Windstream (WIN)

The following discussion and analysis details results for Windstream Consolidated Revenues.

The following table reflects the primary drivers of year-over-year changes in consolidated revenues and sales:

Consolidated revenues and sales decreased $74.4 million, or 2 percent in 2008, and increased $212.6 million, or 7 percent, in 2007. The decrease in 2008 is primarily due to the sale of the Company’s directory publishing business in the fourth quarter of 2007, as discussed above, and declines associated with continued access line losses, partially offset by increases in high-speed Internet customers and the acquisition of CTC. The increase in consolidated revenues and sales in 2007 is primarily due to the acquisitions of Valor and CTC, as well as to increases in high-speed Internet customers, partially offset by declines in revenues associated with continued access line losses.

The decline in product distribution revenues and sales in 2008 is primarily due to lower affiliate sales and changes in capital expenditures in the Company’s wireline operations, which had a corresponding impact on affiliate eliminations. Also impacting eliminations of affiliate revenues and sales was the sale of directory publishing and resulting reduction of publishing rights revenues. In 2007 the change in affiliate eliminations was primarily due to the discontinued application of Statement of Financial Accounting Standards (“SFAS”) No. 71, “Accounting for the Effects of Certain Types of Regulation” during the third quarter of 2006 (see Note 2). Previously, certain affiliated revenues earned and expenses incurred by the Company’s regulated subsidiaries were not eliminated because they were priced in accordance with Federal Communications Commission guidelines and were recovered through the regulatory process.

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See below a detailed discussion and analysis of segment revenues and sales in our discussion of segment operating results.

The following discussion and analysis details results for Windstream Consolidated Revenues.

The following table reflects the primary drivers of year-over-year changes in consolidated revenues and sales:

The following discussion and analysis details results for Windstream Consolidated Revenues.

The following table reflects the primary drivers of year-over-year changes in consolidated revenues and sales:

Consolidated revenues and sales

Consolidated revenues and sales decreased $24.7 million, or 3 percent, and $35.2 million, or 1 percent in the three and nine month periods ended September 30, 2008, respectively, as compared to the same periods of 2007. The decreases are primarily due to the sale of the Company’s directory publishing business in the fourth quarter of 2007, as discussed above, partially offset by the acquisition of CTC. Additionally, consolidated revenues and sales increased due to increases in high-speed Internet customers, partially offset by declines in revenues associated with continued access line losses. The decline in product

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distribution revenues and associated change in affiliate eliminations were the result of lower sales to affiliates primarily due to the decline in revenues from directory publishing rights and changes in capital expenditures in the Company’s wireline operations during the three and nine months ended September 30, 2008.

See below a detailed discussion and analysis of segment revenues and sales in our discussion of segment operating results.

The following discussion and analysis details results for Windstream Consolidated Revenues.

The following table reflects the primary drivers of year-over-year changes in consolidated revenues and sales:

Consolidated revenues and sales

Consolidated revenues and sales decreased $26.8 million, or 3 percent, and $10.5 million, or 1 percent in the three and six month periods ended June 30, 2008, respectively, as compared to the same periods of 2007. The decreases are primarily due to the sale of the Company’s directory publishing business in the fourth quarter of 2007, as discussed above, and a one time settlement for switched access revenues recorded in the second quarter of 2007, partially offset by the acquisition of CTC. Additionally, consolidated revenues and sales increased due to increases in high-speed Internet customers, partially offset by declines in

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revenues associated with continued access line losses. The decline in product distribution revenues and associated change in affiliate eliminations were the result of lower sales to affiliates primarily due to the decline in revenues from directory publishing rights and changes in capital expenditures in the Company’s wireline operations during the three and six months ended June 30, 2008.

See below a detailed discussion and analysis of segment revenues and sales in our discussion of segment operating results.

The following discussion and analysis details results for Windstream Consolidated Revenues.

The following table reflects the primary drivers of year-over-year changes in consolidated revenues and sales:

Consolidated revenues and sales increased $28.0 million, or 4 percent in the three months ended March 31, 2008, as compared to the same period of 2007, primarily due to the acquisition of CTC, as well as to increases in high-speed Internet customers, partially offset by declines in revenues associated with continued access line losses. The decline in product distribution revenues and associated change in affiliate eliminations were the result of lower sales to affiliates primarily due the decline in capital expenditures in the Company’s wireline operations during the three months ended March 31, 2008.

See below a detailed discussion and analysis of segment revenues and sales in our discussion of segment operating results.

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The following discussion and analysis details results for Windstream Consolidated Revenues.

The following table reflects the primary drivers of year-over-year changes in consolidated revenues and sales:

Consolidated revenues and sales increased $227.5 million, or 8 percent in 2007, and $109.8 million, or 4 percent, in 2006. Increases in consolidated revenues and sales are primarily due to the acquisitions of Valor and CTC, as well as to

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increases in high-speed Internet customers, partially offset by declines in revenues associated with continued access line losses.

Eliminations of affiliated revenues and sales and, related costs and expenses, increased primarily due to the discontinued application of Statement of Financial Accounting Standards (“SFAS”) No. 71, “Accounting for the Effects of Certain Types of Regulation” during the third quarter of 2006 (See Note 2). Previously, certain affiliated revenues earned and expenses incurred by the Company’s regulated subsidiaries were not eliminated because they were priced in accordance with Federal Communications Commission guidelines and were recovered through the regulatory process.

See below a detailed discussion and analysis of segment revenues and sales in our discussion of segment operating results.