Windstream 2014 Annual Report Download - page 162

F-46
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.
Organizational Structure – Windstream Holdings, Inc. (“Windstream Holdings”) is a publicly traded holding company and the
parent of Windstream Corporation (“Windstream Corp.”). Windstream Holdings common stock trades on the Nasdaq Global Select
Market under the ticker symbol “WIN”. Windstream Corp. common stock, consisting of 1,000 shares outstanding, all of which
are held by Windstream Holdings, does not trade on any stock market. Windstream Corp. and its guarantor subsidiaries are the
sole obligors of all outstanding debt obligations and, as a result also 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 Windstream Holdings 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 121,000 miles, a robust business sales division and 27 data centers offering managed
services and cloud computing.
Enterprise and small 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. Carrier revenues include revenues from other carriers
for special access circuits and fiber connections as well as voice and data services sold on a wholesale basis. 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 and Universal Service Fund (“USF”) revenues. Other service revenues include USF
surcharge revenues, 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.
There are no significant differences between the consolidated results of operations, financial condition, and cash flows of
Windstream Holdings and those of Windstream Corp. other than for certain expenses incurred directly by Windstream Holdings
principally consisting of audit, legal and board of director fees, Nasdaq listing fees, other shareholder-related costs, income taxes,
common stock activity, and payables from Windstream Corp. to Windstream Holdings. Earnings per share data has not been
presented for Windstream Corp., because that entity has not issued publicly held common stock as defined in accordance with
accounting principles generally accepted in the United States (“U.S. GAAP”). Unless otherwise indicated, the note disclosures
included herein pertain to both Windstream Holdings and Windstream Corp.
Certain prior year amounts have been reclassified to conform to the current year financial statement presentation. These changes
and reclassifications did not impact net (loss) income or comprehensive (loss) income.
2. Summary of Significant Accounting Policies and Changes:
Significant Accounting Policies
Use of Estimates – The preparation of financial statements, in accordance with U.S. GAAP, requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets
and liabilities. The estimates and assumptions used in the accompanying consolidated financial statements are based upon
management’s evaluation of the relevant facts and circumstances as of the date of the consolidated financial statements. Actual
results may differ from the estimates and assumptions used in preparing the accompanying consolidated financial statements, and
such differences could be material.