FairPoint Communications 2006 Annual Report Download - page 79
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(a) Marketable Equity Securities
As of December 31, 2006, the Company no longer holds any marketable equity investments classified as available-for-sale. Following an August 2, 2004
announcement by Choice One of a financial restructuring under Chapter 11 of the United States Bankruptcy Code, the quoted market value of the
Company’s investment in Choice One Communications Inc.’s common stock declined to $33,000. The Company determined that the decline in fair value was
other-than-temporary and recorded an impairment loss of $0.5 million in 2004, of which $0.4 million was recorded as an expense in the consolidated statement
of operations and $0.1 million was recorded as a reduction in accumulated other comprehensive income. On November 8, 2004, Choice One exited Chapter 11
and, in accordance with its plan of reorganization, Choice One’s preferred stockholders and common stockholders did not receive any recovery and all of the
preferred stock and common stock has now been cancelled. Total proceeds from sales of available-for-sale securities were $0.3 million in 2004. Gross gains of
$0.1 million were realized on those sales in 2004.
(b) Equity Method Investments
The Company records its share of the earnings or losses of the investments accounted for under the equity method on a three-month lag. The investments
accounted for under the equity method and the Company’s ownership percentage as of December 31, 2006 and 2005 are summarized below:
Chouteau Cellular Telephone Company 33.7%33.7%
ILLINET Communications, LLC 9.1%9.1%
Orange County—Poughkeepsie Limited Partnership 7.5%7.5%
ILLINET Communications of Central IL LLC 5.2%5.2%
Syringa Networks, LLC 11.5%11.7%
Illinois Valley Cellular RSA 2, Inc. 0.0%25.0%
Earnings in equity investments for the years ended December 31, 2006, 2005, and 2004 consisted of the following (in thousands):
Orange County—Poughkeepsie Limited Partnership $10,018 $ 10,523 $ 10,249
Syringa Networks, LLC 213 81 26
Illinois Valley Cellular RSA 2, Inc. 49 477 372
Chouteau Cellular Telephone Company — — 2
Other, net 336 221 250
Total $10,616 $11,302 $10,899
Distributions from investments during the years ended December 31, 2006, 2005, and 2004 consisted of the following (in thousands):
Orange County—Poughkeepsie Limited Partnership $9,150 $9,975 $11,775
Illinois Valley Cellular RSA 2, Inc. — — 375
Chouteau Cellular Telephone Company —40 2,524
CoBank, ACB 1,034 634 —
Distributions from other equity investments 470 210 343
Total $10,654 $10,859 $15,017
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