Form 8-K Lumos Networks Corp. For: Aug 05

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August 6, 2015 6:10 AM EDT

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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 5, 2015

Lumos Networks Corp.

(Exact Name of Registrant as Specified in Charter)

Delaware

001-35180

80-0697274

(State or Other Jurisdiction

of Incorporation)

(Commission
File Number)

(IRS Employer

Identification No.)

One Lumos Plaza, P.O. Box 1068, Waynesboro, Virginia 22980

(Address of Principal Executive Offices) (Zip Code)

(540) 946-2000

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

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 (see General Instruction A.2. below):

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

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

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

¨	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 5, 2015, Lumos Networks Corp. (the “Company”) issued a press release (the “Earnings Release”) announcing its results of operations and financial condition for the three and six months ended June 30, 2015. A copy of the Earnings Release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, 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.

On August 5, 2015, the Company disclosed in the Earnings Release that it has entered into a definitive agreement providing for an investment by affiliates of Pamplona Capital Management LLC (“Pamplona”) in the Company. In connection with the investment, affiliates of Pamplona will invest $150 million in cash in debt securities to be issued by the Company and will be granted warrants to acquire up to 5.5 million shares of the Company’s common stock.

A copy of the Earnings Release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference. In addition, a copy of the materials that the Company will present in connection with upcoming presentations to investors is furnished 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 in this Current Report on Form 8-K, including Exhibit 99.2, 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 liabilities 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. The information in this Report will not be deemed as an admission as to the materiality of any information required to be disclosed solely to satisfy the requirements of Regulation FD.

Item 9.01

Financial Statements and Exhibits.

(d)

Exhibits


Exhibit No.		Description

99.1		Press release issued by Lumos Networks Corp. dated August 5, 2015 (furnished herein pursuant to Items 2.02 and 7.01)

99.2		Company Presentation – Second Quarter 2015 Update (furnished herein pursuant to Item 7.01)

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.

Date: August 5, 2015


LUMOS NETWORKS CORP.

By:		/s/ Johan G. Broekhuysen
		Johan G. Broekhuysen Executive Vice President, Chief Financial Officer and Chief Accounting Officer

EXHIBIT INDEX


Exhibit No.		Description

99.1		Press release issued by Lumos Networks Corp. dated August 5, 2015 (furnished herein pursuant to Items 2.02 and 7.01)

99.2		Company Presentation – Second Quarter 2015 Update (furnished herein pursuant to Item 7.01)

Exhibit 99.1

Contact:

Will Davis

Vice President of Investor Relations and Chief of Staff

Phone: 917-519-6994

Email: [email protected]

Lumos Networks Corp. Reports Second Quarter 2015 Results

Announces $150 million Investment from Pamplona Capital Management

Creates Strategic Partnership to Accelerate the Transformation of Lumos Networks to a Pure-Play Fiber Bandwidth Infrastructure Company

Delivers 2Q15 Revenue of $51 million and Adjusted EBITDA of $22.7 Million

Reiterates 2015 Revenue and Adjusted EBITDA Guidance of Approximately $202 Million and Approximately $92 Million, respectively

2Q15 Fiber to the Cell (“FTTC”) Revenue Reaches $6.8 million, up 34% Year-over-Year

Raises 2015 Enterprise Growth Target to 8-9% from 6% after posting 8.2% 2Q15 Enterprise growth

WAYNESBORO, VA – August 5, 2015 – Lumos Networks Corp. (“Lumos Networks”, “Lumos” or the “Company”) (Nasdaq: LMOS), a leading fiber-based service provider of data, voice and IP-based telecommunication services in the Mid-Atlantic region, today announced entry into definitive agreements providing for an investment by affiliates of Pamplona Capital Management (“Pamplona”) in the Company, forming a strategic financial partnership between the parties. Pamplona is a leading global private equity firm with offices in New York and London. Since its inception in 2005, Pamplona has raised private equity funds with over $8 billion of capital commitments and invests across a wide range of industry sectors and geographies.

The closing of the investment is scheduled to occur before the market opens on August 6, 2015, upon which affiliates of Pamplona will invest $150 million in debt securities of the Company and warrants to acquire up to 5.5 million shares of the Company’s common stock. The Company intends to allocate up to $50 million of the investment proceeds to pay down its existing senior bank debt and costs related to the transaction with the remainder of approximately $100 million expected to be allocated towards pursuing potential growth opportunities, both organic and inorganic, in order to accelerate the Company’s strategic transformation to a pure-play fiber bandwidth infrastructure company. At the closing, the Company will appoint William Pruellage, a Partner of Pamplona based in New York, and Peter Aquino, former Executive Chairman of Primus Telecommunications Group and former President and CEO of RCN Corporation, as members of the Lumos Board of Directors in accordance with the terms of Pamplona’s investment which entitle Pamplona to nominate two Board designees. No other changes to the Lumos Board of Directors are contemplated at this time.

Interest payable on the notes to be issued to Pamplona will accrue at an annual rate of 8%, paid quarterly either in cash or in kind. The warrants to be issued will entitle Pamplona to purchase up to 5.5 million shares of the Company’s common stock by net share settlement at an exercise price equal to $13.99, the closing bid price per share of the Company’s common stock prior to the announcement of the transaction on August 5, 2015. Further detail regarding the terms of the strategic investment will be disclosed in a Current Report on Form 8-K to be filed by the Company with the SEC.

“We are excited to announce our strategic financial relationship with Pamplona as it serves as validation of our operating strategy and provides significant capital runway needed to accelerate our transformation into a pure-play fiber bandwidth infrastructure provider,” said Timothy G. Biltz, President and CEO of Lumos Networks. “We are in the midst of a generational demand curve for bandwidth and our industry is aggressively consolidating. This partnership provides the capital required to capitalize on these significant opportunities. Additionally, the investment will result in adding two strong members to our Board who we believe will significantly add to our already robust Board dynamic, including by the addition of Peter Aquino who brings relevant operational and capital markets industry expertise to our Board that we believe will be invaluable in helping to accelerate our transformation and the enhancement of value for our shareholders.”

“Pamplona is thrilled to announce this strategic investment in Lumos Networks,” said William Pruellage. “We see a great opportunity for Lumos to become a significant platform company within the fiber and co-location sectors and have strong confidence that the current management team will successfully execute this transformation. We believe that our interests are very clearly aligned with those of the current shareholder base and the Lumos leadership team.”

Wells Fargo Securities, LLC acted as exclusive financial advisor to Lumos Networks and Troutman Sanders LLP provided legal representation on the transaction. RBC Capital Markets has also provided investment banking services to Lumos Networks. Jefferies LLC acted as the exclusive financial advisor to Pamplona and Skadden, Arps, Slate Meagher & Flom LLP provided legal representation.

Second Quarter 2015 Results

Total revenue in the second quarter of 2015 grew nearly 1% on a sequential basis and 1.6% from the prior year period. Total Adjusted EBITDA reached nearly $22.7 million, up nearly 1% from the first quarter of 2015 and essentially flat from the prior year period. Total Data segment revenue grew over 5% year-over-year and constituted 55% of total revenue, up from 53% in the prior year period. In aggregate, FTTC and Enterprise revenue grew nearly 17% year-over-year and constituted 64% of total data revenue, up from 58% in the prior year period.

The Company generated operating income of $9.3 million and $17.7 million for the three and six months ended June 30, 2015, respectively. Net income attributable to Lumos Networks Corp. was $3.3 million, or 14 cents per diluted share, for the second quarter of 2015 and $6.1 million, or 26 cents per diluted share, for the six months ended June 20, 2015.

“Our results in the second quarter validate that our transformation into a fiber bandwidth infrastructure provider is progressing well,” said Timothy G. Biltz, President and CEO of Lumos Networks. “We are investing in valuable fiber infrastructure, supported by long-term contracts from large Enterprise and carrier customers. FTTC revenue is on pace to achieve our target of $29 million in 2015, up 45% year-over-year. We now expect 2015 Enterprise revenue of $46 million, up 8-9% from 2014 and ahead of our prior guidance of 6% growth. Due to higher than expected TDM churn from carrier grooming, we reduce our 2015 target for total data revenue slightly from $116 million to $115 million. This implies 2015 overall data growth of 8%, which is among the industry’s fastest organic data growth rates.”

“We remain focused on completing the vast majority of our transformational network expansion project of approximately 665 miles into the Richmond and Norfolk markets by the end of 2015. This network, underpinned by a 257 FTTC site build with a major US wireless carrier, increases our Enterprise addressable market by approximately 60%, or $135 million, and significantly de-risks our business model in 2016.”

Second Quarter 2015 Highlights

•

The Company ended 2Q15 with 976 unique FTTC sites, up 69 sequentially and an increase of 45% from the prior year. Additionally, Lumos ended the second quarter with 1,307 total FTTC connections, which is in-line with our target, up 49% from the prior year. In the last year, Lumos installed 431 FTTC connections.

•

In the second quarter of 2015, the Company renewed Enterprise accounts totaling $255,000 in monthly recurring charges (“MRC”), up 60% from the prior year period. In the last six quarters, Lumos has renewed approximately 27% of the total Enterprise monthly revenue stream on long-term contracts of 3-4 years. In the first half of 2015, the Company renewed Enterprise accounts totaling nearly $18.5 million in total contract value, up 60% from the first half of 2014.

•

Lumos Networks added 145 route miles of fiber in the quarter, all of which are Company-owned, ending the quarter with 8,100 total route miles. Lumos added 44 Enterprise lit buildings in the quarter and 97 in the first half of 2015, up over 70% from the second half of 2014.

Business Outlook

For the full year 2015, the Company reiterates its financial guidance for revenue of approximately $202 million, Adjusted EBITDA of approximately $92 million and capital expenditures of approximately $112 million.

Please see the schedules accompanying this release for additional financial guidance, including reconciliations of non-GAAP measures to GAAP results.

Statements made are based on management’s current expectations. These statements are forward-looking and actual results may differ materially. Please see “Special Note from the Company Regarding Forward-Looking Statements.”

Conference Call

A conference call and simultaneous webcast, hosted by Timothy G. Biltz, CEO, Johan Broekhuysen, CFO, and Will Davis, Vice President of Investor Relations and Chief of Staff, to discuss today’s announcement and to review these financial and operational results and financial guidance will be held at 8:30 A.M. (ET) on August 6, 2015.

The webcast may be accessed via the Internet at http://ir.lumosnetworks.com/ and the live call (“Lumos Networks First Quarter Earnings Conference Call”) may be accessed with the following numbers:

Domestic: 1-877-510-3772

International: 1-412-902-4135

Canada: 1-855-669-9657

The conference call will be archived and available for replay through August 21, 2015 and may be accessed with the following numbers:

Domestic: 1-877-344-7529

International: 1-412-317-0088

Canada: 1-855-669-9658

Replay pass codes: Conference ID: 10069524

The webcast will also be archived and the replay may be accessed at http://ir.lumosnetworks.com/.

About Lumos Networks

Lumos Networks is a leading fiber-based service provider in the Mid-Atlantic region serving Carrier, Enterprise and Data Center customers, offering end-to-end connectivity in 24 markets in Virginia, Pennsylvania, West Virginia, Maryland, Ohio and Kentucky. With a fiber network of 8,100 fiber route miles and over 369,000 total fiber strand miles, Lumos Networks connects 976 unique Fiber to the Cell sites, 1,307 total FTTC connections, 32 data centers, including 7 company owned co-location facilities, 1,574 on-net buildings and approximately 2,560 total on-net locations. In 2014, Lumos Networks generated over $106 million in data revenue and nearly $52 million in Adjusted EBITDA over our fiber network. Detailed information about Lumos Networks is available at www.lumosnetworks.com.

About Pamplona Capital Management

Pamplona Capital Management is a New York and London based specialist investment manager established in 2005 that provides an alternative investment platform across private equity, fund of hedge funds and single manager hedge fund investments. Pamplona Capital Management manages over USD 8 billion in assets across a number of funds for a variety of clients including public pension funds, international wealth managers, multinational corporations, family offices and funds of hedge funds. Pamplona is currently managing its fourth private equity fund, Pamplona Capital Partners IV, L.P., which was raised in 2014. Pamplona invests long-term capital across the capital structure of its portfolio companies in both public and private market situations. Please see http://pamplonafunds.com for further information.

Pamplona Media Enquiries:

Temple Bar Advisory

Ed Orlebar

Phone: +44 20 7002 1510 / +44 773 872 4630

E-Mail: [email protected]

Non-GAAP Measures

Adjusted EBITDA is defined as net income attributable to Lumos Networks before interest, income taxes, depreciation and amortization, accretion of asset retirement obligations, net income or loss attributable to non-controlling interests, other income or expenses, equity-based compensation charges, acquisition-related charges, amortization of actuarial losses on retirement plans, employee separation charges, restructuring-related charges, gain or loss on settlements and gain or loss on interest rate swap derivatives. Adjusted EBITDA margin is calculated as the ratio of Adjusted EBITDA, as defined, to operating revenues.

Adjusted EBITDA is a non-GAAP financial performance measure. It should not be considered in isolation or as an alternative to measures determined in accordance with GAAP. Please refer to the schedules herein and our SEC filings for a reconciliation of these non-GAAP financial performance measures to the most comparable measures reported in accordance with GAAP and for a discussion of the presentation, comparability and use of such financial performance measures.

SPECIAL NOTE FROM THE COMPANY REGARDING FORWARD-LOOKING STATEMENTS

Any statements contained in this presentation that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. The words “anticipates,” “believes,” “expects,” “intends,” “plans,” “estimates,” “targets,” “projects,” “should,” “may,” “will,” “scheduled” and similar words and expressions are intended to identify forward-looking statements. Such forward-looking statements reflect, among other things, our current expectations, plans and strategies, and anticipated financial results, all of which are subject to known and unknown risks, uncertainties and factors that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. Many of these risks are beyond our ability to control or predict. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the date they are made. We do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise. Important factors with respect to any such forward-looking statements, including certain risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, include, but are not limited to: rapid development and intense competition in the telecommunications and high speed data transport industry; our ability to offset expected revenue declines in legacy voice and access products related to the recent regulatory actions, wireless substitution, technology changes and other factors; our ability to effectively allocate capital and implement our “edge-out” expansion plans in a timely manner; our ability to complete customer installations in a timely manner; adverse economic conditions; operating and financial restrictions imposed by our senior credit facility; our cash and capital requirements; declining prices for our services; our ability to maintain and enhance our network; the potential to experience a high rate of customer turnover; federal and state regulatory fees, requirements and developments; our reliance on certain suppliers and vendors; and other unforeseen difficulties that may occur. These risks and uncertainties are not intended to represent a complete list of all risks and uncertainties inherent in our business, and should be read in conjunction with the more detailed cautionary statements and risk factors included in our SEC filings, including our Annual Report filed on Form 10-K.

Exhibits:

•

Condensed Consolidated Balance Sheets

•

Condensed Consolidated Statements of Income

•

Condensed Consolidated Statements of Cash Flows

•

Summary of Operating Results, Customer and Network Statistics

•

Reconciliation of Net Income Attributable to Lumos Networks Corp. to Adjusted EBITDA

•

Business Outlook

Lumos Networks Corp.

Condensed Consolidated Balance Sheets


	June 30, 2015		December 31, 2014
(In thousands)
ASSETS
Current Assets
Cash and cash equivalents	$	7,200	$	14,140
Marketable securities		22,046		16,870
Restricted cash ¹		2,634		4,208
Accounts receivable, net		21,442		22,925
Other receivables		2,409		2,113
Income tax receivable		175		172
Prepaid expenses and other		5,487		4,321
Deferred income taxes		5,418		5,601

Total Current Assets		66,811		70,350

Securities and investments		1,092		914
Property, plant and equipment, net		462,198		429,451
Other Assets
Goodwill		100,297		100,297
Other intangibles, net		12,536		15,884
Deferred charges and other assets		7,059		5,718

Total Other Assets		119,892		121,899

Total Assets	$	649,993	$	622,614

LIABILITIES AND EQUITY
Current Liabilities
Current portion of long-term debt	$	10,462	$	10,227
Accounts payable		16,020		20,257
Dividends payable		—		3,152
Advance billings and customer deposits		13,772		14,029
Accrued compensation		1,409		1,516
Accrued operating taxes		4,734		4,618
Other accrued liabilities		4,630		4,223

Total Current Liabilities		51,027		58,022

Long-Term Liabilities
Long-term debt, excluding current portion		384,732		363,156
Retirement benefits		17,441		18,257
Deferred income taxes		92,117		87,864
Other long-term liabilities		1,865		1,746
Income tax payable		89		110

Total Long-term Liabilities		496,244		471,133

Stockholders’ Equity		101,862		92,677

Noncontrolling Interests		860		782

Total Equity		102,722		93,459

Total Liabilities and Equity	$	649,993	$	622,614

During 2010, the Company received a Federal stimulus award providing 50% funding to bring broadband services and infrastructure to Alleghany County, Virginia. The Company was required to deposit 100% of its grant ($8.1 million) into pledged accounts in advance of any reimbursements, to be drawn down ratably following reimbursement approvals.

Lumos Networks Corp.

Condensed Consolidated Statements of Income


	Three months ended June 30,						Six months ended June 30,
(In thousands, except per share amounts)	2015			2014			2015			2014
Operating Revenues	$	50,953		$	50,165		$	101,448		$	100,255
Operating Expenses
Network access costs		9,912			10,190			19,624			20,904
Selling, general and administrative ¹		20,269			18,487			40,103			36,419
Depreciation and amortization		11,441			11,210			23,309			21,869
Accretion of asset retirement obligations		38			30			72			57
Restructuring charges		4			—			637			—

Total Operating Expenses		41,664			39,917			83,745			79,249

Operating Income		9,289			10,248			17,703			21,006
Other Income (Expenses)
Interest expense		(3,719	)		(3,812	)		(7,205	)		(7,786	)
Gain (loss) on interest rate swap derivatives		165			(16	)		247			93
Other income (expenses), net		96			170			(147	)		350

Income Before Income Tax Expense		5,831			6,590			10,598			13,663
Income Tax Expense		2,438			2,711			4,447			5,689

Net Income		3,393			3,879			6,151			7,974
Net Income Attributable to Noncontrolling Interests		(44	)		(33	)		(78	)		(66	)

Net Income Attributable to Lumos Networks Corp.	$	3,349		$	3,846		$	6,073		$	7,908

Basic and Diluted Earnings per Common Share Attributable to Lumos Networks Corp. Stockholders:
Earnings per share—basic	$	0.15		$	0.17		$	0.27		$	0.36
Earnings per share—diluted	$	0.14		$	0.17		$	0.26		$	0.35
Cash Dividends Declared per Share—Common Stock	$	—		$	0.14		$	—		$	0.28

Includes equity-based compensation expense related to all of the Company’s share-based awards and the Company’s 401(k) matching contributions of $1.6 million and $1.2 million for the three months ended June 30, 2015 and 2014, respectively, and $2.8 million and $2.0 million for the six months ended June 30, 2015 and 2014, respectively.

Lumos Networks Corp.

Condensed Consolidated Statements of Cash Flows


	Six Months Ended June 30,
(In thousands)	2015			2014
Cash Flows from Operating Activities:
Net income	$	6,151		$	7,974
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		19,961			17,275
Amortization		3,348			4,594
Accretion of asset retirement obligations		72			57
Deferred income taxes		4,166			5,383
Gain on interest rate swap derivatives		(247	)		(93	)
Equity-based compensation expense		2,782			1,986
Amortization of debt issuance costs		822			738
Retirement benefits, net of cash contributions and distributions		(142	)		(813	)
Excess tax benefits from share-based compensation		—			(149	)
Other		332			128
Changes in operating assets and liabilities, net		(2,251	)		938

Net Cash Provided by Operating Activities		34,994			38,018

Cash Flows from Investing Activities:
Purchases of property, plant and equipment		(55,349	)		(37,288	)
Broadband network expansion funded by stimulus grant		(2,082	)		196
Purchases of available-for-sale marketable securities		(23,356	)		(12,461	)
Proceeds from sale or maturity of available-for-sale marketable securities		18,045			14,174
Change in restricted cash		1,574			—
Cash reimbursement received from broadband stimulus grant		1,574			—

Net Cash Used in Investing Activities		(59,594	)		(35,379	)

Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt		28,000			—
Payment of debt issuance costs		(861	)		—
Principal payments on senior secured term loans		(3,945	)		(1,375	)
Cash dividends paid on common stock		(3,152	)		(6,195	)
Principal payments under capital lease obligations		(2,317	)		(1,145	)
Proceeds from stock option exercises and employee stock purchase plan		182			1,630
Excess tax benefits from share-based compensation		—			149
Other		(247	)		(13	)

Net Cash Provided by (Used in) Financing Activities		17,660			(6,949	)

Decrease in cash and cash equivalents		(6,940	)		(4,310	)
Cash and cash equivalents:
Beginning of Period		14,140			14,114

End of Period	$	7,200		$	9,804

Lumos Networks Corp.

Operating Results, Customer and Network Statistics


	Three months ended:															Six months ended:
(Dollars in thousands)	June 30, 2015			March 31, 2015			December 31, 2014			September 30, 2014			June 30, 2014			June 30, 2015			June 30, 2014
Revenue, Gross Margin and Adjusted EBITDA
Revenue
Enterprise Data		11,298			11,027			10,833			10,470			10,445			22,325			21,031
Transport		10,036			10,473			10,962			11,279			11,225			20,509			22,132
FTTC		6,755			6,267			5,515			4,739			5,037			13,022			9,681

Total Data		28,089			27,767			27,310			26,488			26,707			55,856			52,844
Residential and Small Business		17,010			17,265			17,423			17,668			18,290			34,275			36,937
RLEC Access		5,854			5,463			5,952			6,360			5,168			11,317			10,474

Total Revenue		50,953			50,495			50,685			50,516			50,165			101,448			100,255
Gross Margin
Data		85.5	%		86.9	%		85.5	%		85.1	%		85.3	%		86.2	%		84.7	%
Residential and Small Business		65.6	%		64.9	%		67.0	%		64.3	%		65.7	%		65.2	%		65.3	%
Adjusted EBITDA¹
Data		12,492			12,367			12,629			12,984			13,395			24,859			26,112
Residential and Small Business		5,327			5,627			4,623			4,503			5,230			10,954			10,774
RLEC Access		4,848			4,517			4,621			5,214			4,098			9,365			8,404

Adjusted EBITDA before Curtailment Gain		22,667			22,511			21,873			22,701			22,723			45,178			45,290
Curtailment Gain²		—			—			567			10,207			—			—			—

Total Adjusted EBITDA		22,667			22,511			22,440			32,908			22,723			45,178			45,290
Adjusted EBITDA Margin¹
Data		44.5	%		44.5	%		46.2	%		49.0	%		50.2	%		44.5	%		49.4	%
Residential and Small Business		31.3	%		32.6	%		26.5	%		25.5	%		28.6	%		32.0	%		29.2	%
RLEC Access		82.8	%		82.7	%		77.6	%		82.0	%		79.3	%		82.8	%		80.2	%
Total Adjusted EBITDA Margin		44.5	%		44.6	%		44.3	%		65.1	%		45.3	%		44.5	%		45.2	%
Capital Expenditures		26,125			29,224			19,949			26,863			19,171			55,349			37,288
Adjusted EBITDA less Capital Expenditures		(3,458	)		(6,713	)		2,491			6,045			3,552			(10,171	)		8,002
Fiber Network Statistics
Fiber Route-Miles		8,100			7,955			7,822			7,645			7,548			8,100			7,548
Fiber Miles³		369,238			363,189			354,118			352,347			—			369,238			—
Fiber Markets		24			23			23			23			23			24			23
FTTC Unique Towers		976			907			858			708			673			976			673
FTTC Total Connections		1,307			1,236			1,153			961			876			1,307			876
On-Network Buildings		1,574			1,530			1,477			1,456			1,420			1,574			1,420
Data Centers⁴		32			31			31			28			26			32			26
R&SB Statistics
Competitive Voice Connections		79,022			81,456			83,406			85,683			88,941			79,022			88,941
Video Subscribers		5,516			5,472			5,352			5,309			5,155			5,516			5,155
Fiber-to-the-Premise Broadband Connections		6,807			6,602			6,358			6,119			5,906			6,807			5,906
Premises Passed by Fiber⁵		18,983			18,142			17,461			17,102			16,631			18,983			16,631
RLEC Access Lines		26,276			26,746			27,257			27,716			28,081			26,276			28,081

¹	Adjusted EBITDA is a non-GAAP measure. See definition on page 2 of this earnings release. Adjusted EBITDA margin is calculated as the ratio of Adjusted EBITDA, as defined, to Total Revenue.

²	The Company recorded a gain totaling $10.8 million in the second half of 2014 related to the curtailment of medical benefits under the Company’s postretirement plan, which was not allocated to the operating segments.

Fiber miles are calculated as the fiber route miles multiplied by the number of fiber strands within each cable (represents an average of 46 fibers per route as of June 30, 2015) and are based on the results of the Company’s conversion of its fiber records to a centralized fiber management system in the third quarter of 2014.

⁴	Data centers reported include both commercial and private data centers and Company-owned facilities offering commercial data center services.

⁵	Includes residential and small business locations passed by fiber and available for service. Approximately 93% of the premises passed by fiber and available for service as of June 30, 2015 were residential.

Lumos Networks Corp.

Reconciliation of Net Income Attributable to Lumos Networks Corp. to Adjusted EBITDA


(Dollars in thousands)	2015			2014
For The Three Months Ended June 30,
Net Income Attributable to Lumos Networks Corp.	$	3,349		$	3,846
Net Income Attributable to Noncontrolling Interests		44			33

Net Income		3,393			3,879
Income tax expense		2,438			2,711
Interest expense		3,719			3,812
(Gain) loss on interest rate swap derivatives		(165	)		16
Other income, net		(96	)		(170	)

Operating Income		9,289			10,248
Depreciation and amortization and accretion of asset retirement obligations		11,479			11,240
Amortization of actuarial losses		338			64
Equity-based compensation		1,557			1,152
Restructuring charges		4			—
Employee separation charges		—			19

Adjusted EBITDA	$	22,667		$	22,723

Adjusted EBITDA Margin		44.5	%		45.3	%

For The Six Months Ended June 30,
Net Income Attributable to Lumos Networks Corp.	$	6,073		$	7,908
Net Income Attributable to Noncontrolling Interests		78			66

Net Income		6,151			7,974
Income tax expense		4,447			5,689
Interest expense		7,205			7,786
Gain on interest rate swap derivatives		(247	)		(93	)
Other expense (income), net		147			(350	)

Operating Income		17,703			21,006
Depreciation and amortization and accretion of asset retirement obligations		23,381			21,926
Amortization of actuarial losses		675			128
Equity-based compensation		2,782			1,986
Restructuring charges		637			—
Employee separation charges		—			244

Adjusted EBITDA	$	45,178		$	45,290

Adjusted EBITDA Margin		44.5	%		45.2	%

Lumos Networks Corp.

Business Outlook ¹ (as of August 5, 2015)


(In millions)		2015 Annual Guidance ¹
Operating Revenues		approximately $202
Adjusted EBITDA		approximately $92
Capital Expenditures		approximately $112
Cash, Cash Equivalents and Marketable Securities (at end of period)²		approximately $5
Reconciliation of Net Income to Adjusted EBITDA:
Net Income		approximately $12
Income tax expense		approximately $8
Interest expense		approximately $15

Operating Income		approximately $35
Depreciation and amortization		approximately $50
Equity-based compensation charges		approximately$6
Amortization of actuarial losses		approximately $1

Adjusted EBITDA		approximately $92

These estimates are based on management’s current expectations. These estimates are forward-looking and actual results may differ materially. Please see “Special Note from the Company Regarding Forward-Looking Statements” in the Lumos Networks Corp. second quarter 2015 earnings release dated August 5, 2015.

²	Exclusive of proceeds from Pamplona investment transaction described on Page 1 of this release.

Company Presentation

August 2015

Company Presentation

August 2015

Exhibit 99.2

Use

Non-GAAP

Financial

Measures

Included

this

presentation

are

certain

non-GAAP

financial

measures

that

are

not

determined

accordance

with

generally

accepted

accounting

principles.

These

financial

performance

measures

are

not

indicative

cash

provided

used

operating

activities

and

exclude

the

effects

certain

operating,

capital

and

financing

costs

and

may

differ

from

comparable

information

provided

other

companies,

and

they

should

not

considered

isolation,

alternative

to,

meaningful

than

measures

financial

performance

determined

accordance

with

generally

accepted

accounting

principles.

These

financial

performance

measures

are

commonly

used

the

industry

and

are

presented

because

Lumos

Networks

Corp.

believes

they

provide

relevant

and

useful

information

investors.

The

Company

utilizes

these

financial

performance

measures

assess

its

ability

meet

future

capital

expenditure

and

working

capital

requirements,

incur

indebtedness

necessary,

and

fund

continued

growth.

Lumos

Networks

Corp.

also

uses

these

financial

performance

measures

evaluate

the

performance

its

business,

for

budget

planning

purposes

and

factors

its

employee

compensation

programs.

Special

Note

Regarding

Forward-Looking

Statements

Any

statements

contained

this

presentation

that

are

not

statements

historical

fact,

including

statements

about

our

beliefs

and

expectations,

are

forward-looking

statements

and

should

evaluated

such.

The

words

“anticipates,”

“believes,”

“expects,”

“intends,”

“plans,”

“estimates,”

“targets,”

“projects,”

“should,”

“may,”

“will”

and

similar

words

and

expressions

are

intended

identify

forward-looking

statements.

Such

forward-

looking

statements

reflect,

among

other

things,

our

current

expectations,

plans

and

strategies,

and

anticipated

financial

results,

all

which

are

subject

known

and

unknown

risks,

uncertainties

and

factors

that

may

cause

our

actual

results

differ

materially

from

those

expressed

implied

these

forward-looking

statements.

Many

these

risks

are

beyond

our

ability

control

predict.

Because

these

risks,

uncertainties

and

assumptions,

you

should

not

place

undue

reliance

these

forward-looking

statements.

Furthermore,

forward-looking

statements

speak

only

the

date

they

are

made.

not

undertake

any

obligation

update

review

any

forward-looking

information,

whether

result

new

information,

future

events

otherwise.

Important

factors

with

respect

any

such

forward-looking

statements,

including

certain

risks

and

uncertainties

that

could

cause

actual

results

differ

from

those

contained

the

forward-looking

statements,

include,

but

are

not

limited

to:

rapid

development

and

intense

competition

the

telecommunications

and

high

speed

data

transport

industry;

our

ability

offset

expected

revenue

declines

legacy

voice

and

access

products

the

recent

regulatory

actions,

wireless

substitution,

technology

changes

and

other

factors;

our

ability

effectively

allocate

capital

and

implement

our

“edge-out”

expansion

plans

timely

manner;

our

ability

complete

customer

installations

timely

manner;

adverse

economic

conditions;

operating

and

financial

restrictions

imposed

our

senior

credit

facility;

our

cash

and

capital

requirements;

declining

prices

for

our

services;

our

ability

maintain

and

enhance

our

network;

the

potential

experience

high

rate

customer

turnover;

federal

and

state

regulatory

fees,

requirements

and

developments;

our

reliance

certain

suppliers

and

vendors;

and

other

unforeseen

difficulties

that

may

occur.

These

risks

and

uncertainties

are

not

intended

represent

complete

list

all

risks

and

uncertainties

inherent

our

business,

and

should

read

conjunction

with

the

detailed

cautionary

statements

and

risk

factors

included

our

SEC

filings,

including

our

Annual

Report

filed

Form

10-K.

Advanced Fiber Network Driving Value for Our Customers

Lumos

at a Glance

Attractive Fundamentals

2015 Data Revenue target of ~$115m, up 8% YoY

Total data contract value: ~$362m with avg.

length: 4+ years. Target of $500mm by YE15

Targeted 15-20%+ ROI on fiber deals

FTTC/Enterprise revenue is 90%+ non-TDM

4G LTE wireless deployments (FTTC)

On-net focus: 60% Data EBITDA margin target

Network Expansion to increase Addressable

market by $135m or 60%

Enterprise growth of 8-9% expected in 2015

Favorable interest rate and tax environment

As of 6/30/2015

Based

Lumos

Networks’

internal

research

and

analysis

data

from

research,

surveys

and

studies

conducted

third

parties,

such

Tower

Source

(for

FTTC

sites),

Equifax

Telecom

and

Stratsoft

(for

On-Net

buildings)

and

public

records

databases

(for

data

centers).

Market

Opportunity

denotes

wireless

cell

sites

within

miles

and

buildings

within

mile

the

Lumos

Networks

fiber

footprint

and

includes

recently

announced

planned

market

expansion

Richmond

and

Norfolk

Current

Market

Opportunity

FTTC Unique

Sites

976

~7,400

On-Net Buildings

1,574

104,000

Total Connected

Data Centers

100+

8,100 Fiber Route Miles; 369,238 Total Fiber Strand Miles

45+ Avg

Strand Count; 64% of Strand Miles are Lumos-owned

Revenue Opportunities

Pamplona Capital Announced as Strategic Financial Partner

August

2015,

Lumos

announced

$150

Million

cash

investment

from

Pamplona

Capital,

Private

Equity

Fund

with

over $8 billion

total

capital

commitments

Creates

Strategic

Partnership

Accelerate

the

Transformation

Lumos

Networks

Pure-Play

Fiber

Bandwidth

Infrastructure

Company

Use of Proceeds

$50m

pay

down

existing

senior

bank

debt

and

deal

costs

Approximately

$100m

for

general

corporate

purposes.

Provides

the

company

with

additional

capital

pursue

organic

and

inorganic

growth

opportunities

the

fiber

and

data

center

space.

Interest

payable

on the notes to be issued in connection with Pamplona’s

investment

will

accrue

annual

rate

of 8%,

paid

quarterly

either

cash

kind.

The warrants to be issued

entitle Pamplona

purchase

5.5

million

common

stock

an exercise

price

equal

the

closing

price

immediately

prior

the

announcement

the

transaction on

August

2015.

Pamplona

will

receive

two

seats

the

Lumos

Board

Directors

William

Pruellage,

Partner

Pamplona

Capital

(based

New

York)

Peter

Aquino,

former

Executive

Chairman

Primus

Telecommunications

Group

and

former

President

and

CEO

RCN

Corporation

0.0 EB

1.0 EB

2.0 EB

3.0 EB

4.0 EB

5.0 EB

2014

2015

2016

2017

2018

0.0 EB

0.5 EB

1.0 EB

1.5 EB

2.0 EB

2014

2015

2016

2017

2018

Exponential Growth in Bandwidth Demand

Bandwidth Demand Drivers

U.S. Mobile IP Traffic

Web & Data

Video

Source: Cisco Visual Networking Index 2015

U.S. Business IP Traffic

Web & Data

Video

Cisco VNI estimates US mobile data traffic growth of

47% from 2014-2019

LTE traffic grew 2x YoY

in 2Q15 for large US operator

Proliferation of network-connected devices and

locations

2014 to 2019 tablets, smartphones, and M2M

traffic growth rates of 83%, 60%, and 103%,

respectively

Rapid growth in rich media applications

Of the 24.3 exabytes

per month crossing the

mobile network by 2019, 17.4 exabytes

will be

due to video

Spectrum constraints require increased efficiency to

manage mobile data traffic

Cloud adoption, increased outsourcing of IT

infrastructure

Data Products

Goals highlighted herein are long-term in nature and are subject to various risks and uncertainties, one or more of which could cause goals to be unattainable. You should not regard the inclusion of a goal in this presentation as

a representation by any person that the results will be achieved

Enterprise

2Q15 Rev: $11.3m

8% YoY

Growth

40% of Data Revs

Non-TDM products account for ~90%+ of total revenue

Enterprise 2015 growth target raised from 6% to 8-9%

Renewed Enterprise contracts totaling $18.5 million in

1H15, up 60% vs 1H14

Network expansion into Richmond/Norfolk increases

Enterprise Addressable Market by $135 million

Transport

2Q15 Rev: $10m

(-11%) YoY

Growth

36% of Data Revs

IP-based Ethernet Transport and wavelength potential

Significant reduction in DS1/DS3 exposure in last 2-3

years

TDM Carrier grooming trends universal across industry

FTTC

2Q15 Rev: $6.8m

34% YoY

Growth

24% of Data Revs

Carrier

Ethernet:

97%+

revenue

and

~98%

total

bookings

FTTC backhaul supports 4G LTE growth

Long-term

target

~$85

million

FTTC

revenue

Achieved target of 1,300 FTTC installations by 2Q15

Targeted

FTTC

incremental

gross

margin

85%+

FY2014A

FY2015E

$20m/19%

~$29m/25%

$42.3m/40%

~$46m/40%

$44.3m/41%

~$40m/35%

Revenue/(% of Data Rev)

Accelerating the Transformation

FTTC + Enterprise as % of Data Revenue

55.4%

55.7%

58.3%

58.0%

57.5%

59.9%

62.3%

64.3%

65.2%

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

2015E

In 2Q15, 90%+ of Total FTTC (~97%)/Enterprise(~90%) Revenue was non-TDM based

Planned 665 Mile Fiber Network Expansion in Richmond and Norfolk

Underpinned by 257 unique FTTC site contract (269 total FTTC connections) with major wireless carrier

Vast majority of network expected to be completed by YE15 vs original target of 3Q16

Three signed Enterprise contracts: total MRC of ~$13,000 (two new logos, one new site with existing core market customer)

Significant expansion of Richmond, VA network with the addition of Norfolk, Petersburg and Hampton Roads markets

Increases total Enterprise addressable market by ~$135 million, up ~60% vs. existing markets

Increases tower addressable market to 7,400 within 3 miles of footprint

Richmond/Petersburg Metro Fiber Network

Green: Existing market launched 2H13 (144 miles);

Yellow: Expansion Footprint (Additional 314 miles)

Norfolk/Hampton Roads/Tidewater Metro Market Expansion

All

New

Footprint:

~270

Fiber

Route

Miles.

Portions

Network

“Lit”

August

‘15

Metro

Market

Dark Fiber Product Officially Launched May 2015

Targeting a Growing Number of RFPs in our Footprint:

Macro Fiber to the Cell Backhaul

Small Cell Fronthaul

Large Enterprises: Healthcare, Education/Gov’t, Financial

Data Centers

Relatively limited dark fiber deployments in our footprint (by any fiber

provider), but industry dark fiber network activity should increase in

2015 and beyond

Lumos Dark Fiber Product has standardized Monthly Recurring Charge

(MRC)

and Non-Recurring Charge (NRC) pricing

Lumos provides dark fiber cable and customer supplies equipment and

resources to manage their bandwidth service

Lumos has $1m+ in annual Dark Fiber revenue, mostly derived from

Allegheny Energy assets purchased in 2009

Dark Fiber Solutions for FTTC Small Cell Deployments

C-RAN Architecture

Architecture is designed for FTTC Customers who are:

Using Small Cell Strategy to supplement macro sites for cell coverage and capacity

Leveraging a centralized Base Band Unit (“BBU”) design

Note: One large wireless operator leading the way

Key FTTC Statistics

2Q15 Revenue: $6.8m up 34% YoY

2015 Revenue Target: $29m, up 45% YoY

Unique FTTC Towers: 976 up 45% YoY

1,307 FTTC Connections: up 49% YoY

FTTC Tenants (connections) per tower: 1.3-1.4x

Avg

Monthly Revenue/Connection: $1,735

Average contracted bandwidth/connection: ~100Mbs

~97-98% of total booked revenue (3-4% current revenue) is Carrier Ethernet

0% microwave sites

Total FTTC Revenue under contract: $215-$220m

Average Contract length: 6-7 years

Gross Margin: ~85%

# of Active Mobile Operator Customers: 5

FTTC Opportunities Accelerate

Dramatic Growth in Mobile Data Traffic Driving Increased Backhaul Bandwidth Requirements

Compelling Tower-Like Economics

Scalable bandwidth capability drives margin expansion

Increased tenants per unique site combined with higher bandwidth per site magnifies

leverage. FTTC bandwidth upgrade activity accelerating in 2015.

Long-term contracts (ranging from 5 to 13 years). Avg

of 6-7 years.

Attractive return on investments

Devices

Use Case

Backhaul Technology

Voice / Text / Email /

Rich Media / Streaming Video

Moving to Carrier Ethernet

2015+

Voice / Text / Email

T1 / SONET

2004 -

2007

Voice / Text

1999 -

2003

Project Ark: 100G Core -

Premier FTTC Network in Footprint

New MEF-certified Carrier Ethernet MPLS/IP fiber network

Fully Redundant/Fast Re-route

A key selling point for a series of contract wins (total of 500+ FTTC

sites) with a major US wireless carrier

100G: Entire Ark Core and and 1/3 of distribution rings

Core network completed in Sept ’14 using Cisco routers

FTTC traffic already routed onto Ark

Expect 100% of FTTC traffic routed onto Ark by YE15, to coincide

with completion of Richmond/Norfolk market expansion

Cisco provides new testing tools, thousands of hours of training,

and 2 R&D centers

Ark planned to provide total bandwidth throughput up to ~1

Terabit (equivalent to 2,500 circuits at 400 Mbps each)

Allows for cost effective scalability for upgraded FTTC connection

target of 3,100

Goals

highlighted

herein

are

long-term

nature

and

are

subject

various

risks

and

uncertainties,

one

which

could

cause

goals

unattainable.

You

should

not

regard

the

inclusion

goal

this

presentation

representation

any

person

that

the

results

will

achieved

Represents

management’s

long-term

estimates

prepared

using

data

from

industry

publications

and

its

market

knowledge

and

experience.

Management’s

estimates

have

not

been

verified

any

independent

source

and

are

subject

various

risks

and

uncertainties,

which

could

cause

actual

results

materially

deviate

from

estimates.

You

should

not

regard

the

inclusion

estimate

this

presentation

representation

any

person

future

results

Long-Term Fiber to the Cell Targets

FTTC Targets (as updated in Nov 2014)

Key Drivers of FTTC Upgrade

Expansion of 4G/LTE coverage and capacity in

Lumos’ footprint by multiple wireless carriers

Continued migration of copper, microwave and

SONET FTTC sites to Carrier Ethernet

Planned 665 route-mile market expansion,

underpinned by 257 FTTC unique tower contract

Pro forma tower addressable market increase to

7,400 (within 3 miles) from 5,400

Added 686 fiber route miles since YE13, including

key routes from Richmond-Charlottesville and

Richmond-Ashburn, VA

Increased RFP activity for small cell and dark fiber

FTTC contracts in our footprint

Expectation for increased tenants per site and

higher bandwidth per site over time

Revised

Prior

Annual Revenue

~$85 million

~$70 million

Gross Margin

~$72 million

~$60 million

Total Unique Towers

1,875

1,500

Total FTTC Connections

3,100

2,250

Tenants (Connections/Tower)

1.65

1.50

Monthly Revenue/Connection

~$2,300

~$2,600

Addressable Market

7,400

5,400

2Q15

Long-Term

Estimate

FTTC Unique

Towers

976

1,875

Tenants/Unique

Tower

~1.3-1.4

1.65x

Monthly Revenue/Connection

~$1,750

~$2,300

Monthly Revenue/Unique

Tower

Contracted Bandwidth Per Site

~$2,300

~100MBs

~$3,800

400MBs+

~7,400 towers within 3 miles of

Lumos Network fiber footprint

Early stages of 4G LTE rollout

Conversion from T-1,

microwave and SONET to

Carrier Ethernet

Significant new LTE site

builds/network densification

Continued FTTC share gains

expected

Carrier Ethernet more scalable

than SONET of other providers

FTTC operating leverage drives

margin expansion opportunity

Strong FTTC Growth Opportunity in Our Footprint

Anticipated FTTC Trends

+287

+208

+303

Represents

management’s

long-term

estimates

prepared

using

data

from

industry

publications

and

its

market

knowledge

and

experience.

Management’s

estimates

have

not

been

verified

any

independent

source

and

are

subject

various

risks

and

uncertainties,

which

could

cause

actual

results

materially

deviate

from

estimates.

You

should

not

regard

the

inclusion

estimate

this

presentation

representation

any

person

future

results

Goals

highlighted

herein

are

long-term

nature

and

are

subject

various

risks

and

uncertainties,

one

which

could

cause

goals

unattainable.

You

should

not

regard

the

inclusion

goal

this

presentation

representation

any

person

that

the

results

will

achieved

FTTC Opportunity

178

465

673

976

1,875

2Q12

2Q13

2Q14

2Q15

Long-Term Goal

FTTC as a percentage of total Lumos Data revenue

2012: ~8%

2013: ~14%

2014: ~19%

2015:

~25%

Annual FTTC Revenue

a representation by any person that the results will be achieved

FTTC Revenue Growth

in Millions)

Long-term goal of

$85 million

$6.8

$14.3

$19.9

$29.0

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

2012

2013

2014

2015E

Total FTTC Connections Exceed 1,300

10%

20%

30%

40%

50%

60%

600

700

800

900

1000

1100

1200

1300

1400

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

Installs

YoY Growth

Total FTTC Connections

Key Enterprise Accounts

Key Enterprise Statistics

2Q15 Revenue: $11.3m, up 8% YoY

2015 Revenue Target: $46m, up 8-9% YoY

Enterprise Churn Trends improved in 2015

Estimated Enterprise market share in core markets: 17%

Renewal

Program

Gaining

Momentum:

Estimated

MRC

renewed

accounts

17%

YoY

2015

Network Expansion into Richmond/Norfolk/Hampton Roads Metro Markets Increases Addressable Market for

Enterprise

data

spend

estimated

$135m

~60%...

Target

these

expansion

markets:

17%

Target: 80% of revenue on-net

Focus: “Large Locals” with multiple sites in footprint: Healthcare, Gov’t/Education, Banks, Professional Services

Target: 80% Enterprise MRC under contract by YE15

Target: Carrier End User Partnership Program to reach 50% of long-term total Enterprise sales

Key Metro Markets (‘14 stats)

Market Status

Population

MSA Rank(out of 381)

Norfolk/Hampton Roads, VA

Expansion Market

1.7m

Richmond, VA

Expansion Market

1.26m

Huntington, WVA

Core Market

363k

144

Roanoke, VA

Core Market

315k

159

Hagerstown, MD

Core Market

260k

181

Lynchburg, VA

Core Market

257k

184

Charlottesville, VA

Core Market

296k

196

Charleston, WVA

Core Market

223k

198

Total Core Market

~3m

Total Expansion Markets

~3m

Launched August 2015

Launched 2H13, 2015 expansion 3x miles, see slide 9

100% fiber fed portfolio of lit buildings (ALL success-based)

Added 44 buildings in 2Q15. Average of 16 buildings/month in 1H15 vs 12 historically

Increases on-net revenue and opens up opportunity for additional FTTC builds

Connected to 32 total data centers (including 7 company owned co-lo facilities)

2Q15 On-Net Building Growth Accelerated

On-Net Buildings

1,091

1,273

1,420

1,574

2Q12

2Q13

2Q14

2Q15

Enterprise Revenue Hits Inflection Point

-1.1%

-1.7%

1.7%

4.2%

8.2%

8-9%

2Q14

3Q14

4Q14

1Q15

2Q15

2015E

Enterprise Revenue YoY Growth

Enterprise Renewal Program Results Accelerating

New Enterprise Contract Amounts (MRC)

Total Enterprise Contract Value Renewed

($ in Thousands)

Renewal program locks-in revenue on increasingly longer term deals, reducing churn

Target 1H15 total contract value renewed of $18.5 million up over 60% from 1H14

27% of current Enterprise revenue has been renewed in last 6 quarters at average contract

length of ~39 months

Expecting total MRC of $725,000 to be renewed in 2015, up 17% YoY

$619

$725

2014A

2015E

($ in Thousands)

$11,500

$18,450

1H 2014

1H 2015

Carrier End User Pipeline Building with Growing MSA Partner

Strong Growth in 2014 and a Solid Pipeline in Place for 2015

Leverage Lumos Networks’ 8,100 mile fiber footprint to target incremental Enterprise

customers with thousands of sales people from leading national service providers

33 MSAs signed and 39 pending/in pipeline with major U.S. operators, MSOs and fiber

companies operating in our footprint

Pro forma “near-net” list buildings within ½ mile of our footprint of 104,000 (67,000 pre-

expansion), including planned 665 fiber route-mile expansion in the Norfolk, Richmond,

Petersburg and Hampton Roads, VA metro markets

Carrier End User Sales Grew Over 100% in 2014

2013: $77,000

2014: $294,000

2015 (target): ~$400,000

New Distribution Channel for Enterprise Data

Data Center Fiber Connection Strategy

32 Total Data Center Connections

32 total data center connections as of 2Q15

Includes

commercial,

private

and

Lumos

operated

data

centers

Lumos Co-los: Washington PA, Waynesboro VA, Charlottesville VA, Covington VA,

Harrisonburg VA, Lynchburg VA, Charleston WV

Key data center relationships: Peak 10, Iron Mountain, QTS, DC Corp, Alpha Technologies

Increasingly, Enterprise traffic moving to data centers with customers requesting secure, fiber

bandwidth access to those locations

~100+ data center market opportunity within existing footprint

Lumos

is under-penetrated in data center connections relative to fiber peers. Data center

connections

represent

promising

fiber

bandwidth

revenue

upside

Key Residential/Small Business (“RSB”) Highlights

RSB EBITDA Margins improved to 32% in 1H15 from 29% in 1H14

Total 2Q15 RSB Revenue ex-CLEC Voice/Access essentially flat YoY

High Speed Internet Connections up 15% YoY

Total Premises Passed by Fiber of nearly 19k, up 14% YoY

Completed RUS build in 2Q15 (~5,300 sites passed with fiber)

CLEC Rate Increases instituted in 2Q15

1G Broadband Service launched 2Q15 for residential and SMB customers

-14%

-13%

-12%

-11%

-10%

-9%

-8%

-7%

-6%

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

Improving YoY

Revenue Growth Trends in RSB

Improving YoY

Revenue Growth Trends in RSB

Selected Financial Highlights

Data Revenue

Data as a % of Total Revenue

Data Gross Margin

Overall Adjusted EBITDA Margin

($ in Millions)

Defined as operating revenues less network access costs divided by operating revenues for Data segment

Defined as Adjusted EBITDA divided by operating revenues on a consolidated basis, excluding the impact of one-time curtailment gain on benefit plans in Q314 and Q414

$26.7

$26.5

$27.3

$27.8

$28.1

2Q14

3Q14

4Q14

1Q15

2Q15

53.2%

52.4%

53.9%

55.0%

55.1%

2Q14

3Q14

4Q14

1Q15

2Q15

85.3%

85.1%

85.5%

86.9%

85.5%

2Q14

3Q14

4Q14

1Q15

2Q15

45.3%

44.9%

43.2%

44.6%

44.5%

2Q14

3Q14

4Q14

1Q15

2Q15

Liquidity and Debt Maturities

Debt refinancing completed in April 2013; closed

new Term Loan C in January 2015 for $28 million

Liquidity to support growth capital requirements

~$29 million in cash

$50 million undrawn revolver capacity

Cash investment from Pamplona Capital on

August 5, 2015 for gross proceeds of $150 million

Debt Maturity Profile

Capitalization

Note: Excludes capital leases

Pro forma to include Pamplona Capital investment transaction

Does not account for any value assigned to detachable warrants issued in conjunction with the debt offering.

( in Millions)

($ in Millions)

As of

6/30/2015

Cash and Marketable Securities

29.2

Revolving Credit Facility ($50MM)

Pamplona Note

150.0

Term Loan A

85.3

Term Loan B

242.0

Term Loan C

25.1

Capital Leases

2.8

Total Debt

505.2

2015

2016

2017

2018

2019

2020

2021

2022

$12

$72

$258

$162

2Q15 Snapshot

2Q15 Balance Sheet & Valuation

2Q15 Metrics

Data

revenue

5%+

YoY

and

comprises

55% of total revenue

FTTC and Enterprise revenue grew 34%

and 8% YoY, respectively

Completed

installation

FTTC

sites

and

71 total FTTC Connections

Exceeded 75% target ratio for success-

based/growth capital projects. Target of

~90% for 2015

Connected 44

on-net buildings

Added 145

miles of fiber route miles

Key 2Q15 Accomplishments

Based on closing share price of $13.96 as of 7/31/2015 and 22,881,853 shares outstanding as of 6/30/2015

Pro forma to include Pamplona Capital investment transaction

($ in Millions)

Cash and Marketable Securities

$29.2

Total Long-Term Debt

$505.2

Net Long-Term Debt

$476.0

Market Capitalization¹

$319.4

Enterprise Value

$795.4

($ in Millions)

4Q14

1Q15

2Q15

Revenue

$50.7

$50.5

$51.0

Adjusted EBITDA

$22.4

$22.5

$22.7

% Margin

44.3%

44.6%

44.5%

Capital Expenditures

$19.9

$29.2

$26.1

% of Revenue

39.4%

57.9%

51.3%

Historical Financial Metrics by Segment

Defined as operating revenues less network access costs

Defined as net income attributable to Lumos Networks before interest, income taxes, depreciation and amortization, accretion of asset retirement obligations, net income or loss attributable to noncontrolling interests, other

income or expenses, equity-based compensation charges, acquisition-related charges, amortization of actuarial losses on retirement plans, employee separation charges, restructuring-related charges, gain or loss on settlements

and gain or loss on interest rate swap derivatives. See note from the Company on “Use of Non-GAAP Measures” on Slide 1

The Company recorded a $10.8 million curtailment gain in the second half of 2014 related to the elimination of certain medical benefits under the postretirement plan, which was not allocated to the operating segments

($ in Thousands)

FYE 2013

FYE 2014

FYE 2015

% of 2Q15

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

Total

Revenue

Data

$25,369

$25,706

$26,094

$26,943

$26,137

$26,707

$26,488

$27,310

$27,767

$28,089

55.1%

Residential and Small Business

21,057

20,453

20,055

19,094

18,647

18,290

17,668

17,423

17,265

17,010

33.4%

RLEC Access

6,108

6,152

5,478

4,966

5,306

5,168

6,360

5,952

5,463

5,854

11.5%

Total Revenue

$52,534

$52,311

$51,627

$51,003

$50,090

$50,165

$50,516

$50,685

$50,495

$50,953

100.0%

% Sequential Growth

(0.3%)

(0.4%)

(1.3%)

(1.2%)

(1.8%)

0.1%

0.7%

1.0%

(0.4%)

0.9%

% YoY Growth by Segment

Data

19.0%

17.5%

15.1%

10.3%

3.0%

3.9%

1.5%

1.4%

6.2%

5.2%

Residential and Small Business

(12.3%)

(12.5%)

(13.5%)

(12.8%)

(11.4%)

(10.6%)

(11.9%)

(8.8%)

(7.4%)

(7.0%)

RLEC Access

0.4%

11.0%

(10.8%)

(21.8%)

(13.1%)

(16.0%)

16.1%

19.9%

3.0%

13.3%

Gross Profit

Data

$21,338

$21,827

$22,206

$22,940

$21,963

$22,788

$22,551

$23,350

$24,122

$24,025

58.5%

Residential and Small Business

13,934

13,831

13,601

12,677

12,107

12,019

11,355

11,670

11,198

11,162

27.2%

RLEC Access

6,108

6,152

5,478

4,966

5,306

5,168

6,360

5,952

5,463

5,854

14.3%

Total Gross Profit

$41,380

$41,810

$41,285

$40,583

$39,376

$39,975

$40,266

$40,972

$40,783

$41,041

100.0%

Adjusted EBITDA

Data

$13,124

$13,355

$13,012

$14,011

$12,717

$13,395

$12,984

$12,629

$12,367

$12,492

55.1%

Residential and Small Business

6,697

6,356

5,691

5,917

5,544

5,230

4,503

4,623

5,627

5,327

23.5%

RLEC Access

4,874

4,840

4,343

4,104

4,306

4,098

5,214

4,621

4,517

4,848

21.4%

Adjusted EBITDA, Before Curtailment Gain

$24,695

$24,551

$23,046

$24,032

$22,567

$22,723

$22,701

$21,873

$22,511

$22,667

100.0%

Curtailment Gain

10,207

567

Total Adjusted EBITDA

$24,695

$24,551

$23,046

$24,032

$22,567

$22,723

$32,908

$22,440

$22,511

$22,667

% Sequential Growth, Normalized

6.4%

(0.6%)

(6.1%)

4.3%

(6.1%)

0.7%

(0.1%)

(3.6%)

2.9%

0.7%

% Margin, Normalized

47.0%

46.9%

44.6%

47.1%

45.1%

45.3%

44.9%

43.2%

44.6%

44.5%

Financial Guidance

Guidance as of date of 2Q15 earnings release dated August 5, 2015

Normalized Adjusted EBITDA excludes the impact of a $10.8 million curtailment gain for the elimination of other postretirement plan medical benefits recognized in the second half of 2014

2014

2Q15

FY 2015

($ in Millions)

Actual

Guidance¹

Revenue

Data

$106.6

$28.1

~$115

% of Total

52.9%

55.1%

~57%

Residential

& Small Business

$72.0

$17.0

~67

% of Total

35.8%

33.4%

~33%

Access

$22.8

$5.9

~$20

% of Total

11.3%

11.5%

~10%

Total

$201.5

$51.0

~$202

Adjusted

EBITDA, Normalized

$89.9

$22.7

~$92

% Margin

44.6%

44.5%

~46%

Total Capex

$84.1

$26.1

~$112

% Success-Based/Growth Capex

75%

95%

>75%

Annual Reconciliation of Net Income Attributable to Lumos

Networks Corp. to Adjusted EBITDA

($ in millions)

Year Ended

FY 2010

FY 2011

FY 2012

FY 2013

FY 2014

FY 2015E¹

Net Income (Loss) Attributable to Lumos

Networks Corp

20.8

(43.9)

16.3

17.8

21.5

12.0

Net Income Attributable to Noncontrolling

Interests

0.1

Net Income (Loss)

20.9

(43.8)

16.4

17.9

21.6

12.0

Interest Expense

5.7

11.9

14.2

15.6

15.0

Loss (Gain) on Interest Rate Swap

Derivatives

1.9

0.1

(0.5)

0.0

Income Tax Expense (Benefit)

14.5

(4.4)

11.0

12.0

14.4

8.0

Other (Income) Expense, net

(0.1)

1.6

(0.7)

0.0

Operating Income (Loss)

41.1

(36.4)

41.1

45.8

50.5

35.0

Depreciation, amortization and accretion of

asset retirement obligations

31.4

43.2

39.0

42.4

45.3

50.0

Equity-based compensation

1.5

2.4

3.9

6.8

4.3

6.0

Asset impairment charge

0.0

86.3

Business separation charges

1.4

Amortization of actuarial losses

1.8

1.2

0.2

1.0

Acquisition related charges

3.0

0.1

Employee separation charges

2.3

0.2

0.0

Restructuring charges

3.0

0.1

Gain on settlements, net

(2.3)

Adjusted EBITDA

77.1

96.9

88.9

96.3

100.6

92.0

Guidance as of date of 2Q earnings release dated August 5, 2015

Quarterly Reconciliation of Net Income Attributable to Lumos

Networks Corp. to Adjusted EBITDA

($ in millions)

Quarter Ended

6/30/2013

9/30/2013

12/31/2013

3/31/2014

6/30/2014

9/30/2014

12/31/2014

3/31/2015

6/30/2015

Net Income Attributable to Lumos Networks Corp

4.8

2.5

4.1

3.8

10.2

3.4

2.7

3.3

Net Income Attributable to Noncontrolling

Interests

0.1

Net Income

4.8

2.5

4.1

3.8

10.2

3.5

2.7

3.3

Interest expense

3.4

3.8

4.0

3.8

4.0

3.8

3.5

3.7

(Gain) loss on interest rate swap derivatives

(0.3)

0.6

0.0

(0.1)

0.0

(0.3)

(0.1)

(0.2)

Income Tax Expense

3.2

1.5

3.0

2.7

6.7

2.0

2.4

Other expenses (income), net

0.9

(0.1)

0.8

(0.2)

(0.1)

0.2

(0.1)

Operating Income

12.1

8.3

11.7

10.8

10.2

20.4

9.1

8.4

9.3

Depreciation, amortization and accretion of asset

retirement obligations

10.8

11.2

10.8

10.7

11.2

11.3

12.1

11.9

11.5

Equity-based compensation

1.3

3.2

1.2

0.8

1.2

1.1

1.2

1.6

Amortization of actuarial losses

0.3

0.1

0.3

Employee separation charges

0.2

Restructuring charges

0.6

Adjusted EBITDA

24.6

23.0

24.0

22.6

22.7

32.9

22.4

22.5

22.7

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