FairPoint Communications 2005 Annual Report Download - page 43

26,442 remain outstanding at December 31, 2005. Non-cash compensation charges associated with restricted units and restricted stock were $2.4 million for
the twelve months ended December 31, 2005. We did not recognize any additional charges associated with the stockholder appreciation rights that were settled
in 2005.
Non-cash compensation charges associated with restricted units totaled $49,000 in 2004. These charges consisted of compensation charges of $0.2
million for restricted units, a charge of $0.3 million in connection with the modification of employee stock options and a non-cash benefit of $0.4 million
associated with the reduction in estimated fair market value of stockholder appreciation rights. Non-cash compensation charges in 2003 were not material,
primarily due to the fact that the fair market value per share of our common stock remained relatively stable.
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On September 30, 2003, MJD Services Corp., or MJD Services, a wholly-owned subsidiary of the Company, 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 Telephone Properties, Inc. 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 FairPoint Carrier Services, Inc., or 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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