8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 8-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): August 8, 2016

EARTHLINK HOLDINGS CORP.

(Exact Name of Registrant as Specified in Its Charter)

Delaware
(State of Incorporation) 001-15605
(Commission File Number) 46-4228084
(I.R.S. Employer Identification No.)

1170 Peachtree Street, Suite 900, Atlanta, Georgia	30309
(Address of principal executive offices)	(Zip Code)

(404) 815-0770

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report date)

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:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o 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 August 8, 2016, EarthLink Holdings Corp. (the “Company”) issued a press release announcing its financial results for the three and six months ended June 30, 2016. A copy of the press release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K.

In accordance with General Instruction B.2 of Form 8-K, the information furnished in Item 2.02 of this Current Report on Form 8-K and in Exhibit 99.1 attached hereto shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01 Regulation FD Disclosure

In connection with the Company’s conference call to be held on August 9, 2016, officers of the Company will be reviewing certain materials regarding financial results for the three and six months ended June 30, 2016 and guidance for the year ending December 31, 2016. A copy of the materials is attached hereto as Exhibit 99.2 to this Current Report on Form 8-K.

In accordance with General Instruction B.2 of Form 8-K, the information furnished in Item 7.01 of this Current Report on Form 8-K and in Exhibit 99.2 attached hereto shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits

(d)           Exhibits

Exhibit No.	Description
99.1	Press release dated August 8, 2016
99.2	Presentation regarding financial results and guidance

2

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 hereunto duly authorized.

	EARTHLINK HOLDINGS CORP.
	(Registrant)
	By:	/s/ Louis M. Alterman
		Name: Louis M. Alterman
		Title: Executive Vice President,
		Chief Financial Officer
Date: August 8, 2016

3

Exhibit Index

Exhibit No.	Description
99.1	Press release dated August 8, 2016
99.2	Presentation regarding financial results and guidance

4

EX-99.1

Exhibit 99.1

	Investors
	Trey Huffman
	404-748-6219
	huffmanal@elnk.com
	Media
	Randi Drinkwater
	404-709-3404
	randi.drinkwater@elnk.com

EARTHLINK REPORTS POSITIVE NET INCOME FOR SECOND CONSECUTIVE QUARTER

Stronger balance sheet, recognition by Forbes highlight productive second quarter 2016

·Revenue of $240.4 million

·Net income of $4.1 million and net income per share of $0.04

·Adjusted EBITDA of $56.6 million

·Net cash provided by operating activities of $40.3 million

·Unlevered Free Cash Flow of $39.9 million

·Ending cash balance of $76.8 million

·Refinanced revolving credit facility at end of quarter and redeemed $90 million of outstanding 8.875% debt subsequent to quarter end

ATLANTA, GA — August 8, 2016 - EarthLink (EarthLink Holdings Corp., NASDAQ: ELNK), a leading network services provider dedicated to delivering great customer experiences, today announced financial results for its second quarter of 2016.

“The second quarter was another strong quarter for the company,” said EarthLink CEO and President Joe Eazor. “Our overall business performance continued to improve, we strengthened our balance sheet further with a new credit facility, and we were recognized by Forbes as one of America’s top 100 most trustworthy companies.  Finally, in early July, we acquired Boston Retail Partners to expand our capabilities as a trusted advisor to retailers.”

Second Quarter 2016 Financial Summary

								First		Second
Figures in US $ millions,	Second Quarter							Quarter		Quarter
except per share	2015			2016		Change		2016		2016		Change
Revenues
Enterprise/Mid-Market	$	114.4		$	97.6	(14.7	)%	$	104.7	$	97.6	(6.8	)%
Small Business	79.0			57.3		(27.5	)%	62.1		57.3		(7.7	)%
Carrier/Transport	34.1			35.1		2.9	%	36.1		35.1		(2.8	)%
Consumer Services	56.1			50.4		(10.2	)%	51.4		50.4		(1.9	)%
Total Revenue	283.7			240.4		(15.3	)%	254.3		240.4		(5.5	)%
Gross Margin	156.6			129.4		(17.4	)%	139.1		129.4		(7.0	)%
Selling, General & Administrative	94.3			76.9		(18.5	)%	81.4		76.9		(5.5	)%
Net Income (Loss)	(9.9		)	4.1		NM	*	7.9		4.1		(48.1	)%
Net Income (Loss) per share	(0.10		)	0.04		NM	*	0.07		0.04		(42.9	)%
Adjusted EBITDA (1)	66.1			56.6		(14.4	)%	61.7		56.6		(8.3	)%
Capital Expenditures	20.9			16.6		(20.6	)%	18.6		16.6		(10.8	)%
Cash	87.4			76.8		(12.1	)%	60.7		76.8		26.5	%
Gross Debt Outstanding (2)	558.9			466.9		(16.5	)%	466.9		466.9		—	%
Net Cash Provided by Operating Activities	33.3			40.3		21.0	%	10.6		40.3		280.2	%
Unlevered Free Cash Flow (1)	45.2			39.9		(11.7	)%	43.2		39.9		(7.6	)%

(1) Adjusted EBITDA and Unlevered Cash Flow are non-GAAP measures, see definitions in “Non-GAAP Measures” below.

(2) Gross debt excludes unamortized debt issuance costs, unamortized debt discount and capital leases..

* NM - Percentage is not meaningful

Revenue and Gross Margin

·Total revenue was $240.4 million during the second quarter of 2016, a decline of 15.3% from the prior year quarter and 5.5% from the first quarter of 2016.

·During the third quarter of 2015, the Company discontinued certain IT services product offerings, and during the first quarter of 2016, the Company sold certain assets related to its IT services product offerings. Total revenue during the second quarter of 2016 did not include any revenue related to these product offerings, compared to $11.7 million during the second quarter of 2015 and $3.4 million during the first quarter of 2016.

·Total revenue during the second quarter of 2016 included $0.7 million of favorable settlements and one-time favorable items, compared to $1.6 million during the second quarter of 2015 and $3.1 million during the first quarter of 2016.

·Adjusting for the above impacts, revenue declined 11% from the prior year quarter and 3% from the first quarter of 2016.

·Gross margin during the second quarter of 2016 was $129.4 million, compared to $156.6 million in the second quarter of 2015 and $139.1 million in the first quarter of 2016. Cost of revenue in the second quarter of 2016 included $3.7 million of favorable settlements, compared to $3.1 million in the second quarter of 2015 and $3.9 million in the first quarter of 2016.  Gross margin during the second quarter of 2016 did not include any gross margin related to the aforementioned IT services product offerings, compared to $6.4 million during the second quarter of 2015 and $1.7 million during the first quarter of 2016.

Net Income (Loss) and Adjusted EBITDA

·Net income was $4.1 million during the second quarter of 2016. This compares to a net loss of $(9.9) million in the second quarter of 2015 and net income of $7.9 million in the first quarter of 2016. Net income during the first quarter of 2016 included a $5.7 million pretax gain on the sale of the Company’s IT services assets.

·Adjusted EBITDA (a non-GAAP measure, see definition in “Non-GAAP Measures” below) was $56.6 million in the second quarter of 2016. This compares to Adjusted EBITDA of $66.1 million in the second quarter of 2015 and $61.7 million during the first quarter of 2016.

Balance Sheet and Cash Flow

·Net cash provided by operating activities was $40.3 million during the second quarter of 2016. This compares to net cash provided by operating activities of $33.3 million in the second quarter of 2015 and $10.6 million in the first quarter of 2016.

·Unlevered Free Cash Flow (a non-GAAP measure, see definition in “Non-GAAP Measures” below) was $39.9 million during the second quarter of 2016. This compares to Unlevered Free Cash Flow of $45.2 million in the second quarter of 2015 and $43.2 million in the first quarter of 2016.

·EarthLink ended the second quarter of 2016 with $76.8 million in cash.

·On June 30, 2016, the Company exercised its right to call a portion of its 8.875% Senior Notes due 2019. On August 4, 2016, the Company redeemed $90.0 million aggregate principal amount of its Senior Notes. The Company used $34 million in existing cash, $50 million in term loan proceeds and $10 million in revolving credit facility borrowings to fund the redemption, premium and accrued interest. As of June 30, 2016, $31.7 million net carrying amount of the Senior Notes was classified as current portion of debt and capital lease obligations.

Non-GAAP Measures

Adjusted EBITDA is defined as net income (loss) before interest expense and other, net, income taxes, depreciation and amortization, stock-based compensation expense, impairment of goodwill and long-lived assets, restructuring, acquisition and integration-related costs, gain on sale of business and loss on extinguishment of debt. Unlevered Free Cash Flow is defined as net income (loss) before interest expense and other, net, income taxes, depreciation and amortization, stock-based compensation expense, impairment of goodwill and long-lived assets, restructuring, acquisition and integration-related costs, gain on sale of business and loss on extinguishment of debt, less cash used for purchases of property and equipment.

Adjusted EBITDA and Unlevered Free Cash Flow are non-GAAP financial measures.  They should not be considered in isolation or as an alternative to measures determined in accordance with U.S. generally accepted accounting principles. Please refer to the Consolidated Financial Highlights for a reconciliation of these non-GAAP financial measures to the most comparable measures reported in accordance with U.S. generally accepted accounting principles and Footnote 4 of the Consolidated Financial Highlights for a discussion of the presentation, comparability and use of such financial measures.

Conference Call for Analysts and Investors

EarthLink’s Second Quarter 2016 Conference Call will be held on Tuesday, August 9, 2016, at 8:30 a.m. ET and hosted by EarthLink’s Chief Executive Officer and President Joseph F. Eazor and Executive Vice President and Chief Financial Officer Louis M. Alterman.

The dial-in number is:  (866) 887-3882.

Participants should reference the conference ID number 46134199 or “EarthLink Second Quarter 2016 Earnings Call” and dial in 10 minutes prior to the scheduled start time.

Webcast

A live webcast of the conference call will be available at: http://ir.earthlink.net/.

Presentation

An investor presentation to accompany the conference call and webcast will be available at: http://ir.earthlink.net/.

Replay

A webcast replay will be available from 11:30 a.m. ET on August 9, 2016 through midnight on September 9, 2016. Dial toll-free:  (855) 859-2056. The replay confirmation code is 46134199. The webcast will be archived on the company’s website at: http://ir.earthlink.net/events.cfm.

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 Information Regarding Forward-Looking Statements

This press release includes “forward-looking” statements (rather than historical facts) that are subject to risks and uncertainties that could cause actual results to differ materially from those described. Although we believe that the expectations expressed in these forward-looking statements are reasonable, we cannot promise that our expectations will turn out to be correct. Our actual results could be materially different from and worse than our expectations. With respect to such forward-looking statements, we seek the protections afforded by the Private Securities Litigation Reform Act of 1995. These risks include, without limitation: (1) that we may not be able to execute our strategy to successfully transition to a leading managed network, security and cloud services provider, which could adversely affect our results of operations and cash flows; (2) that we may not be able to increase revenues from our growth products and services to offset declining revenues from our traditional products and services, which could adversely affect our results of operations and cash flows; (3) that if we are unable to adapt to changes in technology and customer demands, we may not remain competitive, and our revenues and operating results could suffer; (4) that failure to achieve operating efficiencies and otherwise reduce costs would adversely affect our results of operations and cash flows; (5) that we may have to undertake further restructuring plans that would require additional charges; (6) that we may be unable to successfully divest non-strategic products, which could adversely affect our results of operations; (7) that acquisitions we complete could result in operating difficulties, dilution, increased liabilities, diversion of management attention and other adverse consequences, which could adversely affect our results of operations; (8) that we face significant competition in our business markets, which could adversely affect our results of operations; (9) that failure to retain existing customers could adversely affect our results of operations and cash flows; (10) that decisions by legislative or regulatory authorities, including the Federal Communications Commission, relieving incumbent carriers of certain regulatory requirements, and possible further deregulation in the future, may restrict our ability to provide services and may increase the costs we incur to provide these services; (11) that if we are unable to interconnect with AT&T, Verizon and other incumbent carriers on acceptable terms, our ability to offer competitively priced local telephone services will be adversely affected; (12) that the continued decline in switched access and reciprocal compensation revenue will adversely affect our results of operations; (13) that failure to obtain and maintain necessary permits and rights-of-way could interfere with our network infrastructure and operations; (14) that if our larger carrier customers terminate the service they receive from us, our wholesale revenue and results of operations could be adversely affected; (15) that we obtain a majority of our network equipment and software from a limited number of third-party suppliers; (16) that work stoppages experienced by other communications companies on whom we rely for service could adversely impact our ability to provision and service our customers; (17) that our commercial and alliance arrangements may not be renewed or may not generate expected benefits, which could adversely affect our results of operations; (18) that our consumer business is dependent on the availability of third-party network service providers; (19) that we face significant competition in the Internet access industry that could reduce our profitability; (20) that the continued decline of our consumer access subscribers will adversely affect our results of operations; (21) that lack of regulation governing wholesale Internet service providers could adversely affect our operations; (22) that cyber security breaches could harm our business; (23) that privacy concerns relating to our business could damage our reputation and deter current and potential users from using our services; (24) that interruption or failure of our network, information systems or other technologies could impair our ability to provide our services, which could damage our reputation and harm our operating results; (25) that our business depends on effective business support systems and processes; (26) that if we, or other industry participants, are unable to successfully defend against disputes or legal actions, we could face substantial liabilities or suffer harm to our financial and operational prospects; (27) that we may be accused of infringing upon the intellectual property rights of third parties, which is costly to defend and could limit our ability to use certain technologies in the future; (28) that we may not be able to protect our intellectual property; (29) that we may be unable to hire and retain sufficient qualified personnel, and the loss of any of our key executive officers could adversely affect us; (30) that unfavorable general economic conditions could harm our business; (31) that government regulations could adversely affect our business or force us to change our business practices; (32) that our business may suffer if third parties are unable to provide services or terminate their relationships with us; (33) that we may be required to recognize impairment charges on our goodwill and other intangible assets, which would adversely affect our results of operations and financial position; (34) that we may have exposure to greater than anticipated tax liabilities and we may be limited in the use of our net operating losses and certain other tax attributes in the future; (35) that our indebtedness could

adversely affect our financial health and limit our ability to react to changes in our business and industry; (36) that we may require substantial capital to support business growth, and this capital may not be available to us on acceptable terms, or at all; (37) that our debt agreements include restrictive covenants, and failure to comply with these covenants could trigger acceleration of payment of outstanding indebtedness; (38) that we may reduce, or cease payment of, quarterly cash dividends; (39) that our stock price may be volatile; (40) that provisions of our certificate of incorporation, bylaws and other elements of our capital structure could limit our share price and delay a change of control of the company; and (41) that our bylaws designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ flexibility in obtaining a judicial forum for disputes with us or our directors, officers or employees. These risks and uncertainties, as well as other risks and uncertainties that could cause our actual results to differ significantly from management’s expectations, 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 Annual Report on Form 10-K for the year ended December 31, 2015 and our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016.

#        #        #

EARTHLINK HOLDINGS CORP.

Unaudited Condensed Consolidated Statements Of Operations

(in thousands, except per share data)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
Revenues	$	283,664		$	240,357		$	566,111		$	494,619
Operating costs and expenses:
Cost of revenues (exclusive of depreciation and amortization shown separately below)	127,048			110,934			256,510			226,140
Selling, general and administrative (exclusive of depreciation and amortization shown separately below)	94,349			76,925			189,607			158,337
Depreciation and amortization	47,723			33,571			94,987			73,770
Restructuring, acquisition and integration-related costs (1)	3,978			3,279			9,350			6,292
Total operating costs and expenses	273,098			224,709			550,454			464,539
Income from operations	10,566			15,648			15,657			30,080
Gain on sale of business (2)	—			—			—			5,727
Interest expense and other, net	(14,112		)	(10,824		)	(28,049		)	(21,933		)
Loss on extinguishment of debt (3)	(5,966		)	(226		)	(7,252		)	(458		)
Income (loss) before income taxes	(9,512		)	4,598			(19,644		)	13,416
Income tax provision	(410		)	(483		)	(761		)	(1,434		)
Net income (loss)	$	(9,922	)	$	4,115		$	(20,405	)	$	11,982
Net income (loss) per share
Basic	$	(0.10	)	$	0.04		$	(0.20	)	$	0.11
Diluted	$	(0.10	)	$	0.04		$	(0.20	)	$	0.11
Weighted average common shares outstanding
Basic	103,323			105,322			102,969			104,879
Diluted	103,323			108,328			102,969			108,015
Dividends declared per share	$	0.05		$	0.05		$	0.10		$	0.10

EARTHLINK HOLDINGS CORP.

Unaudited Condensed Consolidated Balance Sheets

(in thousands, except per share data)

	December 31, 2015			June 30, 2016
ASSETS
Current assets:
Cash and cash equivalents	$	91,296		$	76,833
Accounts receivable, net of allowance of $3,537 and $2,957 as of December 31, 2015 and June 30, 2016, respectively	74,724			72,750
Prepaid expenses	14,187			16,609
Other current assets	9,724			10,014
Total current assets	189,931			176,206
Property and equipment, net	372,504			338,009
Goodwill	137,751			134,464
Other intangible assets, net	25,325			3,969
Other long-term assets	9,141			9,867
Total assets	$	734,652		$	662,515
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	18,442		$	12,158
Accrued payroll and related expenses	50,532			19,897
Other accrued liabilities	64,305			63,804
Deferred revenue	40,229			37,033
Current portion of long-term debt and capital lease obligations	6,787			33,585
Total current liabilities	180,295			166,477
Long-term debt and capital lease obligations	505,613			437,492
Long-term deferred income taxes, net	3,876			4,446
Other long-term liabilities	22,022			26,107
Total liabilities	711,806			634,522
Stockholders’ equity:
Preferred stock, $0.01 par value, 100,000 shares authorized, 0 shares issued and outstanding as of December 31, 2015 and June 30, 2016	—			—
Common stock, $0.01 par value, 300,000 shares authorized, 200,207 and 201,805 shares issued as of December 31, 2015 and June 30, 2016, respectively, and 103,880 and 105,478 shares outstanding as of December 31, 2015 and June 30, 2016, respectively	2,002			2,018
Additional paid-in capital	2,026,638			2,019,786
Accumulated deficit	(1,260,937		)	(1,248,954		)
Treasury stock, at cost, 96,327 shares as of December 31, 2015 and June 30, 2016	(744,857		)	(744,857		)
Total stockholders’ equity	22,846			27,993
Total liabilities and stockholders’ equity	$	734,652		$	662,515

EARTHLINK HOLDINGS CORP.

Reconciliation of Net Income (Loss) to Adjusted EBITDA (4)

(in thousands)

	Three Months Ended
	June 30,			March 31,			June 30,
	2015			2016			2016
Net income (loss)	$	(9,922	)	$	7,867		$	4,115
Interest expense and other, net	14,112			11,109			10,824
Income tax provision	410			951			483
Depreciation and amortization	47,723			40,199			33,571
Stock-based compensation expense	3,814			4,086			4,075
Restructuring, acquisition and integration-related costs (1)	3,978			3,013			3,279
Gain on sale of business (2)	—			(5,727		)	—
Loss on extinguishment of debt (3)	5,966			232			226
Adjusted EBITDA (4)	$	66,081		$	61,730		$	56,573

Reconciliation of Net Income (Loss) to Unlevered Free Cash Flow (4)

(in thousands)

	Three Months Ended
	June 30,			March 31,			June 30,
	2015			2016			2016
Net income (loss)	$	(9,922	)	$	7,867		$	4,115
Interest expense and other, net	14,112			11,109			10,824
Income tax provision	410			951			483
Depreciation and amortization	47,723			40,199			33,571
Stock-based compensation expense	3,814			4,086			4,075
Restructuring, acquisition and integration-related costs (1)	3,978			3,013			3,279
Gain on sale of business (2)	—			(5,727		)	—
Loss on extinguishment of debt (3)	5,966			232			226
Purchases of property and equipment	(20,873		)	(18,573		)	(16,635		)
Unlevered Free Cash Flow (4)	$	45,208		$	43,157		$	39,938

Reconciliation of Net Cash Provided by Operating Activities to Unlevered Free Cash Flow (4)

(in thousands)

	Three Months Ended
	June 30,			March 31,			June 30,
	2015			2016			2016
Net cash provided by operating activities	$	33,262		$	10,630		$	40,308
Income tax provision	410			951			483
Non-cash income taxes	(196		)	(298		)	(224		)
Interest expense and other, net	14,112			11,109			10,824
Amortization of debt discount and debt issuance costs	(994		)	(859		)	(861		)
Restructuring, acquisition and integration-related costs (1)	3,978			3,013			3,279
Changes in operating assets and liabilities	16,255			36,589			2,677
Purchases of property and equipment	(20,873		)	(18,573		)	(16,635		)
Other, net	(746		)	595			87
Unlevered Free Cash Flow (4)	$	45,208		$	43,157		$	39,938
Net cash (used in) provided by investing activities	$	(20,873	)	$	7,427		$	(16,635	)
Net cash used in financing activities	$	(33,080	)	$	(48,640	)	$	(7,553	)

EARTHLINK HOLDINGS CORP.

Supplemental Schedules of Segment Information (5)

(in thousands)

The following table presents segment results for the three and six months ended June 30, 2015 and 2016:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2016		2015		2016
Enterprise/Mid-Market
Revenues	$	114,368	$	97,586	$	228,759	$	202,275
Cost of revenues (excluding depreciation and amortization)	56,216		50,499		112,488		102,070
Gross margin	58,152		47,087		116,271		100,205
Small Business
Revenues	79,041		57,270		158,095		119,403
Cost of revenues (excluding depreciation and amortization)	35,263		27,205		72,860		56,939
Gross margin	43,778		30,065		85,235		62,464
Carrier/Transport
Revenues	34,149		35,123		67,021		71,192
Cost of revenues (excluding depreciation and amortization)	15,350		15,289		30,943		30,753
Gross margin	18,799		19,834		36,078		40,439
Consumer
Revenues	56,106		50,378		112,236		101,749
Cost of revenues (excluding depreciation and amortization)	20,219		17,941		40,219		36,378
Gross margin	35,887		32,437		72,017		65,371
Total Segments
Revenues	283,664		240,357		566,111		494,619
Cost of revenues (excluding depreciation and amortization)	127,048		110,934		256,510		226,140
Gross margin	$	156,616	$	129,423	$	309,601	$	268,479

The following table presents a reconciliation of segment gross margin to consolidated income (loss) before income taxes for the three and six months ended June 30, 2015 and 2016:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2016			2015			2016
Gross margin	$	156,616		$	129,423		$	309,601		$	268,479
Operating costs and expenses:
Selling, general and administrative expenses	94,349			76,925			189,607			158,337
Depreciation and amortization	47,723			33,571			94,987			73,770
Restructuring, acquisition and integration-related costs	3,978			3,279			9,350			6,292
Total operating costs and expenses	146,050			113,775			293,944			238,399
Income from operations	10,566			15,648			15,657			30,080
Gain on sale of business	—			—			—			5,727
Interest expense and other, net	(14,112		)	(10,824		)	(28,049		)	(21,933		)
Loss on extinguishment of debt	(5,966		)	(226		)	(7,252		)	(458		)
Income (loss) before income taxes	$	(9,512	)	$	4,598		$	(19,644	)	$	13,416

EARTHLINK HOLDINGS CORP.

Supplemental Schedule of Revenue Detail

(in thousands)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2016		2015		2016
	(in thousands)
Monthly recurring revenues	$	251,145	$	212,693	$	499,120	$	436,095
Usage revenues	25,120		21,271		52,798		43,729
Equipment revenues	3,935		3,947		7,659		8,054
Non-recurring and other revenues	3,464		2,446		6,534		6,741
Total revenues	$	283,664	$	240,357	$	566,111	$	494,619

EARTHLINK HOLDINGS CORP.

Supplemental Financial Data

	June 30,	March 31,	June 30,
	2015	2016	2016
Number of employees at end of period (6)	2,314	1,895	1,875

EARTHLINK HOLDINGS CORP.

Consumer Operating Metrics

	Three Months Ended
	June 30,			March 31,			June 30,
	2015			2016			2016
Average narrowband subscribers (7)	469,000			441,000			434,000
Average broadband subscribers (7)	313,000			275,000			264,000
Average consumer subscribers (7)	782,000			716,000			698,000
ARPU (8)	$	23.62		$	23.91		$	24.04
Churn rate (9)	1.9		%	1.8		%	1.6		%

EARTHLINK HOLDINGS CORP.

Footnotes to Consolidated Financial Highlights

1.Restructuring, acquisition and integration-related costs consisted of the following for the periods presented (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2016		2015		2016
Integration-related costs	$	1,658	$	1,897	$	2,975	$	3,676
Severance, retention and other employee costs	1,048		667		3,949		1,558
Facility-related costs	1,272		715		2,426		1,058
Restructuring, acquisition and integration-related costs	$	3,978	$	3,279	$	9,350	$	6,292

Restructuring, acquisition and integration-related costs consist of costs related to the Company’s restructuring, acquisition and integration-related activities. Such costs include: 1) integration-related costs, such as system conversions and integration-related consulting and employee costs. The Company is also undertaking a long-term network optimization project designed to consolidate traffic onto network facilities operated by the Company and reduce the usage of other carriers’ networks. Integration-related costs associated with this initiative include costs to migrate traffic to lower cost circuits and to terminate existing contracts prior to their expiration; 2) severance, retention and other employee termination costs associated with acquisition and integration activities and with certain voluntary employee separations; and 3) facility-related costs, such as lease termination and asset impairments.

2.On February 1, 2016, the Company sold certain assets related to its IT services product offerings. The primary purpose of the sale was to simplify operations and provide more flexibility to invest in new capabilities and services to drive growth in the Company’s core business. The purchase price in the transaction was $29.0 million, subject to post-closing contingencies that could increase or decrease the purchase price by up to $5.0 million. The Company received $26.0 million of cash upon completion of the sale. The other $3.0 million of consideration was deposited into an escrow account to fund potential indemnification obligations. The Company recognized a pretax gain of $5.7 million and recorded a $2.0 million deferred gain for contingent consideration. The carrying amount of the IT services assets was $17.5 million, which included $11.4 million of property and equipment, $2.3 million of goodwill, $3.5 million of other intangible assets and $0.3 million of other assets and liabilities.

Total revenue of the Company’s IT services business was $11.7 million during the three months ended June 30, 2015, of which $7.9 million was Enterprise/Mid-Market revenue and $3.8 million was Small Business revenue. There was no was IT services revenue during the three months ended June 30, 2016. Total revenue of the Company’s IT services business was $23.5 million and $3.4 million during the six months ended June 30, 2015 and 2016, respectively, of which $15.8 million and $2.3 million, respectively, was Enterprise/Mid-Market revenue and $7.7 million and $1.1 million, respectively, was Small Business revenue.

3.During the six months ended June 30, 2015 and 2016, the Company redeemed and repurchased $96.1 million and $7.0 million, respectively, outstanding principal of its 8.875% Senior Notes due 2019 and recorded $7.3 million and $0.5 million, respectively, for losses on extinguishment of debt. The losses primarily consisted of premiums paid on the Company’s debt repayments, the write-off of unamortized discount on debt and the write-off of unamortized debt issuance costs.

4.In addition to our financial information presented in accordance with U.S. generally accepted accounting principles (“GAAP”), management uses certain “non-GAAP financial measures” within the meaning of the SEC Regulation G, to clarify and enhance understanding of past performance and prospects for the future. Generally, a non-GAAP financial measure is a numerical measure of a company’s operating 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. The non-GAAP financial performance measures used by management are Adjusted EBITDA and Unlevered Free Cash Flow, as discussed below.

Management believes that these non-GAAP financial performance measures reflect our ongoing business in a manner that allows for meaningful comparisons and analysis of trends in our business, as they exclude the effect of non-operational

items, such as restructuring, acquisition and integration-related costs, gain on sale of business and loss on extinguishment of debt and non-cash items, such as depreciation and amortization and stock-based compensation expense. Management believes that excluding the effects of certain non-operational and non-cash items enables investors to better understand and analyze the current period’s results and provides a better measure of comparability. Management also believes that these non-GAAP financial measures enable investors to evaluate our operating results and future prospects in the same manner as management. These non-GAAP financial measures may also facilitate comparing financial results across accounting periods and to those of peer companies.

There are limitations to using these non-GAAP financial performance measures. Adjusted EBITDA and Unlevered Free Cash Flow are not indicative of cash provided by or used in operating activities and may differ from comparable information provided by other companies. Adjusted EBITDA and Unlevered Free Cash Flow should not be considered in isolation, as an alternative to, or more meaningful than measures of financial performance determined in accordance with U.S. GAAP.

Adjusted EBITDA is defined as net income (loss) before interest expense and other, net, income tax provision (benefit), depreciation and amortization, stock-based compensation expense, impairment of goodwill and long-lived assets, restructuring, acquisition and integration-related costs, gain on sale of business and loss on extinguishment of debt. Management uses Adjusted EBITDA to evaluate the performance of our business and for strategic planning and forecasting. Adjusted EBITDA is also used in incentive compensation arrangements and is a factor in calculating debt covenants.

Unlevered Free Cash Flow is defined as net income (loss) before interest expense and other, net, income tax provision (benefit), depreciation and amortization, stock-based compensation expense, impairment of goodwill and long-lived assets, restructuring, acquisition and integration-related costs, gain on sale of business and loss on extinguishment of debt, less cash used for purchases of property and equipment. Unlevered Free Cash Flow is used by management to evaluate the performance of our business and to assess our ability to fund capital expenditures, make strategic acquisitions, service and repay debt and pay dividends.

5.The Company reports segment information along the same lines that its Chief Operating Decision Maker reviews its operating results in assessing performance and allocating resources. The Company’s Chief Operating Decision Maker is its Chief Executive Officer. The Company’s reportable segments are strategic business units that are aligned around distinct customer categories to optimize operations. The Company operates the following four reportable segments:

•Enterprise/Mid-Market. The Company’s Enterprise/Mid-Market segment provides a broad range of data, voice and managed network services to distributed multi-site business customers.

•Small Business. The Company’s Small Business segment provides a broad range of data, voice and managed network services to small, often single-site business customers.

•Carrier/Transport. The Company’s Carrier/Transport segment provides transmission capacity and other data, voice and managed network services to telecommunications carriers and large enterprises.

•Consumer. The Company’s Consumer segment provides nationwide Internet access and related value-added services to residential customers.

The Company evaluates performance of its segments based on segment gross margin. Segment gross margin includes revenues from external customers and related cost of revenues. Costs excluded from segment gross margin include selling, general and administrative expenses, depreciation and amortization, impairment of goodwill and intangible assets, restructuring, acquisition and integration-related costs, gain on sale of business, interest expense and other, net, and loss on extinguishment of debt, as they are not considered in the measurement of segment performance.

6.Represents full-time equivalents.

7.Consumer average subscribers for the three month periods is calculated by averaging the ending monthly subscribers or accounts for the four months preceding and including the end of the quarterly period.

8.Consumer ARPU represents the average monthly revenue per user (subscriber). ARPU is computed by dividing average monthly revenue for the period by the average number of subscribers for the period. Average monthly revenue used to

calculate ARPU includes recurring service revenue as well as nonrecurring revenues associated with equipment and other one-time charges associated with initiating or discontinuing services.

9.Consumer churn rate is used to measure the rate at which subscribers discontinue service on a voluntary or involuntary basis.  Churn rate is computed by dividing the average monthly number of subscribers that discontinued service during the period by the average subscribers for the period.

EX-99.2

Exhibit 99.2

[LOGO]

Q2 2016 Earnings Highlights August 9, 2016

Participants Joe Eazor Chief Executive Officer and President Louis Alterman Executive Vice President and Chief Financial Officer Trey Huffman Senior Vice President and Treasurer

2012 – 2016 Trends (!) Adjusted EBITDA is a Non-GAAP measure. See appendix for additional information on non-GAAP measures Adjusted EBITDA Margin for 2016 is based on the mid point of Guidance ranges Net Debt and Debt Service are 6/30/2016 results pro forma for $90M Sr. Note repurchase. Exited TechCare and OSDA Sold IT Services assets $(539) $442 $483 $466 $418 $392 $60 $49 $49 $39 $31 $25 $45 $65 $350 $400 $450 $500 2012 2013 2014 2015 2016 ($'s in Millions) Net Debt and Debt Service (3) $8 $(73) $(43) -$80 -$70 -$60 -$50 -$40 -$30 -$20 -$10 $0 $10 $20 2012 2013 2014 2015 2016 ($'s in Millions) Net Income/(Loss) $3 - $9 $284 $227 $213 $242 21% 18% 18% 22% 22% 0% 5% 10% 15% 20% 25% 30% $150 $170 $190 $210 $230 $250 $270 $290 $310 2012 2013 2014 2015 2016 ($'s in Millions) Adjusted EBITDA and Margin (1)(2) $210 - $220 $1,335 $1,241 $1,177 $1,097 $950 - $970 $600 $700 $800 $900 $1,000 $1,100 $1,200 $1,300 $1,400 2012 2013 2014 2015 2016 ($'s in Millions) Revenue

EarthLink’s Multi-year Journey to Leadership We are becoming stronger. We have stabilized the business, improved performance, and we are investing in and positioning for growth. Lead Grow Perform Stabilize Recent Accomplishments Reported second consecutive quarter of positive net income Acquired Boston Retail Partners, expanded retail advisory capabilities SD-WAN operational progress, funnel building, and two successful customer deployments Added Jay Ferro to management team as CIO and EVP Products Completed refinancing of revolving credit facility, increasing size from $135M to $175M and redeemed $90M 8.875% Sr. Notes

Business Unit Operations Update Operating Strategy Consumer Small Business Carrier / Transport Enterprise & Mid-Market Revenue continues to flatten Churn at new record low of 1.6% New HyperLink fiber product performing well Sold small base of subscribers for cash in ‘Q3 Demand and sales remain strong Pricing pressure for lit services, but strong interest in dark fiber Expanding automation in sales and support Strong interest in wholesale products Q2 ‘16 Results Manage for cash, protect revenue. Bookings up 24% over last year New products scheduled for Q3 launch Focus on improving retention to offset continued churn pressure Go-to-market transformation is showing results; need to accelerate the pace Sales performance improving in Direct and Partner channels Improving pipeline, acquisition costs, install intervals Leverage Fiber Routes. Invest to Drive Growth. Invest in Service capabilities. Revamp Go-to-Market motion to Drive Growth.

Q2 2016 Business Unit Revenue & Gross Margin Revenue from IT services and discontinued products contributed: $12M in Q2’15 ($8M Ent/MM and $4M Small Business) $3M in Q1’16 ($2M Ent/MM and $1M Small Business) Settlement activity for all segments was favorable in Q2 ‘16 Q2 ‘16 impact of settlements was less than in previous periods (details in footnote below) NOTES: For Q2, Q3, Q4 ’15, and Q1 and Q2 ‘16, Enterprise & Mid-Market Revenue includes settlements and one-time items of $0.5M, $0.6M, $0.2M, $2.2M, and $0.2M. For Q2, Q3, Q4 ’15, and Q1 and Q2 ‘16, Small Business revenue includes settlements of $0.3M, $0.4M, $0.5M, $0.3M and $0.2M. For Q2, Q3, Q4 ’15, and Q1 and Q2 ‘16, Carrier/Transport Revenue includes settlements and adjustments of $0.2M, $0.3M, $0.2M, $0.6M and $0.3M. Consumer Revenue includes revenue adjustments of $0.6M in Q2 ’15 and $0.1M in Q3 ‘15M. For Q2, Q3, Q4 ’15, and Q1 and Q2 ‘16, Cost of Revenue for the business segments includes favorable adjustments and settlements of $3.1M, $4.1M, $2.2M, $3.9M and $3.7M. Consumer Cost of Revenue includes unfavorable adjustments of $0.5M in Q2 ’15 and $0.2M in Q3 ‘15. Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Revenue Enterprise & Mid-Market $114.4 $110.1 $106.2 $104.7 $97.6 Small Business 79.0 72.9 66.5 62.1 57.3 Carrier/Transport 34.1 34.2 34.3 36.1 35.1 Consumer 56.1 53.8 53.3 51.4 50.4 Total Revenues $283.7 $270.9 $260.2 $254.3 $240.4 Gross Margin Enterprise & Mid-Market $58.2 $55.5 $51.8 $53.1 $47.1 Small Business 43.9 38.8 33.6 32.4 30.1 Carrier/Transport 18.7 19.4 18.4 20.6 19.8 Consumer 35.9 34.9 34.6 32.9 32.5 Total Gross Margin $156.6 $148.5 $138.1 $139.0 $129.5 Gross Margin (%) Enterprise & Mid-Market 50.8% 50.4% 48.8% 50.7% 48.3% Small Business 55.6% 53.2% 50.5% 52.2% 52.4% Carrier/Transport 54.8% 56.7% 53.9% 57.1% 56.5% Consumer 63.9% 64.9% 64.9% 64.0% 64.4% Total Gross Margin (%) 55.2% 54.8% 53.1% 54.7% 53.9% Business Unit

Q2 2016 Operating & Financial Results Adjusted EBITDA, Adjusted EBITDA Margin and Unlevered Free Cash Flow are Non-GAAP measures. See appendix for additional information on non-GAAP measures. Fully Diluted Weighted Average Shares Gross margin decreased about $10M from Q1, ~$4M due to ITS sale and higher settlement activity in Q1 Gross margin rate remains ~54% SG&A Expenses 18% lower than Q2 ’15, ~30% due to ITS sale EBITDA margin ~24%, near recent high and higher year-over-year Net Income reflects lower amortization and interest expense We produced $40M in Unlevered Free Cash Flow in the quarter $ Millions Q2 '15 Q1 '16 Q2 '16 Var to Q1 '16 Total Revenue 283.7 $ 254.3 $ 240.4 $ (13.9) $ Cost of Revenue 127.0 115.2 110.9 (4.3) Total Gross Margin 156.6 $ 139.1 $ 129.5 $ (9.6) $ Gross Margin % 55.2% 54.7% 53.9% -0.8% Selling, G&A Expenses 94.3 81.4 76.9 (4.5) Adjusted EBITDA (1) 66.1 $ 61.7 $ 56.6 $ (5.1) $ Adjusted EBITDA Margin % (1) 23.3% 24.3% 23.6% -0.7% Net Income/(Loss) (9.9) $ 7.9 $ 4.1 $ (3.8) $ Shares Outstanding (2) 103 108 108 - Earnings Per Share (0.10) $ 0.07 $ 0.04 $ (0.03) $ Capital Expenditures 20.9 18.6 16.6 (2.0) Unlevered Free Cash Flow (1) 45.2 43.2 40.0 (3.2)

Q2 2016 Balance Sheet and Cash Flow We renegotiated our credit facility in Q2 ’16 Expanded facility to $175M Extended maturity Increased flexibility After the end of the quarter, repurchased $90M in 8.875% Sr. Notes We have materially strengthened the balance sheet Including recent note redemption: Gross debt $122M lower than Q2 ‘15 Net debt $80M lower than Q2 15 Annual Debt Service down $11M since Q2 ‘15 and $18M since Q4 ’14 Total debt/Adj. EBITDA ratio ~2.0x On June 30, 2016, the Company entered into a $175M credit facility, replacing the $135M credit facility signed in 2013. Excludes capital leases. Adjusted EBITDA is a Non-GAAP measure. See appendix for additional information on non-GAAP measures. The Pro Forma figures incorporate the effects of the Company’s redemption of $90M face value of its 8.875% Sr. Notes on August 4, 2016. (figures in millions) Q2 '15 Q1 '16 Q2 '16 Q2 '16 Pro Forma (4) EarthLink Cash 87 $ 61 $ 77 $ 45 $ 8 7/8% Senior Notes due 2019 204 167 167 77 (Callable at 104.4. Next call in May at 102.2) 7 3/8% Senior Secured Notes due 2020 300 300 300 300 (First call in June at 105.5) $175 M Credit Facility - (L + 325) (1) 55 - - 60 Total Debt (2) 559 467 467 437 Net Debt 472 $ 406 $ 390 $ 392 $ TTM Adjusted EBITDA (3) 239 $ 241 $ 234 $ 234 $ Total Debt/Adj. EBITDA (3) 2.3x 1.9x 2.0x 1.9x Net Debt/Adj. EBITDA (3) 2.0x 1.7x 1.7x 1.7x Annual Run Rate Debt Service 42 $ 37 $ 37 $ 31 $ TTM Adjusted EBITDA (3) /Annual Debt Svc. 5.7x 6.5x 6.3x 7.5x Cash Flow Summary (figures in millions) Q2 '16 Beginning Cash 61 $ Adjusted EBITDA (3) 57 Capital Expenditures (17) Integration & Restructuring (5) Interest Payments (19) Dividends (5) Other/Changes in Net Working Capital 4 Ending Cash 77 $

Guidance as of February 2016 Guidance as of May 2016 Revised guidance as of August 2016 $ Millions Low High Low High Low High Revenue $950 $975 $950 $975 $950 $970 Adjusted EBITDA(1) $205 $220 $205 $220 $210 $220 Capital Expenditures $85 $105 $85 $105 $85 $95 Net Income/(Loss) $(7) $1 $(1) $5 $3 $9 2016 Full Year Guidance Adjusted EBITDA is a Non-GAAP measure. See appendix for additional information on non-GAAP measures

[LOGO]

EarthLink Customers Enterprise & Mid-Market Retailers Restaurants Financial institutions Healthcare providers Professional service firms Federal and local governments We are experts in managing networks for the retail and service industries.

EarthLink Non-GAAP Measures Adjusted EBITDA is defined as net income (loss) before interest expense and other, net, income taxes, depreciation and amortization, stock-based compensation expense, impairment of goodwill and long-lived assets, restructuring, acquisition and integration-related costs, gain on sale of business and loss on extinguishment of debt. Unlevered Free Cash Flow is defined as net income (loss) before interest expense and other, net, income taxes, depreciation and amortization, stock-based compensation expense, impairment of goodwill and long-lived assets, restructuring, acquisition and integration-related costs, gain on sale of business and loss on extinguishment of debt, less cash used for purchases of property and equipment. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by total revenue. Adjusted EBITDA, Unlevered Free Cash Flow and Adjusted EBITDA Margin are non-GAAP measures and are not determined in accordance with U.S. generally accepted accounting principles. These non-GAAP financial measures are commonly used in the industry and are presented because management believes they provide relevant and useful information to investors. Management uses these non-GAAP financial measures to evaluate the performance of its business and determine bonuses. Management believes that excluding the effects of certain non-cash and non-operating items enables investors to better understand and analyze the current period’s results and provides a better measure of comparability. There are limitations to using these non-GAAP financial measures. Adjusted EBITDA, Unlevered Free Cash Flow and Adjusted EBITDA Margin are not indicative of cash provided or used by operating activities and may differ from comparable information provided by other companies. Adjusted EBITDA, Unlevered Free Cash Flow and Adjusted EBITDA Margin should not be considered in isolation, as an alternative to, or more meaningful than measures of financial performance determined in accordance with U.S. GAAP. Non-GAAP Information

2016 Guidance Non-GAAP Reconciliation Year Ending December 31, 2016 Net Loss $3 - $9 Interest expense and other, net 38 - 39 Gain on sale of assets (5) Income tax expense/(benefit) 1 Depreciation and amortization 137 - 138 Stock-based compensation expense 17 Restructuring, acquisition and integration-related costs 15 - 16 Loss on extinguishment of debt 4 - 5 Adjusted EBITDA $210 - $220 EarthLink Holdings Corp. Reconciliation of Adjusted EBITDA to Net Income (in millions)

Historical Non-GAAP Reconciliations June 30, March 31, June 30, December 31, December 31, December 31, December 31, 2015 2016 2016 2012 2013 2014 2015 Net income (loss) (9,922) $ 7,867 $ 4,115 $ 7,520 $ (538,827) $ (72,752) $ (43,210) $ Interest expense and other, net 14,112 11,109 10,824 63,416 58,606 56,261 50,972 Income tax provision (benefit) 410 951 483 (1,331) 211,231 (4,744) 2,730 Depreciation and amortization 47,723 40,199 33,571 183,165 183,114 186,872 188,315 Stock-based compensation expense 3,814 4,086 4,075 10,462 13,275 12,600 14,594 Impairment of goodwill and long-lived assets - - - - 255,599 14,334 - Restructuring, acquisition and integration-related costs 3,978 3,013 3,279 18,244 40,030 20,088 19,320 Gain on sale of business - (5,727) - - - - - Loss on extinguishment of debt 5,966 232 226 - 2,080 - 9,734 Loss from discontinued operations, net of tax - - - 2,418 1,961 381 - Adjusted EBITDA 66,081 $ 61,730 $ 56,573 $ 283,894 $ 227,069 $ 213,040 $ 242,455 $ Total Revenue 283,664 $ 254,262 $ 240,357 $ 1,335,135 $ 1,240,606 $ 1,176,895 $ 1,097,252 $ Adjusted EBITDA Margin 23.3% 24.3% 23.5% 21.3% 18.3% 18.1% 22.1% Three Months Ended Twelve Months Ended EARTHLINK HOLDINGS CORP. Reconciliation of Net income (Loss) to Adjusted EBITDA (in thousands)

Additional Non-GAAP Reconciliations June 30, March 31, June 30, 2015 2016 2016 Net income (loss) (9,922) $ 7,867 $ 4,115 $ Interest expense and other, net 14,112 11,109 10,824 Income tax provision 410 951 483 Depreciation and amortization 47,723 40,199 33,571 Stock-based compensation expense 3,814 4,086 4,075 Restructuring, acquisition and integration-related costs 3,978 3,013 3,279 Gain on sale of business - (5,727) - Loss on extinguishment of debt 5,966 232 226 Purchases of property and equipment (20,873) (18,573) (16,635) Unlevered Free Cash Flow 45,208 $ 43,157 $ 39,938 $ June 30, March 31, June 30, 2015 2016 2016 Net cash provided by operating activities 33,262 $ 10,630 $ 40,308 $ Income tax provision 410 951 483 Non-cash income taxes (196) (298) (224) Interest expense and other, net 14,112 11,109 10,824 Amortization of debt discount and issuance costs (994) (859) (861) Restructuring, acquisition and integration-related costs 3,978 3,013 3,279 Changes in operating assets and liabilities 16,255 36,589 2,677 Purchases of property and equipment (20,873) (18,573) (16,635) Other, net (746) 595 87 Unlevered Free Cash Flow 45,208 $ 43,157 $ 39,938 $ Net cash (used in) provided by investing activities (20,873) 7,427 (16,635) Net cash used in financing activities (33,080) (48,640) (7,735) EARTHLINK HOLDINGS CORP. Reconciliation of Net Income (Loss) to Unlevered Free Cash Flow (in thousands) Three Months Ended Three Months Ended EARTHLINK HOLDINGS CORP Reconciliation of Net Cash Provided by Operating Activities to Unlevered Free Cash Flow (in thousands)

Cautionary Information Regarding Forward Looking Statements This presentation includes “forward-looking” statements (rather than historical facts) that are subject to risks and uncertainties that could cause actual results to differ materially from those described. Although we believe that the expectations expressed in these forward-looking statements are reasonable, we cannot promise that our expectations will turn out to be correct. Our actual results could be materially different from and worse than our expectations. With respect to such forward-looking statements, we seek the protections afforded by the Private Securities Litigation Reform Act of 1995. These risks include, without limitation: (1) that we may not be able to execute our strategy to successfully transition to a leading managed network, security and cloud services provider, which could adversely affect our results of operations and cash flows; (2) that we may not be able to increase revenues from our growth products and services to offset declining revenues from our traditional products and services, which could adversely affect our results of operations and cash flows; (3) that if we are unable to adapt to changes in technology and customer demands, we may not remain competitive, and our revenues and operating results could suffer; (4) that failure to achieve operating efficiencies and otherwise reduce costs would adversely affect our results of operations and cash flows; (5) that we may have to undertake further restructuring plans that would require additional charges; (6) that we may be unable to successfully divest non-strategic products, which could adversely affect our results of operations; (7) that acquisitions we complete could result in operating difficulties, dilution, increased liabilities, diversion of management attention and other adverse consequences, which could adversely affect our results of operations; (8) that we face significant competition in our business markets, which could adversely affect our results of operations; (9) that failure to retain existing customers could adversely affect our results of operations and cash flows; (10) that decisions by legislative or regulatory authorities, including the Federal Communications Commission, relieving incumbent carriers of certain regulatory requirements, and possible further deregulation in the future, may restrict our ability to provide services and may increase the costs we incur to provide these services; (11) that if we are unable to interconnect with AT&T, Verizon and other incumbent carriers on acceptable terms, our ability to offer competitively priced local telephone services will be adversely affected; (12) that the continued decline in switched access and reciprocal compensation revenue will adversely affect our results of operations; (13) that failure to obtain and maintain necessary permits and rights-of-way could interfere with our network infrastructure and operations; (14) that if our larger carrier customers terminate the service they receive from us, our wholesale revenue and results of operations could be adversely affected; (15) that we obtain a majority of our network equipment and software from a limited number of third-party suppliers; (16) that work stoppages experienced by other communications companies on whom we rely for service could adversely impact our ability to provision and service our customers; (17) that our commercial and alliance arrangements may not be renewed or may not generate expected benefits, which could adversely affect our results of operations; (18) that our consumer business is dependent on the availability of third-party network service providers; (19) that we face significant competition in the Internet access industry that could reduce our profitability; (20) that the continued decline of our consumer access subscribers will adversely affect our results of operations; (21) that lack of regulation governing wholesale Internet service providers could adversely affect our operations; (22) that cyber security breaches could harm our business; (23) that privacy concerns relating to our business could damage our reputation and deter current and potential users from using our services; (24) that interruption or failure of our network, information systems or other technologies could impair our ability to provide our services, which could damage our reputation and harm our operating results; (25) that our business depends on effective business support systems and processes; (26) that if we, or other industry participants, are unable to successfully defend against disputes or legal actions, we could face substantial liabilities or suffer harm to our financial and operational prospects; (27) that we may be accused of infringing upon the intellectual property rights of third parties, which is costly to defend and could limit our ability to use certain technologies in the future; (28) that we may not be able to protect our intellectual property; (29) that we may be unable to hire and retain sufficient qualified personnel, and the loss of any of our key executive officers could adversely affect us; (30) that unfavorable general economic conditions could harm our business; (31) that government regulations could adversely affect our business or force us to change our business practices; (32) that our business may suffer if third parties are unable to provide services or terminate their relationships with us; (33) that we may be required to recognize impairment charges on our goodwill and other intangible assets, which would adversely affect our results of operations and financial position; (34) that we may have exposure to greater than anticipated tax liabilities and we may be limited in the use of our net operating losses and certain other tax attributes in the future; (35) that our indebtedness could adversely affect our financial health and limit our ability to react to changes in our business and industry; (36) that we may require substantial capital to support business growth, and this capital may not be available to us on acceptable terms, or at all; (37) that our debt agreements include restrictive covenants, and failure to comply with these covenants could trigger acceleration of payment of outstanding indebtedness; (38) that we may reduce, or cease payment of, quarterly cash dividends; (39) that our stock price may be volatile; (40) that provisions of our certificate of incorporation, bylaws and other elements of our capital structure could limit our share price and delay a change of control of the company; and (41) that our bylaws designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ flexibility in obtaining a judicial forum for disputes with us or our directors, officers or employees. These risks and uncertainties, as well as other risks and uncertainties that could cause our actual results to differ significantly from management’s expectations, 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 Annual Report on Form 10-K and our Quarterly Report on Form 10-Q..

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