Windstream 2011 Annual Report Download - page 157

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
____
F-49
Acquisition of Iowa Telecom – On June 1, 2010, we completed the acquisition of Iowa Telecom, based in Newton, Iowa. This
acquisition provided us with a sizable operating presence in the upper Midwest and the opportunities for operating efficiencies
with our contiguous markets. As of June 1, 2010, Iowa Telecom provided service to approximately 247,000 access lines, 96,000
high-speed Internet customers and 25,000 digital television customers in Iowa and Minnesota. Pursuant to the merger
agreement, each share of Iowa Telecom common stock was converted into the right to receive 0.804 shares of our common
stock and $7.90 in cash. We paid $253.6 million in cash, net of cash acquired, and issued approximately 26.7 million shares of
common stock valued at $280.8 million on the date of issuance. In addition, we repaid outstanding indebtedness, including
related interest rate swap liabilities, of Iowa Telecom of $628.9 million.
Acquisition of NuVox – On February 8, 2010, we completed our acquisition of NuVox, Inc. ("NuVox"), a business
communications provider based in Greenville, South Carolina. Consistent with our focus on growing revenues from business
customers, the completion of the NuVox acquisition added approximately 104,000 business customer locations in 16
contiguous Southwestern and Midwest states. In accordance with the NuVox merger agreement, we 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 common stock valued at $185.0 million on the date of issuance. We 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.
(Millions)
Fair value of assets acquired:
Assets held for sale (a)
Other current assets
Property, plant and equipment
Goodwill
Wireline franchise rights (b)
Cable franchise rights (b)
Customer lists (c)
Trade name (d)
Other assets
Total assets acquired
Fair value of liabilities assumed:
Current maturities of long-term debt
Other current liabilities
Deferred income taxes on acquired assets
Other liabilities
Total liabilities assumed
Common stock issued (inclusive of additional paid-in capital)
Cash paid, net of cash acquired
NuVox
Final
Allocation
$—
68.0
241.7
270.5
—
—
180.0
4.2
—
764.4
(260.7)
(63.8)
(29.7)
(26.8)
(381.0)
(185.0)
$ 198.4
Iowa Telecom
Final
Allocation
$ 34.0
36.7
329.9
552.4
230.0
5.6
130.6
3.1
11.1
1,333.4
(610.2)
(49.7)
(109.6)
(29.5)
(799.0)
(280.8)
$ 253.6
(a) We have 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, 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 provides the opportunity for
operating synergies with our contiguous markets. In accordance with the Lexcom merger agreement, we acquired all of the
issued and outstanding shares of Lexcom for $138.7 million in cash, net of cash acquired.