FairPoint Communications 2003 Annual Report Download - page 56
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Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial
instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be
determined with precision. Changes in assumptions could significantly affect the estimates.
Revenues for interstate access services are based on reimbursement of costs and an allowed rate of return. Revenues of this nature are
received from NECA in the form of monthly settlements. Such revenues amounted to 26.5%, 26.3%, and 26.3% of the Company's total
revenues from continuing operations for the years ended December 31, 2001, 2002, and 2003, respectively.
Certain of the Company's telephone subsidiaries participate in revenue sharing arrangements with other telephone companies for
interstate revenue sharing arrangements and for certain intrastate revenue. Such sharing arrangements are funded by toll revenue and/or
access charges within state jurisdiction and by access charges in the interstate market. Revenues earned through the various sharing
arrangements are initially recorded based on the Company's estimates. The Company
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recognized $7.2 million, $3.1 million and $3.0 million of revenue for settlements and adjustments related to prior years during 2001, 2002,
and 2003, respectively.
Future minimum lease payments under noncancellable operating leases as of December 31, 2003 are as follows:
Year ending December 31:
2004 $1,256 4,172
2005 593 2,424
2006 266 1,790
2007 160 1,491
2008 98 —
Thereafter 613 —
Total minimum lease payments $2,986 9,877
Less estimated rentals to be received under subleases (4,556)
Estimated minimum lease payments included in
liabilities of discontinued operations $5,321
Total rent expense from continuing operations was $3.4 million, $3.1 million, and $3.1 million in 2001, 2002, and 2003, respectively.
From time to time, the Company is involved in litigation and regulatory proceedings arising out of its operations. The Company is not
currently a party to any legal proceedings, the adverse outcome of which, individually or in the aggregate, that management believes would
have a material adverse effect on the Company's financial position or results of operations.
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Not applicable.