FairPoint Communications 2004 Annual Report Download - page 46

$10.1 million in 2003 from $7.8 million in 2002. Other non-operating income (expense) includes net gain (loss) on the extinguishment of
debt and expenses related to the loss on the write-off of loan origination costs. As a result of the issuance of $225.0 million of the 11 7/8%
notes during the first quarter of 2003, we recorded $2.8 million and $0.7 million of non-operating gains on the extinguishment of a portion of
the 91/2% notes and the 121/2% notes and loans under Carrier Services' credit facility, respectively. Additionally, we recorded a non-operating
loss of $5.0 million for the write-off of debt issue costs related to this extinguishment of debt in 2003.
The following is a summary of amounts included in realized and unrealized gains (losses) on interest rate swaps (dollars in thousands):
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Change in fair value of interest rate swaps $7,693 $2,135
Reclassification of transition adjustment included in other comprehensive
income (loss) (1,029) (1,437)
Realized gains (losses) (8,051) (10,275)
Total $(1,387)$(9,577)
 Income tax benefit from continuing operations increased $0.7 million to $0.2 million in 2003 from an expense of
$0.5 million in 2002. The income tax benefit related primarily to income taxes owed in certain states offset by investment tax credits in certain
states.
 In November 2001, we decided to discontinue the competitive local exchange carrier operations of Carrier
Services. Net income from discontinued operations of our competitive local exchange carrier operations was $0.3 million and $19.5 million
for 2003 and 2002, respectively. The income in 2002 was a result of a gain on extinguishment of debt attributable to Carrier Services. Net
income from discontinued operations of our existing operations sold in the South Dakota disposition was $1.9 million and $2.4 million for
2003 and 2002, respectively. We recorded a gain on disposal in connection with the South Dakota disposition of $7.7 million in 2003.
 Our 2003 net loss attributable to common shareholders was $4.3 million after giving effect to $8.9 million in
dividends and accretion related to our series A preferred stock and the repurchase of series A preferred stock at a discount of $2.9 million.
Additionally, as a result of the adoption of SFAS 150 on July 1, 2003, the dividends and accretion of $9.0 million related to these instruments
is included as a reduction of net income for the third and fourth quarters of 2003. Our 2002 net income attributable to common shareholders
was $1.3 million after giving effect to $11.9 million in dividends and accretion related to our series A preferred stock. The differences between
the 2003 and 2002 net income (loss) are a result of the factors discussed above.

Our short-term and long-term liquidity needs arise primarily from: (i) interest payments, which are expected to be approximately
$39.0 million to $40.0 million in 2005, primarily related to our credit facility; (ii) capital expenditures, which are expected to be approximately
$31.0 million in 2005; (iii) working capital requirements as may be needed to support the growth of our business; (iv) dividend payments on
our common stock; and (v) potential acquisitions. Our board of directors has adopted a dividend policy which reflects our judgment that our
stockholders would be better served if we distributed a substantial portion of our cash available for distribution to them instead of retaining it in
our business.
We intend to fund our operations, interest expense, capital expenditures, working capital requirements and dividend payments on our
common stock from cash from operations. To fund future acquisitions, we intend to use borrowings under our credit facility, or, subject to the
restrictions in our
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