Windstream 2015 Annual Report Download - page 201

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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F-71
6. Derivative Instruments, Continued:
The agreements with each of the derivative counterparties contain cross-default provisions, whereby if Windstream Services 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 at the swap termination value of $55.4 million including
accrued interest and excluding the credit valuation adjustment to measure non-performance risk. 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 Services’ creditworthiness in an adverse manner, Windstream Services may be required to fully
collateralize its derivative obligations. At December 31, 2015, Windstream Services had not posted any collateral related to its
interest rate swap agreements.
Balance Sheet Offsetting
Windstream Services 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 Services does not offset assets
and liabilities under these arrangements.
The following tables present the assets and liabilities subject to an enforceable master netting arrangement as of December 31,
2015 and 2014. As of December 31, 2015, all swap agreements with counterparties were in a liability position and, accordingly,
there were no assets to be recognized in the accompanying consolidated balance sheets as of that date.
Information pertaining to derivative assets was as follows:
Gross Amounts Not Offset
in the Consolidated
Balance Sheets
(Millions)
Gross Amount of
Recognized
Assets
Net Amount of Assets
presented in the
Consolidated Balance
Sheets
Financial
Instruments
Cash
Collateral
Received
Net
Amount
December 31, 2014:
Interest rate swaps $ 0.4 $ 0.4 $ (0.3)$ — $ 0.1
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, 2015:
Interest rate swaps $ 51.7 $ 51.7 $ — $ — $ 51.7
December 31, 2014:
Interest rate swaps $ 77.2 $ 77.2 $ (0.3) $ — $ 76.9