Frontier Communications 2013 Annual Report Download - page 37

Covenants
The terms and conditions contained in our indentures, the Credit Agreement, the Revolving Credit
Agreement and the Bridge Loan Agreement include the timely payment of principal and interest when due, the
maintenance of our corporate existence, keeping proper books and records in accordance with U.S. GAAP,
restrictions on the incurrence of liens on our assets, and restrictions on asset sales and transfers, mergers and
other changes in corporate control. We are not subject to restrictions on the payment of dividends either by
contract, rule or regulation, other than that imposed by the General Corporation Law of the State of Delaware.
However, we would be restricted under the Credit Agreement, the Revolving Credit Agreement and the Bridge
Loan Agreement from declaring dividends if an event of default occurred and was continuing at the time or
would result from the dividend declaration.
The Credit Agreement and the Revolving Credit Agreement each contain a maximum leverage ratio
covenant. Under those covenants, we are required to maintain a ratio of (i) total indebtedness minus cash and
cash equivalents (including restricted cash) in excess of $50.0 million to (ii) consolidated adjusted EBITDA (as
defined in the agreements) over the last four quarters not to exceed 4.50 to 1.
The Credit Agreement, the Revolving Credit Agreement, the Bridge Loan Agreement and certain
indentures for our senior unsecured debt obligations limit our ability to create liens or merge or consolidate
with other companies and our subsidiaries’ ability to borrow funds, subject to important exceptions and
qualifications.
As of December 31, 2013, we were in compliance with all of our debt and credit facility covenants.
Dividends
We currently intend to pay regular quarterly dividends. Our ability to fund a regular quarterly dividend
will be impacted by our ability to generate cash from operations. The declarations and payment of future
dividends is at the discretion of our Board of Directors, and will depend upon many factors, including our
financial condition, results of operations, growth prospects, funding requirements, applicable law, restrictions in
agreements governing our indebtedness and other factors our Board of Directors deem relevant.
Off-Balance Sheet Arrangements
We do not maintain any off-balance sheet arrangements, transactions, obligations or other relationships
with unconsolidated entities that would be expected to have a material current or future effect upon our
financial statements.
Future Contractual Obligations and Commitments
A summary of our future contractual obligations and commercial commitments as of December 31, 2013
is as follows:
($ in thousands) Total 2014
2015 and
2016
2017 and
2018 Thereafter
Payments due by period
Long-term debt obligations,
excluding interest ................... $ 8,129,546 $ 257,916 $ 605,306 $1,190,648 $6,075,676
Interest on long-term debt . . . .......... 6,246,760 630,393 1,215,783 1,108,706 3,291,878
Operating lease obligations . . .......... 145,328 61,880 19,256 15,101 49,091
Capital lease obligations............... 35,065 3,107 6,378 6,604 18,976
Financing lease obligations . . .......... 107,102 6,891 14,268 15,051 70,892
Purchase obligations .................. 70,642 28,653 30,490 5,499 6,000
“Take or pay” contract obligations ..... 286,300 145,500 140,800 — —
Liability for uncertain tax positions . . . . 9,329 2,840 3,886 2,603 —
Total ............................ $15,030,072 $1,137,180 $2,036,167 $2,344,212 $9,512,513
At December 31, 2013, we had outstanding performance letters of credit totaling $46.8 million.
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FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES