Windstream 2008 Annual Report Download - page 145
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Acquisitions and Dispositions, Continued:
In connection with the merger, the Company recorded $13.7 million of severance and severance-related costs and
$4.1 million of contract termination costs, which are reflected in goodwill in the above allocation of the cost of the
merger in accordance with EITF 95-3. Of these amounts, $4.9 million and $8.8 million in severance and
severance-related costs were paid in 2007 and 2006, respectively, and $1.0 million, $1.3 million and $0.3 million
of contract termination costs were paid in 2008, 2007 and 2006, respectively. The remaining costs, consisting of
$1.5 million in contract termination costs, are included in other current liabilities in the consolidated balance sheet
as of December 31, 2008, and will be paid over the remaining term of the contract with cash from operations.
The following unaudited pro forma condensed consolidated results of income of Windstream for 2006 assume that
the spin off from Alltel and merger with Valor occurred as of January 1, 2006:
(Millions, except per share amounts) 2006
Revenues and sales $3,299.7
Income before extraordinary item $ 438.4
Net income $ 538.1
Basic weighted average common shares outstanding 473.7
Diluted weighted average common shares outstanding 473.9
Earnings per share before extraordinary item:
Basic $.93
Diluted $.93
Earnings per share:
Basic $1.14
Diluted $1.14
The unaudited pro forma information presents the combined operating results of Alltel Holding Corp. and Valor,
with the results prior to the acquisition date adjusted to include the pro forma impact of the following: the
elimination of transactions between Alltel Holding Corp. and Valor; additional amortization of intangible assets
resulting from the merger; the elimination of merger expenses; additional interest expense incurred on the notes
issued pursuant to the spin off and merger; the impact of income taxes on these pro forma adjustments utilizing
Windstream’s statutory tax rate of 39.35 percent for the year ended December 31, 2006; and the issuance of
common shares to Valor shareholders.
The unaudited pro forma results are presented for illustrative purposes only and do not reflect the realization of
potential cost savings, or any related restructuring costs. These pro forma results do not purport to be indicative of
the results that would have actually been obtained if the merger occurred as of January 1, 2006, nor does the pro
forma data intend to be a projection of results that may be obtained in the future.
F-57