Windstream 2009 Annual Report Download - page 137

Company’s telecommunications network. Windstream will continue to focus capital expenditures on the expansion of
its next generation network services, including Ethernet internet access, Virtual LAN services (“VLS”) and Virtual
Private Network (“VPN”) services. Additionally, Windstream will continue to focus on infrastructure upgrades,
including placing fiber in the network, to support our suite of enterprise and residential high-speed Internet services
and expand our 6 Mb and 12 Mb high-speed Internet footprint. The forecasted spending levels in 2010 are subject to
revision depending on changes in future capital requirements. The Company generated positive cash flows in 2009
sufficient to fund its day-to-day operations and to fund its capital requirements. As mentioned previously, we expect
that cash on hand, along with cash generated from operations over the next year, will be adequate to finance our
ongoing operating requirements and capital expenditures.
Cash Flows – Financing Activities
During 2009, Windstream issued $1,100.0 million in aggregate principle amount of 7.875 percent senior unsecured
notes. Net proceeds from this offering totaled $1,083.6 million with a yield of 8.129 percent. Repayments of
borrowings totaled $356.6 million and included the repayment of $182.4 million in debt assumed from D&E.
Dividends paid to shareholders totaled $437.4 million in 2009, which declined by $7.8 million and $31.6 million in
2009 and 2008, respectively, due to fewer shares issued and outstanding during 2009 and 2008, respectively, as a result
of the stock repurchase program and the split off of the directory publishing business. As previously discussed, in 2009
and 2008 the Company repurchased 13.0 million and 16.0 million shares, respectively, of its common stock at a cost of
$121.3 million and $200.3 million, respectively. The Company also repurchased approximately 3.0 million shares of its
common stock during 2007 using $40.0 million in proceeds from a special cash dividend received pursuant to the sale
of its publishing business.
Repayments of borrowings were $354.3 million during 2008. Gross debt issued, net of issuance costs, during the
twelve months ended December 31, 2008 totaled $380.0 million. In 2008, the Company borrowed $380.0 million from
its $500.0 million revolving credit agreement. Gross payments on the revolving credit agreements totaled $330.0
million during 2008, resulting in a $50.0 million net increase in amounts due under the revolving credit agreement.
Other retirements of long-term debt in 2008 reflected the required scheduled principal payments under the Company’s
existing long-term debt obligations.
Proceeds received from borrowings in 2007, net of issuance costs, totaled $848.9 million, while repayments of
borrowings were $811.0 million. During 2007, the Company issued $500.0 million in senior unsecured notes due 2019.
These proceeds were used to retire $500.0 million in principal borrowings under Tranche B of the senior secured credit
facility, which was refinanced through this transaction to lower the interest rate on the remainder of Tranche B and
modify the pre-payment provisions. The remaining borrowings totaling $350.0 million in 2007 were from the
Company’s revolving line of credit, which was used in part to fund the acquisition of CTC. The remaining repayments
during 2007 included the payoff of $37.5 million of debt obligations assumed from CTC, payments to reduce amounts
outstanding under the revolving line of credit of $250.0 million and scheduled principal payments on the Company’s
outstanding borrowings. As a result, net amounts due under the revolving credit agreement increased $100.0 million
during 2007.
Off-Balance Sheet Arrangements
We do not use securitization of trade receivables, affiliation with special purpose entities, variable interest entities or
synthetic leases to finance our operations. Additionally, we have not entered into any arrangement requiring us to
guarantee payment of third party debt or to fund losses of an unconsolidated special purpose entity.
Contractual Obligations and Commitments
Set forth below is a summary of our material contractual obligations and commitments as of December 31, 2009:
Payments due by Period
(Millions)
Less than
1 Year
1-3
Years
3-5
Years
More than
5 years Total
Long-term debt, including current maturities (a) $ 23.8 $ 189.8 $ 1,253.4 $ 4,867.4 $ 6,334.4
Interest payments on long-term debt obligations (b) 427.6 838.5 755.9 861.6 2,883.6
Operating leases 31.2 33.4 5.5 1.4 71.5
Purchase obligations (c) 63.6 46.9 - - 110.5
Other long-term liabilities and
commitments (d) (e) (f) 86.9 97.7 80.5 1,690.4 1,955.5
Total contractual obligations and commitments $ 633.1 $ 1,206.3 $ 2,095.3 $ 7,420.8 $ 11,355.5
(a) Excludes $39.2 million of unamortized discounts (net of premiums) included in long-term debt at December 31,
2009.
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