UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 9, 2006
WINDSTREAM CORPORATION
(Exact name of registrant as specified in its charter)
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| Delaware
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001-32422
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20-0792300 |
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(State or other jurisdiction of
incorporation or organization)
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(Commission File Number)
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(I.R.S. Employer
Identification No.) |
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| 4001 Rodney Parham Road, |
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| Little Rock, Arkansas
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72212 |
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| (Address of principal executive offices)
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(Zip Code) |
(501) 748-7000
Registrant’s telephone number, including area code
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On November 9, 2006, Windstream Corporation (“Windstream” or the “Company”) issued a press
release announcing the Company’s third quarter 2006 unaudited consolidated results of operations.
The Company’s press release and other communications from time to time include certain
non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a
company’s financial performance, financial position or cash flows that excludes (or includes)
amounts that are included in (or excluded from) the most directly comparable measure calculated and
presented in accordance with generally accepted accounting principles (“GAAP”) in the Company’s
financial statements. The non-GAAP financial measures used by the Company may not be comparable
to similarly titled measures used by other companies and should not be considered in isolation or
as a substitute for measures of performance or liquidity prepared in accordance with GAAP.
The press release presents the Company’s consolidated results of operations measured under
GAAP and certain pro forma results of operations from current businesses. On July 17, 2006, Alltel
Corporation (“Alltel”) completed the spin-off of its wireline telecommunications business to its
stockholders and the merger of that wireline business with Valor Communications Group, Inc.
(“Valor”). The resulting company was renamed Windstream Corporation. The GAAP results for the
Company reflect the Alltel wireline business for the full third quarter of 2006, and for prior
periods, and reflect the results from Valor businesses beginning July 17, 2006. The press release
and other communications from time to time include a presentation of certain unaudited pro forma
historical results of operations that the Company refers to as pro forma results from current
businesses. These results from current businesses are non-GAAP financial measures that reflect the
following adjustments to measures prepared in accordance with GAAP:
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The inclusion of results from Valor businesses for periods prior to July 17, 2006; |
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Inclusion of additional amortization for Valor customer lists; |
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Exclusion of royalty expense charged by Alltel for the use of the Alltel brand
for periods prior to July 17, 2006; |
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Exclusion of restructuring and other charges. |
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Exclusion of the adjustments related to the discontinuation of Statement of
Financial Accounting Standards (“SFAS”) No. 71, “Accounting for the Effects of
Certain Types of Regulation”; |
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Inclusion of additional interest expense for Windstream’s new debt structure; |
Windstream’s purpose for including the results of Valor businesses, and excluding Alltel royalty
expense and the adjustments related to the discontinuance of SFAS No. 71, is to improve
comparability of results of operations for prior periods (which exclude Valor results and include
Alltel royalty expenses under GAAP measures) to the results of operations for periods beginning
with the third quarter of 2006 (which will include Valor results under GAAP measures and will no
longer reflect Alltel royalty expenses as those were discontinued as a result of the Merger, nor
the effects of applying SFAS No. 71). Windstream’s purpose for its other adjustments is to focus
on Windstream’s true earnings capacity associated with providing telecommunication services.
Management believes the items either included or excluded from the pro forma results from current
businesses are related to strategic activities or other events, specific to the time and
opportunity available, and accordingly, should be excluded when evaluating the Company’s
operations.
For these reasons, management believes that presenting the current business measures assists
investors by providing more meaningful comparisons of results from current and prior periods and by
providing information that is a better reflection of the core earnings capacity of the businesses.
The Company uses pro forma results from current businesses as management’s primary measure of the
performance of its business segments. Windstream management, including the chief operating
decision-maker, uses these measures consistently for all purposes, including internal reporting
purposes, the evaluation of business objectives, opportunities and performance, and the
determination of management compensation.
The Company’s press release and other communications from time to time include a non-GAAP
measure titled operating income before depreciation and amortization, or OIBDA. OIBDA can be
calculated directly from the Company’s financial statements by taking operating income and adding
depreciation and amortization. The Company will also at times make reference to pro forma OIBDA
from current businesses, which is also a non-
GAAP measure. Pro forma OIBDA from current businesses
adjusts OIBDA for the items that are either included or
excluded from pro forma results from current businesses. Management considers OIBDA to be
useful to investors because OIBDA provides information related to the Company’s operating
performance and its ability to provide cash flows to service debt, fund capital expenditures and
pay dividends. The Company uses OIBDA as a primary measure of the performance of its business.
The Company’s management, including the chief operating decision-maker, uses OIBDA for internal
reporting purposes, the evaluation of business objectives, opportunities and performance, resource
allocation and the determination of management and employee compensation.
The Company’s communications from time to time include a non-GAAP measure entitled net debt.
Net debt is consolidated debt, including current maturities, less cash and cash equivalents. The
Company believes net debt provides useful information to investors about the capacity of the
company to reduce the debt level and improve its capital structure.
Item 9.01 Financial Statements and Exhibits.
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Description |
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Exhibit 99(a)
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Press Release dated November 9, 2006 of Windstream |
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