FairPoint Communications 2007 Annual Report Download - page 93
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Table of Contents
Distributions from investments during the years ended December 31, 2007, 2006, and 2005 consisted of the following (in
thousands):
Orange County — Poughkeepsie Limited Partnership $ 2,206 $ 9,150 $ 9,975
Chouteau Cellular Telephone Company — — 40
CoBank, ACB 342 1,034 634
Distributions from other equity investments 124 470 210
Total $2,672 $10,654 $10,859
On January 15, 2007, Taconic Telephone Corp., or Taconic, a subsidiary of the Company, entered into a Partnership Interest
Purchase Agreement, or the O-P Interest Purchase Agreement, with Cellco Partnership d/b/a Verizon Wireless and Verizon Wireless of the
East LP, pursuant to which the Company agreed to sell its 7.5% limited partnership interest in Orange County-Poughkeepsie Limited
Partnership to Cellco Partnership, or the O-P Disposition. The O-P Disposition closed on April 10, 2007. In 2007, the Company recorded
a gain on the O-P Disposition of approximately $46.4 million. Total proceeds from the sale were $55.0 million, of which approximately
$1.2 million was paid to the Company in the form of distributions from Orange County-Poughkeepsie Limited Partnership in 2007.
The Company’s investment in Orange County-Poughkeepsie has been consistently accounted for under the equity method using a
three-month lag due to the timing of the receipt of the partnership financial statements, resulting in six months of equity earnings, or
$2.2 million, included in the consolidated results of operations of the Company through the O-P disposition date of April 10, 2007. The
following is summary financial information for the Orange County-Poughkeepsie Limited Partnership:
Current assets $ 10,201
Property, plant, and equipment, net 39,234
Total assets $ 49,435
Current liabilities $ 1,386
Noncurrent liabilities 330
Partners’ capital 47,719
Total liabilities and partners’ capital $ 49,435
Operating revenue $ 32,750
Operating income 24,656
Net income 24,928
During 2005, the Company determined that the carrying amount of its investment in Illinois Valley Cellular RSA No. 2, which was
accounted for under the equity method, exceeded the estimated fair value and such decline was “other-than-temporary.” As a result, the
Company recorded a non-cash impairment charge of $1.2 million. This charge is classified as impairment of investments in the
consolidated statement of operations for the year ended December 31, 2005. The Company sold its investment in Illinois Valley Cellular
RSA No. 2 during 2006 and recorded a gain of $0.1 million.
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