Windstream 2006 Annual Report Download - page 96

WINDSTREAM CORPORATION
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(Dollars in Millions)
Column A Column B Column C Column D Column E
Additions
Description
Balance at
Beginning
of Period
Charged to
Cost and
Expenses
Charged
to Other
Accounts Deductions
Balance at
End of
Period
Allowance for doubtful accounts,
customers and other:
For the years ended:
December 31, 2006 $ 9.7 $ 18.4 - $ 17.7 (A) $ 10.4
December 31, 2005 $ 11.3 $ 29.2 - $ 30.8 (A) $ 9.7
December 31, 2004 $ 11.2 $ 38.3 - $ 38.2 (A) $ 11.3
Valuation allowance for deferred tax assets:
For the years ended:
December 31, 2006 $ - $ - $ 10.6 (B) $ - $ 10.6
December 31, 2005 $ - $ - $ - $ - $ -
December 31, 2004 $ - $ - $ - $ - $ -
Accrued liabilities related to restructuring
and other charges:
For the years ended:
December 31, 2006 $ - $ 48.6 (C) $ 17.8 (D) $ 37.5 (E) $ 28.9
December 31, 2005 $ - $ 35.7 (F) $ - $ 35.7 (G) $ -
December 31, 2004 $ - $ 11.8 (H) $ - $ 11.8 (I) $ -
Notes:
(A) Accounts charged off net of recoveries of amounts previously written off.
(B) Valuation allowance for deferred taxes was established related to expected realization of net operating losses assumed
from Valor in the merger.
(C) During 2006, the Company incurred $26.8 million of incremental costs, principally consisting of rebranding costs,
consulting and legal fees, and system conversion costs related to the spin off of the Alltel wireline telecommunication
business and merger with Valor. These costs do not include a $0.8 million non-cash charge related to the accelerated
vesting of employees’ Alltel restricted stock, which was recorded against paid-in capital. Windstream also incurred $10.6
million in restructuring charges, which consisted of severance and employee benefit costs related to a planned workforce
reduction, and $11.2 million in investment banker, audit and legal fees associated with the announced split off of its
directory publishing business.
(D) Valor integration charges included in goodwill in the amount of $17.8 million consisted primarily of severance and lease
termination penalties.
(E) Includes cash outlays of $28.4 million for restructuring costs charged to expense, and $9.1 million in cash outlays for
Valor integration charged to goodwill.
(F) During 2005, the Company incurred $4.5 million of severance and employee benefit costs related to a workforce reduction
in its wireline operations. The Company also incurred $31.2 million of incremental costs, principally consisting of
investment banker, audit and legal fees, related to the spin-off from Alltel and merger with Valor.
(G) Includes cash outlays of $35.7 million for expenses in 2005.
(H) During 2004, Windstream reorganized its operations and support teams and also announced its plans to exit its competitive
service operations in the Jacksonville, Florida market due to the continued unprofitability of these operations. In
connection with these activities, Windstream recorded a restructuring charge of $13.6 million consisting of $11.6 million
in severance and employee benefit costs related to a workforce reduction, $1.3 million of employee relocation expenses
and $0.7 million of other exit costs. During 2004, the Company also recorded a $1.8 million reduction in the liabilities
associated with various restructuring activities initiated prior to 2003, consisting of lease and contract termination costs.
The reduction primarily reflected differences between estimated and actual costs paid in completing the previous planned
lease and contract terminations.
(I) Includes cash outlays of $11.8 million for expenses in 2004.
See Note 10, “Restructuring and Other Charges”, to the consolidated financial statements on pages F-59 to F-61 in the Financial
Supplement, which is incorporated herein by reference, for additional information regarding the restructuring and other charges
recorded by the Company in 2006, 2005 and 2004.
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