Windstream 2012 Annual Report Download - page 147

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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F-49
3. Acquisitions and Dispositions, Continued:
(b) Trade names were amortized on a straight-line basis over an estimated useful life of one year. Other intangibles, which
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 - The amounts of PAETEC's revenue and net loss
included in our consolidated statements of income for the year ended December 31, 2012, and the revenue and net income from
continuing operations of the combined entity for the twelve months ended December 31, 2011 and 2010 had the acquisition
occurred January 1, 2010, are as follows:
(Millions) Revenue
Net (Loss)
Income from
Continuing
Operations
PAETEC actual for the twelve months ended December 31, 2012 $ 2,106.8 $ (69.4)
Supplemental pro forma for the twelve months ended December 31, 2011 $ 6,170.1 $ 115.0
Supplemental pro forma for the twelve months ended December 31, 2010 $ 5,324.5 $ 192.1
The pro forma information presents our historical results adjusted to include PAETEC, with the results prior to the merger
closing date adjusted to include the pro forma effect of the elimination of transactions between us and PAETEC, the adjustment
to revenue to align revenue policies, the adjustment to amortization expense associated with the estimated acquired fair value of
intangible assets, the impact of merger and integration expenses related to the acquisition and the impact of tax benefits from
PAETEC's loss from operations.
The pro forma results are presented for illustrative purposes only and do not reflect either the realization of potential cost
savings or any related integration costs. Certain cost savings may result from the PAETEC merger, although there can be no
assurance that cost savings will be achieved. These pro forma results do not purport to be indicative of the results that would
have actually been obtained if the merger had occurred as of the date indicated, nor do the pro forma results intend to be a
projection of results that may be obtained in the future.
Acquisition of Q-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 for operating synergies across our markets.
Under the terms of the merger agreement, we paid $279.1 million in cash, net of cash acquired, and issued approximately
20.6 million shares of our common stock valued at $271.6 million to acquire all of the issued and outstanding shares of Q-
Comm common stock. We also repaid $266.2 million in outstanding indebtedness and related liabilities on existing swap
agreements of Q-Comm. The transaction included Q-Comm’s wholly-owned subsidiaries Kentucky Data Link, Inc. ("KDL"), a
fiber services provider in 23 states and the District of Columbia, and Norlight, Inc. ("Norlight"), a business communications
provider serving approximately 5,500 business customers.
Acquisition of Hosted Solutions – On December 1, 2010, we completed the acquisition of Hosted Solutions Acquisitions, LLC
("Hosted Solutions") in an all-cash transaction valued at $312.8 million, which included a $2.8 million net working capital
adjustment, net of cash acquired. We financed the transaction through cash reserves and revolving credit capacity. Hosted
Solutions, based in Raleigh, N.C., is a leading regional data center and managed hosting provider focused on enterprise-class
Infrastructure as a Service (IaaS) solutions. This acquisition provided us with five state-of-the-art data centers in Raleigh, NC,
Charlotte, NC, and Boston, MA which serve more than 600 customers.