8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): November 7, 2016

Exact name of registrant as specified in its charter	State or other jurisdiction of  incorporation or organization	Commission File Number	I.R.S. Employer Identification No.
Windstream Holdings, Inc.	Delaware	001-32422	46-2847717

4001 Rodney Parham Road
Little Rock, Arkansas			72212
(Address of principal executive offices)			(Zip Code)
		(501) 748-7000
	(Registrants’ telephone number, including area code)
		N/A
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

ý	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On November 7, 2016, Windstream Holdings, Inc. (“Windstream”, the “Company”, “we”, “us”, or “our”) issued a press release announcing the Company’s third quarter 2016 consolidated results of operations. The press release presents our unaudited consolidated results of operations measured under generally accepted accounting principles in the United States (“GAAP”) and certain unaudited adjusted results of operations, which are not calculated in accordance with GAAP. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in a company’s financial statements. The non-GAAP financial measures used by us may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as a substitute for measures of performance or liquidity prepared in accordance with GAAP.

Our press release, and other communications from time to time, include a non-GAAP measure titled operating income before depreciation and amortization (“OIBDA”). OIBDA can be calculated directly from the Company’s consolidated financial statements prepared in accordance with GAAP by taking operating income and adding back depreciation and amortization expense. Management considers OIBDA to be useful to investors because OIBDA provides information specific to the Company’s operating performance.

We also present our unaudited consolidated results on an adjusted basis, which when compared to measures prepared in accordance with GAAP, exclude pension costs, restructuring charges, share-based compensation expense, merger and integration costs related to strategic transactions and the operating results of disposed non-strategic businesses. In addition, we have presented certain measures of our operating performance that adjusts for the impact of the annual cash rent payment due under the master lease agreement with Communications Sales & Leasing, Inc. (“CS&L”). Windstream’s purpose for presenting its unaudited consolidated results on an adjusted basis is to improve the comparability of results of operations between current and prior periods in order to focus on the true earnings capacity of our core business operations and our ability to generate cash flow. We use adjusted results as a key measure of our operational performance. Windstream management, including the chief operating decision-maker, uses adjusted results consistently for all purposes, including internal reporting, the evaluation of business objectives, opportunities and performance, and the determination of management compensation.

Our press release makes reference to adjusted OIBDA, adjusted OIBDAR, adjusted free cash flow and adjusted capital expenditures, which are non-GAAP measures and are defined as follows:

• Adjusted OIBDA, defined as OIBDA excluding the impacts of pension costs, restructuring charges, share-based compensation expense, merger and integration costs related to strategic transactions and the operating results of disposed non-strategic businesses and including the annual cash rent payment due under the master lease agreement with CS&L.

• Adjusted OIBDAR, defined as adjusted OIBDA excluding the impact of the annual cash payment due under the master lease agreement with CS&L.

• Adjusted free cash flow, defined as OIBDA plus merger and integration costs, pension costs, share-based compensation expense, restructuring charges, and the annual cash rent payment due under the master lease agreement with CS&L, less adjusted capital expenditures, interest paid on long-term debt obligations, income taxes paid, net of refunds, plus cash dividends received on our investment in CS&L common stock.

• Adjusted capital expenditures, defined as capital expenditures excluding the impacts of capital expenditures related to Project Excel, a $250 million capital program funded entirely using a portion of the $575 million proceeds from the sale of the data center business completed on December 18, 2015.

Adjusted OIBDA and adjusted OIBDAR are included to provide investors with useful information about our operating performance before the impacts of certain non-cash items and to enhance the comparability of operating results for the periods presented. Adjusted OIBDAR is also used by rating agencies and lenders to evaluate our operating performance and creditworthiness. Management believes that adjusted free cash flow provides investors with useful information about the ability of the Company’s core operations to generate cash flow.

A copy of the press release announcing WIndstream’s third quarter 2016 operating results is attached hereto as Exhibit 99.1.

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Item 8.01 Other Events.

On November 7, 2016, Windstream and EarthLink Holdings Corp. (“EarthLink”) issued a joint press release announcing the execution of an Agreement and Plan of Merger, dated as of November 5, 2016 (the “Merger Agreement”), by and among Windstream, EarthLink, Europa Merger Sub, Inc. (“Merger Sub 1”) and Europa Merger Sub, LLC (“Merger Sub 2”). Subject to the terms and conditions of the Merger Agreement, Merger Sub 1 will merge with and into EarthLink with EarthLink surviving as an indirect, wholly-owned subsidiary of Windstream (the “Initial Merger”) and, immediately following the effective time of the Initial Merger, EarthLink will merge with and into Merger Sub 2, with Merger Sub 2 surviving as an indirect, wholly-owned subsidiary of Windstream (together with the Initial Merger, the “Combination”). On November 7, 2016, Windstream and EarthLink made a joint investor presentation concerning the Combination, as well as their respective third quarter operating results, and posted to its website a fact sheet with respect to the Combination. A copy of each of the joint press release, joint investor presentation and fact sheet is attached hereto as Exhibits 99.2, 99.3 and 99.4, respectively.

The information required by Item 1.01, including a copy of the Merger Agreement, will be filed in a separate Current Report on Form 8-K later this week.

The information contained in this Item 8.01 to this Current Report on Form 8-K, including Exhibits 99.2 and 99.3, shall not be deemed “filed” with the SEC nor incorporated by reference in any registration statement filed by Windstream under the Securities Act of 1933, as amended.

Cautionary Statement Regarding Forward-Looking Statements

Windstream 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, 2016 guidance for service revenue, adjusted OIBDAR and adjusted capital expenditures, along with statements regarding adjusted free cash flow, cash interest and cash taxes; expectations regarding revenue trends and improving margins in the business segments; network cost optimization; stability and growth in adjusted OIBDAR; the anticipated benefits of Project Excel, of network investments pursuant to the Connect America Fund, and of enhanced services available to customers; the ability to improve its debt profile and reduce interest costs; statements about the benefits of the proposed Combination with EarthLink, including future financial and operating results, future revenue, projected synergies in operating and capital expenditures, the expected availability of net operating loss carryforwards to reduce future cash tax expenses, net leverage, adjusted OIBDA/OIBDAR, and adjusted free cash flow; Windstream and EarthLink’s expected dividend policy between the announcement of the transaction and proposed completion of the Combination, and the dividend policy for the proposed combined company after the Combination; the expected timing of completion of the transaction that is contingent upon stockholder approval of both companies and certain regulatory approvals, along with 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 relating to the ability to obtain the requisite Windstream and EarthLink stockholder approvals required to complete the Combination; the ability to satisfy the conditions to consummation of the Combination, including obtaining governmental and regulatory approvals required for the Combination; the risk that required governmental and regulatory approvals may delay the Combination or result in the imposition of conditions that could cause the parties to abandon the Combination or materially impact the financial benefits of the proposed Combination; timing to consummate the proposed Combination; the risk that the businesses will not be integrated successfully; the risk that the cost savings and anticipated synergies from the proposed transaction may not be fully realized or may take longer to realize than expected; the anticipated future cash requirements of the proposed combined company; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; the diversion of management time on merger-related issues; dividend policy changes for the combined company; general worldwide economic conditions and related uncertainties; and the effect of any changes in governmental regulations. Windstream does not undertake any obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise

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Additional Information and Where to Find It

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.  In connection with the proposed Combination between Windstream and EarthLink, Windstream will file with the SEC a Registration Statement on Form S-4 that will include a joint proxy statement of Windstream and EarthLink that also constitutes a prospectus of Windstream.  Windstream and EarthLink will mail the joint proxy statement/prospectus to their respective shareholders.  Windstream and EarthLink urge investors and shareholders to read the joint proxy statement/prospectus regarding the proposed Combination when it becomes available, as well as other documents filed with the SEC, because they will contain important information. You may obtain copies of all documents filed with the SEC regarding this transaction, free of charge, at the SEC’s website (www.sec.gov). You may also obtain these documents, free of charge, from Windstream’s website (www.windstream.com/investors). You may also obtain these documents, free of charge, from EarthLink’s website (www.earthlink.com) under the tab “Investor Relations.”

Participants in the Merger Solicitation

Windstream, EarthLink and their respective directors, executive officers and certain other members of management and employees may be soliciting proxies from Windstream and EarthLink shareholders in favor of the merger and related matters. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the companies’ shareholders in connection with the proposed Combination will be set forth in the joint proxy statement/prospectus when it is filed with the SEC. You can find information about Windstream’s executive officers and directors in its definitive proxy statement filed with the SEC on April 1, 2016. You can find information about EarthLink’s executive officers and directors in its definitive proxy statement filed with the SEC on March 15, 2016. Additional information about Windstream’s executive officers and directors and EarthLink’s executive officers and directors can be found in the above-referenced Registration Statement on Form S-4 when it becomes available. You can obtain free copies of these documents from the companies using the website information above.

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Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

The following exhibits are filed with this report:

Exhibit No.	Description
99.1	Windstream Third Quarter Earnings Release dated November 7, 2016
99.2	Joint Press Release dated November 7, 2016
99.3	Joint Investor Presentation Materials dated November 7, 2016
99.4	Fact Sheet dated November 7, 2016

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SIGNATURE

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

WINDSTREAM HOLDINGS, INC.
By:	/s/ Kristi Moody
Name:	Kristi Moody
Title:	Senior Vice President and Corporate Secretary

Dated: November 7, 2016

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Windstream Third Quarter Earnings Release dated November 7, 2016
99.2	Joint Press Release dated November 7, 2016
99.3	Joint Investor Presentation Materials dated November 7, 2016
99.4	Fact Sheet dated November 7, 2016

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EX-99.1

Exhibit 99.1

Windstream reports third-quarter results

Expanded enterprise contribution margin; grew consumer revenue sequentially

Release date: Nov. 7, 2016

LITTLE ROCK, Ark. - Windstream (NASDAQ: WIN), a leading provider of advanced network communications and technology solutions, today reported third-quarter results.

“Windstream continues to advance our strategy to maximize shareholder value. During the third quarter, we further expanded enterprise contribution margin and grew consumer service revenue sequentially. We continued to make prudent capital investments to better leverage our extensive network to serve customers and provide incremental returns to shareholders. Additionally we further improved our debt maturity profile and reduced future cash interest,” said Tony Thomas, president and chief executive officer at Windstream.

Results under GAAP

Total revenues and sales were $1.34 billion and total service revenues were $1.32 billion in the third quarter compared to $1.50 billion and $1.45 billion respectively year-over-year. Operating income was $129 million compared to $179 million in the same period a year ago. The company reported a net loss of $66 million or a loss of 72 cents per share compared to a loss of $7 million or a loss of 8 cents per share a year ago.

Adjusted Results of Operations

Adjusted service revenues were $1.32 billion, a decrease of 4 percent on a normalized basis, which excludes approximately $49 million in Connect America Fund Phase II revenue received in the third quarter of 2015 that related to prior periods. Through solid expense management, the company reduced cash expenses by $47 million, or 5 percent, relative to the same period a year ago and produced $465 million in Adjusted OIBDAR.

Consumer and small business ILEC service revenues were $395 million, a decrease of 1 percent from the same period a year ago. Consumer service revenues were $312 million, an increase of $1 million sequentially. Consumer average revenue per household increased 2 percent sequentially and 6 percent year-over-year driven by broadband speed penetration gains across all tiers, improved modem rentals and sales of bundled services.

Wholesale service revenues were $155 million, a decrease of 8 percent year-over-year. Core wholesale and resale revenues were $145 million, a decrease of $4 million sequentially.

Enterprise service revenues were $495 million, an increase of $4 million sequentially. Enterprise contribution margin was $83 million, or 16 percent, an increase of $20 million, or 31 percent, year-over-year.

Small business CLEC service revenues were $119 million and contribution margin was $37 million, or 31 percent. Through targeted price increases and incremental sales of additional services, average revenue per user increased 5 percent year-over-year.

Balance Sheet

During the quarter, Windstream redeemed its remaining 2017 notes using incremental term loan proceeds and revolver borrowings, which significantly enhanced the company’s debt maturity profile and provided attractive cash interest savings going forward. Reflecting all balance sheet initiatives to date, the company expects $325 million in cash interest expense in 2017. The company has no near-term maturities.

Quarterly Dividend

On Nov. 4, 2016, the board of directors declared a quarterly dividend of 15 cents per share payable Jan. 17, 2017, to stockholders of record as of Dec. 30, 2016.

Financial Outlook for 2016

Windstream affirmed its previously provided guidance for adjusted service revenue, adjusted OIBDAR and adjusted capital expenditures.

The company expects total service revenue of $5.275 billion to $5.425 billion and adjusted OIBDAR of $1.90 billion to $1.95 billion. Adjusted capital expenditures are expected to be between $800 million and $850 million.

About Windstream

Windstream Holdings, Inc. (NASDAQ: WIN), a FORTUNE 500 company, is a leading provider of advanced network communications and technology solutions for consumers, businesses, enterprise organizations and wholesale customers across the U.S. Windstream offers bundled services, including broadband, security solutions, voice and digital TV to consumers. The company also provides data, cloud solutions, unified communications and managed services to small business and enterprise clients. The company supplies core transport solutions on a local and long-haul fiber network spanning approximately 129,000 miles. Additional information is available at windstream.com. Please visit our newsroom at news.windstream.com or follow us on Twitter at @Windstream.

Adjusted results of operations exclude the impacts of the disposed data center and consumer CLEC businesses and directory publishing operations and all merger and integration costs related to strategic transactions. A reconciliation of adjusted results to the comparable GAAP measures is included in the financial information presented below. Additional supplemental quarterly financial information is available on the company’s Web site at www.windstream.com/investors.

Adjusted OIBDA is operating income before depreciation and amortization adjusted for the impact of restructuring charges, pension costs and share-based compensation.

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 Jan. 1, 2015.

Adjusted free cash flow is defined as operating income plus depreciation and amortization, merger and integration costs, pension costs, share-based compensation expense, restructuring charges and the annual cash rent payment due under the master lease agreement with CS&L, less adjusted capital expenditures, cash taxes, cash interest on long-term debt, plus cash dividends received from CS&L.

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, 2016 guidance for service revenue, adjusted OIBDAR and adjusted capital expenditures, along with statements regarding adjusted free cash flow, cash interest and cash taxes; expectations regarding revenue trends and improving margins in the business segments; network cost optimization; stability and growth in adjusted OIBDAR; the anticipated benefits of Project Excel, of network investments pursuant to the Connect America Fund, and of enhanced services available to customers; the ability to improve its debt profile and reduce interest costs; statements about the benefits of the proposed merger with EarthLink, including future financial and operating results, future revenue, projected synergies in operating and capital expenditures, the expected availability of net operating loss carryforwards to reduce future cash tax expenses, net leverage, adjusted OIBDA/OIBDAR, and adjusted free cash flow; Windstream and EarthLink’s expected dividend policy between the announcement of the transaction and proposed completion of the merger, and the dividend policy for the proposed combined company after the merger; the expected timing of completion of the transaction that is contingent upon stockholder approval of both companies and certain regulatory approvals, along with plans, objectives, expectations and intentions and other statements that are not historical facts. These statements, along with other forward-looking statements regarding Windstream’s and EarthLink’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 relating to the ability to obtain the requisite Windstream and EarthLink stockholder approvals required to complete the merger; the ability to satisfy the conditions to consummation of the merger, including obtaining governmental and regulatory approvals required for the merger; the risk that required governmental and regulatory approvals may delay the merger or result in the imposition of conditions that could cause the parties to abandon the merger or materially impact the financial benefits of the proposed merger; timing to consummate the proposed merger; the risk that the businesses will not be integrated successfully; the risk that the cost savings and anticipated synergies from the transaction may not be fully realized or may take longer to realize than expected; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; the diversion of management time on merger-related issues; dividend policy changes for the combined company; general worldwide economic conditions and related uncertainties; and the effect of any changes in governmental regulations. Windstream does not undertake any obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

Factors that could cause actual results to differ materially from those contemplated in Windstream’s forward looking statements include, among others:

• further adverse changes in economic conditions in the markets served by Windstream;

• the extent, timing and overall effects of competition in the communications business;

• the company’s election to accept state-wide offers under the FCC’s Connect America Fund, Phase 2, and the impact of such election on future receipt by the company of federal universal service funds and capital expenditures;

• the potential for incumbent carriers to impose monetary penalties for failure to meet specific volume and term commitments under their special access pricing plans, which Windstream uses to lease last-mile connections to serve its retail business data service customers, without further FCC action;

• the impact of new, emerging or competing technologies;

• for certain operations where Windstream leases facilities from other carriers, adverse effects on the availability, quality of service, price of facilities and services provided by other carriers on which Windstream’s services depend;

• unfavorable rulings by state public service commissions in proceedings regarding universal service funds, inter-carrier compensation or other matters that could reduce revenues or increase expenses;

• material changes in the communications industry that could adversely affect vendor relationships with equipment and network suppliers and customer relationships with wholesale customers;

• changes to Windstream’s current dividend practice which is subject to the company’s capital allocation policy and may be changed at any time at the discretion of its board of directors;

• the company’s ability to make rent payments under the master lease to CS&L, which may be affected by results of operations, changes in the company’s cash requirements, cash tax payment obligations, or overall financial position;

• unanticipated increases or other changes in the company’s future cash requirements, whether caused by unanticipated increases in capital expenditures, increases in pension funding requirements, or otherwise;

• the availability and cost of financing in the corporate debt markets;

• the potential for adverse changes in the ratings given to Windstream’s debt securities by nationally accredited ratings organizations;

• earnings on pension plan investments significantly below Windstream’s expected long term rate of return for plan assets or a significant change in the discount rate or other actuarial assumptions;

• unfavorable results of litigation or intellectual property infringement claims asserted against Windstream;

• the risks associated with non-compliance by Windstream with regulations or statutes applicable to government programs under which Windstream receives material amounts of end user revenue and government subsidies, or non-compliance by Windstream, its partners, or its subcontractors with any terms of its government contracts;

• the effects of federal and state legislation, and rules and regulations governing the communications industry;

• continued loss of consumer households served and consumer high-speed Internet customers;

• the impact of equipment failure, natural disasters or terrorist acts;

• the effects of work stoppages by Windstream employees or employees of other communications companies on whom Windstream relies for service; and

• those additional factors under “Risk Factors” in Item 1A of Part I of Windstream’s Annual Report on Form 10-K for the year ended December 31, 2015, and in subsequent filings with the Securities and Exchange Commission at www.sec.gov.

In addition to these factors, actual future performance, outcomes and results may differ materially because of more general factors including, among others, general industry and market conditions and growth rates, economic conditions, and governmental and public policy changes.

Windstream undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing review of factors that could cause Windstream’s actual results to differ materially from those contemplated in the forward-looking statements should be considered in connection with information regarding risks and uncertainties that may affect Windstream’s future results included in other filings by Windstream with the Securities and Exchange Commission at www.sec.gov.

-end-

Media Contact:	Investor Contact:
David Avery, 501-748-5876	Mary Michaels, 501-748-7578
david.avery@windstream.com	mary.michaels@windstream.com

WINDSTREAM HOLDINGS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)		THREE MONTHS ENDED											NINE MONTHS ENDED
		September 30,			September 30,			Increase (Decrease)					September 30,			September 30,			Increase (Decrease)
		2016			2015			Amount			%		2016			2015			Amount			%
UNDER GAAP:
Revenues and sales:
	Service revenues	$	1,318.9		$	1,451.2		$	(132.3	)	(9	)	$	3,990.8		$	4,210.2		$	(219.4	)	(5	)
	Product sales	26.0			47.4			(21.4		)	(45	)	87.1			128.1			(41.0		)	(32	)
	Total revenues and sales	1,344.9			1,498.6			(153.7		)	(10	)	4,077.9			4,338.3			(260.4		)	(6	)
Costs and expenses:
	Cost of services (exclusive of depreciation and amortization included below)	677.5			703.9			(26.4		)	(4	)	2,013.5			2,069.1			(55.6		)	(3	)
	Cost of products sold	21.5			41.5			(20.0		)	(48	)	74.6			111.8			(37.2		)	(33	)
	Selling, general and administrative	190.1			215.8			(25.7		)	(12	)	590.8			656.5			(65.7		)	(10	)
	Depreciation and amortization	321.0			350.5			(29.5		)	(8	)	934.0			1,033.0			(99.0		)	(10	)
	Merger and integration costs	2.9			3.1			(0.2		)	(6	)	10.5			74.5			(64.0		)	(86	)
	Restructuring charges	2.5			5.3			(2.8		)	(53	)	12.8			15.7			(2.9		)	(18	)
	Total costs and expenses	1,215.5			1,320.1			(104.6		)	(8	)	3,636.2			3,960.6			(324.4		)	(8	)
Operating income		129.4			178.5			(49.1		)	(28	)	441.7			377.7			64.0			17
Dividend income on CS&L common stock		—			17.6			(17.6		)	(100	)	17.6			30.6			(13.0		)	(42	)
Other income (expense), net		0.6			(0.2		)	0.8			*		(2.5		)	7.9			(10.4		)	(132	)
Net (loss) gain on disposal of investment in CS&L common stock		(2.1		)	—			(2.1		)	*		15.2			—			15.2			*
Net (loss) gain on early extinguishment of debt		(20.1		)	7.6			(27.7		)	*		(18.0		)	(35.8		)	17.8			(50	)
Other-than-temporary impairment loss on investment in CS&L common stock		—			—			—			*		(181.9		)	—			(181.9		)	*
Interest expense (A)		(216.4		)	(230.2		)	13.8			(6	)	(653.5		)	(588.8		)	(64.7		)	11
Loss before income taxes		(108.6		)	(26.7		)	(81.9		)	*		(381.4		)	(208.4		)	(173.0		)	83
Income tax benefit		(42.4		)	(19.5		)	(22.9		)	117		(84.8		)	(95.3		)	10.5			(11	)
Net loss		$	(66.2	)	$	(7.2	)	$	(59.0	)	*		$	(296.6	)	$	(113.1	)	$	(183.5	)	*
Weighted average common shares		92.8			99.3			(6.5		)	(7	)	93.6			99.9			(6.3		)	(6	)
Common shares outstanding		96.1			101.0			(4.9		)	(5	)
Basic and diluted loss per share:
Net loss			($.72	)		($.08	)		($.64	)	*			($3.19	)		($1.16	)		($2.03	)	*
ADJUSTED RESULTS OF OPERATIONS (B):
Adjusted service revenues		$	1,318.9		$	1,419.8		$	(100.9	)	(7	)	$	3,990.8		$	4,107.4		$	(116.6	)	(3	)
Adjusted revenues and sales		$	1,344.9		$	1,467.2		$	(122.3	)	(8	)	$	4,077.9		$	4,235.5		$	(157.6	)	(4	)
Adjusted OIBDAR (C)		$	464.7		$	540.5		$	(75.8	)	(14	)	$	1,432.2		$	1,501.1		$	(68.9	)	(5	)
Adjusted OIBDA (D)		$	301.4		$	378.0		$	(76.6	)	(20	)	$	942.0		$	1,013.6		$	(71.6	)	(7	)
Adjusted capital expenditures (E)		$	193.2		$	294.1		$	(100.9	)	(34	)	$	632.9		$	738.4		$	(105.5	)	(14	)

* Not meaningful
(A)	Includes additional interest expense associated with the master lease agreement with CS&L of $124.8 million and $377.1 million for the three and nine months ended September 30, 2016, respectively, as compared to $128.2 million and $224.2 million for the three and nine months ended September 30, 2015, respectively.
(B)	Adjusted results exclude the impacts of the disposed data center and consumer CLEC businesses and directory publishing operations and all merger and integration costs related to strategic transactions. See Notes to Reconciliation of Non-GAAP Financial Measures.
(C)	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.
(D)	Adjusted OIBDA is operating income before depreciation and amortization adjusted for the impact of restructuring charges, pension costs, share-based compensation expense and the annual cash rent payment due under the master lease agreement with CS&L.
(E)	Adjusted capital expenditures exclude the impacts of capital expenditures related to Project Excel, a $250 million capital program funded entirely using a portion of the $575 million proceeds from the sale of the data center business completed on December 18, 2015.

1

WINDSTREAM HOLDINGS, INC.
UNAUDITED BUSINESS SEGMENT RESULTS
(In millions)	THREE MONTHS ENDED											NINE MONTHS ENDED
	September 30,			September 30,			Increase (Decrease)					September 30,			September 30,			Increase (Decrease)
	2016			2015			Amount			%		2016			2015			Amount			%
Consumer and Small Business - ILEC
Revenues and sales:
Service revenues	$	311.6		$	314.0		$	(2.4	)	(1	)	$	934.1		$	940.0		$	(5.9	)	(1	)
Product sales	0.3			0.6			(0.3		)	(50	)	0.9			2.3			(1.4		)	(61	)
Total consumer	311.9			314.6			(2.7		)	(1	)	935.0			942.3			(7.3		)	(1	)
Small business - ILEC	83.7			87.2			(3.5		)	(4	)	253.0			265.4			(12.4		)	(5	)
Total revenue and sales	395.6			401.8			(6.2		)	(2	)	1,188.0			1,207.7			(19.7		)	(2	)
Costs and expenses	183.5			178.0			5.5			3		522.4			503.0			19.4			4
Segment income	212.1			223.8			(11.7		)	(5	)	665.6			704.7			(39.1		)	(6	)
Wholesale (A)
Service revenues	155.2			168.7			(13.5		)	(8	)	478.3			517.2			(38.9		)	(8	)
Costs and expenses	44.3			44.8			(0.5		)	(1	)	135.0			139.2			(4.2		)	(3	)
Segment income	110.9			123.9			(13.0		)	(10	)	343.3			378.0			(34.7		)	(9	)
Enterprise
Revenues and sales:
Service revenues	495.0			495.7			(0.7		)	—		1,477.7			1,449.6			28.1			2
Product sales	16.2			31.4			(15.2		)	(48	)	55.9			90.7			(34.8		)	(38	)
Total revenue and sales	511.2			527.1			(15.9		)	(3	)	1,533.6			1,540.3			(6.7		)	—
Costs and expenses	428.1			463.8			(35.7		)	(8	)	1,300.2			1,377.5			(77.3		)	(6	)
Segment income	83.1			63.3			19.8			31		233.4			162.8			70.6			43
Small Business - CLEC
Service revenues	118.7			139.0			(20.3		)	(15	)	372.7			427.5			(54.8		)	(13	)
Costs and expenses	81.4			92.7			(11.3		)	(12	)	252.9			288.0			(35.1		)	(12	)
Segment income	37.3			46.3			(9.0		)	(19	)	119.8			139.5			(19.7		)	(14	)
Total segment revenues and sales:
Service revenues	1,164.2			1,204.6			(40.4		)	(3	)	3,515.8			3,599.7			(83.9		)	(2	)
Product sales	16.5			32.0			(15.5		)	(48	)	56.8			93.0			(36.2		)	(39	)
Total segment revenues and sales	1,180.7			1,236.6			(55.9		)	(5	)	3,572.6			3,692.7			(120.1		)	(3	)
Total segment costs and expenses	737.3			779.3			(42.0		)	(5	)	2,210.5			2,307.7			(97.2		)	(4	)
Total segment income	443.4			457.3			(13.9		)	(3	)	1,362.1			1,385.0			(22.9		)	(2	)
Regulatory and other operating revenues and sales (B)	164.2			230.6			(66.4		)	(29	)	505.3			542.8			(37.5		)	(7	)
Revenues and sales related to disposed businesses (C)	—			31.4			(31.4		)	*		—			102.8			(102.8		)	*
Other unassigned operating expenses (D)	(157.2		)	(168.3		)	11.1			(7	)	(491.7		)	(550.7		)	59.0			(11	)
Operating expenses related to disposed businesses (C)	—			(22.0		)	22.0			*		—			(69.2		)	69.2			*
Depreciation and amortization	(321.0		)	(350.5		)	29.5			(8	)	(934.0		)	(1,033.0		)	99.0			(10	)
Operating income	$	129.4		$	178.5		$	(49.1	)	(28	)	$	441.7		$	377.7		$	64.0		17

* Not meaningful
(A)	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.
(B)	Other operating revenues are not allocated to the business segments. These revenues include revenue from federal and state universal service funds, CAF Phase II support, and 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.
(C)	Represents revenues and operating expenses associated with the disposed data center and consumer CLEC businesses and directory publishing operations that are not assigned to the business segments.
(D)	These expenses are not allocated to the business segments. Unallocated expenses include merger and integration costs, restructuring charges, stock-based compensation, pension costs, certain regulatory fees, cost of products sold to contractors, interconnection costs in consumer markets where we lease the connection to the customer premise and shared services, such as accounting and finance, information technology, engineering, network management, legal, human resources, and investor relations. These expenses are centrally managed and are not monitored by management at a segment level.

2

WINDSTREAM HOLDINGS, INC.
UNAUDITED SUPPLEMENTAL OPERATING INFORMATION
(In thousands)
		THREE MONTHS ENDED						NINE MONTHS ENDED
		September 30,	September 30,	Increase (Decrease)				September 30,	September 30,	Increase (Decrease)
		2016	2015	Amount		%		2016	2015	Amount	%
Consumer operating metrics
	Households served	1,378.5	1,471.0	(92.5	)	(6	)
	High-speed Internet customers	1,063.0	1,109.6	(46.6	)	(4	)
	Digital television customers	329.3	366.0	(36.7	)	(10	)
	Net household losses	25.3	23.2	2.1		9		67.3	57.7	9.6	17
	Net high-speed Internet customer losses	12.8	11.2	1.6		14		32.1	22.0	10.1	46
Small Business - ILEC customers (A)		138.5	148.6	(10.1	)	(7	)
Enterprise customers (B)		26.6	26.2	0.4		2
Small Business - CLEC customers (C)		76.7	95.2	(18.5	)	(19	)

(A)	Small business customer relationships that generate less than $1,500 in revenue per month and are located in service areas in which we are the incumbent local exchange carrier ("ILEC") and provide services over network facilities operated by us.
(B)	Enterprise customers represent customers that generate $1,500 or more in revenue per month.
(C)	Small business customer relationships that generate less than $1,500 in revenue per month and are located in service areas in which we are the competitive local exchange carrier ("CLEC") and provide services over network facilities primarily leased from other carriers.

3

WINDSTREAM HOLDINGS, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In millions)
	September 30,			December 31,
	2016			2015
Assets
Current Assets:
Cash and cash equivalents	$	61.4		$	31.3
Accounts receivable, net	649.7			643.9
Inventories	80.3			79.5
Prepaid expenses and other	129.6			120.6
Total current assets	921.0			875.3
Goodwill	4,213.6			4,213.6
Other intangibles, net	1,365.3			1,504.7
Net property, plant and equipment	5,238.8			5,279.8
Investment in CS&L common stock	—			549.2
Other assets	84.9			95.5
Total Assets	$	11,823.6		$	12,518.1
Liabilities and Shareholders' Equity
Current Liabilities:
Current maturities of long-term debt	$	13.4		$	5.9
Current portion of long-term lease obligations	164.5			152.7
Accounts payable	327.8			430.1
Advance payments and customer deposits	183.9			193.9
Accrued taxes	77.6			84.1
Accrued interest	93.1			78.4
Other current liabilities	288.1			322.0
Total current liabilities	1,148.4			1,267.1
Long-term debt	4,852.7			5,164.6
Long-term lease obligations	4,875.7			5,000.4
Deferred income taxes	199.7			287.4
Other liabilities	496.8			492.2
Total liabilities	11,573.3			12,211.7
Shareholders' Equity:
Common stock	—			—
Additional paid-in capital	569.3			602.9
Accumulated other comprehensive loss	(10.3		)	(284.4		)
Accumulated deficit	(308.7		)	(12.1		)
Total shareholders' equity	250.3			306.4
Total Liabilities and Shareholders' Equity	$	11,823.6		$	12,518.1

4

WINDSTREAM HOLDINGS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
	THREE MONTHS ENDED						NINE MONTHS ENDED
	September 30,			September 30,			September 30,			September 30,
	2016			2015			2016			2015
Cash Flows from Operating Activities:
Net loss	$	(66.2	)	$	(7.2	)	$	(296.6	)	$	(113.1	)
Adjustments to reconcile net loss to net cash provided from operations:
Depreciation and amortization	321.0			350.5			934.0			1,033.0
Provision for doubtful accounts	12.6			13.6			33.1			37.1
Share-based compensation expense	9.2			14.6			31.8			42.9
Deferred income taxes	(39.7		)	(19.9		)	(80.0		)	(103.3		)
Net gain on disposal of investment in CS&L common stock	2.1			—			(15.2		)	—
Noncash portion of net gain (loss) on early extinguishment of debt	(6.8		)	(12.1		)	(51.9		)	(15.0		)
Other-than-temporary impairment loss on investment in CS&L common stock	—			—			181.9			—
Amortization of unrealized losses on de-designated interest rate swaps	0.8			2.9			3.0			10.0
Plan curtailment	—			(3.0		)	(5.5		)	(16.5		)
Other, net	6.5			(5.7		)	1.2			(13.0		)
Changes in operating assets and liabilities, net:
Accounts receivable	(33.7		)	(5.2		)	(35.9		)	(58.9		)
Prepaid income taxes	(3.6		)	(4.9		)	(9.7		)	4.3
Prepaid expenses and other	4.8			3.4			17.9			(9.1		)
Accounts payable	(10.4		)	(8.7		)	(91.3		)	(37.9		)
Accrued interest	26.8			54.4			14.8			34.2
Accrued taxes	1.4			0.1			(6.4		)	(2.0		)
Other current liabilities	(5.8		)	21.2			18.3			8.2
Other liabilities	0.8			2.9			(10.9		)	(3.8		)
Other, net	(22.2		)	(20.6		)	(10.5		)	(40.8		)
Net cash provided from operating activities	197.6			376.3			622.1			756.3
Cash Flows from Investing Activities:
Additions to property, plant and equipment	(243.1		)	(300.1		)	(753.4		)	(744.4		)
Proceeds from the sale of property	0.1			—			6.3			—
Grant funds received for broadband stimulus projects	—			6.0			—			23.5
Network expansion funded by Connect America Fund - Phase I	—			(24.5		)	—			(67.4		)
Change in restricted cash	—			2.9			—			6.7
Other, net	(2.2		)	(0.1		)	(6.5		)	8.9
Net cash used in investing activities	(245.2		)	(315.8		)	(753.6		)	(772.7		)
Cash Flows from Financing Activities:
Dividends paid to shareholders	(14.6		)	(11.5		)	(44.1		)	(354.1		)
Payment received from CS&L in spin-off	—			—			—			1,035.0
Repayments of debt and swaps	(1,288.1		)	(456.7		)	(2,919.6		)	(2,098.6		)
Proceeds of debt issuance	1,415.0			520.0			3,340.0			1,620.0
Debt issuance costs	(0.6		)	(0.6		)	(12.3		)	(4.3		)
Stock repurchases	—			(20.0		)	(28.9		)	(20.0		)
Payments under long-term lease obligations	(38.7		)	(34.8		)	(113.2		)	(59.3		)
Payments under capital lease obligations	(5.9		)	(6.3		)	(53.1		)	(24.7		)
Other, net	0.3			(0.4		)	(7.2		)	(8.2		)
Net cash provided from (used in) financing activities	67.4			(10.3		)	161.6			85.8
Increase in cash and cash equivalents	19.8			50.2			30.1			69.4
Cash and Cash Equivalents:
Beginning of period	41.6			47.0			31.3			27.8
End of period	$	61.4		$	97.2		$	61.4		$	97.2

5

WINDSTREAM HOLDINGS, INC.
NON-GAAP FINANCIAL MEASURES - ADJUSTED FREE CASH FLOW AND ADJUSTED CAPITAL EXPENDITURES
(In millions)
	THREE MONTHS ENDED						NINE MONTHS ENDED
	September 30,			September 30,			September 30,			September 30,
	2016			2015			2016			2015
Adjusted Free Cash Flow:
Operating income under GAAP	$	129.4		$	178.5		$	441.7		$	377.7
Depreciation and amortization	321.0			350.5			934.0			1,033.0
OIBDA	450.4			529.0			1,375.7			1,410.7
Adjustments:
Merger and integration costs	2.9			3.1			10.5			74.5
Pension (income) expense	(0.3		)	(1.9		)	1.4			(8.4		)
Restructuring charges	2.5			5.3			12.8			15.7
Share-based compensation expense	9.2			14.6			31.8			42.9
Master lease rent payment	(163.3		)	(162.5		)	(490.2		)	(283.5		)
Adjusted capital expenditures	(193.2		)	(294.1		)	(632.9		)	(738.4		)
Cash paid for interest on long-term debt obligations	(58.0		)	(46.5		)	(252.3		)	(327.5		)
Cash paid for income taxes	(0.3		)	(2.3		)	(8.2		)	(0.8		)
Cash dividends received on CS&L common stock	—			13.0			35.2			13.0
Adjusted free cash flow	$	49.9		$	57.7		$	83.8		$	198.2
Adjusted Capital Expenditures:
Capital expenditures under GAAP	$	243.1		$	300.1		$	753.4		$	744.4
Project Excel capital expenditures (A)	(49.9		)	(6.0		)	(120.5		)	(6.0		)
Adjusted capital expenditures	$	193.2		$	294.1		$	632.9		$	738.4

(A) Represents capital expenditures related to Project Excel, a $250 million capital program funded entirely using a portion of the $575 million proceeds from the sale of the data center business completed on December 18, 2015.

6

WINDSTREAM HOLDINGS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In millions)
		THREE MONTHS ENDED							NINE MONTHS ENDED
		September 30,			September 30,				September 30,			September 30,
		2016			2015				2016			2015
Reconciliation of Revenues and Sales under GAAP to Adjusted    Revenues and Sales:
Service revenues under GAAP		$	1,318.9		$	1,451.2			$	3,990.8		$	4,210.2
Adjustments:
Data center revenues	(A)	—			(31.4		)	(A)	—			(91.0		)
Consumer CLEC revenues	(A)	—			—			(A)	—			(10.2		)
Directory publishing revenues	(A)	—			—			(A)	—			(1.6		)
Adjusted service revenues		1,318.9			1,419.8				3,990.8			4,107.4
Product sales under GAAP		26.0			47.4				87.1			128.1
Adjusted revenues and sales		$	1,344.9		$	1,467.2			$	4,077.9		$	4,235.5
Reconciliation of Net Loss under GAAP to Adjusted OIBDA:
Net loss		$	(66.2	)	$	(7.2	)		$	(296.6	)	$	(113.1	)
Adjustments:
Dividend income on CS&L common stock	(B)	—			(17.6		)	(B)	(17.6		)	(30.6		)
Other (income) expense, net	(B)	(0.6		)	0.2			(B)	2.5			(7.9		)
Net loss (gain) on disposal of investment in CS&L common stock	(B)	2.1			—			(B)	(15.2		)	—
Net loss (gain) on early extinguishment of debt	(B)	20.1			(7.6		)	(B)	18.0			35.8
Other-than-temporary impairment loss on investment in CS&L common stock	(B)	—			—			(B)	181.9			—
Interest expense	(B)	216.4			230.2			(B)	653.5			588.8
Income tax benefit	(B)	(42.4		)	(19.5		)	(B)	(84.8		)	(95.3		)
Operating income under GAAP	(B)	129.4			178.5			(B)	441.7			377.7
Depreciation and amortization	(B)	321.0			350.5			(B)	934.0			1,033.0
Adjustments:
Data center business operating loss	(A)	—			1.1			(A)	—			4.7
Consumer CLEC business operating income	(A)	—			—			(A)	—			(3.3		)
Directory publishing operating income	(A)	—			—			(A)	—			(0.8		)
Depreciation and amortization - disposed businesses	(A)	—			(10.5		)	(A)	—			(34.2		)
Merger and integration costs	(B)	2.9			3.1			(B)	10.5			74.5
Pension (income) expense	(B)	(0.3		)	(1.9		)	(B)	1.4			(8.4		)
Restructuring charges	(B)	2.5			5.3			(B)	12.8			15.7
Share-based compensation expense	(B)	9.2			14.4			(B)	31.8			42.2
Adjusted OIBDAR		464.7			540.5				1,432.2			1,501.1
Master lease rent payment	(C)	(163.3		)	(162.5		)	(C)	(490.2		)	(487.5		)
Adjusted OIBDA		$	301.4		$	378.0			$	942.0		$	1,013.6

See Notes to Reconciliation of Non-GAAP Financial Measures

7

WINDSTREAM HOLDINGS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In millions)		THREE MONTHS ENDED							NINE MONTHS ENDED
		September 30,			September 30,				September 30,			September 30,
		2016			2015				2016			2015
Reconciliation of Adjusted OIBDA to Net Cash Provided from Operating Activities:
Adjusted OIBDA		$	301.4		$	378.0			$	942.0		$	1,013.6
Adjustments:
Master lease rent payment	(C)	163.3			162.5			(C)	490.2			487.5
Cash dividends received on CS&L common stock		—			13.0				35.2			13.0
Pretax operating results of disposed businesses	(A)	—			9.6			(A)	—			34.3
Merger and integration costs	(B)	(2.9		)	(3.1		)	(B)	(10.5		)	(74.5		)
Restructuring charges	(B)	(2.5		)	(5.3		)	(B)	(12.8		)	(15.7		)
Other income (expense), net	(B)	0.6			(0.2		)	(B)	(2.5		)	7.9
Net (loss) gain on early extinguishment of debt	(B)	(20.1		)	7.6			(B)	(18.0		)	(35.8		)
Interest expense	(B)	(216.4		)	(230.2		)	(B)	(653.5		)	(588.8		)
Income tax benefit, net of deferred income taxes		2.7			(0.4		)		4.8			(8.0		)
Provision for doubtful accounts	(D)	12.6			13.6			(D)	33.1			37.1
Noncash portion of net gain (loss) on early extinguishment of debt	(D)	(6.8		)	2.8			(D)	(51.9		)	(0.1		)
Amortization of unrealized losses on de-designated interest rate swaps	(D)	0.9			2.9			(D)	3.1			10.0
Plan curtailment	(D)	—			(3.0		)	(D)	(5.5		)	(16.5		)
Other noncash adjustments, net	(F)	6.7			(14.1		)	(F)	(17.9		)	(1.9		)
Changes in operating assets and liabilities, net	(D)	(41.9		)	42.6			(D)	(113.7		)	(105.8		)
Net Cash Provided From Operating Activities		$	197.6		$	376.3			$	622.1		$	756.3
Reconciliation of Adjusted Free Cash Flow to Net Cash Provided from    Operating Activities:
Adjusted Free Cash Flow		$	49.9		$	57.7			$	83.8		$	198.2
Adjustments:
Cash paid for income taxes		0.3			2.3				8.2			0.8
Cash paid for interest on long-term debt obligations		58.0			46.5				252.3			327.5
Capital expenditures	(D)	243.1			300.1			(D)	753.4			744.4
Project Excel capital expenditures	(E)	(49.9		)	(6.0		)	(E)	(120.5		)	(6.0		)
Master lease rent payment	(A)	163.3			162.5			(A)	490.2			283.5
Merger and integration costs	(B)	(2.9		)	(3.1		)	(B)	(10.5		)	(74.5		)
Restructuring charges	(B)	(2.5		)	(5.3		)	(B)	(12.8		)	(15.7		)
Other income (expense), net	(B)	0.6			(0.2		)	(B)	(2.5		)	7.9
Net (loss) gain on early extinguishment of debt	(B)	(20.1		)	7.6			(B)	(18.0		)	(35.8		)
Interest expense	(B)	(216.4		)	(230.2		)	(B)	(653.5		)	(588.8		)
Income tax benefit, net of deferred income taxes		2.7			(0.4		)		4.8			(8.0		)
Provision for doubtful accounts	(D)	12.6			13.6			(D)	33.1			37.1
Noncash portion of net gain (loss) on early extinguishment of debt	(D)	(6.8		)	2.8			(D)	(51.9		)	(0.1		)
Amortization of unrealized losses on de-designated interest rate swaps	(D)	0.9			2.9			(D)	3.1			10.0
Plan curtailment	(D)	—			(3.0		)	(D)	(5.5		)	(16.5		)
Other noncash adjustments, net	(F)	6.7			(14.1		)	(F)	(17.9		)	(1.9		)
Changes in operating assets and liabilities, net	(D)	(41.9		)	42.6			(D)	(113.7		)	(105.8		)
Net Cash Provided From Operating Activities		$	197.6		$	376.3			$	622.1		$	756.3

See Notes to Reconciliation of Non-GAAP Financial Measures

8

WINDSTREAM HOLDINGS, INC.

NOTES TO RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(A)	Represents applicable amount related to the disposed data center and consumer CLEC businesses and directory publishing operations as reported under GAAP. There were no product sales attributed to the disposed businesses.
(B)	Represents applicable amount as reported under GAAP - See Unaudited Consolidated Statements of Operations.
(C)	Represents the impact of the annual cash rent payment due under the master lease agreement with CS&L assuming the lease payments began on January 1, 2015.
(D)	Represents applicable amount reported under GAAP - See Unaudited Consolidated Statements of Cash Flows.
(E)	Represents capital expenditures related to Project Excel, a $250 million capital program funded entirely using a portion of the $575 million proceeds from the sale of the data center business completed on December 18, 2015.
(F)	Consists of non-cash amortization of debt issuance costs, debt discounts and premiums, accretion expense related to asset retirement obligations, ineffectiveness on interest rate swaps, gains on the sale of property, and other non-cash miscellaneous income and expenses.

Windstream Holdings, Inc ("Windstream", "we", "us", "our") has presented in this press release unaudited adjusted results, which exclude the impacts of the disposed data center and consumer CLEC businesses and directory publishing operations and all merger and integration costs resulting from strategic transactions. In addition to these adjustments, we have presented certain measures of our operating performance that adjusts for the impact of the annual cash rent payment due under the master lease agreement with Communications Sales & Leasing ("CS&L"), and exclude the impacts of restructuring charges, pension costs and share-based compensation expense.

Our purpose for these adjustments is to improve the comparability of results of operations for all periods presented in order to focus on the true earnings capacity of our core business operations and our ability to generate cash flow. We use adjusted results, including adjusted OIBDA, adjusted OIBDAR, adjusted free cash flow and adjusted capital expenditures as key measures of the operational performance of our business. Our management, including the chief operating decision-maker, consistently uses these measures for internal reporting and the evaluation of business objectives, opportunities and performance.

9

EX-99.2

Exhibit 99.2

Windstream and EarthLink to Merge in $1.1 Billion Transaction

Combination Creates a Stronger, More Competitive Company with Extensive National Footprint Spanning Approximately 145,000 Fiber Route Miles

Enables Expanded Products, Services and Enhanced Enterprise Solutions for Customers

Anticipated Annual Operating and Capital Expenditure Synergies of More than $125 Million Representing a Net Present Value of Approximately $900 Million, or More than $4.70 per Windstream Share and $3.85 per EarthLink Share

Expected to be Significantly Accretive to Adjusted Free Cash Flow in Year One,

Improving over Time as All Synergies are Realized

Companies to Host Conference Call at 7:30 a.m. CST / 8:30 a.m. EST Today

Little Rock and Atlanta - Nov. 7, 2016 - Windstream Holdings, Inc. (Nasdaq: WIN) (“Windstream”) and EarthLink Holdings Corp. (Nasdaq: ELNK) (“EarthLink”) today announced that their boards of directors have unanimously approved a definitive merger agreement under which Windstream and EarthLink will merge in an all-stock transaction valued at approximately $1.1 billion, including debt.

Under the terms of the agreement, EarthLink shareholders will receive 0.818 shares of Windstream common stock for each EarthLink share owned. This ratio represents a 13 percent premium to the average exchange ratio of 0.721x over the month ended Nov. 3, 2016, the most recent unaffected trading day. Windstream expects to issue approximately 93 million shares of stock valued at approximately $673 million, based on the company’s closing stock price on Nov. 4, 2016. Upon closing of the transaction, Windstream shareholders will own approximately 51 percent and EarthLink shareholders will own approximately 49 percent of the combined company.

The combined company will have increased scale and scope giving it the ability to leverage best practices across a broader platform, and offer customers expanded products, services and enhanced enterprise solutions. The combination will result in an extensive national footprint spanning approximately 145,000 fiber route miles and provide advanced network connectivity, managed services, voice, internet and other value-added services. Customers will also benefit from combining Windstream’s scale in the Enterprise segment and EarthLink’s successful launch of SD-WAN.

“The combination with EarthLink further advances Windstream’s strategy by creating a stronger, more competitive business to serve our customers while increasing free cash flow and reducing leverage,” said Tony Thomas, president and chief executive officer at Windstream. “With this transaction, we are combining two highly complementary organizations with closely aligned operating strategies and business unit structures. We look forward to working with the talented EarthLink team to create significant benefits and drive value for all of our stakeholders.”

“We are pleased to join forces with a company that shares our core values and operating philosophies, and whose strategy complements our own,” said EarthLink Chief Executive Officer and President Joe Eazor. “In our work with Tony and his team, it’s become clear that we are two companies on parallel paths. We’ve both made significant progress as evidenced by our improving financial results and strengthening balance sheets. Now is the right time for us to come together. We look forward to working with the Windstream team to better serve our customers in a world that is becoming more network-centric every day.”

Compelling Strategic and Financial Benefits

• Strengthens operating position through complementary networks and increased scale: The combined company will have a robust nationwide network and deep footprint of 145,000 fiber route miles, including strategic routes located in the Southeast and Northeast U.S. In addition, Windstream’s assets add significant value to EarthLink’s existing business by providing cost savings and increased sales opportunities.

• Creates net present value of approximately $900 million from synergies, plus tax benefits: The companies have identified more than $125 million in annual operating and capital expense synergies that are expected to be fully realized within 36 months of closing. Approximately $50 million of these synergies are expected to be achieved within 12 months of closing and an incremental $50 million are expected to be achieved within 24 months. The remaining $25 million are expected to be realized within 36 months. The $125 million of synergies has a net present value of $900 million, representing value creation of more than $4.70 per Windstream share and $3.85 per EarthLink share after accounting for integration costs. These synergies will come primarily from the optimization of network and SG&A costs, the reduction of public company costs and the ability to leverage best practices and combined operating scale to drive efficiency. In addition to the synergies from operations, the combined company will benefit from EarthLink’s net operating losses, which are expected to have an estimated net present value of $95 million at closing.

• Enhances balance sheet and increases free cash flow: Including run-rate synergies, on a pro forma basis for the 12 months ended Sept. 30, 2016, the combined company would have a net leverage ratio of 3.2x. Further, the transaction will be significantly accretive to Windstream’s adjusted free cash flow allowing greater financial flexibility for strategic network investments and debt reduction while increasing dividend coverage.

Management Team, Board of Directors and Headquarters

After the transaction closes, Tony Thomas will serve as president and chief executive officer and Bob Gunderman will serve as chief financial officer of the combined company. Key EarthLink management members are expected to join the combined company to bring best-in-class talent and ensure a smooth integration.

Upon close, three of EarthLink’s existing directors will join the current Windstream board of directors, bringing the total number of directors of the combined company’s board to twelve.

The combined company, which will retain the Windstream name, will be headquartered in Little Rock, Ark., and maintain offices in key U.S. markets.

Dividend Practice and Debt Financing

Consistent with Windstream’s current dividend practice, the board of directors expects to maintain Windstream’s annual dividend of $0.60 per share after the transaction closes, providing meaningful benefits to shareholders in the form of long-term capital returns.

At the time of closing, Windstream intends to refinance EarthLink’s gross debt of approximately $436 million.

Approvals and Anticipated Closing

The transaction is expected to close in the first half of 2017. It is subject to the satisfaction of certain customary conditions, including approval by the Federal Communications Commission, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, applicable state-level regulatory approvals and approval by Windstream and EarthLink shareholders.

Advisers

J.P. Morgan is acting as lead financial adviser and Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal adviser to Windstream in the transaction. Barclays also acted as financial adviser and delivered a fairness opinion to the Windstream board of directors in conjunction with the transaction.

Foros is acting as lead financial adviser and has delivered a fairness opinion to EarthLink’s board of directors. Goldman Sachs & Co. is also acting as financial adviser to EarthLink’s board of directors. Paul, Weiss, Rifkind, Wharton & Garrison LLP and Troutman Sanders LLP are acting as legal advisers to EarthLink in the transaction.

Windstream and EarthLink Third Quarter 2016 Earnings Results

In separate press releases issued today, Windstream and EarthLink announced their respective results for the third quarter of 2016. In light of today’s transaction and third quarter earnings results announcements, Windstream and EarthLink have cancelled their previously announced calls scheduled for Nov. 7, 2016, at 9:00 a.m. CST / 10:00 a.m. EST and 7:30 a.m. CST / 8:30 a.m. EST, respectively.

Transaction Conference Call

Windstream and EarthLink will hold a joint conference call at 7:30 a.m. CST / 8:30 a.m. EST today to review the transaction as well as both companies’ third quarter 2016 results.

Interested parties in the United States can access the call by dialing 1-877-374-3977, conference ID 99942553, fifteen minutes prior to the start time. International participants should dial 1-253-237-1161.

A joint presentation will be available at www.windstream.com/investors and ir.earthlink.net.

Webcast Information

The conference call also will be streamed live over the companies' websites at www.windstream.com/investors and ir.earthlink.net. A replay of the webcast will be available on the companies’ websites beginning at noon CST on Nov. 7 and ending at noon CST on Nov. 14.

To Access the Call Replay

A replay of the call will be available beginning at noon CST on Nov. 7 and ending at noon CST on Nov. 14. The replay can be accessed by dialing 1-855-859-2056, conference ID 99942553. International participants should dial 1-404-537-3406.

About Windstream

Windstream Holdings, Inc. (NASDAQ: WIN), a FORTUNE 500 company, is a leading provider of advanced network communications and technology solutions for consumers, businesses, enterprise organizations and wholesale customers across the U.S. Windstream offers bundled services, including broadband, security solutions, voice and digital TV to consumers. The company also provides data, cloud solutions, unified communications and managed services to business and enterprise clients. The company supplies core transport solutions on a local and long-haul fiber network spanning approximately 129,000 miles. Additional information is available at windstream.com. Please visit our newsroom at news.windstream.com or follow us on Twitter at @Windstream.

About EarthLink

EarthLink (EarthLink Holdings Corp.) (NASDAQ:ELNK) is a leading network services provider dedicated to delivering great customer experiences in a cloud connected world. We help thousands of multi-location businesses securely establish critical connections in the cloud. Our solutions for cloud and hybrid networking, security and compliance, and unified communications provide the cost-effective performance and agility to serve customers anytime, anywhere, via any channel, or any device. We operate a nationwide network spanning 29,000+ fiber route miles, with 90 metro fiber rings and secure data centers that provide ubiquitous data and voice IP coverage. To learn why thousands of specialty retailers, restaurants, franchisors, financial institutions, healthcare providers, professional service firms, local governments, residential consumers and other carriers choose to connect with us, visit us at www.earthlink.com, @earthlink, on LinkedIn and Google+.

Cautionary Statement Regarding Forward-Looking Statements

Windstream Holdings, Inc. and EarthLink Holdings Corp. claim 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, 2016 guidance for revenue, adjusted OIBDAR and adjusted capital expenditures, along with statements regarding adjusted free cash flow, cash interest and cash taxes; expectations regarding revenue trends and improving margins in the business segments; network cost optimization; stability and growth in adjusted OIBDAR; for Windstream, the anticipated benefits of Project Excel, of network investments pursuant to the Connect America Fund, and of enhanced services available to customers; the ability to improve its debt profile and reduce interest costs; statements about the benefits of the proposed merger with EarthLink, including future financial and operating results, future revenue, projected synergies in operating and capital expenditures, the expected availability of net operating loss carryforwards to reduce future cash tax expenses, net leverage, adjusted OIBDA/OIBDAR, and adjusted free cash flow; Windstream and EarthLink’s expected dividend policy between the announcement of the transaction and proposed completion of the merger, and the dividend policy for the proposed combined company after the merger; the expected timing of completion of the transaction that is contingent upon stockholder approval of both companies and certain regulatory approvals, along with plans, objectives, expectations and intentions and other statements that are not historical facts. These statements, along with other forward-looking statements regarding Windstream’s and EarthLink’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 are set forth in Windstream’s and EarthLink’s respective filings with the Securities and Exchange Commission. These include risks and uncertainties relating to: the ability to obtain the requisite Windstream and EarthLink stockholder approvals; the ability to satisfy the conditions to consummation of the merger, including obtaining governmental and regulatory approvals required for the merger; the risk that required governmental and regulatory approvals may delay the merger or result in the imposition of conditions that could cause the parties to abandon the merger or materially impact the financial benefits of the merger; timing to consummate the proposed merger; the risk that the businesses will not be integrated successfully; the risk that the cost savings and any other synergies from the transaction may not be fully realized or may take longer to realize than expected; the anticipated future cash requirements of the proposed combined company; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; the diversion of management time on merger-related issues; dividend policy changes for the proposed combined company; general worldwide economic conditions and related uncertainties; and the effect of changes in governmental regulations. Neither Windstream nor EarthLink undertake any obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

Additional Information And Where To Find It

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed merger between Windstream and EarthLink, Windstream will file with the SEC a Registration Statement on Form S-4 that will include a joint proxy statement of Windstream and EarthLink that also constitutes a prospectus of Windstream. Windstream and EarthLink will mail the joint proxy statement/prospectus to their respective shareholders. Windstream and EarthLink urge investors and shareholders to read the joint proxy statement/prospectus regarding the proposed merger when it becomes available, as well as other documents filed with the SEC, because they will contain important information. You may obtain copies of all documents filed with the SEC regarding this transaction, free of charge, at the SEC’s website (www.sec.gov). You may also obtain these documents, free of charge, from Windstream’s website (www.windstream.com/investors). You may also obtain these documents, free of charge, from EarthLink’s website (ir.earthlink.net) on the Investors page.

Participants In The Merger Solicitation

Windstream, EarthLink and their respective directors, executive officers and certain other members of management and employees may be soliciting proxies from Windstream and EarthLink shareholders in favor of the merger and related matters. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the companies’ shareholders in connection with the proposed merger will be set forth in the joint proxy statement/prospectus when it is filed with the SEC. You can find information about Windstream’s executive officers and directors in its definitive proxy statement filed with the SEC on April 1, 2016. You can find information about EarthLink’s executive officers and directors in its definitive proxy statement filed with the SEC on March 15, 2016. Additional information about Windstream’s executive officers and directors and EarthLink’s executive officers and directors can be found in the above-referenced Registration Statement on Form S-4 when it becomes available. You can obtain free copies of these documents from the companies using the website information above.

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.

Net present value of synergies referred to herein assumes integration costs to achieve synergies of $125 million; assumes a discount rate of 8.5% and a tax rate of 37%. Per share calculation assumes Windstream pro forma ownership of 51% and 97 million shares outstanding, and EarthLink pro forma ownership of 49% and existing shares outstanding of 114 million.

Contacts

Windstream Media Contact:	EarthLink Media Contact:
David Avery, 501-748-5876	Jeff Crow, 404-748-7861
david.avery@windstream.com	jeffrey.crow@elnk.com
Joele Frank, Wilkinson Brimmer Katcher	Sard Verbinnen & Co
James Golden/Daniel Moore/Nicholas Leasure	Drew Brown/Robin Weinberg, 212-687-8080
212-355-4449	dbrown@sardverb.com
	rweinberg@sardverb.com
Windstream Investor Contact:	EarthLink Investor Contact:
Mary Michaels, 501-748-7578	Trey Huffman, 404-748-6219
mary.michaels@windstream.com	huffmanal@elnk.com

EX-99.3

Exhibit 99.3

EX-99.4

Exhibit 99.4