Windstream 2013 Annual Report Download - page 114

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As of February 24, 2014, Moody's Investors Service ("Moody's"), S&P and Fitch Ratings ("Fitch") had granted Windstream the
following senior secured, senior unsecured and corporate credit ratings:
Description Moody’s S&P Fitch
Senior secured credit rating Ba2 BB+ BBB-
Senior unsecured credit rating B1 B BB
Corporate credit rating Ba3 BB- BB
Outlook Stable Stable Stable
Factors that could affect our short and long-term credit ratings include, but are not limited to, a material decline in our
operating results, increased debt levels relative to operating cash flows resulting from future acquisitions, increased capital
expenditure requirements, or changes to our dividend policy. In addition, we are not currently paying down a significant
amount of debt. If our credit ratings were to be downgraded from current levels, we might incur higher interest costs on future
borrowings, and our access to the public capital markets could be adversely affected.
Tax legislation and administrative initiatives or challenges to our tax positions could adversely affect our results of
operations and financial condition.
We are frequently subject to routine audits by federal, state and local tax authorities. While we believe we have adequately
provided for tax contingencies, these audits may result in tax liabilities that differ materially from what we have recognized in
our consolidated financial statements.
Furthermore, legislators and regulators at all levels of government may from time to time change existing tax rules and
regulations or enact new rules that could negatively impact our operating results and financial condition.
Competition in our consumer service areas could reduce our market share and adversely affect our results of operations
and financial condition.
We face intense competitive pressures in our consumer service areas. If we continue to lose consumer voice lines as we have
historically, our results of operations and financial condition could be adversely affected. During 2013, our consumer voice
lines declined 6.5 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 television companies, have advantages over
us, including substantially larger operational and financial resources, larger and more diverse networks, less stringent regulation
and superior brand recognition. For additional discussion regarding competition, see "Competition" in Item 1.
Cable television companies have aggressively expanded in our consumer markets, offering voice and high-speed Internet
services in addition to video services. Some of our customers have chosen to move to cable television providers for their voice,
high-speed Internet and television bundles. Cable television companies are subject to less stringent regulations than our
consumer operations. For more information, refer to the risk factor, "Our competitors, especially cable television companies, in
our consumer markets are subject to less stringent industry regulations."
Wireless competition has contributed to a reduction in our voice lines and generally has caused pricing pressure in the industry.
Some customers have chosen to stop using traditional wireline phone service and instead rely solely on wireless service. We
anticipate that this trend toward solely using wireless services will continue, particularly if wireless prices continue to decline
and the quality of wireless services improves.
Competition in our consumer markets could affect our revenues and profitability in several ways, including accelerated
consumer voice line loss, reductions by customers in usage-based services or shifts to less profitable services and a need to
lower our prices on unregulated services or increase marketing expenses to stay competitive.