FairPoint Communications 2004 Annual Report Download - page 553

expenses in 2002, 2001, and 2000 were $1,194,151; $1,040,212; and $885,246; respectively. These reimbursed expenses are classified
and presented under the Operating Expenses category to which each relates.
In addition, $107,974, $105,260, and $96,678 were paid to an affiliate of MC for contract labor, interest, and other services in 2002,
2001, and 2000, respectively.
Certain cellular equipment sold to subscribers by the Partnership is provided to the Partnership by a related entity at cost. Cost of goods
sold is recorded by the Partnership at the time of sale.
The Partnership has an arrangement with Illinois Valley Cellular RSA 2, Inc. (Switching Company) to provide switching services to the
Partnership. The stockholders of the Switching Company own 53% of the Partnership. In 2002, switching and toll roaming services of
$794,832 and $1,431,105, respectively, were provided to the Partnership. These services in 2001 were $767,976 and $1,311,962,
respectively and in 2000 were $719,858 and $816,461, respectively. The Switching Company received $414,548, $353,983, and
$231,694 of access and billing and collecting services from the Partnership in 2002, 2001, and 2000, respectively.
NOTE 8. CONCENTRATIONS OF CREDIT RISK
Financial instruments that potentially subject the Partnership to concentrations of credit risk consist principally cash equivalents and
accounts receivable. The Partnership grants credit to cellular customers located primarily within its portion of the Illinois RSA 2 cellular
geographic service area, to other cellular carriers, and to other telecommunications carriers.
The Partnership maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Partnership has
not experienced any losses in such accounts. The Partnership believes it is not exposed to any significant credit risk on cash and cash
equivalents.
Retail cellular revenues are derived from customers located primarily within the Partnership's portion of the Illinois RSA 2 cellular
geographic service area. The Partnership grants credit to these customers, substantially all of whom are local residents of this geographic
area.
Roamer cellular revenues are derived under arrangements with other wireless carriers (roaming partners) whose customers use the
Partnership's network to place of complete calls. Roaming revenues from Verizon Wireless accounted for 34%, 43%, and 30% of total
operating revenues in 2002, 2001, and 2000, respectively.