FairPoint Communications 2003 Annual Report Download - page 17

On September 30, 2003, MJD Services completed the sale of all of the capital stock owned by Union, Armour, WMW and Kadoka to
Golden West. The sale was completed in accordance with the terms of the South Dakota purchase agreement. MJD Services received
approximately $24.2 million in proceeds from the South Dakota disposition, subject to certain escrow obligations as set forth in the South
Dakota purchase agreement. The companies sold to Golden West served approximately 4,150 voice access lines located in South Dakota.
The operations of these companies were presented as discontinued operations beginning in the second quarter of 2003. Therefore, the
balances associated with these activities were reclassified as "held for sale." All prior period financial statements have been restated
accordingly. We recorded a gain on disposal of the South Dakota companies of $7.7 million during the third quarter of 2003.
In November 2001, we decided to discontinue the CLEC operations of Carrier Services. This decision was a proactive response to the
deterioration in the capital markets, the general slow-down of the economy and the slower-than-expected growth in Carrier Services CLEC
operations.
Carrier Services provides wholesale long distance services and support to our RLECs and other non-affiliated communications
providers. These services allow such companies to operate their own long distance communication services and sell such services to their
respective customers. Our long distance business is included as part of continuing operations in the accompanying financial statements.
The information in our year to year comparisons below represents only our results from continuing operations.
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The following table sets forth the percentages of revenues represented by selected items reflected in our consolidated statements of
operations. The year-to-year comparison of financial results are not necessarily indicative of future results:
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Revenues 100.0%100%100%
Operating expenses 50.3 47.8 48.0
Depreciation and amortization 23.9 20.1 20.8
Stock based compensation 0.6 0.4 0.0
Total operating expenses 74.8 68.3 68.8
Income from operations 25.2 31.7 31.2
Net gain (loss) on sale of investments and other assets (0.3)0.0 0.3
Interest and dividend income 0.9 0.8 0.8
Interest expense (33.2)(30.1)(39.0)
Impairment of investments 0.0 (5.4)0.0
Equity in net earnings of investees 2.1 3.4 4.4
Realized and unrealized losses on interest rate swaps (5.6)(4.1)(0.6)
Other non-operating, net 0.0 0.2 (0.7)
Total other expenses (36.1)(35.3)(34.8)
Loss from continuing operations before income taxes (10.9)(3.5)(3.7)
Income tax benefit (expense) (0.2)(0.2)0.1
Minority interest in income of subsidiaries 0.0 0.0 0.0
Loss from continuing operations (11.0)% (3.8)% (3.6)%
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 Revenues increased $0.6 million to $231.4 million in 2003 compared to $230.8 million in 2002. Of this increase,
$0.7 million was attributable to the Maine acquisition and $1.5 million to revenues from our existing operations. This was offset by a
decrease in revenues of $1.6 million from our wholesale long distance company. We derived our revenues from the following sources:
 Local calling service revenues increased $2.1 million from $54.0 million in 2002 to $56.1 million in 2003.
Despite a slight decline in access lines, revenues from our existing operations increased $1.8 million due to increases in local calling
features and local interconnection revenues. The remaining increase of $0.3 million was attributable to the Maine acquisition.
 Universal service fund—high cost loop receipts decreased $3.5 million to $18.9 million in