Windstream 2009 Annual Report Download - page 86

Windstream Corporation
Form 10-K, Part I
Item 1. Business
The Pennsylvania PUC is currently conducting a review of its universal service fund. The review is focused on various
aspects of the fund as they pertain to the basic rates of eligible USF recipient companies and the impact of their
alternative regulation plans. The Company receives $13.3 million annually from the fund. The Company cannot
estimate at this time the financial impact that would result from the changes, if any, to the Pennsylvania universal
service fund.
In June 2006, the D&E subsidiaries made a filing to increase their local rates in accordance with their alternative
regulation plans. Under the plans, local rates would have exceeded a prescribed local rate cap of $18.00. The D&E
subsidiaries sought to recover the revenues that exceeded the rate cap by increasing intrastate switched access rates. On
July 11, 2007, the Pennsylvania PUC allowed the local rate increases to go into effect, but denied the proposed
increases in switched access rates. The D&E subsidiaries filed a petition for reconsideration, asking in the alternative,
to be permitted to recover revenues in excess of the local rate cap from the Pennsylvania universal service fund. On
November 29, 2007, the Pennsylvania PUC approved the local rate increases and allowed the D&E subsidiaries to
exceed the rate cap, but denied the request for increases in state universal service support. On May 9, 2008, the D&E
subsidiaries filed an appeal in the Commonwealth Court seeking to reverse the above decisions. On December 15,
2009, the Commonwealth Court issued an order affirming the Pennsylvania PUC’s decision. The Court’s decision did
not have a material impact on the Company’s operations and we do not plan to appeal.
Other Regulations
Under applicable state regulations, some of our subsidiaries are required to obtain the applicable state commission
approval for, or are subject to limitations on, any issuance of stock, incurrence of long-term debt, payment of
dividends, acquisition or sale of material utility asset or any change in control of these subsidiaries or their parent
companies. None of these limitations have had any material impact on the Company.
Additionally, if we seek to acquire control of other local exchange carriers, Windstream could be required to obtain the
approval of PSCs in the states where the target companies have operations, and such approvals could be conditioned on
Windstream agreeing to restrictions on its operations to which it would not otherwise be subject. Examples of
conditions of approval include restrictions on the amount of Windstream’s indebtedness, its dividend practice, or
requirements to meet specific service levels or technology deployments.
DIRECTORY PUBLISHING SEGMENT
On November 30, 2007, Windstream completed the split off of its directory publishing business. Effective with the
completion of the split off of its directory publishing business as discussed above in “Material Dispositions Completed
During the Last Five Years”, the Company’s publishing services have ceased.
The following table is a summary of directory publishing operations for the years ended December 31:
Directory Publishing Segment 2009 2008 2007
Total revenues from external customers $ - $ - $ 111.3
Segment income $ - $ - $ 5.3
Total assets $ - $ - $ 85.7
FORWARD-LOOKING STATEMENTS
Windstream claims the protection of the safe-harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995 for this annual report on Form 10-K. Forward-looking statements are subject to
uncertainties that could cause actual future events and results to differ materially from those expressed in the forward-
looking statements. Forward looking statements include, but are not limited to, statements about expected levels of
support from universal service funds or other government programs, expected rates of loss of access lines or
intercarrier compensation, our expected ability to fund operations from cash flows from operations, our expectation of
no pension contribution in 2010, expected synergies and other benefits from completed and pending acquisitions,
expected effective federal income tax rates and forecasted capital expenditure amounts. These and other forward-
looking statements are based on estimates, projections, beliefs, and assumptions that Windstream believes are
reasonable but are not guarantees of future events and results. Actual future events and results of Windstream may
differ materially from those expressed in these forward-looking statements as a result of a number of important factors.
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