Windstream 2015 Annual Report Download - page 142

F-12
The loss on extinguishment of debt by debt instrument was as follows for the year ended December 31, 2013:
(Millions) (Millions)
2019 Notes $ (14.7)
Senior secured credit facility (2.5)
PAETEC 2017 Notes (11.3)
Loss on early extinguishment of debt $ (28.5)
During 2013, Windstream Services retired all $500.0 million of the outstanding 7.000 percent notes due March 15, 2019 (“2019
Notes”) using proceeds from the private placement of $500.0 million in aggregate principal amount of 7.750 percent percent senior
unsecured notes due October 1, 2021 (“2021 Notes”). During 2013, Windstream Services also retired all $650.0 million of the
outstanding 8.875 percent PAETEC Notes due June 30, 2017 (“PAETEC 2017 Notes”). The PAETEC 2017 Notes were repurchased
using proceeds from the issuance of $700.0 million of 6.375 percent notes due August 1, 2023 (“2023 Notes”). Windstream Services
also amended its senior secured credit facility including issuance of Tranche B4, the proceeds of which were used to repay Tranche
A2, Tranche B and Tranche B2 during the first quarter of 2013. The retirements and a portion of the credit facility amendment
were accounted for under the extinguishment method of accounting, and, as a result, Windstream Services recognized losses due
to the extinguishment of the aforementioned debt obligations.
Interest Expense
Set forth below is a summary of interest expense for the years ended December 31:
(Millions) 2015 2014 2013
Senior secured credit facility, Tranche A $ 5.4 $ 17.2 $ 19.4
Senior secured credit facility, Tranche B 37.7 71.2 78.4
Senior secured credit facility, revolving line of credit 21.1 22.2 14.6
Senior unsecured notes 355.4 384.4 418.1
Credit facility extension fees — — 6.2
Notes issued by subsidiaries 22.4 44.9 48.0
Interest expense - long-term lease obligations:
Telecommunications network assets 351.6 — —
Real estate contributed to pension plan 6.7 2.8 —
Impacts of interest rate swaps 20.5 29.0 48.0
Interest on capital leases and other 2.8 3.8 2.9
Less capitalized interest expense (10.4)(3.7)(7.9)
Total interest expense $ 813.2 $ 571.8 $ 627.7
Interest expense increased $241.4 million, or 42 percent in 2015, and decreased $55.9 million, or 9 percent in 2014. The increase
in 2015 was primarily due to the additional interest associated with the long-term lease obligation under the master lease with
CS&L. The increase was partially offset by the retirement of amounts outstanding under Tranches A3, A4 and B4 of Windstream
Services’ senior secured credit facility through the completion of the debt-for-debt exchange and pay-off of the remaining balance
of Tranche B4 and, to a lesser extent, the redemption of the 2018 Notes and PAETEC 2018 notes completed on May 27, 2015.
The decrease in 2014 was primarily due to the payoffs of $800.0 million of 8.125 percent notes due August 1, 2013 and $500.0
million of 7.000 percent notes due March 15, 2019 which were both completed in the third quarter of 2013, the payoff of the
PAETEC 2017 Notes completed in January 2013, and the absence of credit facility extension fees related to refinancing activities
completed in the first quarter of 2013. These decreases were partially offset by additional borrowings under the revolving line of
credit and Tranche B5 of the senior credit facility.