Frontier Communications 2005 Annual Report Download - page 80

F-31
CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
In addition, for the years ended December 31, 2005, 2004 and 2003, restricted stock awards of 1,456,000,
1,686,000 and 1,249,000 shares, respectively, are excluded from our basic weighted average shares outstanding and
included in our dilutive shares until the shares are no longer contingent upon the satisfaction of all specified
conditions.
Equity Units and EPPICS
On August 17, 2004 we issued 32,073,633 shares of common stock, including 3,591,000 treasury shares, to our
equity unit holders in settlement of the equity purchase contract component of the equity units. With respect to the
$460,000,000 Senior Note component of the equity units, we repurchased $300,000,000 principal amount of these
Notes in July 2004. The remaining $160,000,000 of the Senior Notes were repriced and a portion was remarketed on
August 12, 2004 as the 6.75% Notes due August 17, 2006. During 2004, we repurchased an additional $108,230,000
of the 6.75% Notes which, in addition to the $300,000,000 purchased in July, resulted in a pre-tax charge of
approximately $20,080,000 during the third quarter of 2004.
As a result of our July dividend announcement with respect to our common shares, our 5% Company Obligated
Mandatorily Redeemable Convertible Preferred Securities due 2036 (EPPICS) began to convert into shares of our
common stock. As of December 31, 2005, approximately 88% of the EPPICS outstanding, or about $177,971,000
aggregate principal amount of units, have converted to 14,237,807 shares of common stock, including 1,116,000
issued from treasury.
At December 31, 2005 and 2004, we had 465,588 and 1,065,171 shares, respectively, of potentially dilutive
EPPICS, which were convertible into common stock at a 4.36 to 1 ratio at an exercise price of $11.46 per share. As a
result of the September 2004 special, non-recurring dividend, the EPPICS exercise price for conversion into common
stock was reduced from $13.30 to $11.46. These securities have been included in the diluted income per common
share calculation for the period ended December 31, 2005, however, they have not been included in the diluted
income per share calculation for the period ended December 31, 2004 because their inclusion would have had an
antidilutive effect.
At December 31, 2003 we had 4,025,000 shares of potentially dilutive EPPICS that have been included in the
diluted income per common share calculation for the period ended December 31, 2003.
Stock Units
At December 31, 2005, 2004 and 2003, we had 206,630, 464,879 and 427,475 stock units, respectively, issuable
under our Directors’ Deferred Fee Equity Plan and Non-Employee Directors’ Retirement Plan. These securities have
not been included in the diluted income per share calculation because their inclusion would have had an antidilutive
effect.
(21) COMPREHENSIVE INCOME (LOSS):
Comprehensive income consists of net income (loss) and other gains and losses affecting shareholder’s
investment and minimum pension liability that, under GAAP, are excluded from net income (loss).