Windstream 2013 Annual Report Download - page 198

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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F-62
6. Derivatives, Continued:
Changes in the value of these derivative instruments were as follows for the years ended December 31:
(Millions) 2013 2012 2011
Changes in fair value of effective portion, net of tax (a) $ 17.4 $ (12.6) $ (20.1)
Amortization of unrealized losses on de-designated
interest rate swaps, net of tax (a) $ 22.2 $ 28.0 $ 30.3
(a) Included as a component of other comprehensive income and will be reclassified into earnings as the hedged
transaction affects earnings.
The agreements with each of the derivative counterparties contain cross-default provisions, whereby if Windstream Corp. were
to default on certain indebtedness, it could also be declared in default on its derivative obligations and may be required to net
settle any outstanding derivative liability positions with its counterparties. In addition, certain of the agreements with the
counterparties contain provisions where if a specified event or condition, such as a merger, occurs that materially changes
Windstream Corp.'s creditworthiness in an adverse manner, Windstream Corp. may be required to fully collateralize its
derivative obligations. At December 31, 2013, Windstream Corp. had not posted any collateral related to its interest rate swap
agreements.
Balance Sheet Offsetting
Windstream Corp. is party to master netting arrangements, which are designed to reduce credit risk by permitting net settlement
of transactions, with counterparties. For financial statement presentation purposes, Windstream Corp. does not offset assets and
liabilities under these arrangements.
The following table presents the liabilities subject to an enforceable master netting arrangement as of December 31, 2013 and
December 31, 2012. As of December 31, 2013 and December 31, 2012, all swap agreements with counterparties were in a
liability position and, accordingly, there were no assets to be recognized in the consolidated balance sheets.
Information pertaining to derivative liabilities was as follows:
Gross Amounts Not Offset
in the Consolidated
Balance Sheets
(Millions)
Gross Amount of
Recognized
Liabilities
Net Amount of
Liabilities presented in
the Consolidated
Balance Sheets Financial Instruments
Cash
Collateral
Received Net Amount
December 31, 2013:
Derivatives $ 71.8 $ 71.8 $ — $ — $ 71.8
December 31, 2012:
Derivatives $ 120.2 $ 120.2 $ — $ — $ 120.2