Frontier Communications 2008 Annual Report Download - page 60

FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2008, 2007 and 2006
($ in thousands) 2008 2007 2006
Cash flows provided by (used in) operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 182,660 $ 214,654 $ 344,555
Deduct: Gain on sale of discontinued operations, net of tax. . . . . . . . . . . . . . . . . . . . . — — (71,635)
Income from discontinued operations, net of tax. . . . . . . . . . . . . . . . . . . . . . . — — (18,912)
Adjustments to reconcile income to net cash provided by operating activities:
Depreciation and amortization expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 561,801 545,856 476,487
Stock based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,788 9,022 10,340
Loss on debt exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 2,433
Loss on extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,290 20,186 —
Investment gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (61,428)
Other non-cash adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,044) (7,598) 5,191
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,967 81,011 132,031
Legal settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (7,905) —
Change in accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,746 (4,714) 15,333
Change in accounts payable and other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (52,047) (36,257) (3,064)
Change in other current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,895) 7,428 (2,148)
Net cash provided by continuing operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 739,266 821,683 829,183
Cash flows provided from (used by) investing activities:
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (288,264) (315,793) (268,806)
Cash paid for acquisitions (net of cash acquired) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (725,548) —
Proceeds from sale of discontinued operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 255,305
Other assets (purchased) distributions received, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,489 6,629 67,050
Net cash (used by) provided from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (282,775) (1,034,712) 53,549
Cash flows provided from (used by) financing activities:
Long-term debt borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,000 950,000 550,000
Debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (857) (12,196) (6,948)
Long-term debt payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (142,480) (946,070) (227,693)
Premium paid to retire debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,290) (20,186) —
Settlement of interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,521 — —
Issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,398 13,808 27,200
Common stock repurchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (200,000) (250,000) (135,239)
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (318,437) (336,025) (323,671)
Repayment of customer advances for construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,185) (942) (264)
Net cash used by financing activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (519,330) (601,611) (116,615)
Cash flows of discontinued operations:
Operating cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 17,833
Investing cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (6,593)
Financing cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —
Net cash provided by discontinued operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 11,240
(Decrease) increase in cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (62,839) (814,640) 777,357
Cash and cash equivalents at January 1, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226,466 1,041,106 263,749
Cash and cash equivalents at December 31, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 163,627 $ 226,466 $1,041,106
Cash paid during the period for:
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 365,858 $ 364,381 $ 332,204
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 78,878 $ 54,407 $ 5,365
Non-cash investing and financing activities:
Change in fair value of interest rate swaps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,909 $ 18,198 $ (1,562)
Conversion of EPPICS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 590 $ 3,339 $ 15,925
Conversion of Commonwealth notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,666 $ 36,731 $ —
Debt-for-debt exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 2,433
Shares issued for Commonwealth acquisition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 39 $ 247,435 $ —
Acquired debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 244,570 $ —
Other acquired liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 112,194 $ —
The accompanying Notes are an integral part of these Consolidated Financial Statements.
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