Frontier Communications 2005 Annual Report Download - page 65

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F-16
CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
2003
On April 1, 2003, we completed the sale of approximately 11,000 telephone access lines in North Dakota for
approximately $25,700,000 in cash. The pre-tax gain on the sale was $2,274,000.
On April 4, 2003, we completed the sale of our wireless partnership interest in Wisconsin for approximately
$7,500,000 in cash. The pre-tax gain on the sale was $2,173,000.
(7) OTHER INTANGIBLES:
Other intangibles at December 31, 2005 and 2004 are as follows:
($ in thousands) 2005 2004
Customer base - amortizable over 96 months . . . . . . . . . . . . . . . . . . $ 994,605 $ 994,605
Trade name - non-amortizable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122,058 122,058
Other intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,116,663 1,116,663
Accumulated amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (557,930 ) (431,552)
Total other intangibles, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 558,733 $ 685,111
Amortization expense was $126,378,000, $126,520,000 and $126,838,000 for the years ended December 31,
2005, 2004 and 2003, respectively. Amortization expense, based on our estimate of useful lives, is estimated to be
$126,380,000 per year through 2008 and $57,533,000 in 2009, at which point these assets will have been fully
amortized.
(8) DISCONTINUED OPERATIONS:
Conference Call USA
In February 2005, we entered into a definitive agreement to sell Conference-Call USA, LLC (CCUSA), our
conferencing services business. On March 15, 2005, we completed the sale for $43,565,000 in cash, subject to adjustments
under the terms of the agreement. The pre-tax gain on the sale of CCUSA was $14,061,000. Our after-tax gain was
approximately $1,167,000. The book income taxes recorded upon sale are primarily attributable to a low tax basis in the
assets sold.
In accordance with SFAS No. 144, any component of our business that we dispose of or classify as held for sale
that has operations and cash flows clearly distinguishable from operations, and for financial reporting purposes, and
that will be eliminated from the ongoing operations, should be classified as discontinued operations. Accordingly,
we have classified the results of operations of CCUSA as discontinued operations in our consolidated statements of
operations and have restated prior periods.
CCUSA had revenues of approximately $24,600,000 and operating income of approximately $8,000,000 for the
year ended December 31, 2004. At December 31, 2004, CCUSA’s net assets totaled approximately $23,400,000. The
company had no outstanding debt specifically identified with CCUSA and therefore no interest expense was allocated
to discontinued operations. In addition, we ceased to record depreciation expense effective February 16, 2005.