FairPoint Communications 2003 Annual Report Download - page 23

Non-compete agreements 245 145 100 — —
Minimum purchase contract 4,027 2,833 1,194 — —
Total contractual cash obligations $949,975 $31,388 $77,213 $314,068 $527,306
(1) The Company has the option to redeem the series A preferred stock at any time. Under certain circumstances, the Company would be
required to pay a premium of up to 6% in connection with a redemption. The Company is required to redeem the series A preferred
stock upon the occurrence of one of the following events: (i) a merger, consolidation, sale, transfer or disposition of at least 50% of the
assets or business of the Company and its subsidiaries, (ii) a public offering of the Company's common stock which yields in the
aggregate at least $175.0 million, or (iii) the first anniversary of the maturity of the 12 1/2% notes (which first anniversary will occur in
May 2011), unless prohibited by its credit facility or the indentures governing its 9 1/2% notes, floating rate notes and 121/2% notes.
(2) Real property lease obligations of $9.9 million associated with the discontinued operations discussed in note (12) to our consolidated
financial statements which are stated in this table at total contractual amounts. However, we have negotiated lease terminations or
subleases on these properties to reduce the total obligation. Operating leases from continuing operations of $3.0 million are also
included.
(3) Payable to affiliates of Kelso upon the occurrence of certain events. See "Item 13. Certain Relationships and Related Party
Transactions—Financial Advisory Agreements."
The following table discloses aggregate information about our commercial commitments as of December 31, 2003. Commercial
commitments are items that we could be obligated to pay in the future. They are not included in our condensed consolidated balance sheets.
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Source of fair value:
Financial guarantee $1,511 $617 $894 $ — $ —
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The following table discloses aggregate information about our derivative financial instruments as of December 31, 2003, the source of
fair value of these instruments and their maturities.
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Source of fair value:
Derivative financial instruments(1) $874 $874 $ — $ — $ —
(1) Fair value of interest rate swaps at December 31, 2003 was provided by the counterparties to the underlying contracts using
consistent methodologies.
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We have utilized a variety of debt instruments to fund our business and we have a significant amount of debt outstanding. Our high
level of debt could significantly affect our business by: making it more difficult for us to satisfy our obligations, including making scheduled
interest payments under our debt obligations; limiting our ability to obtain additional financing; increasing our vulnerability to generally
adverse economic and communications industry conditions, including changes in interest rates; requiring us to dedicate a substantial portion
of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flow for other purposes; limiting our
flexibility in planning for, or reacting to, changes in our business and the communications industry; and placing us at a competitive
disadvantage compared to those of our competitors that have less debt.
In addition, our credit facility and the indentures governing our senior subordinated notes and our senior notes contain covenants that
limit our operating flexibility and restrict our ability to take specific actions, even if we believe such actions are in our best interest. These
include restrictions on our ability to: incur additional debt; pay dividends or distributions on, or redeem or repurchase, capital stock; create