(7) Long-Term Debt:

The activity in our long-term debt from December 31, 2013 to December 31, 2014 is summarized as follows:



			Year Ended
			December 31, 2014						Interest
									Rate at
	December 31,		Payments		New		December 31,		December 31,
($ in thousands)	2013		and Retirements		Borrowings		2014		2014 *

Senior Unsecured Debt	$	8,107,066	$	(257,500)	$	1,900,000	$	9,749,566	7.63%
Other Secured Debt		13,550		(2,019)		11,125		22,656	3.77%
Rural Utilities Service Loan Contracts		8,930		(416)		-		8,514	6.15%
Total Long-Term Debt	$	8,129,546	$	(259,935)	$	1,911,125	$	9,780,736	7.62%

Less: Debt (Discount)/Premium		2,037						2,501
Less: Current Portion		(257,916)						(297,622)
	$	7,873,667					$	9,485,615

* Interest rate includes amortization of debt issuance costs and debt premiums or discounts. The interest rates at December 31, 2014 represent a weighted average of multiple issuances.

Additional information regarding our Senior Unsecured Debt at December 31, 2014 and 2013 is as follows:



($ in thousands)	2014			2013

	Principal		Interest	Principal		Interest
	Outstanding		Rate	Outstanding		Rate

Senior Notes and Debentures Due:
5/1/2014	$	-	-	$	200,000	8.250%
3/15/2015		105,026	6.625%		105,026	6.625%
4/15/2015		96,872	7.875%		96,872	7.875%
10/14/2016 *		402,500	3.045% (Variable)		460,000	3.045% (Variable)
4/15/2017		606,874	8.250%		606,874	8.250%
10/1/2018		582,739	8.125%		582,739	8.125%
3/15/2019		434,000	7.125%		434,000	7.125%
10/24/2019 **		350,000	3.545% (Variable)		-	-
4/15/2020		1,021,505	8.500%		1,021,505	8.500%
7/1/2021		500,000	9.250%		500,000	9.250%
9/15/2021		775,000	6.250%		-	-
4/15/2022		500,000	8.750%		500,000	8.750%
1/15/2023		850,000	7.125%		850,000	7.125%
4/15/2024		750,000	7.625%		750,000	7.625%
1/15/2025		775,000	6.875%		-	-
11/1/2025		138,000	7.000%		138,000	7.000%
8/15/2026		1,739	6.800%		1,739	6.800%
1/15/2027		345,858	7.875%		345,858	7.875%
8/15/2031		945,325	9.000%		945,325	9.000%
10/1/2034		628	7.680%		628	7.680%
7/1/2035		125,000	7.450%		125,000	7.450%
10/1/2046		193,500	7.050%		193,500	7.050%
		9,499,566			7,857,066
Subsidiary Debentures Due:
2/15/2028		200,000	6.730%		200,000	6.730%
10/15/2029		50,000	8.400%		50,000	8.400%
Total	$	9,749,566	7.45% ***	$	8,107,066	7.78% ***

* Represents borrowings under the 2011 CoBank Credit Agreement, as defined below.

** Represents borrowings under the 2014 CoBank Credit Agreement, as defined below.

*** Interest rate represents a weighted average of the stated interest rates of multiple issuances.

On June 2, 2014, the Company entered into a credit agreement with CoBank, ACB, as administrative agent, lead arranger and a lender, and the other lenders party thereto, for a $350 million senior unsecured delayed draw term loan facility (the 2014 CoBank Credit Agreement). The facility was drawn upon closing of the Connecticut Acquisition with proceeds used to partially finance the acquisition. The maturity date is the fifth anniversary of the draw date. Repayment of the outstanding principal balance will be made in quarterly installments in the amount of $9 million, commencing one full fiscal quarter after the draw date, with the remaining outstanding principal balance to be repaid on the maturity date. Borrowings under the 2014 CoBank Credit Agreement will bear interest based on the margins over the Base Rate (as defined in the 2014 CoBank Credit Agreement) or LIBOR, at the election of the Company. Interest rate margins under the facility (ranging from 0.875% to 2.875% for Base Rate borrowings and 1.875% to 3.875% for LIBOR borrowings) are subject to adjustments based on the Total Leverage Ratio of the Company, as such term is defined in the 2014 CoBank Credit Agreement. The interest rate on this facility at December 31, 2014 was LIBOR plus 3.375%.

On June 2, 2014, the Company entered into a new revolving credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, the lenders party thereto and the other parties named therein (the Revolving Credit Agreement), for a $750 million revolving credit facility (the Revolving Credit Facility) with a scheduled termination date of May 31, 2018 and terminated its existing revolving credit facility (the Prior Revolving Credit Facility) under the Credit Agreement, dated as of May 3, 2013, among the Company, JPMorgan Chase Bank, N.A., as administrative agent, the lenders party thereto and the other parties named therein (the Prior Revolving Credit Agreement). As of December 31, 2014, the Revolving Credit Facility was fully available and no borrowings had been made thereunder. Associated commitment fees under the Revolving Credit Facility will vary from time to time depending on the Company’s debt rating (as defined in the Revolving Credit Agreement) and were 0.450% per annum as of December 31, 2014. During the term of the Revolving Credit Facility, the Company may borrow, repay and reborrow funds, and may obtain letters of credit, subject to customary borrowing conditions. Loans under the Revolving Credit Facility will bear interest based on the alternate base rate or the adjusted LIBO Rate (each as determined in the Revolving Credit Agreement), at the Company’s election, plus a margin based on the Company’s debt rating (ranging from 0.50% to 1.50% for alternate base rate borrowings and 1.50% to 2.50% for adjusted LIBO Rate borrowings). The current pricing on this facility would have been 1.50% or 2.50%, respectively, as of December 31, 2014. Letters of credit issued under the Revolving Credit Facility will also be subject to fees that vary depending on the Company’s debt rating. The Revolving Credit Facility is available for general corporate purposes but may not be used to fund dividend payments. The terms of the Revolving Credit Facility are substantially similar to the terms of the Prior Revolving Credit Facility.

The Company has a credit agreement with CoBank, ACB, as administrative agent, lead arranger and a lender, and the other lenders party thereto, for a $575 million senior unsecured term loan facility with a final maturity of October 14, 2016 (the 2011 CoBank Credit Agreement). The entire facility was drawn upon execution of the 2011 CoBank Credit Agreement in October 2011. Repayment of the outstanding principal balance is made in quarterly installments in the amount of $14 million, which commenced on March 31, 2012, with the remaining outstanding principal balance to be repaid on the final maturity date. Borrowings under the 2011 CoBank Credit Agreement bear interest based on the margins over the Base Rate (as defined in the 2011 CoBank Credit Agreement) or LIBOR, at the election of the Company. Interest rate margins under the facility (ranging from 0.875% to 2.875% for Base Rate borrowings and 1.875% to 3.875% for LIBOR borrowings) are subject to adjustments based on the Total Leverage Ratio of the Company, as such term is defined in the 2011 CoBank Credit Agreement. The current pricing on this facility is LIBOR plus 2.875%.

On September 17, 2014, the Company completed a registered debt offering of $775 million aggregate principal amount of 6.250% senior unsecured notes due 2021, and $775 million aggregate principal amount of 6.875% senior unsecured notes due 2025. We received net proceeds, after deducting underwriting fees, of $1,519 million from the offering. The Company used the net proceeds from the offering of the notes, together with borrowings under the 2014 CoBank Credit Agreement, as defined above, and cash on hand, to finance the Connecticut Acquisition, which closed on October 24, 2014. See Note 3 for further discussion of the Connecticut Acquisition.

During 2014, we also entered into secured financings totaling $11 million with four year terms and no stated interest rate for certain equipment purchases.

On April 10, 2013, the Company completed a registered debt offering of $750 million aggregate principal amount of 7.625% senior unsecured notes due 2024, issued at a price of 100% of their principal amount. We received net proceeds of $737 million from the offering after deducting underwriting fees. The Company used the net proceeds from the sale of the notes, together with cash on hand, to finance the cash tender offers discussed below.

On April 10, 2013, the Company accepted for purchase $471 million aggregate principal amount of its senior notes tendered for total consideration of $532 million, consisting of $194 million aggregate principal amount of the Company’s 6.625% senior notes due 2015 (the March 2015 Notes), tendered for total consideration of $216 million, and $277 million aggregate principal amount of the Company’s 7.875% senior notes due 2015 (the April 2015 Notes), tendered for total consideration of $316 million. On April 24, 2013, the Company accepted for purchase $1 million aggregate principal amount of the March 2015 Notes, tendered for total consideration of $1 million, $1 million of the April 2015 Notes, tendered for total consideration of $1 million, and $225 million aggregate principal amount of the Company’s 8.250% senior notes due 2017 (the 2017 Notes), tendered for total consideration of $268 million. The repurchases in the debt tender offers for the senior notes resulted in a loss on the early extinguishment of debt of $105 million, ($65 million or $0.06 per share after tax).

Additionally, during the second quarter of 2013, the Company repurchased $209 million of the 2017 Notes in a privately negotiated transaction, along with $17 million of its 8.125% senior notes due 2018 and $79 million of its 8.500% senior notes due 2020 in open market repurchases. These transactions resulted in a loss on the early extinguishment of debt of $55 million ($34 million or $0.04 per share after tax).

On May 17, 2012, the Company completed a registered offering of $500 million aggregate principal amount of 9.250% senior unsecured notes due 2021, issued at a price of 100% of their principal amount. We received net proceeds of $490 million from the offering after deducting underwriting fees and offering expenses. The Company also commenced a tender offer to purchase the maximum aggregate principal amount of its 8.250% Senior Notes due 2014 (the 2014 Notes) and the April 2015 Notes (and together with the 2014 Notes, the Notes) that it could purchase for up to $500 million in cash (the 2012 Debt Tender Offer).

Pursuant to the 2012 Debt Tender Offer, the Company accepted for purchase $400 million aggregate principal amount of 2014 Notes, tendered for total consideration of $446 million, and $50 million aggregate principal amount of April 2015 Notes, tendered for total consideration of $54 million. The Company used proceeds from the sale of its May 2012 offering of $500 million of 9.250% Senior Notes due 2021, plus cash on hand, to purchase the Notes.

In connection with the 2012 Debt Tender Offer and repurchase of the Notes, the Company recognized a loss of $69 million for the premium paid on the early extinguishment of debt during 2012. We also recognized losses of $2 million during 2012 for $78 million in total open market repurchases of our 6.25% Senior Notes due 2013.

On August 15, 2012, the Company completed a registered offering of $600 million aggregate principal amount of 7.125% senior unsecured notes due 2023 (the 2023 Notes), issued at a price of 100% of their principal amount. We received net proceeds of $588 million from the offering after deducting underwriting fees and offering expenses. The Company used the net proceeds from the sale of the notes to repurchase or retire existing indebtedness in 2013.

On October 1, 2012, the Company completed a registered debt offering of $250 million aggregate principal amount of the 2023 Notes, issued at a price of 104.250% of their principal amount. We received net proceeds of $256 million from the offering after deducting underwriting fees and offering expenses. The notes are an additional issuance of, are fully fungible with and form a single series voting together as one class with the $600 million aggregate principal amount of the 2023 Notes issued by the Company on August 15, 2012. The Company used the net proceeds from the sale of the notes to repurchase or retire existing indebtedness in 2013.

On October 1, 2012, the Company accepted for purchase $76 million and $59 million aggregate principal amount of the April 2015 Notes and the 2017 Notes, respectively, in open market repurchases for total consideration of $155 million. The repurchases resulted in a loss on the early retirement of debt of $19 million.

As of December 31, 2014, we were in compliance with all of our debt and credit facility financial covenants.

Our future principal payments are as follows as of December 31, 2014:



	Principal
($ in thousands)	Payments

2015	$	297,622
2016	$	383,248
2017	$	645,156
2018	$	619,035
2019	$	644,565
Thereafter	$	7,191,110

Other Obligations

During 2013, the Company contributed four real estate properties to its qualified defined benefit pension plan. The pension plan obtained independent appraisals of the properties and, based on these appraisals, the pension plan recorded the contributions at their fair value of $23 million. The Company has entered into leases for the contributed properties with initial terms of 15 years at a combined aggregate annual rent of approximately $2 million. The properties are managed on behalf of the pension plan by an independent fiduciary, and the terms of the leases were negotiated with the fiduciary on an arm’s-length basis.

The contribution and leaseback of the properties was treated as a financing transaction and, accordingly, the Company continues to depreciate the carrying value of the properties in its financial statements and no gain or loss was recognized. An obligation of $23 million was recorded in our consolidated balance sheet within “Other liabilities” and the liability will be reduced annually by a portion of the lease payments made to the pension plan.

During 2012, the Company entered into a sale and leaseback arrangement for a facility in Everett, Washington and entered into a capital lease for the use of fiber in the state of Minnesota. These agreements have lease terms of 12 and 23 years, respectively. These capital lease obligations are included in our consolidated balance sheet within “Other liabilities” and “Other current liabilities.”

Future minimum payments for finance lease obligations and capital lease obligations as of December 31, 2014 are as follows:



($ in thousands)	Finance Lease Obligations		Capital Lease Obligations

Year ending December 31:
2015	$	7,043	$	3,245
2016		7,225		3,300
2017		7,418		3,357
2018		7,632		3,415
2019		7,838		3,474
Thereafter		63,055		16,790
Total future payments		100,211		33,581
Less: Amounts representing interest		(56,951)		(9,092)
Present value of minimum lease payments	$	43,260	$	24,489