Windstream 2010 Annual Report Download - page 144

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies and Changes, Continued:
A reconciliation of net income and number of shares used in computing basic and diluted earnings per share was
as follows for the years ended December 31:
(Millions, except per share amounts) 2010 2009 2008
Basic and diluted earnings per share:
Numerator:
Income from continuing operations $ 310.7 $ 334.5 $ 434.9
Income from continuing operations allocable to participating
non-vested restricted shares (3.0) (3.6) (3.7)
Adjusted income from continuing operations attributable to
common shares 307.7 330.9 431.2
Loss from discontinued operations - - (22.2)
Loss from discontinued operations allocable to participating
non-vested restricted shares - - -
Adjusted loss from discontinued operations attributable to common
shares - - (22.2)
Net income attributable to common shares $ 307.7 $ 330.9 $ 409.0
Denominator:
Weighted average basic shares outstanding 471.0 436.6 440.7
Weighted average participating non-vested restricted shares (3.0) (3.7) -
Weighted average shares outstanding for basic earnings per share 468.0 432.9 440.7
Basic and diluted earnings per share:
From continuing operations $.66 $.76 $.98
From discontinued operations - - (.05)
Net income $.66 $.76 $.93
Accounting Changes
Change in Accounting Estimate – Effective January 1, 2009, the Company prospectively changed its estimate of
useful life for its wireline franchise rights from indefinite-lived to 30 years, primarily due to the effects of
increasing competition. Commensurate with this change, the Company reviewed its wireline franchise rights for
impairment and noted that no impairment existed as of January 1, 2009. See “Significant Accounting Policies –
Goodwill and Other Intangible Assets” for further discussion.
Recently Adopted Accounting Standards
Accounting Standards Codification – In the third quarter of 2009, Windstream adopted the Financial Accounting
Standards Board (“FASB”) Accounting Standards Codification (the “Codification”) as the single authoritative
source for U.S. GAAP. The Codification superseded all existing accounting standard documents and other
accounting literature became nonauthoritative and simplified user access to all authoritative U.S. GAAP by
providing all the authoritative literature related to a particular topic in one place. As a result, Windstream has
removed all references to superseded accounting standards in its consolidated financial statements and
accompanying notes.
Fair Value Measurements – On January 1, 2008, Windstream adopted authoritative guidance for fair value
measurements of financial assets and liabilities and non-financial assets and liabilities recognized or disclosed at
fair value on a recurring basis. This authoritative guidance clarified the definition of fair value, established a
framework for measuring fair value and expanded the disclosures related to fair value measurements that are
included in a company’s financial statements. It emphasized that fair value is a market-based measurement and
not an entity-specific measurement, and that it should be based on an exchange transaction in which a company
sells an asset or transfers a liability. The guidance also established a fair value hierarchy in which observable
market data would be considered the highest level, while fair value measurements based on an entity’s own
assumptions would be considered the lowest level. The Company adopted the provisions of this guidance for
non-financial assets and liabilities recognized or disclosed at fair value on a non-recurring basis, except items
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