Windstream 2013 Annual Report Download - page 157

F-21
Proceeds from new issuances of long term debt totaled approximately $4.9 billion. On December 6, 2013, Windstream Corp.
incurred new borrowings of $590.0 million under Tranche B5 of the senior secured credit facility due on August 8, 2019, the
proceeds of which along with available cash on hand were used to repay the amount outstanding under Tranche B3. On
August 26, 2013, Windstream Corp. completed the private placement of $500.0 million of the 2021 Notes and received
proceeds of $517.5 million, the proceeds of which were used to repay the 2019 Notes. On January 23, 2013, Windstream Corp.
incurred new borrowings of $1,345.0 million under Tranche B4 of its senior secured credit facility due January 23, 2020, the
proceeds of which were used to repay the Tranche A2 and Tranche B and B2 of the senior secured credit facility. Also on
January 23, 2013, Windstream Corp. completed the private placement of $700.0 million of the 2023 Notes, the proceeds of
which were used to repay the PAETEC 2017 Notes. During 2013, Windstream Corp. borrowed $1,770.0 million under the
revolving line of credit in its senior secured credit facility and later repaid $1,180.0 million of these borrowings. Debt issuance
costs associated with the new borrowings in 2013 of $30.0 million were recorded in other assets on the balance sheet and will
be amortized into interest expense over the life of the borrowings.
Debt repayments during 2012 totaled approximately $2.1 billion. Windstream Corp. retired $300.0 million of indebtedness
related to the PAETEC 2015 Notes and amended and restated $150.4 million of borrowings outstanding under Tranche A2 of
its senior secured credit facility to Tranche A3. Reductions in long-term debt in 2012 also included $1,650.0 million of
repayments related to Windstream Corp.'s revolving line of credit, as further discussed below.
Proceeds from the issuance of long-term debt totaled approximately $1.9 billion in 2012. Windstream Corp. borrowed $730.0
million under the revolving line of credit in the senior secured credit facility and later repaid $1,650.0 million of these
borrowings. During 2012, Windstream Corp. also incurred new borrowings of $280.0 million of Tranche A3 due December 30,
2016, $300.0 million of Tranche A4 due August 8, 2017, and $600.0 million of Tranche B3 due August 8, 2019, under its senior
secured credit facility.
Our board of directors maintains a dividend practice for the payment of quarterly cash dividends at a rate of $0.25 per share of
our common stock, or $1.00 per common share on an annual basis. This practice can be changed at any time at the discretion of
the board of directors, and is subject to the restricted payment capacity under Windstream Corp.'s debt covenants as further
discussed below. Dividends paid to shareholders during 2013 totaled $593.6 million, which was an increase of $5.6 million, as
compared to 2012, due to additional shares issued and the vesting of restricted stock units.
Pension Contribution
On September 13, 2013, we contributed 3.3 million shares of our common stock to fund our remaining 2013 funding obligation
and a portion of our expected 2014 funding obligation. At the time of the contribution, the common shares had an appraised
value of approximately $27.8 million, as determined by a third party valuation firm. Employer contributions for pension
benefits in 2013 also included $0.7 million necessary to fund the expected benefit payments related to the unfunded
supplemental executive retirement pension plans. We did not make a pension contribution during 2012.
The 2014 expected employer contribution for pension benefits consists of $0.8 million necessary to fund the expected benefit
payments related to the unfunded supplemental executive retirement pension plans and approximately $83.0 million in
contributions to the pension plan to meet our remaining 2014 funding obligations and to avoid certain benefit restrictions. The
amount and timing of future contributions to the qualified pension plan are dependent upon a myriad of factors including future
investment performance, changes in future discount rates and changes in the demographics of the population participating in
the plan.
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. The pension trust subsequently sold all 10.8 million shares for approximately $133.5 million.
Debt and Dividend Capacity
Windstream Holdings has no direct debt obligations. All of our debt, including the facilities described below, has been incurred
by our subsidiaries (primarily Windstream Corp.). Windstream Holdings is neither a guarantor of nor subject to the restrictive
covenants imposed by such debt.