FairPoint Communications 2006 Annual Report Download - page 27
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Please find page 27 of the 2006 FairPoint Communications annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
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We originate and terminate calls for long distance carriers and other interexchange carriers over our network and for that service we receive payments for
access charges. These payments represent a significant portion of our revenues. Should these carriers go bankrupt or experience substantial financial
difficulties, our inability to then collect access charges from them could have a negative effect on our business and results of operations.
We have grown rapidly by acquiring other businesses and we expect that a portion of our future growth will result from additional acquisitions, some of
which may be material. Growth through acquisitions, including the Merger, entails numerous risks, including:
· strain on our financial, management and operational resources, including the distraction of our management team in identifying potential acquisition
targets, conducting due diligence and negotiating acquisition agreements;
· difficulties in integrating the network, operations, personnel, products, technologies and financial, computer, payroll and other systems of acquired
businesses;
· difficulties in enhancing our customer support resources to adequately service our existing customers and the customers of acquired businesses;
· the potential loss of key employees or customers of the acquired businesses;
· unanticipated liabilities or contingencies of acquired businesses;
· unbudgeted costs which we may incur in connection with pursuing potential acquisitions which are not consummated;
· failure to achieve 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 on attractive terms due to a potential increase in competitors; and
· difficulties in obtaining and maintaining any required regulatory authorizations in connection with acquisitions.
The size of Spinco’s business in relation to our existing business may exacerbate the above risks with respect to the Merger.
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 Spinco or of other 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, there will be
a risk that our business may be adversely affected.
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