Windstream 2010 Annual Report Download - page 76

Windstream Corporation
Form 10-K, Part I
Item 1A. Risk Factors
In addition, our ability to borrow funds in the future will depend in part on the satisfaction of the covenants in our
credit facilities and its other debt agreements. If we are unable to satisfy the financial covenants contained in those
agreements, or are unable to generate cash sufficient to make required debt payments, the lenders and other parties to
those arrangements could accelerate the maturity of some or all of our outstanding indebtedness.
We may not generate sufficient cash flows from operations, or have future borrowings available under our credit
facilities or from other sources sufficient to enable us to make our debt payments or to fund dividends and other
liquidity needs. We may not be able to refinance any of our debt, including our credit facilities, on commercially
reasonable terms or at all. If we are unable to make payments or refinance our debt, or obtain new financing under
these circumstances, we would have to consider other options, such as selling assets, issuing additional equity or debt,
or negotiating with our lenders to restructure the applicable debt. Our credit agreement and the indentures governing
our senior notes may restrict, or market or business conditions may limit, our ability to do some of these things on
favorable terms or at all.
As of February 16, 2011, Moody’s Investors Service (“Moody’s”), Standard & Poor’s Corporation (“S&P”) and Fitch
Ratings (“Fitch”) had granted Windstream the following senior secured, senior unsecured and corporate credit ratings:
Description Moody’s S&P Fitch
Senior secured credit rating Baa3 BB+ BBB-
Senior unsecured credit rating Ba3 B+ BB+
Corporate credit rating Ba2 BB- BB+
Outlook Stable Stable Stable
Factors that could affect Windstream’s short and long-term credit ratings include, but are not limited to, a material
decline in the Company’s operating results, increased debt levels relative to operating cash flows resulting from future
acquisitions, increased capital expenditure requirements, or changes to our dividend policy. If Windstream’s credit
ratings were to be downgraded from current levels, the Company might incur higher interest costs on future
borrowings, and the Company’s access to the public capital markets could be adversely affected.
Windstream may be unable to fully realize expected synergies and growth opportunities in connection with various
recent transactions.
In addition to the D&E and Lexcom transactions completed in 2009, the Company has acquired NuVox, Iowa
Telecom, Q-Comm and Hosted Solutions during the year ended December 31, 2010. For more information on these
transactions, see “Item 1 – Material Acquisitions Completed During The Last Five Years”.
Windstream expects to achieve substantial synergies, cost savings and growth opportunities as a result of such
acquisitions. However, Windstream’s ability to realize the anticipated synergies, cost savings and growth opportunities
will depend upon the successful integration of the respective businesses with Windstream. Even if Windstream
successfully integrates these businesses, there can be no assurance that these integrations will result in the realization of
the full benefit of the anticipated synergies, cost savings or growth opportunities or that these benefits will be realized
within the expected time frames. Despite Windstream’s efforts to retain quality employees, Windstream might lose
some employees in connection with these acquisitions. Windstream cannot assure you that the combined companies
will be able to attract, retain and integrate employees following these acquisitions. It is possible that the integration
process of the respective acquisitions could result in the diversion of Windstream’s management’s attention, the
disruption or interruption of, or the loss of momentum in, Windstream’s ongoing business or inconsistencies in
standards, controls, procedures and policies, any of which could adversely affect Windstream’s ability to maintain
relationships with its customers and employees or Windstream’s ability to achieve the anticipated benefits of these
acquisitions, or could reduce the earnings or otherwise adversely affect Windstream’s business and financial results.
The market price of Windstream common stock may decline as a result of these acquisitions if the integration of these
businesses is unsuccessful or takes longer than expected, the perceived benefits of these acquisitions are not achieved
as rapidly or to the extent anticipated by financial analysts or investors, or the effect of these acquisitions on
Windstream’s financial results is not consistent with the expectations of investors.
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