FairPoint Communications 2002 Annual Report Download - page 455

SEGMENTS - The Partnership has one reportable business segment and
operates domestically only. The Partnership's products and services are
materially comprised of wireless telecommunications services.
DUE FROM GENERAL PARTNER - Due from General Partner principally represents
the Partnership's cash position. The general partner manages all cash and
financing activities of the Partnership. As such, the change in Due from
General Partner is reflected as a financing activity in the Statements of
Cash Flows. Additionally, administrative and operating costs incurred by
the general partner on behalf of the Partnership are charged to the
Partnership through this account. Interest income is based on the average
monthly outstanding balance in this account and is calculated by applying
Cellco's average borrowing rate which was approximately 5.5% and 4.6% at
December 31, 2002 and 2001, respectively. Included in Other Income, Net is
net interest income related to the Due from General Partner balance of
$1,553 and $1,167 for the years ended December 31, 2002 and 2001,
respectively.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS - In June 2001, the Financial
Accounting Standards Board, ("FASB") issued Statement of Financial
Accounting Standards ("SFAS") No. 143, "Accounting for Asset Retirement
Obligations." This standard requires entities to recognize the fair value
of any legal obligation associated with the retirement of long-lived
assets and to capitalize that amount as a part of the book value of the
long-lived asset. That cost is then depreciated over the remaining life of
the underlying long-lived asset. The Partnership is required to adopt the
standard effective January 1, 2003. The Partnership does not expect the
impact of the adoption of SFAS No. 143 to have a material effect on the
Partnership's results of operations or financial position.
In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." This standard re-addresses
financial accounting and reporting for the impairment or disposal of
long-lived assets. It concludes that one accounting model be used for
long-lived assets to be disposed of by sale and broadens the presentation
of discontinued operations to include more disposal transactions. The
Partnership adopted the standard effective January 1, 2002. The adoption
of SFAS No. 144 had no material effect on the Partnership's results of
operations or financial position.
In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities". This standard nullifies
Emerging Issue Task Force (EITF) Issue No. 94-3, "Liability Recognition
for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring)." This
standard requires the recognition of a liability for a cost associated
with an exit or disposal activity at the time the liability is incurred,
rather than at the commitment date to exit a plan as required by EITF
94-3. The Partnership will adopt this standard effective January 1, 2003.
The Partnership does not expect the impact of the adoption of SFAS No. 146
to have a material effect on the Partnership's results of operations or
financial position.
RECLASSIFICATIONS - Certain reclassifications have been made to the prior
year financial statements to conform to the current year presentation.
DISTRIBUTIONS - The Partnership is required to make distributions to its
partners on a quarterly basis based upon the Partnership's operating
results, cash availability and financing needs as determined by the
general partner at the date of the distribution. In March 2003, the
Partnership expects to make a distribution of approximately $30 million to
its partners.
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