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Table of Contents
In connection with the One Communications acquisition in April 2011, we repaid $266.5 million of One Communications debt. In
November 2011, we redeemed and repaid our outstanding $255.8 million principal amount of Convertible Notes. In addition, under the indenture
for the ITC^DeltaCom Notes, following the consummation of the acquisition of ITC^DeltaCom, ITC^DeltaCom was required to offer to
repurchase any or all of the ITC^DeltaCom Notes at 101% of their principal amount. The tender window was open from December 20, 2010
through January 18, 2011. As a result, approximately $0.2 million outstanding principal amount of the ITC^DeltaCom Notes was repurchased in
January 2011. Also during the year ended December 31, 2011, we repaid $3.0 million of debt assumed in the STS Telecom acquisition.
Future Uses of Cash and Funding Sources
Future Uses of cash
Our primary future cash requirements relate to outstanding indebtedness, capital expenditures, investments in our business services
segment, acquisition-
related costs and dividends. In addition, we may use cash in the future to make strategic acquisitions or repurchase common
stock or debt.
Debt and interest.
We expect to use cash to service our outstanding indebtedness. In connection with our acquisition of ITC^DeltaCom,
we assumed ITC^DeltaCom's outstanding $324.8 million aggregate principal amount of 10.5% senior secured notes due on April 1, 2016. We
also issued $300.0 million aggregate principal amount of Senior Notes in May 2011 and entered into a $150.0 million revolving credit facility.
As a result, we expect to use cash for incremental interest payments. We also may use cash to redeem the ITC^DeltaCom Notes in accordance
with the terms of the related indenture or to purchase them in the open market.
Capital expenditures.
We expect to incur capital expenditures of approximately $115.0 million to $135.0 million during the year ending
December 31, 2012. We believe that to remain competitive with much larger communications companies, we will require significant additional
capital expenditures to enhance and operate our fiber network. We may also make capital expenditures to upgrade acquired network or other
assets. We plan on making capital expenditures relating to acquiring new customers, to further enhance our customers' experience and growth
opportunities and to maintain and upgrade our network and technology infrastructure. The actual amount of capital expenditures may fluctuate
due to a number of factors which are difficult to predict and could change significantly over time. Additionally, technological advances may
require us to make capital expenditures to develop or acquire new equipment or technology in order to replace aging or obsolete equipment.
Investments in business services segment.
One of our key strategies is to grow our business services revenue. In addition to leveraging
our fiber network and nationwide IP reach to provide a broad range of communications services, we are deploying a wide array of cloud,
managed security and IT support services. We expect to invest cash in sales and marketing efforts for our business services. We also expect to
invest cash to build out data center space across our nationwide footprint to support our cloud, managed security and IT support services.
Acquisition-related costs. We expect to continue to use cash for one-
time costs related to our acquisitions, including severance and
retention costs and integration-
related costs. There are a number of systems that continue to be integrated, including management information,
sales, billing and human resources. We expect to incur expenses in connection with integrating the businesses, policies, procedures, operations,
technologies and financial and other operating support systems of our acquisitions to common platforms.
Dividends.
During the years ended December 31, 2009, 2010 and 2011, cash dividends declared were $0.28, $0.62 and $0.20 per
common share, respectively. We currently intend to continue to pay regular quarterly dividends on our common stock. However, any decision to
declare future dividends will be made
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