Windstream 2010 Annual Report Download - page 121

services. Additionally, Windstream will continue to focus on infrastructure upgrades, including placing fiber in the
network, to support our suite of business and consumer high-speed Internet services and expand our 6 Mb and 12 Mb
high-speed Internet footprint. The forecasted spending levels in 2011 are subject to revision depending on changes in
future capital requirements. The Company generated positive cash flows in 2010 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 2010, Windstream issued $400.0 million in aggregate principal amount of 8.125 percent senior unsecured notes
due September 1, 2018 at an issue price of 99.248 percent to yield 8.25 percent. Windstream also issued $500.0 million
in aggregate principal amount of 7.750 percent senior unsecured notes due October 15, 2020 at par to yield 7.75
percent. The Company borrowed $665.0 million under the revolving line of credit in its senior secured credit facility
and later repaid $515.0 million during 2010. Additional repayments of borrowings totaled $281.0 million, $628.9
million and $266.2 million in debt and related swap agreements assumed from NuVox, Iowa Telecom and Q-Comm,
respectively, in addition to regularly scheduled payments of $23.9 million. Dividends paid to shareholders totaled
$464.6 million in 2010, which was an increase of $27.2 million, due to additional shares issued and outstanding during
2010 from shares issued for the recent acquisitions.
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.
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.
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, 2010:
Obligations 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) $ 139.2 $ 1,444.3 $ 1,432.3 $ 4,347.0 $ 7,362.8
Interest payments on long-term debt obligations (b) 496.8 985.0 815.5 822.6 3,119.9
Operating leases (c) 76.9 100.6 47.0 28.8 253.3
Purchase obligations (d) 83.5 10.2 - - 93.7
Other long-term liabilities and commitments (e) (f) (g) (h) 126.5 48.4 52.2 2,147.3 2,374.4
Total contractual obligations and commitments $ 922.9 $ 2,588.5 $ 2,347.0 $ 7,345.7 $ 13,204.1
(a) Excludes $37.0 million of unamortized discounts (net of premiums) included in long-term debt at December 31,
2010.
(b) Variable rates on tranches A and B of the senior secured credit facility are calculated in relation to LIBOR, which
was 0.29 percent at December 31, 2010.
(c) Operating leases consist of non-cancelable operating leases, consisting principally of leases for network facilities,
real estate, office space and office equipment.
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