Frontier Communications 2004 Annual Report Download - page 76

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CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
F-32
(21) Net Income (Loss) Per Common Share:
The reconciliation of the net income (loss) per common share calculation for the years ended December 31, 2004, 2003
and 2002 is as follows:
Stock Options
For the year ended December 31, 2004, 2003 and 2002 options of 2,494,634 (at exercise prices ranging from $13.30
to $18.46), and 10,190,000 and 14,391,000 (at exercise prices ranging from $9.18 to $21.47), respectively, issuable
under employee compensation plans were excluded from the computation of diluted EPS for those periods because
the exercise prices were greater than the average market price of common shares and, therefore, the effect would be
antidilutive.
In connection with the payment of the special, non-recurring dividend of $2 per common share on September 2,
2004, the exercise price and number of all outstanding options was adjusted such that each option had the same value
to the holder after the dividend as it had before the dividend. In accordance with FASB Interpretation No. 44 (“FIN
44”), “Accounting for Certain Transactions involving Stock Compensation” and EITF 00-23, “Issues Related to the
Accounting for Stock Compensation under APB No. 25 and FIN 44”, there is no accounting consequence for changes
made to the exercise price and the number of shares of a fixed stock option or award as a direct result of the special,
non-recurring dividend.
($ in thousands, except per-share amounts)
2004 2003 2002
Net income (loss) used for basic and diluted
earnings per common share:
Income (loss) from continuing operations before cumulative
effect of change in accounting principle 72,150$ 122,083$ (822,976)$
Income from discontinued operations - - 179,891
Income (loss) before cumulative effect of change in accounting principle 72,150 122,083 (643,085)
Income (loss) from cumulative effect of change in accounting principle - 65,769 (39,812)
Total basic net income (loss) available for common shareholders 72,150$ 187,852$ (682,897)$
Effect of conversion of preferred securities - 6,210 -
Total diluted net income (loss) available for common shareholders 72,150$ 194,062$ (682,897)$
Basic earnings (loss) per common share:
Weighted-average shares outstanding - basic 303,989 282,434 280,686
Income (loss) from continuing operations before cumulative
effect of change in accounting principle 0.24$ 0.44$ (2.93)$
Income from discontinued operations - - 0.64
Income (loss) before cumulative effect of change in accounting principle 0.24 0.44 (2.29)
Income (loss) from cumulative effect of change in accounting principle - 0.23 (0.14)
Net income (loss) per share available for common shareholders 0.24$ 0.67$ (2.43)$
Diluted earnings (loss) per common share:
Weighted-average shares outstanding 303,989 282,434 280,686
Effect of dilutive shares 5,194 4,868 3,887
Effect of conversion of preferred securities - 15,134 -
Weighted-average shares outstanding - diluted 309,183 302,436 284,573
Income (loss) from continuing operations before cumulative
effect of change in accounting principle 0.23$ 0.42$ (2.93)$
Income from discontinued operations - - 0.64
Income (loss) before cumulative effect of change in accounting principle 0.23 0.42 (2.29)
Income (loss) from cumulative effect of change in accounting principle - 0.22 (0.14)
Net income (loss) per share available for common shareholders 0.23$ 0.64$ (2.43)$