Windstream 2012 Annual Report Download - page 145

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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F-47
2. Summary of Significant Accounting Policies and Changes, Continued:
The following table presents the effect the revision had on our consolidated statement of operations:
(Millions, except per share amounts)
As
Previously
Reported
Effect of
Revision As Revised (a)
As of and for the year ended December 31, 2011:
Consumer service revenues $ 1,380.2 $ (1.9) $ 1,378.3
Total service revenues 4,156.5 (1.9) 4,154.6
Product sales 129.2 (2.6) 126.6
Total revenues and sales 4,285.7 (4.5) 4,281.2
Income taxes 101.1 (1.7) 99.4
Income from continuing operations 172.4 (2.8) 169.6
Net income 172.3 (2.8) 169.5
Basic and diluted earnings per share 0.33 (0.01) 0.32
Advance payments and customer deposits 240.4 3.5 243.9
Other liabilities 646.3 1.0 647.3
Deferred income taxes 1,851.5 (1.7) 1,849.8
Additional paid-in-capital 1,496.1 (2.8) 1,493.3
(a) The effect of the revision is also reflected in our consolidated statements of cash flows, net income and relevant
adjustments to reconcile net income to net cash provided by operating activities.
Change in Accounting Estimate
The calculation of depreciation and amortization expense is based on the estimated economic useful lives of the underlying
property, plant and equipment and finite-lived intangible assets. We periodically obtain updated depreciation studies to evaluate
whether certain useful lives remain appropriate in accordance with authoritative guidance. With the assistance of outside
expertise, we completed analyses of the depreciable lives of assets held for certain subsidiaries during the year 2012. Based on
those results, we implemented new depreciation rates resulting in a net increase to depreciation of $59.1 million and a net
decrease in net income of $36.5 million or $0.06 per share for the year ended December 31, 2012.
Recently Adopted Accounting Standards
Testing Goodwill for Impairment – Effective January 1, 2012, we adopted 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 did not have a material impact on our consolidated financial statements.
Fair Value Measurement – Effective January 1, 2012, we adopted 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 did not have a
material impact on our consolidated financial statements.