Earthlink 2013 Annual Report Download - page 54

Table of Contents
The decrease in net cash used in investing activities during the year ended December 31, 2013 compared to the prior year period was
primarily due to a $64.1 million change in net cash from purchases and sales of marketable securities. During the year ended December 31,
2012, we used $17.2 million of cash for purchases of marketable securities, net of sales and maturities. During the year ended December 31,
2013, we generated $46.9 million of cash from sales and maturities of marketable securities, net of purchases. Also contributing was a $3.7
million decrease in capital expenditures. Partially offsetting these decreases was $16.8 million of cash used for our acquisition of CenterBeam in
July 2013.
Financing activities
The decrease in net cash used in financing activities during the year ended December 31, 2012
compared to the prior year was primarily
due to a $215.0 million net change in cash flows from debt activities, a $21.6 million decrease in repurchases of common stock and a $1.8
million decrease in dividend payments. During the year ended December 31, 2011, we used $250.3 million for repayment of debt and capital
lease obligations and during the year ended December 31, 2012, we used $35.3 million for repayment of debt and capital lease obligations.
During the year ended December 31, 2011, we repurchased 6.3 million shares of our common stock for $47.0 million and during the year ended
December 31, 2012, we repurchased 3.7 million shares of our common stock for $25.4 million. Dividend payments were $22.9 million and $21.1
million during the years ended December 31, 2011 and 2012, respectively, reflecting quarterly dividends of $0.05 per share.
The decrease in net cash used in financing activities during the year ended December 31, 2013 compared to the prior year was primarily
due to a $19.3 million decrease in repurchases of common stock, a $9.4 million decrease in net cash used for debt and capital lease transactions
and a $0.3 million decrease in dividends paid. During the year ended December 31, 2012, we repurchased 3.7 million shares of our common
stock for $25.4 million compared to 1.1 million shares of our common stock for $6.1 million during the year ended December 31, 2013. During
the year ended December 31, 2012, we used $35.3 million for repayments of debt and capital lease obligations, compared to $25.8 million net
cash used for debt transactions during the year ended December 31, 2013, which are more fully described below. Dividend payments were $21.1
million and $20.8 million during the years ended December 31, 2012 and 2013, respectively, reflecting quarterly dividends of $0.05 per share.
In May 2013, we completed a private placement of $300.0 million aggregate principal amount of Senior Secured Notes, resulting in net
proceeds of $292.6 million after deducting transaction fees of $7.4 million. We used proceeds from the private placement, together with
available cash, to fund a tender offer and redemption of our ITC^DeltaCom Notes. We used approximately $314.8 million to repay the
ITC^DeltaCom Notes, which consisted of $292.3 million of outstanding principal amount, $16.2 million of premiums and $6.3 million of
accrued and unpaid interest. In May 2013, we also amended and restated our revolving credit facility and paid $1.9 million of transaction fees
and expenses. Finally, in connection with our acquisition of CenterBeam in July 2013, we assumed and repaid $6.5 million of debt.
Future uses of cash
Our primary future cash requirements relate to outstanding indebtedness, capital expenditures and investments in our Business Services
segment. In addition, we have historically used cash for dividends and 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, including our $300.0 million aggregate principal
amount of Senior Notes due in May 2019, our $300.0 million aggregate principal amount of Senior Secured Notes due in June 2020 and any
future borrowings under our $135.0 million revolving credit facility.
Capital expenditures . We expect to incur capital expenditures of approximately $125.0 million to $135.0 million
during 2014. The
capital expenditures primarily relate to the acquisition of new customers 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 our Business Services segment.
One of our key strategies is to grow our Business Services revenue. We are deploying a
wide array of cloud, managed security and IT support services. We expect to invest cash in sales and marketing efforts and resources required to
support our business services, including investments in search engine marketing campaigns and advertising to increase brand awareness.
Dividends . During the years ended December 31, 2011, 2012 and 2013 , cash dividends declared were $0.20
per common share. The
decision to declare future dividends is made at the discretion of the Board of Directors and will depend on, among other
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