Windstream 10-Q 9 Nov 09 2009 Q3 Quarterly report Financial data

Statement Of Income Alternative

Statement Of Income Alternative (USD $)
In Millions, except Per Share data	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Revenues and sales:
Service revenues	704.9	741.9	2140.2	2254.7
Product sales	29.4	52.2	102	139.3
Total revenues and sales	734.3	794.1	2242.2	2,394
Costs and expenses:
Cost of services (excluding depreciation of $103.3, $99.3, $306.5 and $294.3 respectively, included below)	253	255.9	753.9	760.2
Cost of products sold	26	49.5	89.9	128
Selling, general, administrative and other	87.6	93.3	267	273
Depreciation and amortization	133.8	123.8	399.1	368.7
Restructuring charges	7.5	1	7.5	2.1
Merger and integration costs	1	0	2.4	6.2
Total costs and expenses	508.9	523.5	1519.8	1538.2
Operating income	225.4	270.6	722.4	855.8
Other income, net	-2.2	0.5	-0.8	9.1
Interest expense	-97.5	-103.3	(295)	-311.9
Income from continuing operations before income taxes	125.7	167.8	426.6	553
Income taxes	45.7	63.5	167.6	208.9
Income from continuing operations	80	104.3	259	344.1
Discontinued operations, net of tax expense of $1.2 and $0.8, respectively	0	1.6	0	-12.5
Net income	$80	105.9	$259	331.6
Basic and diluted earnings per share:
Income from continuing operations	0.18	0.24	0.59	0.77
Loss from discontinued operations	$0	$0	$0	-0.03
Net income	0.18	0.24	0.59	0.74

1_Statement Of Income Alternati

Statement Of Income Alternative (Parenthetical) (USD $)
In Millions	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Cost of services, depreciation	103.3	99.3	306.5	294.3
Discontinued operations, tax expense	$0	1.2	$0	0.8

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Millions	9 Months Ended Sep. 30, 2009	9 Months Ended Dec. 31, 2008
Current Assets:
Cash and cash equivalents	$290	296.6
Accounts receivable (less allowance for doubtful accounts of $16.5 and $16.3, respectively)	294.7	316.6
Inventories	23.5	30.8
Deferred income taxes	16.5	30.8
Prepaid expenses and other	53.9	33.9
Total current assets	678.6	708.7
Goodwill	2198.2	2198.2
Other intangibles	1072.8	1132.2
Net property, plant and equipment	3751.8	3897.1
Other assets	66.7	73.1
Total Assets	7768.1	8009.3
Current Liabilities:
Current maturities of long-term debt	24.1	24.3
Current portion of interest rate swaps	47.3	40.5
Accounts payable	131.9	134
Advance payments and customer deposits	92	94
Accrued dividends	108.8	109.9
Accrued taxes	43.1	48
Accrued interest	64.1	138.4
Other current liabilities	60.8	76.2
Total current liabilities	572.1	665.3
Long-term debt	5,199	5358.2
Deferred income taxes	1177.7	1070.6
Other liabilities	629.5	662.9
Total liabilities	7578.3	7,757
Commitments and Contingencies (See Note 7)	-	-
Shareholders' Equity:
Common stock, $0.0001 par value, 1,000.0 shares authorized, 435.2 and 439.4 shares issued and outstanding, respectively	0	0
Additional paid-in capital	63.6	101.5
Accumulated other comprehensive loss	-292.8	-336.6
Retained earnings	419	487.4
Total shareholders' equity	189.8	252.3
Total Liabilities and Shareholders' Equity	7768.1	8009.3

2_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
In Millions	Sep. 30, 2009	Dec. 31, 2008
Accounts receivable, allowance for doubtful accounts	16.5	16.3
Common stock, par value	0.0001	0.0001
Common stock, shares authorized	1,000	1,000
Common stock, shares issued	435.2	439.4
Common stock, shares outstanding	435.2	439.4

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Millions	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Cash Provided from Operations:
Net income	$259	331.6
Adjustments to reconcile net income to net cash provided from operations:
Loss on net assets held for sale	0	16.4
Depreciation and amortization	399.1	370.9
Provision for doubtful accounts	32.4	25.1
Stock-based compensation expense	14.3	13.5
Pension and postretirement benefits expense	72.8	12.3
Deferred taxes	92.4	74.3
Other, net	4.2	8.8
Changes in operating assets and liabilities, net:
Accounts receivable	-10.5	-27.9
Prepaid expenses and other	-20.9	-15.6
Accounts payable	-2.1	-8.7
Accrued interest	-74.3	-69.8
Accrued taxes	-4.9	17.5
Other current liabilities	-13.9	-12.5
Other, net	-6.2	-6.1
Net cash provided from operations	741.4	729.8
Cash Flows from Investing Activities:
Additions to property, plant and equipment	-206.8	-219.5
Disposition of acquired assets held for sale	0	17.3
Other, net	0.3	11.6
Net cash used in investing activities	-206.5	-190.6
Cash Flows from Financing Activities:
Dividends paid on common shares	-328.6	-335.3
Stock repurchase	-43.5	-200.3
Repayment of debt	-160.7	-340.7
Debt issued, net of issuance costs	0	380
Other, net	-8.7	-3.3
Net cash used in financing activities	-541.5	-499.6
(Decrease) increase in cash and cash equivalents	-6.6	39.6
Cash and Cash Equivalents:
Beginning of period	296.6	72
End of period	290	111.6
Supplemental Cash Flow Disclosures:
Interest paid	367.5	378.6
Income taxes paid, net of refunds	$95	118.3

Statement Of Shareholders Equit

Statement Of Shareholders Equity And Other Comprehensive Income (USD $)
In Millions	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Total
Beginning Balance at Dec. 31, 2008	101.5	-336.6	487.4	252.3
Net income			259	259
Other comprehensive income, net of tax: (See Note 10)
Change in employee benefit plans		31.7		31.7
Unrealized holding gain on interest rate swaps		12.1		12.1
Comprehensive income		43.8	259	302.8
Stock repurchase	-43.5			-43.5
Stock-based compensation expense	14.3			14.3
Other	-8.7			-8.7
Dividends of $0.75 per share declared to stockholders			-327.4	-327.4
Ending Balance at Sep. 30, 2009	63.6	-292.8	$419	189.8

3_Statement Of Shareholders Equ

Statement Of Shareholders Equity And Other Comprehensive Income (Parenthetical) (USD $)
	9 Months Ended Sep. 30, 2009
Dividends declared to stockholders, per share	0.75

1.Preparation of Interim Financ

1.Preparation of Interim Financial Statements:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
1.Preparation of Interim Financial Statements:	1. Preparation of Interim Financial Statements: Formation of Windstream - In this report, Windstream Corporation and its subsidiaries are referred to as Windstream, we, or the Company. On July17, 2006, Alltel Corporation, which has subsequently merged with Verizon Communications Inc. (Alltel), completed the spin off of its wireline telecommunications division and immediately merged with and into Valor Communications Group, Inc. (Valor), with Valor continuing as the surviving corporation. The resulting company was renamed Windstream Corporation. Windstream is a customer-focused telecommunications company that provides phone, high-speed Internet, and digital television services. The Company also offers a wide range of IP-based voice and data services and advanced phone systems and equipment to businesses and government agencies. The Company has approximately 2.9million customers primarily located in rural areas in 16 states. In the first quarter of 2009, the Company reorganized its operations to integrate the sales and administrative functions of the product distribution segment into its wireline operations. As a result of this change, the chief operating decision maker no longer reviews the financial statements of the product distribution operations on a stand alone basis, and the Company operates as a single reporting segment. As required by the authoritative guidance for segment presentation, segment results of operations have been retrospectively adjusted to reflect a single segment presentation for all periods presented. As such, separate segment reporting is no longer required, and thus not included. Additionally, certain amounts previously reported have been reclassified to conform to the current year presentation of the consolidated financial statements. These changes and reclassifications did not impact net or comprehensive income. The accompanying unaudited consolidated financial statements have been prepared based upon Securities and Exchange Commission (SEC) rules that permit reduced disclosure for interim periods. Certain information and footnote disclosures have been condensed or omitted in accordance with those rules and regulations. The accompanying consolidated balance sheet at December31, 2008 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States (U.S. GAAP). In our opinion, these financial statements reflect all adjustments that are necessary for a fair presentation of results of operations and financial condition for the interim periods shown including normal recurring accruals and other items. The results for the interim periods are not necessarily indicative of results for the full year. For a more complete discussion of significant accounting policies and certain other information, this report should be read in conjunction with the consolidated financial statements and accompanying notes included in Windstreams Annual Report on Form 10-K for the year ended December31, 2008, which was filed with the SEC on February19, 2009. The preparation of financial statements in accordance with U.S. GAAP requires m

2.Accounting Changes:

2.Accounting Changes:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
2.Accounting Changes:	2. Accounting Changes: Change in Accounting Estimate - Effective January1, 2009, the Company prospectively changed its estimate of useful life for its franchise rights from indefinite-lived to 30 years primarily due to the effects of increasing competition. Commensurate with this change, the Company reviewed its franchise rights for impairment, and noted that no impairment existed as of January1, 2009. As a result of this change, amortization expense increased by $8.0 million and $23.9 million, calculated on a straight line basis, and net income decreased $5.1 million and $14.5 million or $.01 and $.03 per share for the three and nine month periods ended September30, 2009, respectively. Recently Adopted Accounting Standards Accounting Standards Codification In the third quarter of 2009, Windstream adopted the Financial Accounting Standards Board (FASB) Accounting Standards Codification (the Codification) as the single authoritative source for U.S. GAAP. The Codification superseded all existing accounting standard documents and other accounting literature became nonauthoritative. As a result, Windstream has removed all references to superseded accounting standards in its consolidated financial statements and accompanying notes. Subsequent Events In the second quarter of 2009 Windstream adopted authoritative guidance for subsequent events, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. This guidance sets forth the period after the balance sheet date during which management should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements; the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements; and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. See Note 15 for the disclosures required by this guidance. Interim Disclosures about the Fair Value of Financial Instruments Effective April1, 2009, Windstream adopted authoritative guidance related to interim disclosures about the fair value of financial instruments. This guidance extended the annual disclosures about fair value of financial instruments to interim reporting periods. See Note 6 for the interim disclosures required by this guidance. Fair Value Measurements Effective January1, 2008, Windstream adopted authoritative guidance for fair value measurements of financial assets and liabilities and non-financial assets and liabilities recognized or disclosed at fair value on a recurring basis. This authoritative guidance clarified the definition of fair value, established a framework for measuring fair value and expanded the disclosures related to fair value measurements that are included in a companys financial statements. It emphasized that fair value is a market-based measurement and not an entity-specific measurement, and that it should be based on an exchange transaction in which a company sells

3.Dispositions:

3.Dispositions:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
3.Dispositions:	3. Dispositions: Disposition of Out of Territory Product Distribution Operations - On August21, 2009, Windstream completed the sale of its out of territory product distribution operations to Walker and Associates of North Carolina, Inc. (Walker) for approximately $5.3 million in total consideration. The out of territory product distribution operations primarily consisted of product inventory with a carrying value of $4.9 million and customer relationships outside of Windstreams telecommunications operating territories. These operations were not central to the Companys strategic goals in its core communications business. Product revenues from these operations totaled $8.2 million and $38.5 million during the three and nine month periods ended September30, 2009, respectively, with related cost of products sold of $7.6 million and $34.3 million for the same periods in 2009. In conjunction with this transaction, Windstream recognized a gain of $0.4 million in other income, net in its consolidated statements of income for the three and nine month periods ended September30, 2009. Disposition of Wireless Business - On November21, 2008, Windstream completed the sale of its wireless business to ATT Mobility II, LLC for approximately $56.7 million. The transaction included approximately 52,000 wireless customers, spectrum licenses and cell sites covering a four-county area of North Carolina with a population of approximately 450,000, and six retail locations. Revenues from these operations totaled $11.7 million and $35.2 million during the three and nine month periods ended September30, 2008, respectively. The operating results of the wireless business have been separately presented as discontinued operations in the accompanying unaudited interim consolidated statements of income. Disposition of Acquired Assets Held for Sale - Certain assets acquired from CT Communications, Inc. (CTC), including the corporate headquarters building and a license for wireless spectrum, were sold during the first nine months of 2008. Windstream received net proceeds of $17.3 million, which approximated the fair value at the date of acquisition. During the third quarter of 2008, Windstream recognized a non-cash impairment charge of $6.5 million included in selling, general, administrative and other in the accompanying unaudited interim consolidated statements of income to reduce the carrying value of certain wireless spectrum licenses designated as held for sale, and not used in operations, to their fair market value. The fair market value of these holdings has been reduced to a nominal amount due to an impairment resulting from general market conditions and limited interest on this bandwidth of spectrum.

4.Goodwill and Other Intangible

4.Goodwill and Other Intangible Assets:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
4.Goodwill and Other Intangible Assets:	4. Goodwill and Other Intangible Assets: As of January1, 2009, the Company completed its annual impairment review of goodwill and franchise rights and determined that no write-down in the carrying value of these assets was required. Commensurate with its change from multiple segments to a single reporting segment as discussed further in Note 1, the Company no longer uses a combination of the discounted cash flows and the calculated market values of comparable companies to determine the fair value of a reporting unit. Rather, the Company assesses impairment of its goodwill by evaluating the carrying value of its shareholders equity against the current fair market value of its outstanding equity, where the fair market value of the Companys equity is equal to its current market capitalization plus a control premium estimated to be 20 percent through the review of recent market observable transactions involving wireline telecommunication companies. During the nine months ended September30, 2009, there were no changes in the carrying amounts of goodwill. The carrying value of the Companys franchise rights was $955.0 million as of December31, 2008. As discussed in Note 2, effective January1, 2009, the Company prospectively changed its assessment of useful life for its franchise rights from indefinite-lived to 30 years. Effective with this change, these rights are now amortized on a straight line basis in accordance with the way in which these operations are expected to contribute to the undiscounted cash flows of the Company. Intangible assets subject to amortization were as follows: (Millions) September30, 2009 Gross Cost Accumulated Amortization Net Carrying Value Franchise rights $ 955.0 $ (23.9 ) $ 931.1 Valor customer list 210.0 (117.9 ) 92.1 CTC customer list 45.0 (17.6 ) 27.4 Other customer list 67.6 (45.9 ) 21.7 Cable franchise rights 22.5 (22.0 ) 0.5 $ 1,300.1 $ (227.3 ) $ 1,072.8 December 31, 2008 (Millions) Gross Cost Accumulated Amortization NetCarrying Value Valor customer list $ 210.0 $ (94.4 ) $ 115.6 CTC customer list 45.0 (11.7 ) 33.3 Other customer list 67.6 (40.9 ) 26.7 Cable franchise rights 22.5 (20.9 ) 1.6 $ 345.1 $ (167.9 ) $ 177.2 Amortization expense for intangible assets subject to amortization was $19.1 million and $59.4 million for the three and nine month periods ended September30, 2009, respectively, as compared to $12.7 million and $39.6 million for the same periods of 2008. Amortization expense for intangible assets subject to amortization is estimated to be $78.2 million in 2009, $71.1 million in 2010, $65.4 million in 2011, $59.7 million in 2012 and $47.4 million in 2013.

5.Debt and Derivative Instrumen

5.Debt and Derivative Instruments:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
5.Debt and Derivative Instruments:	5. Debt and Derivative Instruments: Long-term debt was as follows: (Millions) September30, 2009 December31, 2008 Issued by Windstream Corporation: Senior secured credit facility, Tranche A - variable rates, due July17, 2011 (a) $283.3 $283.3 Senior secured credit facility, Tranche B - variable rates, due July17, 2013 (a) 1,368.5 1,379.0 Senior secured credit facility, Revolving line of credit - variable rates, dueJuly17, 2011 (a)(b) 150.0 Debentures and notes, without collateral: 2016 Notes 8.625%, due August1, 2016 (c) 1,746.0 1,746.0 2013 Notes 8.125%, due August1, 2013 (c) 800.0 800.0 2019 Notes 7.000%, due March15, 2019 (c) 500.0 500.0 Issued by subsidiaries of the Company: Valor Telecommunications Enterprises LLC and Valor Telecommunications Finance Corp. - 7.75%, due February15, 2015 (c)(d) 400.0 400.0 Windstream Holdings of the Midwest, Inc. - 6.75%, due April1, 2028 (c)(d) 100.0 100.0 Debentures and notes, without collateral: Windstream Georgia Communications LLC - 6.50%, due November15,2013 50.0 50.0 Teleview, LLC - 7.00%, due January2, 2010 and May2, 2010 0.1 0.3 Discount on long-term debt, net of premiums (24.8 ) (26.1 ) 5,223.1 5,382.5 Less current maturities (24.1 ) (24.3 ) Total long-term debt (e) $5,199.0 $5,358.2 (a) In October 2009, Windstream received consent from its lenders to an amendment and restatement of its senior secured credit facility (the Amendment). See Note 15 for further discussion of the financial impact of the Amendment. (b) The Company has a revolving line of credit in its senior secured credit facility under which it may borrow up to $500.0 million less outstanding letters of credit. During the second quarter of 2009, the Company repaid the full amount outstanding under the revolving line of credit. The revolving line of credits variable interest rates ranged from 1.59 percent to 2.45 percent, with a weighted average rate of 1.77 percent during the nine months ended September30, 2009. After giving consideration to the Companys letters of credit, the Company had $491.8 million of available borrowing capacity under the revolving line of credit as of September30, 2009. (c) Certain of the Companys debentures and notes are callable by the Company at various premiums on early redemption. (d) The Companys collateralized Valor debt is equally and ratably secured with debt under the senior secured credit facilities. Debt held by Windstream Holdings of the Midwest, Inc., a subsidiary of the Company, is secured solely by the assets of the subsidiary. (e) On October8, 2009, Windstream completed the private placement of approximately $400.0 million aggregate principal amount of senior unsecured notes due November1, 2017, (the Private Placement). See Note 15 for further discussion of the financial impact of the Private Placement. The terms of the senior secured credit facilities and indentures include customary covenants that,

6.Fair Value Measurements:

6.Fair Value Measurements:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
6.Fair Value Measurements:	6. Fair Value Measurements: Windstream utilizes market data or assumptions that market participants would use in valuing its assets and liabilities, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. Valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs are used, and the fair value balances are classified based on the observability of those inputs. The highest priority is given to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority is given to unobservable inputs (level 3 measurement). Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Companys assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. The Companys non-financial assets and liabilities, including goodwill, intangible assets and asset retirement obligations, are measured at fair value on a non-recurring basis. No event occurred during the nine months ended September30, 2009 requiring these non-financial assets and liabilities to be recognized at fair value. The Companys financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, long-term debt and interest rate swaps. The carrying amount of accounts receivable and accounts payable was estimated by management to approximate fair value due to the relatively short period of time to maturity for those instruments. Cash equivalents, long-term debt and interest rate swaps are measured at fair value on a recurring basis. The fair values of the Companys cash equivalents and interest rate swaps were determined using the following inputs: (Millions) September30, 2009 QuotedPrice in Active Markets for IdenticalAssets Significant Other Observable Inputs Significant Unobservable Inputs FairValue CarryingAmount Level 1 Level 2 Level 3 Cash equivalents (a) $ 290.0 $ 290.0 $ 290.0 $ $ Interest rate swaps (b) (see Note 5) $ (131.9 ) $ (131.9 ) $ $ (131.9 ) $ (Millions) December31, 2008 QuotedPrice in Active Markets for IdenticalAssets Significant Other Observable Inputs Significant Unobservable Inputs FairValue CarryingAmount Level 1 Level 2 Level 3 Cash equivalents (a) $ 296.6 $ 296.6 $ 296.6 $ $ Interest rate swaps (b) (see Note 5) $ (153.4 ) $ (153.4 ) $ $ (153.4 ) $ (a) Included in cash and cash equivalents on the unaudited consolidated balance sheet as of September30, 2009 and consolidated balance sheet as of December31, 2008. (b) Included in current portion of interest rate swaps

7.Commitments and Contingencies

7.Commitments and Contingencies:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
7.Commitments and Contingencies:	7. Commitments and Contingencies: The Company is party to various legal proceedings. Although the ultimate resolution of these various proceedings cannot be determined at this time, management of the Company does not believe that such proceedings, individually or in the aggregate, will have a material adverse effect on the future consolidated results of income, cash flows or financial condition of the Company. In addition, management of the Company is currently not aware of any environmental matters that, individually or in the aggregate, would have a material adverse effect on the consolidated financial condition or results of operations of the Company.

8.Employee Benefit Plans and Po

8.Employee Benefit Plans and Postretirement Benefits Other Than Pensions:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
8.Employee Benefit Plans and Postretirement Benefits Other Than Pensions:	8. Employee Benefit Plans and Postretirement Benefits Other Than Pensions: Windstream maintains a non-contributory qualified defined benefit pension plan, which covers substantially all employees. Prior to establishing the pension plan pursuant to the spin off in 2006, the Companys employees participated in a substantially equivalent plan maintained by Alltel. Future benefit accruals for all eligible nonbargaining employees covered by the pension plan ceased as of December31, 2005 (December 31, 2010 for employees who had attained age 40 with two years of service as of December31, 2005). The Company also maintains supplemental executive retirement plans that provide unfunded, non-qualified supplemental retirement benefits to a select group of current and former management employees. Additionally, the Company provides postretirement healthcare and life insurance benefits for eligible employees. Employees share in, and the Company funds, the costs of these plans as benefits are paid. The components of pension expense (including provision for executive retirement agreements) were as follows for the three and nine month periods ended September30: (Millions) ThreeMonthsEnded Nine Months Ended 2009 2008 2009 2008 Benefits earned during the year $ 3.3 $ 3.3 $ 10.0 $ 9.9 Interest cost on benefit obligation 14.3 14.0 42.9 42.1 Amortization of net actuarial loss 17.8 1.6 53.4 4.8 Amortization of prior service credit (0.1 ) (0.1 ) Expected return on plan assets (12.4 ) (19.1 ) (37.4 ) (57.2 ) Net periodic benefit expense (income) $ 23.0 $ (0.2 ) $ 68.8 $ (0.5 ) The components of postretirement expense were as follows for the three and nine month periods ended September30: (Millions) ThreeMonthsEnded NineMonthsEnded 2009 2008 2009 2008 Benefits earned during the year $ 0.1 $ 0.1 $ 0.1 $ 0.2 Interest cost on benefit obligation 2.1 3.1 6.3 10.1 Amortization of transition obligation 0.1 0.5 Amortization of net actuarial loss 0.3 1.0 Amortization of prior service (credit) cost (0.8 ) 0.1 (2.4 ) 1.0 Net periodic benefit expense $ 1.4 $ 3.7 $ 4.0 $ 12.8 Windstream contributed $10.7 million to the postretirement plan during the nine months ended September30, 2009, and expects to contribute an additional $3.2 million for postretirement benefits throughout the remainder of 2009, excluding amounts that will be funded by participant contributions to the plans. The Company contributed $2.5 million to the pension plan during the nine months ended September30, 2009, and does not expect to make any additional contributions for pension benefits for the remainder of 2009.

9.Merger, Integration and Restr

9.Merger, Integration and Restructuring Charges:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
9.Merger, Integration and Restructuring Charges:	9. Merger, Integration and Restructuring Charges: The following is a summary of merger, integration and restructuring charges recorded in the three and nine month periods ended September30: (Millions) ThreeMonthsEnded NineMonthsEnded 2009 2008 2009 2008 Transaction costs associated with the acquisition of DE $ 0.9 $ $ 2.3 $ Transaction costs associated with the acquisition of Lexcom 0.1 0.1 Transaction costs associated with the acquisition of CTC 0.1 Computer system separation and conversion costs 6.1 Total merger and integration costs 1.0 2.4 6.2 Severance and employee benefit costs 7.5 1.0 7.5 2.1 Total merger, integration and restructuring charges $ 8.5 $ 1.0 $ 9.9 $ 8.3 Costs triggered by strategic transactions, including transaction costs, rebranding costs and system conversion costs are unpredictable by nature. Restructuring charges, consisting primarily of severance and employee benefit costs, are triggered by the Companys continued evaluation of its operating structure and identification of opportunities for increased operational efficiency and effectiveness and should not necessarily be viewed as non-recurring. They are reviewed regularly by the Companys decision makers and are included as a component of compensation targets. Transaction costs are expensed as incurred and primarily include charges for accounting, legal, broker fees and other miscellaneous costs, including computer system and conversion costs associated with the acquisition of CTC and the pending acquisitions of DE and Lexcom (see Note 14). During the third quarter of 2009, Windstream recognized $7.5 million of the $9.0 million total expected severance and employee benefit costs primarily related to the announced workforce reduction initiated to better align the Companys focus on high-speed Internet and enterprise opportunities. The Company expects to complete the workforce reduction in the fourth quarter of 2009. During the second quarter of 2009, the Company incurred $0.1 million in severance and employee benefit related costs associated with the closure of an out of territory sales and product distribution facility. During the first quarter of 2009, the Company recorded a $0.1 million reduction in liabilities to reflect differences between estimated and actual costs paid associated with a work force reduction initiated during the fourth quarter of 2008. During the three and nine months ended September30, 2009, the Company expensed consulting fees of $1.0 million and $2.4 million, respectively, associated with the pending acquisitions of DE and Lexcom. During the nine months ended September30, 2008, the Company incurred $2.1 million in severance and employee-related costs primarily related to the announced realignment of certain information technology, network operations and business sales functions. Additionally, in 2008 the Company incurred charges for accounting, legal and broker fees and other miscellaneous cos

10.Comprehensive Income

10.Comprehensive Income (Loss):
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
10.Comprehensive Income (Loss):	10. Comprehensive Income (Loss): Comprehensive income (loss) was as follows for the three and nine month periods ended September30: (Millions) ThreeMonthsEnded Nine Months Ended 2009 2008 2009 2008 Net income $ 80.0 $ 105.9 $ 259.0 $ 331.6 Comprehensive income: Defined benefit pension plans: Change in net actuarial loss for employee benefit plans (11.2 ) (27.5 ) Amounts included in net periodic benefit cost: Amortization of prior service credits (0.1 ) (0.1 ) Amortization of net actuarial loss 17.8 1.6 53.4 4.8 Income tax (expense) benefit (6.8 ) (0.6 ) (16.1 ) 8.9 Change in pension plan 11.0 1.0 26.0 (13.9 ) Postretirement plan: Change in net actuarial gain (loss) for employee benefit plans 67.3 12.9 59.0 Amounts included in net periodic benefit cost: Amortization of transition obligation 0.1 0.5 Amortization of prior service costs (credits) (0.8 ) 0.1 (2.4 ) 1.0 Amortization of net actuarial loss 0.3 1.0 Income tax (expense) benefit 0.3 (26.9 ) (4.8 ) (20.5 ) Change in postretirement plan (0.5 ) 40.9 5.7 41.0 Change in employee benefit plans 10.5 41.9 31.7 27.1 Interest rate swaps: Unrealized holding gain (loss) on interest rate swaps (7.4 ) (2.7 ) 20.2 6.2 Income tax benefit (expense) 2.8 1.0 (8.1 ) (2.4 ) Unrealized holding gain (loss) on interest rate swaps (4.6 ) (1.7 ) 12.1 3.8 Comprehensive income $ 85.9 $ 146.1 $ 302.8 $ 362.5 Accumulated other comprehensive loss was as follows: (Millions) September30, December31, 2009 2008 Pension and postretirement plans $ (216.6 ) $ (248.3 ) Unrealized holding losses on interest rate swaps: Designated portion (74.8 ) (86.6 ) Undesignated portion (1.4 ) (1.7 ) Accumulated other comprehensive loss $ (292.8 ) $ (336.6 )

11.Earnings per Share:

11.Earnings per Share:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
11.Earnings per Share:	11. Earnings per Share: Basic earnings per share was computed by dividing net income applicable to common shares by the weighted average number of common shares outstanding during each period. Windstreams non-vested restricted shares that contain a non-forfeitable right to receive dividends on a one-to-one per share ratio to common shares are considered participating securities, and the impact is included in the computation of basic earnings per share pursuant to the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings attributable to common shares and participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. Earnings per common share was computed by dividing the sum of distributed earnings and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and non-vested restricted shares based on the pro-rata weighted average shares outstanding during the period. The Company also computed dilutive earnings per share using the two-class method as this method is more dilutive than the treasury stock method. Under this method, Windstreams diluted earnings per share is equal to the Companys calculated basic earnings per share. Effective January1, 2009, the Company adopted this revised authoritative guidance for calculating earnings per share, and commensurate therewith, has retrospectively adjusted prior period earnings per share data, the impact of which was immaterial. A reconciliation of net income and number of shares used in computing basic and diluted earnings per share was as follows for the three and nine month periods ended September30: (Millions, except per share amounts) Three Months Ended Nine Months Ended 2009 2008 2009 2008 Basic and diluted earnings per share: Numerator: Income from continuing operations $ 80.0 $ 104.3 $ 259.0 $ 344.1 Income from continuing operations allocable to non-vested restricted shares (0.7 ) (0.8 ) (2.9 ) (2.9 ) Adjusted income from continuing operations available to common shares $ 79.3 $ 103.5 $ 256.1 $ 341.2 Loss from discontinued operations 1.6 (12.5 ) Loss from discontinued operations allocable to non-vested restricted shares (0.1 ) 0.1 Adjusted income from discontinued operations available to common shares 1.5 (12.4 ) Net income available to common shares $ 79.3 $ 105.0 $ 256.1 $ 328.8 Denominator: Weighted average common shares outstanding for the period 433.0 435.9 433.8 442.3 B

12.Stock-Based Compensation Pla

12.Stock-Based Compensation Plans:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
12.Stock-Based Compensation Plans:	12. Stock-Based Compensation Plans: Under the Companys stock-based compensation plans, Windstream may issue restricted stock and other equity securities to directors, officers and other key employees. The maximum number of shares available for issuance under the Windstream 2006 Equity Incentive Plan is 10.0million shares. As of September30, 2009, the balance available for grant was approximately 3.5million shares. During February, May and August 2009, the Windstream Board of Directors approved grants of restricted stock to officers, executives, non-employee directors and certain management employees. These grants include the standard annual grants to this employee and director group as a key component of their annual incentive compensation plan. The vesting periods and grant date fair value for shares issued during the nine months ended September30, 2009 was as follows: (Thousands) WeightedAverage FairValuePerShare Number of Shares Non-vested at December 31, 2008 3,352.8 $12.30 Granted 1,857.8 $8.71 Vested (2,198.1 ) $12.50 Forfeited (119.4 ) $10.78 Non-vested at September 30, 2009 2,893.1 $9.90 For performance based shares granted, the operating target for the first vesting period was approved by the Board of Directors in February 2009. While achievement of these performance targets remains uncertain, management has determined that it is probable that such targets will be met for fiscal year 2009. Non-vested restricted stock activity for the nine months ended September30, 2009 was as follows: (Thousands) Common Shares Vest ratably over a three-year service period 1,125.1 Vest contingently over a three-year performance period 677.5 Vest one year from date of grant, service based (a) 55.2 Total granted 1,857.8 Grant date fair value (Millions) $ 16.2 (a) Represents shares granted to non-employee directors. The weighted average grant date fair value for restricted stock granted was $1.4 million and $16.2 million for the three and nine month periods ended September30, 2009, respectively, compared to $14.3 million for the nine month period ended September30, 2008. There was no change in the weighted average grant date fair value for the three months ended September30, 2008. At September30, 2009, unrecognized compensation expense for non-vested Windstream restricted shares was $13.4 million. The unrecognized compensation expense for these non-vested restricted shares has a remaining weighted average vesting period of 1.5 years. Stock-based compensation expense was $3.7 million and $14.3 million for the three and nine month periods ended September30, 2009, respectively, as compared to $4.3 million and $13.5 million for the same periods of 2008.

13.Supplemental Guarantor Infor

13.Supplemental Guarantor Information:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
13.Supplemental Guarantor Information:	13. Supplemental Guarantor Information: In connection with the issuance of the 2013 Notes, the 2016 Notes, and the 2019 Notes (the guaranteed notes), certain of the Companys wholly-owned subsidiaries (the Guarantors), including all former subsidiaries of Valor, provided guarantees of those debentures. These guarantees are full and unconditional as well as joint and several. Certain Guarantors may be subject to restrictions on their ability to distribute earnings to the Company. The remaining subsidiaries (the Non-Guarantors) of Windstream are not guarantors of the guaranteed notes. Following the acquisition of CTC, the guaranteed notes were amended to include certain subsidiaries of CTC as guarantors. The following information presents condensed consolidated statements of income for the three and nine month periods ended September30, 2009 and 2008, condensed consolidated balance sheets as of September30, 2009 and December31, 2008, and condensed consolidated statements of cash flows for the nine months ended September30, 2009 and 2008 of the parent company, the Guarantors, and the Non-Guarantors. Investments in consolidated subsidiaries are held primarily by the parent company in the net assets of its subsidiaries and have been presented using the equity method of accounting. Condensed Consolidated Statement of Income (Unaudited) Three Months Ended September30, 2009 (Millions) Parent Guarantors Non- Guarantors Eliminations Consolidated Revenues and sales: Service revenues $ $ 185.1 $ 522.1 $ (2.3 ) $ 704.9 Product sales 16.8 12.6 29.4 Total revenues and sales 201.9 534.7 (2.3 ) 734.3 Costs and expenses: Cost of services 62.4 192.4 (1.8 ) 253.0 Cost of products sold 15.4 10.6 26.0 Selling, general, administrative and other 20.3 67.8 (0.5 ) 87.6 Depreciation and amortization 47.8 86.0 133.8 Merger, integration and restructuring 3.0 5.5 8.5 Total costs and expenses 148.9 362.3 (2.3 ) 508.9 Operating income 53.0 172.4 225.4 Earnings (losses) from consolidated subsidiaries 134.0 17.8 (151.8 ) Other income (expense), net (1.7 ) 27.5 (28.0 ) (2.2 ) Intercompany interest income (expense) 8.8 (3.8 ) (5.0 ) Interest expense (95.3 ) (1.6 ) (0.6 ) (97.5 ) Income before income taxes 45.8 92.9 138.8 (151.8 ) 125.7 Income tax expense (benefit) (34.2 ) 27.4 52.5 45.7 Net income $ 80.0 $ 65.5 $ 86.3 $ (151.8 ) $ 80.0

14. Pending Transactions:

14. Pending Transactions:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
14. Pending Transactions:	14. Pending Transactions: On May10, 2009 the Company entered into a definitive agreement to acquire all of the outstanding shares of common stock of DE in a transaction valued at approximately $350.0 million as of September 30, 2009. Under the terms of the agreement, DE shareholders will receive 0.650 shares of Windstream common stock and $5.00 in cash per each share of DE common stock. As of September30, 2009, DE had outstanding approximately 14.4million shares of common stock and approximately $180.8 million of long-term debt, including current maturities. Including the early extinguishment of debt, cash consideration to be paid at closing was estimated to be approximately $256.0 million as of September30, 2009. The acquisition of DE will significantly increase Windstreams presence in Pennsylvania. As of September30, 2009, DE had approximately 114,000 incumbent local exchange carrier (ILEC) access lines, 47,000 competitive local exchange carrier access lines and 46,000 high-speed Internet customers in central Pennsylvania. In addition, we expect this acquisition to generate significant opportunities for operating efficiencies with contiguous Windstream markets. The acquisition is expected to close on November 10, 2009. On September8, 2009 the Company entered into a definitive agreement to acquire Lexcom based in Lexington, North Carolina, for approximately $141.0 million in cash, net of working capital to be acquired. The acquisition will increase Windstreams presence in North Carolina. As of September30, 2009, Lexcom had approximately 23,000 ILEC access lines, 9,000 high-speed Internet customers and 12,000 cable television customers in North Carolina. In addition, we expect this acquisition to generate opportunities for operating efficiencies with contiguous Windstream markets. The acquisition has received Lexcom shareholder approval and is expected to close in the fourth quarter of 2009, subject to certain conditions including the necessary approvals from federal regulators.

15. Subsequent Events:

15. Subsequent Events:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
15. Subsequent Events:	15. Subsequent Events: On October8, 2009, Windstream completed the Private Placement of $400 million in aggregate principle amount of 7.875 percent senior unsecured notes due November1, 2017. Proceeds from the Private Placement totaled $394.1million, excluding debt issuance costs, with a yield of 8.125 percent. Windstream expects to use the net proceeds of the Private Placement to finance the cash portion of the purchase price of the DE and Lexcom acquisitions, to refinance certain indebtedness of DE in connection with the DE merger, to pay related transaction fees and expenses and for general corporate purposes. Additionally, during October of 2009, Windstream received consent from its lenders to an amendment and restatement of its $2.2 billion senior secured credit facility, including the $500.0 million revolving line of credit. Windstream amended and restated its senior secured credit facility to, among other things, extend the maturities of the facility and amend certain covenants to afford Windstream additional flexibility, resulting in increased interest rates on the extended maturities. The extended maturities and related interest rate increases associated with the Amendment were as follows: Non-extended Extended Total Due Amount (Millions) Interest RateIncrease (BasisPoints) Due Amount (Millions) Amount (Millions) Senior secured credit facility: Tranche A - variable rates July17,2011 $ 114.4 100 July17,2013 $ 168.9 $ 283.3 Tranche B - variable rates July 17, 2013 $ 290.5 125 December17,2015 $ 1,078.0 $ 1,368.5 Revolving line of credit - variable rates (a) July 17, 2011 $ 152.4 100 July 17, 2013 $ 347.6 $ 500.0 (a) As of September30, 2009, the Company repaid the full amount outstanding under the revolving line of credit. After giving effect to the Private Placement and Amendment, Windstream will have approximately $5.6 billion in long-term debt outstanding, including current maturities. Following the completion of the Private Placement and Amendment, the Companys scheduled principal payments approximate $23.8 million, $142.8 million, $42.3 million, $1,248.0 million and $20.8 million for each of the twelve month periods ended September30, 2010, 2011, 2012, 2013 and 2014, respectively. The scheduled principal payments remaining after 2014 approximate $4,170.1 million. On November2, 2009, Windstream entered into a definitive agreement to acquire all of the issued and outstanding shares of common stock of NuVox, Inc. (NuVox), a privately held competitive local exchange carrier based in Greenville, South Carolina, in a transaction valued at approximately $643.0 million. Under the terms of the agreement, Windstream expects to issue approximately 18.7 million fixed shares of common stock valued at approximately $183.0 million and pay approximately $280.0 million in cash as part of the transaction. Windstream will assume estimated net debt of $180.0 million and intends to finance the acquisition with existing cash on hand and borrowings available unde

Document Information

Document Information
	9 Months Ended Sep. 30, 2009 USD / shares
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-09-30

Entity Information

Entity Information (USD $)
	9 Months Ended Sep. 30, 2009	Oct. 31, 2009
Entity [Text Block]
Trading Symbol	WIN
Entity Registrant Name	WINDSTREAM CORP
Entity Central Index Key	0001282266
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		427,390,506