Windstream 2006 Annual Report Download - page 151

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Goodwill and Other Intangible Assets, Continued:
The Valor customer list is amortized on an accelerated sum-of-the-years digits methodology over its estimated
useful life of 9 years. Other customer lists are amortized on a straight-line basis over their estimated useful lives of
10 years. Cable franchise rights subject to amortization are amortized on a straight-line basis over their estimated
useful lives of 15 years. Amortization expense for intangible assets subject to amortization was $27.3 million in
2006, $8.2 million in 2005 and $8.1 million in 2004. Amortization expense for intangible assets subject to
amortization is estimated to be $48.0 million in 2007, $43.4 million in 2008, $38.7 million in 2009, $32.6 million
in 2010 and $27.9 million in 2011.
5. Debt:
Long-term debt was as follows at December 31:
(Millions) 2006 2005
Issued by Windstream Corporation:
Senior secured credit facility, Tranche A – variable rates, due July 17, 2011 $ 500.0 $ -
Senior secured credit facility, Tranche B – variable rates, due July 17, 2013 1,900.0 -
Debentures and notes, without collateral:
Company Securities – 8.625%, due August 1, 2016 1,746.0 -
2013 Notes – 8.125%, due August 1, 2013 800.0 -
Issued by subsidiaries of the Company:
Valor Telecommunications Enterprises LLC and Valor Telecommunications
Finance Corp. - 7.75%, due February 15, 2015 (b) 400.0 -
Windstream Holdings of the Midwest, Inc. – 6.75%, due April 1, 2028 (b) 100.0 100.0
Debentures and notes, without collateral:
Windstream Georgia Communications Corp. – 6.50%, due November 15, 2013 70.0 80.0
Teleview, Inc. – 7.00%, due January 2, 2010 and May 2, 2010 0.8 1.0
Windstream New York, Inc. – 9.14% to 9.55%, due August 1, 2009 and
October 1, 2011 (a) - 10.7
Windstream Pennsylvania, Inc. – 9.07%, due November 1, 2011 (a) - 8.7
Georgia Windstream, Inc. – 8.05% to 8.17%, due October 1, 2009 and 2014 (a) - 20.5
Texas Windstream, Inc. – 8.11%, due March 31, 2018 (a) - 15.0
Windstream Western Reserve, Inc. – 8.05% to 8.17%, due October 1, 2009 and
2014 - 25.9
Discount on long-term debt, net of premiums (28.4) (1.0)
5,488.4 260.8
Less current maturities (32.2) (22.1)
Total long-term debt $ 5,456.2 $ 238.7
Weighted average interest rate 7.8% 7.2%
Weighted maturity 7.8 years 13.2 years
(a) Certain of the Company’s subsidiary debt was retired using a portion of the proceeds from the senior secured
credit facilities (See Note 2). As a result, the Company incurred debt prepayment penalties of $7.9 million in
2006.
(b) The Company’s collateralized subsidiary debt is equally and ratably secured with debt under the senior
secured credit facilities.
The terms of our senior secured credit facilities and indentures include customary covenants that, among other
things, require Windstream to maintain certain financial ratios and restrict its ability to incur additional
indebtedness. These financial ratios include a minimum interest coverage ratio of 2.75 to 1 and a maximum
leverage ratio of 4.5 to 1. The Company was in compliance with these covenants as of December 31, 2006.
Maturities and sinking fund requirements for the four years after 2007 for long-term debt outstanding as of
December 31, 2006, were $66.8 million, $91.8 million, $116.5 million and $329.0 million, respectively.
F-50