Orange County-Poughkeepsie Limited Partnership

6 Months Ended

Jun. 30, 2015

Orange County-Poughkeepsie Limited Partnership [Abstract]

Orange County-Poughkeepsie Limited Partnership

NOTE 4: 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 in the O-P until April 30, 2014, which was 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 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 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 then outstanding borrowings under the TriState credit facility, paid taxes on the gain and fund a special dividend paid in this quarter. The Company expects to use the remaining gross proceeds, among other things, for working capital needs and support growth initiatives. The Company may, in its discretion, use the gross proceeds for other purposes.

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. On May 26, 2011, the Company entered into an agreement (the "4G 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. The 4G Agreement provided for guaranteed annual cash distributions to the Company through 2013. The Company was therefore required to apply the cash payments made 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 during 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 the 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. As of June 30, 2015 and December 31, 2014, the investment account was zero.

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

		For the three
		months ended
($ in thousands)		June 30, 2014
Net sales	$	86,305
Cellular service cost		42,441
Operating expenses		23,037
Operating income		20,827
Other income		42
Net income	$	20,869
Company's share	$	558

		For the six months
		ended
($ in thousands)		June 30, 2014
Net sales	$	170,746
Cellular service cost		80,051
Operating expenses		44,726
Operating income		45,969
Other income		62
Net income	$	46,031
Company's share	$	2,597