Discontinued operations

9 Months Ended

Sep. 30, 2011

Discontinued operations [Abstract]

Discontinued operations

2.  Discontinued Operations

In September 2008, the Company announced its intention to sell its Converged Services operation, and the related assets and liabilities were reclassified as held for sale in the consolidated balance sheet and the historical operating results were reclassified as discontinued operations.  Depreciation and amortization on long-lived assets was also discontinued.

During 2009 and 2010, the Company determined that the fair value of Converged Services had declined.  Accordingly, the Company recorded an impairment loss of $17.5 million ($10.7 million, net of taxes) as of March 31, 2009, and recorded an additional impairment loss of $1.9 million ($1.1 million, net of taxes) as of December 31, 2010, to reduce the carrying value of these assets to their estimated fair value less cost to sell.  Enhancements to the physical assets since the impairment recorded at December 31, 2010, have been capitalized and immediately expensed during 2011, in the amount of $0.2 million and $0.4 million in the three months and nine months ended September 30, 2011, respectively.

During the first quarter of 2011, the Company made the decision to transfer service contracts and related equipment for five Converged Services' properties that were within the Shentel Cable franchised cable footprint and could be serviced by the Company's nearby cable headends.  These properties, with an aggregate net book value of approximately $0.4 million, were transferred to Shentel Cable and have been reclassified from discontinued operations for all prior periods.  The Company recorded an adjustment to depreciation expense of $0.1 million to reduce the carrying value of the assets transferred to the lower of their carrying value net of the impairment charge or the carrying value as if depreciation had been recorded on these assets at all times.

During the second quarter of 2011, the Company sold service contracts and related equipment for seven Converged Services' properties to a third-party purchaser, receiving cash proceeds of $0.9 million (with an additional $0.1 million in proceeds placed in escrow for twelve months).  The total proceeds approximated the carrying value of the assets sold.

During the third quarter of 2011, the Company sold service contracts and related equipment for two Converged Services' properties to third party purchasers, receiving cash proceeds of $0.3 million.  The total proceeds approximated the carrying value of the assets sold.

At September 30, 2011, negotiations with potential purchasers continue.  Based upon indications of interest made by potential buyers in recent months, the Company has determined that the fair value of Converged Services has declined.  Accordingly, the Company recorded an impairment loss of $0.6 million ($0.4 million, net of taxes) as of September 30, 2011, to reduce the carrying value of these assets to their estimated fair value less cost to sell.

Assets and liabilities held for sale consisted of the following:

	September 30, 2011		December 31, 2010
Assets held for sale:
Property, plant and equipment, net	$	4,966	$	6,614
Intangible assets, net		640		706
Deferred charges		670		1,310
Other assets		691		675
	$	6,967	$	9,305
Liabilities:
Other liabilities	$	1,017	$	910

Discontinued operations included the following amounts of operating revenue and income (loss) before income taxes:

		Three Months Ended
		September 30,
		2011		2010
Operating revenues	$	2,531		$	2,816
Earnings (loss) before income taxes	$	(1,005	)	$	(280	)

		Nine Months Ended
		September 30,
		2011		2010
Operating revenues	$	8,868		$	9,358
Earnings (loss) before income taxes	$	(1,136	)	$	103