FairPoint Communications 2004 Annual Report Download - page 552

one-half percent or such lessor amount as determined by RTFC. The rate at December 31, 2002 was 5.8%. The agreement is subject to the
provisions of the mortgage and security agreement described below. In addition, the aggregate amount of outstanding principal balance of all
Partnership unsecured indebtedness is limited to $1,000,000 at any one time.
The maximum amount of short-term borrowings at any month-end during 2002 and 2001 were $1,500,000 and $500,000, respectively.
NOTE 6. LONG-TERM DEBT
Long-term debt consists of:
2001
RTFC notes—variable rate $160,160
RTFC notes—variable rate $76,530
Total long-term debt 236,690
Less current portion (236,690)
$ —
These mortgage notes outstanding at December 31, 2001, are to be repaid in equal quarterly installments covering principal and interest
beginning two to three years after date of issue and expiring by 2002. The interest rate on the debt is a variable rate established periodically by
the RTFC. The rate at December 3, 2001, was 5.3%.
Substantially all assets of the Partnership are pledged as security under the mortgage and security agreement with the RTFC.
The mortgage and security and loan agreements underlying the RTFC notes contain certain restrictions on Partnership distributions,
return of partner capital contributions, and investment in, or loans to others. In 2000, the Partnership received a waiver from the lender to
make partnership distributions. Also included in the loan agreement is a provision, which requires the partners to infuse, on an ongoing
basis, the greater of sufficient amounts of equity to accommodate any cash shortfalls or certain specified amounts. Further, the Partnership is
required, under the loan agreement, to achieve a debt service coverage ratio of not less than 1.25.
Of the funds available under the RTFC approved loans, including amendments, all amounts were advanced as of December 31, 2002.
Cash paid for interest net amounts capitalized for 2002, 2001, and 2000 totaled $24,922, $62,028, and $97,253, respectively.
The fair value of the partnership debt is estimated based on the discounted value of future cash flows expected to be paid using current
rates of borrowing for similar types of debt. The fair value of debt approximates carrying value at December 31, 2002 and 2001.
NOTE 7. RELATED PARTY TRANSACTIONS
MC, as operating and network partner, performed certain technical, professional, and administrative services on behalf of the
Partnership. In accordance with the Partnership Agreement, MC is reimbursed by the Partnership's share of these costs. MC allocates these
costs to the various cellular systems to which they provide service based on each entity's customer access lines. Reimbursed