Windstream 2011 Annual Report Download - page 154

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
____
F-46
comprehensive income or in two separate but consecutive statements. As a result, we presented all non-owner changes in
shareholders' equity in two separate but consecutive statements.
Goodwill Impairment – Effective January 1, 2011, we adopted revised authoritative guidance when testing for goodwill
impairment. The guidance modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying
amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely
than not that a goodwill impairment exists. This guidance did not have a material impact on our consolidated financial
statements.
Fair Value Measurement – Effective January 1, 2011, we adopted revised authoritative guidance related to fair value
measurements. This guidance requires separate disclosure for purchase, sale, issuance and settlement activity in the
reconciliation of Level 3 fair value measurements. This guidance did not have a material impact on our consolidated financial
statements.
Revenue Arrangements with Multiple Element Deliverables – Effective January 1, 2011, we adopted revised authoritative
guidance on accounting for revenue arrangements with multiple deliverables. The updated guidance addresses how to
determine whether an arrangement involving multiple deliverables contains more than one unit of accounting and how the
arrangement consideration should be allocated among the separate units of accounting. This guidance did not have a material
impact on our consolidated financial statements.
Recently Issued Authoritative Guidance
Balance Sheet Offsetting – In December 2011, the Financial Accounting Standards Board ("FASB") issued authoritative
guidance related to balance sheet offsetting. This guidance requires enhanced disclosures for financial instruments and
derivative instruments that are subject to an enforceable master netting arrangement. This guidance is effective for fiscal years
beginning on or after January 1, 2013, including interim periods therein and requires retrospective application. We are
currently evaluating the impact this guidance will have on our consolidated financial statements.
Comprehensive Income – In December 2011, the FASB issued authoritative guidance that defers the presentation of
reclassification adjustments on the statement of comprehensive income. In June 2011, the FASB had issued authoritative
guidance requiring reclassification adjustments for items that are reclassified from other comprehensive income to net income
be presented on the face of the financial statements where the components of net income and the components of other
comprehensive income are presented. This guidance is effective for fiscal years, and interim periods within those years,
beginning after December 15, 2011. We do not expect this guidance to have a material impact on our consolidated financial
statements.
Testing Goodwill for Impairment – In September 2011, the FASB issued authoritative guidance related to the testing of
goodwill for impairment. This guidance allows an entity the option to first assess qualitative factors before calculating the fair
value of a reporting unit. The entity may avoid applying the current two-step impairment test to a reporting unit if it
determines, based on its assessment of qualitative factors, it is more likely than not that the fair value of the reporting unit is
greater than its carrying amount. This guidance is effective for fiscal years, and interim periods within those years, beginning
after December 15, 2011. We do not expect this guidance to have a material impact on our consolidated financial statements.
Fair Value Measurement – In May 2011, FASB issued authoritative guidance related to fair value measurements. This guidance
expands existing disclosure requirements for fair value measurements and makes other amendments. Key additional
disclosures include quantitative disclosures about unobservable inputs in Level 3 measures, qualitative information about
sensitivity of Level 3 measures and valuation process, and classification within the fair value hierarchy for instruments where
fair value is only disclosed in the footnotes but carrying amount is on some other basis. This guidance is effective for fiscal
years, and interim periods within those years, beginning after December 15, 2011. We do not expect this guidance to have a
material impact on our consolidated financial statements.
3. Acquisitions and Dispositions:
Acquisition 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 a total transaction value of $842.0 million, based
on our closing stock price on November 30, 2011, and the fair value of the equity awards assumed. We also assumed PAETEC's
debt, net of cash acquired, of approximately $1,591.3 million, which includes a net premium of $113.9 million based on the fair
value of the debt on November 30, 2011 and bank debt of $99.5 million that was repaid on December 1, 2011.