![]() Company Presentation May 2015 Exhibit 99.2 |
![]() 1 Special Note Regarding Forward-Looking Statements Any statements contained in this presentation that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. The words “anticipates,” “believes,” “expects,” “intends,” “plans,” “estimates,” “targets,” “projects,” “should,” “may,” “will” and similar words and expressions are intended to identify forward-looking statements. Such forward-looking statements reflect, among other things, our current expectations, plans and strategies, and anticipated financial results, all of which are subject to known and unknown risks, uncertainties and factors that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. Many of these risks are beyond our ability to control or predict. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the date they are made. We do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise. Important factors with respect to any such forward-looking statements, including certain risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, include, but are not limited to: rapid development and intense competition in the telecommunications and high speed data transport industry; our ability to offset expected revenue declines in legacy voice and access products related to the recent regulatory actions, wireless substitution, technology changes and other factors; our ability to effectively allocate capital and implement our “edge-out” expansion plans in a timely manner; our ability to complete customer installations in a timely manner; adverse economic conditions; operating and financial restrictions imposed by our senior credit facility; our cash and capital requirements; declining prices for our services; our ability to maintain and enhance our network; the potential to experience a high rate of customer turnover; federal and state regulatory fees, requirements and developments; our reliance on certain suppliers and vendors; and other unforeseen difficulties that may occur. These risks and uncertainties are not intended to represent a complete list of all risks and uncertainties inherent in our business, and should be read in conjunction with the more detailed cautionary statements and risk factors included in our SEC filings, including our Annual Report filed on Form 10-K. Use of Non-GAAP Financial Measures Included in this presentation are certain non-GAAP financial measures that are not determined in accordance with US generally accepted accounting principles. These financial performance measures are not indicative of cash provided or used by operating activities and exclude the effects of certain operating, capital and financing costs and may differ from comparable information provided by other companies, and they should not be considered in isolation, as an alternative to, or more meaningful than measures of financial performance determined in accordance with US generally accepted accounting principles. These financial performance measures are commonly used in the industry and are presented because Lumos Networks Corp. believes they provide relevant and useful information to investors. The Company utilizes these financial performance measures to assess its ability to meet future capital expenditure and working capital requirements, to incur indebtedness if necessary, and to fund continued growth. Lumos Networks Corp. also uses these financial performance measures to evaluate the performance of its business, for budget planning purposes and as factors in its employee compensation programs. |
![]() Advanced Fiber Network Driving Value for Our Customers 2 |
![]() Lumos at a Glance Attractive Fundamentals 2016 Data Revenue target of ~$116m, up 9% yoy Total data contract value: ~$350mm with avg. length: ~ 52 months. Target of $500mm by YE15 Targeted 15-20%+ ROI on fiber deals 4G LTE wireless deployments (FTTC) On-net focus: 60% Data EBITDA margin target Unique fiber assets in footprint Enterprise growth of 6% expected in 2015 Favorable interest rate and tax environment 1 Current ¹ Market Opportunity ² FTTC Unique Sites 907 ~7,400 On-Net Buildings 1,530 104,000 Total Connected Data Centers 31 100+ 7,955 Fiber Route Miles; 363,189 Total Fiber Miles 45+ Average Strand Count 3 Revenue Opportunities Market Expansion Route Fiber Network Edge Out Markets Internet Exchange Points Data Centers “Lit” Markets Norfolk Washington DC Chicago, IL Columbus Ashland Bristol Atlanta Greensboro Clarksburg Lewisburg Richmond Charlottesville Harrisonburg Winchester Ashburn Hagerstown Harrisburg Altoona Erie Morgantown Blacksburg Pittsburgh Cumberland Culpeper Waynesboro Lynchburg Danville Bluefield Huntington Charleston Covington Parkersburg Norfolk As of 3/31/2015 Based on Lumos Networks’ internal research and analysis of data from research, surveys and studies conducted by third parties, such as Tower Source (for FTTC sites), Equifax Telecom and Stratsoft (for On-Net buildings) and public records databases (for data centers). Market Opportunity denotes wireless cell sites within 3 miles and buildings within ½ mile of the Lumos Networks fiber footprint and includes recently announced planned market expansion in Richmond and Norfolk 2 |
![]() Exponential Growth in Bandwidth Demand Bandwidth Demand Drivers U.S. Mobile IP Traffic Source: Cisco Visual Networking Index 2015 U.S. Business IP Traffic 4 Proliferation of network-connected devices and locations 2014 to 2019 tablets, smartphones, and M2M traffic growth rates of 83%, 60%, and 103%, respectively Rapid growth in rich media applications Of the 24.3 exabytes per month crossing the mobile network by 2019, 17.4 exabytes will be due to video Spectrum constraints require increased efficiency to manage mobile data traffic Adoption of network-centric computing services, e.g. Cloud Increased outsourcing of IT infrastructure 0.0 EB 0.5 EB 1.0 EB 1.5 EB 2.0 EB 2014 2015 2016 2017 2018 Web & Data Video 0.0 EB 1.0 EB 2.0 EB 3.0 EB 4.0 EB 5.0 EB 2014 2015 2016 2017 2018 Web & Data Video |
![]() Data Products 1 Goals highlighted herein are long-term in nature and are subject to various risks and uncertainties, one or more of which could cause goals to be unattainable. You should not regard the inclusion of a goal in this presentation as a representation by any personthat the results will be achieved 5 Enterprise Data (~40% of 1Q15 Data Revenue) Revenue grew 4% yoy and maintain target of 6% in 2015 Targeting renewal of $17.5 million of worth of Enterprise contracts in 1H15, up almost 55% vs 1H14 Carrier End User: Sales grew 100%+ in ‘14 and ~70% growth tgt in 2015. Long-term target of ~50% of total Enterprise sales Transport (~37% of 1Q15 Data Revenue) IP-based Ethernet Transport and wavelength potential Solid pipeline of long-term (3-7 year) Wavelength/TDM deals Significant reduction in DS1/DS3 exposure in last 2 years FTTC (~23% of 1Q15 Data Revenue) FTTC backhaul supports 4G LTE growth Long-term target of ~$85 million in FTTC revenue Signed contracts for 54%+ of total connections in long-term plan Targeted FTTC incremental gross margin of 85%+ 1 1 1 |
![]() 6 Planned 665 Mile Fiber Network Expansion in Richmond and Norfolk Underpinned by 257 unique FTTC site contract (269 total FTTC connections) with major wireless carrier Vast majority of network expected to be completed by YE15 vs original target of 3Q16 Signed First Enterprise Customer in Norfolk in April 2015 ($4,000 monthly recurring revenue) Significant expansion of Richmond, VA network with the addition of Norfolk, Petersburg and Hampton Roads markets Increases total Enterprise addressable market by ~$135 million, up ~60% vs. existing markets Increases tower addressable market to 7,400 within 3 miles of footprint |
![]() Dark Fiber Product Officially Launched May 2015 Targeting a Growing Number of RFPs in our Footprint: Macro Fiber to the Cell Backhaul Small Cell Fronthaul Large Enterprises: Healthcare, Education/Gov’t, Financial Data Centers Relatively limited Dark Fiber deployments in our footprint (by any fiber provider), but activity should increase in 2015 and beyond Lumos Dark Fiber Product has standardized Monthly Recurring Charge (MRC) and Non-Recurring Charge (NRC) pricing Lumos provides Dark Fiber cable and customer supplies equipment and resources to manage the services Lumos has $1m+ in annual Dark Fiber revenue, mostly derived from Alleghany Energy assets purchased in 2009 7 |
![]() FTTC Opportunities Accelerate Dramatic Growth in Mobile Data Traffic Driving Increased Backhaul Bandwidth Requirements Compelling Tower-Like Economics Scalable bandwidth capability drives margin expansion Increased tenants per unique site combined with higher bandwidth per site magnifies leverage Long-term contracts (ranging from 5 to 12 years) Attractive return on investments Devices Use Case Backhaul Technology Voice / Text / Email / Rich Media / Streaming Video Moving to Carrier Ethernet 2015+ Voice / Text / Email T1 / SONET 2004 - 2007 Voice / Text T1 1999 - 2003 8 |
![]() 9 Project Ark Underway: Premier FTTC Network in Footprint New MEF-certified Carrier Ethernet MPLS/IP fiber network Fully Redundant/Fast Re-route A key selling point for a series of contract wins (total of 500+ FTTC sites) with a major US wireless carrier Core network completed in Sept ’14 using Cisco routers FTTC traffic already routed onto Ark Expect 100% of FTTC traffic routed onto Ark by end of 3Q16 Cisco provides new testing tools, thousands of hours of training, and 2 R&D centers Ark planned to provide total bandwidth throughput up to ~1 Terabit (equivalent to 2,500 circuits at 400 Mbps each) Allows for cost effective scalability for upgraded FTTC connection target of 3,100 |
![]() 10 Long-Term Fiber to the Cell Targets FTTC Targets (as updated in Nov 2014) Key Drivers of FTTC Upgrade Expansion of 4G/LTE coverage and capacity in Lumos’ footprint by multiple wireless carriers Continued migration of copper, microwave and SONET FTTC sites to Carrier Ethernet Planned 665 route-mile market expansion, underpinned by 257 FTTC unique tower contract Pro forma tower addressable market increase to 7,400 (within 3 miles) from 5,400 Added 541 fiber route miles since YE13, including key routes from Richmond-Charlottesville and Richmond-Ashburn, VA Increased RFP activity for small cell and dark fiber FTTC contracts in our footprint Expectation for increased tenants per site and higher bandwidth per site over time Revised Prior Annual Revenue ¹ ~$85 million ~$70 million Gross Margin ¹ ~$72 million ~$60 million Total Unique Towers ¹ 1,875 1,500 Total FTTC Connections ² 3,100 2,250 Tenants (Connections/Tower) ² 1.65 1.50 Monthly Revenue/Connection ² ~$2,300 ~$2,600 Addressable Market ² 7,400 5,400 Goals highlighted herein are long-term in nature and are subject to various risks and uncertainties, one or more of which could cause goals to be unattainable. You should not regard the inclusion of a goal in this presentation as a representation by any person that the results will be achieved Represents management’s long-term estimates prepared using data from industry publications and its market knowledge and experience. Management’s estimates have not been verified by any independent source and are subject to various risks and uncertainties, which could cause actual results to materially deviate from estimates. You should not regard the inclusion of an estimate in this presentation as a representation by any person of future results 1 2 |
![]() 1Q15 Long-Term Estimate ¹ FTTC Unique Towers 907 1,875 Tenants/Unique Tower ~1.3-1.4 1.65x Monthly Revenue/Connection ~$1,750 ~$2,300 Monthly Revenue/Unique Tower ~$2,300 ~7,400 towers within 3 miles of Lumos Network fiber footprint Early stages of 4G LTE rollout Conversion from T-1, microwave and SONET to Carrier Ethernet Significant new LTE site builds/network densification Continued FTTC share gains expected Carrier Ethernet more scalable than SONET of other providers FTTC operating leverage drives margin expansion opportunity Strong FTTC Growth Opportunity in Our Footprint +250 +228 +274 Anticipated FTTC Trends 1,875 2 ~$3,800 FTTC Opportunity 155 405 633 907 1Q12 1Q13 1Q14 1Q15 Long Term Goal 11 - 1 2 Represents management’s long-term estimates prepared using data from industry publications and its market knowledge and experience. Management’s estimates have not been verified by any independent source and are subject to various risks and uncertainties, which could cause actual results to materially deviate from estimates. You should not regard the inclusion of an estimate in this presentation as a representation by any person of future results Goals highlighted herein are long-term in nature and are subject to various risks and uncertainties, one or more of which could cause goals to be unattainable. You should not regard the inclusion of a goal in this presentation as a representation by any person that the results will be achieved |
![]() FTTC as a percentage of total Lumos fiber Data revenue 2012: ~8% 2013: ~14% 2014: ~19% 2015: ~25% Annual FTTC Revenue 12 1 Goals highlighted herein are long-term in nature and are subject to various risks and uncertainties, one or more of which could cause goals to be unattainable. You should not regard the inclusion of a goal in this presentation as a representation by any person that the results will be achieved FTTC Revenue Growth ($ in Millions) Long-term goal of $85 million 1 $6.8 $14.3 $19.9 $29.0 2012 2013 2014 2015E |
![]() Monthly Recurring FTTC Revenue 13 Continued Shift in FTTC Revenue Towards 100% Ethernet ($ in Thousands) TDM billing is 2.5% of total FTTC in billing and in backlog (signed deals) $231 $125 $124 $105 $75 $1,296 $1,534 $1,638 $1,868 $2,033 $415 $716 $984 $922 $792 $1,942 $2,375 $2,745 $2,895 $2,900 $0 $1,000 $2,000 $3,000 $4,000 Jan-14 Sept-14 Oct-14 Dec-14 Mar-15 TDM Billings Ethernet Billings Total Backlog |
![]() Key Enterprise Accounts 14 |
![]() 100% fiber fed portfolio of lit buildings (ALL success-based) Added 53 buildings in 1Q15, well above avg of ~12 buildings/month since 1Q12 Increases on-net revenue and opens up opportunity for additional FTTC builds Connected to 31 total data centers 1Q15 On-Net Building Growth Accelerated On-Net Buildings 15 1,066 1,235 1,387 1,530 1Q12 1Q13 1Q14 1Q15 |
![]() Enterprise Renewal Program Results Accelerating New Contract Amounts (MRC) Total Contract Renewed 16 ($ in Thousands) Renewal program locks-in revenue on increasingly longer term deals, reducing churn Target 1H15 total contract value renewed of $17.5 million up over 50% from 1H14 18% of Enterprise revenue renewed for an average of 38 months in 2014 Expecting total MRC of $725,000 to be renewed in 2015 ($ in Thousands) $619 $725 2014A 2015E $11,500 $17,500 1H 2014 1H 2015E |
![]() Existing Richmond and Western PA Edge-Out Strategy 17 Richmond, VA Western PA 110-mile 100G enabled fiber network, which will expand significantly post completion of announced market expansion Anchor Enterprise and Carrier customers signed Significant data center opportunities, recently connected Peak 10 and QTS ~$4.8 million in annualized Enterprise and Transport sales bookings Pivot point for critical long-haul routes between Ashburn, VA and Charlottesville, VA Pittsburgh NOC /sales office opened in 2014 Washington PA PoP opened, with Tier 1 data center services and adding customer redundancy Expansion of fiber assets in Western PA – leverage existing fiber by adding on / off ramps Offer diverse routes in and out of Pittsburgh, PA Completed key routes from Pittsburgh, PA to Harrisburg, PA and Ashburn, VA Requires increased Metro investment to extract full market potential Announced 665-mile market build will expand Richmond footprint and add Norfolk as the 24 Lumos market and a key edge-out market Contiguous market expansion to pursue new FTTC, Data Center, Transport and Enterprise targets Leveraging existing customer base and assets with experienced in-market teams th |
![]() Leverage Lumos Networks’ 7,955 mile fiber footprint to target incremental Enterprise customers with thousands of sales people from leading national service providers Over 60+ MSAs signed or pending with major U.S. operators, MSOs and fiber companies operating in our footprint Pro forma “near-net” list buildings within ½ mile of our footprint of 104,000 (67,000 pre- expansion), including planned 665 fiber route-mile build in the Norfolk, Richmond, Petersburg and Hampton Roads, VA metro markets 18 Carrier End User: Growth Momentum Continues Strong Growth in 2014 and a Solid Pipeline in Place for 2015 2013: $77,000 2014: $294,000 2015 (target): ~$500,000 Carrier End User Sales Grew Over 100% in 2014 New Distribution Channel for Enterprise Data |
![]() 19 31 total data center connections as of 1Q15 Includes: commercial, private and Lumos operated data centers Key data center relationships: Peak 10, Iron Mountain, QTS, DC Corp, Alpha Technologies Increasingly, Enterprise traffic moving to data centers with customers requesting secure, fiber bandwidth access to those locations ~100+ data center market opportunity within existing footprint Lumos is under-penetrated in data center connections relative to fiber peers. Data center connections represent significant fiber bandwidth revenue upside Data Center Fiber Connection Strategy 31 Total Data Center Connections |
![]() Key Virginia 100G Long-Haul Fiber Routes 20 Charlottesville, VA to Richmond, VA Richmond, VA to Ashburn, VA Completed in June 2014 53 Mile 100G DWDM all-IP Long-Haul Fiber Route Reduces Significant Type 2 Leased Access Costs Expanded Fiber Breadth to Reach Incremental Data Centers, Enterprises and FTTC Opportunities Lit for Commercial use in January 2015 Creates Fully-Redundant all-IP 100G Route Between all 3 Virginia Cities Straight-Shot Fiber Access into Ashburn, the “Data Center Capital of the World” Critical Element in Creating the Densest Fiber Network in the Mid-Atlantic Richmond, VA to Norfolk, VA 150 Mile Fiber Route-Mile Build Planned with Announced Market Expansion |
![]() Selected Financial Highlights Data Revenue Data as a % of Total Revenue Data Gross Margin 1 Overall Adjusted EBITDA Margin 2 ($ in Millions) 21 $26.1 $26.7 $26.5 $27.3 $27.8 1Q14 2Q14 3Q14 4Q14 1Q15 52.2% 53.2% 52.4% 53.9% 55.0% 1Q14 2Q14 3Q14 4Q14 1Q15 84.0% 85.3% 85.1% 85.5% 86.9% 1Q14 2Q14 3Q14 4Q14 1Q15 45.3% 44.9% 43.2% 44.6% 45.5% 2Q14 3Q14 4Q14 1Q15 2015 Target Defined as operating revenues less network access costs divided by operating revenues for Data segment Defined as Adjusted EBITDA divided by operating revenues on a consolidated basis, excluding the impact of one time cutrailment gain on benefit plans in Q314 and Q414 1 2 |
![]() Liquidity and Debt Maturities Debt refinancing completed in April 2013; closed new Term Loan C in January 2015 for $28 million Liquidity to support growth capital requirements ~$42 million in cash $50 million undrawn revolver capacity As of March 2015, the $0.14 quarterly dividend suspended in favor of FTTC and network expansion opportunities with an annual impact of $12-$13 million Debt Maturity Profile Capitalization ($ in Millions) Note: Excludes capital leases 22 ($ in Millions) As of 3/31/2015 Cash and Marketable Securities $42.1 Revolving Credit Facility ($50MM) $0.0 Term Loan A 96.3 Term Loan B 270.2 Term Loan C 28.0 Capital Leases 5.0 Total Debt $399.4 $6 $8 $13 $81 $287 2015 2016 2017 2018 2019 |
![]() 1Q15 Snapshot 1Q15 Balance Sheet & Valuation 1Q15 Metrics Data revenue up 6%+ yoy and comprises 55% of total revenue FTTC and Enterprise revenue grew 35% and 4% yoy, respectively Completed installation of 49 FTTC sites and 83 total FTTC Connections Maintained 75% ratio for success- based/growth capital projects Connected 53 on-net buildings Added 133 miles of fiber route miles Key 1Q15 Accomplishments 1 Based on closing share price of $15.46 as of 4/28/2015 and 22,747,205 shares outstanding as of 3/31/2015 23 ($ in Millions) Cash and Marketable Securities $42.1 Total Long-Term Debt $399.4 Net Long-Term Debt $357.3 Market Capitalization¹ $351.7 Enterprise Value $709.0 ($ in Millions) 3Q14 4Q14 1Q15 Revenue $50.5 $50.7 $50.5 Adjusted EBITDA $32.9 $22.4 $22.5 % Margin 65.1% 44.3% 44.6% Capital Expenditures $26.9 $19.9 $29.2 % of Revenue 53.2% 39.4% 57.9% |
![]() Historical Financial Metrics by Segment 24 ($ in Thousands) FYE 2012 FYE 2013 FYE 2014 FYE 2015 % of 1Q15 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 Total Revenue Data $21,322 $21,883 $22,664 $24,424 $25,369 $25,706 $26,094 $26,943 $26,137 $26,707 $26,488 $27,310 $27,767 55.0% Residential and Small Business 24,004 23,379 23,173 21,905 21,057 20,453 20,055 19,094 18,647 18,290 17,668 17,423 17,265 34.2% RLEC Access 6,086 5,541 6,140 6,350 6,108 6,152 5,478 4,966 5,306 5,168 6,360 5,952 5,463 10.8% Total Revenue $51,412 $50,803 $51,977 $52,679 $52,534 $52,311 $51,627 $51,003 $50,090 $50,165 $50,516 $50,685 $50,495 100.0% % Sequential Growth (1.2%) 2.3% 1.4% (0.3%) (0.4%) (1.3%) (1.2%) (1.8%) 0.1% 0.7% 1.0% (0.4%) % YoY Growth by Segment Data 19.0% 17.5% 15.1% 10.3% 3.0% 3.9% 1.5% 1.4% 6.2% Residential and Small Business (12.3%) (12.5%) (13.5%) (12.8%) (11.4%) (10.6%) (11.9%) (8.8%) (7.4%) RLEC Access 0.4% 11.0% (10.8%) (21.8%) (13.1%) (16.0%) 16.1% 19.9% 3.0% Gross Profit Data $17,724 $18,080 $18,818 $20,488 $21,338 $21,827 $22,206 $22,940 $21,963 $22,788 $22,551 $23,350 $24,122 59.1% Residential and Small Business 15,838 15,005 15,490 14,466 13,934 13,831 13,601 12,677 12,107 12,019 11,355 11,670 11,198 27.5% RLEC Access 6,086 5,541 6,140 6,350 6,108 6,152 5,478 4,966 5,306 5,168 6,360 5,952 5,463 13.4% Total Gross Profit $39,648 $38,626 $40,448 $41,304 $41,380 $41,810 $41,285 $40,583 $39,376 $39,975 $40,266 $40,972 $40,783 100.0% Adjusted EBITDA Data $11,171 $11,350 $11,620 $12,822 $13,124 $13,355 $13,012 $14,011 $12,717 $13,395 $12,984 $12,629 $12,367 54.9% Residential and Small Business 6,735 5,944 6,208 5,639 6,697 6,356 5,691 5,917 5,544 5,230 4,503 4,623 5,627 25.0% RLEC Access 4,385 3,812 4,453 4,750 4,874 4,840 4,343 4,104 4,306 4,098 5,214 4,621 4,517 20.1% Adjusted EBITDA, Before Curtailment Gain $22,291 $21,106 $22,281 $23,211 $24,695 $24,551 $23,046 $24,032 $22,567 $22,723 $22,701 $21,873 $22,511 100.0% Curtailment Gain 0 0 0 0 0 0 0 0 0 0 10,207 567 0 Total Adjusted EBITDA $22,291 $21,106 $22,281 $23,211 $24,695 $24,551 $23,046 $24,032 $22,567 $22,723 $32,908 $22,440 $22,511 % Sequential Growth, Normalized (5.3%) 5.6% 4.2% 6.4% (0.6%) (6.1%) 4.3% (6.1%) 0.7% (0.1%) (3.6%) 2.9% % Margin, Normalized 43.4% 41.5% 42.9% 44.1% 47.0% 46.9% 44.6% 47.1% 45.1% 45.3% 44.9% 43.2% 44.6% 1 1 2 3 1 Defined as operating revenues less network access costs 2 Defined as net income attributable to Lumos Networks before interest, income taxes, depreciation and amortization, accretion of asset retirement obligations, net income or loss attributable to noncontrolling interests, other income or expenses, equity-based compensation charges, acquisition-related charges, amortization of actuarial losses on retirement plans, employee separation charges, restructuring-related charges, gain or loss on settlements and gain or loss on interest rate swap derivatives. See note from the Company on “Use of Non-GAAP Measures” on Slide 1 3 The Company recorded a $10.8 million curtailment gain in the second half of 2014 related to the elimination of certain medical benefits under the postretirement plan, which was not allocated to the operating segments |
![]() Financial Guidance 1 Guidance as of date of 1Q15 earnings release dated May 5, 2015 2 Normalized Adjusted EBITDA excludes the impact of a $10.8 million curtailment gain for the elimination of other postretirement plan medical benefits recognized in the second half of 2014 2014 1Q15 FY 2015 ($ in Millions) Actual Actual Guidance¹ Revenue Data $106.6 $27.8 ~$116 % of Total 52.9% 55.0% ~57% Residential & Small Business $72.0 $17.3 ~63 % of Total 35.8% 34.2% ~36% Access $22.8 $5.5 ~$23 % of Total 11.3% 10.8% ~11% Total $201.5 $50.5 ~$202 Adjusted EBITDA, Normalized ² $89.9 $22.5 ~$92 % Margin 44.6% 44.6% ~46% Total Capex $84.1 $29.2 ~$112 % Success-Based/Growth Capex 75% 85% 75% 25 |
![]() Reconciliation of Net Income Attributable to Lumos Networks Corp. to Operating Income 26 ($ in Millions) 3/31/2013 6/30/2013 9/30/2013 12/31/2013 3/31/2014 6/30/2014 9/30/2014 12/31/2014 3/31/2015 Net Income Attributable to Lumos Networks Corp. $6.4 $4.8 $2.5 $4.1 $4.1 $3.8 $10.2 $3.4 $2.7 Net Income Attributable to Noncontrolling Interests 0.1 0.0 0.0 - 0.0 0.0 0.0 0.1 0.0 Net Income 6.5 4.8 2.6 4.1 4.1 3.9 10.2 3.5 2.8 Interest Expense 3.1 3.4 3.8 3.8 4.0 3.8 4.0 3.8 3.5 Loss (Gain) on Interest Rate Derivatives (0.2) (0.3) 0.6 0.0 (0.1) 0.0 (0.3) (0.1) (0.1) Income Tax Expense 4.3 3.2 1.5 3.0 3.0 2.7 6.7 2.0 2.0 Other (Income) Expense, net (0.0) 0.9 (0.1) 0.8 (0.2) (0.2) (0.2) (0.1) 0.2 Operating Income $13.7 $12.1 $8.3 $11.7 $10.8 $10.2 $20.4 $9.1 $8.4 ($ in Millions) FY2010 FY2011 FY2012 FY2013 FY2014 Net Income (Loss) Attributable to Lumos Networks Corp. $20.8 ($43.9) $16.3 $17.8 $21.5 Net Income Attributable to Noncontrolling Interests 0.1 0.1 0.1 0.1 0.1 Net Income (Loss) 20.9 (43.9) 16.4 17.9 21.6 Interest Expense 5.8 12.0 11.9 14.2 15.6 Loss (Gain) on Interest Rate Derivatives - - 1.9 0.1 (0.5) Income Tax Expense (Benefit) 14.5 (4.4) 11.0 12.0 14.4 Other (Income) Expense, net (0.0) (0.1) (0.1) 1.6 (0.7) Operating Income (Loss) $41.1 ($36.4) $41.2 $45.8 $50.5 |
![]() Adjusted EBITDA Reconciliation 27 1 Guidance as of date of 1Q15 earnings release dated May 5, 2015 ($ in Millions) Year Ended FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 ¹ Operating Income (Loss) $41.1 ($36.4) $41.2 $45.8 $50.5 ~$32 Depreciation and Amortization 31.4 43.2 39.0 42.4 45.3 ~53 Equity Based Compensation 1.5 2.4 3.9 6.8 4.3 ~6 Asset Impairment Charge - 86.3 - - - - Amortization of Actuarial Losses - - 1.8 1.2 0.2 ~1 Business Separation Charges - 1.4 - - - - Acquisition Related Charges 3.0 0.1 - - - - Employee Separation Charges - - 2.3 - 0.2 - Restructuring Charges - - 3.0 0.1 - - Gain on Settlements, net - - (2.3) - - - Adjusted EBITDA $77.1 $96.9 $88.9 $96.3 $100.6 ~$92 ($ in Millions) 3/31/2013 6/30/2013 9/30/2013 12/31/2013 3/31/2014 6/30/2014 9/30/2014 12/31/2014 3/31/2015 Operating Income $13.7 $12.1 $8.3 $11.7 $10.8 $10.2 $20.4 $9.1 $8.4 Depreciation and Amortization 9.6 10.8 11.2 10.8 10.7 11.2 11.3 12.1 11.9 Equity Based Compensation 1.0 1.3 3.2 1.2 0.8 1.2 1.1 1.2 1.2 Amortization of Actuarial Losses 0.3 0.3 0.3 0.3 0.1 0.1 0.1 0.1 0.3 Employee Separation Charges - - - - 0.2 0.0 - - - Restructuring Charges 0.0 - 0.0 - - - - - 0.6 Adjusted EBITDA $24.7 $24.6 $23.0 $24.0 $22.6 $22.7 $32.9 $22.4 $22.5 |