FairPoint Communications 2004 Annual Report Download - page 83

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(a) Organization
FairPoint Communications, Inc. (FairPoint) provides management services to its wholly owned subsidiaries: ST
Enterprises, Ltd. (STE); MJD Ventures, Inc. (Ventures); MJD Services Corp. (Services); FairPoint Carrier Services, Inc.
(Carrier Services) (formerly known as FairPoint Communications Solutions Corp.); FairPoint Broadband, Inc. (Broadband);
and MJD Capital Corp. STE, Ventures, and Services also provide management services to their wholly owned subsidiaries.
Collectively, the wholly owned subsidiaries of STE, Ventures, and Services primarily provide telephone local exchange
services in various states. Operations also include resale of long distance services, internet services, cable services,
equipment sales, and installation and repair services. MJD Capital Corp. leases equipment to other subsidiaries of FairPoint.
Carrier Services provides wholesale long distance services. Broadband provides wireless broadband services and wholesale
data products.
STE's wholly owned subsidiaries include Sunflower Telephone Company, Inc. (Sunflower); Northland Telephone
Company of Maine, Inc. and STE/NE Acquisition Corp. (d.b.a. Northland Telephone Company of Vermont), (collectively, the
Northland Companies); and ST Long Distance, Inc. (ST Long Distance). Ventures' wholly owned subsidiaries include Sidney
Telephone Company (Sidney); C-R Communications, Inc. (C-R); Taconic Telephone Corp. (Taconic); Ellensburg Telephone
Company (Ellensburg); Chouteau Telephone Company (Chouteau); Utilities, Inc. (Utilities); Chautauqua and Erie Telephone
Corporation (C&E); The Columbus Grove Telephone Company (Columbus Grove); The Orwell Telephone Company (Orwell);
GTC Communications, Inc. (GT Com); Peoples Mutual Telephone Company (Peoples); Fremont Telcom Co. (Fremont);
Fretel Communications, LLC (Fretel); Comerco, Inc. (Comerco); Marianna and Scenery Hill Telephone Company (Marianna);
Community Service Telephone Co. (CST); and Commtel Communications Inc. (Commtel). Services' wholly owned
subsidiaries include Bluestem Telephone Company (Bluestem); Big Sandy Telecom, Inc. (Big Sandy); Columbine Telecom
Company (Columbine); Odin Telephone Exchange, Inc. (Odin); Ravenswood Communications, Inc. (Ravenswood); and Yates
City Telephone Company (Yates).
(b) Principles of Consolidation and Basis of Presentation
The consolidated financial statements include the accounts of FairPoint and its subsidiaries (the Company). All
intercompany transactions and accounts have been eliminated in consolidation.
On November 7, 2001, the Company announced Carrier Services' plan to sell certain of its assets and to discontinue
competitive communications operations. As a result of the adoption of this plan, the financial results have been reclassified in
the accompanying consolidated financial statements to present these operations as discontinued (see note 13).
On September 30, 2003, the Company completed the sale of all of the capital stock owned by Services of Kadoka
Telephone Co., Union Telephone Company of Hartford, Armour
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