Discontinued Operations

12 Months Ended

Dec. 31, 2012

Discontinued Operations [Abstract]

Discontinued Operations

Note 2.  Discontinued Operations

The Company has announced its intention to sell its Converged Services operation, and the assets and liabilities related to this operation were reclassified as held for sale in the consolidated balance sheet.  The historical operating results of the entity have been reclassified as discontinued operations for all periods presented, and depreciation and amortization on long-lived assets was discontinued.

Certain costs historically charged or allocated to the Converged Services segment cannot be allocated to discontinued operations.  As a result, certain general corporate overhead costs, affiliated interest charges, and certain investment gains and losses have been excluded from the reported discontinued operations.  These items have been reclassified to the "Other" category in the segment financial statements for all reported periods (see Note 16).

Assets and liabilities held for sale consisted of the following (in thousands):

	December 31,
	2012		2011
Assets:
Property, plant and equipment, net	$	203	$	2,424
Other assets		-		373
Assets held for sale	$	203	$	2,797
Liabilities:
Other liabilities	$	-	$	267

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

	Years Ended December 31,
	2012			2011			2010
	(in thousands)
Operating revenues	$	1,091		$	10,516		$	12,929
Loss before income taxes	$	(496	)	$	(904	)	$	(1,179	)

During the fourth quarter of 2010, based upon developments in the process of selling these assets, the Company determined that the fair value of Converged Services had declined from earlier estimates.  Accordingly, the Company recorded an impairment loss of $1.9 million ($1.1 million, net of taxes) to further reduce the carrying value of these assets to their revised estimated fair value less cost to sell.

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.

The Company sold service contracts and related equipment for $1.2 million during the second and third quarters of 2011.  Proceeds received approximated the carrying values of the assets sold.  During the third quarter of 2011, based upon developments in the process of selling the remaining assets, the Company determined that the fair value of the remaining Converged Services had declined from earlier estimates.  Accordingly, the Company recorded an impairment loss of $0.6 million ($0.4 million, net of taxes) to further reduce the carrying value of these assets to their revised estimated fair value less cost to sell.

During the fourth quarter of 2011, the Company sold service contracts and related equipment for $4.0 million, of which $2.2 million was in escrow at December 31, 2011.  During 2012, the Company sold service contracts and assets for cash and receivables totaling approximately $1.9 million in cash and receivables, and collected $2.3 million of receivables.  Approximately $0.1 million of receivables remain to be collected from these sales and, as of December 31, 2012, the Company was in the process of finalizing the dispositions of the remaining five properties for an expected aggregate of $0.2 million in cash.