Windstream Holdings, Inc. (NASDAQ:WIN) Q4 2017 Earnings Conference Call - Preliminary Transcript

Feb 22, 2018 • 07:30 am ET

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Windstream Holdings, Inc. (NASDAQ:WIN) Q4 2017 Earnings Conference Call - Preliminary Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Windstream Q4 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to introduce your host for today's conference, Mr. Chris King, Vice President of Investor Relations at Windstream. You may begin.

Executive
Chris C. King

Thank you. Good morning, everyone, and thank you for joining Windstream's Fourth Quarter 2017 Earnings Conference Call. Joining me on the call today are Tony Thomas, our CEO; and Bob Gunderman, our CFO. To accompany today's call, we have posted the presentation slides, earnings release and supplemental schedule on our Investor Relations website.

Today's discussion includes statements about expected future events and financial results that are forward looking and subject to risks and uncertainties. A discussion of factors that may affect future results is contained in Windstream's filings with the SEC which are available on our website. Of note, as mentioned last quarter, we have now consolidated our financial reporting into two primary business units: ILEC Consumer and Small Business, and Enterprise and Wholesale, which was previously referred to as our cloud and connectivity unit. The Enterprise and Wholesale business includes our Enterprise and Wholesale segments as well as our CLEC/SMB segment. We are now reporting our CLEC Consumer segment separately and have provided complete historical pro forma financial information for the new reporting structure.

During the fourth quarter, following the completion of the company's goodwill impairment assessment and year end planning process, the company recorded a $1.8 billion non-cash impairment charge related to the ILEC Consumer and Small Business and Wholesale segments. This impairment was primarily due to changes in long-term cash flow projections driven by recent operational results and future assumptions as well as changes in cost of capital assumptions.

With that, let me turn it over to Tony Thomas.

Executive
Anthony W. Thomas

Thanks, Chris. Good morning, everyone, and thank you for joining us today. Starting on slide 4, I wanted to begin by reviewing our 2017 accomplishments in what was a very busy and productive year for Windstream as we position the company for the growth opportunities ahead. During the year, we completed the EarthLink and Broadview acquisitions, which have given us a meaningful advantage with significant strategic best-of-breed assets such as SD-WAN expertise, and OfficeSuite, Broadview's UCaaS platform.

We developed and launched SD-WAN Concierge, our flagship SD-WAN product offering, as well as OfficeSuite across our entire company footprint. We expanded our enterprise contribution margin percentage by 200 basis points sequentially and 160 basis points year-over-year. The company exited 2017 at its highest adjusted OIBDAR margin level since prior to the EarthLink acquisition. We delivered our 12th consecutive quarter of consumer ARPU growth in the fourth quarter. We significantly improved the maturity profile of our balance sheet by extending almost $2 billion of maturities out an average of more than two years. And our synergy plans remain on schedule, and