Windstream 2015 Annual Report Download - page 2

Dear Shareholder:
2015 was a year of signicant progress for Windstream, and I am pleased to report that we are successfully
executing on a focused operational strategy.
It has been a little over a year since I became the President and CEO of Windstream, and I grow more
condent every day in our strategy. I am proud of all that the Windstream team accomplished during 2015,
and three achievements in particular positioned us to take a big step forward in 2016 and beyond.
First, we implemented a business unit structure with clear operational strategies for each segment. We
aligned the organization by customer type to increase visibility and accountability for the results, which led
to signicant improved nancial performance in 2015. For the year, we delivered steady, consistent results,
demonstrated progress in our core business units and achieved our nancial guidance.
Second, we made meaningful advancements in our network capabilities. Notably, we upgraded our consumer
and small business network to provide faster broadband speeds, which will allow us to gain market share
and grow Consumer and SMB ILEC revenue. We also expanded our carrier network in strategic areas and
improved the performance of the overall network.
Third, we completed key strategic transactions, including the formation and spino of Communication Sales
& Leasing Inc. (CSAL) and the sale of our data center business, using the proceeds from these transactions to
reduce debt by approximately $3.5 billion and to reinvest in the business. We also returned signicant value
to our shareholders through both our dividend and a $75 million share repurchase program.
As we look ahead, we are engaged in multiple initiatives to create value for our investors. We are executing
a comprehensive strategy to stabilize and grow operating cash ow, and the business is performing well
and generating improving results. We also are actively improving our debt prole to optimize our balance
sheet and will further reduce debt when we monetize our CSAL shares. Collectively, these initiatives position
Windstream well for the future and drive value for shareholders.
Sincerely,
Anthony W. Thomas
President and Chief Executive Ocer
March 31, 2016
A LETTER FROM THE PRESIDENT
AND CHIEF EXECUTIVE OFFICER
• ~1.6M residential and small
businesses (within ILEC
territory)
• Addressability:~ 4M locations
Financial Prole:
• Total revenue: $1.6B
• Contribution margin: $935M
• Broadband network, Premium
Internet speeds, Expanding
Kinetic (IPTV)
• Telcos, content providers, cable
and other network operators
Financial Prole:
• Total revenue: $688M
• Contribution margin: $502M
• 100 Gig capable long-haul and
regional express network
• Fiber to ~5000 towers
• Expanded interconnection
locations
• Small business customers
residing outside of our ILEC
territory (<$1,500 per month in
recurring revenue)
Financial Prole:
• Total revenue: $559M
• Contribution margin: $181M
• Improve protability by
focusing on growing
customer relationships
and managing costs
• ~26k enterprise customers
nationwide
• Mid-size enterprise customer
focus
Financial Prole:
• Total revenue: $2.1B
• Contribution margin: $241M
• Continued revenue growth
• Margin expansion
• Broad portfolio of advanced,
customized solutions
fiber route miles
Completed the spino of CSAL
fiber route miles
Completed the spino of CSAL
fiber route miles
Completed the spino of CSAL
fiber route miles
Completed the spino of CSAL