Q1 2010 Earnings Call
May 05, 2010 5:30 pm ET
Anthony Thomas - Chief Financial Officer
Brent Whittington - Chief Operating Officer
Jeff Gardner - Chief Executive Officer, President and Director
Robert Clancy - Senior Vice President of Investor Relations and Treasurer
Christopher King - Stifel, Nicolaus & Co., Inc.
Michael McCormack - JP Morgan Chase & Co
Michael Rollins - Citigroup Inc
Simon Flannery - Morgan Stanley
Jason Armstrong - Goldman Sachs Group Inc.
Previous Statements by WIN
» Windstream Q4 2009 Earnings Call Transcript
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» Windstream Corporation Q2 2009 Earnings Call Transcript
Good day, ladies and gentlemen, and welcome to the Q1 2010 Windstream Communications Earnings Conference Call. My name is Peggy, and I will be your conference operator for today. [Operator Instructions] I would now like to turn the conference over to your host for today, Mr. Robert Clancy, Senior Vice President and Treasurer. Please proceed.
Thank you, Peggy, and good afternoon, everyone. Thank you for joining us today. Today's conference call was preceded by our first quarter 2010 earnings release, which has been distributed on the newswires and is available from the Investor Relations section of our website. Today's conference call should be considered together with our earnings release and related financial information.
Today's discussion will include certain forward-looking statements, particularly as they pertain to guidance and other outlooks on our business. Please review the Safe Harbor language found in our press release and in our SEC filings, which described factors that could cause our actual results to differ materially from those projected by us in our forward-looking statements. Today's discussion will also include certain non-GAAP financial measures. Again, we refer you to the IR section of our website where we have posted our earnings release and supplemental materials, which contain information and reconciliations for any non-GAAP financial measure.
On February 8, Windstream completed the acquisition of NuVox. To assist investors, we have revised our pro forma results to include the results of NuVox for all periods shown. These supplemental financials also include D&E Communications and Lexcom, and exclude our former non-affiliate product distribution business.
As part of our integration process, we reviewed and updated our methodology for counting and reporting key customer metrics. As a result, we are now providing several new operating metrics which align to the specific revenue categories by type and provide better transparency into our operations. Specifically, we are now disclosing voice access lines, special access circuits and advanced data and integrated solutions, which are generally connections that provide integrated voice and data services. These connections aggregated together will be reported as total access lines, which is consistent with our historical presentation, as well as our peer group reporting.
We also updated our supplemental schedules to enhance the revenue and operating metric transparency by channel and customer type. Finally, we are providing pro forma adjusted free cash flow, defined as adjusted OIBDA, excluding non-cash pension expense, non-cash stock compensation expense and restructuring expense, which is the framework used to provide our annual free cash flow guidance in February of this year. We will make references to these pro forma results including the year-over-year comparisons during our call.
Participating in our call this morning are Jeff Gardner, Windstream President and Chief Executive Officer; Brent Whittington, Windstream Executive Vice President and Chief Operating Officer; and Tony Thomas, Windstream Chief Financial Officer. At the end of the call, we will take a few questions. With that, here is Jeff Gardner.
Thank you, Rob, and good afternoon, everyone. This afternoon, I will make a few comments about our performance and provide an update on our strategic initiatives. Brent will then discuss our operating results, and Tony will review our financial performance.
First, I am very pleased with our results for the first quarter. We continued to make improvements in many key operating metrics and delivered very solid financial results, with improving revenue trends, which is very important to sustaining cash flows over the long term.
Additionally, our teams are progressing extremely well with our integration efforts, which all remained on track and in line with our expectations. During the first quarter, we completed the NuVox acquisition, acquiring approximately 104,000 business connections in complementary markets in 16 states.
NuVox is a great strategic fit for Windstream. As this transaction bolsters our strategy to focus more on the business segment, which offers better growth prospects going forward. We are very excited to have the NuVox team on board, and look forward to the future opportunities that this transaction creates for our combined company.
Additionally, we are progressing nicely with the approvals required to close the acquisition of Iowa Telecom. During the quarter, the Iowa Telecom shareholders approved the transaction. And just last week, we obtained the remaining state approvals necessary to proceed with the closing. Thus at this point, we are only waiting for FCC approval. It is our expectation that this transaction will close by the end of the second quarter.
Turning to the regulatory front. We were encouraged by the FCC's National Broadband Plan. Released in March and believed the plan appears to be focused on the right issues, while acknowledging reforms need to be manageable with appropriate time to transition. The plan was a positive first step and now the challenge will be working through the rule-making process to ultimately implement the recommendation.
Windstream shares the core goal of making robust broadband available to everyone and the National Broadband Plan's recognition that this goal cannot be achieved without effective reform of universal service and intercarrier compensation. In March, we applied for $238 million in federal stimulus grants to expand broadband availability and offer faster broadband speeds to more than 500,000 homes and 80,000 businesses in the rural areas of 16 states.