Hickory Tech (HTCO)

Inventories

Inventory includes parts, materials and supplies stored in our warehouses to support basic levels of service and maintenance as well as scheduled capital projects and equipment awaiting configuration for customers. Inventory also includes parts and equipment shipped directly from vendors to customer locations while in transit and parts and equipment returned from customers which is being returned to vendors for credit, as well as maintenance contracts associated with customer sales which have not yet transferred to the customer. The inventory value in the Telecom Sector, comprised of materials, as of December 31, 2008 and December 31, 2007 was $3,564,000 and $3,312,000, respectively. The inventory value in the Enventis Sector, comprised of finished goods, as of December 31, 2008 and December 31, 2007 was $5,110,000 and $3,742,000, respectively.

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Inventories

Inventory includes parts, materials and supplies
stored in our warehouses to support basic levels of service and maintenance as
well as scheduled capital projects and equipment awaiting configuration for
customers. Inventory also includes parts and equipment shipped directly from
vendors to customer locations while in transit and parts and equipment returned
from customers which is being returned to vendors for credit, as well as
maintenance contracts associated with customer sales which have not yet
transferred to the customer. The inventory value in the Telecom Sector,
comprised of materials, as of December 31, 2008 and December 31, 2007
was $3,564,000 and $3,312,000, respectively. The inventory value in the
Enventis Sector, comprised of finished goods, as of December 31, 2008 and December 31,
2007 was $5,110,000 and $3,742,000, respectively.

46

Inventories

Inventory includes parts, materials and supplies
stored in our warehouses to support basic levels of service and maintenance as
well as scheduled capital projects and equipment awaiting configuration for
customers. Inventory also includes parts and equipment shipped directly from
vendors to customer locations while in transit and parts and equipment returned
from customers which is being returned to vendors for credit, as well as
maintenance contracts associated with customer sales which have not yet
transferred to the customer. The inventory value in the Telecom Sector,
comprised of materials, as of December 31, 2008 and December 31, 2007
was $3,564,000 and $3,312,000, respectively. The inventory value in the
Enventis Sector, comprised of finished goods, as of December 31, 2008 and December 31,
2007 was $5,110,000 and $3,742,000, respectively.

46

Inventories

Inventory includes parts, materials and supplies stored in our warehouses to support basic levels of service and maintenance as well as scheduled capital projects and equipment awaiting configuration for customers. Inventory also includes parts and equipment shipped directly from vendors to customer locations while in transit and parts and equipment returned from customers which is being returned to vendors for credit, as well as maintenance contracts associated with customer sales which have not yet transferred to the customer. The inventory value in the Telecom Sector, comprised of raw materials, as of December 31, 2008 and December 31, 2007 was $3,564,000 and $3,312,000, respectively. The inventory value in the Enventis Sector is comprised of finished goods in transit to customers as of December 31, 2008 and December 31, 2007 was $5,110,000 and $3,742,000, respectively.

Inventories are valued using the lower of cost (perpetual weighted average-cost or specific identification) or market method. We adjust our inventory carrying value for estimated obsolescence or unmarketable inventory to the estimated market value based upon assumptions about future demand and market conditions. As market and other conditions change, additional inventory write-downs may be recorded at the time acts that give rise to the lower value become known.

61

Inventories

Inventory includes
parts, materials and supplies stored in our warehouses to support basic levels
of service and maintenance as well as scheduled capital projects and equipment
awaiting configuration for customers. Inventory also includes parts and
equipment shipped directly from vendors to customer locations while in transit
and parts and equipment returned from customers which is being returned to
vendors for credit, as well as maintenance contracts associated with customer
sales which have not yet transferred to the customer. The inventory value in
the Telecom Sector, comprised of raw materials, as of December 31, 2008
and December 31, 2007 was $3,564,000 and $3,312,000, respectively. The
inventory value in the Enventis Sector is comprised of finished goods in transit
to customers as of December 31, 2008 and December 31, 2007 was
$5,110,000 and $3,742,000, respectively.

Inventories are
valued using the lower of cost (perpetual weighted average-cost or specific
identification) or market method. We adjust our inventory carrying value for
estimated obsolescence or unmarketable inventory to the estimated market value
based upon assumptions about future demand and market conditions. As market and
other conditions change, additional inventory write-downs may be recorded at
the time acts that give rise to the lower value become known.

61

Inventories

Inventory includes
parts, materials and supplies stored in our warehouses to support basic levels
of service and maintenance as well as scheduled capital projects and equipment
awaiting configuration for customers. Inventory also includes parts and
equipment shipped directly from vendors to customer locations while in transit
and parts and equipment returned from customers which is being returned to
vendors for credit, as well as maintenance contracts associated with customer
sales which have not yet transferred to the customer. The inventory value in
the Telecom Sector, comprised of raw materials, as of December 31, 2008
and December 31, 2007 was $3,564,000 and $3,312,000, respectively. The
inventory value in the Enventis Sector is comprised of finished goods in transit
to customers as of December 31, 2008 and December 31, 2007 was
$5,110,000 and $3,742,000, respectively.

Inventories are
valued using the lower of cost (perpetual weighted average-cost or specific
identification) or market method. We adjust our inventory carrying value for
estimated obsolescence or unmarketable inventory to the estimated market value
based upon assumptions about future demand and market conditions. As market and
other conditions change, additional inventory write-downs may be recorded at
the time acts that give rise to the lower value become known.

61

Note 5.  Inventories

Inventory includes parts, materials and supplies stored in our warehouses to support basic levels of service and maintenance as well as scheduled capital projects and equipment awaiting configuration for customers. Inventory also includes parts and equipment shipped directly from vendors to customer locations while in transit and parts and equipment returned from customers which are being returned to vendors for credit, as well as maintenance contracts associated with customer sales which have not yet transferred to the customer. The inventory value in the Telecom Sector, comprised of materials, as of September 30, 2008 and December 31, 2007 was $4,109,000 and $3,312,000, respectively. The inventory value in the Enventis Sector, comprised of finished goods, as of September 30, 2008 and December 31, 2007 was $4,679,000 and $3,742,000, respectively.

Inventories are valued using the lower of cost (perpetual weighted average-cost or specific identification) or market method. We adjust our inventory carrying value for estimated obsolescence or unmarketable inventory to the estimated market value based upon assumptions about future demand and market conditions as market and other conditions change.

Note 5.  Inventories

Inventory includes parts, materials and supplies stored in our warehouses to support basic levels of service and maintenance as well as scheduled capital projects and equipment awaiting configuration for customers. Inventory also includes parts and equipment shipped directly from vendors to customer locations while in transit and parts and equipment returned from customers which is being returned to vendors for credit, as well as maintenance contracts associated with customer sales which have not yet transferred to the customer. The inventory value in the Telecom Sector, comprised of materials, as of June 30, 2008 and December 31, 2007 was $3,874,000 and $3,312,000, respectively. The inventory value in the Enventis Sector, comprised of finished goods, as of June 30, 2008 and December 31, 2007 was $5,399,000 and $3,742,000, respectively.

Inventories are valued using the lower of cost (perpetual weighted average-cost or specific identification) or market method. We adjust our inventory carrying value for estimated obsolescence or unmarketable inventory to the estimated market value based upon assumptions about future demand and market conditions. As market and other conditions change, additional inventory write-downs may be recorded at the time acts that give rise to the lower value become known.

Note 5.  Inventories

Inventory includes parts, materials and supplies stored in our warehouses to support basic levels of service and maintenance as well as scheduled capital projects and equipment awaiting configuration for customers. Inventory also includes parts and equipment shipped directly from vendors to customer locations while in transit and parts and equipment returned from customers which is being returned to vendors for credit, as well as maintenance contracts associated with customer sales which have not yet transferred to the customer. The inventory value in the Telecom Sector, comprised of materials, as of March 31, 2008 and December 31, 2007 was $3,989,000 and $3,312,000, respectively. The inventory value in the Enventis Sector, comprised of finished goods, as of March 31, 2008 and December 31, 2007 was $3,760,000 and $3,742,000, respectively.

Inventories are valued using the lower of cost (perpetual weighted average-cost or specific identification) or market method. We adjust our inventory carrying value for estimated obsolescence or unmarketable inventory to the estimated market value based upon assumptions about future demand and market conditions. As market and other conditions change, additional inventory write-downs may be recorded at the time acts that give rise to the lower value become known.

Inventories

Inventory includes parts, materials and supplies stored in our warehouses to support basic levels of service and maintenance as well as scheduled capital projects and equipment awaiting configuration for customers. Inventory also includes parts and equipment shipped directly from vendors to customer locations while in transit and parts and equipment returned from customers which is being returned to vendors for credit, as well as maintenance contracts associated with customer sales which have not yet transferred to the customer. The inventory value in the Telecom Sector, comprised of raw materials, as of December 31, 2007 and December 31, 2006 was $3,312,000 and $2,850,000, respectively. The inventory value in the Enventis Sector is comprised of “finished goods in transit to customers” as of December 31, 2007 and December 31, 2006 was $3,742,000 and $8,444,000, respectively.

Inventories are valued using the lower of cost (perpetual weighted average-cost or specific identification) or market method. We adjust our inventory carrying value for estimated obsolescence or unmarketable inventory to the estimated market value based upon assumptions about future demand and market conditions. As market and other conditions change, additional inventory write–downs may be recorded at the time acts that give rise to the lower value become known.

59

Inventories

Inventory includes
parts, materials and supplies stored in our warehouses to support basic levels
of service and maintenance as well as scheduled capital projects and equipment
awaiting configuration for customers. Inventory also includes parts and
equipment shipped directly from vendors to customer locations while in transit
and parts and equipment returned from customers which is being returned to
vendors for credit, as well as maintenance contracts associated with customer
sales which have not yet transferred to the customer. The inventory value in
the Telecom Sector, comprised of raw materials, as of December 31, 2007
and December 31, 2006 was $3,312,000 and $2,850,000, respectively. The
inventory value in the Enventis Sector is comprised of “finished goods in
transit to customers” as of December 31, 2007 and December 31, 2006
was $3,742,000 and $8,444,000, respectively.

Inventories are
valued using the lower of cost (perpetual weighted average-cost or specific
identification) or market method. We adjust our inventory carrying value for
estimated obsolescence or unmarketable inventory to the estimated market value
based upon assumptions about future demand and market conditions. As market and
other conditions change, additional inventory write–downs may be recorded at
the time acts that give rise to the lower value become known.

59

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NOTE 5. INVENTORIES

Inventories, which consist of equipment for resale, materials and supplies, are stated at the lower of average cost or market. Cost is determined on a first-in, first-out (FIFO) basis. Reserves offset the cost of inventory to arrive at the net realizable value of the inventory. Telecommunications equipment supply markets have changed in recent years and have caused the Company to apply additional valuation methods, which estimate the lower of cost or market principle in the Enterprise Solutions Sector. The Company has a regular process of evaluating its inventory and modifying its value to its estimate of market prices and making the adjustments to lower of cost or market on a consistent basis. The Company cannot predict the impact or timing, if any, of future inventory valuation changes.

Inventories

Inventories, which consist primarily of communication and data equipment purchased from third parties for resale, are stated at the lower of cost or market. Cost is determined by specific identification.