Windstream 2011 Annual Report Download - page 127

F-19
Cash Flows – Financing Activities
Cash used in financing activities decreased by $265.7 million for the twelve months ended December 31, 2011, as compared to
the same period in 2010. This decrease was due to debt proceeds, partially offset by repayments of debt, discussed below.
During 2011, we issued $1,750.0 million in additional notes and extended the maximum line of credit under our revolving
credit agreement from $750.0 million to $1,250.0 million. The proceeds from the additional notes, along with borrowings from
the revolving line of credit, were used to retire $2,146.0 million in outstanding indebtedness during the year ended December
31, 2011. This included $1,746.0 million of our 2016 Notes and all $400.0 million of our Valor Notes. These transactions
allowed us to extend our existing debt maturities and lower our future interest costs. We borrowed $3,170.0 million under the
revolving line of credit in our senior secured credit facility and later repaid $2,400.0 million during 2011.
Our board of directors maintains a current dividend practice for the payment of quarterly cash dividends at a rate of $0.25 per
share of our common stock. This practice can be changed at any time at the discretion of the board of directors, and is subject to
our restricted payment capacity under our debt covenants as further discussed below. Dividends paid to shareholders were
$1.00 per share during 2011, totaling $509.6 million,which was an increase of $45.0 million due to additional shares issued and
outstanding during 2011 from shares issued for the recent acquisitions. We also paid $146.5 million to shareholders in January
2012 pursuant to a $0.25 quarterly dividend declared during the fourth quarter of 2011.
Cash used in financing activities increased by $795.9 million for the twelve months ended December 31, 2010, as compared to
the same period in 2009. This decrease was primarily due to the repayment of approximately $281.0 million and $628.9 million
in debt and related swap agreements assumed from NuVox and Iowa Telecom, respectively, in 2010.
During 2010, we issued $900.0 million in additional notes. Proceeds from these issuances were used to repay $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. Additionally, we made regularly scheduled payments of $23.9 million, borrowed $665.0 million under the
revolving line of credit in our senior secured credit facility and later repaid $515.0 million of those revolver borrowings during
2010. Dividends paid to shareholders totaled $464.6 million in 2010, which was an increase of $27.2 million, due to additional
shares issued for the recent acquisitions.
During 2009, we issued $1,100.0 million in additional notes. Net proceeds from this offering totaled $1,083.6 million.
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 in 2009 due to fewer shares
issued and outstanding as a result of the stock repurchase program. As previously discussed, in 2009 we repurchased 13.0
million shares of our common stock at a cost of $121.3 million.
Pension Contributions
During 2011, we contributed 10.8 million shares of our common stock to our qualified pension plan to meet our remaining
2011 and expected 2012 obligation, which allowed us to preserve cash and manage overall net debt leverage. At the time of the
contribution, these shares had an appraised value, as determined by an unaffiliated third party valuation firm, of approximately
$135.8 million.
Debt Capacity
As of December 31, 2011, we had $9,002.0 million in long-term debt outstanding, including current maturities and excluding
the premium and capital lease obligations (see Note 5).
During 2011, we issued $1,750.0 million in additional notes. Additionally, on March 18, 2011, we extended the maximum line
of credit under our revolving credit agreement from $750.0 million to $1,250.0 million. We had approximately $319.1 million
of availability under our senior secured revolving credit facility and can request up to an additional $850.0 million of
commitments, loans or other extensions of credit under the optional incremental facility of our credit agreement.
Effective April 27, 2011, all $1,250.0 available under the revolving line of credit will expire December 17, 2015.
The proceeds from the additional notes, along with borrowings from the revolving line of credit, were used to retire $2,146.0
million in outstanding indebtedness during the year ended December 31, 2011. This included $1,746.0 million of our 2016
Notes and all $400.0 million of our Valor Notes. These transactions allowed us to extend our existing debt maturities and lower
our future interest costs. The debt outstanding as of December 31, 2011 is principally comprised of $3,182.0 million secured
primarily under our senior secured credit facility and $5,871.2 million in unsecured senior notes.
As of December 31, 2011, we had approximately $978.6 million of restricted payment capacity as governed by our credit
facility, which limits the amount of dividends we may distribute. We build additional capacity through cash generated from