FairPoint Communications 2002 Annual Report Download - page 462

See Notes to Financial Statements
6
ORANGE COUNTY - POUGHKEEPSIE LIMITED PARTNERSHIP
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
1. BACKGROUND AND DESCRIPTION OF THE BUSINESS
ORANGE COUNTY-POUGHKEEPSIE LIMITED PARTNERSHIP
The Orange County-Poughkeepsie Limited Partnership (the "Partnership")
operates as a limited partnership between NYNEX Mobile Limited Partnership
2 ("NYNEX Mobile LP 2"), Taconic Telephone Corporation ("Taconic"), and
Warwick Valley Telephone Company ("Warwick"). NYNEX Mobile LP 2 is a
partnership between Cellco Partnership ("Cellco"), the Utica-Rome Cellular
Partnership and Bell Atlantic Mobile Systems of Allentown, Inc. ("BAMS of
Allentown"), with ownership interests of 54%, 45% and 1%, respectively.
NYNEX Mobile LP 2 holds an 85% partnership interest in the Partnership.
Taconic and Warwick each hold limited partnership interests of 7.5%.
On December 1, 1999, Frontier Communications of New York, Inc. and
Frontier Communications of Sylvan Lake, each holding 7.5% interests in the
Partnership, sold their interests to NYNEX Mobile LP 2.
GENERAL PARTNER
On April 3, 2000, Bell Atlantic and Vodafone AirTouch Plc ("Vodafone")
consummated their previously announced agreement to combine their U. S.
wireless operations. In accordance with the terms of the U.S. Wireless
Alliance Agreement (the "Alliance Agreement") dated September 21, 1999
between the two companies, Vodafone contributed its U.S. wireless
operations, its 50% ownership interest in PrimeCo Personal Communications
L.P. ("PrimeCo") and debt to Cellco, in exchange for a 65.1% interest in
Cellco. Bell Atlantic also contributed its 50% ownership interest in
PrimeCo, and retained a 34.9% interest in Cellco. As of April 3, 2000,
Cellco began conducting business as Verizon Wireless.
On June 30, 2000, Bell Atlantic and GTE Corporation ("GTE Corp.")
completed a merger of equals under a definitive merger agreement entered
into on July 27, 1998. On June 30, 2000, the newly merged entity changed
its name to Verizon Communication, Inc. ("Verizon Corp."). Under the
Alliance Agreement, Verizon Corp. contributed GTE Corp.'s wireless net
assets and operations increasing its interest in Cellco to 55% and
decreasing Vodafone's interest in Cellco to 45%.
DESCRIPTION OF THE BUSINESS
The Partnership provides cellular mobile telephone service to resellers
who operate principally in the Orange County and Poughkeepsie, New York
metropolitan areas. The Orange County-Poughkeepsie cellular system became
operational in 1987. The partners make capital contributions, share in the
operating results and receive distributions from the Partnership in
accordance with their respective ownership percentages.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities,