NOTE 5: ORANGE COUNTY-POUGHKEEPSIE LIMITED PARTNERSHIP

The Company was a limited partner in the Orange County-Poughkeepsie Limited Partnership ("O-P") and had an 8.108% limited partnership interest until April 30, 2014, which is accounted for under the equity method of accounting. The majority owner and general partner of the O-P is Verizon Wireless of the East LP ("Verizon").

On May 26, 2011, the Company entered into an agreement with Verizon and Cellco Partnership (d/b/a Verizon Wireless), the other limited partner, in the O-P to make certain changes to the O-P partnership agreement which, among other things, specifies that the O-P will provide 4G cellular services (the "4G Agreement"). The 4G Agreement provides that the O-P's business will be converted from a wholesale business to a retail business. The 4G Agreement provided for guaranteed annual cash distributions to the Company from the O-P through 2013. For the years ended December 31, 2013, 2012 and 2011, the Company received annual cash distributions from the O-P of $13.0 million, $13.0 million and $13.6 million, respectively. Starting in 2014, the agreement provided that the Company would receive cash distributions equal to its ownership share percentage of the approved total distributions by the O-P. The 4G Agreement also gave the Company the right (the "Put") to require Verizon to purchase all of the Company's ownership interest in the O-P during April 2013 or April 2014 for an amount equal to the greater of (a) $50.0 million or (b) the product of five (5) times 0.081081 times the O-P's EBITDA, as defined in the 4G Agreement for the calendar year preceding the exercise of the Put.

On April 30, 2014, the Company exercised the Put option and sold all of its ownership interest in the O-P for gross proceeds of $50 million, which resulted in a gain on the sale of $49.8 million. The Company has not and will not receive any income from the O-P after April 30, 2014. The Company used a portion of the proceeds to repay all of the outstanding borrowings under the TriState credit facility (see Note 6). The Company expects the remaining gross proceeds to be used to pay taxes on the related gain, fund working capital needs and support growth initiatives.

Pursuant to the equity method accounting of the Company's investment income, the Company is required to record the income from the O-P as an increase to the Company's investment account. The Company is required to apply the cash payments made under the 4G Agreement as a return on its investment when received. As a result of receiving the fixed guaranteed cash distributions from the O-P in excess of the Company's proportionate share of the O-P income, the investment account was reduced to zero within the first six months of 2012. Thereafter, the Company recorded the fixed guaranteed cash distributions that were received from the O-P in excess of the proportionate share of the O-P income directly to the Company's statement of operations as other income. In 2014 when guaranteed distribution ceased, the Company returned to recording the income from the O–P as in increase to the Company's investment account and any cash payments received were applied as a return on its investment.

The Company recognized $0.6 million of income for its April 2014 share of income from the O-P. As of June 30, 2014, $0.5 million of the income was undistributed and is included in other accounts receivable on its balance sheet. Pursuant to the 4G Agreement, the Company will receive its remaining distribution in August 2014.

The following summarizes the income statement (unaudited) for the three months ended June 30, 2014 and 2013 that the O-P provided to the Company:


		For the three		For the three
		months ended		months ended
($ in thousands)		June 30, 2014		June 30, 2013
Net sales	$	86,305	$	81,176
Cellular service cost		42,441		36,307
Operating expenses		23,037		22,237
Operating income		20,827		22,632
Other income (expense)		42		4
Net income	$	20,869	$	22,636

Company's share (1)	$	558	$	1,835

(1)	Company's share for the three months ended June 30, 2014 was calculated using a weighted average ownership rate of 2.673% due to the fact that the Company exercised the Put option and sold all of its ownership interest on April 30, 2014.

The following summarizes the income statement (unaudited) for the six months ended June 30, 2014 and the six months ended June 30, 2013 that O-P provided to the Company:


		For the six		For the six
		months ended		months ended
($ in thousands)		June 30, 2014		June 30, 2013
Net sales	$	170,746	$	161,068
Cellular service cost		80,051		72,287
Operating expenses		44,726		43,635
Operating income		45,969		45,146
Other income (expense)		62		7
Net income	$	46,031	$	45,153

Company's share (2)	$	2,597	$	3,661

(2)

Company's share of income for the six months ended June 30, 2014 is a blend of its ownership rate of 8.108% for first quarter earnings and the weighted average ownership rate of 2.673% for the second quarter earnings due to the fact that the Company sold all of its ownership interest on April 30, 2014.

The following summarizes the balance sheet as of December 31, 2013 that the O-P provided to the Company:


		As of
($ in thousands)		December 31, 2013
Current assets	$	23,351
Property, plant and equipment, net		41,646
Other assets		365
Total assets	$	65,362

Total liabilities	$	17,887
Partners' capital		47,475
Total liabilities and partners' capital	$	65,362