4Q19 Earnings Presentation February 20, 2020 Safe Harbor Statement - PowerPoint PPT Presentation

4Q19 Earnings Presentation February 20, 2020

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, projections regarding our 2020 Financial Plan, including adjusted OIBDAR and adjusted OIBDAR margin, anticipated net Kinetic broadband subscriber growth, improved Enterprise contribution margin, and acceleration of Enterprise strategic sales and services; our ability to successfully execute our 2020 priorities; certain revenue and contribution margin trends in our business units; opportunities to expand our strategic products and services for our small and medium sized business customers; increasing broadband penetration levels and availability of faster broadband speeds to more households and businesses within our service areas; anticipated results and funding opportunities related to the Rural Digital Opportunity Fund and the current CAF II program, both administered by the Federal Communications Commission; statements concerning the current arrangement with Uniti Group, Inc.; expectations regarding expense management activities, including interconnection expense, and the timing and benefit of such activities; and any other 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 are 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 our voluntary filing for reorganization under Chapter 11 of the Bankruptcy Code (“Chapter 11 Cases”) and the length of time we will remain subject to the restructuring process; our ability to pursue our business strategies and achieve our 2020 financial and operational goals in light of the Chapter 11 Cases; diversion of management’s attention as a result of the Chapter 11 Cases; the volatility of our financial results due to the Chapter 11 Cases; risks associated with third party actions or motions in the Chapter 11 Cases; that the expected benefits of cost reduction and expense management activities are not realized or adversely affect our sales and operational activities or are otherwise disruptive to our business and personnel; further adverse changes in economic conditions in our markets; the impact of new, emerging, or competing technologies and our ability to utilize these technologies to provide services to our customers; general U.S. and worldwide economic conditions and related uncertainties; and the effect of any changes in federal or state 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 Tony Thomas Bob Gunderman Chris King Chief Executive Officer Chief Financial Officer & Treasurer VP, Investor Relations 3

2019 Windstream Operational Priorities 2019 Priorities Growth in 2019 4 4

2019 Highlights Continued acceleration in SD-WAN Included in Gartner Magic and Strategic Sales Quadrant for OfficeSuite Largest SD-WAN service provider in country today MEF SD-WAN Service Provider Strategic Enterprise revenues grew 37.9% y-o-y of the Year Consolidated adjusted OIBDAR Consumer broadband growth of 28,300 margin of 34.1% subscribers in 2019 Up 80 bps y-o-y Delivered faster broadband speeds to 1.3 million homes in 2019 Consolidated cash expenses down 8.8% in 2019 5

Fourth Quarter 2019 Highlights $423 million in adjusted OIBDAR Consolidated adjusted OIBDAR margin of 34.1% Flat Adjusted OIBDAR sequentially Up 40 bps y-o-y Consolidated cash expenses down 9.0% y-o-y Continued acceleration in SD-WAN and Strategic Sales Consumer broadband growth of 9,300 subscribers in 4Q19 Largest SD-WAN service provider in country today Strategic Enterprise revenues grew 30% y-o-y Broadband subscriber growth of 28,300 in 2019, a 96% increase compared to 2018 6

Kinetic Speed Addressability % of Homes in ILEC Footprint with Access to Available Speeds 70% 61% 57% 50% 42% 38% 15% 12% 8% 0% 2015 2016 2017 2018 Today 25 Meg+ 100 Meg+ 7

Delivered Broadband Subscriber Growth in 2019 Net Broadband Adds (in thousands)  22 consecutive months 15 of consumer broadband 9.3 unit growth through 10 6.0 5 December 2019 0  Driven by Project Excel -5 -10.3 investments and efforts -10.8 -11.9 -10 -14.5 to extend faster -15 broadband speed tiers -20 to more customers 4Q14 4Q15 4Q16 4Q17 4Q18 4Q19 across ILEC footprint Significant Improvement in Broadband Subscriber Growth  Achieved 28,300 net (in thousands) subscriber additions in 50 2019 28 30 14 10 -10 -37 -30 -40 -44 -45 -50 2014 2015 2016 2017 2018 2019 8

Improved Broadband Speed Capabilities Customer Speed Distribution of 25 Mbps or Faster 60% 53% 51% 50% 47% 44% 41% 40% 36% 32% 28% 30% 24% 21% 18% 20% 14% 10% 0% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1GB Fiber Internet Service now expanded to 100,000 business locations 9

Windstream Enterprise 2019 Year in Review ~$300M 3,200 38% Strategic Revenue % 27,000+ ~550K of Total Enterprise Annualized Strategic SD-WAN Customers Strategic Product SD-WAN Endpoint UCaaS Seats Service Revenue Product Revenue Under Contract Revenue Growth Y-O-Y Locations Under Contract Installed (based on 4Q19 results) (based on 4Q19 results) 2019 SD-WAN Service Provider of the Year 2019 Gartner Magic Quadrant for UCaaS Maintained position as the nation’s largest SD-WAN provider 10

4Q19 Financial Results Financial Overview (1) 2018 2018 2019 2019 (Dollars in Millions) Q4 YE Q1 Q2 Q3 Q4 YE Revenue Kinetic $519 $2,114 $514 $509 $506 $503 $2,032 Enterprise $723 $2,968 $696 $673 $650 $623 $2,642 Wholesale $94 $385 $93 $88 $86 $83 $350 Segment Service Revenue $1,336 $5,467 $1,302 $1,270 $1,242 $1,210 $5,024 Product/Fiber Sales $17 $75 $18 $16 $28 $29 $92 Total Revenue and Sales $1,353 $5,542 $1,321 $1,287 $1,270 $1,238 $5,115 Contribution Margin Kinetic $308 $1,256 $309 $303 $287 $290 $1,189 Enterprise $143 $562 $133 $139 $126 $121 $519 Wholesale $66 $274 $63 $65 $66 $67 $261 Segment Contribution Margin $517 $2,092 $504 $508 $479 $479 $1,969 Shared Expenses $61 $246 $57 $57 $55 $57 $226 Adjusted OIBDAR (1) (2) (3) (4) $456 $1,846 $447 $450 $423 $423 $1,743 Margin % 33.7% 33.3% 33.8% 35.0% 33.3% 34.1% 34.1% Segment Contribution Margin % Kinetic 58.6% 58.7% 59.2% 58.7% 55.0% 56.3% 57.3% Enterprise 19.5% 18.6% 18.8% 20.4% 19.1% 19.2% 19.4% Wholesale 70.0% 71.1% 67.7% 73.8% 73.0% 73.6% 72.0% (1) Operating results for the consumer CLEC business sold on December 31, 2018 have been excluded from all prior periods (2) Adjusted OIBDAR is adjusted OIBDA before the annual cash payment due under the Uniti arrangement (3) Adjusted OIBDA is operating income (loss) before depreciation and amortization and goodwill impairment, excluding expense associated with the arrangement with Uniti, pension expense, share-based compensation expense, restructuring charges, merger, integration and certain other costs (4) Margins are calculated by dividing the respective profitability measures by total revenues and sales. 11