FairPoint Communications 2007 Annual Report Download - page 94

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Table of Contents



The aggregate cost of the Company’s cost method investments totaled $3.7 million at December 31, 2007. These investments consist
primarily of investments in stock of governmental agencies and minority interests in limited partnerships or corporations. Therefore, the
investments are highly illiquid and there is no readily available market for these securities which makes it impracticable to estimate a fair
value. As a result, these investments were not evaluated for impairment because (a) the Company did not estimate the fair value of those
investments in accordance with paragraphs 14 and 15 of SFAS No. 107 and
(b) the Company did not identify any events or circumstances that may have had a significant adverse effect on the fair value of those
investments.
On August 4, 2005, the Board of Directors of the RTB approved the liquidation and dissolution of the RTB. As part of such
liquidation and dissolution, all RTB loans were to be transferred to the Rural Utilities Service and all shares of the RTB’s Class A Stock,
Class B Stock and Class C Stock were to be redeemed at par value. The Company had no outstanding loans with the RTB but owned
2,477,493 shares of Class B Stock and 24,380 shares of Class C Stock. This liquidation was completed in April 2006, and, as a
result, the Company received proceeds of $26.9 million from the RTB liquidation. The Company recorded a gain on this investment of
approximately $4.1 million in 2006. A portion of the proceeds received from the RTB, while not estimable at this time, may be subject to
review by regulatory authorities who may require the Company to record a portion thereof as a regulatory liability. In October 2006, the
Company was notified that the state of Washington opened a docket to review the proceeds received by companies from the RTB in that
state. In November 2006, the Company also received an information request from the state of Maine regarding the RTB transaction. At
this time, the Company can not determine the impact of these reviews.
On May 1, 2006, the Company completed the sale of its investment in Southern Illinois Cellular Corp., or SICC, from which it
received total proceeds of $16.9 million. As part of this sale, the Company received a portion of total proceeds, approximately
$2.1 million, in the form of a dividend. In addition to the dividend income of $2.1 million, the Company recorded a gain on this
investment of approximately $10.2 million in 2006. Additional proceeds of approximately $2.6 million were paid out of escrow in 2007
and the Company recorded the gain on this portion of the transaction in 2007.
 
Long-term debt at December 31, 2007 and 2006 is shown below (in thousands):
 
2005 Senior secured notes, variable rates ranging from 7.00% to 8.53% (weighted average rate of 7.1%) at
December 31, 2007, due 2011 to 2012 $ 621,200 $ 603,500
2003 Senior notes, 11.875%, due 2010 2,050 2,050
Senior notes to RTFC:
Fixed rate, ranging from 8.2% to 9.20%, due 2009 to 2014 1,722 2,436
Total outstanding long-term debt 624,972 607,986
Less current portion (753) (714)
Total long-term debt, net of current portion $624,219 $ 607,272
92