FairPoint Communications 2005 Annual Report Download - page 96

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Selected information relating to the restructuring charge follows (in thousands):
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Restructuring accrual as of December 31, 2002 $7,182
Adjustments from initial estimated charges (246)
Cash payments (1,683)
Restructuring accrual as of December 31, 2003 5,253
Adjustments from initial estimated charges 80
Cash payments (2,682)
Restructuring accrual as of December 31, 2004 2,651
Adjustments from initial estimated charges (600)
Cash payments (739)
Restructuring accrual as of December 31, 2005 $ 1,312
(b) Rural Local Exchange Carrier Operations
On September 30, 2003, the Company completed the sale of all of the capital stock owned by 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. (Golden West). The sale
was completed in accordance with the terms of the purchase agreement, dated as of May 9, 2003, with Golden West. The Company received $24.2 million in
sales proceeds. The South Dakota properties were geographically isolated from other Company properties making it increasingly difficult to realize additional
operating efficiencies. These properties were adjacent to Golden West’s operations and offered Golden West numerous operational synergies. The proceeds from
this divestiture were used to fund acquisitions completed in 2003. The operations of these companies are presented as discontinued operations.
Income from the South Dakota divestiture operations consists of the following (in thousands):
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Revenue $4,028
Income from discontinued operations 1,929
The Company recorded a gain on disposal of the South Dakota companies of $7.7 million.
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The Company had entered into financial advisory agreements with certain equity investors, pursuant to which the equity investors provided certain
consulting and advisory services related, but not limited to, equity financings and strategic planning. In 2005, the Company paid approximately $0.1 million
related to these agreements. These agreements were cancelled on February 8, 2005. The Company paid $1.0 million for each of the years ended December 31,
2004 and 2003 in such fees to the equity investors and this expense was classified within operating expenses. The agreements also provided that the Company
reimburse the equity investors for travel relating to the Company’s board of directors meetings. The
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