Windstream 2008 Annual Report Download - page 81

WINDSTREAM CORPORATION
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(Dollars in Millions)
Column A Column B Column C
Additions
Column D Column E
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 others:
For the years ended:
December 31, 2008 $ 13.1 $ 38.7 $ - $35.5 (A) $ 16.3
December 31, 2007 $ 10.4 $ 28.5 $ - $25.6 (A) $ 13.1
December 31, 2006 $ 9.7 $ 18.4 $ - $17.7 (A) $ 10.4
Valuation allowance for deferred tax assets:
For the years ended:
December 31, 2008 $ 11.3 $ - $ - $ 8.7 (B) $ 2.6
December 31, 2007 $ 10.6 $ - $ 3.5 (C) $ 2.8 (D) $ 11.3
December 31, 2006 $ - $ - $ 10.6 (E) $ - $ 10.6
Accrued liabilities related to merger, integration
and restructuring charges:
For the years ended:
December 31, 2008 $ 14.7 $ 10.1 (F) $ - $16.5 (G) $ 8.3
December 31, 2007 $ 28.9 $ 13.9 (H) $ 25.3 (I) $53.4 (J) $ 14.7
December 31, 2006 $ - $ 48.6 (K) $ 17.8 (L) $37.5 (M) $ 28.9
Notes:
(A) Accounts charged off net of recoveries of amounts previously written off.
(B) Net valuation allowance adjustment through goodwill in 2008 primarily due to a purchase accounting
adjustment for a revision in the limitation associated with the federal net operating loss carry forward
acquired from the merger with Valor.
(C) Valuation allowance for deferred taxes was established through goodwill related to expected realization of
net operating losses assumed from the acquisition of CTC.
(D) Adjustment through goodwill to the net operating loss carry forwards acquired from Valor.
(E) Valuation allowance for deferred taxes was established through goodwill related to expected realization of
net operating losses assumed from Valor in the merger.
(F) The Company incurred merger and integration costs of $6.2 million related to the acquisition of CTC
wireline operations during the twelve months ended December 31, 2008, primarily related to system
conversion costs. During the second quarter of 2008, the Company determined not to use certain software
acquired in the CTC acquisition; therefore, we recognized a $5.4 million non-cash charge to abandon this
asset, of which $0.8 million was related to the wireless business. Additionally in 2008, the Company incurred
$8.5 million in restructuring costs primarily related to the announced workforce reduction in the fourth
quarter of 2008 to control expenses in a challenging economy and to realign certain information technology,
network operations and business sales functions.
(G) Includes cash outlays of $5.0 million for merger, integration and restructuring costs charged to expense, and
$11.5 million in cash outlays for CTC and Valor transaction costs charged to goodwill.
(H) During 2007, the Company incurred total merger and integration costs of $5.6 million to complete the
acquisition of CTC, and incurred $3.7 million in transaction costs to complete the split off of its directory
publishing business. Additionally in 2007, the Company incurred $4.6 million in restructuring costs from a
workforce reduction plan and the announced realignment of its business operations and customer service
functions intended to improve overall support to its customers.
(I) CTC transaction charges included in goodwill in the amount of $25.3 million consisted primarily of
capitalized transaction and employee-related costs.
(J) Includes cash outlays of $32.4 million for merger, integration and restructuring costs charged to expense, and
$21.0 million in cash outlays for CTC and Valor transaction costs charged to goodwill.
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