EX-99.2 4 v052827_ex99-2.htm
Mid-Maine Communications, Inc. & Subsidiaries
Consolidated Balance Sheets
June 30, 2006 and December 31, 2005
           
ASSETS
          
       
(Restated)
  
   
June 30, 2006
  
December 31, 2005
  
 
  
(Unaudited)
      
Current assets
          
Cash and cash investments
  
$
568,460
  
$
458,545
  
Accounts receivable, net of allowance for doubtful accounts of $12,039 in 2006 and $12,500 in 2005
    
2,332,103
   
2,241,548
 
Materials and supplies
    
1,260,198
   
1,145,777
 
Prepaid expenses and other current assets
   
171,423
   
204,506
 
Rural Telephone Bank stock
    
-
    
372,667
 
Income taxes receivable
    
314,804
   
222,338
 
Total current assets
    
4,646,988
   
4,645,381
 
               
Property, plant and equipment
              
General support assets
    
5,706,201
   
5,727,777
 
Information origination/termination equipment
    
93,652
   
93,444
 
Central office equipment
    
21,210,626
   
20,631,343
 
Cable and wire facilities
    
15,296,954
   
15,194,913
 
     
42,307,433
   
41,647,477
 
Less accumulated depreciation and amortization
    
25,664,402
   
23,811,832
 
     
16,643,031
   
17,835,645
 
Plant held for future use
    
13,000
   
13,000
 
Telecommunications plant under construction
    
917,753
   
268,975
 
Net property, plant and equipment
    
17,573,784
   
18,117,620
 
               
Noncurrent assets
              
Goodwill
    
1,918,559
   
1,918,559
 
Investments in nontraded stocks
    
695,678
   
641,777
 
Deferred charges, net
    
294,231
   
589,160
 
Other noncurrent assets, net
    
155,844
   
248,914
 
Total noncurrent assets
    
3,064,312
   
3,398,410
 
               
   
$
25,285,084
  
$
26,161,411
  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
1
 
LIABILITIES AND STOCKHOLDERS' EQUITY
            
               
 
    
June 30, 2006
    
(Restated)
December 31, 2005
  
               
Current liabilities
              
Current portion of long term debt
  
$
1,214,000
  
$
886,000
  
Accounts payable
   
775,831
   
1,352,735
 
Accrued expenses
    
1,997,760
   
1,079,834
 
Deferred revenue
    
1,114,927
   
1,076,418
  
Total current liabilities
    
5,102,518
   
4,394,987
 
               
Deferred income taxes
    
2,664,641
   
2,967,351
 
               
Long-term debt, excluding current portion
    
22,858,849
   
17,560,099
 
Total liabilities
    
30,626,008
   
24,922,437
 
               
Stockholders' equity
              
Common stock, par value $.01; 20,000 shares authorized, 3,513.27 shares issued and outstanding
   
35
   
35
 
Additional paid-in capital
    
2,570,568
   
2,570,568
 
Accumulated deficit
    
(7,911,527
)
  
(1,331,629
)
Total stockholders' equity
   
(5,340,924
)
  
1,238,974
 
               
   
$
25,285,084
  
$
26,161,411
  
 
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
Mid-Maine Communications, Inc. & Subsidiaries
Consolidated Statements of Income and Accumulated Deficit
For The Six Months Ended June 30,
(Unaudited)
       
 
  
   
2006
  
2005
  
   
 
      
Telecommunications revenue
  
$
11,357,027
  
$
10,901,454
  
               
Operating Expenses
              
Network
    
5,068,605
   
4,729,390
 
Sales and marketing
    
1,936,039
   
2,113,505
 
General and administrative
    
2,208,235
   
1,492,493
 
Depreciation, amortization and loss on sale of equipment
    
2,567,479
   
1,767,829
 
Total operating expenses
    
11,780,358
   
10,103,217
 
               
Operating income (loss)
    
(423,331
)
  
798,237
 
               
Other income (expense)
             
Interest and dividends
    
311,362
   
339,921
 
Interest expense
    
(808,171
)
  
(598,253
)
Non-operating
   
200,333
   
(107,381
)
 
              
Net other expense
    
(296,476
)
  
(365,713
)
               
Income (loss) before income taxes
    
(719,807
)
  
432,524
 
               
Income taxes (benefit)
    
(289,909
)
  
173,010
 
               
Net income (loss)
   
(429,898
)
  
259,514
 
               
Accumulated deficit, beginning of year, as restated
    
(1,331,629
)
  
(1,989,469
)
               
Dividends paid
    
6,150,000
    
-
  
               
Accumulated deficit, end of period, as restated
  
$
(7,911,527
)
$
(1,729,955
)
 
 
The accompanying notes are an integral part of these consolidated financial statements.
2
 
Mid-Maine Communications, Inc. & Subsidiaries
Consolidated Statements of Cash Flows (Restated)
For The Six Months Ended June 30,
(Unaudited)
           
   
2006
  
2005
  
Cash flows from operating activities
          
Net income (loss)
 
$
(429,898
)
$
259,541
  
Adjustments to reconcile net income to net cash provided (used) by operating activities:
              
Depreciation, amortization and loss on sale of equipment
    
2,119,099
   
1,735,729
 
Amortization of deferred financing costs
   
448,380
   
32,100
 
Deferred income taxes
    
(302,710
)
  
146,782
 
Decrease (increase) in
              
Accounts receivable
    
(90,555
)
  
(385,638
)
Materials and supplies
    
(114,422
)
  
(141,467
)
Prepaid expenses and other current assets
    
405,751
   
(53,062
)
Income taxes receivable
    
(92,466
)
  
-
  
Increase (decrease) in
              
Accounts payable
    
(576,904
)
  
8,101
 
Accrued expenses
    
917,926
   
(342,461
)
Deferred revenue
    
 38,509
   
695,567
 
Income taxes payable
    
-
    
72,500
 
Net cash provided by operating activities
    
2,322,710
   
2,027,665
 
               
Cash flows from investing activities
              
Plant additions
   
(1,425,615
)
  
(1,536,430
)
Payment of deferred charges
    
(214,831
)
  
-
  
Increase in investments, net
    
(49,099
)
  
(16,128
)
Net cash used by investing activities
   
(1,689,545
)
  
(1,552,558
)
               
Cash flows from financing activities
              
Dividends paid
    
(6,150,000
)
  
-
  
Net proceeds from revolving credit facilities
    
5,626,750
   
-
  
Principal payments on long-term debt
   
-
    
(489,742
)
Net cash used by financing activities
    
(523,250
)
  
(489,742
)
               
Net increase in cash and cash investments
    
109,915
   
(14,635
)
               
Cash and cash investments, beginning of year
    
458,545
   
368,546
 
               
Cash and cash investments, end of period
  
$
568,460
  
$
353,911
  
 
 
The accompanying notes are an integral part of these consolidated financial statements.
3
 
MID-MAINE COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 
 
1.
Organization and Basis of Financial Reporting
 
Basis of Presentation and Principlies of Consolidation
The conaolidated financial statements include the accounts of Mid-Maine communications, Inc. (the “Company”), its wholly owned subsidiaries, Mid-Maine Telecom, Inc. and Mid-Maine TelPlus, Inc. The accompanying consolidated financial statements include the accounts of the Company and all of its subsidiaries after elimination of all material intercompany balances and transactions.
 
2.
Other Income
 
Other income included the gain of $200,333 from the liquidation of the Rural Telephone Bank (RTB) stock. The RTB stock liquidation resulted from the United States Department of Agriculture closing the Rural Telephone Bank. As part of the liquidation process, the Company received April 2006, $573,000 for the redemption of all outstanding RTB stock owned by Mid-Maine Telecom, Inc. The investment had a cost of $372,667.
 
3.
Subsequent Events
 
On July 3, 2006, Otelco, a publicly traded telecommunications company headquartered in Alabama, acquired the Company for approximately $37.8 million in cash, subject to post-closing adjustments.
 
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