FairPoint Communications 2004 Annual Report Download - page 40

•During 2002, we made no acquisitions.
In the normal course of business, we evaluate selective acquisitions and may enter into non-binding letters of intent with respect to such
acquisitions, subject to customary conditions. Management currently intends to fund future acquisitions through additional financing.
However, our substantial amount of indebtedness and our dividend policy could restrict our ability to obtain such financing on acceptable
terms or at all.
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In February 2005, we issued 473,716 shares of restricted stock under our 2005 Stock Incentive Plan. This issuance will result in
recognition of an additional compensation expense of approximately $2.2 million in 2005. In addition, 473,725 shares of our common stock
may be issued in the future pursuant to awards authorized under our 2005 Stock Incentive Plan which could result in an additional
compensation expense.
Non-cash compensation charges associated with restricted stock units were $0.2 million for 2004. In October 2004, we recorded a non-
cash compensation charge of $0.3 million in connection with the modification of employee stock options of one of our officers. In
December 2004, we recognized a non-cash compensation benefit of $0.4 million associated with the reduction in estimated fair market value
of the stockholder appreciation rights agreements.
In 2003, we did not recognize any material non-cash compensation charges, primarily due to the fact that the fair market value per share
of our common stock remained relatively stable.
In March 2002, we recognized a non-cash compensation benefit of $0.2 million associated with the reduction in estimated fair market
value of the stockholder appreciation rights agreements. In December 2002, an additional benefit of $0.1 million was recognized in
connection with these agreements. This benefit was offset by a non-cash compensation charge of $1.2 million in connection with the
modification of employee stock options by one of our officers.
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On September 30, 2003, MJD Services completed the sale of all of the capital stock owned by MJD Services of Union Telephone
Company of Hartford, Armour Independent Telephone Co., WMW Cable TV Co. and Kadoka Telephone Co. 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. The companies sold to Golden West provided communication services to approximately 4,150
voice access lines located in South Dakota as of the date of such disposition. 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 competitive local exchange carrier 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' competitive local exchange carrier operations. Carrier Services now provides wholesale long distance services and support
to our rural local exchange carriers and communications providers not affiliated with us. 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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