Windstream 2013 Annual Report Download - page 188

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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F-52
2. Summary of Significant Accounting Policies and Changes, Continued:
Comprehensive Income – Effective January 1, 2013, we adopted authoritative guidance requiring additional disclosure of the
effect of significant reclassifications out of accumulated other comprehensive income in the respective line items in our
consolidated statements of income if the amount being reclassified is required under U.S. GAAP to be reclassified in its entirety
to net income. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income in the
same reporting period, an entity is required to cross-reference other disclosures required under U.S. GAAP that provide
additional detail about those amounts. Other than the additional disclosure requirements, the adoption of these changes had no
impact on our consolidated financial statements. See Note 11 for the required disclosures.
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.
3. Acquisitions:
On November 30, 2011, we completed the acquisition of PAETEC in an all-stock transaction valued at approximately $2.4
billion. PAETEC shareholders received 0.460 shares of our stock for each PAETEC share owned at closing. We issued 70.0
million shares and assumed equity awards shares for a total transaction value of $842.0 million, based on our closing stock
price on November 30, 2011, and the fair value of the equity awards assumed. We also assumed PAETEC's debt, net of cash
acquired, of approximately $1,591.3 million, which includes a net premium of $113.9 million based on the fair value of the
debt on November 30, 2011 and bank debt of $99.5 million that was repaid on December 1, 2011. The PAETEC transaction
enhances our capabilities in strategic growth areas, including Internet protocol ("IP") based services, cloud computing and
managed services. This transaction significantly advances our strategy to drive top-line revenue growth by expanding our focus
on business and fiber transport services.
The following table summarizes the final fair values of the assets acquired and liabilities assumed for PAETEC.
(Millions) Final Allocation
Fair value of assets acquired:
Cash and other current assets $ 240.8
Accounts receivable 227.5
Property, plant and equipment 875.7
Goodwill 653.3
Customer lists (a) 830.0
Trade names and other (b) 15.0
Deferred income taxes on acquired assets 162.8
Other assets 8.4
Total assets acquired 3,013.5
Fair value of liabilities assumed:
Current maturities of long-term debt and capital lease obligations (19.0)
Other current liabilities (453.5)
Long-term debt and capital lease obligations (1,643.7)
Other liabilities (55.3)
Total liabilities assumed (2,171.5)
Common stock issued to PAETEC shareholders $ 842.0
(a) Customer lists are amortized using the sum-of-years digit methodology over an estimated useful life of ten years.
(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, are amortized on a straight-line basis over an estimated useful life of three
years.