Frontier Communications 2014 Annual Report Download - page 47

Dividends
We currently intend to continue to pay regular quarterly dividends. Our ability to fund a regular
quarterly dividend will be impacted by our ability to generate cash from operations. On December 11,
2014, our Board of Directors approved a 5% increase over the 2014 dividend rate in the planned
quarterly cash dividend rate, commencing with the dividend for the first quarter of 2015. On an annual
basis, this plan would increase the dividend from $0.40 to $0.42 per share. The declarations and
payment of future dividends is at the discretion of our Board of Directors, and will depend upon many
factors, including our financial condition, results of operations, growth prospects, funding requirements,
applicable law, restrictions in agreements governing our indebtedness and other factors our Board of
Directors deem relevant.
Off-Balance Sheet Arrangements
We do not maintain any off-balance sheet arrangements, transactions, obligations or other
relationships with unconsolidated entities that would be expected to have a material current or future
effect upon our financial statements.
Future Contractual Obligations and Commitments
A summary of our future contractual obligations and commercial commitments as of December 31,
2014 is as follows:
($ in thousands) Total 2015 2016 2017 2018 2019 Thereafter
Payments due by period
Long-term debt obligations,
excluding interest. ................ $ 9,780,736 $ 297,622 $ 383,248 $ 645,156 $ 619,035 $ 644,565 $ 7,191,110
Interest on long-term debt .......... 6,525,133 718,108 720,305 683,732 657,903 593,191 3,151,894
Operating lease obligations ......... 132,080 59,833 11,716 5,951 3,725 4,803 46,052
Capital lease obligations ............ 33,581 3,245 3,300 3,357 3,415 3,474 16,790
Financing lease obligations ......... 100,211 7,043 7,225 7,418 7,632 7,838 63,055
Purchase obligations ............... 62,348 28,401 17,011 16,906 30 — —
“Take or pay” contract obligations . . . 140,800 140,800 — — — — —
Liability for uncertain tax positions. . . 19,662 2,521 504 6,680 9,957 — —
Total .......................... $16,794,551 $1,257,573 $1,143,309 $1,369,200 $1,301,697 $1,253,871 $10,468,901
At December 31, 2014, we had outstanding performance letters of credit totaling $47 million.
In our normal course of business we have obligations under certain non-cancelable arrangements
for services. During 2012, we entered into a “take or pay” arrangement for the purchase of future long
distance and carrier services. Our remaining commitment under the arrangement is $141 million for the
year ending December 31, 2015. As of December 31, 2014, we expect to utilize the services included
within the arrangement and no liability for the “take or pay” provision has been recorded.
As of December 31, 2014, all capital investment commitment requirements of the three state
regulatory commissions in connection with the 2010 Acquisition had been satisfied. All funds had been
released from escrow accounts and the Company had no restricted cash related to escrow accounts.
The FCC and certain state regulatory commissions, in connection with granting their approvals the
2010 Acquisition, specified certain capital expenditure and operating requirements for the territories
acquired in the 2010 Acquisition for specified periods of time post-closing. These requirements focus
primarily on certain capital investment commitments to expand broadband availability to at least 85% of
the households throughout the territories acquired in the 2010 Acquisition with minimum download
speeds of 3 Mbps by the end of 2013. We are required to provide download speeds of 4 Mbps to at
least 75%, 80% and 85% of the households throughout the territories acquired in the 2010 Acquisition
by the end of 2013, 2014 and 2015, respectively. As of December 31, 2012, we met our FCC
requirement to provide 4 Mbps coverage to 75% and 80% of the households in the territories acquired
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FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES