FairPoint Communications 2002 Annual Report Download - page 456

3. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment, net, consists of the following:
DECEMBER 31,
(DOLLARS IN THOUSANDS) 2002 2001
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Buildings and improvements (10-40 years) $ 10,521 $ 9,451
Wireless plant equipment (3-15 years) 40,502 33,803
Furniture, fixtures and equipment (2-7 years) 318 381
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51,341 43,635
Less accumulated depreciation (21,868) (17,578)
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Property, plant and equipment, net $ 29,473 $ 26,057
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Property, plant, and equipment, net, includes the following:
Capitalized network engineering costs of $466 and $112 were recorded
during the years ended December 31, 2002 and 2001 respectively.
Construction-in-progress included in certain of the classifications shown
above, principally wireless plant equipment, amounted to $2,373 and $1,598
at December 31, 2002 and 2001 respectively.
Depreciation expense for the years ended December 31, 2002 and 2001 was
$4,225 and $3,582 respectively.
4. TRANSACTIONS WITH AFFILIATES
Significant transactions with affiliates are summarized as follows:
YEARS ENDED DECEMBER 31,
(Dollars in Thousands) 2002 2001
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Operating revenues (b) $109,232 $ 76,609
Cellsite allocated revenues (c) 3,037 1,981
Direct telecommunication charges (a) 302 335
Allocation of certain general and
administrative expenses (a) 1,399 1,497
Allocation of cost of service (a) 1,105 1,737
Allocation of switch usage cost (a) 5,077 3,760
(a) Expenses were allocated based on the Partnership's percentage of
customers or minutes of use where applicable. The Partnership
believes the allocations are reasonable.
(b) Affiliate operating revenues primarily represent revenues generated
from transactions with Cellco, the Partnership's primary reseller.
(c) Cellsite allocated revenues result from the Partnership sharing a
cell site with the Catskills RSA Limited Partnership, an affiliate
entity.
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5. COMMITMENTS
The general partner, on behalf of the Partnership, and the Partnership