FairPoint Communications 2003 Annual Report Download - page 42

Download and view the complete annual report

Please find page 42 of the 2003 FairPoint Communications annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 135

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135

Total liabilities and members' equity $98,388 120,954

 



 

Revenues $95,852 96,361 98,747
Operating income 7,338 12,407 12,482
Net income before cumulative effect of a change in
accounting principle 4,950 10,402 13,232
Cumulative effect of a change in accounting principle (963)— —
Net income 3,987 10,402 13,232
In addition to holding the 44.45% member interest in Tulsa, LLC, ICT has long-term debt consisting of variable rate borrowings (5.50%
at December 31, 2003) under a loan agreement with RTFC, due in quarterly installments of $0.7 million including interest through 2006.
The note is collateralized by the assets of ICT, including its investment in Tulsa, LLC. The RTFC debt balance at December 31, 2003 was
$6.0 million. The Company has issued an unsecured guarantee of the RTFC debt. As of December 31, 2003, the amount of the unsecured
guarantee was $1.5 million.
During 2003, the Company sold its ownership percentages of Illinois Valley Cellular RSA 2-I Partnership, Illinois Valley Cellular RSA
2-II Partnership and Illinois Valley Cellular RSA 2-III Partnership. Proceeds from the sales of these investments were $1.8 million and gross
gains of approximately $0.4 million were realized on these sales.
The Company continually evaluates its investment holdings for evidence of impairment. During 2002, the Company determined that
the decline in market value of its Choice One common stock was
61
"other than temporary." As such, the Company recorded a noncash charge of $8.2 million. This charge is classified with the impairment on
investments in the consolidated statements of operations.
During 2002, the Company determined that the carrying amount exceeded the estimated fair value of some investments accounted for
under the equity method, and such declines were "other than temporary." As such, the Company recorded a noncash charge of $1.7 million
and $2.7 million, respectively, for the Chouteau and the Illinois Valley Cellular RSA 2—I, II, and III partnership investments. These charges
are classified with the impairment on investments in the consolidated statements of operations.

Long-term debt at December 31, 2002 and 2003 is shown below:


 

Senior secured notes, variable rates ranging from 4.25% to
10.57% at December 31, 2003, due 2004 to 2007 $351,778 171,091
Senior subordinated notes due 2008:
Fixed Rate Notes, 9.50% 125,000 115,207
Variable Rate Notes, 5.81% at December 31, 2003 75,000 75,000
Senior subordinated notes, 12.50%, due 2010 200,000 193,000
Senior subordinated notes, 11.78% due 2010 — 225,000
Carrier Services' senior secured notes, 8.00%, due 2007 28,829 24,570
Senior notes to RTFC:
Fixed rate, 9.20%, due 2009 3,250 2,776
Variable rate, 5.50% at December 31, 2003, due 2009 4,871 4,162
Subordinated promissory notes, 7.00%, due 2005 7,000 7,000
First mortgage notes to Rural Utilities Service, fixed rates ranging
from 2.00% to 10.78%, due 2003 to 2016 7,090 6,492
Senior notes to RTB, fixed rates ranging from 7.50% to 8.00%,
due 2008 to 2014 1,372 1,262
Total outstanding long-term debt 804,190 825,560