FairPoint Communications 2003 Annual Report Download - page 132

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NOTE 9. LEASE COMMITMENTS
Future minimum rental payments under leases for facilities have initial non-cancelable lease terms at December 31, 2002 as follows:
Capitalized
Leases
Operating
Leases
2003 $17,611 $93,538
2004 15,956 71,086
2005 16,256 62,036
2006 16,256 55,436
2007 10,837 34,952
Thereafter — —
Total minimum lease payments $76,916 $317,096
Less amount representing interest 13,246
Present value of minimum lease payments including current maturities of $11,495 $63,670
Cell site leases are renewable for four additional five-year periods under similar terms at the end of the initial term. Lease terms provide
for certain adjustment of the payments in the renewal periods.
The Partnership has an office building lease with an affiliate of MC for an initial term of five years. The Partnership's portion of the
annual base rental, included in the future minimum rental payments above, is $36,936. A contingent rental provision allows for increases
in base rent for real estate taxes and operating costs in excess of base operating costs. The agreement includes an option to extend the lease
for an additional five years.
Rental expense for all cancelable and non-cancelable operating leases totaled $122,319, $95,515, and $90,900 in 2002, 2001, and
2000, respectively.
NOTE 10. ALLOWANCE FOR UNCOLLECTIBLES
The Company uses the reserve method to recognize uncollectible customer accounts. The following activity has been recognized under
this method.
2002
2001
2000
Balance, December 31 $80,000 $70,000 $95,000
Provision for uncollectibles 51,226 36,991 47,460
Accounts written off, net of recoveries 46,226 26,991 72,460
Balance, December 31 $85,000 $80,000 $70,000
12
NOTE 11. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
The following table presents summarized quarterly results.
Quarter
1st
2nd
3rd
4th
2002
Operating revenues $1,707,412 $1,698,737 $1,745,740 $1,728,822
Operating income $48,352 $(19,292)$(45,733)$(170,584)
Net income $51,725 $(26,825)$(52,226)$(184,262)
2001
Operating revenues $1,614,897 $1,872,348 $1,911,963 $1,921,535
Operating income $114,963 $153,201 $169,279 $175,123
Net income $107,694 $136,992 $156,622 $169,050
Quarterly operating results are not necessarily representative of operations for a full year for various reasons, including seasonal
variations in customer calling patterns and timing of promotional activities.