Supplemental Guarantor Information: | 9 Months Ended |
Sep. 30, 2014 |
Condensed Financial Information Disclosure [Abstract] | ' |
Supplemental Guarantor Information: | ' |
Supplemental Guarantor Information: |
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Debentures and notes, without collateral, issued by Windstream Corporation |
In connection with the issuance of the 7.875 percent senior notes due November 1, 2017, the 8.125 percent senior notes due September 1, 2018, the 7.750 percent senior notes due October 15, 2020, the 7.750 percent senior notes due October 1, 2021, the 7.500 percent senior notes due June 1, 2022, the 7.500 percent senior notes due April 1, 2023 and the 6.375 percent senior notes due August 1, 2023 (“the guaranteed notes”), certain of Windstream Corp.’s wholly-owned subsidiaries (the “Guarantors”), provide guarantees of those debentures. These guarantees are full and unconditional, subject to certain customary release provisions, as well as joint and several. All personal property assets and related operations of the Guarantors are pledged as collateral on the senior secured credit facility of Windstream Corp. Certain Guarantors may be subject to restrictions on their ability to distribute earnings to Windstream Corp. The remaining subsidiaries of Windstream Corp. (the “Non-Guarantors”) are not guarantors of the guaranteed notes. Following the acquisitions of acquired businesses, the guaranteed notes were amended to include certain subsidiaries of the acquired businesses as guarantors. Windstream Holdings is not a guarantor of any Windstream Corp. debt instruments. |
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Upon completing an internal legal entity restructuring, as of January 1, 2014, certain of Windstream Corp.’s guarantor and non-guarantor subsidiaries were merged with and into Windstream Corp. Prior period information has been revised to reflect the change in our legal entity structure. |
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The following information presents condensed consolidated and combined statements of comprehensive income for the three and nine month periods ended September 30, 2014 and 2013, condensed consolidated balance sheets as of September 30, 2014 and December 31, 2013, and condensed consolidated and combined statements of cash flows for the nine month period ended September 30, 2014 and 2013 of Windstream Corp., the Guarantors and the Non-Guarantors. Investments consist of investments in net assets of subsidiaries held by Windstream Corp. and other subsidiaries, and have been presented using the equity method of accounting. |
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| | Condensed Consolidated Statement of Comprehensive Income (Unaudited) | | | | |
| | Three Months Ended | | | | |
30-Sep-14 | | | | |
(Millions) | | Windstream Corp. | | Guarantors | | Non- | | Eliminations | | Consolidated | | | | |
Guarantors | | | | |
Revenues and sales: | | | | | | | | | | | | | | |
Service revenues | | $ | — | | | $ | 258.3 | | | $ | 1,158.30 | | | $ | (7.0 | ) | | $ | 1,409.60 | | | | | |
| | | |
Product sales | | — | | | 11.4 | | | 34.5 | | | — | | | 45.9 | | | | | |
| | | |
Total revenues and sales | | — | | | 269.7 | | | 1,192.80 | | | (7.0 | ) | | 1,455.50 | | | | | |
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Costs and expenses: | | | | | | | | | | | | | | |
Cost of services | | — | | | 96.4 | | | 580.4 | | | (5.9 | ) | | 670.9 | | | | | |
| | | |
Cost of products sold | | — | | | 10.9 | | | 28.1 | | | — | | | 39 | | | | | |
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Selling, general and administrative | | — | | | 22.1 | | | 210.5 | | | (1.1 | ) | | 231.5 | | | | | |
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Depreciation and amortization | | 5.3 | | | 74.9 | | | 268.3 | | | — | | | 348.5 | | | | | |
| | | |
Merger and integration costs | | — | | | — | | | 10 | | | — | | | 10 | | | | | |
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Restructuring charges | | — | | | 0.5 | | | 3.1 | | | — | | | 3.6 | | | | | |
| | | |
Total costs and expenses | | 5.3 | | | 204.8 | | | 1,100.40 | | | (7.0 | ) | | 1,303.50 | | | | | |
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Operating (loss) income | | (5.3 | ) | | 64.9 | | | 92.4 | | | — | | | 152 | | | | | |
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Earnings (losses) from consolidated subsidiaries | | 69.6 | | | 12.5 | | | (0.2 | ) | | (81.9 | ) | | — | | | | | |
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Other (expense) income, net | | (0.3 | ) | | 40.9 | | | (40.7 | ) | | — | | | (0.1 | ) | | | | |
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Intercompany interest income (expense) | | 31.8 | | | (13.4 | ) | | (18.4 | ) | | — | | | — | | | | | |
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Interest expense | | (130.9 | ) | | (1.6 | ) | | (10.9 | ) | | — | | | (143.4 | ) | | | | |
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(Loss) income before income taxes | | (35.1 | ) | | 103.3 | | | 22.2 | | | (81.9 | ) | | 8.5 | | | | | |
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Income tax (benefit) expense | | (43.3 | ) | | 34.8 | | | 8.8 | | | — | | | 0.3 | | | | | |
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Net income | | $ | 8.2 | | | $ | 68.5 | | | $ | 13.4 | | | $ | (81.9 | ) | | $ | 8.2 | | | | | |
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Comprehensive income | | $ | 13.8 | | | $ | 68.5 | | | $ | 13.4 | | | $ | (81.9 | ) | | $ | 13.8 | | | | | |
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12. Supplemental Guarantor Information, Continued: |
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| | | | | | | | | | | | | | | | | | | | | | | | |
| | Condensed Consolidated Statement of Comprehensive Income (Unaudited) | | | | |
| | Three Months Ended | | | | |
30-Sep-13 | | | | |
(Millions) | | Windstream Corp. | | Guarantors | | Non- | | Eliminations | | Consolidated | | | | |
Guarantors | | | | |
Revenues and sales: | | | | | | | | | | | | | | |
Service revenues | | $ | — | | | $ | 268.8 | | | $ | 1,182.30 | | | $ | (8.3 | ) | | $ | 1,442.80 | | | | | |
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Product sales | | — | | | 13.4 | | | 42.3 | | | — | | | 55.7 | | | | | |
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Total revenues and sales | | — | | | 282.2 | | | 1,224.60 | | | (8.3 | ) | | 1,498.50 | | | | | |
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Costs and expenses: | | | | | | | | | | | | | | |
Cost of services | | — | | | 92.5 | | | 558.7 | | | (6.4 | ) | | 644.8 | | | | | |
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Cost of products sold | | — | | | 12.7 | | | 33.5 | | | — | | | 46.2 | | | | | |
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Selling, general and administrative | | — | | | 20.9 | | | 224.1 | | | (1.9 | ) | | 243.1 | | | | | |
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Depreciation and amortization | | 6.2 | | | 73.3 | | | 258.7 | | | — | | | 338.2 | | | | | |
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Merger and integration costs | | — | | | — | | | 5.8 | | | — | | | 5.8 | | | | | |
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Restructuring charges | | — | | | 1 | | | (0.2 | ) | | — | | | 0.8 | | | | | |
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Total costs and expenses | | 6.2 | | | 200.4 | | | 1,080.60 | | | (8.3 | ) | | 1,278.90 | | | | | |
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Operating (loss) income | | (6.2 | ) | | 81.8 | | | 144 | | | — | | | 219.6 | | | | | |
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Earnings from consolidated subsidiaries | | 106.7 | | | 17.2 | | | 0.7 | | | (124.6 | ) | | — | | | | | |
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Other (expense) income, net | | (0.8 | ) | | 43 | | | (47.8 | ) | | — | | | (5.6 | ) | | | | |
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Loss on early extinguishment of debt | | (14.6 | ) | | — | | | (0.1 | ) | | — | | | (14.7 | ) | | | | |
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Intercompany interest income (expense) | | 33 | | | (14.9 | ) | | (18.1 | ) | | — | | | — | | | | | |
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Interest expense | | (138.7 | ) | | (1.4 | ) | | (8.7 | ) | | — | | | (148.8 | ) | | | | |
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(Loss) income before income taxes | | (20.6 | ) | | 125.7 | | | 70 | | | (124.6 | ) | | 50.5 | | | | | |
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Income tax (benefit) expense | | (51.2 | ) | | 43.3 | | | 27.8 | | | — | | | 19.9 | | | | | |
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Net income | | $ | 30.6 | | | $ | 82.4 | | | $ | 42.2 | | | $ | (124.6 | ) | | $ | 30.6 | | | | | |
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Comprehensive income | | $ | 25.1 | | | $ | 82.4 | | | $ | 42.2 | | | $ | (124.6 | ) | | $ | 25.1 | | | | | |
| | | |
12. Supplemental Guarantor Information, Continued: |
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| | | | | | | | | | | | | | | | | | | | | | | | |
| | Condensed Consolidated Statement of Comprehensive Income (Unaudited) | | | | |
| | Nine Months Ended | | | | |
30-Sep-14 | | | | |
(Millions) | | Windstream Corp. | | Guarantors | | Non- | | Eliminations | | Consolidated | | | | |
Guarantors | | | | |
Revenues and sales: | | | | | | | | | | | | | | |
Service revenues | | $ | — | | | $ | 776.7 | | | $ | 3,488.60 | | | $ | (18.3 | ) | | $ | 4,247.00 | | | | | |
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Product sales | | — | | | 31.8 | | | 107.6 | | | — | | | 139.4 | | | | | |
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Total revenues and sales | | — | | | 808.5 | | | 3,596.20 | | | (18.3 | ) | | 4,386.40 | | | | | |
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Costs and expenses: | | | | | | | | | | | | | | |
Cost of services | | — | | | 278.3 | | | 1,704.60 | | | (15.1 | ) | | 1,967.80 | | | | | |
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Cost of products sold | | — | | | 30.6 | | | 89.5 | | | — | | | 120.1 | | | | | |
| | | |
Selling, general and administrative | | — | | | 74.8 | | | 661.1 | | | (3.2 | ) | | 732.7 | | | | | |
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Depreciation and amortization | | 16.3 | | | 224.3 | | | 790.8 | | | — | | | 1,031.40 | | | | | |
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Merger and integration costs | | — | | | — | | | 26 | | | — | | | 26 | | | | | |
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Restructuring charges | | — | | | 3.4 | | | 16.4 | | | — | | | 19.8 | | | | | |
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Total costs and expenses | | 16.3 | | | 611.4 | | | 3,288.40 | | | (18.3 | ) | | 3,897.80 | | | | | |
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Operating (loss) income | | (16.3 | ) | | 197.1 | | | 307.8 | | | — | | | 488.6 | | | | | |
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Earnings from consolidated subsidiaries | | 229.7 | | | 37 | | | 1 | | | (267.7 | ) | | — | | | | | |
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Other (expense) income, net | | (0.4 | ) | | 123.5 | | | (123.0 | ) | | — | | | 0.1 | | | | | |
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Intercompany interest income (expense) | | 95.1 | | | (40.6 | ) | | (54.5 | ) | | — | | | — | | | | | |
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Interest expense | | (392.8 | ) | | (4.8 | ) | | (30.2 | ) | | — | | | (427.8 | ) | | | | |
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(Loss) income before income taxes | | (84.7 | ) | | 312.2 | | | 101.1 | | | (267.7 | ) | | 60.9 | | | | | |
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Income tax (benefit) expense | | (123.9 | ) | | 105.8 | | | 39.8 | | | — | | | 21.7 | | | | | |
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Net income | | $ | 39.2 | | | $ | 206.4 | | | $ | 61.3 | | | $ | (267.7 | ) | | $ | 39.2 | | | | | |
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Comprehensive income | | $ | 31.8 | | | $ | 206.4 | | | $ | 61.3 | | | $ | (267.7 | ) | | $ | 31.8 | | | | | |
| | | |
12. Supplemental Guarantor Information, Continued: |
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| | | | | | | | | | | | | | | | | | | | | | | | |
| | Condensed Consolidated Statement of Comprehensive Income (Unaudited) | | | | |
| | Nine Months Ended | | | | |
30-Sep-13 | | | | |
(Millions) | | Windstream Corp. | | Guarantors | | Non- | | Eliminations | | Consolidated | | | | |
Guarantors | | | | |
Revenues and sales: | | | | | | | | | | | | | | |
Service revenues | | $ | — | | | $ | 804.3 | | | $ | 3,560.40 | | | $ | (25.2 | ) | | $ | 4,339.50 | | | | | |
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Product sales | | — | | | 41.9 | | | 115.3 | | | — | | | 157.2 | | | | | |
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Total revenues and sales | | — | | | 846.2 | | | 3,675.70 | | | (25.2 | ) | | 4,496.70 | | | | | |
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Costs and expenses: | | | | | | | | | | | | | | |
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Cost of services | | — | | | 271.5 | | | 1,680.40 | | | (19.3 | ) | | 1,932.60 | | | | | |
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Cost of products sold | | — | | | 42.1 | | | 96.1 | | | — | | | 138.2 | | | | | |
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Selling, general and administrative | | — | | | 61.4 | | | 662.1 | | | (5.9 | ) | | 717.6 | | | | | |
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Depreciation and amortization | | 18.8 | | | 218.5 | | | 762.4 | | | — | | | 999.7 | | | | | |
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Merger and integration costs | | — | | | — | | | 17.8 | | | — | | | 17.8 | | | | | |
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Restructuring charges | | — | | | 2.3 | | | 6 | | | — | | | 8.3 | | | | | |
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Total costs and expenses | | 18.8 | | | 595.8 | | | 3,224.80 | | | (25.2 | ) | | 3,814.20 | | | | | |
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Operating (loss) income | | (18.8 | ) | | 250.4 | | | 450.9 | | | — | | | 682.5 | | | | | |
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Earnings from consolidated subsidiaries | | 352.5 | | | 49.7 | | | 1.9 | | | (404.1 | ) | | — | | | | | |
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Other income (expense), net | | 2.1 | | | 125.1 | | | (132.2 | ) | | — | | | (5.0 | ) | | | | |
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Loss on early extinguishment of debt | | (17.1 | ) | | — | | | (11.4 | ) | | — | | | (28.5 | ) | | | | |
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Intercompany interest income (expense) | | 103.2 | | | (47.1 | ) | | (56.1 | ) | | — | | | — | | | | | |
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Interest expense | | (447.0 | ) | | (4.4 | ) | | (28.3 | ) | | — | | | (479.7 | ) | | | | |
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(Loss) income from continuing operations before | | (25.1 | ) | | 373.7 | | | 224.8 | | | (404.1 | ) | | 169.3 | | | | | |
income taxes | | | | |
Income tax (benefit) expense | | (147.7 | ) | | 126.1 | | | 69 | | | — | | | 47.4 | | | | | |
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Income from continuing operations | | 122.6 | | | 247.6 | | | 155.8 | | | (404.1 | ) | | 121.9 | | | | | |
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Discontinued operations | | — | | | — | | | 0.7 | | | — | | | 0.7 | | | | | |
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Net income | | $ | 122.6 | | | $ | 247.6 | | | $ | 156.5 | | | $ | (404.1 | ) | | $ | 122.6 | | | | | |
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Comprehensive income | | $ | 135.2 | | | $ | 247.6 | | | $ | 156.5 | | | $ | (404.1 | ) | | $ | 135.2 | | | | | |
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12. Supplemental Guarantor Information, Continued: |
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| | | | | | | | | | | | | | | | | | | | | | | | |
| | Condensed Consolidated Balance Sheet (Unaudited) | | | | |
| | As of September 30, 2014 | | | | |
(Millions) | | Windstream Corp. | | Guarantors | | Non- | | Eliminations | | Consolidated | | | | |
Guarantors | | | | |
Assets | | | | | | | | | | | | | | |
Current Assets: | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 57.6 | | | $ | 0.8 | | | $ | 45.3 | | | $ | — | | | $ | 103.7 | | | | | |
| | | |
Restricted cash | | 7.7 | | | — | | | — | | | — | | | 7.7 | | | | | |
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Accounts receivable (less allowance for doubtful | | — | | | 129.9 | | | 487.4 | | | — | | | 617.3 | | | | | |
accounts of $40.2) | | | | |
Notes receivable - affiliate | | — | | | 4.7 | | | — | | | (4.7 | ) | | — | | | | | |
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Affiliates receivable, net | | — | | | 1,015.20 | | | 2,049.90 | | | (3,065.1 | ) | | — | | | | | |
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Inventories | | — | | | 41.9 | | | 26.2 | | | — | | | 68.1 | | | | | |
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Deferred income taxes | | 28.6 | | | 10.5 | | | 30.4 | | | — | | | 69.5 | | | | | |
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Prepaid income taxes | | 21 | | | — | | | — | | | — | | | 21 | | | | | |
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Prepaid expenses and other | | 5.8 | | | 20.4 | | | 114.6 | | | — | | | 140.8 | | | | | |
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Total current assets | | 120.7 | | | 1,223.40 | | | 2,753.80 | | | (3,069.8 | ) | | 1,028.10 | | | | | |
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Investments in consolidated subsidiaries | | 10,227.70 | | | 972.1 | | | 283 | | | (11,482.8 | ) | | — | | | | | |
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Notes receivable - affiliate | | — | | | 318.6 | | | — | | | (318.6 | ) | | — | | | | | |
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Goodwill | | 1,649.50 | | | 825.6 | | | 1,856.30 | | | — | | | 4,331.40 | | | | | |
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Other intangibles, net | | 603.4 | | | 365.3 | | | 857 | | | — | | | 1,825.70 | | | | | |
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Net property, plant and equipment | | 10.1 | | | 1,283.60 | | | 4,162.60 | | | — | | | 5,456.30 | | | | | |
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Other assets | | 108.8 | | | 16.9 | | | 64.4 | | | — | | | 190.1 | | | | | |
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Total Assets | | $ | 12,720.20 | | | $ | 5,005.50 | | | $ | 9,977.10 | | | $ | (14,871.2 | ) | | $ | 12,831.60 | | | | | |
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Liabilities and Shareholders’ Equity | | | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | | | |
Current maturities of long-term debt | | $ | 92.4 | | | $ | — | | | $ | 0.1 | | | $ | — | | | $ | 92.5 | | | | | |
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Current portion of interest rate swaps | | 29.4 | | | — | | | — | | | — | | | 29.4 | | | | | |
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Accounts payable | | 6.2 | | | 64.5 | | | 285.8 | | | — | | | 356.5 | | | | | |
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Affiliates payable, net | | 3,217.80 | | | — | | | — | | | (3,065.1 | ) | | 152.7 | | | | | |
| | | |
Notes payable - affiliate | | — | | | — | | | 4.7 | | | (4.7 | ) | | — | | | | | |
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Advance payments and customer deposits | | — | | | 17.1 | | | 199.6 | | | — | | | 216.7 | | | | | |
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Accrued taxes | | 0.2 | | | 24.4 | | | 73 | | | — | | | 97.6 | | | | | |
| | | |
Accrued interest | | 148.7 | | | 3.8 | | | 17.3 | | | — | | | 169.8 | | | | | |
| | | |
Other current liabilities | | 33.9 | | | 15.2 | | | 239.6 | | | — | | | 288.7 | | | | | |
| | | |
Total current liabilities | | 3,528.60 | | | 125 | | | 820.1 | | | (3,069.8 | ) | | 1,403.90 | | | | | |
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Long-term debt | | 7,996.20 | | | 99.6 | | | 472.8 | | | — | | | 8,568.60 | | | | | |
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Notes payable - affiliate | | — | | | — | | | 318.6 | | | (318.6 | ) | | — | | | | | |
| | | |
Deferred income taxes | | 675.8 | | | 413.6 | | | 783.1 | | | — | | | 1,872.50 | | | | | |
| | | |
Other liabilities | | 60.7 | | | 51.5 | | | 415.5 | | | — | | | 527.7 | | | | | |
| | | |
Total liabilities | | 12,261.30 | | | 689.7 | | | 2,810.10 | | | (3,388.4 | ) | | 12,372.70 | | | | | |
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Commitments and Contingencies (See Note 6) | | | | | | | | | | | | | | | | | | | |
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Shareholders’ Equity: | | | | | | | | | | | | | | |
Common stock | | — | | | 39.4 | | | 81.9 | | | (121.3 | ) | | — | | | | | |
| | | |
Additional paid-in capital | | 437.8 | | | 3,794.90 | | | 3,979.40 | | | (7,774.3 | ) | | 437.8 | | | | | |
| | | |
Accumulated other comprehensive income | | 21.1 | | | — | | | 19.8 | | | (19.8 | ) | | 21.1 | | | | | |
| | | |
Retained earnings | | — | | | 481.5 | | | 3,085.90 | | | (3,567.4 | ) | | — | | | | | |
| | | |
Total shareholders’ equity | | 458.9 | | | 4,315.80 | | | 7,167.00 | | | (11,482.8 | ) | | 458.9 | | | | | |
| | | |
Total Liabilities and Shareholders’ Equity | | $ | 12,720.20 | | | $ | 5,005.50 | | | $ | 9,977.10 | | | $ | (14,871.2 | ) | | $ | 12,831.60 | | | | | |
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12. Supplemental Guarantor Information, Continued: |
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| | | | | | | | | | | | | | | | | | | | | | | | |
| | Condensed Consolidated Balance Sheet (Unaudited) | | | | |
| | As of December 31, 2013 | | | | |
(Millions) | | Windstream Corp. | | Guarantors | | Non- | | Eliminations | | Consolidated | | | | |
Guarantors | | | | |
Assets | | | | | | | | | | | | | | |
Current Assets: | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 13.7 | | | $ | 0.7 | | | $ | 33.8 | | | $ | — | | | $ | 48.2 | | | | | |
| | | |
Restricted cash | | 9.7 | | | — | | | — | | | — | | | 9.7 | | | | | |
| | | |
Accounts receivable (less allowance for doubtful | | — | | | 117.4 | | | 517.9 | | | — | | | 635.3 | | | | | |
accounts of $40.0) | | | | |
Notes receivable - affiliate | | — | | | 4.8 | | | — | | | (4.8 | ) | | — | | | | | |
| | | |
Affiliates receivable, net | | — | | | 743.7 | | | 1,864.50 | | | (2,608.2 | ) | | — | | | | | |
| | | |
Inventories | | — | | | 49.8 | | | 17.9 | | | — | | | 67.7 | | | | | |
| | | |
Deferred income taxes | | 202.1 | | | 10.5 | | | 28.9 | | | — | | | 241.5 | | | | | |
| | | |
Prepaid income taxes | | 29.7 | | | — | | | — | | | — | | | 29.7 | | | | | |
| | | |
Prepaid expenses and other | | 5.6 | | | 20.8 | | | 126.3 | | | — | | | 152.7 | | | | | |
| | | |
Total current assets | | 260.8 | | | 947.7 | | | 2,589.30 | | | (2,613.0 | ) | | 1,184.80 | | | | | |
| | | |
Investments in consolidated subsidiaries | | 9,997.50 | | | 936.7 | | | 291.1 | | | (11,225.3 | ) | | — | | | | | |
| | | |
Notes receivable - affiliate | | — | | | 321.3 | | | — | | | (321.3 | ) | | — | | | | | |
| | | |
Goodwill | | 1,649.50 | | | 825.6 | | | 1,856.30 | | | — | | | 4,331.40 | | | | | |
| | | |
Other intangibles, net | | 645 | | | 397.6 | | | 977.5 | | | — | | | 2,020.10 | | | | | |
| | | |
Net property, plant and equipment | | 10.2 | | | 1,350.90 | | | 4,341.50 | | | — | | | 5,702.60 | | | | | |
| | | |
Other assets | | 120.3 | | | 14.8 | | | 70.6 | | | — | | | 205.7 | | | | | |
| | | |
Total Assets | | $ | 12,683.30 | | | $ | 4,794.60 | | | $ | 10,126.30 | | | $ | (14,159.6 | ) | | $ | 13,444.60 | | | | | |
| | | |
Liabilities and Shareholders’ Equity | | | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | | | |
Current maturities of long-term debt | | $ | 84.9 | | | $ | — | | | $ | 0.1 | | | $ | — | | | $ | 85 | | | | | |
| | | |
Current portion of interest rate swaps | | 30 | | | — | | | — | | | — | | | 30 | | | | | |
| | | |
Accounts payable | | 5 | | | 54.8 | | | 326.1 | | | — | | | 385.9 | | | | | |
| | | |
Affiliates payable, net | | 2,758.90 | | | — | | | — | | | (2,608.2 | ) | | 150.7 | | | | | |
| | | |
Notes payable - affiliate | | — | | | — | | | 4.8 | | | (4.8 | ) | | — | | | | | |
| | | |
Advance payments and customer deposits | | — | | | 17.4 | | | 206.1 | | | — | | | 223.5 | | | | | |
| | | |
Accrued taxes | | 0.2 | | | 33.8 | | | 70.3 | | | — | | | 104.3 | | | | | |
| | | |
Accrued interest | | 95.4 | | | 1.8 | | | 6.3 | | | — | | | 103.5 | | | | | |
| | | |
Other current liabilities | | 38.1 | | | 17.2 | | | 307.1 | | | — | | | 362.4 | | | | | |
| | | |
Total current liabilities | | 3,012.50 | | | 125 | | | 920.8 | | | (2,613.0 | ) | | 1,445.30 | | | | | |
| | | |
Long-term debt | | 8,044.90 | | | 99.6 | | | 477.7 | | | — | | | 8,622.20 | | | | | |
| | | |
Notes payable - affiliate | | — | | | — | | | 321.3 | | | (321.3 | ) | | — | | | | | |
| | | |
Deferred income taxes | | 724.7 | | | 421.7 | | | 891.9 | | | — | | | 2,038.30 | | | | | |
| | | |
Other liabilities | | 60.7 | | | 28.8 | | | 408.8 | | | — | | | 498.3 | | | | | |
| | | |
Total liabilities | | 11,842.80 | | | 675.1 | | | 3,020.50 | | | (2,934.3 | ) | | 12,604.10 | | | | | |
| | | |
Commitments and Contingencies (See Note 6) | | | | | | | | | | | | | | | | | | |
| | | |
Shareholders’ Equity: | | | | | | | | | | | | | | |
Common stock | | — | | | 39.4 | | | 81.9 | | | (121.3 | ) | | — | | | | | |
| | | |
Additional paid-in capital | | 812 | | | 3,657.50 | | | 3,978.80 | | | (7,636.3 | ) | | 812 | | | | | |
| | | |
Accumulated other comprehensive income | | 28.5 | | | — | | | 26.3 | | | (26.3 | ) | | 28.5 | | | | | |
| | | |
Retained earnings | | — | | | 422.6 | | | 3,018.80 | | | (3,441.4 | ) | | — | | | | | |
| | | |
Total shareholders’ equity | | 840.5 | | | 4,119.50 | | | 7,105.80 | | | (11,225.3 | ) | | 840.5 | | | | | |
| | | |
Total Liabilities and Shareholders’ Equity | | $ | 12,683.30 | | | $ | 4,794.60 | | | $ | 10,126.30 | | | $ | (14,159.6 | ) | | $ | 13,444.60 | | | | | |
| | | |
|
12. Supplemental Guarantor Information, Continued: |
| | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Condensed Consolidated Statement of Cash Flows (Unaudited) | | | | |
| | Nine Months Ended | | | | |
30-Sep-14 | | | | |
(Millions) | | Windstream Corp. | | Guarantors | | Non- | | Eliminations | | Consolidated | | | | |
Guarantors | | | | |
Cash Provided from Operations: | | | | | | | | | | | | | | |
Net cash provided from operations | | $ | 43.4 | | | $ | 354.8 | | | $ | 715.5 | | | $ | — | | | $ | 1,113.70 | | | | | |
| | | |
Cash Flows from Investing Activities: | | | | | | | | | | | | | | |
Additions to property, plant and equipment | | (1.4 | ) | | (75.5 | ) | | (475.8 | ) | | — | | | (552.7 | ) | | | | |
| | | |
Broadband network expansion funded by | | — | | | (0.3 | ) | | (11.3 | ) | | — | | | (11.6 | ) | | | | |
stimulus grants | | | | |
Changes in restricted cash | | 2 | | | — | | | — | | | — | | | 2 | | | | | |
| | | |
Grant funds received for broadband | | 25.8 | | | — | | | — | | | — | | | 25.8 | | | | | |
stimulus projects | | | | |
Grant funds received from Connect America Fund | | — | | | 9.4 | | | 16.6 | | | — | | | 26 | | | | | |
| | | |
Network expansion funded by Connect America | | — | | | (0.5 | ) | | (1.5 | ) | | — | | | (2.0 | ) | | | | |
Fund | | | | |
Net cash provided from (used in) | | 26.4 | | | (66.9 | ) | | (472.0 | ) | | — | | | (512.5 | ) | | | | |
investing activities | | | | |
Cash Flows from Financing Activities: | | | | | | | | | | | | | | |
Distributions to Windstream Holdings, Inc. | | (452.4 | ) | | — | | | — | | | — | | | (452.4 | ) | | | | |
| | | |
Repayments of debt and swaps | | (1,049.0 | ) | | — | | | — | | | — | | | (1,049.0 | ) | | | | |
| | | |
Proceeds of debt issuance | | 985 | | | — | | | — | | | — | | | 985 | | | | | |
| | | |
Intercompany transactions, net | | 500 | | | (290.5 | ) | | (209.5 | ) | | — | | | — | | | | | |
| | | |
Payments under capital lease obligations | | — | | | — | | | (19.8 | ) | | — | | | (19.8 | ) | | | | |
| | | |
Other, net | | (9.5 | ) | | 2.7 | | | (2.7 | ) | | — | | | (9.5 | ) | | | | |
| | | |
Net cash used in financing activities | | (25.9 | ) | | (287.8 | ) | | (232.0 | ) | | — | | | (545.7 | ) | | | | |
| | | |
Increase in cash and cash equivalents | | 43.9 | | | 0.1 | | | 11.5 | | | — | | | 55.5 | | | | | |
| | | |
Cash and Cash Equivalents: | | | | | | | | | | | | | | |
Beginning of period | | 13.7 | | | 0.7 | | | 33.8 | | | — | | | 48.2 | | | | | |
| | | |
End of period | | $ | 57.6 | | | $ | 0.8 | | | $ | 45.3 | | | $ | — | | | $ | 103.7 | | | | | |
| | | |
|
|
|
|
|
|
12. Supplemental Guarantor Information, Continued: |
| | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Condensed Consolidated Statement of Cash Flows (Unaudited) | | | | |
| | Nine Months Ended | | | | |
30-Sep-13 | | | | |
(Millions) | | Windstream Corp. | | Guarantors | | Non- | | Eliminations | | Consolidated | | | | |
Guarantors | | | | |
Cash Provided from Operations: | | | | | | | | | | | | | | |
Net cash (used in) provided from operations | | $ | (92.5 | ) | | $ | 426.7 | | | $ | 826.5 | | | $ | — | | | $ | 1,160.70 | | | | | |
| | | |
Cash Flows from Investing Activities: | | | | | | | | | | | | | | |
Additions to property, plant and equipment | | (1.0 | ) | | (117.0 | ) | | (548.0 | ) | | — | | | (666.0 | ) | | | | |
| | | |
Broadband network expansion funded by | | — | | | (3.5 | ) | | (25.3 | ) | | — | | | (28.8 | ) | | | | |
stimulus grants | | | | |
Changes in restricted cash | | 11.5 | | | — | | | 1.5 | | | — | | | 13 | | | | | |
| | | |
Grant funds received for broadband | | 53.5 | | | — | | | — | | | — | | | 53.5 | | | | | |
stimulus projects | | | | |
Net cash provided from (used in) | | 64 | | | (120.5 | ) | | (571.8 | ) | | — | | | (628.3 | ) | | | | |
investing activities | | | | |
Cash Flows from Financing Activities: | | | | | | | | | | | | | | |
Dividends paid to shareholders | | (444.6 | ) | | — | | | — | | | — | | | (444.6 | ) | | | | |
| | | |
Repayments of debt and swaps | | (3,443.1 | ) | | — | | | (650.1 | ) | | — | | | (4,093.2 | ) | | | | |
| | | |
Proceeds of debt issuance | | 3,997.50 | | | — | | | — | | | — | | | 3,997.50 | | | | | |
| | | |
Debt issuance costs | | (29.7 | ) | | — | | | — | | | — | | | (29.7 | ) | | | | |
| | | |
Intercompany transactions, net | | (74.4 | ) | | (309.1 | ) | | 383.5 | | | — | | | — | | | | | |
| | | |
Payments under capital lease obligations | | — | | | — | | | (13.8 | ) | | — | | | (13.8 | ) | | | | |
| | | |
Other, net | | (7.2 | ) | | 2.7 | | | (2.7 | ) | | — | | | (7.2 | ) | | | | |
| | | |
Net cash used in financing activities | | (1.5 | ) | | (306.4 | ) | | (283.1 | ) | | — | | | (591.0 | ) | | | | |
| | | |
Decrease in cash and cash equivalents | | (30.0 | ) | | (0.2 | ) | | (28.4 | ) | | — | | | (58.6 | ) | | | | |
| | | |
Cash and Cash Equivalents: | | | | | | | | | | | | | | |
Beginning of period | | 57.5 | | | 1.1 | | | 73.4 | | | — | | | 132 | | | | | |
| | | |
End of period | | $ | 27.5 | | | $ | 0.9 | | | $ | 45 | | | $ | — | | | $ | 73.4 | | | | | |
| | | |
|
|
12. Supplemental Guarantor Information, Continued: |
|
Debentures and notes, issued by PAETEC Holding Corporation |
|
In connection with the acquisition of PAETEC on November 30, 2011, Windstream Corp. acquired the PAETEC 2018 Notes (“the guaranteed notes”). Windstream Corp. and all former wholly-owned subsidiaries of PAETEC (the “Guarantors”) provide guarantees of those debentures. These guarantees are full and unconditional, subject to certain customary release provisions, as well as joint and several. Certain Guarantors may be subject to restrictions on their ability to distribute earnings to Windstream Corp. The remaining subsidiaries (the “Non-Guarantors”) of Windstream Corp. are not guarantors of these guaranteed notes. |
|
Upon completing an internal legal entity restructuring, as of January 1, 2014, certain of Windstream Corp.’s guarantor and non-guarantor subsidiaries were merged with and into Windstream Corp. Prior period information has been revised to reflect the change in our legal entity structure. |
|
The following information presents condensed consolidated and combined statements of comprehensive income for the three and nine month periods ended September 30, 2014 and 2013, condensed consolidated balance sheets as of September 30, 2014 and December 31, 2013, condensed consolidated and combined statements of cash flows for the three and nine month periods ended September 30, 2014 and 2013 of Windstream Corp., the Guarantors and the Non-Guarantors. Investments consist of investments in net assets of subsidiaries held by Windstream Corp. and other subsidiaries, and have been presented using the equity method of accounting. |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Condensed Consolidated Statement of Comprehensive Income (Unaudited) |
| | Three Months Ended |
30-Sep-14 |
(Millions) | | Windstream Corp. | | PAETEC Issuer | | Guarantors | | Non- | | Eliminations | | Consolidated |
Guarantors |
Revenues and sales: | | | | | | | | | | | | |
Service revenues | | $ | — | | | $ | — | | | $ | 487.6 | | | $ | 923 | | | $ | (1.0 | ) | | $ | 1,409.60 | |
|
Product sales | | — | | | — | | | 29.9 | | | 16.3 | | | (0.3 | ) | | 45.9 | |
|
Total revenues and sales | | — | | | — | | | 517.5 | | | 939.3 | | | (1.3 | ) | | 1,455.50 | |
|
Costs and expenses: | | | | | | | | | | | | |
Cost of services | | — | | | — | | | 308 | | | 363.6 | | | (0.7 | ) | | 670.9 | |
|
Cost of products sold | | — | | | — | | | 24 | | | 15.3 | | | (0.3 | ) | | 39 | |
|
Selling, general and administrative | | — | | | — | | | 132.2 | | | 99.3 | | | — | | | 231.5 | |
|
Depreciation and amortization | | 5.3 | | | — | | | 106.5 | | | 236.7 | | | — | | | 348.5 | |
|
Merger and integration costs | | — | | | — | | | — | | | 10 | | | — | | | 10 | |
|
Restructuring charges | | — | | | — | | | 1.4 | | | 2.2 | | | — | | | 3.6 | |
|
Total costs and expenses | | 5.3 | | | — | | | 572.1 | | | 727.1 | | | (1.0 | ) | | 1,303.50 | |
|
Operating (loss) income | | (5.3 | ) | | — | | | (54.6 | ) | | 212.2 | | | (0.3 | ) | | 152 | |
|
Earnings (losses) from consolidated | | 69.6 | | | (26.4 | ) | | (0.1 | ) | | (0.7 | ) | | (42.4 | ) | | — | |
subsidiaries |
Other (expense) income, net | | (0.3 | ) | | — | | | — | | | 0.2 | | | — | | | (0.1 | ) |
|
Intercompany interest income (expense) | | 31.8 | | | — | | | — | | | (31.8 | ) | | — | | | — | |
|
Interest expense | | (130.9 | ) | | (9.6 | ) | | (0.1 | ) | | (2.8 | ) | | — | | | (143.4 | ) |
|
(Loss) income before income taxes | | (35.1 | ) | | (36.0 | ) | | (54.8 | ) | | 177.1 | | | (42.7 | ) | | 8.5 | |
|
Income tax (benefit) expense | | (43.3 | ) | | (3.5 | ) | | (21.1 | ) | | 68.3 | | | (0.1 | ) | | 0.3 | |
|
Net income (loss) | | $ | 8.2 | | | $ | (32.5 | ) | | $ | (33.7 | ) | | $ | 108.8 | | | $ | (42.6 | ) | | $ | 8.2 | |
|
Comprehensive income (loss) | | $ | 13.8 | | | $ | (32.5 | ) | | $ | (33.7 | ) | | $ | 108.8 | | | $ | (42.6 | ) | | $ | 13.8 | |
|
12. Supplemental Guarantor Information, Continued: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Condensed Consolidated Statement of Comprehensive Income (Unaudited) |
| | Three Months Ended |
30-Sep-13 |
(Millions) | | Windstream Corp. | | PAETEC Issuer | | Guarantors | | Non- | | Eliminations | | Consolidated |
Guarantors |
Revenues and sales: | | | | | | | | | | | | |
Service revenues | | $ | — | | | $ | — | | | $ | 485.6 | | | $ | 958.9 | | | $ | (1.7 | ) | | $ | 1,442.80 | |
|
Product sales | | — | | | — | | | 37 | | | 19.3 | | | (0.6 | ) | | 55.7 | |
|
Total revenues and sales | | — | | | — | | | 522.6 | | | 978.2 | | | (2.3 | ) | | 1,498.50 | |
|
Costs and expenses: | | | | | | | | | | | | |
Cost of services | | — | | | — | | | 292.6 | | | 352.9 | | | (0.7 | ) | | 644.8 | |
|
Cost of products sold | | — | | | — | | | 28.7 | | | 18.6 | | | (1.1 | ) | | 46.2 | |
|
Selling, general and administrative | | — | | | — | | | 132.7 | | | 110.9 | | | (0.5 | ) | | 243.1 | |
|
Depreciation and amortization | | 6.2 | | | — | | | 101.4 | | | 230.6 | | | — | | | 338.2 | |
|
Merger and integration costs | | — | | | — | | | (0.4 | ) | | 6.2 | | | — | | | 5.8 | |
|
Restructuring charges | | — | | | — | | | 1.9 | | | (1.1 | ) | | — | | | 0.8 | |
|
Total costs and expenses | | 6.2 | | | — | | | 556.9 | | | 718.1 | | | (2.3 | ) | | 1,278.90 | |
|
Operating (loss) income | | (6.2 | ) | | — | | | (34.3 | ) | | 260.1 | | | — | | | 219.6 | |
|
Earnings (losses) from consolidated | | 106.7 | | | (16.9 | ) | | (0.2 | ) | | 0.2 | | | (89.8 | ) | | — | |
subsidiaries |
Other expense, net | | (0.8 | ) | | — | | | (0.3 | ) | | (4.5 | ) | | — | | | (5.6 | ) |
|
Loss on early extinguishment of debt | | (14.6 | ) | | (0.1 | ) | | — | | | — | | | — | | | (14.7 | ) |
|
Intercompany interest income (expense) | | 33 | | | — | | | — | | | (33.0 | ) | | — | | | — | |
|
Interest (expense) income | | (138.7 | ) | | (9.6 | ) | | 0.1 | | | (0.6 | ) | | — | | | (148.8 | ) |
|
(Loss) income before income taxes | | (20.6 | ) | | (26.6 | ) | | (34.7 | ) | | 222.2 | | | (89.8 | ) | | 50.5 | |
|
Income tax (benefit) expense | | (51.2 | ) | | (3.9 | ) | | (13.7 | ) | | 88.7 | | | — | | | 19.9 | |
|
Net income (loss) | | $ | 30.6 | | | $ | (22.7 | ) | | $ | (21.0 | ) | | $ | 133.5 | | | $ | (89.8 | ) | | $ | 30.6 | |
|
Comprehensive income (loss) | | $ | 25.1 | | | $ | (22.7 | ) | | $ | (21.0 | ) | | $ | 133.5 | | | $ | (89.8 | ) | | $ | 25.1 | |
|
|
12. Supplemental Guarantor Information, Continued: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Condensed Consolidated Statement of Comprehensive Income (Unaudited) |
| | Nine Months Ended |
30-Sep-14 |
(Millions) | | Windstream Corp. | | PAETEC Issuer | | Guarantors | | Non- | | Eliminations | | Consolidated |
Guarantors |
Revenues and sales: | | | | | | | | | | | | |
Service revenues | | $ | — | | | $ | — | | | $ | 1,460.50 | | | $ | 2,789.50 | | | $ | (3.0 | ) | | $ | 4,247.00 | |
|
Product sales | | — | | | — | | | 94.5 | | | 45.2 | | | (0.3 | ) | | 139.4 | |
|
Total revenues and sales | | — | | | — | | | 1,555.00 | | | 2,834.70 | | | (3.3 | ) | | 4,386.40 | |
|
Costs and expenses: | | | | | | | | | | | | |
Cost of services | | — | | | — | | | 895.5 | | | 1,074.60 | | | (2.3 | ) | | 1,967.80 | |
|
Cost of products sold | | — | | | — | | | 78.3 | | | 41.9 | | | (0.1 | ) | | 120.1 | |
|
Selling, general and administrative | | — | | | — | | | 406.4 | | | 326.9 | | | (0.6 | ) | | 732.7 | |
|
Depreciation and amortization | | 16.3 | | | — | | | 312.4 | | | 702.7 | | | — | | | 1,031.40 | |
|
Merger and integration costs | | — | | | — | | | — | | | 26 | | | — | | | 26 | |
|
Restructuring charges | | — | | | — | | | 7.2 | | | 12.6 | | | — | | | 19.8 | |
|
Total costs and expenses | | 16.3 | | | — | | | 1,699.80 | | | 2,184.70 | | | (3.0 | ) | | 3,897.80 | |
|
Operating (loss) income | | (16.3 | ) | | — | | | (144.8 | ) | | 650 | | | (0.3 | ) | | 488.6 | |
|
Earnings (losses) from consolidated | | 229.7 | | | (71.3 | ) | | (0.2 | ) | | (0.5 | ) | | (157.7 | ) | | — | |
subsidiaries |
Other (expense) income, net | | (0.4 | ) | | — | | | 0.1 | | | 0.4 | | | — | | | 0.1 | |
|
Intercompany interest income (expense) | | 95.1 | | | — | | | — | | | (95.1 | ) | | — | | | — | |
|
Interest (expense) income | | (392.8 | ) | | (28.7 | ) | | 0.1 | | | (6.4 | ) | | — | | | (427.8 | ) |
|
(Loss) income before income taxes | | (84.7 | ) | | (100.0 | ) | | (144.8 | ) | | 548.4 | | | (158.0 | ) | | 60.9 | |
|
Income tax (benefit) expense | | (123.9 | ) | | (10.9 | ) | | (55.9 | ) | | 212.5 | | | (0.1 | ) | | 21.7 | |
|
Net income (loss) | | $ | 39.2 | | | $ | (89.1 | ) | | $ | (88.9 | ) | | $ | 335.9 | | | $ | (157.9 | ) | | $ | 39.2 | |
|
Comprehensive income (loss) | | $ | 31.8 | | | $ | (89.1 | ) | | $ | (88.9 | ) | | $ | 335.9 | | | $ | (157.9 | ) | | $ | 31.8 | |
|
|
12. Supplemental Guarantor Information, Continued: |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Condensed Consolidated Statement of Comprehensive Income (Unaudited) |
| | Nine Months Ended |
30-Sep-13 |
(Millions) | | Windstream Corp. | | PAETEC Issuer | | Guarantors | | Non- | | Eliminations | | Consolidated |
Guarantors |
Revenues and sales: | | | | | | | | | | | | |
Service revenues | | $ | — | | | $ | — | | | $ | 1,451.30 | | | $ | 2,892.90 | | | $ | (4.7 | ) | | $ | 4,339.50 | |
|
Product sales | | — | | | — | | | 102.2 | | | 56.2 | | | (1.2 | ) | | 157.2 | |
|
Total revenues and sales | | — | | | — | | | 1,553.50 | | | 2,949.10 | | | (5.9 | ) | | 4,496.70 | |
|
Costs and expenses: | | | | | | | | | | | | |
Cost of services | | — | | | — | | | 883.6 | | | 1,051.30 | | | (2.3 | ) | | 1,932.60 | |
|
Cost of products sold | | — | | | — | | | 81 | | | 59 | | | (1.8 | ) | | 138.2 | |
|
Selling, general and administrative | | — | | | — | | | 397.2 | | | 322.2 | | | (1.8 | ) | | 717.6 | |
|
Depreciation and amortization | | 18.8 | | | — | | | 294.3 | | | 686.6 | | | — | | | 999.7 | |
|
Merger and integration costs | | — | | | — | | | (0.4 | ) | | 18.2 | | | — | | | 17.8 | |
|
Restructuring charges | | — | | | — | | | 4.4 | | | 3.9 | | | — | | | 8.3 | |
|
Total costs and expenses | | 18.8 | | | — | | | 1,660.10 | | | 2,141.20 | | | (5.9 | ) | | 3,814.20 | |
|
Operating (loss) income | | (18.8 | ) | | — | | | (106.6 | ) | | 807.9 | | | — | | | 682.5 | |
|
Earnings (losses) from consolidated | | 352.5 | | | (56.9 | ) | | (0.6 | ) | | 0.7 | | | (295.7 | ) | | — | |
subsidiaries |
Other income (expense), net | | 2.1 | | | — | | | 0.6 | | | (7.7 | ) | | — | | | (5.0 | ) |
|
Loss on early extinguishment of debt | | (17.1 | ) | | (11.4 | ) | | — | | | — | | | — | | | (28.5 | ) |
|
Intercompany interest income (expense) | | 103.2 | | | — | | | — | | | (103.2 | ) | | — | | | — | |
|
Interest (expense) income | | (447.0 | ) | | (31.6 | ) | | 0.1 | | | (1.2 | ) | | — | | | (479.7 | ) |
|
(Loss) income from continuing operations | | (25.1 | ) | | (99.9 | ) | | (106.5 | ) | | 696.5 | | | (295.7 | ) | | 169.3 | |
before income taxes |
Income tax (benefit) expense | | (147.7 | ) | | (16.7 | ) | | (41.1 | ) | | 252.9 | | | — | | | 47.4 | |
|
Income (loss) from continuing operations | | 122.6 | | | (83.2 | ) | | (65.4 | ) | | 443.6 | | | (295.7 | ) | | 121.9 | |
|
Discontinued operations | | — | | | — | | | 0.7 | | | — | | | — | | | 0.7 | |
|
Net income (loss) | | $ | 122.6 | | | $ | (83.2 | ) | | $ | (64.7 | ) | | $ | 443.6 | | | $ | (295.7 | ) | | $ | 122.6 | |
|
Comprehensive income (loss) | | $ | 135.2 | | | $ | (83.2 | ) | | $ | (64.7 | ) | | $ | 443.6 | | | $ | (295.7 | ) | | $ | 135.2 | |
|
12. Supplemental Guarantor Information, Continued: |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Condensed Consolidated Balance Sheet (Unaudited) |
| | As of September 30, 2014 |
(Millions) | | Windstream Corp. | | PAETEC Issuer | | Guarantors | | Non- | | Eliminations | | Consolidated |
Guarantors |
Assets | | | | | | | | | | | | |
Current Assets: | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 57.6 | | | $ | — | | | $ | 5.3 | | | $ | 40.8 | | | $ | — | | | $ | 103.7 | |
|
Restricted cash | | 7.7 | | | — | | | — | | | — | | | — | | | 7.7 | |
|
Accounts receivable (less allowance for | | — | | | — | | | 306.1 | | | 312.1 | | | (0.9 | ) | | 617.3 | |
doubtful accounts of $40.2) |
Affiliates receivable, net | | — | | | 366 | | | — | | | 4,181.70 | | | (4,547.7 | ) | | — | |
|
Inventories | | — | | | — | | | 18.7 | | | 49.4 | | | — | | | 68.1 | |
|
Deferred income taxes | | 28.6 | | | — | | | — | | | 76.9 | | | (36.0 | ) | | 69.5 | |
|
Prepaid income taxes | | 21 | | | 0.1 | | | — | | | — | | | (0.1 | ) | | 21 | |
|
Prepaid expenses and other | | 5.8 | | | — | | | 30.6 | | | 103.1 | | | 1.3 | | | 140.8 | |
|
Total current assets | | 120.7 | | | 366.1 | | | 360.7 | | | 4,764.00 | | | (4,583.4 | ) | | 1,028.10 | |
|
Investments in consolidated subsidiaries | | 10,227.70 | | | — | | | 0.7 | | | — | | | (10,228.4 | ) | | — | |
|
Goodwill | | 1,649.50 | | | 643.8 | | | — | | | 2,038.10 | | | — | | | 4,331.40 | |
|
Other intangibles, net | | 603.4 | | | — | | | 442.7 | | | 779.6 | | | — | | | 1,825.70 | |
|
Net property, plant and equipment | | 10.1 | | | — | | | 724.2 | | | 4,722.00 | | | — | | | 5,456.30 | |
|
Deferred income taxes | | — | | | 216.1 | | | 90 | | | — | | | (306.1 | ) | | — | |
|
Other assets | | 108.8 | | | — | | | 17.1 | | | 64.2 | | | — | | | 190.1 | |
|
Total Assets | | $ | 12,720.20 | | | $ | 1,226.00 | | | $ | 1,635.40 | | | $ | 12,367.90 | | | $ | (15,117.9 | ) | | $ | 12,831.60 | |
|
Liabilities and Shareholders’ Equity | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | |
Current maturities of long-term debt | | $ | 92.4 | | | $ | — | | | $ | — | | | $ | 0.1 | | | $ | — | | | $ | 92.5 | |
|
Current portion of interest rate swaps | | 29.4 | | | — | | | — | | | — | | | — | | | 29.4 | |
|
Accounts payable | | 6.2 | | | — | | | 94.1 | | | 256.2 | | | — | | | 356.5 | |
|
Affiliates payable, net | | 3,217.80 | | | — | | | 1,477.70 | | | — | | | (4,542.8 | ) | | 152.7 | |
|
Advance payments and customer deposits | | — | | | — | | | 78.7 | | | 138 | | | — | | | 216.7 | |
|
Accrued taxes | | 0.2 | | | — | | | 25.2 | | | 71.9 | | | 0.3 | | | 97.6 | |
|
Accrued interest | | 148.7 | | | 14.8 | | | 2 | | | 4.3 | | | — | | | 169.8 | |
|
Other current liabilities | | 33.9 | | | 4.7 | | | 73.5 | | | 213.5 | | | (36.9 | ) | | 288.7 | |
|
Total current liabilities | | 3,528.60 | | | 19.5 | | | 1,751.20 | | | 684 | | | (4,579.4 | ) | | 1,403.90 | |
|
Long-term debt | | 7,996.20 | | | 470.9 | | | — | | | 101.5 | | | — | | | 8,568.60 | |
|
Deferred income taxes | | 675.8 | | | — | | | — | | | 1,502.80 | | | (306.1 | ) | | 1,872.50 | |
|
Accumulated losses in excess of investments | | — | | | 143.1 | | | — | | | — | | | (143.1 | ) | | — | |
in consolidated subsidiaries |
Other liabilities | | 60.7 | | | 1.9 | | | 53.7 | | | 411.4 | | | — | | | 527.7 | |
|
Total liabilities | | 12,261.30 | | | 635.4 | | | 1,804.90 | | | 2,699.70 | | | (5,028.6 | ) | | 12,372.70 | |
|
Commitments and Contingencies | | | | | | | | | | | | | | | | | | |
(See Note 6) |
Shareholders’ Equity: | | | | | | | | | | | | |
Common stock | | — | | | — | | | — | | | 67.7 | | | (67.7 | ) | | — | |
|
Additional paid-in capital | | 437.8 | | | 842 | | | 0.7 | | | 5,994.50 | | | (6,837.2 | ) | | 437.8 | |
|
Accumulated other comprehensive income | | 21.1 | | | — | | | — | | | 25.9 | | | (25.9 | ) | | 21.1 | |
|
Accumulated (deficit) retained earnings | | — | | | (251.4 | ) | | (170.2 | ) | | 3,580.10 | | | (3,158.5 | ) | | — | |
|
Total shareholders’ equity | | 458.9 | | | 590.6 | | | (169.5 | ) | | 9,668.20 | | | (10,089.3 | ) | | 458.9 | |
|
Total Liabilities and Shareholders’ Equity | | $ | 12,720.20 | | | $ | 1,226.00 | | | $ | 1,635.40 | | | $ | 12,367.90 | | | $ | (15,117.9 | ) | | $ | 12,831.60 | |
|
12. Supplemental Guarantor Information, Continued: |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Condensed Consolidated Balance Sheet (Unaudited) |
| | As of December 31, 2013 |
(Millions) | | Windstream Corp. | | PAETEC Issuer | | Guarantors | | Non- | | Eliminations | | Consolidated |
Guarantors |
Assets | | | | | | | | | | | | |
Current Assets: | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 13.7 | | | $ | — | | | $ | 7.8 | | | $ | 26.7 | | | $ | — | | | $ | 48.2 | |
|
Restricted cash | | 9.7 | | | — | | | — | | | — | | | — | | | 9.7 | |
|
Accounts receivable (less allowance for | | — | | | — | | | 251 | | | 384.5 | | | (0.2 | ) | | 635.3 | |
doubtful accounts of $40.0) |
Affiliates receivable, net | | — | | | 374.3 | | | — | | | 3,670.40 | | | (4,044.7 | ) | | — | |
|
Inventories | | — | | | — | | | 10.6 | | | 57.1 | | | — | | | 67.7 | |
|
Deferred income taxes | | 202.1 | | | — | | | — | | | 76.5 | | | (37.1 | ) | | 241.5 | |
|
Prepaid income taxes | | 29.7 | | | 0.1 | | | — | | | — | | | (0.1 | ) | | 29.7 | |
|
Prepaid expenses and other | | 5.6 | | | — | | | 29.9 | | | 116 | | | 1.2 | | | 152.7 | |
|
Total current assets | | 260.8 | | | 374.4 | | | 299.3 | | | 4,331.20 | | | (4,080.9 | ) | | 1,184.80 | |
|
Investments in consolidated subsidiaries | | 9,997.50 | | | — | | | 0.8 | | | — | | | (9,998.3 | ) | | — | |
|
Goodwill | | 1,649.50 | | | 643.8 | | | — | | | 2,038.10 | | | — | | | 4,331.40 | |
|
Other intangibles, net | | 645 | | | — | | | 533.6 | | | 841.5 | | | — | | | 2,020.10 | |
|
Net property, plant and equipment | | 10.2 | | | — | | | 799.3 | | | 4,893.10 | | | — | | | 5,702.60 | |
|
Deferred income taxes | | — | | | 219 | | | 31 | | | — | | | (250.0 | ) | | — | |
|
Other assets | | 120.3 | | | — | | | 16.2 | | | 69.2 | | | — | | | 205.7 | |
|
Total Assets | | $ | 12,683.30 | | | $ | 1,237.20 | | | $ | 1,680.20 | | | $ | 12,173.10 | | | $ | (14,329.2 | ) | | $ | 13,444.60 | |
|
Liabilities and Shareholders’ Equity | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | |
Current maturities of long-term debt | | $ | 84.9 | | | $ | — | | | $ | — | | | $ | 0.1 | | | $ | — | | | $ | 85 | |
|
Current portion of interest rate swaps | | 30 | | | — | | | — | | | — | | | — | | | 30 | |
|
Accounts payable | | 5 | | | — | | | 85.9 | | | 295 | | | — | | | 385.9 | |
|
Affiliates payable, net | | 2,758.90 | | | — | | | 1,431.70 | | | — | | | (4,039.9 | ) | | 150.7 | |
|
Advance payments and customer deposits | | — | | | — | | | 77.7 | | | 145.8 | | | — | | | 223.5 | |
|
Accrued taxes | | 0.2 | | | — | | | 24.5 | | | 79.3 | | | 0.3 | | | 104.3 | |
|
Accrued interest | | 95.4 | | | 3.7 | | | 2.3 | | | 2.1 | | | — | | | 103.5 | |
|
Other current liabilities | | 38.1 | | | 4 | | | 87.1 | | | 270.5 | | | (37.3 | ) | | 362.4 | |
|
Total current liabilities | | 3,012.50 | | | 7.7 | | | 1,709.20 | | | 792.8 | | | (4,076.9 | ) | | 1,445.30 | |
|
Long-term debt | | 8,044.90 | | | 475.8 | | | — | | | 101.5 | | | — | | | 8,622.20 | |
|
Deferred income taxes | | 724.7 | | | — | | | — | | | 1,563.60 | | | (250.0 | ) | | 2,038.30 | |
|
Accumulated losses in excess of investments | | — | | | 71.8 | | | — | | | — | | | (71.8 | ) | | — | |
in consolidated subsidiaries |
Other liabilities | | 60.7 | | | 2.3 | | | 51.6 | | | 383.7 | | | — | | | 498.3 | |
|
Total liabilities | | 11,842.80 | | | 557.6 | | | 1,760.80 | | | 2,841.60 | | | (4,398.7 | ) | | 12,604.10 | |
|
Commitments and Contingencies | | | | | | | | | | | | | | | | | | |
(See Note 6) |
Shareholders’ Equity: | | | | | | | | | | | | |
Common stock | | — | | | — | | | — | | | 67.7 | | | (67.7 | ) | | — | |
|
Additional paid-in capital | | 812 | | | 842 | | | — | | | 5,865.00 | | | (6,707.0 | ) | | 812 | |
|
Accumulated other comprehensive income | | 28.5 | | | — | | | — | | | 32.4 | | | (32.4 | ) | | 28.5 | |
|
Accumulated (deficit) retained earnings | | — | | | (162.4 | ) | | (80.6 | ) | | 3,366.40 | | | (3,123.4 | ) | | — | |
|
Total shareholders’ equity | | 840.5 | | | 679.6 | | | (80.6 | ) | | 9,331.50 | | | (9,930.5 | ) | | 840.5 | |
|
Total Liabilities and Shareholders’ Equity | | $ | 12,683.30 | | | $ | 1,237.20 | | | $ | 1,680.20 | | | $ | 12,173.10 | | | $ | (14,329.2 | ) | | $ | 13,444.60 | |
|
12. Supplemental Guarantor Information, Continued: |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Condensed Consolidated Statement of Cash Flows (Unaudited) |
| | Nine Months Ended |
30-Sep-14 |
(Millions) | | Windstream Corp. | | PAETEC | | Guarantors | | Non- | | Eliminations | | Consolidated |
Issuer | Guarantors |
Cash Provided from Operations: | | | | | | | | | | | | |
Net cash provided from (used in) | | $ | 43.4 | | | $ | (8.3 | ) | | $ | 115.2 | | | $ | 963.7 | | | $ | (0.3 | ) | | $ | 1,113.70 | |
operations |
Cash Flows from Investing Activities: | | | | | | | | | | | | |
Additions to property, plant and equipment | | (1.4 | ) | | — | | | (126.9 | ) | | (424.4 | ) | | — | | | (552.7 | ) |
|
Broadband network expansion funded by | | — | | | — | | | — | | | (11.6 | ) | | — | | | (11.6 | ) |
stimulus grants |
Changes in restricted cash | | 2 | | | — | | | — | | | — | | | — | | | 2 | |
|
Grant funds received for broadband | | 25.8 | | | — | | | — | | | — | | | — | | | 25.8 | |
stimulus projects |
Grant funds received from Connect | | — | | | — | | | — | | | 26 | | | — | | | 26 | |
America Fund |
Network expansion funded by Connect | | — | | | — | | | — | | | (2.0 | ) | | — | | | (2.0 | ) |
America Fund |
Net cash provided from (used in) | | 26.4 | | | — | | | (126.9 | ) | | (412.0 | ) | | — | | | (512.5 | ) |
investing activities |
Cash Flows from Financing Activities: | | | | | | | | | | | | |
Distributions to Windstream Holdings, Inc. | | (452.4 | ) | | — | | | — | | | — | | | — | | | (452.4 | ) |
|
Repayments of debt and swaps | | (1,049.0 | ) | | — | | | — | | | — | | | — | | | (1,049.0 | ) |
|
Proceeds of debt issuance | | 985 | | | — | | | — | | | — | | | — | | | 985 | |
|
Intercompany transactions, net | | 500 | | | 8.3 | | | 15.2 | | | (523.8 | ) | | 0.3 | | | — | |
|
Payments under capital lease obligations | | — | | | — | | | (6.0 | ) | | (13.8 | ) | | — | | | (19.8 | ) |
|
Other, net | | (9.5 | ) | | — | | | — | | | — | | | — | | | (9.5 | ) |
|
Net cash (used in) provided from | | (25.9 | ) | | 8.3 | | | 9.2 | | | (537.6 | ) | | 0.3 | | | (545.7 | ) |
financing activities |
Increase (decrease) in cash and cash | | 43.9 | | | — | | | (2.5 | ) | | 14.1 | | | — | | | 55.5 | |
equivalents |
Cash and Cash Equivalents: | | | | | | | | | | | | |
Beginning of period | | 13.7 | | | — | | | 7.8 | | | 26.7 | | | — | | | 48.2 | |
|
End of period | | $ | 57.6 | | | $ | — | | | $ | 5.3 | | | $ | 40.8 | | | $ | — | | | $ | 103.7 | |
|
|
12. Supplemental Guarantor Information, Continued: |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Condensed Consolidated Statement of Cash Flows (Unaudited) |
| | Nine Months Ended |
30-Sep-13 |
(Millions) | | Windstream Corp. | | PAETEC | | Guarantors | | Non- | | Eliminations | | Consolidated |
Issuer | Guarantors |
Cash Provided from Operations: | | | | | | | | | | | | |
Net cash (used in) provided from | | $ | (92.5 | ) | | $ | (41.9 | ) | | $ | 165.5 | | | $ | 1,129.80 | | | $ | (0.2 | ) | | $ | 1,160.70 | |
operations |
Cash Flows from Investing Activities: | | | | | | | | | | | | |
Additions to property, plant and equipment | | (1.0 | ) | | — | | | (122.1 | ) | | (542.9 | ) | | — | | | (666.0 | ) |
|
Broadband network expansion funded by | | — | | | — | | | — | | | (28.8 | ) | | — | | | (28.8 | ) |
stimulus grants |
Changes in restricted cash | | 11.5 | | | — | | | 1.5 | | | — | | | — | | | 13 | |
|
Grant funds received for broadband | | 53.5 | | | — | | | — | | | — | | | — | | | 53.5 | |
stimulus projects |
Net cash provided from (used in) | | 64 | | | — | | | (120.6 | ) | | (571.7 | ) | | — | | | (628.3 | ) |
investing activities |
Cash Flows from Financing Activities: | | | | | | | | | | | | |
Dividends paid to shareholders | | (444.6 | ) | | — | | | — | | | — | | | — | | | (444.6 | ) |
|
Repayments of debt and swaps | | (3,443.1 | ) | | (650.0 | ) | | — | | | (0.1 | ) | | — | | | (4,093.2 | ) |
|
Proceeds of debt issuance | | 3,997.50 | | | — | | | — | | | — | | | — | | | 3,997.50 | |
|
Debt issuance costs | | (29.7 | ) | | — | | | — | | | — | | | — | | | (29.7 | ) |
|
Intercompany transactions, net | | (74.4 | ) | | 691.9 | | | (47.5 | ) | | (570.2 | ) | | 0.2 | | | — | |
|
Payments under capital lease obligations | | — | | | — | | | (11.6 | ) | | (2.2 | ) | | — | | | (13.8 | ) |
|
Other, net | | (7.2 | ) | | — | | | — | | | — | | | — | | | (7.2 | ) |
|
Net cash (used in) provided from | | (1.5 | ) | | 41.9 | | | (59.1 | ) | | (572.5 | ) | | 0.2 | | | (591.0 | ) |
financing activities |
Decrease in cash and cash equivalents | | (30.0 | ) | | — | | | (14.2 | ) | | (14.4 | ) | | — | | | (58.6 | ) |
|
Cash and Cash Equivalents: | | | | | | | | | | | | |
Beginning of period | | 57.5 | | | — | | | 26.5 | | | 48 | | | — | | | 132 | |
|
End of period | | $ | 27.5 | | | $ | — | | | $ | 12.3 | | | $ | 33.6 | | | $ | — | | | $ | 73.4 | |
|