Windstream 2013 Annual Report Download - page 164

F-28
The discount rate selected is derived by identifying a theoretical settlement portfolio of high quality corporate bonds sufficient
to provide for the plan's projected benefit payments. The values of the plan's projected benefit payments are matched to the cash
flows of the theoretical settlement bond portfolio to arrive at a single equivalent discount rate that aligns the present value of the
required cash flows with the market value of the bond portfolio. The discount rate determined on this basis was 5.01 percent at
December 31, 2013. Lowering the discount rate by 25 basis points (from 5.01 percent to 4.76 percent) would result in a
decrease in our projected pension income of approximately $33.9 million in 2014.
See Notes 2 and 8 to the consolidated financial statements for additional information on our pension plans.
Income Taxes
Our estimates of income taxes and the significant items resulting in the recognition of deferred tax assets and liabilities are
disclosed in Note 12 to the consolidated financial statements and reflect our assessment of future tax consequences of
transactions that have been reflected in our financial statements or tax returns for each taxing jurisdiction in which we operate.
Actual income taxes to be paid could vary from these estimates due to future changes in income tax law or the outcome of
audits completed by federal and state taxing authorities. Included in the calculation of our annual income tax expense are the
effects of changes, if any, to our income tax reserves for uncertain tax positions. We maintain income tax reserves for potential
assessments from the IRS or other taxing authorities. The reserves are determined in accordance with authoritative guidance
and are adjusted, from time to time, based upon changing facts and circumstances. Changes to the income tax reserves could
materially affect our future consolidated operating results in the period of change. In addition, a valuation allowance is recorded
to reduce the carrying amount of deferred tax assets unless it is more likely than not that such assets will be realized.
Recently Issued Authoritative Guidance
There were no accounting pronouncements recently issued that had or are expected to have a material impact on our
consolidated financial statements.
Forward-Looking Statements
This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes, and future filings on
Form 10-K, Form 10-Q and Form 8-K and future oral and written statements by us and our management may include, certain
forward-looking statements. We claim the protection of the safe-harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995 for this Annual Report on Form 10-K. Forward looking statements are subject to
uncertainties that could cause actual future events and results to differ materially from those expressed in the forward-looking
statements. Forward looking statements include, but are not limited to, statements about our expectation to maintain our current
dividend practice at the current rate of dividend, expected levels of support from universal service funds or other government
programs, expected rates of loss of voice lines or inter-carrier compensation, expected increases in business data connections,
our expected ability to fund operations, expected required contributions to our pension plan, capital expenditures, cash income
tax payments, and certain debt maturities from cash flows from operations, expected synergies and other benefits from
completed acquisitions, expected effective federal income tax rates, the amounts expected to be received from the Rural
Utilities Service to fund a portion of our broadband stimulus projects and the expected benefits of those projects and forecasted
capital expenditure amounts. These and other forward-looking statements are based on estimates, projections, beliefs, and
assumptions that we believe are reasonable but are not guarantees of future events and results. Actual future events and our
results may differ materially from those expressed in these forward-looking statements as a result of a number of important
factors.
Factors that could cause actual results to differ materially from those contemplated in our forward looking statements include,
among others:
• further adverse changes in economic conditions in the markets served by us;
• the extent, timing and overall effects of competition in the communications business;
• the impact of new, emerging or competing technologies;
• for certain operations where we lease facilities from other carriers, adverse effects on the availability, quality of
service, price of facilities and services provided by other carriers on which our services depend;