Windstream 2011 Annual Report Download

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WINDSTREAM 2011 ANNUAL REPORT
PROXY STATEMENT AND FORM 10-K

Table of contents

  • Page 1
    WINDSTREAM 2011 ANNUAL REPORT PROXY STATEMENT AND FORM 10-K

  • Page 2
    ... consumer demand for wireless data drove wireless carriers to seek more bandwidth on the wireline transport network, creating intense competition among transport providers. The Windstream team did tremendous work winning long-term contracts to supply fiber optic connections to cell towers. We spent...

  • Page 3
    WINDSTREAM CORPORATION Table of Contents Proxy Statement Annual Report Form 10-K Information Regarding Non-GAAP Financial Measures Corporate Information

  • Page 4

  • Page 5
    ... MAY VOTE ON THE INTERNET, BY TELEPHONE OR BY MAIL. Important notice regarding the availability of proxy materials for the 2012 Annual Meeting of Stockholders to be held on May 9, 2012. Windstream's Proxy Statement and Annual Report to security holders for the fiscal year ended December 31, 2011 are...

  • Page 6

  • Page 7
    ......Compensation of Named Executive Officers ...Information on Plan-Based Awards ...Pension Benefits ...Non-Qualified Deferred Compensation ...Potential Payments Upon Termination or Change-in-Control ...Clawback Policy ...Risks Presented by Windstream's Compensation Programs ...Compensation Committee...

  • Page 8
    ... annual report. The notice also instructs you on how to vote through the Internet or by telephone. This process is designed to expedite stockholders' receipt of proxy materials, lower the cost of the annual meeting, and help conserve natural resources. However, if you would prefer to receive printed...

  • Page 9
    ... as a vote "AGAINST" each item. In order to minimize the number of broker non-votes, Windstream encourages you to provide voting instructions to the organization that holds your shares by carefully following the instructions provided in the notice of internet availability of proxy materials. 3

  • Page 10
    ... insights into Windstream's challenges and opportunities. As a current chief executive officer of a public company and a director of several private businesses, he has insight on managing complex business operations, overseeing business risk, designing compensation programs that motivate people...

  • Page 11
    ...in July 2006 until February 2010 when, to enhance Windstream's corporate governance profile, Mr. Frantz and the Board determined to select a Chairman who is "independent", as defined by applicable stock exchange rules (because of compensation arrangements implemented in connection with the 2006 spin...

  • Page 12
    ... in operating and capital synergies. Windstream completed four acquisitions in 2010 alone totaling $2.2 billion. In 2011, Windstream acquired PAETEC, a leading communications provider for $2.3 billion. Mr. Gardner's service on the boards of another public company and several non-profit organizations...

  • Page 13
    ... and business experience. In his current role as Chair of the Compensation Committee of Windstream and through his professional career including his prior role as a chief executive officer of a private company, Mr. Montgomery has experience in strategic planning, risk management, compensation plans...

  • Page 14
    ...: (1) The director, or one or more members of the director's immediate family, purchased services or products from Windstream in the ordinary course of business and on terms generally available to employees or customers; (2) The director, or one or more members of the director's immediate family...

  • Page 15
    ... with Windstream's related party transaction policy and stock ownership guidelines, and oversees spending on political activities by Windstream. On an annual basis, the Governance Committee reviews and assesses Windstream's Corporate Governance Board Guidelines and recommends any proposed changes to...

  • Page 16
    .... Windstream's Corporate Governance Board Guidelines, its code of ethics policy entitled "Working With Integrity", and the charters for the Audit, Compensation and Governance Committees are available on the Investor Relations page of the Windstream Corporation website at www.windstream.com/investors...

  • Page 17
    ..., the person's base salary and the closing price of Windstream common stock, in each case as of the date of Windstream's 2011 Annual Meeting of Stockholders, and the number of shares deemed owned under the guidelines: Named Executive Officers Jeffery R. Gardner Anthony W. Thomas Brent Whittington...

  • Page 18
    ... to own and the number of shares deemed owned under the guidelines. Based on current ownership amounts, Windstream expects that each non-management director will be in compliance with the stock ownership guidelines at the time of the 2012 Annual Meeting of Stockholders. Non-Management Director Carol...

  • Page 19
    SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS Set forth below is certain information, as of March 1, 2012, as to shares of Windstream Common Stock beneficially owned by each director, by each named executive officer who was serving as an executive officer at the end of 2011, and by all ...

  • Page 20
    ... the outstanding unvested PBRSUs granted to each named executive officer: Unvested Performance-Based Restricted Stock Units (PBRSUs) 511,813 82,145 109,715 82,145 38,258 Named Executive Officers Jeffery R. Gardner Anthony W. Thomas Brent Whittington John P. Fletcher Cynthia B. Nash Total Shares...

  • Page 21
    ...COMMITTEE REPORT ON EXECUTIVE COMPENSATION This report provides information concerning the Compensation Committee of Windstream Corporation's Board of Directors. The Compensation Committee's Charter is available on the Investor Relations page of Windstream Corporation's website at www.windstream.com...

  • Page 22
    AUDIT COMMITTEE REPORT This report provides information concerning the Audit Committee of Windstream Corporation's Board of Directors. The Audit Committee's Charter is available on the Investor Relations page of Windstream Corporation's website at www.windstream.com/investors. The Audit Committee is...

  • Page 23
    ...of our short-term and long-term incentive plans since our formation in 2006. 2011 was an incredibly successful year for Windstream. Throughout the year, we integrated several key acquisitions made in 2010, which expanded our suite of business offerings. In December 2011, Windstream added another key...

  • Page 24
    ... Compensation Committee. During 2011, the Compensation Committee engaged Pearl Meyer & Partners, LLC ("PM&P") to assist the Committee in the review and design of Windstream's executive compensation program. PM&P reports directly to the Compensation Committee and performed no services to Windstream...

  • Page 25
    ... Windstream Pension Plan and the related Windstream Benefit Restoration Plan. 2011 Compensation Philosophy. The Compensation Committee considers the total compensation of each executive officer as well as the allocation of compensation among base salary, short-term incentive compensation, and equity...

  • Page 26
    ... will accrue dividend equivalents to be paid if performance-based conditions are satisfied. The Compensation Committee increased the percentage of equity awards granted in the form of performance-based equity awards to 70% (up from 50% in 2011) for named executive officers other than Mr. Gardner and...

  • Page 27
    ... successfully integrating four key acquisitions made in 2010, and adding another key business to Windstream's portfolio with the acquisition of PAETEC. Equity-Incentive Awards. Windstream maintains an equity-based compensation program for executive officers to provide long-term incentives, to better...

  • Page 28
    ... the high-dividend, low-growth profile of Windstream. For 2011 and 2012, all performance-based equity awards were granted in the form of PBRSUs. For all outstanding grants of time-based restricted stock, executive officers have the rights of a stockholder to vote the restricted stock and to receive...

  • Page 29
    ...no agreement or plan to provide severance benefits to executive officers other than benefits that are generally available to all employees under Windstream's severance plan and benefits available under the change-in-control agreements discussed below. During 2009, the Compensation Committee approved...

  • Page 30
    ... on the foregoing, the Compensation Committee approved the payment of change-in-control benefits to Mr. Gardner and the other executive officers on a "double-trigger" basis, which means that a change-in-control of Windstream must occur and the officer's employment with Windstream must be terminated...

  • Page 31
    ... will accrue dividend equivalents to be paid if performance-based conditions are satisfied. The Compensation Committee increased the percentage of equity awards granted in the form of performance-based equity awards to 70% (up from 50% in 2011) for named executive officers other than Mr. Gardner and...

  • Page 32
    ...receive $60,000 of the $186,000 in Windstream common stock instead of cash. Amount reflects change in pension value for the Windstream Pension Plan and Benefit Restoration Plan. Compensation of Named Executive Officers The following table shows the compensation paid during all of 2011 by Windstream...

  • Page 33
    ...fiscal year ended December 31, 2011. The information provided in the Stock Awards column does not reflect the manner in which the Compensation Committee viewed or determined the equity compensation values for the named executive officers. Specifically, under applicable SEC rules, the grant date fair...

  • Page 34
    ...executive officer in 2009, 2010 and 2011 that vest ratably over a three-year period with each year set as a separate performance period. The Compensation Committee sets the threshold and target Adjusted OIBDA amount each year during the three-year vesting period. Pursuant to SEC rules and applicable...

  • Page 35
    ... P. Fletcher Cynthia B. Nash (1) Windstream named executive officers have no outstanding awards of stock options. (2) Market value calculated using the closing price of Windstream Common Stock on December 30, 2011, which was $11.74. (3) Performance-based shares vested ratably in annual one-third...

  • Page 36
    ... grant stock options and had no exercises for executive officers in 2011. Shares vested on February 15, 2011 with a closing price of $13.24. Pension Benefits The following is a brief summary of the material terms of the retirement plans maintained by Windstream. Windstream Pension Plan. Windstream...

  • Page 37
    ... career average annual base salary (three highest years) exceeds his or her Social Security covered compensation, multiplied by his years of pre-1988 credited service. Windstream Benefit Restoration Plan. The Windstream Benefit Restoration Plan ("BRP") contains an unfunded, unsecured pension benefit...

  • Page 38
    ... from the Alltel Corporation Pension Plan and the Alltel Corporation Benefit Restoration Plan as part of the spin-off. The present value of accumulated benefits was calculated based on retirement at age 60 with 20 years of credited service, current compensation as of December 31, 2011, no pre...

  • Page 39
    ... previously filed proxy statements in the year earned to the extent he/ she was a named executive officer for purposes of the SEC's executive compensation disclosure. Potential Payments Upon Termination or Change-in-Control Windstream has entered into certain agreements and maintains certain plans...

  • Page 40
    ... by Mr. Gardner of the corporate governance board guidelines and code of ethics of Windstream or any affiliate; (v) a material violation by Mr. Gardner of the requirements of the Sarbanes-Oxley Act of 2002 or other federal or state securities law, rule or regulation; (vi) the repeated use of alcohol...

  • Page 41
    ... vesting of restricted shares is based on the closing price of Windstream's common stock on December 30, 2011 of $11.74 per share. Change-in-Control Agreements. Windstream has a Change-in-Control Agreement with certain of its executive officers, including its executive officers listed in the above...

  • Page 42
    ... Windstream and the acquiring or successor entity prior to receiving severance benefits under the agreement. Excise Tax Gross-Up. On or after a change-in-control, the named executive officers listed above may be subject to certain excise taxes pursuant to Section 4999 of the Internal Revenue Code...

  • Page 43
    ... by the executive of the corporate governance board guidelines and code of ethics of Windstream or any affiliate; (v) a material violation by the executive of the requirements of the SarbanesOxley Act of 2002 or other federal or state securities law, rule or regulation; (vi) the repeated use of...

  • Page 44
    ...January 1, 2010 under Windstream's existing change-in-control agreements. Risks Presented by Windstream's Compensation Programs As required by SEC rules, Windstream has assessed the risks that could arise from its compensation policies for all employees, including employees who are not officers, and...

  • Page 45
    ... under the Plan to qualify as tax-deductible "performance-based compensation" within the meaning of Section 162(m) of the Internal Revenue Code (which is sometimes referred to in this Proxy Statement as "Section 162(m)"), Windstream is asking stockholders to re-approve the material terms of the...

  • Page 46
    ... in the Plan will be available to officers or key management employees of Windstream or its subsidiaries who are customarily employed more than 20 hours per week and at least six months per year. At this time, however, the Compensation Committee anticipates that only its 9 executive officers and one...

  • Page 47
    ... business expansion goals; cost targets; customer satisfaction; gross or net additional customers; average customer life; employee satisfaction; management of employment practices and employee benefits; supervision of litigation and information technology; and goals relating to acquisitions...

  • Page 48
    ... Code. Plan Benefits Future benefits to be received by a person or group under the Plan are not determinable at this time and will depend on individual and corporate performance. Actual awards under the Plan to named executive officers for 2011 are reported in this proxy statement in the "Non-Equity...

  • Page 49
    ...of our short-term and long-term incentive plans since our formation in 2006. 2011 was an incredibly successful year for Windstream. Throughout the year, we integrated several key acquisitions made in 2010, which expanded our suite of business offerings. In December 2011, Windstream added another key...

  • Page 50
    ... compensation design features, along with our robust stock ownership guidelines, including ten times base salary for the CEO, and clawback policy that allows Windstream to recover both incentive and non-incentive based compensation in certain situations, strengthen our executive compensation program...

  • Page 51
    ... 2011 proxy summarizes the potential exposure if unvested equity awards should vest upon a change in control. According to the proxy, if there had been a change of control on December 31, 2010, CEO Jeffery R. Gardner would have been eligible to receive more than $36 million in severance and benefits...

  • Page 52
    ...the closing of the transaction. If compensation programs are not properly designed, the risk of loss of a substantial portion of executive compensation can work to discourage management from pursuing the best alternatives for creating long-term value for shareholders, including a potential change-of...

  • Page 53
    ...that it was the best path for creating long-term value for Windstream shareholders. Under those circumstances, the Board does not believe it is appropriate for senior management to forfeit their unvested equity awards that represent a significant portion of their total annual compensation. For these...

  • Page 54
    ...and accountability may expose the company to reputational and business risks that could threaten long-term shareholder value. Windstream contributed at least $191,000 in corporate funds since the 2006 election cycle. (CQ: http: // moneyline.cg.com/pml/home.do and National Institute on Money in State...

  • Page 55
    ... following policy regarding spending on political activities which is posted on the Investor Relations portion of Windstream's website: Windstream's Board of Directors oversees corporate political spending. At least annually, Windstream will brief its Governance Committee on the company's corporate...

  • Page 56
    ... Corporate Secretary at 4001 Rodney Parham Road, Little Rock, Arkansas 72212, no later than November 27, 2012. Such proposals must meet the requirements set forth in the rules and regulations of the SEC in order to be eligible for inclusion in the proxy statement for Windstream's 2013 Annual Meeting...

  • Page 57
    ..., the sale of products or other transactions conducted by Windstream in the ordinary course of business and on terms generally available to employees or customers. Covered transactions also do not include an employment or service relationship involving a director or executive officer and any related...

  • Page 58
    ... sharing an address and receiving by mail multiple copies of Windstream's proxy statement and Annual Report who wish to share a single copy of those documents in the future should also notify Windstream at: Investor Relations, Windstream Corporation, 4001 Rodney Parham Road, Little Rock, Arkansas...

  • Page 59
    ... Windstream Pension Plan. (c) Tax fees are principally comprised of fees for tax consulting services provided by PwC. The decrease in 2011 tax fees is primarily due to work performed in connection with the prior year acquisitions of NuVox, Inc.; Iowa Telecom; Q-Comm Corporation; and Hosted Solutions...

  • Page 60
    ... or intent of which is to mitigate loss to or manage risk or benefit of share price changes for, or to increase or decrease the voting power of, such stockholder or any such stockholder associated person with respect to any share of Windstream stock; and (3) as to the beneficial owner, if any, on...

  • Page 61
    ..., Little Rock, Arkansas 72212. Windstream will bear the cost of solicitation of proxies. In addition to the use of the mail, proxies may be solicited by officers, directors, and employees of Windstream, personally or by telephone or electronic means. In the event the management of Windstream deems...

  • Page 62

  • Page 63
    ... under the Plan after the death of a Participant. c. "Board" shall mean the Board of Directors of the Company. d. "CEO" shall mean the Chief Executive Officer of the Company. e. "Code" shall mean the Internal Revenue Code of 1986, as amended. f. "Committee" shall mean the Compensation Committee of...

  • Page 64
    ... business expansion goals, cost targets, customer satisfaction, gross or net additional customers, average customer life, employee satisfaction, management of employment practices and employee benefits, supervision of litigation and information technology, and goals relating to acquisitions...

  • Page 65
    ... each member of the Committee and each other officer, employee and director of the Company to whom any duty or act relating to the administration of the Plan may be allocated or delegated, against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of...

  • Page 66
    ..., death, or Retirement, the Participant's Award shall be pro-rated on the basis of the ratio of the number of days of participation during the Plan Year to which the Award relates to the aggregate number of days in such Plan Year. If a Participant's employment with the Company and its Subsidiaries...

  • Page 67
    ... or other person a right to benefits under such other plan or program. The Company and its Subsidiaries shall have the right to deduct from all payments made to any person under the Plan any federal, state, local, foreign or other taxes which, in the opinion of the Company and its Subsidiaries are...

  • Page 68
    ...to assume this Plan. This Plan shall be binding upon and inure to the benefit of the Company and any successor of or to the Company, including without limitation any persons acquiring directly or indirectly all or substantially all of the business and/or assets of the Company whether by sale, merger...

  • Page 69
    WINDSTREAM CORPORATION ANNUAL REPORT ON FORM 10-K

  • Page 70

  • Page 71
    ...WINDSTREAM CORPORATION (Exact name of registrant as specified in its charter) DELAWARE (State or other jurisdiction of incorporation or organization) 4001 Rodney Parham Road, Little Rock, Arkansas (Address of principal executive offices) Registrant's telephone number, including area code Securities...

  • Page 72

  • Page 73
    ... Directors, Executive Officers, and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accountant Fees and Services Part IV Item...

  • Page 74
    ...site networking and managed data services. Second, cellular customers were using more and more wireless data, requiring the wireless carriers to obtain additional bandwidth on the wireline network that transports their wireless traffic. Third, consumers were demanding faster broadband speeds at home...

  • Page 75
    ... our strategy to drive top-line revenue growth by expanding our focus on business and fiber transport services. PAETEC adds an attractive base of medium to large-sized business customers, approximately 36,700 fiber route miles and seven data centers and provides opportunities for significant...

  • Page 76
    ... network provides private, secure multi-site connections for large businesses with multiple locations. High-speed Internet access services: We provide reliable broadband Internet access, including high-speed T1, Dedicated Internet and Ethernet Internet options. We also offer low cost, high-speed...

  • Page 77
    ...Carrier services also include fiber-to-the-tower connections to support the growing wireless backhaul market. Business voice services consist of basic telephone services, including voice, long-distance and related features. In addition to the services offered above, we sell customized communications...

  • Page 78
    ... to offer a full suite of voice and advanced data services, including, but not limited to, multi-site networking, dedicated Internet and Ethernet solutions, high-speed Internet and VoIP services. In certain territories, we serve business customers by leasing last-mile connections from other carriers...

  • Page 79
    ...are available. In some areas, we own last-mile facilities and are able to connect to our customers directly. Where we own last-mile facilities, we are able to offer up to 10 Gbps of Ethernet managed services. Our owned local networks consist of central office digital switches, routers, loop carriers...

  • Page 80
    ... investor relations, acquisitions and dispositions, corporate planning, tax planning, cash and debt management, accounting, insurance, sales and marketing support, government affairs, legal matters, human resources and engineering services. EMPLOYEES At December 31, 2011, we had 14,638 employees...

  • Page 81
    ... from Local Insight Yellow Pages on advertising revenues generated from covered directories for the duration of the publishing agreement. MORE INFORMATION Our web site address is www.windstream.com. We file with, or furnish to, the Securities and Exchange Commission (the "SEC") annual reports on...

  • Page 82
    ...support from universal service funds or other government programs, expected rates of loss of voice lines or intercarrier compensation, expected increases in high-speed Internet and business data connections, our expected ability to fund operations, expected required contributions to our pension plan...

  • Page 83
    ...be considered in connection with information regarding risks and uncertainties that may affect our future results included in this Management's Discussion and Analysis of Financial Condition and Results of Operations and in our other filings with the Securities and Exchange Commission at www.sec.gov...

  • Page 84
    ... condition could be adversely affected. During 2011, our consumer access lines declined 4.0 percent. Sources of competition include, but are not limited to, wireless companies, cable television companies and other communications carriers. Many of our competitors, especially wireless and cable...

  • Page 85
    ... and peer-to-peer file sharing applications use significantly more bandwidth than traditional Internet activity such as web browsing and email. As utilization rates and availability of these services continue to grow, our high-speed Internet customers may use much more bandwidth than in the past...

  • Page 86
    ... believe demand for these services may drive high-speed Internet customers to pay for faster broadband speeds, we may not be able to recover the costs of the necessary network investments. This could result in an adverse impact to our results of operations and financial condition. We are subject to...

  • Page 87
    ... profitability. We receive state and federal USF revenues to support the high cost of providing affordable telecommunications services in rural markets. Such support payments constituted approximately 6 percent of our revenues for the year ended December 31, 2011. A portion of such fees are based on...

  • Page 88
    ... increases were partially offset by routine benefit payments of $59.1 million and lump sum payments and administrative expenses of $17.6 million. Returns generated on plan assets have historically funded a large portion of the benefits paid under our pension plan. We estimate that the long term rate...

  • Page 89
    ... calls for long distance and other voice carriers over our network in exchange for access charges. These access charges represent a significant portion of our revenues. Additionally, we are making significant capital investments to deploy fiber-to-the-tower and other network services for wireless...

  • Page 90
    ...plant and related equipment. Outside communications plant includes aerial and underground cable, conduit, poles and wires. Central office equipment includes digital switches and peripheral equipment. As such, our properties do not provide a basis for description by character or location of principal...

  • Page 91
    ... Matters and Issuer Purchases of Equity Securities Market Information, Holders and Dividends (a) Our common stock is traded on the NASDAQ Global Select Market under the symbol "WIN". The following table reflects the range of high, low and closing prices of our common stock as reported by Dow Jones...

  • Page 92
    ... Windstream S&P 500 S&P Telecom Total Cumulative Shareholder Returns 2006 2007 2008 $100.00 $98.26 $76.01 $100.00 $105.49 $66.46 $100.00 $111.88 $77.78 2009 $101.18 $84.05 $84.73 2010 $139.38 $96.71 $100.80 2011 $127.24 $98.75 $107.16 The graph and table above provide the cumulative change...

  • Page 93
    ...-based compensation plans, we may issue restricted stock and other equity securities to directors, officers and other key employees. The maximum number of shares available for issuance under the Windstream 2006 Amended and Restated Equity Incentive Plan is 20.0 million shares and under the PAETEC...

  • Page 94
    Windstream Corporation Form 10-K, Part II Item 6. Selected Financial Data For information pertaining to our Selected Financial Data, refer to page F-29 of the Financial Supplement, which is incorporated by reference herein. Item 7. Management's Discussion and Analysis of Financial Condition and ...

  • Page 95
    ... was acquired by us in a recently completed 2011 purchase business combination. The operations of PAETEC represent approximately 19.2 percent of our consolidated total assets and 4.2 percent of our consolidated revenues and sales, as of, and for the year ended, December 31, 2011. Management's Report...

  • Page 96
    ... We have a code of ethics that applies to all employees and members of the Board of Directors. Our code of ethics, referred to as the "Working with Integrity" guidelines, is posted on the Investor Relations page of the our web site (www.windstream.com) under "corporate governance". We will disclose...

  • Page 97
    ... Compensation For information pertaining to Executive Compensation, refer to "Compensation Committee Report on Executive Compensation" and "Management Compensation" in our Proxy Statement for our 2012 Annual Meeting of Stockholders, which are incorporated herein by reference. Item 12. Security...

  • Page 98
    ... of Shareholders' Equity for the years ended December 31, 2011, 2010 and 2009 Notes to Consolidated Financial Statements F-32 F-33 F-34 F-35 F-36 F-37 F-38 - F-87 Form 10-K Page Number 28 29 2. Financial Statement Schedules: Report of Independent Registered Public Accounting Firm Schedule II...

  • Page 99
    ..., thereunto duly authorized. Windstream Corporation Registrant By Date: February 22, 2012 /s/ Jeffery R. Gardner Jeffery R. Gardner, President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following...

  • Page 100
    ... and Shareholders of Windstream Corporation: Our audits of the consolidated financial statements and of the effectiveness of internal control over financial reporting referred to in our report dated February 22, 2012 appearing in this 2011 Annual Report on Form 10-K of the Company also included an...

  • Page 101
    ... related to expected realization of net operating losses assumed from the acquisitions of D&E and Lexcom. (F) Costs primarily include charges for accounting, legal, broker fees and other miscellaneous costs associated with the acquisitions of NuVox, Iowa Telecom, Hosted Solutions, Q-Comm and PAETEC...

  • Page 102
    EXHIBIT INDEX Number and Name Agreement and Plan of Merger, dated July 31, 2011, by and among Windstream Corporation, Peach Merger 2.1 Sub, Inc. and PAETEC Holding Corp. (incorporated herein by reference to Exhibit 2.1 to Current Report on Form 8-K of PAETEC dated July 31, 2011). 3.1 Amended and ...

  • Page 103
    ... obligations of PAETEC Holding Corp. under its 9 7/8% Senior Secured Notes due 2018 (incorporated herein by reference to Exhibit 4.3 to the Corporation's Form 8-K date November 30, 2011). Amended and Restated Credit Agreement dated as of October 19, 2009 among Windstream Corporation, certain lenders...

  • Page 104
    ... Policy/ Accrued Dividends) entered into between Windstream Corporation and its executive officers (incorporated herein by reference to Exhibit 10.2 to the Corporation's Current Report dated February 19, 2010). Form of Restricted Shares Agreement (Officers: Restricted Stock-Clawback Policy) entered...

  • Page 105
    ... Report on Form 8 K dated November 22, 2011). Code of Ethics (Working with Integrity) of Windstream Corporation (incorporated herein by reference to Exhibit 14.1 to the Corporation's Annual Report on Form 10-K for the year ended December 31, 2008). Letter on Change in Accounting Principles Listing...

  • Page 106
    ...Number and Name 31(a) 31(b) 32(a) 32(b) Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Certification of Chief Executive Officer... Filed herewith. 34

  • Page 107
    WINDSTREAM CORPORATION FINANCIAL SUPPLEMENT TO ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2011

  • Page 108

  • Page 109
    ... Data Management's Responsibility for Financial Statements Management's Report on Internal Control Over Financial Reporting Report of Independent Registered Public Accounting Firm Annual Financial Statements: Consolidated Statements of Income for the years ended December 31, 2011, 2010 and 2009...

  • Page 110
    ... Internet connection. We also offer multi-site networking services which provide a fast and private connection between business locations as well as a variety of other data services. We view this as a strategic growth area, but we are subject to competition from other carriers and cable television...

  • Page 111
    ...sized business customers; expands our existing business service offerings; provides opportunities for approximately $100.0 million in pre-tax operating cost and $10.0 million in capital synergies; creates a nationwide fiber network, adding 36,700 fiber miles; and adds seven data centers. The PAETEC...

  • Page 112
    ...customers in Iowa and Minnesota. Lexcom - On December 1, 2009, we completed the acquisition of Lexcom Inc. ("Lexcom"), a local communications company in Lexington, North Carolina. The transaction added approximately 22,000 access lines, 9,000 high-speed Internet customers and 12,000 cable television...

  • Page 113
    ...continuing operations before income taxes Income taxes Income from continuing operations Discontinued operations, net of tax Net income Consumer voice lines in service Consumer high-speed Internet Digital television customers Total consumer connections (a) 2011 2010 2009 $ 2,098.4 1,380.2 626.7 51...

  • Page 114
    ... from wireless carriers, cable television companies and other providers using emerging technologies. For the twelve months ended December 31, 2011, consumer voice lines decreased by approximately 81,000, or 4.0 percent. Increasing revenues from high-speed Internet and related services help to...

  • Page 115
    ... and data services sold on a wholesale basis. Switched access revenues include usage sensitive revenues from long distance companies and other carriers for access to our network in connection with the completion of long distance calls, as well as reciprocal compensation received from wireless and...

  • Page 116
    ... 31, 2010 Increase (Decrease) 18.0 (9.5) 8.5 22% % Decreases in other revenue were primarily attributable to decreases in consumer service and other rent revenue. Product Sales Product sales include data and communications equipment sold to business customers and high-speed Internet modems, home...

  • Page 117
    ... expenses in 2010 were primarily attributable to cost saving measures and storm-related expenses in 2009 that did not recur, partially offset by increases in network support costs and charges incurred to provide third party services to customers. Increases in interconnection expense in 2011 were...

  • Page 118
    ... 2011 and 2010. Changes in business cost of products sold were consistent with the changes in business product sales in both periods. Decreases in consumer costs of products sold for both periods are primarily due to declines in prices paid for consumer broadband home networking equipment. Selling...

  • Page 119
    ... $ $ 2010 41.2 26.7 4.2 5.2 77.3 7.7 85.0 $ $ 2009 11.4 8.6 1.6 0.7 22.3 9.3 31.6 Transaction costs in 2011 and 2010 primarily relate to accounting, legal, broker fees and other miscellaneous costs associated with the acquisitions of PAETEC and the Acquired Companies, respectively. These costs are...

  • Page 120
    ..., integration and restructuring costs decreased net income $44.1 million, $59.1 million and $19.4 million for the years ended December 31, 2011, 2010 and 2009, respectively, giving consideration to tax benefits on deductible items. See Note 10 for additional information regarding these charges. The...

  • Page 121
    ... on sale of investments Mark-to-market of interest rate swap agreements Ineffectiveness of interest rate swaps (a) Interest expense on de-designated swap (b) Other income (expense), net Other expense, net (a) (b) $ 2011 1.5 $ 1.1 - (5.2) - 2.5 (0.1) $ 2010 1.2 $ 0.5 (0.3) - (4.5) (0.4) (3.5) $ 2009...

  • Page 122
    ... taxes. Discontinued Operations, net of tax On November 30, 2011, we completed the acquisition of PAETEC. The operating results of the energy business acquired as part of PAETEC, which sells electricity to business and residential customers, primarily in certain geographic regions in New York state...

  • Page 123
    ... eligible to receive incremental universal service support during the interim period. Longer term, the FCC opened an additional rule-making to develop and adopt final rules to the CAF funding based on a forward-looking cost model to extend broadband to high-cost areas. We believe the Order provides...

  • Page 124
    ... basic local telecommunications services at reasonable rates to customers in high cost rural areas and to qualifying low-income and disabled customers. By order of the Texas PUC, the Texas USF distributes support to eligible carriers serving areas identified as high cost, on a per-line basis. Texas...

  • Page 125
    ... in Ohio, Kentucky, Pennsylvania and North Carolina. In those proceedings, it is alleged that our intrastate switched access rates are excessive and should be reduced to the same levels charged by the largest incumbent carriers or to our interstate access rate levels in each state. The various...

  • Page 126
    ... Acquired Companies. Cash paid, net of cash acquired for the acquisitions of NuVox, Iowa Telecom, Hosted and Q-Comm was $198.4 million, $253.6 million, $312.8 million and $279.1 million, respectively. Capital expenditures were $702.0 million, $412.0 million and $286.9 million for 2011, 2010 and 2009...

  • Page 127
    ... borrowings during 2010. Dividends paid to shareholders totaled $464.6 million in 2010, which was an increase of $27.2 million, due to additional shares issued for the recent acquisitions. During 2009, we issued $1,100.0 million in additional notes. Net proceeds from this offering totaled $1,083...

  • Page 128
    ... to grant security on accounts relating to escrow notes and the proceeds of notes held in such accounts. On September 17, 2010, we amended our credit facility to permit the signing of rural broadband stimulus grant agreements with the Rural Utilities Service. We also increased the size of our...

  • Page 129
    ... cash flows resulting from future acquisitions, increased capital expenditure requirements, or changes to our dividend policy. If our credit ratings were to be downgraded, we might incur higher interest costs on future borrowings, and our access to the public capital markets could be adversely...

  • Page 130
    ... $ 1-3 Years Total $ 9,002.0 3,971.8 51.3 577.8 454.3 2,512.7 $ 16,569.9 Excludes $97.2 million of unamortized premiums (net of discounts) included in long-term debt at December 31, 2011. Variable rates on tranches A and B of the senior secured credit facility are calculated in relation to LIBOR...

  • Page 131
    ... increases were partially offset by routine benefit payments of $59.1 million and lump sum payments and administrative expenses of $17.6 million. Returns generated on plan assets have historically funded a large portion of the benefits paid under our pension plan. See "Critical Accounting Policies...

  • Page 132
    ... to customers. Revenues derived from other telecommunications services, including interconnection, long distance and enhanced service revenues are recognized monthly as services are provided. Revenue from sales of indefeasible rights to use fiber optic network facilities ("IRUs") and the related...

  • Page 133
    .... In general, PPA changed the rules governing the minimum contribution requirements for funding a qualified pension plan on an annual basis without paying excise tax penalties. Among other requirements, PPA changed the assumptions used to calculate the minimum lump-sum benefit payments, and applied...

  • Page 134
    ... that we had two reporting units to test for impairment (1) the data center reporting unit representing the Hosted Solutions business acquired on December 2, 2010 and (2) a reporting unit including the remaining Windstream operations. Reducing our January 1, 2011 market capitalization by 90...

  • Page 135
    ... limited to, statements about expected levels of support from universal service funds or other government programs, expected rates of loss of access lines or inter-carrier compensation, expected increases in high-speed Internet and business data connections, our expected ability to fund operations...

  • Page 136
    ... or terrorist acts; earnings on pension plan investments significantly below our expected long term rate of return for plan assets or a significant change in the discount rate; and those additional factors under the caption "Risk Factors" in Item 1A of this annual report. In addition to these...

  • Page 137
    ... including tax expense (benefit) of $0, ($10.6) and $0.5, for 2011, 2008 and 2007, respectively Net income Basic and diluted earnings per share: From continuing operations From discontinued operations Net income Dividends declared per common share Balance sheet data Total assets Total long-term debt...

  • Page 138
    ...our management and the Board of Directors. The internal auditors and the independent registered public accounting firm periodically meet alone with the Audit Committee and have access to the Audit Committee at any time. Dated February 22, 2012 Jeffery R. Gardner President and Chief Executive Officer...

  • Page 139
    ... over financial reporting as of December 31, 2011, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein. Dated February 22, 2012 Jeffery R. Gardner President and Chief Executive Officer Anthony W. Thomas...

  • Page 140
    ... basis for our opinions. As discussed in Note 2 to the consolidated financial statements, in 2011 the Company has changed its method of accounting for pension benefits. All periods have been retroactively restated for this accounting change. A company's internal control over financial reporting...

  • Page 141
    ... before income taxes Income taxes Income from continuing operations Discontinued operations, net of tax Net income Basic and diluted earnings per share: From continuing operations From discontinued operations Net income 2011 $ 4,156.5 129.2 4,285.7 $ 2010 3,621.4 89.3 3,710.7 $ 2009 2,872.5 123...

  • Page 142
    ... postretirement plan Defined benefit pension plans: Amounts included in net periodic benefit cost: Amortization of prior service credits Income tax expense Change in pension plan Change in employee benefit plans Other comprehensive income (loss) Comprehensive income 2011 172.3 $ 2010 312.7 2009 398...

  • Page 143
    ...Equity Current Liabilities: Current maturities of long-term debt and capital lease obligations Current portion of interest rate swaps Accounts payable Advance payments and customer deposits Accrued dividends Accrued taxes Accrued interest Other current liabilities Total current liabilities Long-term...

  • Page 144
    ...of D&E, net of cash acquired Acquisition of Lexcom, net of cash acquired Acquisition of NuVox, net of cash acquired Acquisition of Iowa Telecom, net of cash acquired Acquisition of Hosted Solutions, net of cash acquired Acquisition of Q-Comm, net of cash acquired Cash acquired from PAETEC Changes in...

  • Page 145
    ... share amounts) Balance at December 31, 2008 Net income Other comprehensive income, net of tax: Change in employee benefit plans Changes in designated interest rate swaps Comprehensive income Stock repurchase Stock-based compensation expense Taxes withheld on vested restricted stock and other Stock...

  • Page 146
    ... Columbia, a local and long-haul fiber network spanning approximately 115,000 miles, a robust business sales division and 21 data centers offering managed services and cloud computing. Basis of Presentation - The preparation of financial statements, in accordance with accounting principles generally...

  • Page 147
    ... our equity, both including and excluding the control premium, exceeded our goodwill carrying value as of January 1, 2011, even after taking into consideration the data center reporting unit. Due to the close proximity of the Hosted Solutions business combination to our annual impairment assessment...

  • Page 148
    ... rate we received on the swaps was the three-month LIBOR (London-Interbank Offered Rate), which was 0.29 percent at December 31, 2010. The weighted-average fixed rate paid by us was 5.604 percent. On October 19, 2009, we completed an amendment and restatement of our credit facility and as part...

  • Page 149
    ..., net of tax, during the twelve months ended December 31, 2011. This is included as a component of other comprehensive income and will be reclassified into earnings as the hedged transaction affects earnings. Set forth below is information related to our interest rate swap agreements: (Millions...

  • Page 150
    ... to customers. Revenues derived from other telecommunications services, including interconnection, long distance and enhanced service revenues are recognized monthly as services are provided. Revenue from sales of indefeasible rights to use fiber optic network facilities ("IRUs") and the related...

  • Page 151
    ... replace outstanding, unvested PAETEC restricted stock units held by these same employees as of the acquisition date. Since these restricted stock units contain a non-forfeitable right to receive dividends on a one-to-one per share ratio to common shares, they are considered participating securities...

  • Page 152
    ...average future service life of active employees in these plans. These gains and losses are measured annually as of December 31st and accordingly recorded during the fourth quarter or whenever a remeasurement of the pension benefit obligation occurs. While our historical policy of recognizing pension...

  • Page 153
    ...31, 2010 or for the year ended: Service revenues Cost of services (exclusive of depreciation and amortization included below) Selling, general and administrative and other Depreciation and amortization Income taxes Income from continuing operations Net income Basic and diluted earnings per share Net...

  • Page 154
    ...of PAETEC - On November 30, 2011, we completed the acquisition of PAETEC in an all-stock transaction valued at approximately $2.4 billion. PAETEC shareholders received 0.460 shares of our stock for each PAETEC share owned at closing. We issued 70.0 million shares and assumed equity awards shares for...

  • Page 155
    ...includes internally developed software, will be amortized on a straight-line basis over an estimated useful life of three years. Supplemental Pro Forma Information (Unaudited) - PAETEC Acquisition - On November 30, 2011, we completed the acquisition of PAETEC. The amounts of PAETEC's revenue and net...

  • Page 156
    ...Comm - On December 2, 2010, we completed the acquisition of Q-Comm Corporation ("Q-Comm"), a privately held regional fiber transport and business communications provider. This acquisition significantly enhanced our fiber network with increased scale and business revenues, as well as the opportunity...

  • Page 157
    ... 1, 2009, we completed our acquisition of Lexcom, Inc. ("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 our presence in North Carolina and...

  • Page 158
    ... 10, 2009, we completed our merger with D&E, which as of the date of acquisition served approximately 145,000 access lines, 45,000 high-speed Internet customers and 9,000 cable television customers. This acquisition increased our presence in Pennsylvania and provides the opportunity for operating...

  • Page 159
    ... be recognized as compensation cost over the remaining future service period. The purchase price allocations for Q-Comm, Hosted Solutions, Iowa Telecom, NuVox, D&E and Lexcom have been completed. Pro forma financial results related to the acquisitions of the Acquired Companies, D&E or Lexcom have...

  • Page 160
    ... (a) Customer lists (a) Cable franchise rights (a) Other (a) Balance $ $ $ $ (a) Changes in the gross cost of intangible assets were associated with the acquisitions of PAETEC and the Acquired Companies as previously discussed in Note 3. Effective January 1, 2009, we prospectively changed our...

  • Page 161
    ... 1, 2018 Capital lease obligations Premium (discount) on long-term debt, net Less current maturities Total long-term debt and capital leases Weighted average interest rate Weighted maturity Senior Secured Credit Facilities Effective October 18, 2010, we extended the maturity of an additional $13...

  • Page 162
    ... percent. Proceeds from the issuance were used to repay borrowings against our line of credit, which together with cash on hand, was used to pay the cash portion of the Iowa Telecom and NuVox purchase prices and to repay the outstanding debt of these businesses. 2019 Notes - The 7.000 percent Senior...

  • Page 163
    ... revolving line of credit. The carrying value as of December 31, 2010 was $406.5 million. Debt held by Windstream Holdings of the Midwest, Inc., a subsidiary, is secured solely by the assets of the subsidiary. PAETEC 2015 Notes - In connection with our acquisition of PAETEC on November 30, 2011, we...

  • Page 164
    ...with the most restrictive being 4.75 to 1.0. As of December 31, 2011, we were in compliance with all of our covenants. On August 11, 2011, in connection with our acquisition of PAETEC, we amended our senior secured credit agreement to, among other things, (i) permit the issuance of bridge loans, (ii...

  • Page 165
    ... and other fees related to the increase in the revolver capacity agreements and amendment and restatement of our senior secured credit facility in 2010 and 2009, respectively. In order to mitigate the interest rate risk inherent in our variable rate senior secured credit facility, we entered into...

  • Page 166
    ... the closing price of our stock on November 30, 2011, and the fair value of the equity awards assumed, as part of the consideration paid to acquire PAETEC (see Note 3). Also as part of this transaction, we assumed $1,591.3 million in long-term debt net of cash acquired, which includes a net premium...

  • Page 167
    ... over the average future service life of active employees in these plans. These gains and losses are measured annually as of December 31st and accordingly will be recorded during the fourth quarter or whenever a remeasurement of the pension benefit obligation occurs. While our historical policy of...

  • Page 168
    ... Iowa Telecom plans were merged into our pension and postretirement employee benefit plans effective December 31, 2010. In conjunction with the acquisition of D&E on November 10, 2009, we assumed certain obligations related to a noncontributory qualified pension plan and postretirement benefit plan...

  • Page 169
    ...) Net actuarial loss Prior service credits Pension Benefits $ $ Postretirement Benefits 1.2 - $ (12.3) (0.1) $ The accumulated benefit obligation of our pension plan and executive retirement agreements, was $1,243.6 million, $1,128.5 million and $1,022.0 million at December 31, 2011, 2010 and 2009...

  • Page 170
    ... for paying out benefits, and our strong financial condition, the pension plan can accept an average level of risk relative to other similar plans. The liquidity needs of the plan are manageable given that lump sum payments are not available to most participants. Equity securities include stocks of...

  • Page 171
    ... our pension and post retirement benefit plan assets were determined using the following inputs as of December 31, 2011: Quoted Price in Active Markets for Identical Assets (Millions) Domestic equities (b) International equities (b) Agency backed bonds (b) Asset backed securities (b) Corporate bonds...

  • Page 172
    ... are mostly comprised of publicly traded equity securities and fixed income securities. These securities are valued at the official closing price of, or the last reported sale prices as of the close of business or, in the absence of any sales, at the latest available bid price. (d) Valued at fair...

  • Page 173
    ... funded annually. We recorded $13.7 million, $10.9 million and $8.9 million in 2011, 2010 and 2009, respectively, related to the employee savings plan, which was included in cost of services and selling, general and administrative and other expenses in the consolidated statements of income. 9. Share...

  • Page 174
    .... Share-based compensation expense was $24.0 million, $17.0 million and $17.4 million for 2011, 2010 and 2009, respectively. Stock Option Activity - In conjunction with the acquisition of PAETEC, we issued 3,933,230 stock options to former PAETEC employees to replace outstanding PAETEC stock options...

  • Page 175
    ... the total pretax intrinsic value (the difference between the closing sale price of Windstream's common stock as reported on the NASDAQ Global Select Market on December 31, 2011 and the option exercise price, multiplied by the number of in-the-money options) that would have been received by...

  • Page 176
    ...and restructuring charges decreased net income $44.1 million, $59.1 million and $19.4 million for the years ended December 31, 2011, 2010 and 2009, respectively, giving consideration to tax benefits on deductible items. The following is a summary of the activity related to the liabilities associated...

  • Page 177
    ... tax rate Increase (decrease) State income taxes, net of federal benefit Adjust deferred taxes for state net operating loss carryforward Acquisition costs Tax refund interest Other items, net Effective income tax rate 2011 35.0% 2.0 1.9 (0.5) (0.5) (0.9) 37.0% 2010 35.0% 2.5 - 1.2 - (0.2) 38.5% 2009...

  • Page 178
    ... the ability to adjust those net operating losses related to closed years. We have identified Arkansas, California, Florida, Georgia, Illinois, Iowa, Kentucky, Nebraska, New York, North Carolina, Pennsylvania, Texas and Virginia as "major" state taxing jurisdictions. We recognize accrued interest...

  • Page 179
    ... of the acquired businesses as guarantors. The parent company is Windstream Corporation who is also the issuer of the notes. The following information presents condensed consolidated and combined statements of income for the years ended December 31, 2011, 2010 and 2009, condensed consolidated...

  • Page 180
    ... For the Year Ended December 31, 2010 (Millions) Parent Guarantors NonGuarantors Eliminations Consolidated Revenues and sales: Service revenues Product sales Total revenues and sales Costs and expenses: Cost of services Cost of products sold Selling, general, administrative and other Depreciation...

  • Page 181
    ... For the Year Ended December 31, 2009 (Millions) Parent Guarantors NonGuarantors Eliminations Consolidated Revenues and sales: Service revenues Product sales Total revenues and sales Costs and expenses: Cost of services Cost of products sold Selling, general, administrative and other Depreciation...

  • Page 182
    ... assets Total Assets Liabilities and Shareholders' Equity Current Liabilities: Current maturities of long-term debt and capital lease obligations Current portion of interest rate swaps Accounts payable Affiliates payable, net Advance payments and customer deposits Accrued dividends Accrued taxes...

  • Page 183
    ... assets Total Assets Liabilities and Shareholders' Equity Current Liabilities: Current maturities of long-term debt and capital lease obligations Current portion of interest rate swaps Accounts payable Affiliates payable, net Advance payments and customer deposits Accrued dividends Accrued taxes...

  • Page 184
    ... accounts Equity in (earnings) losses from subsidiaries Stock-based compensation expense Pension expense Deferred income taxes Unamortized net discount on retired debt Amortization of unrealized losses on dedesignated interest rate swaps Gain from postretirement plan termination Other, net Pension...

  • Page 185
    ...plant and equipment Acquisition of NuVox, net of cash acquired Acquisition of Iowa Telecom, net of cash acquired Acquisition of Hosted Solutions, net of cash acquired Acquisition of Q-Comm, net of cash acquired Advances received from (paid to) parent, net Other, net Net cash from (used in) investing...

  • Page 186
    ... Equity in (earnings) losses from subsidiaries Stock-based compensation expense Pension income Deferred income taxes Amortization of unrealized losses on de-designated interest rate swaps Other, net Pension contribution Changes in operating assets and liabilities, net Net cash provided from (used...

  • Page 187
    ... ended December 31, 2011, 2010 and 2009 of the Parent, the Guarantors and the Non-Guarantors. Investments consist of investments in net assets of subsidiaries held by the Parent and other subsidiaries, and have been presented using the equity method of accounting. Condensed Consolidated Statement...

  • Page 188
    ... For the Year Ended December 31, 2010 (Millions) Parent PAETEC Issuer Guarantors NonGuarantors Eliminations Consolidated Revenues and sales: Service revenues Product sales Total revenues and sales Costs and expenses: Cost of services Cost of products sold Selling, general, administrative and other...

  • Page 189
    ... assets Total Assets Liabilities and Shareholders' Equity Current Liabilities: Current maturities of long-term debt and capital lease obligations Current portion of interest rate swaps Accounts payable Affiliates payable, net Advance payments and customer deposits Accrued dividends Accrued taxes...

  • Page 190
    ... assets Total Assets Liabilities and Shareholders' Equity Current Liabilities: Current maturities of long-term debt and capital lease obligations Current portion of interest rate swaps Accounts payable Affiliates payable, net Advance payments and customer deposits Accrued dividends Accrued taxes...

  • Page 191
    ....7 42.3 227.0 Stock-based compensation expense Pension expense Deferred income taxes Unamortized net discount on retired debt Amortization of unrealized losses on dedesignated interest rate swaps Gain from postretirement plan termination Other, net Pension contribution Changes in operating assets...

  • Page 192
    ... of Iowa Telecom, net of cash acquired Acquisition of Hosted Solutions, net of cash acquired Acquisition of Q-Comm, net of cash acquired Advances received from parent, net Other, net Net cash used in investing activities Cash Flows from Financing Activities: Dividends paid on common shares Dividends...

  • Page 193
    ... Equity in (earnings) losses from subsidiaries Stock-based compensation expense Pension income Deferred income taxes Amortization of unrealized losses on dedesignated interest rate swaps Other, net Pension contribution Changes in operating assets and liabilities, net Net cash provided from (used...

  • Page 194
    ... 16. Discontinued Operations: The operating results of the energy business acquired as part of PAETEC, which sells electricity to business and residential customers, primarily in certain geographic regions in New York state, as a competitive electricity supplier, have been separately presented as...

  • Page 195
    ... completed the acquisition of PAETEC on November 30, 2011. The operating results from this business are included in our results for periods subsequent to its acquisition (see Note 3). We completed the acquisitions of NuVox, Iowa Telecom, Hosted Solutions and Q-Comm on February 8, 2010, June 1, 2010...

  • Page 196

  • Page 197
    ... the acquisitions of NuVox, Iowa Telecom, Hosted Solutions, Q-Comm and PAETEC, and to exclude all merger and integration costs related to strategic transactions. Q-Comm includes only those entities acquired from Q-Comm. PAETEC results include results from companies acquired by PAETEC for periods...

  • Page 198
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  • Page 199
    INVESTOR INFORMATION Corporate Headquarters Windstream 4001 Rodney Parham Road Little Rock, AR 72212 501-748-7000 www.windstream.com Executive Officers Jeffery R. Gardner President and Chief Executive Officer Anthony W. Thomas Chief Financial Officer Brent K. Whittington Chief Operating Officer...

  • Page 200
    Windstream Corporation 4001 Rodney Parham Road | Little Rock, AR 72212 windstream.com