WIN » Topics » Income Taxes

This excerpt taken from the WIN 10-Q filed May 8, 2009.

Income Taxes

Income tax expense decreased $9.6 million, or 13 percent, in the three month period ending March 31, 2009, as compared to the same period of 2008. The decrease in income tax expense is generally consistent with the Company’s decrease in income before taxes. The Company’s effective tax rate increased to 42.6 percent in the three months ended March 31, 2009 as compared to 37.9 percent in the corresponding period of 2008. The increase in the effective rate is due to a discrete item recognized in the first quarter of 2009 related to the Company’s net operating loss carryforward in Kentucky. The impact of this discrete item is immaterial to the estimated annual effective income tax rate. For 2009, the Company’s effective income tax rate is expected to range between 38.0 and 39.0 percent. Changes in the profitability of the Company, as well as recent and proposed changes to federal and state tax laws may cause the rate to change from historical rates. In determining its quarterly provision for income taxes, the Company uses an estimated annual effective tax rate, which is based on its expected annual income, statutory rates and tax planning opportunities. Significant or unusual items are separately recognized in the quarter in which they occur.

This excerpt taken from the WIN 10-K filed Feb 19, 2009.

Income Taxes

Income tax expense increased $31.7 million, or 13 percent, in 2008 and decreased $24.8 million, or 9 percent, in 2007. The increase in income tax expense in 2008 is primarily driven by adjustments to deferred income taxes for the impact of completing an internal reorganization of our legal entity structure. The decrease in income tax expense in 2007 is driven by adjustments to deferred income taxes for the impact of commencing an internal reorganization of our legal entity structure and a reduction in the Kentucky state income tax rate. The Company’s effective tax rate in 2008 was 39.4 percent, compared to 21.6 percent in 2007 and 38.3 percent in 2006. The increase in the effective tax rate between 2008 and 2007 is due to upward adjustments to deferred income taxes upon completing an internal reorganization of our legal entity structure, while 2007 includes the nontaxable gain from the split off of the publishing business and downward adjustments to deferred income taxes upon commencing the reorganization of our legal entity structure. For 2009, the Company’s effective income tax rate is expected to range between 37.5 and 38.5 percent excluding any possible one-time discrete items. Changes in the relative profitability of our operating segments, as well as recent and proposed changes to federal and state tax laws may cause the rate to change from historical rates. See Note 12, “Income Taxes”, to the accompanying consolidated financial statements for further discussion of income tax expense and deferred taxes.

Discontinued Operations, Net of Tax

On November 21, 2008 Windstream completed the sale of its wireless business to AT&T Mobility II, LLC (see Note 16). In connection with this transaction, we have reported the related results as discontinued operations and recognized a pre-tax loss of $21.3 million to reduce the carrying value of the net assets sold to the transaction price less costs to sell. Wireless business income before taxes was $9.7 million and $1.2 million in 2008 and 2007, respectively. Additionally, the Company made additional tax payments of $14.8 million related to the excess of consideration received over tax basis in the assets sold.

This excerpt taken from the WIN 10-Q filed Nov 7, 2008.

Income Taxes

Income tax expense increased $2.2 million, or 4 percent, and $12.3 million, or 6 percent, in the three and nine month periods ending September 30, 2008, respectively, as compared to the same periods of 2007. The Company’s effective tax rate increased to 37.8 percent for both the three and nine month periods ended September 30, 2008, as compared to 34.3 percent and 37.1 percent in the corresponding periods of 2007. The increase in income tax expense and the effective rate for the three month period ending in 2008 as compared to same period in 2007 is attributable to the fact that during the three month period ended in 2007, the company evaluated its projected state income tax rates which resulted in a $6.0 million reduction in income tax expense and lowered the overall effective tax rate. There were no similar adjustments made during the three months ended in 2008. The increase in income tax expense and the effective rate for the nine month period is generally consistent with the change in income before taxes. For 2008, the Company’s annual effective income tax rate is expected to range between

 

44


Table of Contents

37.5 and 38.5 percent. Changes in the relative profitability of the Company’s operating business units, as well as recent and proposed changes to federal and state tax laws, may cause the rate to change from historical rates. In determining its quarterly provision for income taxes, the Company uses an estimated annual effective tax rate, which is based on its expected annual income, statutory rates and tax planning opportunities. Significant or unusual items are separately recognized in the quarter in which they occur.

Discontinued Operations, Net of Tax

On August 7, 2008 Windstream entered into a definitive agreement to sell its wireless business to AT&T Mobility II, LLC (see Note 15). In connection with the contemplated transaction, we have reported the related results as discontinued operations and recognized a pre-tax loss of $18.0 million during the second quarter of 2008 to reduce the carrying value of the assets held for sale to the contemplated transaction price less estimated costs to sell. Wireless business income before taxes of $2.8 million and $6.3 million for the three and nine month periods ending September 30, 2008, respectively, as compared to $0.6 million for both the three and nine month periods of 2007, was reported as discontinued operations in the unaudited interim consolidated statements of income (see Note 15). Upon consummation of the contemplated transaction, the Company expects to recognize additional tax expense of approximately $9.7 million related to the excess of consideration to be received over tax basis in the assets to be sold.

This excerpt taken from the WIN 10-Q filed Aug 8, 2008.

Income Taxes

Income tax expense decreased $4.7 million, or 6 percent, and increased $10.1 million, or 7 percent, in the three and six month periods ending June 30, 2008, respectively, as compared to the same periods of 2007. The change in income tax expense is generally consistent with the Company’s change in income before taxes. The Company’s effective tax rate decreased to 37.4 percent and 37.7 percent in the three and six month periods ended June 30, 2008, respectively, as compared to 39.3 percent and 38.5 percent in the corresponding periods of 2007. For 2008, the Company’s annual effective income tax rate is expected to range between 37.5 and 38.5 percent. Changes in the relative profitability of the Company’s operating segments, as well as recent and proposed changes to federal and state tax laws, may cause the rate to change from historical rates. In determining its quarterly provision for income taxes, the Company uses an estimated annual effective tax rate, which is based on its expected annual income, statutory rates and tax planning opportunities. Significant or unusual items are separately recognized in the quarter in which they occur.

Discontinued Operations, Net of Tax

During the second quarter of 2008, the Company entered negotiations, and subsequently reached a definitive purchase agreement dated August 7, 2008, for the sale of its wireless business that was acquired from CTC on September 1, 2007. In connection with the contemplated transaction, we have reported the related results as discontinued operations and recognized a pre-tax loss of $18.0 million to reduce the carrying value of the assets held for sale to the contemplated transaction price less estimated costs to sell. Wireless business income before taxes of $1.1 million and $3.5 million for the three and six month periods ending June 30, 2008, respectively, were reported as discontinued operations in the unaudited interim consolidated statements of income (see Notes 15 and 16). Upon consummation of the contemplated transaction, the Company expects to recognize additional tax expense of approximately $9.7 million related to the excess of consideration to be received over tax basis in the assets to be sold.

This excerpt taken from the WIN 10-Q filed May 9, 2008.

Income Taxes

Income tax expense increased $15.4 million, or 25.6 percent, in the three month period ending March 31, 2008, as compared to the same period of 2007. The increase in income tax expense is generally consistent with the Company’s increase in income before taxes. The Company’s effective tax rate increased to 37.9 percent in the three months ended March 31, 2008, as compared to 37.6 percent in the corresponding period of 2007. For 2008, the Company’s annual effective income tax rate is expected to range between 37.5 and 38.5 percent. Changes in the relative profitability of the Company’s operating segments, as well as recent and proposed changes to federal and state tax laws, may cause the rate to change from historical rates. In determining its quarterly provision for income taxes, the Company uses an estimated annual effective tax rate, which is based on its expected annual income, statutory rates and tax planning opportunities. Significant or unusual items are separately recognized in the quarter in which they occur.

These excerpts taken from the WIN 10-K filed Feb 29, 2008.

Income Taxes

Our estimates of income taxes and the significant items resulting in the recognition of deferred tax assets and liabilities are disclosed in Note 12 and reflect our assessment of future tax consequences of transactions that have been reflected in our financial statements or tax returns for each taxing authority in which we operate. Actual income taxes to be paid could vary from these estimates due to future changes in income tax law or the outcome of audits completed by federal and state taxing authorities. Included in the calculation of our annual income tax expense are the effects of changes, if any, to our income tax contingency reserves. We maintain income tax contingency reserves for potential assessments from the IRS or other taxing authorities. The reserves are determined based upon our judgment of the probable outcome of the tax contingencies and are adjusted, from time to time, based upon changing facts and circumstances. Changes to the tax contingency reserves could materially affect our future consolidated operating results in the period of change. In addition, a valuation allowance is recorded to reduce the carrying amount of deferred tax assets unless it is more likely than not that such assets will be realized.

Income Taxes

Our
estimates of income taxes and the significant items resulting in the recognition of deferred tax assets and liabilities are disclosed in Note 12 and reflect our assessment of future tax consequences of transactions that have been reflected in our
financial statements or tax returns for each taxing authority in which we operate. Actual income taxes to be paid could vary from these estimates due to future changes in income tax law or the outcome of audits completed by federal and state taxing
authorities. Included in the calculation of our annual income tax expense are the effects of changes, if any, to our income tax contingency reserves. We maintain income tax contingency reserves for potential assessments from the IRS or other taxing
authorities. The reserves are determined based upon our judgment of the probable outcome of the tax contingencies and are adjusted, from time to time, based upon changing facts and circumstances. Changes to the tax contingency reserves could
materially affect our future consolidated operating results in the period of change. In addition, a valuation allowance is recorded to reduce the carrying amount of deferred tax assets unless it is more likely than not that such assets will be
realized.

This excerpt taken from the WIN 10-Q filed Nov 8, 2007.

Income Taxes

Income tax expense increased $0.6 million, or 1 percent, and decreased $16.4 million, or 8 percent, in the three and nine month periods ended September 30, 2007, respectively, as compared to the same periods of 2006. The Company’s effective income tax rate decreased to 34.3 percent and 37.1 percent in the three and nine months ended September 30, 2007, as compared to 38.7 percent and 39.4 percent in the corresponding periods of 2006. This decrease was primarily due to an evaluation of the Company's projected state income tax rates. Adjustments to these projected rates during the third quarter of 2007 resulted in an approximate $6.0 million reduction in income tax expense. Additionally, income tax expense was favorably impacted by discrete items recorded during the first half of 2007, which consisted primarily of a $3.5 million favorable adjustment to deferred income taxes due to a reduction of the Kentucky state income tax rate from 7.0 percent to 6.0 percent on January 1, 2007. Offsetting these favorable impacts were increases consistent with the increases in pre-tax income. For 2007, the Company’s annual effective income tax rate is expected to range between 37.5 and 38.5 percent. In determining its quarterly provision for income taxes, the Company uses an estimated annual effective tax rate, which is based on its expected annual income, statutory rates and tax planning opportunities. Significant or unusual items are separately recognized in the quarter in which they occur.

This excerpt taken from the WIN 10-Q filed Aug 8, 2007.

Income Taxes

Income tax expense decreased $4.9 million, or 6 percent, and $17.0 million, or 11 percent, in the three and six month periods ended June 30, 2007, respectively, as compared to the same periods of 2006. The changes in income tax expense were generally consistent with the decrease in the Company’s income before income taxes. Additionally, the Company’s effective income tax rate decreased to 39.3 percent and 38.5 percent in the three and six months ended June 30, 2007, as compared to 40.3 percent and 39.7 percent in the corresponding periods of 2006, primarily due to the impact of favorable discrete items recorded within the first half of 2007. Included in discrete items in the first quarter of 2007 was a $3.5 million favorable adjustment to deferred income taxes due to a reduction of the Kentucky state income tax rate from 7 percent to 6 percent on January 1, 2007. For 2007, the Company’s annual effective income tax rate is expected to range between 39.0 and 40.0 percent. In determining its quarterly provision for income taxes, the Company uses an estimated annual effective tax rate, which is based on its expected annual income, statutory rates and tax planning opportunities. Significant or unusual items are separately recognized in the quarter in which they occur.

This excerpt taken from the WIN 10-K filed Feb 28, 2006.
Income Taxes
 
The following table sets forth income taxes for the periods shown:
 
                         
    Year Ended December 31,  
    2003     2004     2005  
    (Dollars in thousands)  
 
Income tax expense
  $ 2,478     $ 665     $ 14,329  
 
The income taxes for 2004 and 2003 represent those of VTS II, which had elected to be taxed as a corporation for federal income tax purposes. (See Note  2, “Summary of Significant Accounting Policies” and Note 8, “Income Taxes” of the Notes to the Consolidated Financial Statements for an expanded discussion of income taxes.) In February 2005, we completed a reorganization concurrent with our Offering. Prior to our reorganization, substantially all of the operations of Valor elected partnership treatment for income tax purposes. Following the completion of our Offering and the related reorganization, the operations of our company and all wholly owned subsidiaries became reportable in a consolidated corporate federal tax return. As such, for the period from January 1, 2005 through the Offering date, we recorded income tax expense directly attributable to the operations of VTS II. Following the Offering date, we recorded income taxes on the operations of Valor. Additionally, we recorded deferred tax assets and liabilities related to the differences between financial reporting and the tax basis of our assets and liabilities and net operating losses incurred prior to becoming a taxable entity.
 
The differences between the federal income tax statutory rate and our effective income tax rate for the years ended December 31, 2004 and 2003 are primarily related to consolidated entities not subject to income taxes prior to our reorganization. Fiscal year ended December 31, 2004 was further impacted by permanent differences associated with the purchase of minority interests and our impairment charge on our investment in cellular partnerships. The differences between the federal income tax statutory rate and our effective income tax rate for the year ended December 31, 2005 is primarily related to consolidated entities not subject to income taxes prior to the effective date of the Offering, a permanent difference related to the step-up in our tax basis of assets attributable to goodwill that occurred in connection with our reorganization and an impairment charge on our investment in cellular partnerships.
 
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki