Windstream 2010 Annual Report Download - page 149

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Acquisitions and Dispositions, Continued:
using a multiprotocol label switch backbone and distributed IP voice switching architecture. In accordance with
the NuVox merger agreement, Windstream acquired all of the issued and outstanding shares of common stock of
NuVox for $198.4 million in cash, net of cash acquired, and issued approximately 18.7 million shares of
Windstream common stock valued at $185.0 million on the date of issuance. Windstream also repaid outstanding
indebtedness and related liabilities on existing swap agreements of NuVox totaling $281.0 million.
The following table summarizes the final fair values of the assets acquired and liabilities assumed for NuVox and
Iowa Telecom. Adjustments to the preliminary assessment of fair value assets and liabilities of NuVox and Iowa
Telecom were primarily associated with changes in current assets and liabilities, wireless licenses and deferred
taxes that existed as of the date of acquisition.
NuVox Iowa Telecom
(Millions)
Final
Allocation
Final
Allocation
Fair value of assets acquired:
Assets held for sale (a) $ - $ 34.0
Other current assets 68.0 36.7
Property, plant and equipment 241.7 329.9
Goodwill 269.7 568.1
Wireline franchise rights (b) - 230.0
Cable franchise rights (b) - 5.6
Customer lists (c) 180.0 130.6
Trade name (d) 4.2 3.1
Other assets - 11.1
Total assets acquired 763.6 1,349.1
Fair value of liabilities assumed:
Current maturities of long-term debt (260.7) (610.2)
Other current liabilities (63.8) (49.7)
Deferred income taxes on acquired assets (28.9) (125.3)
Other liabilities (26.8) (29.5)
Total liabilities assumed (380.2) (814.7)
Common stock issued (inclusive of additional paid-in capital) (185.0) (280.8)
Cash paid, net of cash acquired $ 198.4 $ 253.6
(a) The Company has designated wireless licenses acquired from Iowa Telecom as held for sale.
(b) Wireline franchise rights and cable franchise rights will be amortized on a straight-line basis over an
estimated life of 30 years and 15 years, respectively.
(c) Customer lists will be amortized using the sum-of-years digit methodology over an estimated useful life of
nine years.
(d) Trade names will be amortized on a straight-line basis over an estimated useful life of one year.
Acquisition of Lexcom – On December 1, 2009, we completed our acquisition of Lexcom, which as of the date of
acquisition served approximately 22,000 access lines, 9,000 high-speed Internet customers and 12,000 cable
television customers in North Carolina. This acquisition increased Windstream’s presence in North Carolina and
provides the opportunity for operating synergies with contiguous Windstream markets. In accordance with the
Lexcom merger agreement, Windstream acquired all of the issued and outstanding shares of Lexcom for $138.7
million in cash, net of cash acquired.
Acquisition of D&E – On November 10, 2009, we completed our merger with D&E, which as of the date of
acquisition served approximately 110,000 ILEC access lines, 35,000 CLEC access lines, 45,000 high-speed
Internet customers and 9,000 cable television customers. This acquisition increased Windstream’s presence in
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