SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME Years Ended December 31, 2003, 2002 and 2001 in thousands, except per share amounts Shares Common Stock Retained Earnings Accumulated Other Comprehensive Income (loss) Total Balance, January 1, 2001 7,518 $4,817 $ 55,873 $5,645 $ 66,335 Comprehensive income: Net income - - 16,372 - 16,372 Net unrealized change in securities available-for-sale, net of tax of $3,482 - - -  (5,603) (5,603) Total comprehensive income $ 10,769 Dividends declared ($0.35 per share) - -  (2,635) -  (2,635) Common stock issued through exercise of incentive stock options 12 133 - - 133 Balance, December 31, 2001 7,530 $4,950 $ 69,610 $ 42 $ 74,602 Comprehensive income: - - 4,519 - 4,519 Net income Net unrealized change in securities available-for-sale, net of tax of $29 - - - (46) (46) Total comprehensive income $ 4,473 Dividends declared ($0.37 per share) - - (2,794) - (2,794) Common stock issued through exercise of incentive stock options and stock grants 22 296 - - 296 Balance, December 31, 2002 7,552 $5,246 $ 71,335 $ (4) $ 76,577 Comprehensive income Net income 32,074 32,074 Net unrealized change in securities available-for-sale, net of tax of $(18) 30 30 Total comprehensive income $ 32,104 Dividends declared ($0.39 per share) - - (2,960) (2,960) Common stock issued through exercise of incentive stock options 41 487 - - 487 Balance, December 31, 2003 7,593 $5,733 $100,449 $ 26 $106,208 - - - - - - - See accompanying notes to consolidated financial statements. 15 ■  2003 ANNUAL REPORT