Windstream 2007 Annual Report Download - page 68

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Windstream Corporation
Form 10-K, Part I
Item 2. Properties
WIRELINE PROPERTY
The Company’s wireline subsidiaries own property in their respective operating territories which consists primarily of
land and buildings, central office equipment, outside plant and related equipment. Outside communications plant
includes aerial and underground cable, conduit, poles and wires. Central office equipment includes digital switches and
peripheral equipment. The gross investment by category in wireline property as of December 31, 2007, was as follows:
(Millions)
Land $ 24.7
Buildings and improvements 435.1
Central office equipment 3,667.8
Outside communications plant 4,445.8
Furniture, vehicles and other equipment 447.7
Total $ 9,021.1
PRODUCT DISTRIBUTION PROPERTY
Properties of the product distribution operations consist primarily of office and warehouse facilities and software to
support the business units in the distribution of telecommunications products. The total gross investment by category
for the product distribution operations of the Company as of December 31, 2007, was as follows:
(Millions)
Land $-
Buildings and leasehold improvements 0.3
Software, including internally developed 6.5
Furniture, fixtures, vehicles and other 4.8
Total $ 11.6
OTHER OPERATIONS PROPERTY
Windstream also holds a $12.7 million gross investment in property used in its wireless business, consisting primarily
of central office equipment.
Item 3. Legal Proceedings
On October 16, 2006, the Company received a negative ruling in a binding arbitration proceeding previously brought
against Valor Communications Southwest LLC and Valor Communications Group, Inc., by former employees
regarding stock option award agreements. On January 8, 2007, the arbitrator entered a final award for the former
employees of $7.2 million for the value of options that the Company asserts were without value immediately prior to
Valor’s initial public offering in February 2005. The Company had established a liability for this amount in accounting
for the merger with Valor in 2006. The basis for the award was the arbitrator’s finding that these particular claimants’
options were extended past the initial public offering date. In September 2007, the Company entered into a confidential
settlement agreement that resolved this matter through a cash payment in an amount less than the amount of the
arbitrator’s final award in return for a full and complete release of all claims from the claimants. The Company made
no admission of liability in the settlement of this matter.
The Company is party to various other legal proceedings. Although the ultimate resolution of these various proceedings
cannot be determined at this time, management of the Company does not believe that such proceedings, individually or
in the aggregate, will have a material adverse effect on the future consolidated results of income, cash flows or
financial condition of the Company.
In addition, management of the Company is currently not aware of any environmental matters that, individually or in
the aggregate, would have a material adverse effect on the consolidated financial condition or results of operations of
the Company.
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