Windstream 2013 Annual Report Download - page 181

F-45
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Background and Basis for Presentation:
In these consolidated financial statements, unless the context requires otherwise, the use of the terms "Windstream," "we," "us"
or "our" shall refer to Windstream Holdings, Inc. and its subsidiaries, including Windstream Corporation, and the term
"Windstream Corp." shall refer to Windstream Corporation and its subsidiaries.
Change in Organizational Structure – On August 30, 2013, through the creation of a new holding company structure (the
"Holding Company Formation"), Windstream Corporation ("Windstream Corp.") became a wholly-owned subsidiary of a new
publicly traded parent company, Windstream Holdings, Inc. ("Windstream Holdings"). As the reorganization occurred at the
parent company level, the remainder of our subsidiaries, operations and customers were not affected. Therefore, the operations
of Windstream Corp. are the same as the operations of Windstream Holdings as of December 31, 2013. Accordingly, the
historical financial statements reflect the effect of the Holding Company Formation for all periods presented.
The Holding Company Formation was effected through the merger of Windstream Corp. with and into WIN Merger Sub, Inc., a
Delaware corporation and a wholly-owned subsidiary of Windstream Holdings, with Windstream Corp. surviving the merger
and becoming a direct, wholly-owned subsidiary of Windstream Holdings. At the effective time of the merger, each share of
Windstream Corp. common stock, par value $0.0001 per share, issued and outstanding was automatically converted into and
was deemed exchanged for one share of Windstream Holdings common stock, par value $0.0001 per share, having the same
rights, powers, preferences, qualifications, limitations and restrictions as the Windstream Corp. common stock being converted
and exchanged. As a result of the Holding Company Formation, Windstream Holdings common stock replaced the Windstream
Corp. common stock on the Nasdaq Global Select Market and on September 3, 2013, began trading under the ticker symbol
"WIN." Windstream Corp. common stock, consisting of 1,000 shares outstanding, all of which are held by Windstream
Holdings, no longer trades on any stock market.
At the effective time of the merger, all unvested time-based and performance-based restricted stock and restricted stock units
and all unexercised and unexpired options and warrants to purchase Windstream Corp. common stock then outstanding under
Windstream Corp.'s equity compensation plans and any other equity incentive plans of Windstream Corp. then in existence
which allows for the purchase, grant or issuance of Windstream Corp. common stock, whether or not then exercisable, were
assumed by Windstream Holdings. Each restricted share, restricted stock unit, option or warrant assumed by Windstream
Holdings under the Holding Company Formation will continue to have, and be subject to, the same terms and conditions as set
forth in the applicable equity compensation plan and the applicable agreements thereunder immediately prior to the effective
time of the merger.
Following the Holding Company Formation, Windstream Corp. and its guarantor subsidiaries remained the sole obligors on its
outstanding debt obligations and, as a result will continue to file periodic reports with the Securities and Exchange Commission
("SEC"). Windstream Holdings is not a guarantor of nor subject to the restrictive covenants included in any of Windstream
Corp.'s debt agreements. The existing Windstream Corp. board of directors and officers oversee both companies.
Description of Business – We are a leading provider of advanced communications and technology solutions, including managed
services and cloud computing, to businesses nationwide. In addition to business services, we offer broadband, voice and video
services to consumers in primarily rural markets. We have operations in 48 states and the District of Columbia, a local and
long-haul fiber network spanning approximately 118,000 miles, a robust business sales division and 26 data centers offering
managed services and cloud computing.
Business service revenues include revenues from integrated voice and data services, advanced data, traditional voice and long-
distance services to enterprise and small-business customers, and revenues from other carriers for special access circuits and
fiber connections. Consumer service revenues are generated from the provision of high-speed Internet, voice and video services
to consumers. Wholesale service revenues include switched access revenues, Universal Service Fund ("USF") revenues and
voice and data services sold on a wholesale basis. Other service revenues include USF surcharge revenues, revenues from
software, other miscellaneous services and consumer revenues generated in markets where we lease the connection to the
customer premise. We no longer offer new consumer service in those areas.
Basis of Presentation – The consolidated financial statements include the accounts of Windstream Holdings, Windstream Corp.
and the accounts of its subsidiaries. All affiliated transactions have been eliminated.