FairPoint Communications 2005 Annual Report Download - page 244

applicable. The General Partner believes the allocations are reasonable. The affiliate transactions are not necessarily conducted at arm’s length.
The Partnership had net purchases of plant, property, and equipment with affiliates of $4,738, $7,245 and $3,935 in 2005, 2004 and 2003,
respectively.
5. COMMITMENTS
The General Partner, on behalf of the Partnership, and the Partnership itself have entered into operating leases for facilities and equipment used in its
operations. Lease contracts include renewal options that include rent expense adjustments based on the Consumer Price Index as well as annual and end-
of-lease term adjustments. Rent expense is recorded on a straight-line basis. The noncancellable lease term used to calculate the amount of the straight-line
rent expense is generally determined to be the initial lease term, including any optional renewal terms that are reasonably assured. Leasehold improvements
related to these operating leases are amortized over the shorter of their estimated useful lives or the noncancellable lease term. For the years ended
December 31, 2005, 2004 and 2003, the Partnership recognized a total of $1,845, $1,446 and $1,234, respectively, as rent expense related to payments
under these operating leases, which was included in cost of service and general and administrative expenses in the accompanying Statements of
Operations.
Aggregate future minimum rental commitmen ts under noncancelable operating leases, excluding renewal options that are not reasonably assured, for the
years shown are as follows:
Years Amount
2006 $1,612
2007 1,468
2008 1,370
2009 798
2010 186
2011 and thereafter 372
Total minimum payments $5,806
From time to time the General Partner enters into purchase commitments, primarily for network equipment, on behalf of the Partnership.
6. VALUATION AND QUALIFYING ACCOUNTS
Balance at Additions Write-offs Balance at
Beginning Charged to Net of End
of the Year Operations Recoveries of the Year
Accounts Receivable Allowances:
2005 $ — $ — $ — $ —
2004 $20 $ — $ (20) $ —
2003 1 49 (30)20
7. CONTINGENCIES
Cellco is subject to various lawsuits and other claims including class actions, product liability, patent infringement, antitrust, partnership disputes, and
claims involving relations with resellers and agents.
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