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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT ON 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 JUNE 30, 2002

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: 0-29279

----------------------------

CHOICE ONE COMMUNICATIONS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


STATE OF DELAWARE 16-1550742
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

100 CHESTNUT STREET, SUITE 600, ROCHESTER, NEW YORK 14604-2417
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

(716) 246-4231
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

----------------------------

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 the filing
requirements for the past 90 days. Yes X _____ No _____

As of August 12, 2002, there were outstanding 41,527,107 shares of the
registrant's common stock, par value $.01 per share.









CHOICE ONE COMMUNICATIONS AND SUBSIDIARIES FORM 10-Q

INDEX


PART I. FINANCIAL INFORMATION



Item 1. Financial Statements

Condensed Consolidated Balance Sheets as of June 30, 2002 and
December 31, 2001................................................2

Condensed Consolidated Statements of Operations for the three
months ended June 30, 2002 and June 30, 2001.....................3

Condensed Consolidated Statements of Operations for the six months
ended June 30, 2002 and June 30, 2001............................4

Condensed Consolidated Statements of Cash Flow for the six months
ended June 30, 2002 and June 30, 2001............................5

Notes to Condensed Consolidated Financial Statements.............6

Cautionary Statement On Forward-Looking Statements..............16

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations...........................................16

Item 3. Quantitative and Qualitative Disclosures about Market Risk......29

PART II. OTHER INFORMATION

Item 1. Legal Proceedings...............................................30

Item 2. Changes in Securities and Use of Proceeds.......................30

Item 3. Defaults Upon Senior Securities.................................30

Item 4. Submission of Matters to a Vote of Security Holders.............30

Item 5. Other Information...............................................30

Item 6. Exhibits and Reports on Form 8-K................................30

Signatures....................................................................31
(i)





PART I FINANCIAL INFORMATION
CHOICE ONE COMMUNICATIONS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


JUNE 30, DECEMBER 31,
2002 2001
___________ _____________
(Unaudited
ASSETS
Current Assets:
Cash and cash equivalents................. $ 18,811 $ 14,415
Accounts receivable, net.................. 39,463 40,239
Prepaid expenses and other current assets. 2,290 1,910
---------- -------------
Total current assets......................... 60,564 56,564

Property and equipment, net.................. 345,456 361,768

Goodwill, net................................ -- 282,905
Intangible assets, net....................... 52,696 58,922
Other assets, net............................ 6,468 6,419
---------- -------------

Total assets........................ $ 465,184 $ 766,578
========== =============

LIABILITIES AND STOCKHOLDERS' (DEFICIT)/EQUITY
Current Liabilities:
Current portion of capital leases for
indefeasible rights to use fiber......... $ 364 $ 310
Accounts payable.......................... 15,142 12,629
Accrued expenses.......................... 47,665 49,962
Debt...................................... 540,560 --
------- -----------
Total current liabilities........... 603,731 62,901

Long-Term Debt and Other Liabilities:
Long-term debt............................ -- 473,432
Interest rate swaps....................... 15,068 13,484
Long-term capital leases for
indefeasible rights to use fiber......... 13,001 12,550
---------- -----------
Total long-term debt and other
liabilities........................ 28,069 499,466

Commitments and Contingencies (Note 12)

Redeemable Preferred Stock:
Series A preferred stock, $0.01 par
value, 340,000 shares authorized,
191,588 and 200,000 shares issued
and outstanding as of June 30, 2002 and
December 31, 2001, respectively,
($204,999 liquidation value)............. 161,686 200,780

Stockholders' (Deficit)/Equity:
Non-redeemable Series A preferred stock,
$0.01 par value, 60,000 shares authorized,
issued and outstanding, ($64,200
liquidation value)....................... 56,394 --
Undesignated preferred stock, $0.01 par
value, 4,600,000 share authorized, no
shares issued and outstanding............ -- --
Common stock, $0.01 par value, 150,000,000
shares authorized, 41,662,522 and
40,431,583 shares issued as of June 30,
2002 and December 31, 2001, respectively. 417 404
Additional paid-in capital................ 521,838 537,059
Deferred compensation..................... (1,913) (16,896)
Treasury stock, 133,768 and 132,328 shares
as of June 30, 2002 and December 31, 2001,
respectively, at cost................... (472) (480)
Accumulated deficit....................... (889,498) (503,172)
Accumulated other comprehensive loss...... (15,068) (13,484)
---------- ------------
Total stockholders'
(deficit)/equity................... (328,302) 3,431
---------- ------------
Total liabilities and stockholders'
(deficit)/equity................... $ 465,184 $ 766,578
========== ============

The accompanying notes to consolidated financial statements are an integral
part of these balance sheets.

2






CHOICE ONE COMMUNICATIONS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

THREE MONTHS ENDED
JUNE 30,
2002 2001
----- -----
(unaudited) (unaudited)


Revenue...................................... $ 73,191 $ 41,751

Operating expenses:
Network costs........................... 40,434 29,574
Selling, general and administrative,
including non-cash deferred
compensation of $2,037 and $2,414
in 2002 and 2001, respectively, and
non-cash management ownership allocation
charge of $5,348 and $6,595 in 2002
and 2001, respectively................ 56,554 42,099
Loss on disposition of assets........... 533 801
Impairment loss on intangible assets.... 283,251 --
Depreciation and amortization........... 16,533 21,370
------- ------

Total operating expenses.......... 397,305 93,844
------- ------

Loss from operations......................... (324,114) (52,093)
..........
Other income/(expense):
Interest income......................... 76 1,157
Interest expense........................ (14,973) (13,588)
-------- --------


Total other income/(expense), net............ (14,897) (12,431)
-------- --------

Net loss..................................... (339,011) (64,524)

Accretion on preferred stock................. 2,011 1,812
Accrued dividends on preferred stock......... 8,806 7,674
----- -----

Net loss applicable to common stockholders... $ (349,828) $ (74,010)
============ ============

Net loss per share, basic and diluted........ $ (8.17) $ (1.87)
============ ============

Weighted average number of shares outstanding,
basic and diluted....................... 42,804,170 39,590,269
============ ============


Adoption of Statement of Financial Accounting Standards No. 142,
"Goodwill and Other Intangible Assets"


Net loss applicable to common stockholders,
as reported................................. $ (349,828) $ (74,010)
Goodwill amortization........................ -- 8,229
----------- -----------
Adjusted net loss applicable to common
stockholders................................ $ (349,828) $ (65,781)
============ ===========

Net loss per share, basic and diluted,
as reported................................. $ (8.17) $ (1.87)
Goodwill amortization per share.............. -- 0.21
----------- -----------
Adjusted net loss per share, basic and
diluted..................................... $ (8.17) $ (1.66)
============= =============

The accompanying notes to consolidated financial statements are an integral part
of these financial statements.

3


CHOICE ONE COMMUNICATIONS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

SIX MONTHS ENDED
JUNE 30,
2002 2001
--------- ----------
(unaudited) (unaudited)


Revenue...................................... $ 143,786 $ 76,602

Operating expenses:
Network costs........................... 82,619 55,557
Selling, general and administrative,
including non-cash deferred compensation
of $4,146 and $4,843 in 2002 and 2001,
respectively, and non-cash management
ownership allocation charge of $10,715
and $13,106 in 2002 and 2001,
respectively........................... 101,750 82,886
Impairment of intangible assets......... 283,251 --
Loss on disposition of assets........... 778 801
Depreciation and amortization........... 32,707 42,131
------ ------

Total operating expenses.......... 501,105 181,375
------- -------

Loss from operations......................... (357,319) (104,773)

Other income/(expense):
Interest income......................... 130 3,779
Interest expense........................ (29,137) (28,643)
-------- --------


Total other income/(expense), net............ (29,007) (24,864)
-------- --------

Net loss..................................... (386,326) (129,637)

Accretion on preferred stock................. 3,997 3,351
Accrued dividends on preferred stock......... 17,313 15,088
------ ------

Net loss applicable to common stockholders... $ (407,636) $ (148,076)
============ ===========

Net loss per share, basic and diluted........ $ (9.60) $ (3.74)
============= ============

Weighted average number of shares outstanding,
basic and diluted................... 42,458,170 39,592,904
========== ==========

Adoption of Statement of Financial Accounting Standards No. 142,
"Goodwill and Other Intangible Assets"

Net loss applicable to common stockholders,
as reported................................. $ (407,636) $ (148,076)
Goodwill amortization........................ -- 16,458
--------- ---------
Adjusted net loss applicable to common
stockholders................................ $ (407,636) $ (131,618)
============ ============

Net loss per share, basic and diluted,
as reported................................. $ (9.60) $ (3.74)
Goodwill amortization per share.............. -- 0.42
------------ -----------
Adjusted net loss per share, basic
and diluted................................ $ (9.60) $ (3.32)
=============== ============

The accompanying notes to consolidated financial statements are an integral
part of these financial statements.

4


CHOICE ONE COMMUNICATIONS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)

SIX MONTHS ENDED
JUNE 30,
2002 2001
----- -----
(unaudited) (unaudited)
Cash flows from operating activities:
Net loss....................................... $ (386,326) $(129,637)
Adjustments to reconcile net loss to net
cash used in operating activities:

Loss on disposition of assets............... 778 801
Depreciation and amortization............... 32,707 42,131
Impairment loss on intangible assets........ 283,251 --
Non-cash interest on subordinated notes..... 11,879 --
Amortization of deferred financing costs.... 2,045 1,691
Amortization of discount on debt............ 249 --
Deferred compensation and management
ownership allocation charge................ 14,861 17,948

Changes in assets and liabilities:
Accounts receivable, net................. 776 (5,874)
Prepaid expenses and other assets........ (30) 398
Accounts payable and accrued expenses.... 540 3,401
--------- ----------

Net cash used in operating activities...... (39,270) (69,141)

Cash flows from investing activities:
Capital expenditures........................... (12,180) (43,220)
Decrease in restricted cash.................... -- 12,591
Proceeds from sales of investments............. -- 7,502
Proceeds from sale of assets................... 1,002 --
--------- ---------

Net cash used in investing activities (11,178) (23,127)

Cash flows from financing activities:
Additions to long-term debt.................... 153,700 37,000
Principal payments of long-term debt........... (98,700) (34,000)
Payments under long-term capital leases for
indefeasible rights to use fiber.............. (156) (27)
Proceeds from capital contributions and issuance
of common stock............................... -- 100
Repurchase of treasury stock................... -- (12)
Payments of financing costs.................... -- (1,011)
--------- ----------

Net cash provided by financing activities.. 54,844 2,050
--------- ----------

Net increase/(decrease) in cash and cash equivalents. 4,396 (90,218)

Cash and cash equivalents, beginning of period....... 14,415 173,573
--------- ----------

Cash and cash equivalents, end of period............. $ 18,811 $ 83,355
=========== ==========



The accompanying notes to consolidated financial statements are an integral
part of these financial statements.

5


CHOICE ONE COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2002

(Unaudited)
(All amounts in thousands, except share and per share data)


NOTE 1. DESCRIPTION OF BUSINESS

Choice One Communications Inc. and its wholly-owned subsidiaries (the
"Company") is an integrated communications provider offering facilities-based
voice and data telecommunications services and web services. The Company,
incorporated under the laws of the State of Delaware on June 2, 1998, markets
and provides these services primarily to small and medium-sized businesses in 30
second and third tier markets in the northeastern and midwestern United States.
The Company's services include local exchange and long distance services,
high-speed data and Internet services, and web hosting and design services. The
Company seeks to become the leading integrated communications provider in each
market by offering a single source for competitively priced, high quality,
customized telecommunications and web-based services.


At June 30, 2002, the Company has $18.8 million in cash and cash
equivalents and has fully drawn on its existing credit facility. Borrowings
under the credit facility are subject to compliance with covenants, including
the requirement for Minimum Available Cash, as defined in the amended credit
facility dated August 30, 2001. The Company was in default of the minimum
revenue covenant under the senior credit facility for the three months ended
June 30, 2002. The Company received a waiver of this covenant from its lending
institutions. Such waiver is contingent upon the closing of $48.875 million in
committed debt financing. As a result, the Company has classified its long-term
debt as current. Upon the closing of the additional financing and assuming the
Company is in compliance with its covenants, the debt will be reclassified as
long term. See Note 13 for further details on the additional debt financing.


The Company has experienced net losses applicable to common
stockholders of $349.8 million and $74.1 million during the three
month periods ended June 30, 2002 and March 31, 2002. The Company's viability
is dependent upon its ability to continue to execute under its business
strategy, to begin to generate positive cash flows from operations during 2002
and on compliance with the covenants under the credit facilities.
The execution of the Company's business strategy requires obtaining and
retaining a significant number of customers, and generating significant and
sustained growth in its operating cash flows to be able to meet its debt service
obligations and fund working capital and capital expenditures; see Note 1 to the
Company's Consolidated Financial Statements as filed in the Company's Form 10-K
for the fiscal year ended December 31, 2001, with respect to the Company's 2002
plan.

NOTE 2. BASIS OF PRESENTATION

The accompanying unaudited interim condensed consolidated financial
statements have been prepared in accordance with accounting principles generally
accepted in the United States of America ("GAAP") for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information required by GAAP
for complete financial statement presentation. The unaudited interim condensed
consolidated financial statements include the consolidated accounts of the
Company with all significant intercompany transactions eliminated. In the
opinion of management, all adjustments (consisting only of normal recurring
adjustments) necessary for a fair statement of the financial position, results
of operations and cash flows for the interim periods presented have been made.
These financial statements should be read in conjunction with the Company's
audited financial statements as of and for the year ended December 31, 2001. The
results of operations for the three and six month periods ended June 30, 2002
are not necessarily indicative of the results to be expected for other interim
periods or for the year ended December 31, 2002.

Certain amounts in the prior period's condensed consolidated financial
statements have been reclassified to conform to the current period presentation.
These reclassifications had no impact on the results of operations and cash
flows for the periods presented.

Unless otherwise stated, all amounts are in thousands except share and
per share data.

6

CHOICE ONE COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


NOTE 3. NEW ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 143, "Accounting for
Asset Retirement Obligations". This standard addresses the financial accounting
and reporting for obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement costs. The standard is
effective for fiscal years beginning after June 15, 2002. The Company expects to
adopt this standard effective January 1, 2003. The Company's management does not
expect the adoption of SFAS No. 143 to have a material impact on the Company's
financial statements or results of operations.

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections". This standard rescinds FASB No. 4 and an amendment to that
Statement, FASB No. 64, which related to extinguishment of debt. It
rescinds FASB No. 44, which related to accounting for intangible
assets of motor carriers. This standard also amends FASB No. 13 as it
relates to certain sale-leaseback transactions. The Company adopted this
standard on April 1, 2002. The adoption did not have a material impact on the
Company's financial statements or results of operations.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities". This standard amends Emerging
Issue Task Force (EITF) Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity". This
statement requires that a liability for costs associated with an exit or
disposal activity be recognized when the liability is incurred, rather than when
an entity commits to an exit plan. The standard also established the use of fair
value for the measurement of exit liabilities. The standard is effective for
exit or disposal activities initiated after December 31, 2002, with early
application encouraged. The Company expects to adopt this standard effective
January 1, 2003. Management does not expect adoption to have a material impact
on the Company's financial statements or results of operations.

7


CHOICE ONE COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


NOTE 4. PROPERTY AND EQUIPMENT

Property and equipment, at cost, consisted of the following:

JUNE 30, 2002 DECEMBER 31, 2001
------------- -----------------

Switch equipment.......... $297,989 $293,765

Computer equipment and
software................ 51,539 49,393

Office furniture and
equipment............... 9,900 11,203

Leasehold improvement..... 24,979 25,585

Indefeasible right to
use fiber............... 48,684 47,893

Construction in progress.. 11,507 6,309
---------- ----------

Total property
and equipment....... 444,598 434,148

Less: accumulated
depreciation............. (99,142) (72,380)
-------- --------

Property and
equipment, net...... $345,456 $361,768
========= ========

8


CHOICE ONE COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


NOTE 5. ACCOUNTING FOR GOODWILL AND INTANGIBLE ASSETS

In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other
Intangible Assets." SFAS No. 142 addresses financial accounting and reporting
for acquired goodwill and other intangible assets, and is effective for fiscal
years beginning after December 15, 2001. Effective January 1, 2002, the Company
adopted SFAS No. 142, which requires that goodwill not be amortized, but instead
be tested at least annually for impairment and expensed against earnings when
the implied fair value of a reporting unit, including goodwill, is less than its
carrying amount. The Company completed the required impairment evaluation of
goodwill in conjunction with its adoption of SFAS No. 142 during the first
quarter of 2002. Based on an analysis that considered the future cash flows of
the Company and market capitalization information, the evaluation noted no
impairment of goodwill at that time.

As outlined in SFAS No. 142, certain intangible assets with a finite
life, however, are required to continue to be amortized. The following schedule
sets forth the major classes of intangible assets held by the Company:

JUNE 30, 2002 DECEMBER 31, 2001

Amortized intangibles:

Customer relationships............ $53,635 $52,285

Deferred financing costs.......... 27,310 27,769

Less: accumulated amortization

Customer relationships... (20,422) (15,350)

Deferred financing costs. (7,827) (5,782)
-------- --------

Intangible assets, net $52,696 $58,922
======= =======

Deferred financing costs are amortized to interest expense over the
life of the related debt using the effective interest rate method. The Company
continues to amortize its intangible assets that have finite lives.
Additionally, the Company no longer amortizes its goodwill as a result of the
adoption of SFAS No. 142. The estimated amortization expense on customer
relationships, which have an estimated life of five years, is as follows for the
following fiscal periods:

July to December, 2002................ 5,364
2003.................................. 10,727
2004.................................. 10,617
2005.................................. 6,026
2006.................................. 370
2007.................................. 109

9


CHOICE ONE COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Amortization expense was $2.6 million and $11.3 million for the three
months ended June 30, 2002 and June 30, 2001, respectively, and $5.3 million and
$22.6 million for the six months ended June 30, 2002 and June 30, 2001,
respectively.

During the three months ended June 30, 2002, the Company noted a
significant adverse change in the business climate of the Company and
telecommunications industry in general. These circumstances required the
Company to perform an interim goodwill impairment test. As a result, the
Company recorded an impairment charge of $283,0 million. The amount of this
impairment charge was determined utilizing a combination of market-based
methods to estimate the fair value in accordance with SFAS No. 142. In
addition, the Company recorded a $0.3 million charge to write-down the value
of acquired customer relationships related to the Company's web hosting and
design services in accordance with the provisions of SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets."

A summary of the changes in the Company's goodwill by reporting unit
as of June 30, 2002:

Web Hosting
Telecommunications and Design Total
------------------ ----------- -----

Balance at December 31, 2002 $280,227 2,757 $282,984

Impairment charge (280,227) (2,757) (282,984)
--------- ------- ---------

Balance at June 30, 2002 $ -- $ -- $ --
=========== ========== ==========



NOTE 6. OTHER ASSETS

Other assets consisted of the following:

JUNE 30, 2002 DECEMBER 31, 2001
------------- -----------------

Investment in FiberTech, LLC....... 3,943 3,943

Notes receivable - officers........ 2,457 2,392

Other assets, net.................. 68 84
---------- ----------

$ 6,468 $ 6,419
=========== =========

The Company has a minority equity investment in FiberTech, LLC
("FiberTech")which is accounted for using the cost method. FiberTech designs,
constructs and leases high performance fiber networks in second and third tier
markets in the Northeast and Mid-Atlantic regions of the United States. As a
minority investor, the Company has the right to appoint one representative to
FiberTech's board of managers, and has a vote in determining the new markets in
which FiberTech will develop and build local loops. The Company also has
a master facilities agreement with FiberTech that provides the Company with a
20-year indefeasible right to use (IRU) fiber without electronics in 13
of Choice One's market cities.

The Company loaned an aggregate of $2.2 million to its chief executive
officer and top four executives. The loans bear interest at a rate of 5.72% and
have a term of three years (subject to acceleration in the event of termination
of employment). The loans are non-recourse and are only secured by 100% of the
common stock owned by the respective executives.

10

CHOICE ONE COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


NOTE 7. ACCRUED EXPENSES

Accrued expenses consisted of the following:

JUNE 30, 2002 DECEMBER 31, 2001
------------- -----------------

Accrued network costs............ $32,646 $32,657

Accrued payroll and payroll
related benefits................ 1,449 2,905

Accrued collocation costs........ 2,688 2,815

Accrued interest................. 3,517 3,228

Other............................ 7,365 8,357
--------- ---------

$47,665 $49,962
========= =========

NOTE 8. DEBT

Debt consist of the following:

JUNE 30, 2002 DECEMBER 31, 2001
------------- -----------------

Term A loan...................... $125,000 $125,000

Term B loan...................... 125,000 125,000

Revolver......................... 100,000 45,000

Subordinated notes............... 190,560 178,432
------- -------

$540,560 $473,432
======== ========

Included in the subordinated notes is a discount on the notes of $3.0
million and $3.3 million as of June 30, 2002 and December 31, 2001, respectively
and payable in kind (PIK) interest of $3.6 million and $3.4 million as of June
30, 2002 and December 31, 2001, respectively.


The Company's amended and restated Credit Agreement (the "Agreement")
provides the Company with an eight-year revolving credit facility of $100.0
million, an eight-year multiple draw term A loan of $125.0 million and an eight
and one-half year term B loan of $125.0 million. As of June 30, 2002, the
maximum borrowings available under the term A loan and term B loan, and the
revolver loan were all outstanding. The weighted average floating interest rate
and the weighted average fixed swapped interest rate at June 30, 2002 were
5.89% and 10.79%, respectively.

The Agreement contains certain covenants that are customary for credit
of this nature, all of which are defined in the Agreement, as amended. The
Company was in default of the minimum revenue covenant under the senior credit
facility for the three months ended June 30, 2002. The Company received a
waiver of this covenant from its lending institutions. Such waiver is
contingent upon the closing of $48.875 million in committed debt financing. As a
result, the Company has classified its long-term debt as current. Upon the
closing of the additional financing and assuming the Company is in compliance
with its covenants, the debt will be reclassified as long-term. See Note 13 for
further details on the additional debt financing.

As of June 30, 2002, the Company had principal borrowings of $190.0
million in subordinated notes, excluding the discount of $3.0 million and
interest payable in kind of $3.6 million. Interest on the notes is fixed at 13%
and is non-cash until November 2005, accreting to the principal semi-annually
for this period. During the second quarter of 2002, $11.7 million in PIK
interest accreted to principal. Thereafter, interest will be payable quarterly,
in cash, based on LIBOR plus an applicable margin.


The discount on the subordinated notes is being amortized over the
nine-year term of the subordinated notes. For the three and six month periods
ended June 30, 2002, $0.1 million and $0.2 million of the discount was
amortized, respectively.

11

CHOICE ONE COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


NOTE 9. DERIVATIVE INSTRUMENTS

The Company accounts for its derivative instruments in accordance with
SFAS No. 133, which requires that all derivative financial instruments, such as
interest rate swap agreements, be recognized in the financial statements and
measured at fair value regardless of the purpose or intent for holding them.

The Company uses derivative instruments to manage its interest rate
risk. The Company does not use the instruments for speculative purposes.
Interest rate swaps are employed as a requirement of the Company's senior credit
facility. The facility requires hedging of the interest rates for at least 50%
of the outstanding principal balance once the Company has utilized 50% of the
aggregate funding under the facility. The interest differential to be paid or
received under the related interest rate swap agreements is recognized over the
life of the related debt and is included in interest expense or income. The
Company designates these interest rate swap contracts as cash flow hedges. The
fair value of the interest rate swap agreements designated and effective as a
cash flow hedging instrument is included in accumulated other comprehensive
loss. Credit risk associated with nonperformance by counterparties is mitigated
by using major financial institutions with high credit ratings.

At June 30, 2002, the Company had interest rate swap agreements with a
notional principal amount of $187.5 million expiring in 2003 and 2006. The
interest rate swap agreements are based on the three-month LIBOR, which are
fixed at 4.985% and 6.94%. Approximately 54 percent of the underlying facility
debt is being hedged with these interest rate swaps. The fair value of the swap
agreements was $15.1 million and $13.5 million as of June 30, 2002 and December
31, 2001, respectively. The fair value of the interest rate swap agreements is
estimated based on quotes from brokers and represents the estimated amount that
the Company would expect to pay to terminate the agreements at the reporting
date.

NOTE 10. STOCKHOLDERS' EQUITY

In December 2001, the Company purchased certain assets from FairPoint
Communications Solutions Corp. The purchase price included contingent
consideration payable in common stock of the Company based on the achievement of
certain operational metrics within 120 days of the closing date. In May 2002,
based on the achievement of operational metrics, 1,000,000 shares were issued to
FairPoint Communications Solutions Corp. as additional consideration for these
assets.

In March 2002, the holders of the Company's Series A senior cumulative
preferred stock agreed to irrevocably waive certain of their redemption rights
with respect to 60,000 shares of Series A preferred stock (shares covered by
such waiver are described herein as non-redeemable Series A preferred stock and
all other shares are described as redeemable Series A preferred stock). The
redemption rights being waived include the mandatory redemption on the maturity
date of August 1, 2012 and the mandatory redemption for cash upon a change in
control.

12

CHOICE ONE COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In consideration for the holders' irrevocable waiver of redemption
rights (and for no other consideration), the holders of the non-redeemable
Series A preferred stock were granted warrants to purchase shares of the
Company's common stock. The Company issued to the holders warrants to purchase
1,177,015 shares of common stock at an exercise price of $1.64 per share. The
warrants vest 40 percent on the date of issuance and then, if the waiver has not
been terminated, 20 percent each on October 1, 2002, January 1, 2003 and April
1, 2003. Beginning on January 1, 2004, additional warrants to purchase 235,403
shares of common stock for $0.01 per share will be issued annually until the
Company elects to terminate the waiver. All the warrants will expire five years
after the Company has elected to terminate the waiver. The Company may elect, at
its sole discretion, to terminate the waiver at any time. In the event that the
Company elects to terminate the waiver, all unvested warrants would expire and
no additional warrants would be granted.

Regular dividends on both the redeemable Series A and non-redeemable
Series A preferred stock remain unchanged. Under certain circumstances, unless
the Company at its sole discretion terminates the waiver, the dividend rate on
the Series A preferred stock would increase from 14.0% to such percentage as
would result in an effective dividend on shares of the non-redeemable Series A
preferred stock to increase to 20.0%. The events that would trigger the increase
include the waiver not having been terminated by August 1, 2012, a redemption of
any of the redeemable Series A preferred stock, the continuance of a delisting
event from the Nasdaq National Market for more than 30 days (or 90 days under
some circumstances), and the inclusion of a going concern qualification in the
Company's annual audit if the average of the closing price of the Company's
common stock is below $3.00 for the 10 trading days after the release of the
annual financial statements including such qualification.

In the event of a change in control, the Company may, at its election,
redeem the non-redeemable Series A preferred stock for cash in the amount of
101% of its liquidation preference plus accrued and unpaid dividends. If the
Company does not redeem the non-redeemable Series A preferred stock for cash,
the Company is obligated to make an offer to exchange such stock for shares of
the Company's common stock. The Company intends to exchange the non-redeemable
Series A preferred stock for common stock in the event of a change in control,
and has the unconditional right to do so. The number of shares of common stock
issued in an event of a change in control would not exceed the number of then
authorized, but not issued or reserved for issuance, shares of the Company's
common stock. Any shares of non-redeemable Series A preferred stock that cannot
be redeemed because there are insufficient shares of common stock available will
remain outstanding and the Company will have no obligation to redeem or exchange
them.

In March 2002, the Company declared the dividends due on its redeemable
Series A preferred stock through March 31, 2002 and issued such dividends in the
form of 51,588 shares of redeemable Series A preferred stock. These 51,588
shares of redeemable Series A preferred stock and additional shares of 8,412
aggregate to the 60,000 shares of Series A preferred stock for which the Company
received the waiver as described above, the non-redeemable Series A preferred
stock. The fair value of the non-redeemable preferred stock was included in
stockholder's equity and the fair value of the related warrants
was included in additional paid-in capital.

The aggregate and per share amounts of cumulative dividends
in arrearages on the non-redeemable preferred stock are $2.1 million and $35.00,
respectively, as of June 30, 2002
13

CHOICE ONE COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


NOTE 11. SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES AND CASH FLOW
INFORMATION

During the six months ended June 30, 2002, the Company executed capital
leases for the indefeasible rights to use fiber, with a related party, for $0.7
million. The leases were for fiber deployed in Pittsburgh, Pennsylvania,
Indianapolis, Indiana, Springfield, Massachusetts and Providence, Rhode Island.

Supplemental disclosures of cash flow information for the six months
ended:

JUNE 30, JUNE 30,
2002 2001
-------- --------
Interest paid........................ $ 14,584 $ 27,896
=========== ==========

NOTE 12. COMMITMENTS AND CONTINGENCIES

On January 26, 2002, the Company and its wholly owned subsidiary US
Xchange Inc. (referred to collectively for purposes of this paragraph as the
Company), filed suit against AT&T Corp ("AT&T") . This action is now pending in
the United States District Court for the Western District of New York
(02-CV-6090L). The Company's complaint seeks damages from AT&T for breach of
contract, based upon AT&T's failure to pay, either on time or in full, the
Company's invoices for access services provided to AT&T. An Answer was filed by
AT&T. The Company has filed a Reply. On April 26, 2002, the Company filed a
motion for partial summary judgment based upon AT&T's failure to pay the
Company's invoices on account, and for a declaration that AT&T materially
breached its agreements for failure to pay. This motion has been fully briefed
and oral argument is tentatively scheduled for August 30, 2002. AT&T has cross
moved for partial summary judgment, seeking dismissal of several of the
Company's causes of action. The Company's responsive papers are due on August
30, 2002.

14

CHOICE ONE COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 13. SUBSEQUENT EVENT


On August 13, 2002, the Company received a commitment subject to
definitive documentation including amendments to the Company's existing credit
agreements, as well as satisfaction of customary closing conditions for new
debt financing of $48.875 million, and a waiver of the default of the revenue
covenant from the Company's lending institutions. Morgan Stanley Capital
Partners and the lenders of the Company's subordinated credit facility agreed
to provide to the Company a $44.5 million Senior Secured Term Loan Facility.
This facility will be fully available at closing and matures on March 31, 2009.
Additionally, such lenders and other existing senior lenders agreed to make
available a separate term loan facility of $4.375 million to be drawn in five
equal quarterly installments commencing on December 31, 2002 and maturing on
February 1, 2009. The closing for the loans is scheduled to take place on or
before September 9, 2002. The Company intends to use the net proceeds from
these loans for it's general corporate purposes.

The following is a summary of the material terms of the new debt
financing and the related required revisions to the Company's existing credit
facilities:

o Provides $44.5 million Senior Secured Term Loan Facility which is
fully available at closing, and matures on March 31, 2009. Such loan will
be secured on an equivalent basis with the same collateral that secures
the Company's existing senior credit facility. Interest on this term loan
will be LIBOR plus 5.75%. Interest is payable in kind (PIK) through
March 31, 2004 and is payable in cash thereafter.

o Provides $4.375 million of incremental cash from the lenders
party to the Company's existing senior credit facility. Cash will be drawn
down in five equal quarterly installments beginning no later than December
31, 2002 pursuant to a term loan. Such loan will also be secured by the
same collateral that secures the Company's existing credit facility, but
ranks senior to all of our other indebtedness. Interest on this term loan
will be LIBOR plus 4.00% and is payable in cash at the end of each
interest period.

o Issuance of warrants to the new lenders to purchase 20% of the fully
diluted common shares of the Company. A significant portion, but not all,
of these warrants are immediately exercisable upon closing. The warrant
exercise price is $0.01 per share of common stock. These warrants will
expire five years from issuance. In addition, warrants will be issued to
the Company's subordinated debt holders for 10% of the fully diluted
common shares of the Company. Such warrants, however, will be exercisable
only upon certain conditions relating to refinancing of the subordinated
notes on certain terms. The warrant exercise price is $0.01 per share of
common stock. These warrants will expire five years from issuance. If
all, or substantially all, of the warrants were fully exercised, there
would be significant dilution to the Company's existing stockholders.

In conjunction with the new debt financing, the Company's existing
Senior Credit Facility will be amended to effect the following changes:

o Principal payments on the Senior Credit Facility, scheduled for
December 31, 2003, and March 31, 2004 are deferred to the final maturity
date in 2009.

o Amendment of several covenants, including elimination of the minimum
revenue and minimum EBITDA covenants through the second quarter of 2004,
after which customary leverage and coverage covenants will be in effect.

Also, in conjunction with the new debt financing, the Company's
subordinated debt agreements will also be amended resulting in an extension of
PIK interest on its senior subordinated notes by one year, to November 2006
and PIK dividends on its preferred stock will be extended by one year until
November 2006, or until such time that all senior debt has been fully repaid,
whichever is later.
15


CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

From time to time, the Company makes oral and written statements that may
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Act") or by the Securities and
Exchange Commission ("SEC") in its rules, regulations, and releases. The words
or phrases "believes", "expects", "estimates", "anticipates", "will", "will be",
"could", "may" and "plans" and the negative or other similar words or
expressions identify forward-looking statements made by or on behalf of the
Company. The Company desires to take advantage of the "safe harbor" provisions
in the Act for forward-looking statements made from time to time, including, but
not limited to, the forward-looking information contained in the Management's
Discussion and Analysis of Financial Condition and Results of Operations and
other statements made in this Form 10-Q and in other filings with the SEC.

The Company cautions readers that any such forward-looking statements made by or
on behalf of the Company are based on management's current expectations and
beliefs but are not guarantees of future performance. Actual results could
differ materially from those expressed or implied in the forward-looking
statements. Factors that could impact the Company include, but are not limited
to:

o Compliance with covenants for borrowing under our bank credit facility;

o The availability of additional financing;

o Successful marketing of our services to current and new customers;

o The existence of strategic alliances, relationships and suitable
acquisitions;

o Technological, regulatory or other developments in the Company's
business;

o Shifts in market demand and other changes in the competitive
telecommunications sector;

These and other applicable risks are summarized under the caption "Risk
Factors" and elsewhere in the Company's Annual Report on Form 10-K, filed on
April 1, 2002. You should consider all of our subsequent written and oral
forward-looking statements only in light of such cautionary statements. You
should not place undue reliance on these forward-looking statements and you
should understand that they represent management's view only as of the dates we
make them.



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

OVERVIEW

We are an integrated communications provider offering facilities-based
voice and data telecommunications services and web services primarily to small
and medium-sized businesses in 30 second and third tier markets in 12 states in
the northeastern and midwestern United States. Our offerings include local
exchange and long distance service, high-speed data and Internet services, and
web hosting and design services. Our principal competitors are incumbent local
exchange carriers, such as the regional Bell operating companies, as well as
other integrated communications providers.

We seek to become the leading integrated communications provider in
each of our markets by offering a single source for competitively priced, high
quality, customized telecommunications and web-based services. A key element of
our strategy has been to be one of the first integrated communications providers
to provide comprehensive network coverage in each of the markets we serve. We
are achieving this market coverage by installing both voice and data equipment
in multiple established telephone company central offices. As of June 30, 2002,
we have connected 91% of our clients directly to our own switches, which allows
us to more efficiently route traffic, ensure a high quality of service and
control costs.

16



We, and many financial analysts, evaluate the growth of our business by
focusing on various operational data in addition to financial data. Lines in
service represent the lines sold that are now being used by us to provide our
services. Although the number of lines we service for each client may vary, our
primary focus is on the small- to medium-sized business customer. On average,
our clients have 5 lines or less. We plan to continue to focus on small- to
medium-sized business clients.




The table below provides selected key operational data as of:

June 30, 2002 June 30, 2001
------------- -------------


Markets served 30 28

Number of switches-voice 26 25

Number of switches-data 63 62

Total central office collocations 530 445

Estimated addressable market
(Business lines) 5.7 million 4.7 million

Lines in service-total 468,272 253,987

Lines in service-voice 452,593 246,071

Lines in service-data 15,679 7,916

Total employees 1,801 1,697

Direct sales employees 511 331

Included in management's discussion and analysis of financial condition
and results of operations are adjusted EBITDA amounts. Adjusted EBITDA
represents earnings before interest, income taxes, depreciation and
amortization, and non-cash charges. Adjusted EBITDA is used by management and
certain investors as an indicator of a company's historical ability to service
its debt. Management believes that an increase in adjusted EBITDA is an
indicator of improved ability to service existing debt, to sustain potential
future increases in debt and to satisfy capital requirements. However, adjusted
EBITDA is not intended to represent cash flows for the period, nor has it been
presented as an alternative to either operating income, as determined by
generally accepted accounting principles, nor as an indicator of operating
performance or cash flows from operating, investing and financing activities, as
determined by generally accepted accounting principles, and is thus susceptible
to varying calculations. Adjusted EBITDA as presented may not be comparable to
other similarly titled measures of other companies. We expect that our adjusted
EBITDA will become positive during 2002 as we expand our telecommunications
services business.

17


Adjusted EBITDA was the following for the period ended:

(in thousands)

Three Months Ended Six Months Ended
------------------ -----------------
June 30, March 31, June 30, June 30, June 30,

2002 2002 2001 2002 2001
---- ---- ---- ---- ----


Loss from operations $(324,114) $(33,205) $(52,093) $(357,319) $(104,773)
Non-cash adjustments:
Depreciation &
Amortization 16,533 16,174 21,370 32,707 42,131
Deferred compensation 2,037 2,109 2,414 4,146 4,843
Management ownership
Allocation charge 5,348 5,367 6,595 10,715 13,106
Specific bad debt
reserves 11,800 800 -- 12,600 --
Other non-cash charges 571 -- -- 571 --
Loss on dispositions
of assets 533 245 801 778 801
Impairment loss on
intangible assets 283,251 -- -- 283,251 --
------- -------- ------- --------- -------


Adjusted EBITDA $(4,041) $ (8,510) $(20,913) $(12,551) $(43,892)
======== ========= ========= ========= =========


During the first six months of 2002, we increased bad debt reserves for
accounts receivable related to telecommunication carriers negatively affected by
current economic conditions, including Global Crossing, WorldCom, and other
distressed carriers. Global Crossing filed for bankruptcy on January 28, 2002
while WorldCom filed for bankruptcy on July 21, 2002. We have commenced legal
action against AT&T for delays in payment of access revenues owed to us.

During the three months ended June 30, 2002, we noted a significant
asverse change in the business climate of the comapny and telecommunications
industry in general. These circumstances required us to perform an interim
goodwill impairment test. As a result, we recorded an impairment charge of
$283.0 million. The amount of the impairment charge was determined utilizing a
combination of market-based methods to estimate the fair value in accordance
with SFAS No. 142. In addition, we recorded a $0.3 million charge to write-down
the value of acquired customer relationships related to our web hosting and
design services in accordance with the provisions of SFAS No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets."



RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2002 AS COMPARED TO
JUNE 30, 2001

Revenue

We generated $73.2 million in revenue during the three months ended
June 30, 2002. This represents a 75.3% increase compared to revenue for the
three months ended June 30, 2001 and a 3.7% increase compared to the three
months ended March 31, 2002. The increase from the same quarter a year ago is
primarily attributable to an increase in volume due to the increase in markets
served (2) and in the number of lines in service (214,285). At June 30, 2002, we
had a total installed base of 468,272 lines, as compared with 253,987 lines at
June 30, 2001. The increase in revenues was partially offset by decreases in
local and long distance usage and per-minute rates and Federal Communications
Commission (FCC) mandated reductions for access rates reduced during the period.
Revenue was generated principally from local calling services, long distance
services, DSL and other data services, as well as e-services, including web
design and hosting services. Revenue growth for local and long distance services
is principally generated from capturing market share from other service
providers. We have benefited and continue to benefit from the declining number
of competitors in our market footprint. Revenue growth for the remainder of 2002
will also depend on our ability to obtain and retain a significant number of
customers and selling additional value added services to our existing customers.

18


We expect revenue from access charges that are based on other
established telephone companies' long distance calls made by and to our clients,
and revenue from reciprocal compensation that entitles us to bill the
established telephone companies for calls in the same local calling area, placed
by their clients to our clients, to increase in 2002 as we increase our client
base, but on a declining per unit basis. Beyond 2002, access is expected to
continue to decline on a per unit basis as the Federal Communications
Commission's benchmark for established interstate access rates declines.
Reciprocal compensation is also expected to decline beyond 2002.

The market for high-speed data communications services and Internet
access is intensely competitive. We offer data services in all 30 of our
markets. We generate revenue from the sale of these services to end user clients
in the small and medium-sized business market segments. We price our services
competitively in relation to those of the established telephone companies and
offer combined service discounts designed to give clients incentives to buy a
portfolio of services.

Our churn for the three months ended June 30, 2002, of our
facilities-based business clients, increased slightly to an average of 1.4% per
month. Our churn levels continue to compare favorably to the significant churn
of clients within the telecommunications industry. We seek to minimize churn by
providing superior client care, by offering a competitively priced portfolio of
local, long distance and Internet services, by signing a significant number of
clients to multi-year service agreements, and by focusing on offering our own
facilities-based services.

Network Costs

Network costs for the three months ended June 30, 2002 were $40.4
million representing a 36.7% increase compared to network costs for the three
months ended June 30, 2001; and a 4.2% decrease compared to network costs for
the three months ended March 31, 2002. Network costs as a percentage of total
revenues were 55.2% at June 30, 2002, down from 70.8% at June 30, 2001 and 59.8%
at March 31, 2002.We believe that network costs as a percentage of revenue
should continue to improve for the second half of 2002.

The increase in network costs from the same period a year ago is
consistent with the deployment of our networks and the increase in number of
lines in service. We have increased our markets from 28 to 30, added 85
collocation sites and grown lines in service approximately 84.4% to 468,272 from
253,987. The decrease in network costs from the first quarter of 2002 is related
to the reduction in unbundled network element (UNE) rates in New York State
effective March 1, 2002, and the elimination of redundancies resulting from
duplicate collocations acquired from FairPoint Communications Solutions
("FairPoint").

Our network costs include:

o Leases of high-capacity digital lines that interconnect our
network with established telephone company networks;

o Leases of local loop lines which connect our clients to our network;

o Leased space in established telephone company central offices for
collocating our transmission equipment;

o Completion of local calls originated by our clients, completion of
originating (1+ calling) and terminating (inbound 800 calling) long
distance calls by our clients; and

o Leases of our inter-city network.

19


We lease fiber capacity in certain markets when economically justified
by traffic volume growth in order to reduce the overall cost of local transport
and reduce our reliance on the established telephone company. Fiber deployment
provides the bandwidth necessary to support substantial incremental growth and
allows us to improve gross margins and enhance the quality and reliability of
our network which strengthens our competitive advantage in the markets.

During the three months ended June 30, 2002, we took possession of
fiber networks in Springfield, Massachusetts and Providence, Rhode Island, from
Fibertech Networks, bringing to 16 the number of markets where we have
intra-city fiber connecting our collocations. We plan to activate fiber in an
additional 5 markets across our footprint. Our operational fiber network now
consists of 1,759 operational route miles of intra- and inter-city fiber miles.
Once complete, our fiber network will consist of approximately 3,400 fiber
miles.

Gross Profit

During the three months ended June 30, 2002 and 2001, we achieved gross
profit (revenue less direct network costs) of $32.8 million, or 44.8% of
revenue, and $12.2 million, or 29.2% of revenue, respectively. This represents a
169.0% increase over the same three months in 2001. Gross profit increased 15.3%
from the three months ended March 31, 2002, from $28.4 million, or 40.2% of
revenue. We expect that our gross profit as a percentage of revenue will improve
as our revenue increases and we realize cost efficiencies in our network costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended
June 30, 2002 were $56.6 million compared to selling, general and administrative
expenses of $42.1 million and $45.2 million during the three months ended June
30, 2001 and March 31, 2002, respectively. Excluding the non-cash deferred
compensation and management ownership allocation charges, the selling, general
and administrative expenses increased from $33.1 million during the three months
ended June 30, 2001 to $49.2 million during the three months ended June 30,
2002. For the three months ended March 31, 2002, selling, general and
administrative expenses excluding non-cash deferred compensation and management
allocation was $37.7 million.

Excluding non-cash deferred compensation and management ownership
allocation charges, the increase in selling, general and administrative expenses
from the same period a year ago resulted primarily from the growth of our
operations, ongoing back office infrastructure enhancements and related growth
in number of employees. In addition, we increased our bad debt reserves for
certain accounts receivable related to telecommunication carriers negatively
affected by current economic conditions, including WorldCom and other distressed
carriers, by $11.8 million. WorldCom filed for bankruptcy on July 21, 2002.
Accounts receivable related to the periods before this date may be uncollectible
due to the bankruptcy protection. We have fully reserved this amount. We have
also commenced legal action against AT&T for delays in the payment of access
revenues owed us. The increase in selling, general and administrative expenses
over the three months ended March 31, 2002 was $11.4 million or 25.1% and was
primarily due to the increase in bad debt reserves as previously mentioned
above. Excluding these charges, selling, general and administrative expenses
decreased $0.1 million or approximately 0.3%. The decrease is due to costs
incurred during the first quarter of 2002 for the migration of lines acquired
from FairPoint onto our network and billing platforms that were non-recurring.

The number of employees increased to 1,801 as of June 30, 2002 from
1,697 as of June 30, 2001,and decreased from 1,820 as of March 31, 2002. As of
June 30, 2002, the number of direct sales employees was 511. This represents an
increase of 180 employees from 331 as of June 30, 2001 and a decrease of 30
employees from 541 as of March 31, 2002.

Our selling, general and administrative expenses include:

o Costs associated with sales and marketing, client care,
billing, corporate administration, personnel and network maintenance;

o Network maintenance costs;


o Administrative overhead and office lease expense; and


o Bad debt expense.

We expect selling, general and administrative expenses to remain
stable or decline through the remainder of 2002 as our economies of scale
improve.

20

Management Ownership Allocation Charge and Deferred Compensation

Upon consummation of our initial public offering, we were required by
generally accepted accounting principles to record a $119.9 million increase in
the assets of Choice One Communications L.L.C. allocated to management as an
increase in additional paid-in capital, with a corresponding increase in
deferred compensation. During the three months ended June 30, 2002 and 2001, we
amortized $5.3 million and $6.6 million, respectively, of the deferred charge.
Amortization expense declined from the same quarter a year ago due to the
expiration of the period over which we may repurchase the securities of certain
members of management. The amortization expense will further decline in the
third quarter of 2002, as the deferred compensation related to securities of
management will be fully amortized.

We also recognized $2.0 million and $2.4 million of non-cash deferred
compensation amortization during the three months ended June 30, 2002 and 2001,
respectively. The amortization expense is expected to decrease significantly in
the third quarter as the amounts related to the issuance of restricted shares to
the employees of the former US Xchange will be fully amortized. Deferred
compensation was recorded in connection with membership units of Choice One
Communications LLC sold to certain management employees, grants to employees
under our 1998 Employee Stock Option Plan, and the issuance of restricted shares
to the employees of the former US Xchange in August 2000.

Impairment Loss On Intangible Assets

During the three months ended June 30, 2002, we noted a significant
asverse change in the business climate of the comapny and telecommunications
industry in general. These circumstances required us to perform an interim
goodwill impairment test. As a result, we recorded an impairment charge of
$283.0 million. The amount of the impairment charge was determined utilizing a
combination of market-based methods to estimate the fair value in accordance
with SFAS No. 142. In addition, we recorded a $0.3 million charge to write-down
the value of acquired customer relationships related to our web hosting and
design services in accordance with the provisions of SFAS No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets."


Depreciation and Amortization

Depreciation and amortization for the three months ended June 30, 2002
was $16.5 million. This represents a 22.6% decrease and a 2.2% increase compared
to the three months ended June 30, 2001 and March 31, 2002, respectively. The
decrease from the same quarter a year ago results from adoption of SFAS No. 142,
"Goodwill and Other Intangible Assets" which requires us to discontinue the
systematic amortization of goodwill and intangible assets with indefinite lives.
Amortization from goodwill was $8.2 million during the three months ended June
30, 2001. This decrease was somewhat offset by the increase in depreciation
expense related to the deployment of our networks and initiation of service in
our markets in 2001 and early 2002. The increase in depreciation from the first
quarter of 2002 was also related to network deployments as well as other asset
acquisitions being placed in service during the first quarter. Our depreciation
and amortization expense includes depreciation of switch related equipment,
non-recurring charges and equipment collocated in established telephone company
central offices, network infrastructure equipment, information systems,
furniture and fixtures, indefeasible rights to use fiber and amortization of
customer relationships.

21


Interest Expense and Income

Interest expense for the three months ended June 30, 2002 and 2001 was
approximately $15.0 million and $13.6 million, respectively. Interest expense
for the three months ended March 31, 2002 was $14.2 million. Interest expense
includes interest payments on borrowings under our senior credit facility and
subordinated notes, amortization of deferred financing costs related to such
facilities, amortization of the discount on the subordinated notes and
commitment fees on the unused senior credit facility. Beginning in November
2001, the interest expense on the subordinated notes was payable in kind (PIK)
for four years.

Interest expense increased from the same quarter a year ago due to
increases in the amount of borrowings during the quarter, offset by favorable
declines in LIBOR rates that impacted our borrowing rates. We expect interest
expense to increase slightly over the next quarter as we realize the full
quarter impact of our fully drawn senior credit facility. Cash interest expense
was $7.7 million for the three months ended June 30, 2002 as compared to $12.4
million for the three months ended June 30, 2001 and $7.2 million for the three
months ended March 31, 2002.

Interest income for the three months ended June 30, 2002 and 2001 was
approximately $76,000 and $1.2 million, respectively. Interest income for the
three months ended March 31, 2002 was $54,000. Interest income results from the
investment of cash and cash equivalents, mainly from the cash proceeds generated
from the borrowings under our senior credit and subordinated debt facilities. We
expect interest income to gradually decline as we use our surplus cash to fund
operations and capital expenditures and market interest rates remain steady or
decrease slightly for the remainder of 2002.

Income Taxes

We have not generated any taxable income to date and do not expect to
generate taxable income in the next few years. Use of our net operating loss
carryforwards, which begin to expire in 2021, may be subject to limitations
under Section 382 of the Internal Revenue Code of 1986, as amended. We have
recorded a full valuation allowance on the deferred tax asset, consisting
primarily of net operating loss carryforwards, due to the uncertainty of its
realizability.

22



RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2002 AS COMPARED TO JUNE
30, 2001



Revenue

We generated $143.8 million in revenue during the six months ended June
30, 2002. This represents an increase of $67.2 million, or 87.7%, as compared to
revenues of $76.6 million for the six months ended June 30, 2001. The increase
from the same period a year ago is primarily attributable to an increase in
volume due to an increase in markets served (2), an increase in the number of
installed voice and data switches (2), and an increase in the number of lines in
service (214,285). At June 30, 2002, we had a total installed base of 468,272
lines, as compared with 253,987 lines at June 30, 2001.

Revenue was generated principally from local calling services, long
distance services, DSL and other data services, as well as e-services, including
web design and hosting services. Revenue growth for local and long distance
services is principally generated from capturing market share from other service
providers. We have benefited and continue to benefit from the declining number
of competitors in our market footprint. Revenue growth for the remainder of 2002
will also depend on our ability to obtain and retain a significant number of
customers, and selling additional value added services to our existing
customers.

We expect revenue from access charges that are based on other incumbent
telephone companies' long distance calls made by and to our clients, and revenue
from reciprocal compensation that entitles us to bill the established telephone
companies for calls in the same local calling area, placed by their clients to
our clients, to increase in 2002 as we increase our client base, but on a
declining per unit basis. Beyond 2002, access is expected to continue to decline
on a per unit basis as the Federal Communications Commission's benchmark for
established interstate access rates declines. Reciprocal compensation is also
expected to decline beyond 2002.

The market for high-speed data communications services and Internet
access is intensely competitive. We offer data services in all 30 of our
markets. We generate revenue from the sale of these services to end user clients
in the small and medium-sized business market segments. We price our services
competitively in relation to those of the established telephone companies and
offer combined service discounts designed to give clients incentives to buy a
portfolio of services.

Our churn for the six months ended June 30, 2002, of our
facilities-based business clients, has remained relatively stable at
approximately 1.2% per month. Our churn levels continue to compare favorably to
the significant churn of clients within the telecommunications industry. We seek
to minimize churn by providing superior client care, by offering a competitively
priced portfolio of local, long distance and Internet services, by signing a
significant number of clients to multi-year service agreements, and by focusing
on offering our own facilities-based services.

Network Costs

Network costs for the six months ended June 30, 2002 were $82.6 million
representing a 48.7% increase compared to network costs for the six months ended
June 30, 2001. Network costs as a percentage of total revenues decreased from
72.5% at June 30, 2001 to 57.5% at June 30, 2002. We believe that network costs
as a percentage of revenue should continue to improve for the second half of
2002.

The increase in network costs from the same period a year ago is
consistent with the deployment of our networks and the increase in number of
lines in service. We have increased our markets from 28 to 30, added 85
collocation sites and grown lines in service approximately 84.4% to 468,272 from
253,987.

23


Our network costs include:

o Leases of high-capacity digital lines that interconnect our
network with established telephone company networks;

o Leases of local loop lines which connect our clients to our network;

o Leased space in established telephone company central offices for
collocating our transmission equipment;

o Completion of local calls originated by our clients, completion of
originating (1+ calling) and terminating (inbound 800 calling) long
distance calls by our ; and

o Leases of our inter-city network.

We lease fiber capacity in certain markets when economically justified
by traffic volume growth in order to reduce the overall cost of local transport
and reduce our reliance on the established telephone company. Fiber deployment
provides the bandwidth necessary to support substantial incremental growth and
allows us to improve gross margins and enhance the quality and reliability of
our network which strengthens our competitive advantage in the markets.

We have currently taken possession of fiber networks, using intra-city
fiber to connect our collocations, in 16 markets. We plan to activate fiber in
an additional 5 markets across our footprint. Our operational fiber network now
consists of 1,759 operational route miles of intra- and inter-city fiber miles.
Once complete, our fiber network will consist of approximately 1,900 intra-city
fiber miles and 1,700 inter-city fiber miles.

Gross Profit

During the six months ended June 30, 2002 and 2001, we achieved gross
profit (revenue less direct network costs) of $61.2 million, or 42.5% of
revenue, and $21.0 million, or 27.5% of revenue, respectively. This represents
an increase of $40.1 million, or approximately 190.6%, over the same six months
in 2001. We expect that our gross profit as a percentage of revenue will improve
as our revenue increases and we realize cost efficiencies in our network costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the six months ended
June 30, 2002 were $101.2 million compared to selling, general and
administrative expenses of $82.9 million during the six months ended June 30,
2001, respectively. Excluding the non-cash deferred compensation and management
ownership allocation charges, the selling, general and administrative expenses
increased from $64.9 million during the six months ended June 30, 2001 to $86.9
million during the six months ended June 30, 2002. This represents an increase
of $22.0 million or approximately 33.8%

Excluding non-cash deferred compensation and management ownership
allocation charges, the increase in selling, general and administrative expenses
from the same period a year ago resulted primarily from the growth of our
operations, ongoing back office infrastructure enhancements and related growth
in number of employees. During this period, salary, commissions and benefits
increased approximately $8.1 million, directly related to headcount increases.
The acquisition of Fairpoint Communications Solutions Corp. ("Fairpoint") also
accounted for incremental expenses of $3.3 million in 2002. These increases were
offset by decreases in other expense items including outsourcing costs of $1.3
million as we brought acess billing functions inhouse.

We also increased the bad debt reserves during the first six months of
2002 for accounts receivable related to telecommunication carriers negatively
affected by current economic conditions, including Global Crossing, WorldCom,
and other distressed carriers, by $12.6 million. Global Crossing filed for
bankruptcy on January 28, 2002 and WorldCom filed for bankruptcy on July 21,
2002. Accounts receivable related to the periods before those dates may be
uncollectible due to the bankruptcy protection. We have fully reserved this
amount. We have also commenced legal action against AT&T for delays in the
payment of access revenues owed us.

24


Our selling, general and administrative expenses include:

o Costs associated with sales and marketing, client care, billing,
corporate administration, personnel and network maintenance;

o Network maintenance costs;

o Administrative overhead and office lease ; and

o Bad debt expense.

We expect selling, general and administrative expenses to remain stable
or decline through the remainder of 2002 as our economies of scale improve.

Management Ownership Allocation Charge and Deferred Compensation

Upon consummation of our initial public offering, we were required by
generally accepted accounting principles to record a $119.9 million increase in
the assets of Choice One Communications L.L.C. allocated to management as an
increase in additional paid-in capital, with a corresponding increase in
deferred compensation. During the six months ended June 30, 2002 and 2001, we
amortized $10.7 million and $13.1 million, respectively, of the deferred charge.
Amortization expense declined from the same six months a year ago due to the
expiration of the period over which we may repurchase the securities of certain
members of management. The amortization expense will further decline in the
third quarter of 2002, as the deferred compensation related to securities of
management will be fully amortized.

We also recognized $4.1 million and $4.8 million of non-cash deferred
compensation amortization during the six months ended June 30, 2002 and 2001,
respectively. The amortization expense is expected to decrease significantly in
the third quarter as the amounts related to the issuance of restricted shares to
the employees of the former US Xchange will be fully amortized. Deferred
compensation was recorded in connection with membership units of Choice One
Communications LLC sold to certain management employees, grants to employees
under our 1998 Employee Stock Option Plan, and the issuance of restricted shares
to the employees of the former US Xchange in August 2000.

Impairment Loss On Intangible Assets

During the six months ended June 30, 2002, we noted a significant
asverse change in the business climate of the comapny and telecommunications
industry in general. These circumstances required us to perform an interim
goodwill impairment test. As a result, we recorded an impairment charge of
$283.0 million. The amount of the impairment charge was determined utilizing a
combination of market-based methods to estimate the fair value in accordance
with SFAS No. 142. In addition, we recorded a $0.3 million charge to write-down
the value of acquired customer relationships related to our web hosting and
design services in accordance with the provisions of SFAS No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets."

Depreciation and Amortization

Depreciation and amortization for the six months ended June 30, 2002
was $32.7 million. This represents a decrease of $9.4 million, or 22.4%,
compared to the six months ended June 30, 2001. The decrease from the same
quarter a year ago results from adoption of No. 142 (SFAS No. 142), "Goodwill
and Other Intangible Assets" which requires us to discontinue the systematic
amortization of goodwill and intangible assets with indefinite lives.
Amortization from goodwill was $16.5 million during the six months ended June
30, 2001. This decrease was somewhat offset by the increase in depreciation
expense related to the deployment of our networks and initiation of service in
our markets in 2001. The increase in depreciation from the first quarter of 2002
was also related to network deployments as well as other asset acquisitions
being placed in service during the first quarter. Our depreciation and
amortization expense includes depreciation of switch related equipment,
non-recurring charges and equipment collocated in established telephone company
central offices, network infrastructure equipment, information systems,
furniture and fixtures, indefeasible rights to use fiber and amortization of
customer relationships.

25


Interest Expense and Income

Interest expense for the six months ended June 30, 2002 and 2001 was
approximately $29.1 million and $28.6 million, respectively. Interest expense
includes interest payments on borrowings under our senior credit facility and
subordinated notes, amortization of deferred financing costs related to such
facilities, amortization of the discount on the subordinated notes and
commitment fees on the unused senior credit facility. Beginning in November
2001, the interest expense on the subordinated notes was payable in kind (PIK)
for four years.

Interest expense increased from the same six months a year ago due to
increases in the amount of borrowings during the quarter, offset by favorable
declines in LIBOR rates that impacted our borrowing rates. We expect interest
expense to increase slightly over the next quarter as we realize the full
quarter impact of our fully drawn senior credit facility. Cash interest expense
was $14.9 million for the six months ended June 30, 2002 as compared to $27.9
million for the six months ended June 30, 2001.

Interest income for the six months ended June 30, 2002 and 2001 was
approximately $130,000 and $3.8 million, respectively. Interest income results
from the investment of cash and cash equivalents, mainly from the cash proceeds
generated from the borrowings under our senior credit and subordinated debt
facilities. We expect interest income to gradually decline as we use our surplus
cash to fund operations and capital expenditures and market interest rates
remain steady or decrease slightly for the remainder of 2002.

Income Taxes

We have not generated any taxable income to date and do not expect to
generate taxable income in the next few years. Use of our net operating loss
carryforwards, which begin to expire in 2021, may be subject to limitations
under Section 382 of the Internal Revenue Code of 1986, as amended. We have
recorded a full valuation allowance on the deferred tax asset, consisting
primarily of net operating loss carryforwards, due to the uncertainty of its
realizability.

26


LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2002, we had $18.8 million in cash and cash equivalents
available. We did not have any further funding availability under our revolving
credit facility and we were in default of our minimum revenue covenant under the
senior credit facility for the three months ended June 30, 2002.

On August 13, 2002, we received a commitment subject to
definitive documentation including amendments to the company's existing credit
agreements, as well as satisfaction of customary closing conditions, for new
debt financing of $48.875 million and a waiver of the default of the revenue
covenant from our lending institutions. Morgan Stanley Capital
Partners and the lenders of our subordinated credit facility agreed to provide
to us a $44.5 million Senior Secured Term Loan Facility. This facility will be
fully available at closing and matures on March 31, 2009. Additionally, such
lenders and other existing senior lenders agreed to make available a separate
term loan facility of $4.375 million to be drawn in five equal quarterly
installments commencing on December 31, 2002 and maturing on February 1, 2009.
The closing for the loans is scheduled to take place on or before
September 9, 2002. We intend to use the net proceeds from these loans for our
general corporate purposes.

The following is a summary of the material terms of the new debt
financing and the related required revisions to our existing credit facilities:

o Provides $44.5 million Senior Secured Term Loan Facility which is
fully available at closing, and matures on March 31, 2009. Such loan will
be secured on an equivalent basis with the same collateral that secures
our existing senior credit facility. Interest on this term loan will be
at LIBOR plus 5.75%. Interest is payable in kind (PIK) through
March 31, 2004 and is payable in cash thereafter.

o Provides $4.375 million of incremental cash from the lenders
party to our existing senior credit facility. Cash will be drawn
down in five equal quarterly installments beginning no later than December
31, 2002 pursuant to a term loan. Such loan will also be secured by the
same collateral that secures our existing credit facility, but ranks senior
to all other indebtedness. Interest on this term loan accrues quarterly at
LIBOR plus 4.00% and is payable in cash at the end of each interest period.

o Issuance of warrants to the new lenders to purchase 20% of the fully
diluted common shares of the Company. A significant portion, but not all,
of these warrants are immediately exercisable upon closing. The warrant
exercise price is $0.01 per share of common stock. These warrants will
expire five years from issuance. In addition, warrants will be issued to
our subordinated debt holders for 10% of the fully diluted common shares
of the Company. Such warrants, however, will be exercisable only upon
certain conditions related to refinancing of the subordinated notes on
certain terms. The warrant exercise price is $0.01 per share of common
stock. These warrants will expire five years from issuance. If all, or
substantially all, of the warrants were fully exercised, there would be
significant dilution to our existing stockholders.

In conjunction with the new debt financing, our existing Senior Credit
Facility will be amended to effect the following changes:


o Principal payments on our Senior Credit Facility, scheduled for
December 31, 2003, and March 31, 2004 are deferred to the final maturity
date in 2009.

o Amendment of several covenants, including elimination of the minimum
revenue and minimum EBITDA covenants through the second quarter of 2004,
after which customary leverage and coverage covenants will be in effect.

Also, in conjunction with the new debt financing, our subordinated debt
agreements will be amended resulting in an extension of PIK interest on our
senior subordinated notes by one year, to November 2006 and PIK dividends on
our preferred stock will be extended by one year until November 2006 or until
such time that all senior debt has been fully re-paid, whichever is later.

27



We have reduced our cash utilization by $15.0 million, or 45.7%, from
the first quarter of 2002. Our cash utilization for the three months ended June
30, 2002 was $17.8 million, compared with $32.8 million for the three months
ended March 31, 2002. We have experienced net losses applicable to common
stockholders of $349.8 million, $74.0 million and $57.8 million during the three
month periods ended June 30, 2002, June 30, 2001 and March 31, 2002. Our
viability is dependent upon our ability to continue to execute under our
business strategy and to begin to generate positive cash flows from operations
during 2002, and compliance with our covenants under our credit facilities. The
execution of our business strategy requires obtaining and retaining a
significant number of customers, and generating significant and sustained growth
in our operating cash flows to be able to meet our debt service obligations and
fund working capital and capital expenditures.

Our cash and cash equivalents will decline during 2002 in accordance
with our plan. However, we believe that our cash flow from operations and the
proceeds of our new debt financing will be sufficient to enable us to execute
our business strategy until such time as we have positive cash flow from
operations to fund working capital, capital expenditures and debt service
requirements. We can make no assurances, however, that our estimates with
respect to the occurrence and timing of positive cash flows will be accurate or
that we will be able to complete our new debt financing within the time frame
or on the terms presently agreed to with our lenders. Accordingly, it may be
necessary for us to seek additional sources of capital, which may include
capital lease financing, private equity, and other sources of funding, for the
successful execution of our business strategy. Our estimates of funding may be
inaccurate due to a variety of factors including delay in timely collection of
amounts owed to us, regulatory changes, changes in technology, changing
conditions within the industry and general economy, increased competition in
price and service, changes in number of customers and penetration of new
services, and changes in cost of our networks in each of our markets. Our
collections from interexchange carriers and established telephone companies
have been slower than those from end-users. Currently, we have commenced a
legal action against AT&T for delays in access payments owed to us. Due to the
uncertainty of all of these factors, actual funding available from operations
and other sources may vary from expected amounts, possibly to a material
degree, and such variations could affect our funding needs and could result in a
default under our credit facilities.

We cannot make any assurances that we would be successful in obtaining
additional funding, if needed or advisable, on favorable terms or at all. In
addition, financing in the form of equity could result in dilution to the common
stockholders. In light of current adverse conditions in the general economy and
specifically the telecommunications industry, it likely will be difficult to
obtain public/private financing, bank financing, capital lease or vendor
financing to continue funding our business. Failure to raise sufficient funds,
as and when needed or advisable, may require us to modify, delay or abandon
some, or all, of our future expenditures with respect to our business strategy,
engage in assets sales or pursue other alternatives designed to enhance our
liquidity or obtain relief from our obligations.

Our failure to comply with the covenants and restrictions contained in
our senior credit facility and subordinated note agreements could lead to
default under those agreements. If such default were to occur, our lenders could
declare all amounts owed to them immediately due and payable. In addition, our
lenders could terminate their commitments to lend to us. If that event should
occur, we can make no assurances that we would be able to make payments on our
indebtedness, meet our working capital or capital expenditure requirements, or
that we would be able to obtain additional financing, any of which would have a
material adverse effect on our business financial condition and results of
operations.

28


Financing Facilities

As of June 30, 2002, we had borrowed the maximum amount, $350.0
million, available under our senior credit facility. At such date, there was
$125.0 million outstanding under the term A loan, $125.0 million outstanding
under the term B loan and $100.0 million outstanding under the revolving
portion. The senior credit facility, which is secured by liens on substantially
all of our and our subsidiaries' assets and a pledge of our subsidiaries' common
stock, contains covenants and events of default that are customary for credit of
this nature. We were in default of the minimum revenue covenant under our
senior credit facility for the three months ended June 30, 2002. We received
a waiver of this covenant from our lending institutions. Such waiver is
contingent upon the closing of $48.875 million in committed debt financing. As
as result, we have classified our long-term debt as current. Upon closing of the
new debt financing and assuming we are in compliance with our covenants, the
debt will be reclassified as long-term. See Note 13 to the Consolidated
Financial Statements for further details on the new debt financing.

As of June 30, 2002, we had principal borrowings of $190.0 million in
subordinated notes, excluding the discount of $3.0 million and interest payable
in kind of $3.6 million, which is subordinated to the senior credit facility.
The interest expense on the subordinated notes is payable in kind (PIK) at a
fixed rate of 13.0%, accreting to principal semi-annually, until November 2005.
Thereafter, until maturity on November 9, 2010, interest will be payable in cash
quarterly. During the second quarter of 2002, $11.7 million in PIK interest
accreted to principal. The subordinated notes contain covenants related to
capital expenditures and events of default that are similar to those within our
senior credit facility.

As described above, we have obtained a commitment for new debt
financing of $48.875 million, which is subject to definitive documentation
including amendments to our existing credit agreements, as well as satisfaction
of customary closing conditions.

Cash Flows

We have incurred significant operating and net losses since our
inception. We expect to have positive adjusted EBITDA during 2002. However, we
expect to experience operating losses as we continue to penetrate our markets.
As of June 30, 2002, we had an accumulated deficit of $889.5 million. Net cash
used for operating activities was approximately $39.3 million and $69.1 million
for the six months ended June 30, 2002 and 2001, respectively. The net cash used
for operating activities during the six months ended June 30, 2002 and 2001 was
primarily due to operating losses incurred while we grew our client base.

Net cash provided by financing activities was $54.8 million and $2.1
million for the six months ended June 30, 2002 and 2001, respectively. Net cash
provided by financing activities for the six months ended June 30, 2002 and
2001, was related to borrowings under the senior credit facility.

Net cash used in investing activities was $11.2 million and $23.1
million for the six months ended June 30, 2002 and 2001, respectively. Net cash
used in investing activities for the six months ended June 30, 2002 related to
capital expenditures offset slightly by the proceeds from the sale of
non-essential corporate assets. Net cash used in investing activities for the
six months ended June 30, 2001 related to capital expenditures, the maturity of
short term investments and the release of restricted cash for the quarterly
interest payments on the subordinated debt.

Capital Requirements

Capital expenditures were $12.2 million and $43.2 million for the six
months ended June 30, 2002 and 2001, respectively. We expect that our capital
expenditures will remain steady or decrease slightly for the remaining quarters
of 2002 and will remain well below the level of 2001. The actual amount and
timing of our future capital requirements may differ materially from our
estimates as a result of the demand for our services and regulatory,
technological and competitive developments, including new opportunities in the
industry.

29


SIGNIFICANT ACCOUNTING POLICIES

Our significant accounting policies, judgments and estimates include those
relating to revenue recognition, the allowance for doubtful accounts and
acquired intangibles.

General. The preparation of the consolidated financial statements requires
management to make estimates and judgments that affect the reported elements of
assets, liabilities, revenue and expenses and disclosure of contingent assets
and liabilities. On an on-going basis, management evaluates the estimates,
including those related to bad debts and income taxes. Management bases its
estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for judgments about carrying values of assets and liabilities. Actual
results could differ from these estimates.

Revenue recognition. Revenue from monthly recurring charges, enhanced features
and usage is recognized in the period in which service is provided. Deferred
revenue represents advance billings for services not yet provided. Such revenue
is deferred and recognized in the period in which service is provided. We
recognize revenue from switched access and reciprocal compensation based on
management's best estimate of its collectibility being reasonably assured.
Certain judgments in measuring revenue may affect our results. Revenue results
may be difficult to predict, and any shortfall in revenue or delay in
recognizing revenue could cause our operating results to vary significantly and
could result in future operating losses.

Allowance for doubtful accounts. We maintain an allowance for doubtful accounts
for estimated losses resulting from the inability of our customers and
interexchange carriers to make the required payments. If the financial condition
of our customers and the interexchange carriers were to further deteriorate,
resulting in an impairment of their ability to make payments, additional
allowances may be required resulting in additional expense to us and affecting
our results of operations.

Acquired intangibles. Our business acquisitions have resulted in goodwill and
other intangible assets which affect the amount of future period amortization
expense and possible impairment expense that we may incur. The determination of
the value, and any subsequent impairment, of such intangible assets requires
management to make estimates and assumptions that affect our consolidated
financial statements.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other
Intangible Assets". We adopted this standard on January 1, 2002. Under SFAS No.
142, goodwill and acquired intangible assets with indefinite lives will no
longer be amortized but will be subject to at least an annual assessment for
impairment through the application of a fair value-based test. The Company
completed the required impairment evaluation of goodwill in conjunction with
its adoption of SFAS No. 142 during the first quarter of 2002. Based on an
analysis that considered the future cash flows of the Company and market
capitalization information, the evaluation noted no impairment of goodwill at
that time. During the three months ended June 30, 2002, the Company noted a
significant adverse change in the business climate of the Company and
telecommunications industry in general. These circumstances required the
Company to perform an interim goodwill impairment test. As a result, the
Company recorded an impairment charge of $283,0 million. The amount of this
impairment charge was determined utilizing a combination of market-based
methods to estimate the fair value in accordance with SFAS No. 142.In addition,
the Company recorded a $0.3 million charge to write-down the value of acquired
customer relationships related to the Company's web hosting and design
services in accordance with the provisions of SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets."


In July 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations". This standard addresses the financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. The standard is effective for
fiscal years beginning after June 15, 2002. We expect to adopt this standard
effective January 1, 2003. We do not expect the adoption of SFAS No. 143 to have
a material impact on the company's financial statements or results of
operations.

30


In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections". This standard rescinds FASB No. 4 and an amendment to that
Statement, FASB No. 64, which related to extinguishment of debt. It
rescinds FASB No. 44, which related to accounting for intangible assets
of motor carriers. This standard also amends FASB No. 13 as it relates
to certain sale-leaseback transactions. We adopted this standard on
April 1, 2002. The adoption did not have a material impact on the company's
financial statements or results of operations.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities". This standard amends Emerging
Issue Task Force (EITF) Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity". This
statement requires that a liability for costs associated with an exit or
disposal activity be recognized when the liability is incurred, rather than when
an entity commits to an exit plan. The standard also established the use of fair
value for the measurement of exit liabilities. The standard is effective for
exit or disposal activities initiated after December 31, 2002, with early
application encouraged. We expect to adopt this standard effective January 1,
2003. We do not expect the adoption of SFAS No. 146 to have a material impact on
the company's financial statements or results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

At June 30, 2002, the carrying value of our debt obligations, excluding
capital lease obligations, was $540.6 million and the fair value of those
obligations was $578.5 million. A hypothetical decrease of approximately 100
basis points from prevailing interest rates at June 30, 2002, would have
resulted in an increase in fair value of long-term debt by approximately $20.8
million.

Also, a hypothetical increase of approximately 100 basis points from
prevailing interest rates at June 30, 2002, would have resulted in an
approximate increase in cash required for interest on variable rate debt during
the next three fiscal years of $1.6 million per year, declining to $1.5 and $1.3
million in the fourth and fifth years, respectively.

As a result of our operating and financing activities, we are exposed
to changes in interest rates that may adversely affect its results of operations
and financial position. In seeking to minimize the risks and/or costs associated
with such activities, we may enter into derivative contracts. However, we do not
use derivative financial instruments for speculative purposes. Interest rate
swap agreements are used to reduce our exposure to risks associated with
interest rate fluctuations and, subject to limitations and conditions, are
required by our credit facility. By their nature, these instruments would
involve risk, including the risk of nonperformance by counterparties, and our
maximum potential loss may exceed the amount recognized in our balance sheet. We
attempt to control our exposure to counterparty credit risk through monitoring
procedures and by entering into multiple contracts.

At June 30, 2002, we had interest rate swap agreements for a notional
amount of $187.5 million. Based on the fair value of the interest rate swaps at
June 30, 2002, it would have cost us $15.1 million to terminate the agreements.
A hypothetical decrease of 100 basis points in the swap rate would have
increased the cost to terminate these agreements by approximately $4.9 million.

31


PART II OTHER INFORMATION

Item 1. Legal Proceedings

On January 26, 2002, the Company and its wholly owned
subsidiary US Xchange Inc. (referred to collectively for
purposes of this paragraph as the Company), filed suit against
AT&T Corp ("AT&T") . This action is now pending in the United
States District Court for the Western District of New York
(02-CV-6090L). The Company's complaint seeks damages in the
amount of $13.31 million from AT&T for breach of contract,
based upon AT&T's failure to pay, either on time or in full,
the Company's invoices for access services provided to AT&T.
An Answer was filed by AT&T. The Company has filed a Reply. On
April 26, 2002, the Company filed a motion for partial summary
judgment based upon AT&T's failure to pay the Company's
invoices on account, and for a declaration that AT&T
materially breached its agreements for failure to pay. This
motion has been fully briefed and oral argument is tentatively
scheduled for August 30, 2002. AT&T has cross moved for
partial summary judgment, seeking dismissal of several of the
Company's causes of action. The Company's responsive papers
are due on August 30, 2002.

Item 2. Changes in Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

The Company was in default of the minimum revenue covenant
under its senior credit facility for the three months ended
June 30, 2002. The Company received a waiver of this covenant
from its lending institutions. Such waiver is contingent
upon the closing of $49 million in new debt financing. As a
result, the Company has classified its long-term debt as
current. Upon the closing of the additional financing and
assuming the Company is in compliance with its covenants, the
debt will be reclassified as long term. See Note 13 to the
Consolidated Financial Statements for further details on
additional financing.

Item 4. Submission of Matters to a Vote of Security Holders

Election of Directors - At the Annual Meeting of Stockholders
held on May 22, 2002, stockholders re-elected current
directors Steve M. Dubnik and Bruce M. Hernandez.

Votes Cast
----------
For Against Abstain Broker Non-Votes
----- ------- ------- ----------------
Steve M. Dubnik 29,542,479 217,741 10,580,656 0

Bruce M. Hernandez 29,703,328 56,892 10,580,656 0

Item 5. Other Information

Not applicable.

Item 6. Exhibits and Reports for Form 8-K

A. Exhibits

See Exhibit Index

B. Reports on Form 8-K

On June, 11, 2002, the Company filed a report on Form 8-K to
report on the Audit Committee's decision not to re-engage
Arthur Andersen LLP ("Andersen") as the independent auditor
for the Choice One Communications Inc. 401(k) Profit Sharing
Plan and Trust (the "Plan").

32



SIGNATURES

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

CHOICE ONE COMMUNICATIONS INC.
Registrant


DATE: August 14, 2002 By:
-------------------------------
Steve M. Dubnik, Chairman and Chief
Executive Officer


By:
-------------------------------
Ajay Sabherwal, Executive Vice President,
Finance and Chief Financial Officer
(Principal Financial Officer)


32



EXHIBIT INDEX



EXHIBIT
NUMBER DESCRIPTION LOCATION

3.1 Amended and Restated Incorporated by reference
Certificate of Incorporation from Exhibit 3.1 to Choice
One Communication Inc.'s
Registration Statement on
Form S-1 declared effective
on February 16, 2000 located
under Securities and
Exchange Commission File No.
333-91321 ("February 2000
Registration Statement")

3.2 Amended and Restated Bylaws Incorporated by reference
from Exhibit 3.2 to the
February 2000 Registration
Statement


3.3 Certificate of Designations Incorporated by reference
for Series A Senior from Exhibit 3.1 to the
Cumulative Preferred Stock August 10, 2000 8-K filing
located under the Securities
and Exchange Commission File
No. 29279

3.4 Certificate of Amendment of Incorporated by reference
Certificate of from Exhibit 3.4 to the
Incorporation with Company's 10-Q filed on May
Certificate of 15, 2002.
Designations, Preferences
and Rights of Series A
Senior Cumulative Preferred
Stock dated March 30, 2002

10.1 1998 Management Stock Incorporated by reference
Incentive Plan of Choice from Exhibit 4.1 to the
One Communications Inc. September 29, 2000 S-8
(May 2000 Restatement) located under Securities and
Exchange Commission File No.
333-47002


10.2 Amendment No. 1 to the 1998 Incorporated by reference
Management Stock Incentive from Exhibit 4.4 to the
Plan of Choice One December 21, 2001 S-8
Communications Inc. (May located under Securities and
2000 Restatement) Exchange Commission File No.
333-75712

10.3 1999 Directors' Stock Incorporated by reference
Incentive Plan of Choice from Exhibit 4.1 to the
One Communications Inc. September 29, 2000 S-8
located under Securities and
Exchange Commission File No.
333-47008

10.4 Transaction Agreement, Incorporated by reference
dated as of July 8, 1998, from Exhibit 10.3 to the
among Choice One February 2000 Registration
Communications Inc., Choice Statement
One Communications L.L.C.
and holders of Investor
Equity and Management Equity

10.5 Amendment No. 1 dated as of Incorporated by reference
December 18, 1998 to from Exhibit 10.4 to the
Transaction Agreement, February 2000 Registration
dated as of July 8, 1998, Statement
among Choice One
Communications Inc., Choice
One Communications L.L.C.
and holders of Investor
Equity and Management Equity

33


10.6 Amendment No. 2 dated as of Incorporated by reference
February 18, 1999 to from Exhibit 10.5 to the
Transaction Agreement, February 2000 Registration
dated as of July 8, 1998, Statement
among Choice One
Communications Inc., Choice
One Communications L.L.C.
and holders of Investor
Equity and Management Equity

10.7 Amendment No. 3 dated as of Incorporated by reference
May, 14 1999 to Transaction from Exhibit 10.6 to the
Agreement, dated as of July February 2000 Registration
8, 1998, among Choice One Statement
Communications Inc., Choice
One Communications L.L.C.
and holders of Investor
Equity and Management Equity

10.8 Amendment No. 4 dated as of Incorporated by reference
June 30, 1999 to from Exhibit 10.7 to the
Transaction Agreement, February 2000 Registration
dated as of July 8, 1998, Statement
among Choice One
Communications Inc., Choice
One Communications L.L.C.
and holders of Investor
Equity and Management Equity

10.9 Amendment No. 5 dated as of Incorporated by reference
June 30, 1999 to from Exhibit 10.8 to the
Transaction Agreement, February 2000 Registration
dated as of July 8, 1998, Statement
among Choice One
Communications Inc., Choice
One Communications L.L.C.
and holders of Investor
Equity and Management Equity

10.10 Amendment No. 6 dated as of Incorporated by reference
November 18, 1999 to from Exhibit 10.9 to the
Transaction Agreement, February 2000 Registration
dated as of July 8, 1998, Statement
among Choice One
Communications Inc., Choice
One Communications L.L.C.
and holders of Investor
Equity and Management Equity

10.11 Amendment No. 7 dated as of Incorporated by reference
August 1, 2000 to from Exhibit 10.2 to the
Transaction Agreement, Company's 8-K filed on
dated as of July 8, 1998, August 10, 2000
among Choice One
Communications Inc., Choice
One Communications L.L.C
and holders of Investor
Equity and Management Equity

10.12 Amendment No. 8 dated as of Incorporated by reference
December 20, 2000 to from Exhibit 10.11 to the
Transaction Agreement, Company's 10-K filed on
dated as of July 8, 1998, March 6, 2001
among Choice One
Communications Inc., Choice
One Communications L.L.C
and holders of Investor
Equity and Management Equity

10.13 Amendment No. 9 dated as of Incorporated by reference
March 13, 2001 to from Exhibit 10.12 to the
Transaction Agreement, Company's 10-Q filed on
dated as of July 8, 1998, August 14, 2001
among Choice One
Communications Inc., Choice
One Communications L.L.C.
and holders of Investor
Equity and Management Equity

10.14 Amendment No. 10 dated as Incorporated by reference
of June 21, 2001 to from Exhibit 10.12 to the
Transaction Agreement, Company's 10-Q filed on
dated as of July 8, 1998, August 14, 2001
among Choice One
Communications Inc., Choice
One Communications L.L.C.
and holders of Investor
Equity and Management Equity

34


10.15 Amendment No. 10 dated as Incorporated by reference
of November 9, 2001 to from Exhibit 10.15 to the
Transaction Agreement, Company's 10-K filed on
dated as of July 8, 1998, April 1, 2002
among Choice One
Communications Inc., Choice
One Communications L.L.C.
and holders of Investor
Equity and Management
Equity (this Amendment No.
10 is a distinct and
separate amendment from the
Amendment No. 10 dated June
21, 2001 referenced in
Exhibit 10.14 above)

10.16 Amendment No. 11 dated as Incorporated by reference
of December 19, 2001 to from Exhibit 10.16 to the
Transaction Agreement, Company's 10-K filed on
dated as of July 8, 1998, April 1, 2002
among Choice One
Communications Inc., Choice
One Communications L.L.C.
and holders of Investor
Equity and Management
Equity

10.17 Registration Rights Incorporated by reference
Agreement dated as of July from Exhibit 10.10 to the
8, 1998, among Choice One February 2000 Registration
Communications Inc., the Statement
Investor Holders and the
Management Holders

10.18 Amendment No. 1 dated as of Incorporated by reference
February 18, 1999 to from Exhibit 10.11 to the
Registration Rights February 2000 Registration
Agreement dated as of July Statement
8, 1998, among Choice One
Communications Inc., the
Investor Holders and the
Management Holders

10.19 Amendment No. 2 dated as of Incorporated by reference
June 30, 1999 to from Exhibit 10.12 to the
Registration Rights February 2000 Registration
Agreement dated as of July Statement
8, 1998, among Choice One
Communications Inc., the
Investor Holders and the
Management Holders

10.20 Amendment No. 3 dated as of Incorporated by reference
June 30, 1999 to from Exhibit 10.13 to the
Registration Rights February 2000 Registration
Agreement dated as of July Statement
8, 1998, among Choice One
Communications Inc., the
Investor Holders and the
Management Holders

10.21 Amendment No. 4 dated as of Incorporated by reference
August 1, 2000 to from Exhibit 10.1 to the
Registration Rights Company's 8-K filed on
Agreement dated as of July August 10, 2000
8, 1998, among Choice One
Communications Inc., the
Investor Holders and the
Management Holders

10.22 Amendment No. 5 dated as of Incorporated by reference
November 9, 2001 to from Exhibit 10.22 to the
Registration Rights Company's 10-K filed on
Agreement dated as of July April 1, 2002
8, 1998, among Choice One
Communications Inc., the
Investor Holders and the
Management Holders

35


10.23 Amendment No. 6 dated as of Filed herewith
May 22, 2002 to
Registration Rights
Agreement dated as of July
8, 2002 among Choice One
Communications Inc., the
Investor Holders and the
Management Holders.

10.24 Debt Registration Rights Incorporated by reference
Agreement dated as of from Exhibit 10.23 to the
November 9, 2001 among Company's 10-K filed on
Choice One Communications April 1, 2002
Inc., Morgan Stanley Senior
Funding, Inc., First Union
Investors and CIBC Inc.

10.25 Equity Registration Rights Incorporated by reference
Agreement dated as of from Exhibit 10.24 to the
November 9, 2001 among Company's 10-K filed on
Choice One Communications April 1, 2002
Inc., Morgan Stanley Senior
Funding, Inc., First Union
Investors and CIBC Inc.

10.26 Investor Rights Agreement Incorporated by reference
dated as of December 19, from Exhibit 10.25 to the
2001 between FairPoint Company's 10-K filed on
Communications Solutions April 1, 2002
Corp. and Choice One
Communications Inc.

10.27 Form of Executive Purchase Incorporated by reference
Agreement dated July 8, from Exhibit 10.14 to the
1998 among the Choice One February 2000 Registration
Communication Inc., Choice Statement
One Communications L.L.C.
and Certain Executives of
the Registrant

10.28 Executive Purchase Incorporated by reference
Agreement dated as of July from Exhibit 10.15 to the
8, 1998 among the Choice February 2000 Registration
One Communication Inc., Statement
Choice One Communications
L.L.C. and Steve M. Dubnik

10.29 Executive Purchase Incorporated by reference
Agreement dated as of July from Exhibit 10.16 to the
8, 1998 among the Choice February 2000 Registration
One Communication Inc., Statement
Choice One Communications
L.L.C. and Mae Squire-Dow

10.30 Executive Purchase Incorporated by reference
Agreement dated as of July from Exhibit 10.17 to the
8, 1998 among the Choice February 2000 Registration
One Communication Inc., Statement
Choice One Communications
L.L.C. and Philip Yawman

10.31 Executive Purchase Incorporated by reference
Agreement dated as of July from Exhibit 10.18 to the
8, 1998 among the Choice February 2000 Registration
One Communication Inc., Statement
Choice One Communications
L.L.C. and Kevin Dickens

10.32 Executive Purchase Incorporated by reference
Agreement dated as of July from Exhibit 10.19 to the
8, 1998 among the Choice February 2000 Registration
One Communication Inc., Statement
Choice One Communications
L.L.C. and Ajay Sabherwal

10.33 Second Amended and Restated Incorporated by reference
Credit Agreement dated as from Exhibit 10.8 to the
of August 1, 2000 among the Company's 8-K filed on
Registrant as Guarantor, August 10, 2000
subsidiaries of the
Registrant, as Borrowers,
First Union Investors,
Inc., as Administrative
Agent, General Electric
Capital Corporation, as
Syndication Agent, and
Morgan Stanley Senior
Funding, Inc. as
Documentation Agent and the
lenders thereto

36


10.34 Amendment to the Second Incorporated by reference
Amended and Restated Credit from Exhibit 10.1 to the
Agreement dated as of March Company's S-3 Registration
31, 2001 among the Statement filed on May 7,
Registrant as Guarantor, 2001
subsidiaries of the
Registrant, as Borrowers,
First Union Investors,
Inc., as Administrative
Agent, General Electric
Capital Corporation, as
Syndication Agent, and
Morgan Stanley Senior
Funding, Inc. as
Documentation Agent and the
lenders thereto

10.35 Amendment to the Second Incorporated by reference
Amended and Restated Credit from Exhibit 10.34 to the
Agreement dated as of Company's 10-Q filed on May
August 30, 2001 among the 15, 2002.
Registrant as Guarantor,
subsidiaries of the
Registrant, as Borrowers,
First Union Investors,
Inc., as Administrative
Agent, General Electric
Capital Corporation, as
Syndication Agent, and
Morgan Stanley Senior
Funding, Inc. as
Documentation Agent and the
lenders thereto

10.36 Lease between the Incorporated by reference
Registrant and from Exhibit 10.21 to the
Bendersen-Rochester February 2000 Registration
Associates, LLC dated Statement
October 14, 1998, as amended

10.37 Unit Purchase Agreement Incorporated by reference
dated as of October 21, from Exhibit 10.22 to the
1999 among the Registrant, February 2000 Registration
Atlantic Connections Statement
L.L.C., ACL
Telecommunications, LTD.,
Paul Cissel, Antonio Lopez,
Jr. and North Atlantic
Venture Fund II, L.P

10.38 General Agreement between Incorporated by reference
the Registrant and Lucent from Exhibit 10.23 to the
Technologies effective as February 2000 Registration
of July 17, 1998, as amended Statement

10.39 Service Bureau Agreement Incorporated by reference
between the Registrant and from Exhibit 10.24 to the
Saville Systems Inc. February 2000 Registration
effective September 30, 1998 Statement

10.40 Agreement and Plan of Incorporated by reference
Merger by and among Choice from Exhibit 99.2 to the
One Communications Inc., Company's 8-K/A filed on May
Barter Acquisition 16, 2000
Corporation, US Xchange,
Inc. and the Stockholder of
US Xchange, Inc. dated as
of May 14, 2000

10.41 Securities Purchase Incorporated by reference
Agreement dated as of from Exhibit 10.7 to the
August 1, 2000 among Morgan Company's 8-K filed on
Stanley Dean Witter Capital August 10, 2000
Partners IV, L.P., Morgan
Stanley Dean Witter Capital
Partners IV 892 Investors,
L.P., Morgan Stanley Dean
Witter Capital Investors
IV, L.P., and Choice One
Communications Inc.
relating to the purchase
and sale of securities of
Choice One Communications
Inc.

37


10.42 Agreement dated as of March Incorporated by reference
31, 2002 between Choice One from Exhibit 10.41 to the
Communications Inc. and the Company's 10-Q filed on May
Holders set forth on the 15, 2002.
signature pages thereto
(Morgan Stanley Dean Witter
Capital Partners IV, L.P.,
MSDW IV 892 Investors,
L.P., Morgan Stanley Dean
Witter Capital Investors
IV, L.P.)

10.43 Warrant to purchase shares Incorporated by reference
of Common Stock of Choice from Exhibit 10.4, 10.5 and
One Communications Inc. 10.6 to the Company's 8-K
filed on August 10, 2000

10.44 Warrant to Purchase Shares Incorporated by reference
of Common Stock of Choice from Exhibit 10.42, 10.43
One Communications Inc. and 10.44to the Company's
10-K filed on April 1, 2002

10.45 Form of Warrant for the Incorporated by reference
Purchase of Shares of from Exhibit 10.44 to the
Common Stock of Choice One Company's 10-Q filed on May
Communications Inc. 15, 2002.

10.46 Form of Warrant for the Incorporated by reference
Purchase of Shares of from Exhibit 10.45 to the
Common Stock of Choice One Company's 10-Q filed on May
Communications Inc. 15, 2002.
(warrant to purchase a
number of shares in
accordance with the
definition of warrant share
amount)



10.47 Bridge Financing Agreement Incorporated by reference
dated as of August 1, 2000 from Exhibit 10.3 to the
among Choice One Company's 8-K filed on
Communications Inc., the August 10, 2000
Lenders party hereto, and
Morgan Stanley Senior
Funding, Inc., as
Administrative Agent

10.48 Form of Rollover Note for Incorporated by reference
the Bridge Financing from Exhibit 10.46 to the
Agreement dated as of Company's 10-K filed on
August 1, 2000 among Choice April 1, 2002
One Communications Inc.,
the Lenders party hereto,
and Morgan Stanley Senior
Funding, Inc., as
Administrative Agent

10.49 Fiber Optic Agreement and Incorporated by reference
Grant of IRU dated August from Exhibit 10.9 to the
1, 2000 by and between Company's 8-K filed on
Choice One Communications August 10, 2000
Inc. and RVP Fiber Company,
L.L.C.

10.50 Form of Executive Incorporated by reference
Employment Agreement from Exhibit 10.10 to the
between former executives Company's 8-K filed on
of US Xchange, Inc. and August 10, 2000
Choice One Communications
Inc.

10.51 Master Facilities Agreement Incorporated by reference
between Fiber Technologies from Exhibit 10.1 to the
Operating Company, LLC and Company's 10-Q for the Choice
One Communications Inc. quarter ended June 30, 2000
dated as of May 31, 2000 *

38


10.52 Addendum Number One 5ESS(R) Incorporated by reference
Switch and Transmission from Exhibit 10.1 to the
Systems Purchase Agreement Company's 10-Q for the
between Choice One quarter ended March 31, 2000
Communications Inc. and
Lucent Technologies Inc.
dated as of
January 1, 2000**

10.53 Choice One Communications Incorporated by reference
Inc. 401(K) Plan from Exhibit 4.3 to the
October 23, 2000 S-8 located under
Securities and Exchange Commission
File No. 333-48430


10.54 Amendment No.1 and No. 2 to Incorporated by reference
the Choice One from Exhibit 4.4 to the
Communications Inc. 401(K) December 21, 2001 S-8
Plan located under Securities and
Exchange Commission File No.
333-75710

10.55 Network Transition Incorporated by reference
Agreement dated as of from Exhibit 10.53 to the
November 7, 2001 between Company's 10-K filed on
FairPoint Communications April 1, 2002
Solutions Corp., Choice One
Communications Inc. and
selected subsidiaries of
Choice One Communications
Inc.

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

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


*Portions of this agreement have been omitted and filed separately with
the Commission pursuant to an application for confidential treatment under Rule
24b-2, which was granted by the Commission until May 31, 2003.
**Portions of this agreement have been omitted and filed separately
with the Commission pursuant to an application for confidential treatment under
Rule 24b-2, which was granted by the Commission until December 31, 2002.

39