Windstream 2013 Annual Report Download - page 156

F-20
Cash Flows – Investing Activities
Cash used in investing activities primarily includes investments in our network to upgrade and expand our service offerings, as
well as spending on strategic initiatives such as the acquisition of complementary businesses. Cash used in investing activities
decreased $394.1 million in 2013 as compared to 2012, primarily due to a reduction in capital expenditures, further discussed
below. Cash flows from investing activities in 2013 also reflected $22.3 million in additional grant funds received for
broadband stimulus projects, the receipt of $60.7 million in support from CAF, and proceeds from the disposition of the
software business of $30.0 million. Cash used in investing activities increased by $449.5 million in 2012 compared to 2011,
primarily driven by increased capital expenditures, as discussed below. Cash flows from investing activities in 2012 was
favorably impacted by approximately $57.0 million in proceeds received from the disposition of wireless assets and $41.7
million in additional grant funds received for broadband stimulus projects.
Capital expenditures were $841.0 million, $1,101.2 million and $702.0 million for 2013, 2012 and 2011, respectively. Capital
expenditures decreased $260.2 million in 2013 due to a decline in capital spending levels related to our fiber-to-the-tower
initiatives as compared to 2012. In addition, capital expenditures for broadband network expansion funded by stimulus grants
also declined $69.3 million in 2013 compared to 2012. These declines reflect the winding down of both our fiber-to-the-tower
and stimulus projects, as we have reached the vast majority of existing towers within our targeted area. In 2014, we will
continue executing on the fiber-to-the-tower projects we have won. Comparatively, the increase in capital expenditures in 2012
from 2011 was driven by success-based fiber-to-the-tower initiatives, our portion of broadband stimulus spend, expansion of
our data center presence, enhancements to our network, and the acquisition of PAETEC.
Capital expenditures by category for the years ended December 31 are as follows:
(Millions) 2013 2012 2011
Recurring capital expenditures $ 622.3 $ 735.2 $ 555.3
Fiber-to-the-tower and broadband stimulus projects 189.4 314.6 146.7
Integration capital expenditures 29.3 51.4 —
Total capital expenditures $ 841.0 $ 1,101.2 $ 702.0
We expect that increases in wireless data usage and expansion of wireless 4G networks will continue through the end of 2014,
which will provide more opportunities for our wireless backhaul services. Accordingly, we expect capital spending to remain
flat compared to 2013, and as such, capital expenditures are expected to range between $800.0 million and $850.0 million for
2014.
Cash Flows – Financing Activities
Cash used in financing activities increased by $124.7 million in 2013, as compared to 2012 and increased $379.0 million in
2012, as compared to 2011. These increases were due to additional repayments of long-term debt, partially offset by proceeds
received from the issuance of new debt obligations, further discussed below.
Debt repayments during 2013 totaled approximately $5.2 billion. On December 6, 2013, Windstream Corp. repaid $592.5
million of borrowings that were outstanding under Tranche B3 of the senior secured credit facility due on August 8, 2019. On
August 12, 2013, Windstream Corp. announced a tender offer to purchase for cash any and all of the $500.0 million aggregate
principal amount of 2019 Notes. As of September 9, 2013, approximately $431.2 million outstanding of the 2019 Notes had
been tendered. On September 25, 2013, the redemption of the remaining $68.8 million outstanding was settled in cash. On
August 1, 2013, Windstream Corp. repaid at maturity $800.0 million in aggregate principal amount of senior unsecured 8.125
percent notes utilizing available borrowings under its revolving credit agreements. On January 8, 2013, Windstream Corp.
announced a tender offer to purchase for cash any and all of the outstanding $650.0 million aggregate principal amount of
PAETEC 2017 Notes. As of February 6, 2013, approximately $588.5 million of the PAETEC 2017 Notes had been tendered.
On February 25, 2013, redemption of the remaining $61.5 million outstanding was settled. On January 23, 2013, Windstream
Corp. repaid $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 its senior secured credit facility due in December 2015, plus accrued interest. Reductions in long-term debt also included
$1,180.0 million of repayments related to Windstream Corp.'s revolving line of credit, as further discussed below.