Windstream (WIN) Gives Final Approval for REIT Spinoff, Declares Prorated Dividend, Affirms Guidance

Windstream Holdings Inc. (Nasdaq: WIN) announced today the company's board of directors has given final approval, subject to certain terms and conditions, for the tax-free spinoff of select telecommunications network assets into Communications Sales & Leasing, Inc. (CS&L), which will become an independent publicly traded real estate investment trust (REIT). In addition, the company's board of directors declared a prorated cash dividend subject to the closing of the spinoff.

"The board's final approval of this innovative strategic transaction significantly advances our commitment to deliver value for shareholders," said Tony Thomas, president and chief executive officer of Windstream. "Windstream will be a stronger company with less debt and increased capacity to invest in our network to provide advanced communication services to customers. CS&L will provide an attractive yield to shareholders with the ability to grow and diversify."

Windstream expects to distribute approximately 80.1 percent of CS&L shares on April 24, 2015, to Windstream shareholders of record as of 5 p.m. EDT on April 10, 2015. The distribution is conditioned upon satisfaction of certain customary closing conditions, including financing of the transaction. Windstream intends to use the approximately 19.9 percent retained CS&L shares opportunistically, subject to market conditions, during a 12-month period following the spinoff to reduce debt.

In addition, conditioned on the closing of the spinoff, Windstream will make a cash distribution equivalent to a prorated $.25 quarterly dividend to Windstream shareholders of record as of 5 p.m. EDT on April 10, 2015. Assuming the spinoff closes on April 24, 2015, the cash dividend would be $.0659, and the company would expect to make the payment on April 24, 2015.

Following the spinoff, Windstream will continue to be listed on Nasdaq under the symbol "WIN," while CS&L expects to list its common stock on Nasdaq under the symbol "CSAL." Nasdaq has approved the listing of CS&L's common stock, subject to official notice of issuance.

It is expected that between the record date of April 10, 2015, up to the distribution date, the Windstream stock will trade with "due bills" allowing the Windstream common stock to trade with an entitlement to receive shares of CS&L common stock and the prorated cash dividend on the distribution date. Any holder of Windstream stock who sells shares of Windstream on or before the distribution date may be selling the entitlement to receive shares of the CS&L common stock in the spinoff and the prorated cash dividend. Holders of Windstream common stock are encouraged to consult with their financial advisers regarding the specific implications of selling Windstream common stock on or before the distribution date.

CS&L Shareholder Distribution & Dividend Practice

Upon close of the transaction, Windstream shareholders will retain their Windstream shares and receive one share of CS&L for every five shares of Windstream held. The spinoff is expected to be a tax-free distribution to Windstream shareholders and requires no action by shareholders. Windstream shareholders will receive cash in lieu of fractional shares for amounts of less than one CS&L share. CS&L expects to pay an annual dividend of $2.40 per share.

Windstream Reverse Stock Split & Dividend Practice

Immediately following the distribution of CS&L shares, Windstream will effect a 1-for-6 reverse stock split. Windstream expects to pay an annual dividend of $.60 per share after giving effect to the stock split.

Windstream Financial Outlook for 2015

Windstream also today affirmed its financial guidance for 2015 as provided on Feb. 24, 2015.

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