Windstream 2007 Annual Report Download - page 67

Windstream Corporation
Form 10-K, Part I
Item 1A. Risk Factors
limitations, power surges or outages, software defects and disruptions beyond our control, such as natural disasters and
acts of terrorism. From time to time in the ordinary course of business, we will experience short disruptions in our
service due to factors such as cable damage, inclement weather and service failures of our third party service providers.
We could experience more significant disruptions in the future. We could also face disruptions due to capacity
limitations if changes in our customers’ usage patterns for our high-speed Internet services result in a significant
increase in capacity utilization, such as through increased usage of video or peer-to-peer file sharing applications.
Disruptions may cause interruptions in service or reduced capacity for customers, either of which could cause us to lose
customers and incur expenses, and thereby adversely affect our business, revenue and cash flows.
Weak economic conditions may decrease demand for our services.
We could be sensitive to economic conditions and downturns in the economy. Downturns in the economy and vendor
concentration in the markets we serve could cause our existing customers to reduce their purchases of our basic and
enhanced services and make it difficult for us to obtain new customers.
Adverse developments in our relationship with our employees could adversely affect our business, financial
condition or results of operations.
As of December 31, 2007, approximately 1,819 of our employees, or 24 percent of all of our employees, at various
sites were covered by collective bargaining agreements. Our relationship with these unions generally has been
satisfactory, but occasional work stoppages have occurred. Within the last five years, one work stoppage occurred at
our facility in Lexington, Kentucky, which involved approximately 350 employees and lasted approximately 120 days.
Any work stoppages in the future could have a material adverse effect on our business, financial condition or results of
operations.
We are currently party to 20 collective bargaining agreements with several unions, which expire at various times. Of
these collective bargaining agreements, 9 agreements covering a total of approximately 763 employees as of
December 31, 2007 are due to expire in 2008, including one contract covering approximately 500 employees in the
former Valor market that expired February 28, 2008, and remain subject to continuing renewal negotiations.
Historically, we have succeeded in negotiating new collective bargaining agreements without work stoppages;
however, no assurances can be given that we will succeed in negotiating new collective bargaining agreements to
replace the expiring ones without work stoppages. Any work stoppage in the future could have a material adverse
effect on our business, financial condition or results of operations.
Item 1B. Unresolved Staff Comments
No reportable information under this item.
Item 2. Properties
The Company’s properties do not provide a basis for description by character or location of principal units. Certain
Windstream properties are pledged as collateral as discussed further in Note 15 to the consolidated financial
statements. The obligations under our senior secured credit facilities are secured by liens on substantially all of the
personal property assets of Windstream and its subsidiaries who are guarantors of our senior secured credit facilities. A
summary of the Company’s investment in property, plant and equipment segregated between the Company’s regulated
wireline, product distribution, and other operations is presented below.
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