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4Q16 Earnings

Presentation

March 1, 2017

Safe Harbor Statement

Regulation G Disclaimer

This presentation includes certain non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly

comparable GAAP financial measures are available on our website at www.windstream.com/investors.

Safe Harbor Statement

Windstream Holdings, Inc. claims the protection of the safe-harbor for forward-looking statements contained in the Private Securities Litigation

Reform Act of 1995. Forward-looking statements are typically identified by words or phrases such as “will,” “anticipate,” “estimate,” “expect,”

“project,” “intend,” “plan,” “believe,” “target,” “forecast” and other words and terms of similar meaning. Forward-looking statements are subject to

risks and uncertainties that could cause actual future events and results to differ materially from those expressed in the forward-looking

statements.

Forward-looking statements include, but are not limited to, 2017 guidance for service revenue, adjusted OIBDAR and adjusted capital

expenditures, along with statements regarding adjusted free cash flow, cash interest and cash taxes; directional outlook for the Company’s

business units in 2017; statements regarding the benefits of the merger with EarthLink Holdings Corp., including future financial and operating

results, projected synergies in operating and capital expenditures and the timing of the synergies, reduction in net leverage, dividend policy of

the combined company, and improvement in our ability to compete; expectations regarding revenue trends, sales opportunities and improving

margins in the business units; network cost optimization; stability and growth in adjusted OIBDAR; the anticipated benefits of Project Excel,

allowing Windstream to offer premium Internet speeds, and of network investments pursuant to the Connect America Fund; the availability of

higher Internet speeds and the ability to leverage next generation technology in products and services offered to customers; the ability to

continue to improve our debt profile and reduce interest costs; along with statements regarding plans, objectives, expectations and intentions

and other statements that are not historical facts. These statements, along with other forward-looking statements regarding Windstream’s

overall business outlook, are based on estimates, projections, beliefs, and assumptions that Windstream believes is reasonable but are not

guarantees of future events, performance or results. Actual future events and results may differ materially from those expressed in these

forward-looking statements as a result of a number of important factors.

Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include risks and

uncertainties that the cost savings and anticipated synergies from the merger with EarthLink Holdings Corp., may not be fully realized or may

take longer to realize than expected; that the businesses will not be integrated successfully; that disruption from the merger may make it more

difficult to maintain relationships with customers, employees or suppliers; that the attention of management and key personnel may be diverted

by integration matters related to the merger; general worldwide economic conditions and related uncertainties; and the effect of any changes in

governmental regulations or statutes. For other risk factors that could cause actual results and events to differ materially from those expressed,

please refer to our filings with the Securities and Exchange Commission. Windstream does not undertake any obligation to publicly update any

forward-looking statement, whether as a result of new information, future events or otherwise.

2

Participants

3

Tony Thomas

Chief Executive Officer

Bob Gunderman

Chief Financial Officer

Christie Grumbos

Treasurer

Closed Merger with EarthLink

Improves Balance Sheet

CreatesSignificant Synergies

Expands Network in Key Areas

Advances Operational Strategy

EarthLink has robust fiber network with 29K route miles,16K of which expands Windstream’s footprint

Strategically located and unique fiber routes synergistic with Windstream network for a combined total

of 147,000 route miles

Significant annual synergies of $150M within 3 years; increased $25 million from original est.

Opex of $125 million annually, $15 million higher

Capex of $25 million annually, $10 million higher

Reduces leverage, improves credit profile and provides more financial flexibility

Significant adjusted FCF accretion supports continued network investment, debt reduction and

provides greater coverage of the dividend

Free Cash Flow Accretive

Improves competitiveness and ability to serve customers through increased scale and an

enhanced product portfolio

Ability to leverage complementary strategy across a broader platform

Creates stronger, more competitive company to serve our customers

4

2016 Achievements

WIN

STRATEGY

5

Announced merger with EarthLink

Improved financial performance

Advanced network capabilities

Improved Enterprise contribution

margin

Completed Uniti Group debt-for-equity

exchange

Reduced and refinanced debt to lower

cash interest expense

Returned capital to shareholders

through the dividend

FOCUSED

OPERATIONAL

STRATEGY

ALLOCATE

CAPITAL +

RETURN VALUE

OPTIMIZE THE

BALANCE

SHEET

6

Customers:

~1.5M residential and small businesses (within ILEC territory)

Addressability:~ 4M locations

Pro Forma Consolidated Financial Profile:

Total revenue: ~$1.6B

Contribution margin: $899M

Contribution margin (%): 57%

Competitive Advantages:

Attractive, rural markets

Limited intersection with national cable companies

Premium internet speeds

Key Drivers:

Upgrading and expanding broadband network

Increasing premium speed availability

1 Gig markets

14

128

WIN Average Non-Rural IndustryAverage (1)

ATTRACTIVE COMPETITIVE

ENVIRONMENT

~40% of footprint does not compete with national cable broadband provider

26% of footprint does not have cable broadband provider

Charter36%

Comcast13%

Mediacom 6%

Cox3%

Suddenlink/Altice

2%

Other Cable14%

No Cable BB

Provider26%

MARKETS WITH

FAVORABLE

RURAL

CHARACTERISTICS

ACCESS LINES PER SQUARE MILE

1) Source: FCC reports

ILEC Consumer & SMB Strategy

Network Enhancements Establish a Foundation for Sustainable

Growth

Favorable Rural Areas Provide Strong Cash Flow Business

Advanced Broadband Capabilities to

Increase ARPU and Improve

Customer Trends

Deliver more speed to more people

Expand premium speed availability

Additional gig market deployment

Next gen broadband technology evolution

Expand Internet availability

CAF program supports and expands broadband capabilities

7

ILEC Consumer & SMB Strategy

Expanding Network Capabilities

Continue to make significant network enhancements to drive higher ARPU and increase retention

Internet Speed Availability

83%

48%

26%13%

10 MBPS 25 MBPS 50 MBPS 75MBPS TO 1GIG

YE 2016 Pro Forma for Project Excel88%

54%

30%

15%

Notes:

• Internet speed availability reflects the speeds available for Consumer and SMB ILEC locations

89%

8%2% 1%

Less than 25MBPS 25 MBPS 50 MBPS 75+ MBPS

Existing Customer Speed

Distribution

8

Customers:

Telcos, content providers, cable and other network operators

Pro Forma Consolidated Financial

Profile:

Total revenue: $757M



Competitive Advantage:

National footprint – 147k route miles of fiber

Key Drivers:

100 gig capable long-haul and regional express network

Expanding interconnection locations

High-growth verticals

Wholesale Strategy

Expanding Network to Drive Sales

WIN operates one of the largest fiber networks with 147k route miles

Note: Includes EarthLink

9

EXPANDING ENTERPRISE CONTRIBUTION

MARGINS TO 20%

20%margins

Profitable growth

Reduce network access costs

More sales on-

net

Improve operating efficiency

Customers:

Mid-size business customers nationwide

Pro Forma Consolidated Financial Profile:

Total revenue: ~$2.4B




Nationwide presence

Mid-size enterprise customer focus

Broad portfolio of advanced, customized solutions

Key Drivers:

Focus on profitable sales

Margin expansion

Network modernization

Enterprise Strategy

Focused Sales to Expand Margins


10

Manage margin at the account level to ensure optimal customer profitability

PROFITABLE

CUSTOMER

PROTECTION

Optimize the cost of revenue

Improve support cost structure

IMPROVE

COST

EFFICIENCY

Target new sales with narrow, simplified SMB product set

Expand relationships of existing customers

TARGETED

SALES

STRATEGY

Customers:

Residential and Small business customers residing outside of our ILEC territory

Pro Forma Consolidated Financial

Profile:

Total revenue: $916M




Relative scale

Ability to leverage Enterprise infrastructure

Key Drivers:

Improve profitability by focusing on growing profitable customer relationships and managing costs

Improve Contribution Trends by growing

profitable customer relationships and

managing costs

CLEC Consumer & SMB Strategy Maximize Cash Flow

Focused on maximizing ARPU and reducing costs


2017 Priorities

11

Focused Operational

Strategy

Allocate Capital and

Return Value

Optimize the Balance

Sheet

Execute Merger Integration To Achieve

Synergies

Improve ILEC Consumer trends

Growth in Enterprise Contribution

Margin

Leverage Next Generation Technology

WIN Strategy

(1) 2016 Adjusted Capex excludes expenditures related to Project Excel

Achieved 2016 Guidance

Excludes EarthLink

12

(in millions)2016 Guidance 2016 Results

Service Revenue $5,275 – $5,425M $5,280M

Adj. OIBDAR $1,900 – $1,950M $1,914M

Adjusted Capex (1) $800 - $850M $816M

Adjusted Free Cash Flow $100M $107M

Fourth Quarter 2016 Results

Excludes EarthLink

(1) Revenue and adjusted OIBDAR adjust operating results under GAAP to exclude the impacts of the disposed data center and consumer CLEC businesses and directory publishing operations, all

merger, integration and other costs related to strategic acquisitions, restructuring, stock based compensation and pension costs

$ in millions 2015 2016

Q4 Q1 Q2 Q3 Q4

Revenue

Consumer & SMB ILEC $397 $397 $395 $395 $392

Wholesale 171 163 160 155 153

Enterprise 497 491 491 495 486

SMB CLEC 132 129 125 119 111

Segment Service Revenue $1,197 $1,180 $1,172 $1,164 $1,142

Regulatory and Other Total Revenue 163 161 160 155 148

Total Service Revenue $1,360 $1,341 $1,331 $1,319 $1,289

Product Sales 39 33 28 26 20

Total Revenue and Sales $1,399 $1,373 $1,360 $1,345 $1,309

Contribution Margin

Consumer & SMB ILEC $230 $228 $225 $212 $233

Wholesale 124 118 115 111 109

Enterprise 78 71 80 83 85

SMB CLEC 41 41 41 37 35

Segment Contribution Margin $473 $458 $461 $443 $463

Regulatory & Other Contribution Margin 30 27 21 22 19

Pro Forma Adjusted OIBDAR $503 $485 $482 $465 $482

Margin % 36.0% 35.3% 35.5% 34.6% 36.8%

Segment Contribution Margin %

Consumer & SMB ILEC 57.8% 57.4% 57.0% 53.6% 59.6%

Wholesale 72.8% 72.1% 71.7% 71.5% 71.3%

Enterprise 14.8% 13.7% 15.7% 16.3% 17.1%

SMB CLEC 31.4% 32.1% 32.9% 31.4% 31.8%

Financial Overview (1)

HIGHLIGHTS

Consumer contribution margin grew $21M or 10% sequentially

FY16 enterprise service revenue grew ~1%

Enterprise contribution margin up $2M sequentially and 4Q at 17.1%

Adjusted OIBDAR increased $17M or ~4% sequentially

13

(Dollars in Millions)

2016 Pro Forma Results

Includes EarthLink

(1) Revenue and adjusted OIBDAR adjust operating results under GAAP to exclude the impacts of the disposed data center and consumer CLEC businesses and directory publishing operations, all

merger, integration and other costs related to strategic acquisitions, restructuring, stock based compensation and pension costs

(2) Includes regulatory and other margin as well as corporate expenses

Note: Pro forma results includes historical Windstream plus pro forma EarthLink

$ in millions 2016

Q1 Q2 Q3 Q4

Revenue

ILEC Consumer & SMB $397 $395 $395 $392

Wholesale 196 191 187 184

Enterprise 594 589 593 584

CLEC Consumer & SMB 241 233 220 209

Segment Service Revenue $1,428 $1,408 $1,396 $1,368

Regulatory and Other Total Revenue 171 170 165 157

Total Service Revenue $1,599 $1,578 $1,560 $1,525

Product Sales 33 29 26 20

Total Revenue and Sales $1,632 $1,607 $1,586 $1,545

Contribution Margin

ILEC Consumer & SMB $228 $225 $212 $233

Wholesale 129 124 121 119

Enterprise 87 94 95 97

CLEC Consumer & SMB 94 92 85 81

Segment Contribution Margin $538 $536 $513 $530

Regulatory & Other Contribution Margin(2) 8 3 2 (3)

Pro Forma Adjusted OIBDAR $546 $539 $515 $527

Margin % 33.5% 33.5% 32.5% 34.1%


ILEC Consumer & SMB 57.4% 57.0% 53.6% 59.6%

Wholesale 66.2% 65.1% 64.9% 64.5%

Enterprise 14.1% 15.5% 15.6% 16.4%

CLEC Consumer & SMB 38.5% 39.0% 37.9% 38.1%

Financial Overview (1)

14

Revenue

ILEC Consumer & SMB $1,603 $1,579

Wholesale 808 $757

Enterprise 2,366 2,360

CLEC Consumer & SMB 1,061 903

Segment Service Revenue $5,838 $5,598

Regulatory and Other Total Revenue 714 664

Total Service Revenue $6,551 $6,262

Product Sales 168 108

Total Revenue and Sales $6,719 $6,369

Contribution Margin

ILEC Consumer & SMB $935 $899

Wholesale 542 494

Enterprise 297 372

CLEC Consumer & SMB 419 352

Segment Contribution Margin $2,192 $2,116

Regulatory & Other Contribution Margin(2) 51 11

Pro Forma Adjusted OIBDAR $2,243 $2,127

Margin % 33.4% 33.4%


ILEC Consumer & SMB 58.2% 56.9%

Wholesale 67.1% 65.2%

Enterprise 12.0% 15.4%

CLEC Consumer & SMB 39.0% 38.4%

Financial Overview (1) 2015 2016(Dollars in Millions) (Dollars in Millions)

2017 Business Unit Directional Outlook

Includes EarthLink

15


Broadband customers and revenue trends improve

Stable contribution margin

WHOLESALE

ILEC

CONSUMER &

SMB

ENTERPRISE

CLEC

CONSUMER &

SMB

Revenue decline to accelerate slightly due to pressure in

legacy TDM services

Contribution margin trends similar to revenue trends

Modest decline in revenue due to focus on more profitable

sales

Continued increase in contribution margin and on track to

expand to 20% margins by 2018

Revenue expected to decline in the mid-teens consistent

with 2016

Contribution margin dollars will decline at improved rate

versus 2016

FY17 Pro Forma Outlook

Service Revenue $1,579

YoY Growth (1.5%)

Contribution Margin $899

Contribution Margin % 56.9%

FY16 Pro Forma Results

Service Revenue $903

YoY Growth (14.9%)



Service Revenue $2,360

YoY Growth (0.3%)



Service Revenue $757

YoY Growth (6.3%)



(Dollars in Millions)

2017 Pro Forma Guidance

Includes EarthLink

16

1) Pro forma results adjust operating results under GAAP to exclude all merger and integration, restructuring, stock based compensation and pension costs2) Adjusted capex excludes expenditures related to Project Excel and Integration Capex


(in millions)

Pro Forma(1)

Consolidated 2016

Actuals

2017 Guidance

Service Revenue $6,262M Similar to FY16 Trends

Adj. OIBDAR $2,127M $2,000 – $2,060M

Adjusted Capex (2) $900M $790 - $840M

Optimizing the Balance Sheet

Pursuing Multiple Paths to Improve the Balance Sheet

17

DEBT MATURITY PROFILE

as of February 28, 2017

$700 $809

$441

$929

$580

$100

$577

$1,345

Sr. Notes Revolver Sr. Loans

Attractive debt maturity profile, with no near-term maturities

Extended 2019 term loan maturity to 2024

Completed a $600M term loan add-on to refinance EarthLink’s debt and pay down revolver

Capex

(in millions)

Success-based $190

Broadband capacity and expansion $130

Enterprise on-net expansion & interconnect savings $40

IT projects to drive efficiencies $60

Wholesale network expansion / upgrade $10

Other $35

Strategic Capex $465

Maintenance capex $350

Adjusted Capital Expenditures $815

2017 Capex Plans

A Closer Look at 2017 Capex

Executing a Network First Strategy

18

(1) Adjusted capex excludes expenditures related to Project Excel and Integration Capex

2017 INITIATIVES

Expand high-speed internet capabilities

Expand Enterprise on-net

Enhance network performance

Make targeted investments to reduce network operating expenses

2017 Adjusted Capex Guidance

$790M – $840M

(1)

Significantly Improved Free Cash

Flow in 2017

19

Allocating capital & returning value

Attractive network investments

Debt reduction

Shareholder dividend

($ in millions)

Expect to generate ~$200M in adjusted free cash flow in 2017

(1) Adjusted capex excludes expenditures related to Project Excel and Integration Capex

Adj. OIBDAR Guidance (Midpoint) $2,030

Lease Payment to Uniti Group (654)

Adjusted Capex Guidance (Midpoint) (1) (815)

Cash Interest (360)

Cash Taxes (5)

Adjusted Free Cash Flow $196

2017 Adjusted FCF Overview

Note: 2017 adjusted free cash flow includes EarthLink and shown pro forma for a full year impact of transaction

Clear roadmap to

GROWING Adjusted

OIBDAR

Generate strong financial

RETURNS for our investors

by leveraging our existing

network and RETURNING

VALUE

WINDSTREAM INVESTMENT THESIS

STRONG and IMPROVING

balance sheet

20

Appendix

21

Contents:

• Quarterly supplemental schedules (WIN Standalone)

• Quarterly supplemental schedules (Pro Forma for WIN and

ELNK)

Supplemental Financial Information

Excludes EarthLink

22

WINDSTREAM HOLDINGS, INC.

UNAUDITED ADJUSTED RESULTS OF OPERATIONS (NON-GAAP) (A)

QUARTERLY SUPPLEMENTAL INFORMATION

for the quarterly periods in the years 2016 and 2015

(In millions)

ADJUSTED RESULTS OF OPERATIONS: Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.

Revenues and sales:

Total service revenues 5,279.9$ 1,289.1$ 1,318.9$ 1,331.3$ 1,340.6$ 5,467.4$ 1,360.0$ 1,419.8$ 1,344.5$ 1,343.1$

Product sales 107.1 20.0 26.0 28.3 32.8 166.7 38.6 47.4 43.9 36.8

Total revenues and sales 5,387.0 1,309.1 1,344.9 1,359.6 1,373.4 5,634.1 1,398.6 1,467.2 1,388.4 1,379.9

Costs and expenses:

Cost of services 2,624.5 621.3 673.7 663.1 666.4 2,675.1 666.2 683.8 668.3 656.8

Cost of products sold 98.5 23.9 21.5 24.2 28.9 145.2 33.4 41.4 38.5 31.9

Selling, general and administrative 750.3 182.4 185.0 190.1 192.8 809.5 195.8 201.5 202.3 209.9

Costs and expenses excluding pension and share-based compensation expense 3,473.3 827.6 880.2 877.4 888.1 3,629.8 895.4 926.7 909.1 898.6

Adjusted OIBDAR (B) 1,913.7 481.5 464.7 482.2 485.3 2,004.3 503.2 540.5 479.3 481.3

Master lease rent payment 653.6 163.4 163.3 163.4 163.5 650.0 162.5 162.5 162.5 162.5

Adjusted OIBDA (C) 1,260.1$ 318.1$ 301.4$ 318.8$ 321.8$ 1,354.3$ 340.7$ 378.0$ 316.8$ 318.8$

Margins (D):

Adjusted OIBDAR margin 35.5% 36.8% 34.6% 35.5% 35.3% 35.6% 36.0% 36.8% 34.5% 34.9%

Adjusted OIBDA margin 23.4% 24.3% 22.4% 23.4% 23.4% 24.0% 24.4% 25.8% 22.8% 23.1%

CAPITAL EXPENDITURES:

Capital expenditures under GAAP 989.8$ 236.4$ 243.1$ 246.5$ 263.8$ 1,055.3$ 310.9$ 300.1$ 255.0$ 189.3$

Project Excel capital expenditures (173.8) (53.3) (49.9) (36.9) (33.7) (47.2) (41.2) (6.0) - -

Capital expenditures funded by CS&L - - - - - (43.1) (43.1) - - -

Adjusted capital expenditures (E) 816.0$ 183.1$ 193.2$ 209.6$ 230.1$ 965.0$ 226.6$ 294.1$ 255.0$ 189.3$

(A)

(B)

(C) Adjusted OIBDA is operating income before depreciation and amortization, excluding merger, integration and other costs related to strategic transactions, restructuring charges, pension costs and share-based compensation expense as shown on page 7.

(D) Margins are calculated by dividing the respective profitability measures by total revenues and sales.

(E)

Note: Effective February 27, 2017, CS&L changed its name to Uniti Group Inc.

Adjusted results of operations exclude the impacts of the disposed data center and consumer CLEC businesses and directory publishing operations.

Adjusted OIBDAR is adjusted OIBDA before the annual cash rent payment due under the master lease agreement with CS&L assuming the lease payments began on January 1, 2015.

Adjusted capital expenditures exclude the impacts of capital expenditures funded by CS&L and expenditures related to Project Excel, a capital program funded entirely using a portion of the proceeds from the sale of the data center business completed on December 18, 2015.

20152016

23


Excludes EarthLink


UNAUDITED ADJUSTED RESULTS OF OPERATIONS (NON-GAAP)



(In millions)

REVENUE SUPPLEMENT (A) Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.

Service revenues:

High-speed Internet bundles 1,049.0$ 263.2$ 263.2$ 261.5$ 261.1$ 1,032.8$ 258.4$ 259.9$ 258.7$ 255.8$

Voice only 148.8 34.9 37.0 37.9 39.0 169.3 40.4 41.8 42.9 44.2

Video and miscellaneous 45.8 11.4 11.4 11.4 11.6 49.0 12.3 12.3 12.2 12.2

Total consumer 1,243.6 309.5 311.6 310.8 311.7 1,251.1 311.1 314.0 313.8 312.2

Small business - ILEC 335.0 82.0 83.7 84.2 85.1 351.5 86.1 87.2 88.7 89.5

Consumer and small business - ILEC 1,578.6 391.5 395.3 395.0 396.8 1,602.6 397.2 401.2 402.5 401.7

Core wholesale (B) 512.4 125.5 126.5 129.6 130.8 543.4 136.7 132.9 135.4 138.4

Resale (C) 74.6 17.7 18.3 18.9 19.7 80.5 19.9 20.5 20.4 19.7

Total core wholesale and resale 587.0 143.2 144.8 148.5 150.5 623.9 156.6 153.4 155.8 158.1

Wireless TDM 44.0 9.5 10.4 11.4 12.7 64.0 14.1 15.3 16.4 18.2

Wholesale 631.0 152.7 155.2 159.9 163.2 687.9 170.7 168.7 172.2 176.3

Voice and long distance 572.0 137.5 141.3 145.1 148.1 604.7 151.2 151.6 149.9 152.0

Data and integrated services (D) 1,285.1 321.2 326.6 320.0 317.3 1,238.8 319.5 317.5 303.1 298.7

Miscellaneous 106.9 27.6 27.1 26.2 26.0 103.6 26.8 26.6 25.2 25.0

Enterprise 1,964.0 486.3 495.0 491.3 491.4 1,947.1 497.5 495.7 478.2 475.7

Small business - CLEC 483.8 111.1 118.7 125.3 128.7 559.0 131.5 139.0 141.9 146.6

Switched access 104.2 22.8 24.1 28.4 28.9 133.5 30.1 30.7 37.0 35.7

CAF Phase II funding and frozen federal USF 193.8 47.8 49.0 48.5 48.5 197.5 49.6 97.8 25.0 25.1

State USF and ARM support 121.9 28.5 31.0 31.2 31.2 144.2 33.7 35.4 37.5 37.6

Pass through taxes and surcharges 175.9 41.7 44.1 44.9 45.2 171.1 42.5 44.0 43.2 41.4

Miscellaneous 26.7 6.7 6.5 6.8 6.7 24.5 7.2 7.3 7.0 3.0

Regulatory and other 622.5 147.5 154.7 159.8 160.5 670.8 163.1 215.2 149.7 142.8

Total service revenues 5,279.9 1,289.1 1,318.9 1,331.3 1,340.6 5,467.4 1,360.0 1,419.8 1,344.5 1,343.1

Product sales:

Enterprise 67.2 11.3 16.2 18.0 21.7 120.1 29.4 31.4 31.7 27.6

Consumer 1.1 0.2 0.3 0.2 0.4 2.9 0.6 0.6 0.6 1.1

Other 38.8 8.5 9.5 10.1 10.7 43.7 8.6 15.4 11.6 8.1

Total product sales 107.1 20.0 26.0 28.3 32.8 166.7 38.6 47.4 43.9 36.8

Total revenues and sales 5,387.0$ 1,309.1$ 1,344.9$ 1,359.6$ 1,373.4$ 5,634.1$ 1,398.6$ 1,467.2$ 1,388.4$ 1,379.9$

(A)

(B)

(C)

(D) Data and integrated service revenues primarily include voice and broadband services delivered over a single Internet connection as well as multi-site networking services.

Core wholesale revenues primarily include revenues from providing special access circuits, fiber connections, data transport and wireless backhaul services.

Revenues represent voice and data services sold to other communications services providers on a resale basis.

Revenue amounts presented above exclude the impacts of the disposed data center and consumer CLEC businesses and directory publishing operations.

2016 2015

24


Excludes EarthLink


UNAUDITED ADJUSTED SEGMENT RESULTS (NON-GAAP) (A)



(In millions)

Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.

Consumer and Small Business - ILEC

Revenues and sales:

Service revenues 1,243.6$ 309.5$ 311.6$ 310.8$ 311.7$ 1,251.1$ 311.1$ 314.0$ 313.8$ 312.2$

Product sales 1.1 0.2 0.3 0.2 0.4 2.9 0.6 0.6 0.6 1.1

Total consumer 1,244.7 309.7 311.9 311.0 312.1 1,254.0 311.7 314.6 314.4 313.3

Small business - ILEC 335.0 82.0 83.7 84.2 85.1 351.5 86.1 87.2 88.7 89.5

Total revenues and sales 1,579.7 391.7 395.6 395.2 397.2 1,605.5 397.8 401.8 403.1 402.8

Costs and expenses 680.7 158.3 183.5 169.8 169.1 671.0 168.0 178.0 161.8 163.2

Consumer and Small Business - ILEC contribution margin 899.0$ 233.4$ 212.1$ 225.4$ 228.1$ 934.5$ 229.8$ 223.8$ 241.3$ 239.6$

Consumer and Small Business - ILEC contribution margin % 56.9% 59.6% 53.6% 57.0% 57.4% 58.2% 57.8% 55.7% 59.9% 59.5%

Wholesale (B)

Service revenues 631.0$ 152.7$ 155.2$ 159.9$ 163.2$ 687.9$ 170.7$ 168.7$ 172.2$ 176.3$


Wholesale contribution margin 452.2$ 108.9$ 110.9$ 114.7$ 117.7$ 502.3$ 124.3$ 123.9$ 123.9$ 130.2$

Wholesale contribution margin % 71.7% 71.3% 71.5% 71.7% 72.1% 73.0% 72.8% 73.4% 72.0% 73.9%

Enterprise

Revenues and sales:

Service revenues 1,964.0$ 486.3$ 495.0$ 491.3$ 491.4$ 1,947.1$ 497.5$ 495.7$ 478.2$ 475.7$

Product sales 67.2 11.3 16.2 18.0 21.7 120.1 29.4 31.4 31.7 27.6

Total revenues and sales 2,031.2 497.6 511.2 509.3 513.1 2,067.2 526.9 527.1 509.9 503.3

Costs and expenses 1,712.5 412.3 428.1 429.5 442.6 1,826.6 449.1 463.8 462.3 451.4

Enterprise contribution margin 318.7$ 85.3$ 83.1$ 79.8$ 70.5$ 240.6$ 77.8$ 63.3$ 47.6$ 51.9$

Enterprise contribution margin % 15.7% 17.1% 16.3% 15.7% 13.7% 11.6% 14.8% 12.0% 9.3% 10.3%

Small business - CLEC

Service revenues 483.8$ 111.1$ 118.7$ 125.3$ 128.7$ 559.0$ 131.5$ 139.0$ 141.9$ 146.6$


Small Business - CLEC contribution margin 155.1$ 35.3$ 37.3$ 41.2$ 41.3$ 180.8$ 41.3$ 46.3$ 44.6$ 48.6$

Small Business - CLEC contribution margin % 32.1% 31.8% 31.4% 32.9% 32.1% 32.3% 31.4% 33.3% 31.4% 33.2%

Total segment revenues and expenses

Revenues and sales:

Service revenues 4,657.4$ 1,141.6$ 1,164.2$ 1,171.5$ 1,180.1$ 4,796.6$ 1,196.9$ 1,204.6$ 1,194.8$ 1,200.3$

Product sales 68.3 11.5 16.5 18.2 22.1 123.0 30.0 32.0 32.3 28.7

Total segment revenues and sales 4,725.7 1,153.1 1,180.7 1,189.7 1,202.2 4,919.6 1,226.9 1,236.6 1,227.1 1,229.0

Total segment costs and expenses 2,900.7 690.2 737.3 728.6 744.6 3,061.4 753.7 779.3 769.7 758.7

Segment contribution margin 1,825.0$ 462.9$ 443.4$ 461.1$ 457.6$ 1,858.2$ 473.2$ 457.3$ 457.4$ 470.3$

Segment contribution margin % 38.6% 40.1% 37.6% 38.8% 38.1% 37.8% 38.6% 37.0% 37.3% 38.3%

20152016

25


Excludes EarthLink


20152016

Consolidated revenues and expenses

Revenues and sales:

Segment revenues and sales

Service revenues 4,657.4$ 1,141.6$ 1,164.2$ 1,171.5$ 1,180.1$ 4,796.6$ 1,196.9$ 1,204.6$ 1,194.8$ 1,200.3$

Product sales 68.3 11.5 16.5 18.2 22.1 123.0 30.0 32.0 32.3 28.7

Segment revenues and sales 4,725.7 1,153.1 1,180.7 1,189.7 1,202.2 4,919.6 1,226.9 1,236.6 1,227.1 1,229.0

Regulatory and other revenues and sales (C)

Service revenues 622.5 147.5 154.7 159.8 160.5 670.8 163.1 215.2 149.7 142.8

Product sales 38.8 8.5 9.5 10.1 10.7 43.7 8.6 15.4 11.6 8.1

Regulatory and other revenues and sales 661.3 156.0 164.2 169.9 171.2 714.5 171.7 230.6 161.3 150.9

Consolidated revenues and sales

Service revenues 5,279.9 1,289.1 1,318.9 1,331.3 1,340.6 5,467.4 1,360.0 1,419.8 1,344.5 1,343.1

Product sales 107.1 20.0 26.0 28.3 32.8 166.7 38.6 47.4 43.9 36.8

Consolidated revenues and sales 5,387.0$ 1,309.1$ 1,344.9$ 1,359.6$ 1,373.4$ 5,634.1$ 1,398.6$ 1,467.2$ 1,388.4$ 1,379.9$

Consolidated costs and expenses

Segment costs and expenses 2,900.7$ 690.2$ 737.3$ 728.6$ 744.6$ 3,061.4$ 753.7$ 779.3$ 769.7$ 758.7$

Regulatory and other expenses (D) 204.4 47.4 51.1 52.8 53.1 208.1 49.4 57.6 53.2 47.9

Shared expenses (E) 368.2 90.0 91.8 96.0 90.4 360.3 92.3 89.8 86.2 92.0

Consolidated costs and expenses 3,473.3$ 827.6$ 880.2$ 877.4$ 888.1$ 3,629.8$ 895.4$ 926.7$ 909.1$ 898.6$

Consolidated

Adjusted OIBDAR 1,913.7$ 481.5$ 464.7$ 482.2$ 485.3$ 2,004.3$ 503.2$ 540.5$ 479.3$ 481.3$

Adjusted OIBDAR margin 35.5% 36.8% 34.6% 35.5% 35.3% 35.6% 36.0% 36.8% 34.5% 34.9%

(A)

(B)

(C)

(D)

(E) Shared expenses are not allocated to the segments and primarily consist of accounting and finance, information technology, engineering, legal, human resources, and investor relations, that are centrally managed and are not monitored by management at a segment level.

These revenues are not allocated to the business segments and include revenue from federal and state universal service funds, CAF Phase II support, funds received from federal access recovery mechanisms, revenues from providing switched access services, and certain

surcharges assessed to our customers, including billings for our required contributions to federal and state USF programs. These revenues also include product sales to contractors and consumer revenues generated in markets where we lease the connection to the customer

premise.These expenses are not allocated to the business segments and primarily consist of various regulatory fees, cost of products sold to contractors, and interconnection costs in consumer markets where we lease the connection to the customer premise.

During the third quarter of 2016, we changed the name of our Carrier segment to Wholesale to better reflect our customer base and the products and services we are selling in the marketplace.

Adjusted results of operations exclude the impacts of the disposed data center and consumer CLEC businesses and directory publishing operations, merger, integration and other costs related to strategic transactions, restructuring charges, pension costs, and share-based

compensation expense as shown on page 27.

26


Excludes EarthLink


UNAUDITED OPERATING METRICS (NON-GAAP)



(Units in thousands, Dollars in millions, except per unit amounts)


KEY OPERATING METRICS:

Consumer

Households served 1,354.6 1,354.6 1,378.5 1,403.8 1,430.7 1,445.8 1,445.8 1,471.0 1,494.2 1,516.5

YOY change in households served -6.3% -6.3% -6.3% -6.1% -5.7% -5.4% -5.4% -5.2% -5.2% -5.6%

Average revenue per household served per month 74.45$ 75.49$ 74.66$ 73.10$ 72.24$ 70.36$ 71.11$ 70.60$ 69.49$ 68.35$

High-speed Internet customers 1,051.1 1,051.1 1,063.0 1,075.8 1,092.0 1,095.1 1,095.1 1,109.6 1,120.8 1,132.4

Digital television customers 321.0 321.0 329.3 342.0 350.1 359.3 359.3 366.0 372.5 378.8

YOY change in high-speed Internet -4.0% -4.0% -4.2% -4.0% -3.6% -3.2% -3.2% -2.8% -2.9% -3.2%

YOY change in digital television customers -10.7% -10.7% -10.0% -8.2% -7.6% -6.7% -6.7% -6.1% -5.5% -5.0%

Small business - ILEC

Small business - ILEC customers 135.9 135.9 138.5 141.0 144.3 146.8 146.8 148.6 151.6 155.9

YOY change in small business - ILEC customers -7.4% -7.4% -6.8% -7.0% -7.4% -8.4% -8.4% -9.6% -10.0% -9.6%

Average revenue per small business - ILEC customer per month 199.51$ 199.22$ 199.64$ 196.75$ 194.89$ 194.34$ 194.31$ 193.65$ 192.30$ 188.76$

Enterprise

Enterprise customers 26.7 26.7 26.6 26.8 26.4 26.3 26.3 26.2 26.0 26.2

YOY change in enterprise customers 1.5% 1.5% 1.5% 3.1% 0.8% - - -0.4% -0.8% 0.4%

Average revenue per enterprise customer per month 6,147.10$ 6,082.55$ 6,179.78$ 6,156.64$ 6,216.32$ 6,198.98$ 6,317.46$ 6,330.78$ 6,107.28$ 6,040.63$

Small business - CLEC

Small business - CLEC customers 72.1 72.1 76.7 81.2 86.4 91.2 91.2 95.2 99.3 107.3

YOY change in small business - CLEC customers -20.9% -20.9% -19.4% -18.2% -19.5% -15.2% -15.2% -14.5% -14.0% -10.4%

Average revenue per small business - CLEC customer per month 509.69$ 497.76$ 501.16$ 498.41$ 483.11$ 474.13$ 470.31$ 476.44$ 457.89$ 455.00$

Revenues Used in Average Revenue Per Month

Computations Above (per page 3):

Consumer revenue 1,243.6$ 309.5$ 311.6$ 310.8$ 311.7$ 1,251.1$ 311.1$ 314.0$ 313.8$ 312.2$

Small business - ILEC revenue 335.0$ 82.0$ 83.7$ 84.2$ 85.1$ 351.5$ 86.1$ 87.2$ 88.7$ 89.5$

Enterprise revenue 1,964.0$ 486.3$ 495.0$ 491.3$ 491.4$ 1,947.1$ 497.5$ 495.7$ 478.2$ 475.7$

Small business - CLEC revenue 483.8$ 111.1$ 118.7$ 125.3$ 128.7$ 559.0$ 131.5$ 139.0$ 141.9$ 146.6$

Note:

20152016

Enterprise customers consist of those relationships that have the propensity now or in the future to generate at least $1,500 or more in monthly recurring revenue. Business customers not meeting this criterion are classified as small business. Our small business customer base is further

disaggregated between those customers located in service areas in which we are the incumbent local exchange carrier (“ILEC”) and provide services over network facilities operated by us and those customers located in service areas in which we are a competitive local exchange carrier

(“CLEC”) and provide services over network facilities primarily leased from other carriers.

In classifying our business customers, we consider the maximum potential revenue to be generated from the customer relationship for both our existing customer base and any new customers in determining which business unit can best support the customer. Accordingly, over time, we may

prospectively change the classification of a particular business customer between enterprise and small business.

27


Excludes EarthLink


UNAUDITED CONSOLIDATED RESULTS (NON-GAAP)



(In millions)


ADJUSTED FREE CASH FLOW:

Operating income under GAAP 515.4$ 73.7$ 129.4$ 154.6$ 157.7$ 509.4$ 131.7$ 178.5$ 79.3$ 119.9$

Depreciation and amortization 1,263.5 329.5 321.0 308.2 304.8 1,366.5 333.5 350.5 341.8 340.7

OIBDA 1,778.9 403.2 450.4 462.8 462.5 1,875.9 465.2 529.0 421.1 460.6

Adjustments:

Merger, integration and other costs 13.8 3.3 2.9 2.6 5.0 95.0 20.5 3.1 57.3 14.1

Pension expense (income) 59.1 57.7 (0.3) 2.0 (0.3) 1.2 9.6 (1.9) (4.7) (1.8)

Restructuring charges 20.3 7.5 2.5 5.9 4.4 20.7 5.0 5.3 3.4 7.0

Share-based compensation expense 41.6 9.8 9.2 8.9 13.7 55.3 12.4 14.6 13.5 14.8

Master lease rent payment (653.6) (163.4) (163.3) (163.4) (163.5) (446.0) (162.5) (162.5) (121.0) -

Adjusted capital expenditures (A) (816.0) (183.1) (193.2) (209.6) (230.1) (965.0) (226.6) (294.1) (255.0) (189.3)

Cash paid for interest on long-term debt obligations (366.2) (113.9) (58.0) (138.8) (55.5) (487.8) (160.3) (46.5) (206.3) (74.7)

Cash (paid) refunded for income taxes (6.2) 2.0 (0.3) (1.4) (6.5) (1.1) (0.3) (2.3) 0.3 1.2

Cash dividends received on CS&L common stock 35.2 - - 17.6 17.6 30.6 17.6 13.0 - -

Adjusted free cash flow 106.9$ 23.1$ 49.9$ (13.4)$ 47.3$ 178.8$ (19.4)$ 57.7$ (91.4)$ 231.9$

Dividends paid 58.6$ 14.5$ 14.6$ 14.6$ 14.9$ 369.2$ 15.1$ 11.5$ 191.1$ 151.5$

Weighted average common shares 93.9

Common stock outstanding 96.3

As of

DEBT LEVERAGE RATIO: 12/31/2016

Long-term debt, including current maturities 4,863.6$

Capital lease obligations 54.3

Total long-term debt and capital lease obligations 4,917.9

Cash and cash equivalents 59.1

Net debt 4,858.8$

Twelve

Months Ended

12/31/2016

Adjusted OIBDA (per page 22) 1,260.1$

Net leverage ratio (B) 3.86

(A)

(B) The net leverage ratio is computed by dividing net debt by adjusted OIBDA.

20152016

Adjusted capital expenditures exclude the impacts of capital expenditures funded by CS&L and expenditures related to Project Excel, a capital program funded entirely using a portion of the proceeds from the sale of the data center business completed on December 18, 2015.

28


Excludes EarthLink


RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (A)


(In millions)


Reconciliation of Revenues and Sales under GAAP to

Adjusted Revenues and Sales:

Service revenues under GAAP 5,279.9$ 1,289.1$ 1,318.9$ 1,331.3$ 1,340.6$ 5,598.6$ 1,388.4$ 1,451.2$ 1,377.2$ 1,381.8$

Adjustments:

Data center revenues - - - - - (119.4) (28.4) (31.4) (30.4) (29.2)

Consumer CLEC revenues - - - - - (10.2) - - (2.3) (7.9)

Directory publishing revenues - - - - - (1.6) - - - (1.6)

Adjusted service revenues 5,279.9 1,289.1 1,318.9 1,331.3 1,340.6 5,467.4 1,360.0 1,419.8 1,344.5 1,343.1

Product sales under GAAP 107.1 20.0 26.0 28.3 32.8 166.7 38.6 47.4 43.9 36.8

Adjusted revenues and sales: 5,387.0$ 1,309.1$ 1,344.9$ 1,359.6$ 1,373.4$ 5,634.1$ 1,398.6$ 1,467.2$ 1,388.4$ 1,379.9$

Reconciliation of Net (Loss) Income under GAAP to Adjusted OIBDA:

Net (loss) income (383.5)$ (86.9)$ (66.2)$ 1.5$ (231.9)$ 27.4$ 140.5$ (7.2)$ (111.2)$ 5.3$

Adjustments:

Dividend income on CS&L common stock (17.6) - - - (17.6) (48.2) (17.6) (17.6) (13.0) -

Other expense (income), net 1.2 (1.3) (0.6) 1.9 1.2 (9.3) (1.4) 0.2 (9.3) 1.2

Loss (gain) on sale of data center business 10.0 10.0 - - - (326.1) (326.1) - - -

Net (gain) loss on disposal of investment in CS&L common stock (15.2) - 2.1 (17.3) - - - - - -

Net loss (gain) on early extinguishment of debt 18.0 - 20.1 (37.5) 35.4 36.4 0.6 (7.6) 43.4 -

Other-than-temporary impairment loss on investment in CS&L common stock 181.9 - - - 181.9 - - - - -

Interest expense 860.6 207.1 216.4 217.4 219.7 813.2 224.4 230.2 217.5 141.1

Income tax (benefit) expense (140.0) (55.2) (42.4) (11.4) (31.0) 16.0 111.3 (19.5) (48.1) (27.7)

Operating income under GAAP 515.4 73.7 129.4 154.6 157.7 509.4 131.7 178.5 79.3 119.9

Depreciation and amortization 1,263.5 329.5 321.0 308.2 304.8 1,366.5 333.5 350.5 341.8 340.7

Adjustments:

Data center business operating (income) loss - - - - - (2.6) (7.3) 1.1 2.1 1.5

Consumer CLEC business operating income - - - - - (3.3) - - (0.8) (2.5)

Directory publishing operating income - - - - - (0.8) - - - (0.8)

Depreciation and amortization - disposed businesses - - - - - (36.2) (2.0) (10.5) (12.4) (11.3)


Pension expense (income) 59.1 57.7 (0.3) 2.0 (0.3) 1.2 9.6 (1.9) (4.7) (1.8)


Share-based compensation expense 41.6 9.8 9.2 8.9 13.7 54.4 12.2 14.4 13.3 14.5

Adjusted OIBDAR (B) 1,913.7 481.5 464.7 482.2 485.3 2,004.3 503.2 540.5 479.3 481.3

Master lease rent payment (653.6) (163.4) (163.3) (163.4) (163.5) (650.0) (162.5) (162.5) (162.5) (162.5)

Adjusted OIBDA (C) 1,260.1$ 318.1$ 301.4$ 318.8$ 321.8$ 1,354.3$ 340.7$ 378.0$ 316.8$ 318.8$

(A)

(B)

(C)

2015

Adjusted OIBDA is operating income before depreciation and amortization, excluding merger, integration and other costs related to strategic transactions, restructuring charges, pension costs and share-based compensation expense as shown on page 27.


2016

Adjusted results of operations exclude the impacts of the disposed data center and consumer CLEC businesses and directory publishing operations.

29


Excludes EarthLink


RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES


(In millions)


Reconciliation of Net Cash Provided from Operating Activities to

Adjusted OIBDA:

Net Cash Provided from Operating Activities 924.4$ 302.3$ 197.6$ 297.3$ 127.2$ 1,026.6$ 270.3$ 376.3$ 136.2$ 243.8$

Adjustments:

Master lease rent payment (653.6) (163.4) (163.3) (163.4) (163.5) (650.0) (162.5) (162.5) (162.5) (162.5)

Cash dividends received on CS&L common stock (35.2) - - (17.6) (17.6) (30.6) (17.6) (13.0) - -

Pretax operating results of disposed businesses - - - - - (43.8) (9.5) (9.6) (11.3) (13.4)






Income tax benefit, net of deferred income taxes (1.7) 3.1 (2.7) 1.4 (3.5) 32.3 24.3 0.4 1.5 6.1

Provision for doubtful accounts (43.8) (10.7) (12.6) (10.8) (9.7) (47.1) (10.0) (13.6) (13.2) (10.3)

Noncash portion of net loss (gain) on early extinguishment of debt 51.9 - 6.8 37.7 7.4 18.5 3.5 12.1 2.9 -

Amortization of unrealized losses on de-designated interest rate swaps (4.8) (1.7) (0.9) (1.0) (1.2) (11.6) (1.6) (2.9) (3.7) (3.4)

Plan curtailment 5.5 - - - 5.5 18.0 1.5 3.0 13.5 -

Other noncash adjustments, net 16.4 (1.5) (6.7) 9.6 15.0 (25.0) (12.0) (0.8) (3.5) (8.7)

Changes in operating assets and liabilities, net 87.1 (26.6) 41.9 (24.7) 96.5 111.0 5.2 (42.6) 44.6 103.8

Adjusted OIBDA 1,260.1$ 318.1$ 301.4$ 318.8$ 321.8$ 1,354.3$ 340.7$ 378.0$ 316.8$ 318.8$

Reconciliation of Net Cash Provided from Operating Activities to

Adjusted Free Cash Flow:

Net Cash Provided from Operating Activities 924.4$ 302.3$ 197.6$ 297.3$ 127.2$ 1,026.6$ 270.3$ 376.3$ 136.2$ 243.8$

Adjustments:

Cash (paid) refunded for income taxes (6.2) 2.0 (0.3) (1.4) (6.5) (1.1) (0.3) (2.3) 0.3 1.2

Cash paid for interest on long-term debt obligations (366.2) (113.9) (58.0) (138.8) (55.5) (487.8) (160.3) (46.5) (206.3) (74.7)

Capital expenditures (989.8) (236.4) (243.1) (246.5) (263.8) (1,055.3) (310.9) (300.1) (255.0) (189.3)

Project Excel capital expenditures 173.8 53.3 49.9 36.9 33.7 47.2 41.2 6.0 - -

Capital expenditures funded by CS&L - - - - - 43.1 43.1 - - -

Master lease rent payment (653.6) (163.4) (163.3) (163.4) (163.5) (446.0) (162.5) (162.5) (121.0) -






Income tax benefit, net of deferred income taxes (1.7) 3.1 (2.7) 1.4 (3.5) 32.3 24.3 0.4 1.5 6.1

Provision for doubtful accounts (43.8) (10.7) (12.6) (10.8) (9.7) (47.1) (10.0) (13.6) (13.2) (10.3)

Noncash portion of net loss (gain) on early extinguishment of debt 51.9 - 6.8 37.7 7.4 18.5 3.5 12.1 2.9 -

Amortization of unrealized losses on de-designated interest rate swaps (4.8) (1.7) (0.9) (1.0) (1.2) (11.6) (1.6) (2.9) (3.7) (3.4)

Plan curtailment 5.5 - - - 5.5 18.0 1.5 3.0 13.5 -

Other noncash adjustments, net 16.4 (1.5) (6.7) 9.6 15.0 (25.0) (12.0) (0.8) (3.5) (8.7)

Changes in operating assets and liabilities, net 87.1 (26.6) 41.9 (24.7) 96.5 111.0 5.2 (42.6) 44.6 103.8

Adjusted Free Cash Flow 106.9$ 23.1$ 49.9$ (13.4)$ 47.3$ 178.8$ (19.4)$ 57.7$ (91.4)$ 231.9$

2016 2015

30


Includes EarthLink

WINDSTREAM HOLDINGS, INC. (INCLUDES EARTHLINK)

UNAUDITED PRO FORMA SEGMENT RESULTS (NON-GAAP) (A)


for the quarterly periods in the year 2016 and for the annual period of 2015

(In millions)

2015

Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total

Consumer and Small Business - ILEC

Revenues and sales:

Service revenues 1,243.6$ 309.5$ 311.6$ 310.8$ 311.7$ 1,251.1$

Product sales 1.1 0.2 0.3 0.2 0.4 2.9

Total consumer 1,244.7 309.7 311.9 311.0 312.1 1,254.0

Small business - ILEC 335.0 82.0 83.7 84.2 85.1 351.5

Total revenues and sales 1,579.7 391.7 395.6 395.2 397.2 1,605.5

Costs and expenses 680.7 158.3 183.5 169.8 169.1 671.0

Consumer and Small Business - ILEC contribution margin 899.0$ 233.4$ 212.1$ 225.4$ 228.1$ 934.5$

Consumer and Small Business - ILEC contribution margin % 56.9% 59.6% 53.6% 57.0% 57.4% 58.2%

Wholesale

Service revenues 757.4$ 183.7$ 187.1$ 191.0$ 195.6$ 808.0$


Wholesale contribution margin 493.6$ 118.5$ 121.4$ 124.3$ 129.4$ 542.0$

Wholesale contribution margin % 65.2% 64.5% 64.9% 65.1% 66.2% 67.1%

Enterprise

Revenues and sales:

Service revenues 2,359.6$ 583.7$ 593.0$ 588.9$ 594.0$ 2,365.9$

Product sales 54.4 8.6 13.2 14.5 18.1 107.3

Total revenues and sales 2,414.0 592.3 606.2 603.4 612.1 2,473.2

Costs and expenses 2,042.0 495.0 511.7 509.8 525.5 2,176.5

Enterprise contribution margin 372.0$ 97.3$ 94.5$ 93.6$ 86.6$ 296.7$

Enterprise contribution margin % 15.4% 16.4% 15.6% 15.5% 14.1% 12.0%

Consumer and Small Business - CLEC

Revenues and sales:

Service revenues 207.2$ 49.6$ 50.5$ 53.0$ 54.1$ 230.9$

Product sales 0.6 0.2 0.1 0.2 0.1 0.8

Total consumer 207.8 49.8 50.6 53.2 54.2 231.7

Service revenues 695.5 159.1 169.7 179.8 186.9 830.1

Product sales 12.8 2.7 3.0 3.5 3.6 12.8

Total small business - CLEC 708.3 161.8 172.7 183.3 190.5 842.9

Total revenues and sales 916.1 211.6 223.3 236.5 244.7 1,074.6


Consumer and Small Business - CLEC contribution margin 351.8$ 80.7$ 84.6$ 92.3$ 94.2$ 419.2$

Consumer and Small Business - CLEC contribution margin % 38.4% 38.1% 37.9% 39.0% 38.5% 39.0%

Total segment revenues and expenses

Revenues and sales:

Service revenues 5,598.3$ 1,367.6$ 1,395.6$ 1,407.7$ 1,427.4$ 5,837.5$

Product sales 68.9 11.7 16.6 18.4 22.2 123.8

Total segment revenues and sales 5,667.2 1,379.3 1,412.2 1,426.1 1,449.6 5,961.3

Total segment costs and expenses 3,550.8 849.4 899.6 890.5 911.3 3,768.9

Segment contribution margin 2,116.4$ 529.9$ 512.6$ 535.6$ 538.3$ 2,192.4$

Segment contribution margin % 37.3% 38.4% 36.3% 37.6% 37.1% 36.8%

2016

31


Includes EarthLink

2015


2016

Consolidated revenues and expenses

Revenues and sales:

Segment revenues and sales

Service revenues 5,598.3$ 1,367.6$ 1,395.6$ 1,407.7$ 1,427.4$ 5,837.5$

Product sales 68.9 11.7 16.6 18.4 22.2 123.8

Segment revenues and sales 5,667.2 1,379.3 1,412.2 1,426.1 1,449.6 5,961.3

Regulatory and other revenues and sales (B)

Service revenues 663.3 157.1 164.7 170.3 171.2 713.7

Product sales 38.8 8.5 9.5 10.1 10.7 43.7

Regulatory and other revenues and sales 702.1 165.6 174.2 180.4 181.9 757.4

Consolidated revenues and sales

Service revenues 6,261.6 1,524.7 1,560.3 1,578.0 1,598.6 6,551.2

Product sales 107.7 20.2 26.1 28.5 32.9 167.5

Consolidated revenues and sales 6,369.3$ 1,544.9$ 1,586.4$ 1,606.5$ 1,631.5$ 6,718.7$

Consolidated costs and expenses

Segment costs and expenses 3,550.8$ 849.4$ 899.6$ 890.5$ 911.3$ 3,768.9$

Regulatory and other expenses (C) 236.6 54.9 59.0 60.9 61.8 240.8

Shared expenses (D) 455.2 113.6 112.7 116.5 112.4 466.0

Consolidated costs and expenses 4,242.6$ 1,017.9$ 1,071.3$ 1,067.9$ 1,085.5$ 4,475.7$

Consolidated

Adjusted OIBDAR 2,126.7$ 527.0$ 515.1$ 538.6$ 546.0$ 2,243.0$

Adjusted OIBDAR margin 33.4% 34.1% 32.5% 33.5% 33.5% 33.4%

(A)

(B)

(C)

(D)

Pro forma results of operations are based upon the historical financial information of Windstream and EarthLink adjusted to exclude the operating results of Windstream's disposed data center and consumer CLEC

businesses and directory publishing operations, EarthLink's disposed information technology services business, merger, integration and other costs related to strategic transactions, restructuring charges, pension costs,

and share-based compensation expense for all periods presented. The pro forma results assume the merger was completed on January 1, 2015.

These revenues are not allocated to the business segments and include revenue from federal and state universal service funds, CAF Phase II support, funds received from federal access recovery mechanisms, revenues

from providing switched access services, and certain surcharges assessed to our customers, including billings for our required contributions to federal and state USF programs. These revenues also include product

sales to contractors and consumer revenues generated in markets where we lease the connection to the customer premise.

These expenses are not allocated to the business segments and primarily consist of various regulatory fees, cost of products sold to contractors, and interconnection costs in consumer markets where we lease the

connection to the customer premise.

Shared expenses are not allocated to the segments and primarily consist of accounting and finance, information technology, engineering, legal, human resources, and investor relations, that are centrally managed and are

not monitored by management at a segment level.

32


Includes EarthLink


UNAUDITED PRO FORMA RESULTS OF OPERATIONS (NON-GAAP) (A)


for the quarterly periods in the year 2016

(In millions)

PRO FORMA RESULTS OF OPERATIONS: Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.

Revenues and sales:

Total service revenues 6,261.6$ 1,524.7$ 1,560.3$ 1,578.0$ 1,598.6$

Product sales 107.7 20.2 26.1 28.5 32.9

Total revenues and sales 6,369.3 1,544.9 1,586.4 1,606.5 1,631.5

Costs and expenses:

Cost of services 3,169.9 754.3 809.3 798.5 807.8

Cost of products sold 99.9 24.2 21.9 24.6 29.2

Selling, general and administrative 972.8 239.4 240.1 244.8 248.5

Costs and expenses excluding pension and share-based compensation expense 4,242.6 1,017.9 1,071.3 1,067.9 1,085.5

Adjusted OIBDAR (B) 2,126.7 527.0 515.1 538.6 546.0

Master lease rent payment 653.6 163.4 163.3 163.4 163.5

Adjusted OIBDA (C) 1,473.1$ 363.6$ 351.8$ 375.2$ 382.5$

Margins (D):

Adjusted OIBDAR margin 33.4% 34.1% 32.5% 33.5% 33.5%

Adjusted OIBDA margin 23.1% 23.5% 22.2% 23.4% 23.4%

CAPITAL EXPENDITURES:

Capital expenditures under GAAP 1,073.9$ 264.9$ 263.5$ 263.1$ 282.4$

Project Excel capital expenditures (173.8) (53.3) (49.9) (36.9) (33.7)

Adjusted capital expenditures (E) 900.1$ 211.6$ 213.6$ 226.2$ 248.7$

As of

PRO FORMA DEBT LEVERAGE RATIO: 12/31/2016

Long-term debt, including current maturities 5,293.0$

Capital lease obligations 66.8

Total long-term debt and capital lease obligations 5,359.8

Cash and cash equivalents 110.6

Net debt 5,249.2$

Twelve

Months Ended

12/31/2016

Adjusted OIBDA 1,473.1$

Net leverage ratio 3.56

(A)

(B)

(C)

(D) Margins are calculated by dividing the respective profitability measures by total revenues and sales.

(E)

Note: Effective February 27, 2017, CS&L changed its name to Uniti Group Inc.

Adjusted capital expenditures exclude expenditures related to Project Excel, a capital program funded entirely using a portion of the proceeds from the sale of Windstream's data center business

completed on December 18, 2015.

2016

Pro forma results of operations are based upon the historical financial information of Windstream and EarthLink adjusted to exclude the operating results of Windstream's disposed data center

and consumer CLEC businesses and directory publishing operations and EarthLink's disposed information technology services business for all periods presented. The pro forma results assume

the merger was completed on January 1, 2015.

Adjusted OIBDA is operating income before depreciation and amortization, excluding merger and integration costs related to strategic transactions, restructuring charges, pension costs and

share-based compensation expense.


33


Includes EarthLink


RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (A)

for the quarterly periods in the year 2016 and for the annual period of 2015

(In millions)

2015


Reconciliation of Revenues and Sales under GAAP to

Pro Forma Revenues and Sales:

Service revenues under GAAP 5,279.9$ 1,289.1$ 1,318.9$ 1,331.3$ 1,340.6$ 5,598.6$

Adjustments:

EarthLink revenues 981.7 235.6 241.4 246.7 258.0 1,083.8

Data center revenues - - - - - (119.4)

Consumer CLEC revenues - - - - - (10.2)

Directory publishing revenues - - - - - (1.6)

Pro forma service revenues 6,261.6 1,524.7 1,560.3 1,578.0 1,598.6 6,551.2

Product sales under GAAP 107.1 20.0 26.0 28.3 32.8 166.7

Adjustments:

EarthLink product sales 0.6 0.2 0.1 0.2 0.1 0.8

Pro forma product sales 107.7 20.2 26.1 28.5 32.9 167.5

Pro forma revenues and sales: 6,369.3$ 1,544.9$ 1,586.4$ 1,606.5$ 1,631.5$ 6,718.7$

Reconciliation of Net (Loss) Income under GAAP to Pro Forma Adjusted OIBDA:

Net (loss) income (383.5)$ (86.9)$ (66.2)$ 1.5$ (231.9)$ 27.4$

Adjustments:

Dividend income on CS&L common stock (17.6) - - - (17.6) (48.2)

Other expense (income), net 1.2 (1.3) (0.6) 1.9 1.2 (9.3)

Loss (gain) on sale of data center business 10.0 10.0 - - - (326.1)

Net (gain) loss on disposal of investment in CS&L common stock (15.2) - 2.1 (17.3) - -

Net loss (gain) on early extinguishment of debt 18.0 - 20.1 (37.5) 35.4 36.4

Other-than-temporary impairment loss on investment in CS&L common stock 181.9 - - - 181.9 -

Interest expense 860.6 207.1 216.4 217.4 219.7 813.2

Income tax (benefit) expense (140.0) (55.2) (42.4) (11.4) (31.0) 16.0

Operating income under GAAP 515.4 73.7 129.4 154.6 157.7 509.4

Depreciation and amortization 1,263.5 329.5 321.0 308.2 304.8 1,366.5

Adjustments:

EarthLink operating income 213.0 45.5 50.4 56.4 60.7 238.7

Data center business operating loss - - - - - (2.6)

Consumer CLEC business operating income - - - - - (3.3)

Directory publishing operating income - - - - - (0.8)

Depreciation and amortization - disposed businesses - - - - - (36.2)

Merger and integration costs 13.8 3.3 2.9 2.6 5.0 95.0

Pension expense (income) 59.1 57.7 (0.3) 2.0 (0.3) 1.2

Restructuring charges 20.3 7.5 2.5 5.9 4.4 20.7

Share-based compensation expense 41.6 9.8 9.2 8.9 13.7 54.4

Pro forma adjusted OIBDAR (B) 2,126.7 527.0 515.1 538.6 546.0 2,243.0

Master lease rent payment (653.6) (163.4) (163.3) (163.4) (163.5) (650.0)

Pro forma adjusted OIBDA (C) 1,473.1$ 363.6$ 351.8$ 375.2$ 382.5$ 1,593.0$

(A)

(B)

(C)

2016

Pro forma results of operations are based upon the historical financial information of Windstream and EarthLink adjusted to exclude the operating results of Windstream's disposed data center and consumer CLEC

businesses and directory publishing operations and EarthLink's disposed information technology services business for all periods presented. The pro forma results assume the merger was completed on January 1,

2015.

Pro forma adjusted OIBDA is operating income before depreciation and amortization, excluding merger and integration costs related to strategic transactions, restructuring charges, pension costs and share-based

compensation expense.

Pro forma adjusted OIBDAR is pro forma adjusted OIBDA before the annual cash rent payment due under the master lease agreement with CS&L assuming the lease payments began on January 1, 2015.

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