Windstream Board Gives Final Approval For REIT Spinoff - Quick Facts

(RTTNews) - Windstream Holdings Inc. (WIN) announced that its board has given final approval for the tax-free spinoff of select telecommunications network assets into Communications Sales & Leasing, Inc. or CS&L, which will become an independent publicly traded real estate investment trust or REIT.

In addition, the company's board of directors declared a prorated cash dividend subject to the closing of the spinoff.

Windstream expects to distribute approximately 80.1 percent of CS&L shares on April 24, 2015, to Windstream shareholders of record as of 5 p.m. EDT on April 10, 2015. The distribution is conditioned upon satisfaction of certain customary closing conditions, including financing of the transaction. Windstream intends to use the approximately 19.9 percent retained CS&L shares opportunistically, subject to market conditions, during a 12-month period following the spinoff to reduce debt.

In addition, conditioned on the closing of the spinoff, Windstream will make a cash distribution equivalent to a prorated $.25 quarterly dividend to Windstream shareholders of record as of 5 p.m. EDT on April 10, 2015. Assuming the spinoff closes on April 24, 2015, the cash dividend would be $.0659, and the company would expect to make the payment on April 24, 2015.

Following the spinoff, Windstream will continue to be listed on Nasdaq under the symbol "WIN," while CS&L expects to list its common stock on Nasdaq under the symbol "CSAL." Nasdaq has approved the listing of CS&L's common stock, subject to official notice of issuance.

Upon close of the transaction, Windstream shareholders will retain their Windstream shares and receive one share of CS&L for every five shares of Windstream held. The spinoff is expected to be a tax-free distribution to Windstream shareholders and requires no action by shareholders. Windstream shareholders will receive cash in lieu of fractional shares for amounts of less than one CS&L share. CS&L expects to pay an annual dividend of $2.40 per share.

Immediately following the distribution of CS&L shares, Windstream will effect a 1-for-6 reverse stock split. Windstream expects to pay an annual dividend of $.60 per share after giving effect to the stock split.

Windstream also affirmed its financial guidance for 2015 as provided on Feb. 24, 2015.

In February, Windstream said it expected improved revenue trends in 2015 in enterprise, consumer and small business and continuation of some revenue pressure in the carrier business. The company expected total service revenue for the year within a range of a 4 percent decline to flat as compared to 2014 service revenue. The company expects Adjusted OIBDA margins, as a percentage of total revenue, to be in the range of 34 percent to 34.5 percent for the year.