expense is principally  based on the composite  group method.
     Depreciation expense was $102,732,000 and $109,278,000 for the three months
     ended  September  30, 2005 and 2004,  respectively,  and  $317,206,000  and
     $333,301,000  for the nine  months  ended  September  30,  2005  and  2004,
     respectively.

(5)  Discontinued Operations and Net Assets Held for Sale:
     -----------------------------------------------------

     Conference Call USA
     -------------------
     In  February  2005,  we  entered  into  a  definitive   agreement  to  sell
     Conference-Call  USA, LLC (CCUSA), our conferencing  services business.  On
     March 15, 2005, we completed the sale for  $43,565,000 in cash,  subject to
     adjustments under the terms of the agreement.  The pre-tax gain on the sale
     of CCUSA was $14,061,000.  Our after-tax gain was approximately $1,167,000.
     The book income taxes  recorded upon sale are primarily  attributable  to a
     low tax basis in the assets sold.

     In  accordance  with SFAS No. 144, any  component  of our business  that we
     dispose of or classify as held for sale that has  operations and cash flows
     clearly  distinguishable  from  operations,  and  for  financial  reporting
     purposes,  and that will be eliminated from the ongoing operations,  should
     be classified as discontinued operations.  Accordingly,  we have classified
     the  results  of  operations  of CCUSA as  discontinued  operations  in our
     consolidated statement of operations and have restated prior periods.

     CCUSA had revenues of  approximately  $24,600,000  and operating  income of
     approximately  $8,000,000 for the year ended December 31, 2004. At December
     31, 2004, CCUSA's net assets totaled approximately $23,400,000. The company
     had no outstanding debt specifically identified with CCUSA and therefore no
     interest expense was allocated to discontinued operations.  In addition, we
     ceased to record depreciation expense effective February 16, 2005.


                                       11
<PAGE>

     Summarized financial information for CCUSA (discontinued operations) is set
     forth below:


                                                    December 31,
     ($ in thousands)                                  2004
                                                   ----------------

     Current assets                                     $ 2,819
     Net property, plant and equipment                    2,450
     Goodwill                                            18,853
                                                   ----------------
    Total assets of discontinued operations             $24,122
                                                   ================

     Current liabilities                                $   735
                                                   ----------------
     Total liabilities of discontinued operations       $   735
                                                   ================

<TABLE>
<CAPTION>

                                            For the three months ended September 30,       For the nine months ended September 30,
                                           --------------------------------------------   ------------------------------------------
     ($ in thousands)                             2005                     2004                   2005                  2004
                                           --------------------   ---------------------   --------------------   -------------------

<S>                                               <C>                    <C>                    <C>                   <C>
     Revenue                                      $ -                    $ 6,205                $ 4,607               $ 18,657
     Operating income                               -                      1,869                  1,489                  6,241
     Income taxes                                   -                        663                    449                  2,254
     Net income                                     -                      1,206                  1,040                  3,987
     Gain on disposal of CCUSA, net of tax          -                         -                   1,167                      -

</TABLE>


     Public Utilities
     ----------------
     On  April  1,  2004,  we  completed  the  sale  of  our  Vermont   electric
     distribution  operations  for  approximately  $13,992,000  in cash,  net of
     selling expenses.  With that  transaction,  we completed the divestiture of
     our public utilities services business pursuant to plans announced in 1999.
     Losses  on the  sales  of  our  Vermont  properties  were  included  in the
     impairment charges recorded in 2003.



                                       12
<PAGE>

(6)  Other Intangibles:
     ------------------
     Other  intangibles  at  September  30,  2005 and  December  31, 2004 are as
     follows:
<TABLE>
<CAPTION>

     ($ in thousands)                                  September 30, 2005     December 31, 2004
                                                      ---------------------  ---------------------

<S>                                   <C>   <C>               <C>                    <C>
     Customer base - amortizable over 84 to 96 months        $  994,605             $  994,605
     Trade name - non-amortizable                               122,058                122,058
                                                       ---------------------  ---------------------
       Other intangibles                                      1,116,663              1,116,663
     Accumulated amortization                                  (526,336)              (431,552)
                                                       ---------------------  ---------------------
       Total other intangibles, net                          $  590,327             $  685,111
                                                       =====================  =====================
</TABLE>

     Amortization  expense was  $31,595,000 and $31,630,000 for the three months
     ended  September  30,  2005 and  2004,  respectively  and  $94,784,000  and
     $94,890,000  for the  nine  months  ended  September  30,  2005  and  2004.
     Amortization  expense,  based on our estimate of useful lives, is estimated
     to be $126,380,000  per year through 2008 and $57,533,000 in 2009, at which
     point these assets will have been fully amortized.

(7)  Long-Term Debt:
     ---------------
     The activity in our long-term  debt from December 31, 2004 to September 30,
     2005 is as follows:
<TABLE>
<CAPTION>

                                                          Nine Months Ended September 30, 2005
                                                    -------------------------------------------------
                                                                Interest                               Interest Rate* at
                                    December 31,                  Rate                  September 30,    September 30,
($ in thousands)                       2004         Payments      Swap        Other         2005             2005
----------------                       -----        --------     -----        -----         -----            ----

Rural Utilities Service Loan
<S>                                 <C>            <C>          <C>         <C>          <C>                 <C>
Contracts                           $   29,108     $  (6,092)   $     -     $     -      $    23,016         6.075%

Senior Unsecured Debt                4,131,803          -        (9,298)       2,171       4,124,676         8.043%

EPPICS** (reclassified as a
  result of adopting FIN 46R)           63,765          -            -       (26,154)         37,611         5.000%

ELI Capital Leases                       4,421           (81)        -           -             4,340        10.364%
Industrial Development Revenue
 Bonds                                  58,140          -            -           -            58,140         5.559%
                                    ----------     ---------   --------    ---------     -----------
TOTAL LONG TERM DEBT                $4,287,237     $  (6,173)   $(9,298)    $(23,983)    $ 4,247,783
                                    ----------     =========   ========    =========     -----------

Less:   Debt Discount                  (13,859)                                              (13,054)
Less:   Current Portion                 (6,380)                                             (227,762)
                                    ----------                                           -----------
                                    $4,266,998                                           $ 4,006,967
                                    ==========                                           ===========

* Interest rate includes  amortization of debt issuance costs,  debt premiums or
discounts. The interest rate for Rural Utilities Service Loan Contracts,  Senior
Unsecured  Debt, and Industrial  Development  Revenue Bonds represent a weighted
average of multiple issuances.

** In  accordance  with FIN 46R,  the Trust  holding  the EPPICS and the related
Citizens Utilities Capital L.P. are now deconsolidated (see Note 14).

     Total future minimum cash payment commitments under ELI's long-term capital
     leases including interest amounted to $9,478,000 as of September 30, 2005.

     As of September 30, 2005, we have available  lines of credit with financial
     institutions in the aggregate amount of $250,000,000.  Associated  facility
     fees vary,  depending on our debt leverage ratio,  and are 0.375% per annum
     as of September 30, 2005. The  expiration  date for the facility is October
     29, 2009. During the term of the facility we may borrow, repay and reborrow
     funds. The credit facility is available for general corporate  purposes but
     may not be used to fund  dividend  payments.  There  have  never  been  any
     borrowings under the facility.


</TABLE>


                                       13
<PAGE>
     For the nine months  ended  September  30,  2005,  we retired an  aggregate
     principal  amount of $32,327,000 of debt,  including  $26,154,000 of EPPICS
     that were converted to our common stock. During the second quarter of 2005,
     we entered into two  debt-for-debt  exchanges of our debt securities.  As a
     result,  $50,000,000  of our  7.625%  Notes  due 2008  were  exchanged  for
     approximately  $52,171,000 of our 9.00% Notes due 2031. The 9.00% Notes are
     callable  on the same  general  terms and  conditions  as the 7.625%  Notes
     exchanged. No cash was exchanged in these transactions,  however a non-cash
     pre-tax loss of approximately  $3,175,000 was recognized in accordance with
     EITF No. 96-19, "Debtor's Accounting for a Modification or Exchange of Debt
     Instruments" which is included in investment and other income.


(8)  Net Income (Loss) Per Common Share:
     -----------------------------------
     The  reconciliation  of the income (loss) per common share  calculation for
     the three and nine months ended September 30, 2005 and 2004,  respectively,
     is as follows:

<TABLE>
<CAPTION>

($ in thousands, except per-share amounts)        For the three months ended September 30,   For the nine months ended September 30,
                                                  ----------------------------------------   ---------------------------------------
                                                         2005               2004                  2005               2004
                                                   -----------------  -----------------      -----------------  -----------------
Net income (loss) used for basic and diluted
--------------------------------------------
   earnings per common share:
   -------------------------
<S>                                                        <C>               <C>                 <C>                 <C>
Income (loss) from continuing operations                   $ 38,376          $ (12,496)          $ 123,387           $ 51,383
Income from discontinued operations                               -              1,206               2,207              3,987
                                                     ---------------    ---------------     ---------------    ---------------
Net income (loss) available to common shareholders         $ 38,376          $ (11,290)          $ 125,594           $ 55,370
                                                     ===============    ===============     ===============    ===============

Effect of conversion of preferred securities
   - EPPICS                                                     217                  -                   -                  -
                                                     ---------------    ---------------     ---------------    ---------------
Diluted net income (loss) available to common
   shareholders                                            $ 38,593          $ (11,290)          $ 125,594           $ 55,370
                                                     ===============    ===============     ===============    ===============

Basic earnings (loss) per common share:
---------------------------------------
Weighted-average shares outstanding - basic                 338,928            309,732             339,027            294,455
                                                     ---------------    ---------------     ---------------    ---------------

Income (loss) from continuing operations                   $   0.11          $   (0.04)          $    0.36           $   0.18
Income from discontinued operations                               -                  -                0.01               0.01
                                                     ---------------    ---------------     ---------------    ---------------
Net income (loss) available to common shareholders         $   0.11          $   (0.04)          $    0.37           $   0.19
                                                     ===============    ===============     ===============    ===============

Diluted earnings (loss) per common share:
-----------------------------------------
Weighted-average shares outstanding                         338,928            309,732             339,027            294,455
Effect of dilutive shares                                     3,117              4,480               3,090              5,783
Effect of conversion of preferred securities
   - EPPICS                                                   2,364                  -                   -                  -
                                                    ----------------    ---------------     ---------------    ---------------
Weighted-average shares outstanding - diluted               344,409            314,212             342,117            300,238
                                                    ================    ===============     ===============    ===============

Income (loss) from continuing operations                   $   0.11          $   (0.04)          $    0.36           $   0.17
Income from discontinued operations                               -                  -                0.01               0.01
                                                    ----------------    ---------------     ---------------    ---------------
Net income (loss) available to common shareholders         $   0.11          $   (0.04)          $    0.37           $   0.18
                                                    ================    ===============     ===============    ===============
</TABLE>

     Stock Options
     -------------
     For the  three  and nine  months  ended  September  30,  2005,  options  of
     1,900,000 and  1,910,000,  respectively,  at exercise  prices  ranging from
     $13.45 to $18.46 issuable under employee  compensation  plans were excluded
     from the  computation of diluted EPS for those periods because the exercise
     prices were  greater than the average  market  price of common  shares and,
     therefore, the effect would be antidilutive.

     For the  three  and nine  months  ended  September  30,  2004,  options  of
     1,913,000 and  2,495,000,  respectively,  at exercise  prices  ranging from
     $13.30 to $18.46 issuable under employee  compensation  plans were excluded
     from the  computation of diluted EPS for those periods because the exercise
     prices were  greater than the average  market  price of common  shares and,
     therefore, the effect would be antidilutive.


                                       14
<PAGE>

     In connection with the payment of the special, non-recurring dividend of $2
     per common share on September 2, 2004, the exercise price and number of all
     outstanding  options were adjusted such that each option had the same value
     to the  holder  after  the  dividend  as it had  before  the  dividend.  In
     accordance  with FASB  Interpretation  No. 44 ("FIN 44"),  "Accounting  for
     Certain Transactions  involving Stock Compensation" and EITF 00-23, "Issues
     Related to the Accounting for Stock  Compensation  under APB No. 25 and FIN
     44",  there is no accounting  consequence  for changes made to the exercise
     price and the number of shares of a fixed stock option or award as a direct
     result of the special, non-recurring dividend.

     In addition,  restricted stock awards of 1,495,000 shares for the three and
     nine  months  ended  September  30,  2005 and  restricted  stock  awards of
     1,543,000  shares for the three and nine months ended  September  30, 2004,
     are  excluded  from our  basic  weighted  average  shares  outstanding  and
     included in our dilutive  shares until the shares are no longer  contingent
     upon the satisfaction of all specified conditions.

     EPPICS
     ------
     As a result of our July 2004  dividend  announcement  with  respect  to our
     common shares, our 5% Company Obligated Mandatorily  Redeemable Convertible
     Preferred  Securities due 2036 (EPPICS) began to convert to Citizens common
     shares.  As  of  September  30,  2005,  approximately  87%  of  the  EPPICS
     outstanding,  or about  $174,146,000  aggregate  principal amount of units,
     have  converted to 13,904,153  Citizens  common shares,  including  782,000
     shares issued from treasury.

     At  September  30,  2005,  we had 542,088  shares of  potentially  dilutive
     EPPICS, which were convertible into common stock at a 4.36 to 1 ratio at an
     exercise  price of $11.46  per  share.  As a result of the  September  2004
     special,  non-recurring  dividend, the EPPICS exercise price for conversion
     into common stock was reduced from $13.30 to $11.46.  These securities have
     been  included in the diluted  income per share  calculation  for the three
     months ended  September 30, 2005,  however they have been excluded from the
     calculation  for the nine months ended  September  30, 2005  because  their
     inclusion would have had an antidilutive effect.

     At September  30, 2004,  we had 1,797,000  shares of  potentially  dilutive
     EPPICS, which were convertible into common stock at a 4.36 to 1 ratio at an
     exercise price of $11.46 per share. These securities have not been included
     in the diluted income per common share  calculation  for the three and nine
     months ended  September 30, 2004 because their  inclusion would have had an
     antidilutive effect.

     Stock Units
     -----------
     At  September  30, 2005 and 2004,  we had 210,334 and 454,331  stock units,
     respectively,  issuable under our  Directors'  Deferred Fee Equity Plan and
     Non-Employee  Directors'  Retirement  Plan.  These securities have not been
     included  in  the  diluted  income  per  share  calculation  because  their
     inclusion would have had an antidilutive effect.


(10) Segment Information:
     --------------------
     We operate in two  segments,  ILEC and ELI (a  competitive  local  exchange
     carrier  (CLEC)).  The ILEC segment provides both regulated and unregulated
     communications  services to residential,  business and wholesale  customers
     and is typically the incumbent provider in its service areas.

     As permitted by SFAS No. 131, we have utilized the aggregation  criteria in
     combining our markets  because all of the Company's ILEC  properties  share
     similar  economic  characteristics:  they  provide  the same  products  and
     services to similar  customers  using  comparable  technologies  in all the
     states  we  operate.   The  regulatory   structure  is  generally  similar.
     Differences  in  the  regulatory  regime  of  a  particular  state  do  not
     materially  impact the economic  characteristics  or operating results of a
     particular property.



                                       15
<PAGE>
<TABLE>
<CAPTION>

($ in thousands)                      For the three months ended September 30, 2005
                                      ----------------------------------------------
                                                                         Total
                                          ILEC             ELI          Segments
                                      --------------  -------------- ---------------
<S>                                       <C>              <C>            <C>
Revenue                                   $ 497,576        $ 39,770       $ 537,346
Depreciation and amortization               128,115           6,212         134,327
Operating income                            137,015           4,602         141,617
Capital expenditures                         57,888           3,244          61,132

($ in thousands)                              For the three months ended September 30, 2004
                                      ------------------------------------------------------------
                                                                                        Total
                                          ILEC             ELI        Electric (1)     Segments
                                      --------------  -------------- --------------- -------------
Revenue                                   $ 499,978        $ 39,210         $ -       $ 539,188
Depreciation and amortization               134,787           6,121           -         140,908
Strategic alternatives and
   management succession expenses            73,051           2,807           -          75,858
Operating income (loss)                      69,324             774         (11)         70,087
Capital expenditures                         65,622           1,907           -          67,529
</TABLE>

(1)  Consists principally of post-sale activities associated with the completion
     of our utility divestiture  program.  These costs could not be accrued as a
     selling cost at the time of sale.

<TABLE>
<CAPTION>
($ in thousands)                      For the nine months ended September 30, 2005
                                      ----------------------------------------------
                                                                         Total
                                          ILEC             ELI          Segments
                                      --------------  -------------- ---------------
<S>                                     <C>               <C>           <C>
Revenue                                 $ 1,489,590       $ 116,777     $ 1,606,367
Depreciation and amortization               393,192          18,798         411,990
Operating income                            423,589          10,037         433,626
Capital expenditures                        162,226          13,134         175,360

($ in thousands)                              For the nine months ended September 30, 2004
                                      ------------------------------------------------------------
                                                                                        Total
                                          ILEC             ELI          Electric       Segments
                                      --------------  -------------- --------------- -------------
Revenue                                 $ 1,502,283       $ 117,277       $ 9,735    $ 1,629,295
Depreciation and amortization               410,290          17,901             -        428,191
Strategic alternatives and
   management succession expenses            87,279           3,353             -         90,632
Operating income (loss)                     330,910           5,121        (2,332)       333,699
Capital expenditures                        191,934           8,066             -        200,000

</TABLE>

The  following  table   reconciles   segment   capital   expenditures  to  total
consolidated capital expenditures.

<TABLE>
<CAPTION>
                                       For the three months ended     For the nine months ended
($ in thousands)                            September 30,                  September 30,
                                      ------------------------------ -----------------------------
                                          2005            2004            2005           2004
                                      --------------  -------------- --------------- -------------
<S>                                        <C>             <C>            <C>           <C>
Total segment capital expenditures         $ 61,132        $ 67,529       $ 175,360     $ 200,000
General capital expenditures                     25               9             100           180
                                      --------------  -------------- --------------- -------------
Consolidated reported capital
   expenditures                            $ 61,157        $ 67,538       $ 175,460     $ 200,180
                                      ==============  ============== =============== =============
</TABLE>

                                      16
<PAGE>

(11) Derivative Instruments and Hedging Activities:
     ----------------------------------------------
     Interest rate swap  agreements are used to hedge a portion of our debt that
     is  subject  to  fixed  interest  rates.   Under  our  interest  rate  swap
     agreements, we agree to pay an amount equal to a specified variable rate of
     interest  times a notional  principal  amount,  and to receive in return an
     amount equal to a specified  fixed rate of interest times the same notional
     principal amount.  The notional amounts of the contracts are not exchanged.
     No other cash payments are made unless the agreement is terminated prior to
     maturity,  in which case the  amount  paid or  received  in  settlement  is
     established  by agreement at the time of  termination  and  represents  the
     market  value,  at the then  current  rate of  interest,  of the  remaining
     obligations to exchange payments under the terms of the contracts.

     The  interest  rate  swap  contracts  are  reflected  at fair  value in our
     consolidated balance sheet and the related portion of fixed-rate debt being
     hedged is  reflected at an amount equal to the sum of its book value and an
     amount  representing  the  change  in fair  value of the  debt  obligations
     attributable to the interest rate risk being hedged.  The notional  amounts
     of fixed-rate indebtedness hedged as of September 30, 2005 and December 31,
     2004 were  $500,000,000  and  $300,000,000,  respectively.  Such  contracts
     require us to pay variable rates of interest  (estimated  average pay rates
     of approximately  8.13% as of September 30, 2005 and approximately 6.12% as
     of December 31, 2004) and receive fixed rates of interest  (average receive
     rates of 8.46% as of September  30, 2005 and 8.44% as of December 31, 2004,
     respectively).  The fair value of these  derivatives  is reflected in other
     assets as of September  30,  2005,  in the amount of  $(4,832,000)  and the
     related  underlying  debt  has been  decreased  by a like  amount.  The net
     amounts  received during the three and nine months ended September 30, 2005
     as a  result  of these  contracts  amounted  to  $498,000  and  $2,708,000,
     respectively, and are included as a reduction of interest expense.

     During the third  quarter of 2005, we entered into a series of forward rate
     agreements with our swap counter-parties that fixed the underlying variable
     rate  component  of some of our swaps at the market  rate as of the date of
     execution for certain future rate-setting dates. At September 30, 2005, the
     rates obtained under these forward rate agreements were below market rates.
     The fair value of these derivatives is reflected in other current assets as
     of September  30, 2005,  in the amount of  $1,305,000.  Changes in the fair
     value of these forward rate agreements are recorded in investment and other
     income.

     We do not anticipate any nonperformance by counterparties to our derivative
     contracts as all counterparties have investment grade credit ratings.

(12) Management Succession and Strategic Alternatives Expenses:
     ----------------------------------------------------------
     On July 11, 2004,  our Board of Directors  announced  that it had completed
     its review of the Company's financial and strategic  alternatives.  Through
     the  first  nine  months of 2004,  we  expensed  approximately  $90,632,000
     related to  management  succession  and our  exploration  of financial  and
     strategic alternatives.

(13) Investment and Other Income (Loss):
     -----------------------------------
     The components of investment and other income (loss) are as follows:

<TABLE>
<CAPTION>
                                             Three Months Ended September 30,      Nine Months Ended September 30,
                                            -----------------------------------   -----------------------------------
($ in thousands)                                  2005              2004                2005              2004
                                            -----------------  ----------------   ----------------- -----------------
<S>                                                  <C>              <C>                  <C>               <C>
Investment income (loss)                             $ 2,913         $  (2,742)           $ 9,120           $ 2,869
Gain (loss) on expiration/settlement of
   customer advances                                    (176)                -                 492            25,345
Loss on exchange of debt                                   -                 -              (3,175)                -
Premium on debt repurchases                                -           (20,368)                  -           (20,368)
Investment gain                                          688                 -               1,576                 -
Gain on forward rate agreements                        1,305                 -               1,305                 -
Gain/(loss) on sale of assets                              -            10,735                   -             9,365
Other, net                                             2,038            (1,279)              3,431              (362)
                                            -----------------  ----------------   ----------------- -----------------
  Total investment and other income (loss)           $ 6,768         $ (13,654)           $ 12,749          $ 16,849
                                            =================  ================   ================= =================

</TABLE>
     In connection  with our exchange of debt during the second quarter of 2005,
     we  recognized  a  non-cash  pre-tax  loss  of  approximately   $3,175,000.
     Investment  gain  represents  the gain on the sale of shares of  Prudential
     Financial,  Inc.  during the first quarter,  and Global Crossing LTD during
     the second and third quarters of 2005.


                                       17
<PAGE>

     During 2005 and 2004,  we  recognized  income in  connection  with  certain
     retained  liabilities  associated with customer  advances for  construction
     from  our  disposed  water  properties,  as  a  result  of  some  of  these
     liabilities  terminating.  Gain/(loss)  on sale of  assets  represents  the
     gain/(loss) recognized on the sale of fixed assets during 2004.

(14) Company Obligated Mandatorily Redeemable Convertible Preferred Securities:
     --------------------------------------------------------------------------
     In 1996, our consolidated wholly-owned subsidiary, Citizens Utilities Trust
     (the Trust),  issued, in an underwritten public offering,  4,025,000 shares
     of  5%  Company  Obligated  Mandatorily  Redeemable  Convertible  Preferred
     Securities due 2036 (EPPICS), representing preferred undivided interests in
     the assets of the Trust, with a liquidation  preference of $50 per security
     (for a total liquidation amount of $201,250,000).  These securities have an
     adjusted  conversion  price  of  $11.46  per  Citizens  common  share.  The
     conversion price was reduced from $13.30 to $11.46 during the third quarter
     of 2004 as a result of the $2.00 per share special, non-recurring dividend.
     The  proceeds  from  the  issuance  of  the  Trust  Convertible   Preferred
     Securities  and a  Company  capital  contribution  were  used  to  purchase
     $207,475,000  aggregate  liquidation  amount of 5% Partnership  Convertible
     Preferred  Securities  due  2036  from  another  wholly-owned   subsidiary,
     Citizens  Utilities Capital L.P. (the  Partnership).  The proceeds from the
     issuance of the Partnership  Convertible Preferred Securities and a Company
     capital  contribution were used to purchase from us $211,756,000  aggregate
     principal  amount of 5% Convertible  Subordinated  Debentures due 2036. The
     sole  assets  of  the  Trust  are  the  Partnership  Convertible  Preferred
     Securities,  and our Convertible  Subordinated Debentures are substantially
     all the assets of the  Partnership.  Our  obligations  under the agreements
     related to the issuances of such securities,  taken together,  constitute a
     full and unconditional  guarantee by us of the Trust's obligations relating
     to  the  Trust  Convertible  Preferred  Securities  and  the  Partnership's
     obligations relating to the Partnership Convertible Preferred Securities.

     In  accordance  with the  terms of the  issuances,  we paid the  annual  5%
     interest  in  quarterly   installments  on  the  Convertible   Subordinated
     Debentures  in the first,  second and third  quarters  of 2005 and the four
     quarters  of 2004.  Only cash was paid (net of  investment  returns) to the
     Partnership  in payment of the  interest  on the  Convertible  Subordinated
     Debentures.  The cash was then  distributed by the Partnership to the Trust
     and then by the Trust to the holders of the EPPICS.

     As of September 30, 2005,  EPPICS  representing a total principal amount of
     $174,146,000  had been converted into 13,904,153  shares of Citizens common
     stock, and a total of $27,104,000 remains outstanding to third parties. Our
     long-term  debt footnote  indicates  $37,611,000  of EPPICS  outstanding at
     September  30,  2005  of  which  $10,506,000  is  intercompany   debt.  Our
     accounting  treatment of the EPPICS debt is in accordance with FIN 46R (see
     Note 2).

     We adopted the  provisions of FIN 46R (revised  December 2003) ("FIN 46R"),
     "Consolidation of Variable Interest Entities," effective January 1, 2004.



                                       18
<PAGE>

(15) Retirement Plans:
     -----------------
     The following table provides the components of net periodic benefit cost:

<TABLE>
<CAPTION>
                                                                  Pension Benefits
                                           --------------------------------------------------------
                                           For the three months ended     For the nine months ended
                                                   September 30,                  September 30,
                                           ----------------------------   -------------------------
($ in thousands)                               2005           2004           2005         2004
                                           -------------  -------------   ------------ ------------
Components of net periodic benefit cost
---------------------------------------
<S>                                             <C>            <C>            <C>          <C>
Service cost                                   $  1,509       $  1,133       $  4,588     $  4,311
Interest cost on projected benefit obligation    11,710         11,859         34,812       34,851
Return on plan assets                           (15,093)       (14,286)       (45,278)     (42,902)
Amortization of prior service cost and
   unrecognized net obligation                      (61)           (61)          (183)        (183)
Amortization of unrecognized loss                 2,748          2,911          7,411        6,619
                                           -------------  -------------   ------------ ------------
Net periodic benefit cost                      $    813       $  1,556       $  1,350     $  2,696
                                           =============  =============   ============ ============

                                                          Other Postretirement Benefits
                                           --------------------------------------------------------
                                           For the three months ended     For the nine months ended
                                                    September 30,              September 30,
                                           ----------------------------   -------------------------
($ in thousands)                               2005           2004           2005         2004
                                           -------------  -------------   ------------ ------------
Components of net periodic benefit cost
---------------------------------------
Service cost                                   $    188       $     48       $    784     $    846
Interest cost on projected benefit obligation     2,736          3,203          9,041        9,517
Return on plan assets                              (312)          (641)          (936)      (1,701)
Amortization of prior service cost and
   unrecognized net obligation                     (732)          (162)          (941)        (150)
Amortization of unrecognized loss                 1,478            809          4,962        3,927
                                           -------------  -------------   ------------ ------------
Net periodic benefit cost                      $  3,358       $  3,257       $ 12,910     $ 12,439
                                           =============  =============   ============ ============

</TABLE>
     We  expect  that  our  pension  expense  for  2005  will  be  approximately
     $1,800,000 (it was $3,600,000 in 2004) and no contribution will be required
     to be made by us to the  pension  plan in 2005.  We expect that our retiree
     medical cost for 2005 will be approximately $17,000,000 (it was $16,600,000
     in 2004).

     In  December  2003,  the  Medicare   Prescription   Drug   Improvement  and
     Modernization  Act of 2003 (the  Act)  became  law.  The Act  introduces  a
     prescription drug benefit under Medicare.  It includes a federal subsidy to
     sponsors of retiree  health care benefit  plans that provide a benefit that
     is at least  actuarially  equivalent  to the Medicare  Part D benefit.  The
     amount of the federal  subsidy will be based on 28 percent of an individual
     beneficiary's annual eligible  prescription drug costs ranging between $250
     and $5,000.  We have determined that the company  sponsored  postretirement
     healthcare  plans that provide  prescription  drug benefits are actuarially
     equivalent to the Medicare  Prescription Drug benefit.  We will incorporate
     the impact of the federal subsidy as of the next measurement date, which is
     December 31, 2005.

(16) Related Party Transaction:
     --------------------------
     In June 2005,  the Company  sold for cash its  interests in certain key man
     life  insurance  policies on the lives of Leonard Tow, our former  Chairman
     and Chief  Executive  Officer,  and his wife, a former  director.  The cash
     surrender value of the policies purchased by Dr. Tow totaled  approximately
     $24,195,000,  and we  recognized a gain of  approximately  $457,000 that is
     included in investment and other income.



                                       19
<PAGE>
(17) Commitments and Contingencies:
     ------------------------------
     The City of Bangor,  Maine,  filed suit against us on November 22, 2002, in
     the U.S.  District  Court  for the  District  of Maine  (City of  Bangor v.
     Citizens  Communications  Company,  Civ. Action No.  02-183-B-S).  The City
     alleged,  among  other  things,  that we are  responsible  for the costs of
     cleaning up environmental  contamination  alleged to have resulted from the
     operation  of a  manufactured  gas plant owned by Bangor Gas  Company  from
     1852-1948 and by us from  1948-1963.  In acquiring the operation in 1948 we
     acquired  the stock of Bangor Gas Company  and merged it into the  Company.
     The City alleged the existence of extensive  contamination of the Penobscot
     River and  asserted  that money  damages  and other  relief at issue in the
     lawsuit could exceed  $50,000,000.  The City also  requested  that punitive
     damages be assessed against us. We filed an answer denying liability to the
     City, and asserted a number of counterclaims against the City. In addition,
     we identified a number of other potentially responsible parties that may be
     liable for the  damages  alleged by the City and joined  them as parties to
     the  lawsuit.  These  additional  parties  include  Honeywell  Corporation,
     Guilford  Transportation   (operating  as  Maine  Central  Railroad),   UGI
     Utilities,  Inc. and Centerpoint  Energy Resources  Corporation.  The Court
     dismissed all but two of the City's claims,  including its claims for joint
     and  several  liability  under the  Comprehensive  Environmental  Response,
     Compensation,  and  Liability  Act  (CERCLA)  and the claim  against us for
     punitive damages. Trial was conducted in September and October 2005 for the
     first  (liability)  phase of the  case,  and a  decision  from the court is
     anticipated  by  year-end.  We  intend  to  continue  to  defend  ourselves
     vigorously against the City's lawsuit. We have demanded that various of our
     insurance  carriers  defend  and  indemnify  us with  respect to the City's
     lawsuit,  and on December 26, 2002, we filed a declaratory  judgment action
     against those insurance carriers in the Superior Court of Penobscot County,
     Maine, for the purpose of establishing their obligations to us with respect
     to the City's  lawsuit.  We intend to  vigorously  pursue  this  lawsuit to
     obtain from our insurance carriers indemnification for any damages that may
     be  assessed  against  us in the City's  lawsuit as well as to recover  the
     costs of our defense of that lawsuit.

     On June 7, 2004,  representatives  of Robert A. Katz Technology  Licensing,
     LP, contacted us regarding possible infringement of several patents held by
     that firm. The patents cover a wide range of operations in which  telephony
     is supported by computers,  including obtaining  information from databases
     via  telephone,   interactive  telephone  transactions,  and  customer  and
     technical support  applications.  We are cooperating with the patent holder
     to  determine  if we are  currently  using  any of the  processes  that are
     protected by its patents.  If we determine that we are utilizing the patent
     holder's  intellectual  property,  we expect to commence  negotiations on a
     license agreement.

     On June 24, 2004, one of our subsidiaries,  Frontier Subsidiary Telco Inc.,
     received a "Notice of Indemnity Claim" from Citibank, N.A., that is related
     to a complaint  pending against Citibank and others in the U.S.  Bankruptcy
     Court for the Southern  District of New York as part of the Global Crossing
     bankruptcy  proceeding.  Citibank  bases  its claim  for  indemnity  on the
     provisions  of a credit  agreement  that was entered  into in October  2000
     between  Citibank  and our  subsidiary.  We purchased  Frontier  Subsidiary
     Telco,  Inc.,  in June  2001 as part  of our  acquisition  of the  Frontier
     telephone  companies.  The complaint against  Citibank,  for which it seeks
     indemnification,  alleges that the seller  improperly used a portion of the
     proceeds  from the  Frontier  transaction  to pay off the  Citibank  credit
     agreement, thereby defrauding certain debt holders of Global Crossing North
     America Inc.  Although the credit  agreement was paid off at the closing of
     the Frontier  transaction,  Citibank claims the indemnification  obligation
     survives.  Damages  sought  against  Citibank and its  co-defendants  could
     exceed $1,000,000,000.  In August 2004, we notified Citibank by letter that
     we believe its claims for indemnification are invalid and are not supported
     by applicable law. We have received no further communications from Citibank
     since our August 2004 letter.

     We are party to other legal proceedings arising in the normal course of our
     business. The outcome of individual matters is not predictable. However, we
     believe that the ultimate resolution of all such matters, after considering
     insurance  coverage,  will  not  have  a  material  adverse  effect  on our
     financial position, results of operations, or our cash flows.

     We  have   budgeted   capital   expenditures   in  2005  of   approximately
     $265,000,000,  including  $249,000,000  for ILEC and  $16,000,000  for ELI.
     Although we from time to time make  short-term  purchasing  commitments  to
     vendors with respect to these expenditures,  we generally do not enter into
     firm, written contracts for such activities.

     The  Company  sold all of its  utility  businesses  as of  April  1,  2004.
     However,  we have retained a potential payment  obligation  associated with
     our  previous  electric  utility  activities  in the state of Vermont.  The
     Vermont Joint Owners (VJO), a consortium of 14 Vermont utilities, including
     us, entered into a purchase power agreement with  Hydro-Quebec in 1987. The
     agreement contains  "step-up"  provisions that state that if any VJO member
     defaults on its purchase  obligation  under the contract to purchase  power

                                       20
<PAGE>

     from Hydro-Quebec the other VJO participants will assume responsibility for
     the defaulting party's share on a pro-rata basis. Our pro-rata share of the
     purchase power  obligation is 10%. If any member of the VJO defaults on its
     obligations under the Hydro-Quebec agreement, then the remaining members of
     the VJO,  including us, may be required to pay for a  substantially  larger
     share of the VJO's total power purchase obligation for the remainder of the
     agreement  (which runs through 2015).  Paragraph 13 of FIN 45 requires that
     we   disclose,   "the   maximum   potential   amount  of  future   payments
     (undiscounted)   the  guarantor   could  be  required  to  make  under  the
     guarantee." Paragraph 13 also states that we must make such disclosure "...
     even if the likelihood of the guarantor's having to make any payments under
     the guarantee is remote..." As noted above, our obligation only arises as a
     result of default by another VJO member such as upon bankruptcy. Therefore,
     to satisfy the "maximum  potential amount"  disclosure  requirement we must
     assume  that  all  members  of the VJO  simultaneously  default,  a  highly
     unlikely  scenario  given  that the two  members  of the VJO that  have the
     largest  potential  payment  obligations  are  publicly  traded with credit
     ratings that are equal to or superior to ours, and that all VJO members are
     regulated  utility  providers with  regulated  cost  recovery.  Regardless,
     despite the remote chance that such an event could occur, or that the State
     of  Vermont  could or would  allow  such an  event,  assuming  that all the
     members of the VJO defaulted on January 1, 2006 and remained in default for
     the  duration  of the  contract  (another 10 years),  we estimate  that our
     undiscounted   purchase   obligation   for  2006   through  2015  would  be
     approximately $1,400,000,000. In such a scenario the Company would then own
     the power and could seek to recover its costs.  We would do this by seeking
     to recover our costs from the defaulting members and/or reselling the power
     to other utility  providers or the northeast power grid. There is an active
     market for the sale of power.  We could  potentially  lose money if we were
     unable to sell the power at cost.  We caution  that we cannot  predict with
     any degree of certainty any potential outcome.




                                       21
<PAGE>


Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        ------------------------------------------------------------------------
        of Operations
        -------------
This quarterly report on Form 10-Q contains forward-looking  statements that are
subject to risks and  uncertainties  which could cause actual  results to differ
materially from those  expressed or implied in the  statements.  Forward-looking
statements  (including oral  representations) are only predictions or statements
of current plans, which we review continuously.  Forward-looking  statements may
differ  from  actual  future  results due to, but not limited to, and our future
results may be materially affected by, any of the following possibilities:

     o    Changes in the number of our revenue  generating units, which consists
          of access lines plus high-speed internet subscribers;

     o    The effects of  competition  from wireless,  other  wireline  carriers
          (through voice over internet protocol (VOIP) or otherwise), high-speed
          cable modems and cable telephony;

     o    The effects of general and local economic and employment conditions on
          our revenues;

     o    Our  ability  to   effectively   manage  and  otherwise   monitor  our
          operations, costs, regulatory compliance and service quality;

     o    Our ability to successfully  introduce new product offerings including
          our ability to offer bundled  service  packages on terms that are both
          profitable to us and attractive to our  customers,  and our ability to
          sell enhanced and data services in order to offset ongoing declines in
          highly  profitable  revenue from local  services,  access services and
          subsidies;

     o    Our ability to comply with  Section 404 of the  Sarbanes-Oxley  Act of
          2002, which requires management to assess its internal control systems
          and disclose whether the internal  control systems are effective,  and
          the identification of any material  weaknesses in our internal control
          over financial reporting;

     o    Changes in accounting  policies or practices adopted voluntarily or as
          required by generally accepted accounting principles or regulators;

     o    The  effects  of  changes  in  regulation  in  the  telecommunications
          industry as a result of federal and state  legislation and regulation,
          including  potential  changes in access charges and subsidy  payments,
          regulatory   network   upgrade  and  reliability   requirements,   and
          portability requirements;

     o    Our ability to comply with  federal  and state  regulation  (including
          state rate of return  limitations  on our earnings) and our ability to
          successfully  renegotiate  certain ILEC state regulatory plans as they
          expire or come up for renewal from time to time;

     o    Our ability to manage our operating  expenses,  capital  expenditures,
          pay dividends and reduce or refinance our debt;

     o    Adverse  changes  in the  ratings  given  to our  debt  securities  by
          nationally  accredited  ratings  organizations,  which  could limit or
          restrict the availability, and/or increase the cost of financing;

     o    The effects of greater  than  anticipated  competition  requiring  new
          pricing,  marketing  strategies or new product  offerings and the risk
          that we will not respond on a timely or profitable basis;

     o    The effects of bankruptcies in the  telecommunications  industry which
          could result in more price competition and potential bad debts;

     o    The effects of technological  changes on our capital  expenditures and
          product and service  offerings,  including the lack of assurance  that
          our ongoing network  improvements will be sufficient to meet or exceed
          the capabilities and quality of competing networks;


                                       22
<PAGE>


     o    The effects of  increased  medical,  retiree and pension  expenses and
          related funding requirements;

     o    Changes in income tax rates, tax laws, regulations or rulings,  and/or
          federal or state tax assessments;

     o    The effect of changes in the telecommunications  market, including the
          likelihood of significantly increased price and service competition;

     o    The  effects  of state  regulatory  cash  management  policies  on our
          ability  to  transfer  cash among our  subsidiaries  and to the parent
          company;

     o    Our ability to successfully renegotiate union contracts;

     o    Our ability to pay a $1.00 per common share  dividend  annually may be
          affected  by  our  cash  flow  from  operations,   amount  of  capital
          expenditures,  debt service  requirements,  cash paid for income taxes
          and our liquidity;

     o    The  effects  of  any  future   liabilities  or  compliance  costs  in
          connection with environmental and worker health and safety matters;

     o    The  effects of any  unfavorable  outcome  with  respect to any of our
          current or future  legal,  governmental,  or  regulatory  proceedings,
          audits or disputes; and

     o    The effects of more general  factors,  including  changes in economic,
          business and industry conditions.

Any of the foregoing events, or other events, could cause financial  information
to vary from management's  forward-looking  statements  included in this report.
You should consider these important  factors in evaluating any statement in this
Form 10-Q or otherwise made by us or on our behalf. The following information is
unaudited  and should be read in  conjunction  with the  consolidated  financial
statements  and related  notes  included in this report and as  presented in our
2004 Annual Report on Form 10-K. We have no obligation to update or revise these
forward-looking statements.

Overview
--------
We are a communications  company providing services to rural areas and small and
medium-sized  towns and cities as an incumbent local exchange carrier,  or ILEC.
We offer our ILEC services  under the "Frontier"  name. In addition,  we provide
competitive local exchange carrier,  or CLEC, services to business customers and
to other  communications  carriers in certain  metropolitan areas in the western
United  States  through  Electric  Lightwave,  LLC,  or  ELI,  our  wholly-owned
subsidiary.

Competition  in the  telecommunications  industry is  increasing.  We experience
competition  from other  wireline  local  carriers,  from VOIP providers such as
Vonage,  from other long distance  carriers  (including  Regional Bell Operating
Companies),  from cable companies and internet service providers with respect to
internet access and cable  telephony,  and from wireless  carriers.  Competition
from cable  companies  and other  high-speed  internet  service  providers  with
respect to internet access is intense and increasing in many of our markets.  We
expect cable  telephony  competition  to  increase.  Competition  from  wireless
companies and other long distance companies is increasing in all of our markets.

The   telecommunications   industry  is  undergoing   significant   changes  and
difficulties.  The market is extremely  competitive,  resulting in lower prices.
Demand and pricing for  certain  CLEC  services  have  decreased  substantially,
particularly  for  long-haul  services.  These trends are likely to continue and
result in a challenging revenue environment.  These factors could also result in
more  bankruptcies  in the sector and  therefore  affect our  ability to collect
money owed to us by carriers.  Several long distance and interexchange  carriers
(IXCs)  have  filed  for  bankruptcy  protection,   which  will  allow  them  to
substantially  reduce  their cost  structure  and debt.  This could  enable such
companies to further reduce prices and increase competition.

Revenues from data services such as high-speed  internet continue to increase as
a percentage of our total  revenues and revenues from high margin  services such
as local line and access charges and subsidies are decreasing as a percentage of
our revenues.  These factors, along with increasing operating and employee costs
will cause our cash generated by operations to decrease.

                                       23
<PAGE>

(a)  Liquidity and Capital Resources
     -------------------------------
For the nine months ended  September 30, 2005, we used cash flow from continuing
operations,  proceeds  from  the  sale of  non-strategic  assets,  stock  option
exercises and cash and cash equivalents to fund capital expenditures, dividends,
interest payments, debt repayments and common stock repurchases. As of September
30, 2005, we had cash and cash equivalents aggregating $286.6 million.

For the nine months ended  September  30, 2005,  our capital  expenditures  were
$175.5 million, including $162.3 million for the ILEC segment, $13.1 million for
the ELI segment and $0.1 million of general capital expenditures. We continue to
closely  scrutinize all of our capital projects,  emphasize return on investment
and focus our capital  expenditures on areas and services that have the greatest
opportunities with respect to revenue growth and cost reduction. For example, we
will allocate  significant  capital to services  such as high-speed  internet in
areas that are growing or  demonstrate  meaningful  demand.  We will continue to
focus on managing our costs while  increasing our investment in certain  product
areas  such  as  high-speed  internet.  Increasing  competition,   offering  new
services,  improving the  capabilities or reducing the maintenance  costs of our
plant may cause our capital expenditures to increase in the future.

We have budgeted  approximately  $265.0  million for our 2005 capital  projects,
including  $249.0  million for the ILEC  segment  and $16.0  million for the ELI
segment.  Included in these  budgeted  capital  amounts are  approximately  $6.9
million of capital  expenditures  associated with the Communications  Assistance
for Law Enforcement Act (CALEA).

As of  September  30, 2005,  we have  available  lines of credit with  financial
institutions in the aggregate amount of $250.0 million. Associated facility fees
vary,  depending  on our debt  leverage  ratio,  and are  0.375% per annum as of
September 30, 2005.  The  expiration  date for the facility is October 29, 2009.
During the term of the  facility we may borrow,  repay and reborrow  funds.  The
credit facility is available for general corporate  purposes but may not be used
to fund  dividend  payments.  There  have never  been any  borrowings  under the
facility.

Our  ongoing  annual  dividends  of $1.00 per share  under  our  current  policy
utilizes a significant portion of our cash generated by operations and therefore
limits our operating and financial  flexibility and our ability to significantly
increase  capital  expenditures  particularly  compared to the  flexibility  and
ability  to  change  capital  spending  we  would  have if we did  not pay  such
dividends.  While we  believe  that the amount of our  dividends  will allow for
adequate amounts of cash flow for other purposes, any material reduction in cash
generated by  operations  and any  increases in capital  expenditures,  interest
expense or cash taxes  would  reduce the amount of cash  generated  in excess of
dividends.  Losses of access lines, increases in competition,  lower subsidy and
access revenues and the other factors described above are expected to reduce our
cash   generated  by  operations   and  may  require  us  to  increase   capital
expenditures.  The  downgrades  in our  credit  ratings  in July  2004 to  below
investment  grade may make it more  difficult  and  expensive to  refinance  our
maturing  debt.  We have in recent  years paid  relatively  low  amounts of cash
taxes. We expect that over time our cash taxes will increase.

We believe our operating cash flows, existing cash balances, and credit facility
will be  adequate  to finance our working  capital  requirements,  fund  capital
expenditures, make required debt payments through 2007, pay taxes, pay dividends
to our  stockholders  in  accordance  with our  dividend  policy and support our
short-term  and  long-term  operating  strategies.  We have  approximately  $0.2
million,  $227.8  million and $37.9 million of debt maturing in the remainder of
2005, 2006 and 2007, respectively,  all of which we intend to pay at or prior to
maturity utilizing available cash on hand.

Share Repurchase Program
------------------------
On May 25, 2005,  our Board of Directors  authorized  the Company to  repurchase
over the following  twelve-month  period,  up to $250.0 million of the Company's
common stock, either in the open market or through negotiated transactions. This
share repurchase  program  commenced on June 13, 2005. As of September 30, 2005,
the Company had committed to  repurchase a total of 12,656,500  common shares at
an aggregate cost of approximately  $172.0 million.  Of that amount,  11,906,500
shares had settled by September 30, 2005, at a cash cost of approximately $161.9
million.


                                       24
<PAGE>

Debt Reduction and Debt Exchanges
---------------------------------
For the nine months ended September 30, 2005, we retired an aggregate  principal
amount of $32.3  million of debt,  including  $26.2  million of EPPICS that were
converted to our common  stock.  During the second  quarter of 2005,  we entered
into two  debt-for-debt  exchanges of our debt  securities.  As a result,  $50.0
million of our 7.625%  Notes due 2008 were  exchanged  for  approximately  $52.2
million of our 9.00% Notes due 2031.  The 9.00%  Notes are  callable on the same
general  terms  and  conditions  as the  7.625%  Notes  exchanged.  No cash  was
exchanged   in  these   transactions,   however  a  non-cash   pre-tax  loss  of
approximately  $3.2 million was  recognized in  accordance  with EITF No. 96-19,
"Debtor's  Accounting for a Modification or Exchange of Debt Instruments"  which
is included in investment and other income.

We may from time to time repurchase our debt in the open market,  through tender
offers or privately negotiated transactions.  We may also exchange existing debt
obligations for newly issued debt obligations.

Interest Rate Management
------------------------
In order to manage our interest  expense,  we have entered  into  interest  swap
agreements.  Under the terms of these agreements, we make semi-annual,  floating
rate interest  payments based on six month LIBOR and receive a fixed rate on the
notional amount. The underlying  variable rate on these swaps is set in arrears.
During  September 2005, we entered into a series of forward rate agreements that
fixed the underlying  variable rate component of some of our swaps at the market
rate as of the date of  execution  for certain  future  rate-setting  dates.  At
September 30, 2005, the rates obtained under these forward rate  agreements were
below market rates.  Changes in the fair value of these forward rate  agreements
are recorded in investment and other income.

The notional amounts of fixed-rate  indebtedness hedged as of September 30, 2005
and  December  31,  2004 were  $500.0 and  $300.0  million,  respectively.  Such
contracts  require us to pay variable rates of interest  (estimated  average pay
rates of approximately 8.13% as of September 30, 2005 and approximately 6.12% as
of December 31, 2004) and receive fixed rates of interest  (average receive rate
of 8.46% as of  September  30,  2005 and 8.44% as of  December  31,  2004).  All
interest  rate swaps are  accounted for under SFAS No. 149 as fair value hedges.
For the nine months ended  September 30, 2005,  the interest  savings  resulting
from these interest rate swaps totaled approximately $2.7 million.

Sale of Non-Strategic Investments
---------------------------------
On February 1, 2005,  we sold 20,672 shares of  Prudential  Financial,  Inc. for
approximately $1.1 million in cash.

On March 15,  2005,  we  completed  the sale of our  conferencing  business  for
approximately $43.6 million in cash.

In June 2005,  the Company  sold for cash its  interests in certain key man life
insurance  policies on the lives of Leonard Tow,  our former  Chairman and Chief
Executive Officer, and his wife, a former director.  The cash surrender value of
the policies purchased by Dr. Tow totaled  approximately  $24.2 million,  and we
recognized a gain of  approximately  $457,000 that is included in investment and
other income.

During 2005, we sold 79,828 shares of Global Crossing Limited for  approximately
$1.1 million in cash.

Off-Balance Sheet Arrangements
------------------------------
We do not maintain any off-balance sheet arrangements, transactions, obligations
or other  relationships with  unconsolidated  entities that would be expected to
have a material current or future effect upon our financial statements.

EPPICS
------
In 1996, our consolidated wholly-owned subsidiary, Citizens Utilities Trust (the
Trust),  issued,  in an underwritten  public  offering,  4,025,000  shares of 5%
Company Obligated  Mandatorily  Redeemable  Convertible Preferred Securities due
2036 (Trust Convertible Preferred Securities or EPPICS),  representing preferred
undivided interests in the assets of the Trust, with a liquidation preference of
$50 per  security  (for a total  liquidation  amount of $201.3  million).  These
securities  have an  adjusted  conversion  price of $11.46 per  Citizens  common
share.  The conversion  price was reduced from $13.30 to $11.46 during the third
quarter  of 2004 as a result  of the  $2.00  per  share  special,  non-recurring
dividend.  The  proceeds  from the issuance of the Trust  Convertible  Preferred
Securities  and a Company  capital  contribution  were used to  purchase  $207.5
million aggregate  liquidation  amount of 5% Partnership  Convertible  Preferred
Securities due 2036 from another wholly owned consolidated subsidiary,  Citizens
Utilities Capital L.P. (the Partnership).  The proceeds from the issuance of the
Partnership  Convertible Preferred Securities and a Company capital contribution
were used to purchase from us $211.8 million  aggregate  principal  amount of 5%
Convertible  Subordinated  Debentures due 2036. The sole assets of the Trust are
the  Partnership   Convertible   Preferred   Securities,   and  our  Convertible
Subordinated Debentures are substantially all the assets of the Partnership. Our
obligations  under the agreements  related to the issuances of such  securities,


                                       25
<PAGE>


taken  together,  constitute  a full and  unconditional  guarantee  by us of the
Trust's obligations  relating to the Trust Convertible  Preferred Securities and
the Partnership's  obligations relating to the Partnership Convertible Preferred
Securities.

In accordance with the terms of the issuances, we paid the annual 5% interest in
quarterly installments on the Convertible  Subordinated Debentures in the first,
second and third  quarters of 2005 and the four quarters of 2004.  Only cash was
paid (net of investment  returns) to the  Partnership in payment of the interest
on the Convertible Subordinated Debentures. The cash was then distributed by the
Partnership to the Trust and then by the Trust to the holders of the EPPICS.

As of September 30, 2005, EPPICS representing a total principal amount of $174.2
million had been converted into 13,904,153  shares of Citizens common stock, and
a total of $27.1 million  remains  outstanding to third  parties.  Our long-term
debt footnote  indicates  $37.6 million of EPPICS  outstanding  at September 30,
2005 of which $10.5 million is  intercompany  debt. Our accounting  treatment of
the EPPICS debt is in accordance with FIN 46R (see Note 2 and 14).

We adopted the provisions of FASB Interpretation No. 46R (revised December 2003)
("FIN 46R"), "Consolidation of Variable Interest Entities," effective January 1,
2004.

Covenants
---------
The terms and  conditions  contained  in our  indentures  and credit  facilities
agreements  include the timely  payment of principal  and interest when due, the
maintenance  of our  corporate  existence,  keeping  proper books and records in
accordance with GAAP,  restrictions on the allowance of liens on our assets, and
restrictions  on asset  sales  and  transfers,  mergers  and  other  changes  in
corporate control. We currently have no restrictions on the payment of dividends
either by contract, rule or regulation.

Our $200 million term loan facility with the Rural Telephone Finance Cooperative
(RTFC)  contains a maximum  leverage  ratio  covenant.  Under the leverage ratio
covenant,  we are required to maintain a ratio of (i) total  indebtedness  minus
cash and cash  equivalents  in  excess  of $50.0  million  to (ii)  consolidated
adjusted  EBITDA (as defined in the  agreement)  over the last four  quarters no
greater than 4.00 to 1.

Our $250 million credit  facility  contains a maximum  leverage ratio  covenant.
Under the leverage  ratio  covenant,  we are required to maintain a ratio of (i)
total indebtedness minus cash and cash equivalents in excess of $50.0 million to
(ii)  consolidated  adjusted  EBITDA (as defined in the agreement) over the last
four  quarters  no  greater  than 4.50 to 1.  Although  the credit  facility  is
unsecured,  it will be equally and ratably  secured by certain liens and equally
and ratably  guaranteed by certain of our  subsidiaries if we issue debt that is
secured  or  guaranteed.  We are in  compliance  with all of our debt and credit
facility covenants.

Divestitures
------------
On August 24, 1999, our Board of Directors  approved a plan of  divestiture  for
our public utilities services businesses, which included gas, electric and water
and  wastewater  businesses.  We have sold all of these  properties.  All of the
agreements  relating  to the  sales  provide  that we will  indemnify  the buyer
against  certain  liabilities  (typically  liabilities  relating  to events that
occurred prior to sale), including environmental liabilities, for claims made by
specified dates and that exceed threshold amounts specified in each agreement.

On April 1, 2004, we completed the sale of our electric distribution  facilities
in Vermont for $14.0 million in cash, net of selling expenses.

Critical Accounting Policies and Estimates
------------------------------------------
We  review  all  significant  estimates  affecting  our  consolidated  financial
statements  on a  recurring  basis  and  record  the  effect  of  any  necessary
adjustment  prior to  their  publication.  Uncertainties  with  respect  to such
estimates  and   assumptions  are  inherent  in  the  preparation  of  financial
statements;  accordingly,  it is possible that actual  results could differ from
those  estimates  and changes to  estimates  could  occur in the near term.  The
preparation of our financial  statements  requires  management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of the contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period.  Estimates  and  judgments  are used when  accounting  for allowance for
doubtful  accounts,   impairment  of  long-lived   assets,   intangible  assets,
depreciation   and   amortization,   employee   benefit  plans,   income  taxes,
contingencies, and pension and postretirement benefits expenses among others.

                                       26
<PAGE>

Management  has  discussed  the  development  and  selection  of these  critical
accounting  estimates with the audit committee of our Board of Directors and our
audit committee has reviewed our disclosures relating to them.

There have been no material  changes to our  critical  accounting  policies  and
estimates from the information provided in "Item 7. Management's  Discussion and
Analysis of Financial Condition and Results of Operations"  included in our 2004
Annual Report on Form 10-K.

New Accounting Pronouncements
-----------------------------

Stock-Based Compensation
In December  2004,  the FASB issued SFAS No. 123  (revised  2004),  "Share-Based
Payment," ("SFAS No. 123R").  SFAS No. 123R requires that  stock-based  employee
compensation be recorded as a charge to earnings.  In April 2005, the Securities
and Exchange  Commission  required  adoption of SFAS No. 123R for annual periods
beginning after June 15, 2005.  Accordingly,  we will adopt SFAS 123R commencing
January 1, 2006 and expect to  recognize  approximately  $2.8 million of expense
for the year ended December 31, 2006.

Exchanges of Productive Assets
In  December  2004,  the FASB issued SFAS No.  153,  "Exchanges  of  Nonmonetary
Assets,"  an  amendment  of APB  Opinion  No.  29.  SFAS No. 153  addresses  the
measurement  of exchanges  of certain  non-monetary  assets  (except for certain
exchanges  of  products  or  property  held for sale in the  ordinary  course of
business).  The Statement requires that non-monetary  exchanges be accounted for
at the  fair  value  of  the  assets  exchanged,  with  gains  or  losses  being
recognized,  if the fair value is determinable  within reasonable limits and the
transaction has commercial substance.  SFAS No. 153 is effective for nonmonetary
exchanges occurring in fiscal periods beginning after June 15, 2005. The Company
does not expect the  adoption of the new  standard to have a material  impact on
the Company's financial position, results of operations and cash flows.

Accounting for Conditional Asset Retirement Obligations
In March  2005,  the FASB  issued  FIN 47,  "Accounting  for  Conditional  Asset
Retirement  Obligations,"  an  interpretation  of FASB No. 143. FIN 47 clarifies
that the term conditional  asset  retirement  obligation as used in FASB No. 143
refers to a legal  obligation to perform an asset  retirement  activity in which
the timing or method of settlement are conditional on a future event that may or
may not be within  the  control of the  entity.  FIN 47 also  clarifies  when an
entity would have sufficient  information to reasonably  estimate the fair value
of an asset  retirement  obligation.  FIN 47 is  effective  for the  year  ended
December 31, 2005.  Accordingly,  we will adopt FIN 47 during the fourth quarter
of 2005.  The  Company  does not expect the  implementation  of FIN 47 to have a
material effect on the Company's  financial  position,  results of operations or
cash flows.

Accounting Changes and Error Corrections
In May  2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Corrections," a replacement of APB Opinion No. 20 and FASB Statement No. 3. SFAS
No. 154 changes the  accounting  for, and  reporting  of, a change in accounting
principle.  SFAS No. 154 requires  retrospective  application  to prior period's
financial statements of voluntary changes in accounting  principle,  and changes
required by new accounting standards when the standard does not include specific
transition  provisions,  unless it is  impracticable  to do so.  SFAS No. 154 is
effective for accounting  changes and corrections of errors made in fiscal years
beginning after December 15, 2005.

Partnerships
In June 2005,  the FASB issued  EITF No.  04-5,  "Determining  Whether a General
Partner,  or the General Partners as a Group,  Controls a Limited Partnership or
Similar  Entity When the Limited  Partners Have Certain  Rights," which provides
new guidance on how general partners in a limited  partnership  should determine
whether  they  control a limited  partnership.  EITF No. 04-5 is  effective  for
fiscal  periods  beginning  after December 15, 2005. The Company does not expect
the  adoption  of EITF  No.  04-5 to have a  material  impact  on the  Company's
financial position, results of operations or cash flows.

                                       27
<PAGE>

(b)  Results of Operations
     ---------------------
                                     REVENUE

ILEC  revenue is generated  primarily  through the  provision of local,  network
access, long distance and data services. Such services are provided under either
a  monthly  recurring  fee or  based  on  usage  at a  tariffed  rate and is not
dependent  upon  significant  judgments by  management,  with the exception of a
determination of a provision for uncollectible amounts.

CLEC revenue is generated  through  local,  long  distance,  data and  long-haul
services. These services are primarily provided under a monthly recurring fee or
based on usage at agreed  upon  rates  and are not  dependent  upon  significant
judgments by management with the exception of the  determination  of a provision
for  uncollectible  amounts and realizability of reciprocal  compensation.  CLEC
usage based revenue  includes amounts  determined under reciprocal  compensation
agreements.  While this  revenue is  governed  by  specific  contracts  with the
counterparty, management defers recognition of disputed portions of such revenue
until  realizability  is assured.  Revenue  earned from  long-haul  contracts is
recognized over the term of the related agreement.

Consolidated  revenue for the three months ended  September  30, 2005  decreased
$1.8 million as compared  with the prior year  period.  The decrease is due to a
$2.4  million  decrease  in ILEC  revenue,  partially  offset by a $0.6  million
increase in ELI revenue.

Consolidated  revenue for the nine months  ended  September  30, 2005  decreased
$22.9  million,  or 1%, as compared with the prior year period.  The decrease is
due to a $12.7 million decrease in ILEC revenue,  a $0.5 million decrease in ELI
revenue  and a $9.7  million  decrease  resulting  from  the sale in 2004 of our
electric utility property.

On March 15, 2005, we completed the sale of our conferencing  service  business.
As a result of the  sale,  we have  classified  the  results  of  operations  as
discontinued operations in our consolidated statement of operations and restated
prior periods.

Change in the  number of our access  lines is an  important  determinant  of our
revenue and profitability. We have been losing access lines primarily because of
increased competition, changing consumer behavior, economic conditions, changing
technology  and by some  customers  disconnecting  second  lines  when  they add
high-speed internet or cable modem service. We lost approximately  75,700 access
lines during the nine months ended  September  30, 2005 but added  approximately
78,000 high-speed  internet  subscribers  during this period on a net basis. The
loss of  lines  during  the  first  nine  months  of 2005  was  primarily  among
residential  customers.  The  non-residential  line losses were  principally  in
Rochester,  New York, while the residential  losses were throughout our markets.
We expect to continue to lose access lines but to increase  high-speed  internet
subscribers  during  2005.  A  continued  loss of access  lines,  combined  with
increased  competition  and the other factors  discussed in MD&A,  may cause our
revenues to decrease.

<TABLE>
<CAPTION>

                           TELECOMMUNICATIONS REVENUE

($ in thousands)                  For the three months ended September 30,         For the nine months ended September 30,
                                ----------------------------------------------  -----------------------------------------------
                                   2005        2004      $ Change    % Change      2005        2004      $ Change    % Change
                                ----------- ----------- ----------- ----------------------- ----------- ------------ ----------
<S>                              <C>         <C>         <C>               <C>   <C>         <C>          <C>             <C>
Access services                  $ 145,915   $ 157,692    $(11,777)       -7%   $  455,389  $  474,399    $ (19,010)       -4%
Local services                     208,630     214,299      (5,669)       -3%      624,367     640,458      (16,091)       -3%
Long distance and data services     88,809      82,002       6,807         8%      255,897     240,177       15,720         7%
Directory services                  28,362      27,312       1,050         4%       84,866      82,987        1,879         2%
Other                               25,860      18,673       7,187        38%       69,071      64,262        4,809         7%
                                ----------- ----------- -----------             ----------- ----------- ------------
   ILEC revenue                    497,576     499,978      (2,402)        0%    1,489,590   1,502,283      (12,693)       -1%
ELI                                 39,770      39,210         560         1%      116,777     117,277         (500)        0%
                                ----------- ----------- -----------             ----------- ----------- ------------
                                 $ 537,346   $ 539,188    $ (1,842)        0%   $ 1,606,367 $1,619,560    $ (13,193)       -1%
                                =========== =========== ===========             =========== =========== ============

</TABLE>

Access Services
Access services  revenue for the three months ended September 30, 2005 decreased
$11.8  million or 7%, as compared  with the prior year  period.  Access  service
revenue  includes  subsidy  payments we receive from federal and state agencies.
Subsidy  revenue  decreased  $11.3  million  primarily  due to a  missed  filing
deadline (as discussed  below),  which resulted in the decrease of $10.4 million
in Universal  Service Fund (USF) support  during the third quarter of 2005.  USF
subsidies also decreased due to increases in the national  average cost per loop
(NACPL).



                                       28
<PAGE>

Access  services  revenue for the nine months ended September 30, 2005 decreased
$19.0  million or 4%, as compared  with the prior year period.  Switched  access
revenue  decreased  $6.0  million,  as  compared  with the  prior  year  period,
primarily due to a decline in minutes of use.  Special access revenue  increased
$9.2 million primarily due to growth in high-capacity circuits.  Subsidy revenue
decreased $22.2 million  primarily due to decreased USF support of $18.0 million
because of increases in the NACPL,  the $10.4 million decrease due to the missed
filing  deadline and a decrease of $5.8  million  related to changes in measured
factors, partially offset by an increase of $8.2 million in USF surcharge rates.

Increases  in the  number of  competitive  communications  companies  (including
wireless companies) receiving federal subsidies may lead to further increases in
the NACPL,  thereby resulting in further decreases in our subsidy revenue in the
future.  The FCC and state  regulators  are  currently  considering  a number of
proposals for changing the manner in which  eligibility for federal subsidies is
determined as well as the amounts of such  subsidies.  The FCC is also reviewing
the mechanism by which subsidies are funded. We cannot predict when or how these
matters  will  be  decided  nor  the  effect  on our  subsidy  revenues.  Future
reductions in our subsidy and access revenues are not expected to be accompanied
by  proportional  decreases  in our costs,  so any further  reductions  in those
revenues will directly affect our profitability.

We filed  one of our USF  qualifying  reports  two  business  days late and have
obtained a waiver from the FCC that permits acceptance of the late-filed report.
As of  September  30,  2005,  we had not  received  the waiver from the FCC and,
therefore,  did not  qualify for $10.4  million in USF funding  during the third
quarter of 2005. We expect to recognize such amount as revenue during the fourth
quarter of 2005.

Local Services
Local services  revenue for the three months ended  September 30, 2005 decreased
$5.7  million  or 3% as  compared  with the prior  year  period.  Local  revenue
decreased  $7.0 million  primarily  due to the  continued  loss of access lines.
Enhanced  services  revenue  increased $1.3 million,  as compared with the prior
year period, primarily due to sales of additional feature packages.

Local  services  revenue for the nine months ended  September 30, 2005 decreased
$16.1  million or 3% as compared  with the prior year  period.  This  decline is
comprised of $12.6  million  related to the  continued  loss of access lines and
$4.0  million  related  to a  reserve  associated  with  state  rate  of  return
limitations on earnings.  Enhanced services revenue  increased $4.7 million,  as
compared  with the  prior  year  period,  primarily  due to sales of  additional
packages.  Economic  conditions  or  increasing  competition  could make it more
difficult  to sell our packages and bundles and cause us to lower our prices for
those  products  and  services,  which would  adversely  affect our revenues and
profitability.

Long Distance and Data Services
Long distance and data services revenue for the three months ended September 30,
2005 increased  $6.8 million or 8%, as compared with the prior period  primarily
due to  growth  in  sales  of data  services  of  $9.9  million  (data  includes
high-speed internet) partially offset by decreased long distance revenue of $3.1
million because of lower pricing for long distance services.

Long distance and data services  revenue for the nine months ended September 30,
2005 increased $15.7 million or 7%, as compared with the prior period  primarily
due to growth of $25.6  million  related to data  services  partially  offset by
decreased long distance  revenue of $9.9 million as a result of a decline in the
average rate per long distance minute.  Our long distance  revenues may continue
to decrease in the future due to lower rates  and/or  minutes of use.  Competing
services  such as wireless,  VOIP,  and cable  telephony may result in a loss of
customers,  minutes  of use and  further  declines  in the rates we  charge  our
customers.

Directory Services
Directory  revenue  for the three  and nine  months  ended  September  30,  2005
increased  $1.1  million,  or 4%,  and $1.9  million,  or 2%,  respectively,  as
compared with the prior year periods due to growth in yellow pages advertising.

Other
Other  revenue for the three  months ended  September  30, 2005  increased  $7.2
million or 38%, as compared with the prior year  primarily due to a $5.1 million
decrease in bad debt  expense,  increased  sales of customer  premise  equipment
(CPE) of $1.5 million and sales of television  service,  which  contributed $1.1
million.

                                       29
<PAGE>

Other  revenue for the nine months  ended  September  30,  2005  increased  $4.8
million,  or 7% compared  with the prior year  primarily  due to a $3.7  million
decrease in bad debt expense and sales of television service,  which contributed
$2.1 million.

                                ELECTRIC REVENUE

      ($ in thousands)             For the nine months ended September 30,
                                ----------------------------------------------
                                   2005        2004      $ Change    % Change
                                ----------- ----------- ----------- ----------
      Electric revenue              $ -      $ 9,735     $ (9,735)     -100%

Electric  revenue for the nine months ended  September 30, 2005  decreased  $9.7
million,  as compared  with the prior year period due to the sale of our Vermont
electric division on April 1, 2004. We have sold all of our electric  operations
and as a result  will have no  operating  results  in future  periods  for these
businesses.
<TABLE>
<CAPTION>

                                COST OF SERVICES

($ in thousands)            For the three months ended September 30,         For the nine months ended September 30,
                            ----------------------------------------------  -----------------------------------------------
                              2005        2004      $ Change    % Change      2005        2004      $ Change    % Change
                            ----------- ----------- ----------- ----------------------- ----------- ------------ ----------
<S>                          <C>         <C>          <C>             <C>   <C>         <C>             <C>            <C>
Network access               $ 51,050    $ 49,655     $ 1,395         3%    $ 145,766   $ 146,392     $   (626)        0%
Electric energy and
  fuel oil purchased              -             -           -         -             -       5,523       (5,523)     -100%
                            ----------- ----------- -----------             ----------- ----------- ------------
                             $ 51,050    $ 49,655     $ 1,395         3%    $ 145,766   $ 151,915     $ (6,149)       -4%
                            =========== =========== ===========             =========== =========== ============

</TABLE>
Network access  expenses for the three months ended September 30, 2005 increased
$1.4  million,  or 3%, as compared  with the prior year period  primarily due to
increased  costs in circuit  expense due to more data  traffic  associated  with
increased high-speed internet customers and greater long distance minutes of use
in the ILEC sector, and higher costs at ELI due to increased demand.

Electric  energy and fuel oil purchased for the nine months ended  September 30,
2005 decreased  $5.5 million,  as compared with the prior year period due to the
sale of our Vermont electric  division on April 1, 2004. We have sold all of our
electric  operations  and as a result will have no  operating  results in future
periods for these businesses.


<TABLE>
<CAPTION>
                            OTHER OPERATING EXPENSES

($ in thousands)                  For the three months ended September 30,         For the nine months ended September 30,
                                ----------------------------------------------  -----------------------------------------------
                                   2005        2004      $ Change    % Change      2005        2004      $ Change    % Change
                                ----------- ----------- ----------- ----------  ----------- ----------- ------------ ----------
<S>                              <C>         <C>           <C>             <C>   <C>         <C>          <C>               <C>
Operating expenses               $ 157,243   $ 155,249     $ 1,994         1%    $ 453,653   $ 468,507    $ (14,854)       -3%
Taxes other than income taxes       23,075      19,887       3,188        16%       73,889      71,521        2,368         3%
Sales and marketing                 30,034      27,544       2,490         9%       87,443      84,830        2,613         3%
                                ----------- ----------- -----------             ----------- ----------- ------------
                                 $ 210,352   $ 202,680     $ 7,672         4%    $ 614,985   $ 624,858    $  (9,873)       -2%
                                =========== =========== ===========             =========== =========== ============
</TABLE>

Operating  expenses for the three months ended September 30, 2005 increased $2.0
million,  or 1%, as compared  with the prior year period  primarily  due to rate
increases for federal USF mandated  contributions  and annual fees to regulatory
agencies.

Operating  expenses for the nine months ended September 30, 2005 decreased $14.9
million,  or 3%, as compared  with the prior year period  primarily due to lower
billing  expenses as a result of the  conversion  of our billing  system in 2004
partially  offset by rate increases for federal USF mandated  contributions  and
annual  fees  to  regulatory  agencies.  We  routinely  review  our  operations,
personnel and  facilities  to achieve  greater  efficiencies.  These reviews may
result in reductions in personnel and an increase in severance costs.

Taxes other than income taxes for the three and nine months ended  September 30,
2005 increased $3.2 million, or 16%, and $2.4 million, or 3%,  respectively,  as
compared  with the prior year periods  primarily  due to higher  gross  receipts
(which are generally  passed through to our customers) and property taxes in the
ILEC sector.



                                       30
<PAGE>

Sales and marketing  expenses for the three and nine months ended  September 30,
2005 increased $2.5 million,  or 9%, and $2.6 million, or 3%,  respectively,  as
compared with the prior year periods  primarily due to competition for customers
and the launch of new products.  As our markets become more  competitive  and we
launch new products, we expect that our marketing costs will increase.

Included in operating expenses is stock compensation expense. Stock compensation
expense was $6.4  million and $7.8 million for the first nine months of 2005 and
2004,  respectively.  In 2006,  we  expect  to begin  expensing  the cost of the
unvested  portion of  outstanding  stock  options  pursuant to SFAS No. 123R. We
expect to recognize  approximately  $2.8 million of stock option expense for the
year ended December 31, 2006.

Included in operating  expenses is pension  expense.  In future periods,  if the
value of our pension assets or interest rates decline and/or  projected  benefit
costs  increase,  we may have  increased  pension  expenses.  Based  on  current
assumptions and plan asset values,  we estimate that our pension expense will be
approximately  $1.8 million in 2005 (it was $3.6 million in 2004).  In addition,
as medical  costs  increase the costs of our  postretirement  benefit costs also
increase.  Our retiree medical costs for 2004 were $16.6 million and our current
estimate for 2005 is approximately $17.0 million.
<TABLE>
<CAPTION>

                 DEPRECIATION AND AMORTIZATION EXPENSE

      ($ in thousands)            For the three months ended September 30,         For the nine months ended September 30,
                                ----------------------------------------------  -----------------------------------------------
                                   2005        2004      $ Change    % Change      2005        2004      $ Change    % Change
                                ----------- ----------- ----------- ----------------------- ----------- ------------ ----------
      <S>                        <C>         <C>          <C>              <C>   <C>         <C>          <C>               <C>
      Depreciation  expense      $ 102,732   $ 109,278    $ (6,546)       -6%    $ 317,206   $ 333,301    $ (16,095)       -5%
      Amortization expense          31,595      31,630         (35)        0%       94,784      94,890         (106)        0%
                                ----------- ----------- -----------             ----------- ----------- ------------
                                 $ 134,327   $ 140,908    $ (6,581)       -5%    $ 411,990   $ 428,191    $ (16,201)       -4%
                                =========== =========== ===========             =========== =========== ============

</TABLE>

Depreciation  expense for the three and nine  months  ended  September  30, 2005
decreased  $6.6  million,  or 6%, and $16.1  million,  or 5%,  respectively,  as
compared with the prior year periods due to a declining asset base.

<TABLE>
<CAPTION>
                MANAGEMENT SUCCESSION AND STRATEGIC ALTERNATIVES EXPENSES

($ in thousands)                  For the three months ended September 30,         For the nine months ended September 30,
                                ----------------------------------------------  -----------------------------------------------
                                   2005        2004      $ Change    % Change      2005        2004      $ Change    % Change
                                ----------- ----------- ----------- ----------  ----------- ----------- ------------ ----------
Strategic alternatives and
<S>                                  <C>    <C>         <C>             <C>           <C>    <C>         <C>             <C>
  management succession expenses     $ -    $ 75,858    $ (75,858)     -100%          $ -    $ 90,632    $ (90,632)     -100%


</TABLE>
Management succession and strategic  alternatives expenses in 2004 include a mix
of cash retention payments, equity awards and severance agreements.
<TABLE>
<CAPTION>

                        INVESTMENT AND OTHER INCOME (LOSS) / INTEREST EXPENSE / INCOME TAX EXPENSE (BENEFIT)

      ($ in thousands)              For the three months ended September 30,         For the nine months ended September 30,
                                 ----------------------------------------------  -----------------------------------------------
                                    2005        2004      $ Change    % Change      2005        2004      $ Change    % Change
                                 ----------- ----------- ----------- ----------  ----------  ----------  -----------  ----------
      Investment and
<S>                                 <C>       <C>          <C>            <C>      <C>         <C>          <C>             <C>
        other income (loss)         $ 6,768   $ (13,654)   $ 20,422       150%     $ 12,749    $ 16,849     $ (4,100)      -24%
      Interest expense              $85,228   $  90,863    $ (5,635)       -6%     $253,096    $286,296     $(33,200)      -12%
      Income tax expense (benefit)  $24,781   $ (21,934)   $ 46,715       213%     $ 69,892    $ 12,869     $ 57,023       443%

</TABLE>

Investment  and other  income for the three  months  ended  September  30,  2005
increased $20.4 million as compared with the prior year period  primarily due to
higher  income from money market  balances and  short-term  investments  of $5.7
million and a $1.3 million gain on forward rate agreements in 2005, and premiums
paid in 2004 to repurchase  debt of $20.4 million,  partially  offset by a $10.7
million gain on the sales of non-strategic investments in 2004.

Investment  and other  income  for the nine  months  ended  September  30,  2005
decreased  $4.1  million,  or 24%, as compared  with the prior year period.  The
decrease is  primarily  due to $25.3  million of income from the  expiration  of
certain retained  liabilities at less than face value, which are associated with


                                       31
<PAGE>

customer advances for construction from our disposed water properties and a gain
of $9.4 million on the sales of non-strategic  investments,  partially offset by
the $20.4 million of premiums paid to repurchase  debt in 2004.  These decreases
were  partially  offset in 2005 by higher income from money market  balances and
short-term investments of $6.3 million and the $1.3 million gain on forward rate
agreements,  partially  offset by a $3.2  million  loss on the  exchange of debt
during the second quarter of 2005.

Interest  expense for the three months ended  September 30, 2005  decreased $5.6
million,  or 6%,  as  compared  with the  prior  year  period  primarily  due to
conversions  and refinancing of debt. Our composite  average  borrowing rate for
the three months ended September 30, 2005 as compared with the prior year period
was 7 basis points lower, decreasing from 8.0% to 7.93%.

Interest  expense for the nine months ended  September 30, 2005 decreased  $33.2
million,  or 12%,  as  compared  with the prior  year  period  primarily  due to
conversions  and refinancing of debt. Our composite  average  borrowing rate for
the nine months ended  September 30, 2005 as compared with the prior year period
was 16 basis points lower, decreasing from 8.06% to 7.90%.

Income taxes for the three and nine months ended  September  30, 2005  increased
$46.7 million and $57.0 million,  respectively,  as compared with the prior year
periods  primarily due to changes in taxable  income and the effective tax rate.
The  effective  tax rate for the first nine months of 2005 was 36.2% as compared
with 20.0% for the first nine months of 2004.
<TABLE>
<CAPTION>

                             DISCONTINUED OPERATIONS

($ in thousands)             For the three months ended September 30,         For the nine months ended September 30,
                           ----------------------------------------------  -----------------------------------------------
                              2005        2004      $ Change    % Change      2005        2004      $ Change    % Change
                           ----------- ----------- ----------------------- ----------- ----------- ------------ ----------
<S>                              <C>     <C>         <C>           <C>       <C>        <C>         <C>              <C>
Revenue                          $ -     $ 6,205     $ (6,205)    -100%      $ 4,607    $ 18,657    $(14,050)      -75%
Operating income                 $ -     $ 1,869     $ (1,869)    -100%      $ 1,489    $ 6,241     $ (4,752)      -76%
Income from discontinued
   operations, net of tax        $ -     $ 1,206     $ (1,206)    -100%      $ 1,040    $ 3,987     $ (2,947)      -74%
Gain on disposal of CCUSA,
   net of tax                    $ -     $     -     $      -        -       $ 1,167    $     -     $  1,167       100%

</TABLE>

On March 15,  2005,  we completed  the sale of CCUSA for $43.6  million in cash,
subject to adjustments under the terms of the agreement. The pre-tax gain on the
sale of CCUSA was $14.1 million.  Our after-tax gain was $1.2 million.  The book
income taxes recorded upon sale are primarily attributable to a low tax basis in
the assets sold.


                                       32
<PAGE>
Item 3.  Quantitative and Qualitative Disclosures about Market Risk
         ----------------------------------------------------------

Disclosure of primary market risks and how they are managed
We are exposed to market risk in the normal  course of our  business  operations
due to ongoing  investing  and  funding  activities.  Market  risk refers to the
potential  change  in fair  value  of a  financial  instrument  as a  result  of
fluctuations in interest rates and equity and commodity  prices.  We do not hold
or issue  derivative  instruments,  derivative  commodity  instruments  or other
financial instruments for trading purposes. As a result, we do not undertake any
specific  actions to cover our  exposure to market risks and we are not party to
any  market  risk  management  agreements  other  than in the  normal  course of
business or to hedge  long-term  interest  rate risk.  Our  primary  market risk
exposures are interest rate risk and equity and commodity price risk as follows:

Interest Rate Exposure

Our exposure to market risk for changes in interest  rates relates  primarily to
the  interest-bearing  portion of our  investment  portfolio and interest on our
long-term  debt and capital  lease  obligations.  The long term debt and capital
lease  obligations  include  various  instruments  with various  maturities  and
weighted average interest rates.

Our  objectives  in managing our  interest  rate risk are to limit the impact of
interest  rate  changes  on  earnings  and cash  flows and to lower our  overall
borrowing costs. To achieve these objectives,  a majority of our borrowings have
fixed interest rates. Consequently,  we have limited material future earnings or
cash flow  exposures  from changes in interest  rates on our long-term  debt and
capital lease  obligations.  A hypothetical 10% adverse change in interest rates
would  increase  the amount that we pay on our  variable  obligations  and could
result in  fluctuations in the fair value of our fixed rate  obligations.  Based
upon our overall  interest  rate  exposure at  September  30,  2005, a near-term
change in interest rates would not materially affect our consolidated  financial
position, results of operations or cash flows.

In order to  manage  our  interest  rate risk  exposure,  we have  entered  into
interest  rate swap and  forward  rate  agreements.  Under the terms of the swap
agreements,  we make  semi-annual,  floating rate interest payments based on six
month LIBOR and receive a fixed rate on the  notional  amount.  The forward rate
agreements  fix the  underlying  variable rate component of some of our swaps at
the market  rate as of the date of  execution  for certain  future  rate-setting
dates.  At  September  30, 2005,  the rates  obtained  under these  forward rate
agreements were currently below market rates.

Sensitivity analysis of interest rate exposure
At September 30, 2005,  the fair value of our  long-term  debt and capital lease
obligations was estimated to be approximately $4.1 billion, based on our overall
weighted  average rate of 7.97% and our overall  weighted  maturity of 12 years.
There has been no material change in the weighted average maturity applicable to
our obligations since December 31, 2004.

The overall  weighted  average  interest rate on our long-term  debt and capital
lease obligations increased  approximately 14 basis points during the first nine
months of 2005. A  hypothetical  increase of 80 basis points (10% of our overall
weighted average  borrowing rate) would result in an approximate  $216.3 million
decrease in the fair value of our fixed rate obligations.  However, the interest
rates on most of our debt are fixed and  therefore  changes  in market  interest
rates have little near-term impact on our results of operations.

Equity Price Exposure

Our  exposure to market risks for changes in equity  prices as of September  30,
2005 is limited  and  relates to our  investment  in  Adelphia,  and our pension
assets.

As of September  30, 2005 and December 31, 2004,  we owned  3,059,000  shares of
Adelphia  common  stock.  The  stock  price of  Adelphia  was $0.09 and $0.39 at
September 30, 2005 and December 31, 2004, respectively.

Sensitivity analysis of equity price exposure
At September 30, 2005,  the fair value of the equity  portion of our  investment
portfolio  was  estimated to be $0.3  million.  A  hypothetical  10% decrease in
quoted market prices would result in an approximate $28,000 decrease in the fair
value of the equity portion of our investment portfolio.

                                       33
<PAGE>

Disclosure of limitations of sensitivity analysis
Certain  shortcomings  are  inherent in the method of analysis  presented in the
computation  of fair value of financial  instruments.  Actual  values may differ
from those presented should market  conditions vary from assumptions used in the
calculation of the fair value.  This analysis  incorporates only those exposures
that exist as of September  30, 2005.  It does not consider  those  exposures or
positions, which could arise after that date. As a result, our ultimate exposure
with respect to our market risks will depend on the exposures  that arise during
the period and the fluctuation of interest rates and quoted market prices.

Item 4.   Controls and Procedures
          -----------------------

(a) Evaluation of disclosure controls and procedures
We carried out an evaluation,  under the supervision and with the  participation
of our management,  regarding the  effectiveness  of the design and operation of
our  disclosure  controls  and  procedures.  Based  upon  this  evaluation,  our
principal executive officer and principal financial officer concluded, as of the
end of the  period  covered  by  this  report,  September  30,  2005,  that  our
disclosure controls and procedures are effective.

(b) Changes in internal control over financial reporting
We reviewed our internal control over financial reporting at September 30, 2005.
There have been no changes in our  internal  control  over  financial  reporting
identified  in an  evaluation  thereof  that  occurred  during the third  fiscal
quarter of 2005, that materially affected or are reasonably likely to materially
affect our internal control over financial reporting.


                                       34
<PAGE>


                           PART II. OTHER INFORMATION
                CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES

Item 1.   Legal Proceedings
          -----------------

There  have  been  no  material  changes  to  our  legal  proceedings  from  the
information  provided in Item 3. Legal Proceedings included in our Annual Report
on Form 10-K for the year ended December 31, 2004.

We are party to other  legal  proceedings  arising in the  normal  course of our
business.  The outcome of individual  matters is not  predictable.  However,  we
believe that the ultimate  resolution  of all such  matters,  after  considering
insurance  coverage,  will not have a material  adverse  effect on our financial
position, results of operations, or our cash flows.

Item 2.  Unregistered  Sales of Equity  Securities  and Use of Proceeds,  Issuer
         -----------------------------------------------------------------------
         Purchases of Equity Securities
         ------------------------------

There have been no unregistered sales or purchases of equity securities.

<TABLE>
<CAPTION>

                      ISSUER PURCHASES OF EQUITY SECURITIES
                      -------------------------------------

                                                                                            (d) Maximum
                                                                                             Approximate
                                                                        (c) Total Number    Dollar Value of
                                                                            of Shares        Shares that
                                            (a) Total                   Purchased as Part     May Yet be
                                            Number of    (b) Average       of Publicly        Purchased
                                              Shares     Price Paid per   Announced Plans   Under the Plans
Period                                      Purchased       Share          or Programs       or Programs
-----------------------------------------------------------------------------------------------------------

July 1, 2005 to July 31, 2005
<S>                      <C>                               <C>                              <C>
Share Repurchase Program (1)                       -       $     -                -         $231,400,000
Employee Transactions (2)                          -             -                -             N/A

August 1, 2005 to August 31, 2005
Share Repurchase Program (1)               6,576,100       $ 13.68          6,576,100       $141,500,000
Employee Transactions (2)                          -             -            N/A               N/A

September 1, 2005 to September 30, 2005
Share Repurchase Program (1)               4,680,400       $ 13.56          4,680,400       $ 78,000,000
Employee Transactions (2)                        629       $ 13.51            N/A               N/A


Totals July 1, 2005 to September 30, 2005
Share Repurchase Program (1)              11,256,500       $ 13.62         11,256,500       $ 78,000,000
Employee Transactions (2)                        629       $ 13.51            N/A               N/A

</TABLE>

(1)  On May  25,  2005,  our  Board  of  Directors  authorized  the  Company  to
     repurchase over the following  twelve-month period, up to $250.0 million of
     the Company's common stock, either in the open market or through negotiated
     transactions. This share repurchase program commenced on June 13, 2005.
(2)  Includes  restricted  shares  withheld  (under  the terms of  grants  under
     employee stock  compensation  plans) to offset tax withholding  obligations
     that occur upon the  vesting of  restricted  shares.  The  Company's  stock
     compensation  plans provide that the value of shares  withheld shall be the
     average of the high and low price of the Company's common stock on the date
     the relevant transaction occurs.

Item 6.  Exhibits
         --------

a)       Exhibits:

          10.19.3 Summary of Non-Employee Directors'  Compensation  Arrangements
                  Outside of Formal Plans as amended, effective July 1, 2005.

                                       35
<PAGE>



         10.24    Separation Agreement between Citizens Communications Company
                  and L. Russell Mitten dated July 13, 2005.

         10.24.1  Amendment to the Separation Agreement between Citizens
                  Communications Company and L. Russell Mitten dated
                  August 31, 2005.

         31.1     Certification of Principal Executive Officer pursuant to Rule
                  13a-14(a) under the Securities Exchange Act of 1934.

         31.2     Certification of Principal Financial Officer pursuant to Rule
                  13a-14(a) under the Securities Exchange Act of 1934.

         32.1     Certification  of Chief Executive  Officer  pursuant to 18
                  U.S.C.  Section 1350, as adopted pursuant to Section 906
                  of the Sarbanes-Oxley Act of 2002.

         32.2     Certification  of Chief Financial  Officer  pursuant to 18
                  U.S.C.  Section 1350, as adopted pursuant to Section 906
                  of the Sarbanes-Oxley Act of 2002.



                                       36
<PAGE>


                CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
                                    SIGNATURE



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






                         CITIZENS COMMUNICATIONS COMPANY
                                  (Registrant)


                         By:   /s/ Robert J. Larson
                               ---------------------------------------
                               Robert J. Larson
                               Senior Vice President and
                               Chief Accounting Officer






Date: November 2, 2005


                                       37