Frontier Communications 2005 Annual Report Download - page 55

F-6
CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For The Years Ended December 31, 2005, 2004 and 2003
($ in thousands, except for per-share amounts)
2005 2004 2003
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,162,479 $ 2,168,422 $ 2,424,174
Operating expenses:
Cost of services (exclusive of depreciation and amortization) . . . . . . . . . . . . . . . . 195,491 198,938 365,563
Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 818,180 831,939 894,108
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 541,959 570,808 593,161
Recovery of telecommunications bankruptcies . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (4,377 )
Restructuring and other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 9,687
Loss on impairment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 15,300
Management succession and strategic alternatives expenses (see Note 13) . . . . . . — 90,632 —
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,555,630 1,692,317 1,873,442
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 606,849 476,105 550,732
Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,236 33,616 10,418
Other income (loss), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,674 ) (53,359 ) 44,059
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338,903 379,021 416,520
Income from continuing operations before income taxes, dividends on
convertible preferred securities and cumulative effect of change in
accounting principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284,508 77,341 188,689
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,340 10,422 64,776
Income from continuing operations before dividends on convertible preferred
securities and cumulative effect of change in accounting principle . . . . . . . . 200,168 66,919 123,913
Dividends on convertible preferred securities, net of income tax benefit
of $(3,853)* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 6,210
Income from continuing operations before cumulative effect of change in
accounting principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,168 66,919 117,703
Discontinued operations (see Note 8):
Income from operations of discontinued conferencing business (including gain
on disposal of $14,061 in 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,550 8,188 6,820
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,343 2,957 2,440
Income from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,207 5,231 4,380
Income before cumulative effect of change in accounting principle . . . . . . . . . . . 202,375 72,150 122,083
Cumulative effect of change in accounting principle, net of tax of $0, $0 and
$41,591, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 65,769
Net income available for common shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 202,375 $ 72,150 $ 187,852
Basic income per common share:
Income from continuing operations before cumulative effect of change in
accounting principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.59 $ 0.22 $ 0.42
Income from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.01 0.02 0.02
Income from cumulative effect of change in accounting principle . . . . . . . . . . . . . — — 0.23
Net income per common share available for common shareholders . . . . . . . . . . . . $ 0.60 $ 0.24 $ 0.67
Diluted income per common share:
Income from continuing operations before cumulative effect of change in
accounting principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.59 $ 0.22 $ 0.41
Income from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.01 0.01 0.01
Income from cumulative effect of change in accounting principle . . . . . . . . . . . . . — — 0.22
Net income per common share available for common shareholders . . . . . . . . . . . . $ 0.60 $ 0.23 $ 0.64
* The consolidation of this item changed effective January 1, 2004 as a result of the application of a newly
mandated accounting standard “FIN 46R.” See Note 15 for a complete discussion.
The accompanying Notes are an integral part of these Consolidated Financial Statements.