Windstream 2008 Annual Report Download - page 140

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies and Changes, Continued:
assets of $103.2 million, an increase in the liability for pension and other postretirement benefits of $106.1
million, a reduction in deferred taxes of $82.1 million and a reduction in accumulated other comprehensive
income (loss) of $127.2 million.
Step two of the implementation of SFAS No. 158 requires companies to annually measure plan assets and
obligations in order to determine the funded status of its plans as of the date of the company’s fiscal year-end.
Windstream has historically used its fiscal year-end of December 31st as the measurement date of the funded
status of its plans, and thus step two of the implementation will not impact our consolidated financial statements.
Adoption of SFAS No. 123R - On January 1, 2006, the Company adopted SFAS No. 123(R), “Share-Based
Payment”, following the modified prospective transition method using a Black-Scholes valuation model. SFAS
No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be
valued at fair value on the date of grant, and to be expensed over the applicable vesting period. In addition, the
revised standard required recognition of compensation expense related to any awards that were not fully vested as
of the effective date. The Company recognized compensation cost in its consolidated financial statements for all
awards granted after January 1, 2006 and for all existing awards for which the requisite service had not been
rendered as of the date of adoption. The adoption of SFAS No. 123(R) did not have a material impact on net
income in 2006.
Recently Issued Accounting Pronouncements
SFAS No. 141(R) - In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”, a revision
of SFAS No. 141. Under SFAS No. 141(R), an acquiring entity will be required to recognize all the assets
acquired and liabilities assumed in a transaction at the acquisition-date fair value with limited exceptions. SFAS
No. 141(R) will change the accounting treatment for certain specific items, including acquisition costs, acquired
contingent liabilities, restructuring costs, deferred tax asset valuation allowances and income tax uncertainties
after the acquisition date. SFAS No. 141(R) also includes a substantial number of new disclosure requirements.
For calendar year companies like Windstream, SFAS No. 141(R) is effective for, and will be applied to, all future
business combinations transacted on or after January 1, 2009. Upon adoption, SFAS No. 141(R) did not have a
material impact on Windstream’s consolidated financial statements.
SFAS No. 160 - In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated
Financial Statements – An Amendment of ARB No. 51”. SFAS No. 160 requires noncontrolling interest to be
recognized as equity in the consolidated financial statements, separate from the parent’s equity. In addition, net
income attributable to the noncontrolling interest will be included in consolidated net income. SFAS No. 160
clarifies that changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation are
equity transactions if the parent retains its controlling financial interest. In addition, when a subsidiary is
deconsolidated, the parent must recognize a gain or loss in net income, measured using the fair value of the
noncontrolling equity investment on the deconsolidation date. Expanded disclosures are also required regarding
the interests of the parent and its noncontrolling interest. SFAS No. 160 is effective for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15, 2008. The Company does not expect SFAS
No. 160 to have any impact on its consolidated financial statements.
SFAS No. 161 - In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and
Hedging Activities”. SFAS No. 161 requires companies with derivative instruments to disclose information that
should enable financial statement users to understand how and why a company uses derivative instruments, how
derivative instruments and related hedged items are accounted for under SFAS No. 133, “Accounting for
Derivative Instruments and Hedging Activities” and how derivative instruments and related hedged items affect a
company’s financial position, financial performance and cash flows. SFAS No. 161 is effective for financial
statements issued for fiscal years and interim periods beginning after November 15, 2008. Windstream is
currently evaluating the impact, if any, that SFAS No. 161 will have on its consolidated financial statements.
FSP FAS 142-3 - In April 2008, the FASB issued FSP FAS 142-3, “Determination of the Useful Life of Intangible
Assets”. FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension
assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, “Goodwill
and Other Intangible Assets” for intangible assets acquired after adoption. Under FSP FAS 142-3 an entity should
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