Windstream 2015 Annual Report Download - page 160

F-30
The discount rate selected is derived by identifying a theoretical settlement portfolio of high quality corporate bonds sufficient to
provide for the plan’s projected benefit payments. The values of the plan’s projected benefit payments are matched to the cash
flows of the theoretical settlement bond portfolio to arrive at a single equivalent discount rate that aligns the present value of the
required cash flows with the market value of the bond portfolio. The discount rate determined on this basis was 4.55 percent at
December 31, 2015. Lowering the discount rate by 25 basis points (from 4.55 percent to 4.30 percent) would result in a decrease
in our projected pension income of approximately $35.4 million in 2016.
See Notes 2 and 8 to the consolidated financial statements for additional information on our pension plans.
Income Taxes
Our estimates of income taxes and the significant items resulting in the recognition of deferred tax assets and liabilities are disclosed
in Note 13 to the consolidated financial statements and reflect our assessment of future tax consequences of transactions that have
been reflected in our financial statements or tax returns for each taxing jurisdiction in which we operate. Actual income taxes to
be paid could vary from these estimates due to future changes in income tax law or the outcome of audits completed by federal
and state taxing authorities. Included in the calculation of our annual income tax expense are the effects of changes, if any, to our
income tax reserves for uncertain tax positions. We maintain income tax reserves for potential assessments from the IRS or other
taxing authorities. The reserves are determined in accordance with authoritative guidance and are adjusted, from time to time,
based upon changing facts and circumstances. Changes to the income tax reserves could materially affect our future consolidated
operating results in the period of change. In addition, a valuation allowance is recorded to reduce the carrying amount of deferred
tax assets unless it is more likely than not that such assets will be realized.
Recently Issued Authoritative Guidance
The following authoritative guidance, together with our evaluation of the related impact to the consolidated financial statements,
is more fully described in Note 2.
• Revenue Recognition
• Fair Value Measurement Disclosures
• Pension Plan Investment Disclosures
• Valuation of Inventory
• Measurement Period Adjustments in a Business Combination