1120462--2/26/2010--IOWA_TELECOMMUNICATIONS_SERVICES

related topics

{debt, indebtedness, cash}

{acquisition, growth, future}

{system, service, information}

{product, market, service}

{stock, price, share}

{condition, economic, financial}

{regulation, government, change}

{regulation, change, law}

{tax, income, asset}

{provision, law, control}

{cost, regulation, environmental}

{cost, operation, labor}

{personnel, key, retain}

Risk Related to the Proposed Merger with Windstream Corporation Our proposed Merger with Windstream may be delayed or may not occur at all, which could negatively affect the market price of our common stock and our business and financial results. The Merger Agreement contains various covenants which severely restrict our ability to operate outside the ordinary course of business, which could have an adverse effect on our business and financial results and future prospects. Whether or not the proposed Merger with Windstream is completed, the uncertainty of the transaction could create disruptions in our business, which could have an adverse effect on our business and financial results. We and Windstream are exposed to several additional risks relating to the Merger. Risks Related to Our Capital Structure and Ownership Our dividend policy may limit our ability to pursue growth opportunities. Our equity owners may not receive any dividends. We have substantial indebtedness and may incur additional indebtedness in the future, which could restrict our ability to pay dividends. We are subject to restrictive debt covenants and other requirements related to our outstanding debt that limit our business flexibility by imposing operating and financial restrictions on us. We may not be able to refinance our credit facilities at maturity on favorable terms or at all. Due to recent financial market conditions, we may seek funding under our revolving credit facility or a commitment to lend incremental term loans and learn that our lenders cannot fulfill our request for cash. We will require a significant amount of cash, which may not be available to us, to service our debt, pay dividends and fund our other liquidity needs. There may be volatility in the trading price of our common stock, which could negatively affect the value of an investment in our common stock. Future sales, or the possibility of future sales, of a substantial amount of our common stock may depress the price of the shares of our common stock. If the Merger with Windstream is not completed, our organizational documents could limit another party s ability to acquire us and therefore could deprive our investors of the opportunity to obtain a takeover premium for their shares. Factors requiring us to pay cash taxes in future periods may affect our ability to pay dividends. Risks Relating to Our Business and Industry Competition in the telecommunications industry could result in access line losses or reduce our customer base, possibly requiring that we lower our rates, increase marketing expenditures, invest in new technologies or capabilities or use discounting and promotional campaigns that adversely affect our margins. We may lose access lines due to general economic conditions and competition. The recent severe contraction in the global financial markets may have an impact on our business and financial condition We may lose access lines due to the economic conditions and a declining population in many rural Midwest communities. We may in the future compete with the Iowa Communications Network or with a future purchaser of the assets now owned by the Iowa Communications Network. We may not be able to integrate future technologies, respond effectively to customer requirements or provide new services. Network failures and other disruptions could adversely affect our operating results. We may not be able to maintain the necessary rights-of-way for our network. Our competitive local exchange carrier strategy may adversely affect our profitability. We face risks associated with our strategy of growth through acquisitions. We may not be able to raise the capital to grow through acquisitions. We may not be successful in efficiently managing the growth of our business. Our relationships with other telecommunications companies are material to our operations and their financial difficulties may affect our business. We face risks associated with our reliance on third party telecommunications service providers. We face risks associated with our reliance on our information and billing systems. Labor disputes with our employees could interrupt our operations and adversely affect our business. We depend on key members of our senior management team. Risks Related to Our Regulatory Environment FCC, Iowa Utilities Board and Minnesota Public Utilities Commission decisions concerning telecommunications policy and judicial review of such decisions may adversely affect our business. New regulations and changes in existing regulations may force us to incur significant expenses. Our incumbent local exchange carrier is subject to regulation that is not applicable to our competitors. Changes to existing regulations may reduce the revenue we receive from network access charges. To the extent that services that compete with ours are subject to different regulatory regimes, our revenues, particularly from network access charges, may be reduced. Because we are subject to extensive laws and regulations relating to the protection of the environment, natural resources and worker health and safety, we may face significant liabilities or compliance costs in the future.

Full 10-K form ▸

1120462--2/26/2010--IOWA_TELECOMMUNICATIONS_SERVICES_INC