Windstream 2015 Annual Report Download - page 156

F-26
Factors that could affect our short and long-term credit ratings would include, but are not limited to, a material decline in our
operating results, increased debt levels relative to operating cash flows resulting from future acquisitions, increased capital
expenditure requirements, or changes to our dividend policy. If our credit ratings were to be downgraded, we might incur higher
interest costs on future borrowings, and our access to the public capital markets could be adversely affected.
Our exposure to interest risk is further discussed in the Market Risk section below. A downgrade in our current short or long-term
credit ratings would not accelerate scheduled principal payments of our existing long-term debt.
Off-Balance Sheet Arrangements
We do not use securitization of trade receivables, affiliation with special purpose entities, variable interest entities or synthetic
leases to finance our operations. Additionally, we have not entered into any arrangement requiring us to guarantee payment of
third party debt or to fund losses of an unconsolidated special purpose entity.
Contractual Obligations and Commitments
Set forth below is a summary of our material contractual obligations and commitments as of December 31, 2015:
Obligations by Period
(Millions)
Less than
1 Year
1 - 3
Years
3 - 5
Years
More than
5 years Total
Long-term debt, including current maturities (a) $ 5.9 $ 915.9 $ 1,560.5 $ 2,746.4 $ 5,228.7
Interest payments on long-term debt obligations (b) 353.0 634.1 529.2 411.8 1,928.1
Long-term lease obligations (c) 152.7 357.4 451.0 4,109.9 5,071.0
Interest payments on long-term lease obligations (c) 506.9 964.0 883.3 2,294.9 4,649.1
Capital leases (d) 48.2 13.6 1.1 1.2 64.1
Operating leases (e) 113.4 158.5 94.5 130.7 497.1
Purchase obligations (f) 739.8 635.5 7.2 0.4 1,382.9
Other long-term liabilities and commitments (g) (h)
(i) (j) 123.7 255.9 26.8 377.2 783.6
Total contractual obligations and commitments $ 2,043.6 $ 3,934.9 $ 3,553.6 $ 10,072.5 $ 19,604.6
(a) Excludes $4.6 million of unamortized premiums (net of discounts) and $62.8 million of unamortized debt issuance costs
included in long-term debt at December 31, 2015.
(b) Variable rates on the senior secured credit facility are calculated in relation to one-month London Interbank Offered Rate
(“LIBOR”) rate which was 0.35 percent at December 31, 2015.
(c) Represents undiscounted future minimum lease payments related to the master lease agreement with CS&L and the
leaseback of real estate contributed to the Windstream Pension Plan, which exclude the residual value of the obligations
at the end of the initial lease terms.
(d) Capital leases include non-cancellable leases, consisting principally of leases for facilities and equipment.
(e) Operating leases include non-cancellable operating leases, consisting principally of leases for network facilities, real
estate, office space and office equipment.
(f) Purchase obligations include open purchase orders not yet receipted and amounts payable under non-cancellable contracts.
The portion attributable to non-cancellable contracts primarily represents agreements for network capacity and software
licensing.
(g) Other long-term liabilities and commitments primarily consist of deferred tax liabilities, pension and other postretirement
benefit obligations, interest rate swaps, asset retirement obligations and long-term deferred revenue.
(h) Excludes $3.2 million of reserves for uncertain tax positions, including interest and penalties, that were included in other
liabilities at December 31, 2015 for which we are unable to make a reasonably reliable estimate as to when cash settlements
with taxing authorities will occur.