Windstream 2014 Annual Report Download - page 136

F-20
wireless enterprise services provider. Cash flows from investing activities in 2013 was favorably impacted by $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.
Capital expenditures were $786.5 million, $841.0 million and $1,101.2 million for 2014, 2013 and 2012, respectively. Capital
expenditures decreased $54.5 million in 2014 primarily due to a decline in capital spending levels related to our fiber-to-the-tower
initiatives and broadband network expansion funded by stimulus grants in 2014 as compared to 2013. These declines reflect the
wind 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. Currently, we are executing on fiber-to-the-tower projects we have won. Network expansion funded by CAF
totaled $12.8 million in 2014. As previously discussed under “Regulatory Matters”, we committed to match on at least a dollar-
for-dollar basis the total amount of support we received from the CAF of $86.7 million for upgrades and new deployments of
broadband service. Capital expenditures related to CAF projects funded by us are included in recurring capital expenditures as
presented below. Comparatively, the decrease in capital expenditures in 2013 from 2012 also reflected a decline in capital
expenditures related to our fiber-to-the-tower initiatives and broadband network expansion funded by stimulus grants.
Capital expenditures by category for the years ended December 31 are as follows:
(Millions) 2014 2013 2012
Recurring capital expenditures $ 729.1 $ 622.3 $ 735.2
Fiber-to-the-tower and broadband stimulus projects 57.4 189.4 314.6
Integration capital expenditures — 29.3 51.4
Total capital expenditures $ 786.5 $ 841.0 $ 1,101.2
We expect that increases in wireless data usage and expansion of wireless 4G networks will continue through the end of 2015,
which will provide more opportunities for our wireless backhaul services. Some of our largest customers have delayed the build
out of certain fiber-to-the-tower contracts which we had planned to originally complete during 2014. We still expect to deploy
fiber to these towers in the future, and as a result, we expect total 2015 capital expenditures to range between $825.0 million and
$875.0 million.
Cash Flows – Financing Activities
Cash used in financing activities decreased by $177.0 million in 2014, as compared to 2013 and increased $124.7 million in 2013,
as compared to 2012.
Debt repayments during 2014 totaled approximately $1,395.4 million and consisted primarily of $1,280.0 million in repayments
of borrowings under the revolving line of credit agreement. Comparatively, during 2013, Windstream Corp. retired approximately
$5.2 billion of long-term debt consisting of all $500.0 million of the outstanding 2019 Notes using proceeds from the private
placement of the 2021 Notes, repurchased $650.0 million of PAETEC 2017 Notes and 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, repaid at maturity $800.0 million in aggregate principal amount of senior unsecured 8.125
percent notes, and repaid $592.5 million of borrowings that were outstanding under Tranche B3 of the senior secured credit facility.
Proceeds from new issuances of long term debt in 2014 were $1,315.0 million and consisted solely of new borrowings under the
revolving line of credit. During 2013, new issuances of long term debt totaled approximately $4.9 billion. Windstream Corp.
incurred new borrowings of $590.0 million under Tranche B5 of the senior secured credit facility, the proceeds of which along
with available cash on hand were used to repay the amount outstanding under Tranche B3; 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, Tranche B and B2 of the senior secured credit facility; completed the private placement of $700.0 million of the 2023
Notes, the proceeds of which were used to repay the PAETEC 2017 Notes; and completed the private placement of $500.0 million
of the 2021 Notes and received proceeds of $517.5 million, of which were used to repay the 2019 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.
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. 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
2014 were $602.2 million, which was an increase of $8.6 million, as compared to 2013, due to additional shares issued and the