Frontier Communications 2004 Annual Report Download - page 21

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CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
19
As the result of our call of all of our 8.50% Notes due 2006 in November 2004, we terminated five interest rate swaps used to
hedge our interest rate exposure on that issue, each swap having a notional amount of $50.0 million. Proceeds from the swap
terminations of approximately $3.0 million and U.S. Treasury rate lock agreements of approximately $1.0 million were used
to offset the call premium associated with the notes retired.
Sale of Non-Strategic Investments
On August 13, 2004, we sold our entire 1,333,500 shares of D & E Communications, Inc. (D & E) for approximately $13.3
million in cash.
On September 3, 2004, we sold our entire holdings of 2,605,908 common share equivalents in Hungarian Telephone and Cable
Corp. (HTCC) for approximately $13.2 million in cash.
During the third quarter of 2004, we sold our corporate aircraft for approximately $15.3 million in cash.
Off-Balance Sheet Arrangements
We do not maintain any off-balance sheet arrangements, transactions, obligations or other relationship with unconsolidated
entities that would be expected to have a material current or future effect upon our financial statements.
Future Commitments
A summary of our future contractual obligations and commercial commitments as of December 31, 2004 is as follows:
Payment due by period
Contractual Obligations: Less than More than
($ in thousands) Total 1 year 1-3 years 3-5 years 5 years
Long-term debt obligations,
excluding interest (see Note 11)
(1)
$ 4,219,054 $ 6,302 $ 265,464 $ 751,938 $ 3,195,350
Capital lease
obligations (see Note 26) 4,421 81 204 271 3,865
Operating lease
obligations (see Note 26) 104,992 21,198 26,765 21,535 35,494
Purchase obligations (see Note 26) 70,880 35,831 33,159 900 990
Other long-term liabilities (2) 63,765 - - - 63,765
Total $ 4,463,112 $ 63,412 $ 325,592 $ 774,644 $ 3,299,464
(1) Includes interest rate swaps ($4.5 million).
(2) Consists of our Equity Providing Preferred Income Convertible Securities (EPPICS) reflected on our balance sheet.
At December 31, 2004, we have outstanding performance letters of credit totaling $22.4 million.
Management Succession and Strategic Alternatives Expenses
On July 11, 2004, our Board of Directors announced that it completed its review of the Company’s financial and strategic
alternatives. In 2004, we expensed approximately $90.6 million of costs related to management succession and our
exploration of financial and strategic alternatives. Included are $36.6 million of non-cash expenses for the acceleration of
stock benefits, cash expenses of $19.2 million for advisory fees, $19.3 million for severance and retention arrangements and
$15.5 million primarily for tax reimbursements.
EPPICS
In 1996, our consolidated wholly-owned subsidiary, Citizens Utilities Trust (the Trust), issued, in an underwritten public
offering, 4,025,000 shares of 5% Company Obligated Mandatorily Redeemable Convertible Preferred Securities due 2036