FairPoint Communications 2004 Annual Report Download - page 67

•not achieving projected cost savings or cash flow from acquired businesses;
•fluctuations in our operating results caused by incurring considerable expenses to acquire businesses before receiving the
anticipated revenues expected to result from the acquisitions;
•difficulties in finding suitable acquisition candidates;
•difficulties in making acquisitions based on attractive terms due to increased competitiveness; and
•difficulties in obtaining and maintaining any required regulatory authorizations in connection with acquisitions.
In addition, future acquisitions by us could result in the incurrence of indebtedness or contingent liabilities, which could have a material
adverse effect on our business and our ability to pay dividends on our common stock, provide adequate working capital and service our
indebtedness.
There can be no assurance that we will be able to successfully complete the integration of the businesses that we have already acquired
or successfully integrate any businesses that we might acquire in the future. If we fail to do so, or if we do so but at greater cost than we
anticipated, or if our acquired businesses do not experience significant growth, there will be a risk that our business may be adversely
affected.

We may need additional financing to continue growing through acquisitions. Such additional financing may be in the form of additional
debt, which would increase our leverage. We may not be able to raise sufficient additional capital at all or on terms that we consider
acceptable.

To be successful, we will need to continue to provide our customers reliable service over our network. Some of the risks to our network
and infrastructure include:
•physical damage to access lines;
•power surges or outages;
•software defects; and
•disruptions beyond our control.
Disruptions may cause interruptions in service or reduced capacity for customers, either of which could cause us to lose customers and
incur expenses.

We are in the process of converting our six billing systems into a single integrated billing platform for our end-user customers. As of
December 31, 2004, we had made capital expenditures of approximately $5.1 million with respect to such conversion. We expect to make an
additional $3.4 million of capital expenditures to complete such conversion. One of the primary reasons for undertaking this conversion is to
consolidate and streamline our internal controls so that we will be able to comply with the management certification and auditor attestation
requirements of Section 404 of the Sarbanes-Oxley Act of 2002. The portion of the conversion that will enable us to comply with these
requirements is expected to be completed by the end of 2005 and the full conversion is expected to be completed in the second quarter of
2006. The failure to successfully complete this conversion could disrupt our billing process, which could have a material adverse effect on our
business, financial condition and results of operations, and could cause us not to be in compliance with the requirements
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