Earthlink 2015 Annual Report Download - page 51

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Table of Contents
Contractual Obligations and Commitments
The following table presents our contractual obligations and commercial commitments as of December 31, 2015 :
Payment Due by Period
Total
2016
2017-
2018
2019-
2020
After 5 Years
(in thousands)
Long-term debt (1)
$ 508,925
$ 5,000
$ 30,000
$ 473,925
$ —
Interest payments on long-term debt (2)
151,645
38,852
75,661
37,132
—
Purchase commitments (3)
156,188
63,873
65,499
20,461
6,355
Operating leases (4)
137,034
33,898
54,080
30,138
18,918
Capital leases (5)
19,268
3,278
6,574
6,424
2,992
Total (6)
$ 973,060
$ 144,901
$ 231,814
$ 568,080
$ 28,265
__________________________________________
(1) Long-term debt includes principal payments on outstanding debt obligations. Long-term debt excludes unamortized discounts and unamortized issuance
costs. As of December 31, 2015 , we had $508.9 million aggregate principal amount of debt outstanding, consisting of $173.9 million of 8.875% Senior
Notes due May 15, 2019, $300.0 million of 7.375% Senior Secured Notes due June 1, 2020 and $35.0 million outstanding under our revolving credit
facility.
(2) Interest payments on long-term debt includes interest due on outstanding debt through maturity and commitment fees and borrowing costs under our
senior secured revolving credit facility.
(3) Purchase commitments represent non-cancellable contractual obligations for services and equipment; minimum commitments under network access
agreements with several carriers; and certain commitments regarding employee agreements.
(4) These amounts represent base rent payments under non-cancellable operating leases for facilities and equipment that expire in various years through 2023,
as well as an allocation for operating expenses. Not included in these amounts is expected sublease income of $2.4 million , $2.3 million , $2.2 million
and $1.9 million during the years ended December 31, 2016, 2017, 2018 and 2019, respectively.
(5) Represents remaining payments under capital leases, including interest.
(6) The table does not include our reserve for uncertain tax positions, as the specific timing of any cash payments relating to this obligation cannot be
projected with reasonable certainty. Of our total $18.4 million total gross uncertain tax positions as of December 31, 2015, $1.6 million would impact the
effective tax rate once settled.
Debt Covenants
The credit agreement for our senior secured revolving credit facility requires us to maintain a consolidated net leverage ratio of not greater than 3.5 to 1.0 (with
restrictions on cash netting) and a consolidated interest coverage ratio of not less than 3.0 to 1.0 in order to borrow under the agreement. Additionally, the credit
agreement requires us to maintain a consolidated net leverage ratio of not greater than 3.25 to 1.0 in order to repurchase common stock and to make dividend
payments in excess of the $0.05 per share regular quarterly dividend. We were in compliance with all covenants as of December 31, 2015 . We expect to be in
compliance with the maintenance covenants in our credit agreement for the next 12 months.
Off-Balance Sheet Arrangements
As of December 31, 2015 , we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to
investors.
Share Repurchase Program
The Board of Directors has authorized a total of $750.0 million to repurchase our common stock under our share repurchase program. As of December 31, 2015 ,
we had utilized approximately $684.3 million pursuant to the authorizations and had $65.7 million available under the current authorization. We may repurchase
our common stock from time to time in compliance with the Securities and Exchange Commission’s regulations and other legal requirements, and subject to
market conditions and other factors. The share repurchase program does not require us to acquire any specific number of shares and may be terminated by the
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