Company Overviews22.q4cdn.com/999869821/files/doc_presentations/wow-company-o… · Why WOW! is Different Reliance on discounting to maintain / grow subscriber base Market expansion

Company Overview

November, 2016

PROPRIETARY & CONFIDENTIAL ║ 1

Legal disclaimer

Forward-Looking Statements

Certain statements in this presentation and in any accompanying oral remarks made in connection with this presentation are “forward-looking statements” within the meaning of securities laws. Youshould not place undue reliance on these statements. Forward-looking statements include information concerning our liquidity and our possible or assumed future results of operations, includingdescriptions of our business strategies, as well as cost savings and other benefits we expect to achieve (and the timing thereof) as discussed herein. These statements often include words such as“believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “seek,” “will,” “may” or similar expressions. These statements are based on certain assumptions that we have made in light of ourexperience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate in these circumstances. Youshould understand that these statements are not guarantees of performance or results. They involve risks, uncertainties and assumptions which are discussed in detail in the Company’s most recentForm 10-K Annual Report for the year ended December 31, 2015 filed with the Securities and Exchange Commission (the “SEC”) on March 17, 2016 and our Form 10-Q Quarterly Reports subsequentlyfiled with the SEC which should be read in conjunction with this presentation.

Furthermore, we have not yet filed the Company’s Form 10-Q Quarterly Report for the quarter ended September 30, 2016 with the SEC. When the Company ultimately files its Form 10-Q QuarterlyReport with the SEC, actual results and financial information related to the quarter ended September 30, 2016 could differ materially from those reflected in the forward-looking statements containedherein as a result of a variety of factors, many of which are beyond the Company’s control. The Company assumes no responsibility to update or revise any forward-looking statements as a result of newinformation or future developments.

Third Party Information

This presentation has been prepared by the Company and includes information from other sources believed by management to be reliable. No representation or warranty, express or implied, is madeas to the accuracy or completeness of any of the information set forth herein. This presentation may contain summaries of the terms of certain documents and agreements, but reference is made to theactual documents and agreements for the complete information contained therein. The information contained herein is as of the date hereof and is subject to change, completion or amendmentwithout notice.

Non-GAAP Financial MeasuresWe have included certain non-GAAP financial measures in this presentation, including Pro Forma Total Revenue, Adjusted EBITDA, Pro Forma Adjusted EBITDA and Pro Forma Capital Expenditures. Webelieve such measures are commonly used by investors to evaluate our performance and that of our competitors. These measures are not presentations made in accordance with GAAP and our use ofsuch terms varies from others in our industry. These measures should not be considered as alternatives to total revenue, net income (loss), operating income, total capital expenditures or any otherperformance measures derived in accordance with GAAP as measures of operating performance or operating cash flows or as measures of liquidity. These non-GAAP financial measures have importantlimitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. For definitions of these non-GAAP financial measures, adiscussion regarding the limitations of their use and a reconciliation of these measures to the most directly comparable GAAP financial measures, see “Non-GAAP Financial Measures”, “Unaudited ProForma Financial Information” and “Unaudited Reconciliation of GAAP to Non-GAAP and Pro Forma Financial Measures” in the Appendix to this presentation.

Pro Forma Financial InformationThe SEC requires that pro forma financial information be presented in a registrant’s periodic filings when events occur for which disclosure would be material to investors, including a significant businesscombination or the disposition of a significant portion of a business. The significance of an acquired or disposed business is determined based on the “significant subsidiary” tests specified in RegulationS-X, Article 11, Rule 1-02(w). In this regard, the Company has made certain acquisitions and divestitures which do not meet the “significant subsidiary” tests. Accordingly, the Company’s historicalfinancial information as filed with the SEC does not contain pro forma financial information relating to those transactions.

Nevertheless, this presentation makes certain pro forma adjustments to the historical financial information of the Company giving effect to those transactions as if such transactions had beencompleted at the beginning of each period presented because we believe such information would be meaningful to investors by showing how such transactions might have affected the Company’shistorical financial statements. For a discussion regarding such pro forma information and reconciliations to the most directly comparable GAAP financial measures, see “Unaudited Pro Forma FinancialInformation” and “Unaudited Reconciliations of GAAP to Non-GAAP and Pro Forma Financial Measures” in the Appendix to this presentation.

Sean, Customer Care, Ihab, Customer Care, Morena, Training

Company Overview


6th largest MSO in the U.S. with a presence in 21 markets across 11 states clustered in the Midwest and Southeast

Operates in diversified markets, ranging from affluent suburbs to secondary and tertiary markets with favorable competitive dynamics and demographics

Fully-upgraded, technologically advanced systems that enable efficient and discretionary capital spending

Best-in-Class Cable Operator

PF Total Revenue of $1.246 billion

PF Adjusted EBITDA of $464 million

LTM 9/30/16 results (1)

Award winning brand with a reputation for excellent customer experience

Significant growth opportunity led by HSD and business services

Unique ability to drive incremental growth through network “edge-outs” at highly compelling unit economics

Talented, experienced management team with history of successful execution

(1) Financial information includes pro forma adjustments to include the financial results for the acquisition of NuLink which closed on Sept. 9, 2016.


WOW! Overview

6th Largest MSO in the United States

19 J.D. Power awards in the past 9 years

WOW! #1 Internet provider –2009, 2010, 2011, 2012, 2013, 2014

WOW! #1 Cable provider –2007, 2008, 2010, 2011, 2012

WOW! #1 Bundled provider –2010, 2012, 2013, 2014, 2015

WOW! #1 Phone provider – 2010

Award winning performance

Subscriber information as of 9/30/16

Homes Passed 3,075,000

Total Customers 800,800

HSD subscribers 742,000

Video subscribers 514,900

Telephony subscribers 267,400

Total RGUs 1,524,300


Greater focus on growth and protection of Internet customer base

Uniquely well positioned to be video agnostic and flex as consumer behavior evolves

Early and active in integrated partnership with OTT and new media content (first to market with Netflix)

Greater focus on protecting linear video business

Traditional incumbents

Why WOW! is Different

Reliance on discounting to maintain / grow subscriber base

Market expansion is largely M&A dependent given historical unwillingness to overbuild fellow MSOs

History of poor customer service

Focused on profitable customer acquisition and retention

History of award-winning customer experience

Ability, willingness and track record of successful expansion through edge-outs

Company culture / reputation varied Strong, integrated culture throughout the organization


51.9%

23.3%

6.0% 10.2%

2.4% 5.8%

53.1%

3.5% 3.6%

Favorable Competitive Dynamics

(1) (1) None is primarily Mid Michigan and Lawrence (5.6%); Other includes Cox, Google Fiber (0.2%).

~ 90% of footprint overlap with Xfinity & Charter Spectrum

• ~ 35% of Charter Spectrum footprint will be experiencing potential customer disruption as a result of integration activities

Modest overlap with triple-play telco competition

• Competes with a less robust AT&T U-Verse offering (e.g., DSL) in several markets

• Verizon FiOS competition limited to one market, comprising only 3.5% of footprint

• Frontier (acquired FiOS assets in Pinellas market) competition limited to 3.6% of footprint

Cable Companies Telcos

None or Other (1)

40% Charter Spectrum

Competition in % of Footprint (Based on Homes Passed)


Technically Advanced Network & Service Offerings

Multi-use service provider backbone (10G/100G) enabling centrally sourced voice, video and data services for residential and business services

Fully upgraded systems with DOCSIS 3.0 and 3.1 capabilities in all markets providing 750+ MHz capacity in 100% of the combined markets (Lansing, MI is currently in process of being upgraded)

95% of network footprint is on an all-digital platform

• 300Mbps and 600Mbps data offering available in 93% of footprint

• 1Gbps data offering in Q416/Q117 in ~13% of footprint with additional markets planned for 2017

• Ultra TV deployed to 79% of network footprint with penetration rate of 28% of eligible video customers

Robust business services network enabling advanced commercial class data and voice services within and between all markets

- Ethernet over fiber and HFC - Hosted VoIP solutions

- Disaster Recovery & Cloud back-up - SIP & PRI trunk services

Ability to continue to provide advanced services and capabilities, launch new services quickly & efficiently and maintain the networks relatively inexpensively

- Managed Wi-Fi - Layer 3 VPN


WOW! Internet gaining momentum … introducing 600M and 1Gig Internet

WOW! has a proven track record of demonstrating strong organic Internet growth

Focus on free cash flow in 2014-2015 yielded loss of Internet customers

Since returning to a growth strategy, WOW! has gained ~ 16,000 Internet customers through September 30th; Significant year/year improvement:

‒ ~ 35,300 Customers

‒ ~ 31,500 HSD RGUs

‒ ~ 75,100 Total RGUs

New product launch is creating renewed awareness:

‒ WOW! 600M launched across 93% of footprint in August

Fastest available in many of markets served

‒ WOW! 1 Gig launched in Huntsville, Auburn, Evansville, & Knoxville; Grosse Pointe Shores before year end

First to market in three of five markets

‒ Additional markets planned for launch in 2017


WOW! Business Services: Integrated Strategic Approach

Legacy WOW! and Legacy Knology had differing approaches to and prioritization of commercial segment

— Limited legacy WOW! product portfolio and operational support; focused primarily on very small business sector with the exception of Evansville

— Knology had extensive product portfolio serving wide breadth of commercial customers; operations and sales practices not created for scale however

Since the Knology acquisition, have focused on the restructuring necessary to build scale in support of significant demand opportunity

Today, processes & procedures, product strategy, support structure, etc., are rationalized for efficiency and effectiveness

Strategically focused on building a consistent, predictable practice of transactional sales while aggressively ensuring competitiveness to drive market share gain

Multiple distribution channels utilized to capture opportunities across a variety of customer segments:

— Field Sales - recently reorganized to align account executives against specific customer segments (SMB vs. Mid vs. Large Locals) rather than territory

— Call Center - primarily inbound new sales and upgrades to existing customers

— Wholesale - carrier (wireline and wireless) channel is set up to maximize network assets and/or fund expansion of fiber network and footprint

— Multiple contracts to provide back‐haul services to over 1,100 towers/small cell sites in our Chicago market; when fully deployed, annualized total MRR will be ~ $11 million

— Indirect – network of large Masters and sub-agents who represent potential growth opportunity by providing significant scale with salespeople and sales prospecting


Edge-Out Growth Opportunity

WOW! has historically invested success-based, discretionary capital to selectively expand the Company's network with excellent success

Between 2008 – 2012, the Company invested over $100+ million in edge‐out projects

• Typically achieved customer penetration rates of more than ~ 20% of new homes passed within 12 months following completion of construction

• On average, edge‐out projects have achieved cash/cash IRRs of ~ 20% (before application of a terminal value to incremental Adjusted EBITDA)

Elevated levels of capital expenditures, however, following the Knology acquisition in 2012 to integrate the Knology network & back-office infrastructure (i.e. all-digital upgrades, etc.) have prevented investment in edge-out growth opportunities since 2012

New primary equity investment from Crestview, however, has enabled WOW! to once again pursue these opportunities going-forward

In excess of $200 million of such edge-out opportunities have been initially identified with similarly favorable return characteristics providing a relatively low-risk growth opportunity


NuLink – Acquisition Overview

Acquisition of NuLink closed on September 9th

Structured as an asset acquisition; cash consideration

NuLink is a broadband provider of HSD, video and phone services to residential customers and commercial services to small, medium and enterprise businesses

NuLink’s network is an all-digital, fully upgraded and fiber-rich 750 MHz system that is 100% DOCSIS 3.0 compliant passing more than 34,000 homes and providing services to approximately 27,000 RGUs

NuLink operates in and around the city of Newnan, GA, located 34 miles southwest of Atlanta in Coweta County. Newnan boasts attractive demographics; population has increased by 118% since 2000 and is projected to continue growing at rates well above state and national averages


Financial Update


Year/Year – Cumulative RGU net additions (1)

3Q 2016 Subscriber Update (1)

(1) Changes in Customers and RGUs excludes the increase in customers and RGUs attributable to the acquisition of NuLink which closed on September 9, 2016 and are included in September 30, 2016 reported customers and RGU totals.

Quarterly – Customers & RGU net additions (1)

3rd Qtr. of 2016 net customer additions:

• Net Customer Growth totals 50; year/year increase of 5,479

• Net HSD additions totals 2,720; year/year increase of 3,516

YTD Total RGU net additions are ~ 75,100 better than prior year

Continued, strong positive subscriber trends:


Quarterly Pro Forma Total Revenue (1)

3Q 2016 Financial Update (1)

(1) Pro Forma financial information includes pro forma adjustments to (i) include the unaudited financial results for Anne Arundel Broadband prior to its acquisition by WOW, and (ii) exclude the financial results related to the South Dakota systems which were divested on September 30, 2014, and (iii) include pro forma adjustments to include the financial information for WOW!’s acquisition of NuLink which closed on September 9, 2016.

(2) ARPU trends do not include pro forma adjustments to include information for WOW!’s acquisition of NuLink which closed on September 9, 2016.

3Q 2016 Operating TrendsARPU trends (2)

ARPU CAGRs since the 3rd Qtr. of 2014:

• Video – 15.2%

• HSD – 3.5%

• Telephony – (0.1)%

Sequential Video ARPU increases attributable to efforts to manage video services for profitability

3Q-16 reported Total Revenue equals $311.2 million

3Q-16 Pro Forma Total Revenue equals $315.9 million

• up sequentially due to increased HSD subscriber counts and increases in video ARPU

• up on a year/year basis due to increased HSD subscriber counts, increases in Video and HSD ARPU, and increases in wholesale revenue

($ in millions)


3Q 2016 Financial Update (1)

(1) Pro Forma financial information includes pro forma adjustments to (i) include the unaudited financial results for Anne Arundel Broadband prior to its acquisition by WOW, and (ii) exclude the financial results related to the South Dakota systems which were divested on September 30, 2014, and (iii) include pro forma adjustments to include the financial information for WOW!’s acquisition of NuLink which closed on September 9, 2016.

3Q 2016 Operating Trends

($ in millions)

LTM Pro Forma Adjusted EBITDA (1) Quarterly Pro Forma Adjusted EBITDA (1)

($ in millions)

3Q-16 reported Adjusted EBITDA totals $115.7 million

3Q-16 Pro Forma Adjusted EBITDA totals $117.4 million:

7.0% CAGR from 3Q-14

Pro Forma LTM Adjusted EBITDA as of 9/30/16 totals $463.5 million

7.0% CAGR

Pro Forma Adjusted EBITDA % (1)


Lawrence divestiture

Announced the signing of the transaction with MidContinent on Oct. 20th

Structured as an asset acquisition

Valuation:

• $215 million; cash consideration

• LTM 9/30/16 Total Revenue of $45.8 million & Adjusted EBITDA of $23.5 million

• Valuation of 9.2x

Subject to regulatory review/approval; expected to close late 4Q-16 or early 1Q-17

Proceeds will be used to further de-lever the balance sheet and pursue growth initiatives


Lawrence Pro Forma

Maturity Rate 06/30/16 09/30/16 Divestiture 09/30/16

Total Cash 224,300,000 129,300,000 215,000,000 344,300,000

Revolver Jan - '19 L + 350 / no floor - - -

Term Loan B-1 Jul - '17 L + 300 / 0.75 - - -

Term Loan B Apr - '19 L + 350 / 1.00 1,825,195,000 - -

New Term Loan B Apr - '23 L + 350 / 1.00 - 2,065,000,000 2,065,000,000

Capital Leases 5,900,000 5,336,000 5,336,000

Total Senior Secured Debt 1,831,095,000 2,070,336,000 2,070,336,000

Senior Unsecured Notes Jul - '19 10.250% 825,000,000 825,000,000 825,000,000

Senior Subordinated Notes Oct - '19 13.375% 295,000,000 89,035,000 89,035,000

Total Debt 2,951,095,000 2,984,371,000 2,984,371,000

Total Net Debt 2,726,795,000 2,855,071,000 2,640,071,000

LTM Adjusted EBITDA 449,254,000 465,459,000 (23,400,000) 442,059,000

Credit Ratios:

Net Senior Secured Debt/Adj. EBITDA 3.58x 4.17x 3.90x

Net Debt/Adj. EBITDA 6.07x 6.13x 5.97x

Capital Structure Overview

Re-financed the $1.825B Term Loan B on August 19th; upsized the new Term Loan B to $2.065B with a new 7-year term; pricing remains at L+350/1.00

Proceeds from the transaction used to partially redeem 13.375% Senior Subordinated Notes due 2019 and fund the acquisition of NuLink

Annualized interest savings from the re-financing and the 3Q-16 Subordinated Notes redemptions will total ~ $17 million

(1) Total Cash at 9/30/16 of $129.3 million includes $93.2 million of cash held at Racecar Holdings, LLC (the ultimate parent entity of WideOpenWest Finance, LLC), net of fees and expenses, related to the issuance of $165 million of new primary equity in Racecar Holdings, LLC to Crestview and Avista.

(2) LTM Adjusted EBITDA at 9/30/16 includes pro forma adjustments to include LTM Adjusted EBITDA for NuLink and $2.0 million of identified synergies.

(1)

(2)


Appendix


New Equity Investments

WOW Operating entities(LLC’s)

Kite Parent Corp.

WideOpenWest Finance, LLC

Racecar Acquisition,

LLC

Knology Inc.

SEC registrant Secured Debt High Yield Notes

WideOpenWest Kite Inc. C Corp tax vehicle

Crestview

$160 million in new primary equity ($125 million closed in Dec ‘15 &

$35 million closed in April ‘16)

Primary Transactions

Secondary Transaction

Operating Entities

Racecar Holdings, LLC

Avista

$165 million in new primary equity proceeds allows WOW! to aggressively pursue growth opportunities:

• Residential HSD

• Commercial Services

• Edge-Out network expansion

$5 million in new primary equity closed in April ’16

Approximately $560 million of federal

NOLs

Approximately $220 million of federal

NOLs


Non-GAAP Financial Measures

We have included certain non-GAAP financial measures in this presentation including Pro Forma Total Revenue, Adjusted EBITDA, Pro Forma Adjusted EBITDAand Pro Forma Capital Expenditures. We believe that these non-GAAP measures enhance an investor’s understanding of our financial performance. Webelieve that these non-GAAP measures are useful financial metrics to assess our operating performance from period to period by excluding certain items thatwe believe are not representative of our core business. We believe that these non-GAAP measures provide investors with useful information for assessing thecomparability between periods of our ability to generate cash from operations sufficient to pay taxes, to service debt and to undertake capital expenditures.We use these non-GAAP measures for business planning purposes and in measuring our performance relative to that of our competitors. We believe thesenon-GAAP measures are measures commonly used by Investors to evaluate our performance and that of our competitors.

Adjusted EBITDA is defined by WOW! as net income (loss) before net interest expense, income taxes, depreciation and amortization (including impairments),gains (losses) realized and unrealized on derivative instruments, management fees to related party, the write-up or off of any asset, debt modificationexpenses, loss on extinguishment of debt, integration and restructuring expenses and all non-cash charges and expenses (including equity based compensationexpense) and certain other income and expenses, as further defined in our credit facilities. Adjusted EBITDA is not a presentation made in accordance withgenerally accepted accounting principles in the United States (“GAAP”) and our use of the term Adjusted EBITDA varies from others in our industry. AdjustedEBITDA should not be considered as an alternative to net income (loss), operating income or any other performance measures derived in accordance with GAAPas measures of operating performance or operating cash flows or as measures of liquidity. Adjusted EBITDA has important limitations as an analytical tool andyou should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. For example, Adjusted EBITDA:

• excludes certain tax payments that may represent a reduction in cash available to us;

• does not reflect any cash capital expenditure requirements for the assets being depreciated and amortized that may have to be replaced in the future;

• does not reflect changes in, or cash requirements for, our working capital needs; and

• does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt.

Furthermore, although the Company has made certain acquisitions and divestitures which do not meet the SEC’s “significant subsidiary” tests which wouldrequire the presentation of pro forma financial information in its periodic filings, Total Revenue, Adjusted EBITDA and Capital Expenditures in this presentationare presented on a pro forma basis, giving effect to our increased investment in Anne Arundel Broadband (“AAB”) on May 1, 2014, our divestiture of the SouthDakota systems on September 30, 2014 and our acquisition of the operating assets of HC Cable Opco, LLC (dba “NuLink”) on September 9, 2016 as if suchtransactions had been completed at the beginning of each period presented. See “Unaudited Pro Forma Financial Information” and “Unaudited Reconciliationsof GAAP to Non-GAAP and Pro Forma Financial Measures” on the following pages and the accompanying tables for reconciliations of these non-GAAP financialmeasures to their most directly comparable GAAP financial measure.


Unaudited Pro Forma Financial Information

The Securities and Exchange Commission (the “SEC”) requires that pro forma financial information be presented in a registrant’s periodic filings whenevents occur for which disclosure would be material to investors, including significant business combinations or the disposition of a significant portion ofthe business. The significance of an acquired or disposed business is determined based on the “significant subsidiary” tests specified in Regulation S-X,Article 11, Rule 1-02(w). In this regard, although the Company has made certain acquisitions and divestitures, such transactions do not meet the“significant subsidiary” tests and, accordingly, the Company’s historical financial information as filed with the SEC does not contain pro forma financialinformation relating to those transactions.

Nevertheless, this presentation makes certain pro forma adjustments to the historical financial information of the Company as filed with the SEC becausewe believe such information would be meaningful to investors by showing how such transactions might have affected the Company’s historical financialstatements. The unaudited pro forma financial information in this presentation has been prepared giving effect to our increased investment in AAB onMay 1, 2014, our divestiture of the Company’s South Dakota systems on September 30, 2014 and our acquisition of the operating assets of NuLink onSeptember 9, 2016 as if such transactions had been completed at the beginning of each period presented. The unaudited pro forma financial informationis for informational purposes only and does not purport to represent what our results of operations or financial information would have been if suchtransactions had occurred at any date, nor does such information purport to project the results of operations for any future period.

The unaudited pro forma condensed combined financial information in this presentation was prepared based on NuLink’s and AAB’s unaudited financialinformation for the respective periods presented. The historical unaudited financial information has been adjusted to give pro forma effect to events thatare directly attributable to such transactions, factually supportable and expected to have a continuing impact on the combined results. The unaudited proforma financial information herein does not reflect non-recurring charges that have been incurred in connection with the transactions and relatedfinancings, including legal fees, broker fees and accounting fees.

See “Unaudited Reconciliations of GAAP to Non-GAAP and Pro Forma Financial Measures” in the following tables for reconciliations of such pro formainformation to the most directly comparable GAAP financial measures.

The unaudited pro forma financial information herein should be read in conjunction with the information contained in “Management’s Discussion andAnalysis of Financial Condition and Results of Operations,” the consolidated financial statements and the accompanying notes appearing in our mostrecently filed Form 10-K for the year ended December 31, 2015 as filed with the SEC on March 17, 2016 and subsequent quarterly filings on Form 10-Q.

Furthermore, we have not yet filed the Company’s Form 10-Q Quarterly Report for the quarter ended September 30, 2016 with the SEC. When theCompany ultimately files its Form 10-Q Quarterly Report with the SEC, actual results and financial information related to the quarter ended September 30,2016 could differ materially from those reflected in the forward-looking statements contained herein as a result of a variety of factors, many of which arebeyond the Company’s control. The Company assumes no responsibility to update or revise any forward-looking statements as a result of new informationor future developments.


Unaudited Reconciliations of GAAP to Non-GAAP and Pro Forma Financial Measures

The following table provides unaudited reconciliations of our Total Revenue, net income (loss) and Capex to Pro Forma Total Revenue, Pro Forma Adjusted EBITDA and Pro Forma Total Capex for the respective periods presented:

See accompanying notes on page 24

Mar. 31, Jun. 30, Sept. 30, Dec. 31, Mar. 31, Jun. 30, Sept. 30, Dec. 31, Mar. 31, Jun. 30, Sep. 30,

2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016

Total Revenue $ 312.1 $ 319.8 $ 323.2 $ 309.2 $ 312.3 $ 305.8 $ 297.7 $ 301.3 $ 302.3 $ 307.5 $ 311.2

Pro Forma Adjustments:

Revenue related to NuLink (1)

5.6 5.8 5.9 5.9 6.1 6.2 6.2 6.2 6.2 6.2 4.7

Revenue related to AAB (2)

5.3 1.8 - - - - - - - - -

Revenue related to the South Dakota systems (3)

(21.3) (20.0) (21.2) - - - - - - - -

Pro Forma Total Revenue $ 301.7 $ 307.4 $ 307.9 $ 315.1 $ 318.4 $ 312.0 $ 303.9 $ 307.5 $ 308.5 $ 313.7 $ 315.9

Net Income (loss) $ (20.3) ($7.8) $31.7 $ (26.8) $ (6.6) $ (27.5) $ (7.1) $ (1.5) $ 4.8 $ (145.0) $ (12.4)

Depreciation and amortization 66.0 64.1 64.0 57.2 54.8 55.5 55.9 54.9 52.5 52.9 49.6

Management fee to related party 0.4 0.5 0.4 0.4 0.4 0.6 0.5 0.4 0.4 0.5 0.4

Interest expense 57.8 59.4 60.0 59.8 58.9 57.1 55.3 54.7 54.2 55.2 52.9

Loss on extinguishment of debt - - - - - 22.9 - - - 2.5 28.1

Unrealized gain on derivative instruments, net (1.0) (0.8) (1.3) (1.0) (2.0) (1.1) (1.2) (1.3) (1.1) (1.2) -

(Gain) Loss on sale of assets - - (52.6) (0.3) - - - - - - -

Non-recurring prof. fees, M&A integration and restr. exp. 4.9 13.0 8.9 19.8 3.5 4.2 4.8 3.5 1.1 2.4 3.8

Non-cash stock compensation - - - - - - - - - 0.1 0.4

Other expense (income), net 0.1 (0.2) (2.4) (0.9) (0.2) - 0.6 - - (0.1) (1.9)

Income tax (benefit) expense 1.1 (16.7) 1.2 (0.5) 0.9 1.0 0.8 1.2 1.0 147.6 (5.2)

Adjusted EBITDA $ 109.0 $ 111.5 $ 109.9 $ 107.7 $ 109.7 $ 112.7 $ 109.6 $ 111.9 $ 112.9 $ 114.9 $ 115.7


Adjusted EBITDA related to NuLink (1)

1.8 1.9 2.0 2.1 2.0 2.1 2.1 2.2 2.0 2.1 1.7

Adjusted EBITDA related to AAB (2)

0.8 0.2 - - - - - - - - -

Adjusted EBITDA related to the South Dakota systems (3)

(9.4) (8.0) (9.4) - - - - - - - -

Pro Forma Adjusted EBITDA $ 102.2 $ 105.6 $ 102.5 $ 109.8 $ 111.7 $ 114.8 $ 111.7 $ 114.1 $ 114.9 $ 117.0 $ 117.4

Total Capex $ 52.9 $ 66.0 $ 66.3 $ 66.7 $ 55.6 $ 54.7 $ 64.5 $ 57.1 $ 63.6 $ 71.3 $ 72.3


Capex related to NuLink (1)

1.1 0.6 1.0 0.8 0.8 1.1 1.1 0.7 1.2 1.7 0.9

Capex related to AAB (2)

0.9 0.3 - - - - - - - - -

Capex related to the South Dakota systems (3)

(1.9) (3.0) (3.1) - - - - - - - -

Pro Forma Total Capex $ 53.0 $ 63.9 $ 64.2 $ 67.5 $ 56.4 $ 55.8 $ 65.6 $ 57.8 $ 64.8 $ 73.0 $ 73.2

Three Months Ended


Unaudited Reconciliations of GAAP to Non-GAAP and Pro Forma Financial Measures (cont’d)

See accompanying notes on page 24

The following table provides unaudited reconciliations of our Total Revenue, net income (loss) and Capex to Pro Forma Total Revenue, Pro Forma Adjusted EBITDA and Pro Forma Total Capex for the respective periods presented:

Dec. 31, Dec. 31, Sep. 30,

2014 2015 2016

Total Revenue $ 1,264.3 $ 1,217.1 $ 1,222.3


Revenue related to NuLink (1)

23.2 24.7 23.3

Revenue related to AAB (2)

7.1 - -

Revenue related to the South Dakota systems (3)

(62.5) - -

Pro Forma Total Revenue $ 1,232.1 $ 1,241.8 $ 1,245.6

Net loss $ (23.2) $ (42.7) $ (154.1)

Depreciation and amortization 251.3 221.1 209.9

Management fee to related party 1.7 1.9 1.7

Interest expense 237.0 226.0 217.0

Loss on extinguishment of debt - 22.9 30.6

Unrealized gain on derivative instruments, net (4.1) (5.6) (3.6)

(Gain) Loss on sale of assets (52.9) - -

Non-recurring prof. fees, M&A integration and restr. exp. 46.6 16.0 10.8

Non-Cash stock compensation - - 0.6

Other expense (income), net (3.4) 0.4 (2.0)

Income tax (benefit) expense (14.9) 3.9 144.6

Adjusted EBITDA $ 438.1 $ 443.9 $ 455.5


Adjusted EBITDA related to NuLink (1) 7.8 8.4 8.0

Adjusted EBITDA related to AAB (2) 1.0 - -

Adjusted EBITDA related to the South Dakota systems (3)

(26.8) - -

Pro Forma Adjusted EBITDA $ 420.1 $ 452.3 $ 463.5

Total Capex 251.9$ 231.9$ 264.3$


Capex related to NuLink (1)

3.5 3.7 4.5

Capex related to AAB (2)

1.2 - -

Capex related to the South Dakota systems (3)

(8.0) - -

Pro Forma Total Capex $ 248.6 $ 235.6 $ 268.8

Twelve Months Ended


Unaudited Reconciliations of GAAP to Non-GAAP and Pro Forma Financial Measures (cont’d)

Notes to Unaudited Reconciliations of GAAP to Non-GAAP Financial Measures:

(1) Represents our management’s estimate of pre-acquisition Total Revenue, Adjusted EBITDA and Capital Expenditures of HC Cable Opco, LLC d/b/a NuLink(“NuLink”) for the periods preceding our acquisition of substantially all of the operating assets of NuLink on September 9, 2016 based on the books and records of NuLink, as adjusted by our management to reflect the assets actually acquired. We believe that, based on operating data, including operating data for the period following our acquisition of NuLink (from September 9, 2016 through September 30, 2016), the pro forma amounts represent a reasonable estimate of Total Revenue, Adjusted EBITDA and Capital Expenditures from NuLink’s operations. However, there can be no assurances that such results accurately reflect the actual results of the acquired assets of NuLink for the periods preceding September 9, 2016. Such amounts are presented solely for the purposes of presenting the calculation of Pro Forma Total Revenue, Pro Forma Adjusted EBITDA and Pro Forma Capital Expenditures based on information set forth in the books and records of NuLink as provided to us by NuLink at the time of the acquisition. Such amounts are unaudited and have not been verified by our management.

(2) Represents our management’s estimate of pre-acquisition Total Revenue, Adjusted EBITDA and Capital Expenditures of Anne Arundel Broadband (“AAB”) for the periods preceding our increased investment in AAB on April 30, 2014 based on the books and records of AAB, as adjusted by our management to reflect the assets actually acquired. We believe that, based on operating data, including operating data for the period following our increased investment in AAB (from May 1, 2014 through December 31, 2014), the pro forma amounts represent a reasonable estimate of Total Revenue, Adjusted EBITDA and Capital Expenditures from AAB’s operations. However, there can be no assurances that such results accurately reflect the actual results of the acquired assets of AAB for the periods preceding April 30, 2014. Such amounts are presented solely for the purposes of presenting the calculation of Pro Forma Total Revenue, Pro Forma Adjusted EBITDA and Pro Forma Capital Expenditures based on information set forth in the books and records of AAB as provided to us by AAB at the time of the acquisition. Such amounts are unaudited and have not been verified by our management.

(3) Represents the Total Revenue, Adjusted EBITDA and Capital Expenditures of the South Dakota systems for the periods preceding our divestiture of such assets on September 30, 2014 based on the individual books and records of the South Dakota systems. Such amounts have been extracted from the consolidated financial statements for the Company which has been audited. We believe that such pro forma amounts represent a reasonable estimate of Total Revenue, Adjusted EBITDA and Capital Expenditures for the South Dakota systems for the periods proceeding our divestiture, however, the individual books and records of the South Dakota systems have not been unaudited. There can be no assurances that such results accurately reflect the actual results of the South Dakota systems for the periods preceding September 30, 2014. Such amounts are presented solely for the purposes of presenting the calculation of Pro Forma Total Revenue, Pro Forma Adjusted EBITDA and Pro Forma Capital Expenditures based on information set forth in the Company’s books and records at the time of the divestiture.


Reconciliation of Reported Subscriber Information to Pro Forma Subscriber Information

The following table provides a reconciliation of our reported Subscriber Information to Pro Forma Subscriber information for therespective periods presented:

1Q-14 2Q-14 3Q-14 4Q-14 1Q-15 2Q-15 3Q-15 4Q-15 1Q-16 2Q-16 3Q-16

Reported Homes Passed 2,997,000 3,114,000 2,978,000 2,985,000 2,988,600 2,993,100 2,997,200 3,003,100 3,010,700 3,022,800 3,075,000


South Dakota systems (142,000) (142,000) - - - - - - - - -

NuLink 34,000 34,000 34,000 34,000 34,000 34,000 34,000 34,000 34,000 34,000 -

Pro Forma Homes Passed 3,001,000 3,006,000 3,012,000 3,019,000 3,022,600 3,027,100 3,031,200 3,037,100 3,044,700 3,056,800 3,075,000

Reported Total Customers 852,900 867,800 816,000 809,100 799,200 787,100 781,700 777,800 784,600 785,600 800,800



NuLink 15,100 15,300 15,400 15,500 15,600 15,400 15,500 15,500 15,400 15,200 -

Pro Forma Total Customers 831,900 830,800 831,400 824,600 814,800 802,500 797,200 793,300 800,000 800,800 800,800

Reported HSD Subscribers 756,700 769,600 729,700 727,800 722,000 713,100 712,300 712,500 722,200 725,700 742,000



NuLink 12,800 12,900 13,100 13,400 13,600 13,500 13,700 13,800 13,800 13,600 -

Pro Forma HSD Subscribers 737,100 738,400 742,800 741,200 735,600 726,600 726,000 726,300 736,000 739,300 742,000

Reported Video Subscribers 694,300 699,000 653,800 634,700 606,500 582,700 564,500 547,500 537,200 524,300 514,900



NuLink 11,100 11,100 10,900 10,900 10,800 10,400 10,300 10,200 10,100 9,800 -

Pro Forma Video Subscribers 685,800 676,400 664,700 645,600 617,300 593,100 574,800 557,700 547,300 534,100 514,900

Reported Telephony Subscribers 418,800 416,200 373,900 359,400 339,600 324,500 310,600 296,800 286,600 277,500 267,400



NuLink 4,300 4,200 4,100 4,100 4,000 4,000 3,900 3,900 3,700 3,600 -

Pro Forma Telephony Subscribers 396,300 388,900 378,000 363,500 343,600 328,500 314,500 300,700 290,300 281,100 267,400

Reported Total RGUs 1,869,800 1,884,800 1,757,500 1,721,900 1,668,100 1,620,300 1,587,400 1,556,800 1,546,000 1,527,500 1,524,300



NuLink 28,200 28,300 28,200 28,400 28,400 27,900 27,900 27,900 27,600 27,100 -

Pro Forma Total RGUs 1,819,200 1,803,800 1,785,700 1,750,300 1,696,500 1,648,200 1,615,300 1,584,700 1,573,600 1,554,600 1,524,300

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