Frontier Communications 2005 Annual Report Download - page 28

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26
CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
Sale of Non-Strategic Investments
In February 2006, we entered into a definitive agreement to sell all of the outstanding membership interests in
ELI to Integra Telecom Holdings, Inc. (Integra) for $247.0 million, including $243.0 million in cash plus the
assumption of approximately $4.0 million in capital lease obligations, subject to customary adjustments under the
terms of the agreement. We anticipate the recognition of a pre-tax gain on the sale of ELI of approximately $130.0
million. The transaction is expected to close in the third quarter of 2006 and is subject to regulatory and other
customary approvals and conditions, as well as the funding of Integra’s fully committed financing. We expect that
for periods subsequent to December 31, 2005, ELI will be accounted for as a discontinued operation.
On February 1, 2005, we sold shares of Prudential Financial, Inc. for approximately $1.1 million in cash, and
we recognized a pre-tax gain of approximately $0.5 million that is included in other income (loss), net.
On March 15, 2005, we completed the sale of our conferencing business for approximately $43.6 million in
cash. The pre-tax gain on the sale of CCUSA was $14.1 million.
In June 2005, we sold for cash our interests in certain key man life insurance policies on the lives of Leonard
Tow, our former Chairman and Chief Executive Officer, and his wife, a former director. The cash surrender value of
the policies purchased by Dr. Tow totaled approximately $24.2 million, and we recognized a pre-tax gain of
approximately $457,000 that is included in other income (loss), net.
During 2005, we sold shares of Global Crossing Limited for approximately $1.1 million in cash, and we
recognized a pre-tax gain for the same amount that is included in other income (loss), net.
Off-Balance Sheet Arrangements
We do not maintain any off-balance sheet arrangements, transactions, obligations or other relationship with
unconsolidated entities that would be expected to have a material current or future effect upon our financial
statements.
Future Commitments
A summary of our future contractual obligations and commercial commitments as of December 31, 2005 is as
follows:
Contractual Obligations: Payment due by period
($ in thousands)
Total
Less than
1 year 1-3 years 3-5 years
More than
5 years
Long-term debt obligations,
excluding interest (see Note 11) (1) . . . . . . . . $ 4,201,730 $ 227,693 $ 738,709 $ 5,393 $ 3,229,935
ELI capital lease obligations (see Note 25) . . . . 4,287 41 236 310 3,700
Operating lease obligations (see Note 25) . . . . . 92,088 19,062 24,445 19,307 29,274
Purchase obligations (see Note 25) . . . . . . . . . . . 76,384 30,619 29,354 11,296 5,115
Other long-term liabilities (2) . . . . . . . . . . . . . . . . 33,785 — — — 33,785
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,408,274 $ 277,415 $ 792,744 $36,306 $ 3,301,809
(1) Includes interest rate swaps ($(8.7) million).
(2) Consists of our Equity Providing Preferred Income Convertible Securities (EPPICS) reflected on our balance
sheet.
At December 31, 2005, we have outstanding performance letters of credit totaling $22.4 million.