Windstream 2014 Annual Report Download - page 173

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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F-57
4. Long-term Debt and Lease Obligations, Continued:
During 2012, Windstream Corp. retired all $300.0 million of the outstanding 9.500 percent notes due July 15, 2015 (“PAETEC
2015 Notes”). The PAETEC 2015 Notes were purchased using borrowings under Windstream Corp.’s revolving line of credit.
The retirement was accounted for under the extinguishment method, and as a result Windstream Corp. recognized a gain on
extinguishment of debt of $1.9 million during the twelve months ended December 31, 2012.
The (loss) gain on extinguishment of debt was as follows for the years ended December 31:
(Millions) 2013 2012
2019 Notes:
Premium on early redemption $(13.6)$ —
Third-party fees for early redemption (0.5)—
Unamortized debt issuance costs on original issuance (0.6)—
Loss on early extinguishment for 2019 Notes (14.7)—
Senior secured credit facility:
Unamortized debt issuance costs on original issuance (2.5)—
Loss on early extinguishment for senior secured credit
facility (2.5)—
PAETEC 2017 Notes:
Premium on early redemption (51.5)—
Third-party fees for early redemption (1.0)—
Unamortized premium on original issuance 41.2 —
Loss on early extinguishment for PAETEC 2017 Notes (11.3)—
PAETEC 2015 Notes:
Premium on early redemption —(14.3)
Unamortized premium on original issuance —16.2
Gain on early extinguishment for PAETEC 2015 Notes —1.9
Total (loss) gain on early extinguishment of debt $(28.5)$ 1.9
Capital Lease Obligations
We lease facilities and equipment for use in our operations. These facilities and equipment are included in outside communications
plant in property, plant and equipment in the accompanying consolidated balance sheets. Lease agreements that include a bargain
purchase option, transfer of ownership, contractual lease term equal to or greater than 75 percent of the remaining estimated
economic life of the leased facilities or equipment or minimum lease payments equal to or greater than 90 percent of the fair value
of the leased facilities or equipment are accounted for as capital leases in accordance with authoritative guidance for capital leases.
These capital lease obligations are included in the accompanying consolidated balance sheets within other current liabilities and
other liabilities. During 2014 and 2013, we acquired equipment under capital leases of $0.5 million and $72.4 million, respectively.
Future minimum lease payments under capital lease obligations were as follows for the years ended December 31:
Year (Millions)
2015 $ 29.4
2016 21.8
2017 2.7
2018 0.5
2019 0.5
Thereafter 1.9
Total future payments 56.8
Less: Amounts representing interest 3.9
Present value of minimum lease payments $ 52.9