Frontier Communications 2004 Annual Report Download - page 64

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CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
F-20
As of December 31, 2003, we owned 1,333,500 shares of D & E common stock. As the result of an other than
temporary decline in D & E’s stock price, we recognized a loss of $16,400,000 on our investment for the year ended
December 31, 2002.
Marketable equity securities for 2003 include 2,305,908 common shares which represent an ownership of 19% of the
equity in HTCC a company of which our former Chairman and Chief Executive Officer was a member of the Board of
Directors. In addition, in 2003 we held 30,000 shares of non-voting convertible preferred stock, each share having a
liquidation value of $70 per share and is convertible at our option into 10 shares of common stock.
Investments in Other Entities
During 2004, we reclassified our investments accounted for under the equity method from other assets to the
investment caption in our consolidated balance sheets and conformed prior periods to the current presentation.
The Company’s investments in entities that are accounted for under the equity method of accounting consist of the
following: (1) a 33% interest in the Mohave Cellular Limited Partnership which is engaged in cellular mobile
telephone service in the Arizona area; (2) a 25% interest in the Fairmount Cellular Limited Partnership which is
engaged in cellular mobile telephone service in the Rural Service Area (RSA) designated by the FCC as Georgia
RSA No. 3; and (3) our investments in CU Capital and CU Trust with relation to our convertible preferred securities
(for 2004 only). The investments in these entities amounted to $20,726,000 and $12,787,000 at December 31, 2004
and 2003, respectively.
(10) Fair Value of Financial Instruments:
The following table summarizes the carrying amounts and estimated fair values for certain of our financial instruments
at December 31, 2004 and 2003. For the other financial instruments, representing cash, accounts receivables, long-term
debt due within one year, accounts payable and other accrued liabilities, the carrying amounts approximate fair value
due to the relatively short maturities of those instruments.
The fair value of the above financial instruments is based on quoted prices at the reporting date for those financial
instruments.
(1)
2004 and 2003 includes interest rate swaps of $4,466,000 and $10,601,000, respectively. 2003 excludes the $460,000,000
debt portion of the equity units. 2004 includes EPPICS of $63,765,000.
($ in thousands)
Carrying Carrying
Amount Fair Value Amount Fair Value
Investments 23,062$ 23,062$ 57,103$ 57,103$
Long-term debt
(1)
4,266,998$ 4,607,298$ 4,195,629$ 4,608,205$
Equity Providing Preferred
Income Convertible Securities (EPPICS) -$ -$ 201,250$ 205,275$
2004 2003