Frontier Communications 2006 Annual Report Download - page 72

CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
otherwise retire a portion of our outstanding debt. We have agreed to file with the SEC a registration statement
for the purpose of exchanging these notes for registered notes.
In December 2006, we borrowed $150.0 million under a senior unsecured term loan agreement. The loan
matures in 2012 and bears interest based on an average prime rate or London Interbank Offered Rate or LIBOR
plus 1
3
⁄ 8 %, at our election. We intend to use the proceeds to repurchase a portion of our outstanding debt or to
partially finance the Commonwealth acquisition.
As of December 31, 2006, EPPICS representing a total principal amount of $193.9 million had been
converted into 15.6 million shares of our common stock, and a total of $7.4 million remains outstanding to third
parties. Our long term debt footnote indicates $17.9 million of EPPICS outstanding at December 31, 2006, of
which $10.5 million is debt of related parties for which the Company has an offsetting receivable.
We had a total outstanding principal amount of industrial development revenue bonds of $58,140,000 at
December 31, 2006 and 2005. The earliest maturity date for these bonds is in August 2015. Under the terms of
our agreements to sell our former gas and electric operations in Arizona, completed in 2003, we are obligated to
call for redemption, at their first available call dates, three Arizona industrial development revenue bond series
aggregating to approximately $33,440,000. These bonds’ first call dates are in 2007. We expect to retire all
called bonds with cash. In addition, holders of $11,150,000 principal amount of industrial development bonds
may tender such bonds to us at par and we have the simultaneous option to call such bonds at par on August 7,
2007. We expect to call the bonds and retire them with cash.
As of December 31, 2006 we had available lines of credit with financial institutions in the aggregate amount
of $249,600,000 with a maturity date of October 29, 2009. Outstanding standby letters of credit issued under the
facility were $0.4 million. Associated facility fees vary depending on our leverage ratio and were 0.375% as of
December 31, 2006. During the term of the credit facility we may borrow, repay and re-borrow funds. The credit
facility is available for general corporate purposes but may not be used to fund dividend payments.
For the year ended December 31, 2005, we retired an aggregate principal amount of $36.4 million of debt,
including $30.0 million of 5% Company Obligated Mandatorily Redeemable Convertible Preferred Securities
due 2036 (EPPICS) that were converted into our common stock. During the second quarter of 2005, we entered
into two debt-for-debt exchanges of our debt securities. As a result, $50.0 million of our 7.625% notes due 2008
were exchanged for approximately $52.2 million of our 9.00% notes due 2031. The 9.00% notes are callable on
the same general terms and conditions as the 7.625% notes exchanged. No cash was exchanged in these
transactions, however a non-cash pre-tax loss of approximately $3.2 million was recognized in accordance with
EITF No. 96-19, “Debtor’s Accounting for a Modification or Exchange of Debt Instruments,” which is included
in other income (loss), net.
For the year ended December 31, 2004, we retired an aggregate $1,350,397,000 of debt (including
$147,991,000 of EPPICS conversions), representing approximately 28% of total debt outstanding at
December 31, 2003. The retirements generated a pre-tax loss on the early extinguishment of debt at a premium of
approximately $66,480,000 recorded in other income (loss), net.
We are in compliance with all of our debt and credit facility covenants.
Our principal payments for the next five years are as follows:
($ in thousands)
Principal
Payments
2007 ........ 39,271
2008 ........ 497,688
2009 ........ 2,507
2010 ........ 5,886
2011 ........ 1,252,517
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