Windstream 2013 Annual Report Download - page 139

F-3
Key strategic initiatives completed during 2013 included:
• opened three new data centers in Chicago, Illinois; Nashville, Tennessee; and Raleigh-Durham, North Carolina;
demonstrating our commitment to meet the growing business demand for cloud-based and dedicated managed
services;
• made significant success-based capital investments in our fiber network, designed to accommodate network capacity
requirements for wireless carriers as a result of growing wireless data usage;
• improved our debt maturity profile through the following refinancing activities completed in January and August
2013:
• amended Windstream Corp.'s existing senior secured credit facility effective January 23, 2013, to, among other
things, provide for the incurrence of $1,345.0 million of additional term loans, due January 23, 2020, allowing
repayment of $19.5 million of Tranche A2 and $280.9 million of Tranche B due in July 2013 and $1,042.9 million
of Tranche B2 of the senior secured credit facility due in December 2015, plus accrued interest.
• issued $700.0 million in aggregate principal amount of Windstream Corp. 6.375 percent senior unsecured notes,
due August 1, 2023 ("2023 Notes"), at an issue price at par to yield 6.375 percent, which were used to pay the
consideration for the tender offer and consent solicitation to purchase for cash any and all of the outstanding 8.875
percent notes due June 30, 2017 ("PAETEC 2017 Notes"), together with related fees and expenses, the effects of
which also reduced the amount of interest expected to be paid on a go forward basis; and
• completed a private placement on August 26, 2013 of $500.0 million in aggregate principal amount of
Windstream Corp. 7.750 percent senior unsecured notes due October 1, 2021, at an issue price of 103.500 percent
to yield 7.171 percent (the "2021 Notes") which were used to pay the consideration for the tender offer and
consent solicitation to purchase for cash any and all of the outstanding 7.000 percent notes due March 15, 2019
("2019 Notes"), together with related fees and expenses.
Each of these initiatives reflected our continued focus on strategic revenue growth and effective cost management. We are also
proud of the fact that we were named for the first time to the 2013 FORTUNE 500 list of largest U.S. companies as ranked by
revenue, placing No. 414.
BUSINESS TRENDS
The following discussion highlights key trends affecting our business.
Business communications services: Demand for advanced communications services is expected to drive growth in revenues
from business customers. To meet this demand, we continue to expand our capabilities in integrated voice and data services,
which deliver voice and broadband services over a single Internet connection. We also offer multi-site networking services
which provide a fast and private connection between business locations as well as a variety of other data services. We view this
as a strategic growth area, but we are subject to competition from other carriers and cable television companies, which could
suppress growth. We combat competition by offering personalized service to our business customers through advanced
customized solutions, an integrated sales approach, and dedicated representatives. See "Competition" in Item 1 of Part I of this
Annual Report for more details.
Data center services: Many businesses are moving towards cloud computing and managed services as an alternative to a
traditional information technology ("IT") infrastructure. Our data centers are capable of delivering those services, and we are
actively investing in data center expansion in order to meet the growing demand for these types of services. In addition to cloud
computing and managed services, our data centers offer colocation services, in which we provide a safe, secure environment
for storage of servers and networking equipment.
Wireless backhaul: As wireless data usage grows, wireless carriers need additional bandwidth on the wireline network to
accommodate the additional wireless traffic. We have made significant success-based capital investments to provide backhaul
services to wireless carriers. These investments include building out fiber to new wireless towers and replacing copper facilities
with fiber facilities to wireless towers we already serve. We spent approximately $156.4 million in fiber-to-the-tower
investments during 2013. We will continue to make success-based capital investments to offer additional wireless backhaul
services to wireless carriers; however, we expect these investments to decrease substantially during 2014 as we will have
reached the vast majority of existing towers within our targeted area.