Windstream 2014 Annual Report Download - page 188

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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F-72
8. Share-Based Compensation Plans, Continued:
The following table summarizes stock option information as of December 31, 2014:
Options Outstanding Options Exercisable
Range of Exercise Prices
(Thousands)
Number of
Options
Weighted
Average
Exercise
Price
(Thousands)
Number of
Options
Weighted
Average
Exercise
Price
$1.96-$4.70 163.2 $ 4.10 163.2 $ 4.10
$4.71-$8.30 155.0 $ 7.29 135.1 $ 7.15
$8.31-$14.00 175.1 $ 11.60 167.3 $ 11.65
$14.01-$29.27 360.5 $ 20.53 360.5 $ 20.53
853.8 $ 13.15 826.1 $ 13.30
As of December 31, 2014, there was no unrecognized share-based compensation expense related to stock options granted.
In addition to including amounts related to restricted stock, restricted units and stock options, share-based compensation expense
presented in the accompanying consolidated statements of cash flow also includes amounts related to certain executive and
management incentive compensation plans and the matching contribution to the employee savings plan for which payments to
eligible participants are expected to be made in Windstream stock. Except for the second and third quarters of 2014, payments
made under the applicable executive and management incentive plans had been in the form of cash. A summary of share-based
compensation expense was as follows for the years ended December 31:
(Millions) 2014 2013 2012
Restricted stock, restricted units and stock options $ 22.1 $ 26.8 $ 25.4
Employee savings plan (See Note 7) 18.3 18.1 17.8
Executive and management incentive compensation plans 1.4 — —
Share-based compensation expense $ 41.8 $ 44.9 $ 43.2
9. Merger, Integration and Restructuring Charges:
We incur a significant amount of costs to complete a merger or acquisition and integrate its operations into our business, which
are presented as merger and integration expense in our consolidated results of operations. These costs include transaction costs,
such as accounting, legal and broker fees; severance and related costs; IT and network conversion; rebranding; and consulting
fees. The 2011 acquisition of PAETEC and 2010 acquisitions of NuVox Inc. (“NuVox”), and Q-Comm Corporation (“Q-Comm”)
(collectively known as the “Acquired Companies”), account for the merger and integration costs incurred for the periods presented.
Costs incurred related to the proposed spin-off of certain telecommunications network assets into an independent, publicly traded
REIT are also included in merger and integration costs.
Restructuring charges are primarily incurred as a result of evaluations of our operating structure. Among other things, these
evaluations explore opportunities to provide greater flexibility in managing and financing existing and future strategic operations,
for task automation, network efficiency and the balancing of our workforce based on the current needs of our customers. Severance,
lease exit costs and other related charges are included in restructuring charges.
During 2014, we completed two workforce reductions to increase operational efficiency by eliminating a total of approximately
750 positions, including 295 resulting from voluntary separation initiatives. We also completed several smaller workforce
reductions throughout the year. In connection with these workforce reductions, we incurred pre-tax restructuring charges of $24.1
million during 2014, primarily consisting of severance and other employee benefit costs. As a result of certain changes in our
executive management team, we also incurred severance-related costs of $6.3 million in 2014.
In 2012, we completed a review of our management structure and eliminated approximately 350 management positions. We
incurred severance related costs of $22.4 million related to this restructuring.