FairPoint Communications 2005 Annual Report Download - page 47

operations, which, net of tax, resulted in a $0.4 million and $0.7 million adjustment to income from discontinued operations, respectively. The adjustment in
2005 related to the settlement of a lease obligation which reduced our future obligation under this lease. In 2004, the adjustment was mainly attributable to
excise tax refunds received from the Internal Revenue Service as well as a reduction in liabilities associated with potential property tax payments.
 Net income for the year ended December 31, 2005 was $28.9 million. Our 2004 net loss was $23.7 million. The difference between
2005 and 2004 is a result of the factors discussed above.
Year Ended December 31, 2004 Compared with Year Ended December 31, 2003
Revenues
 Revenues increased $21.2 million to $252.6 million in 2004 compared to $231.4 million in 2003. Of this increase, $8.2 million was
attributable to the Maine acquisition and $13.0 million was attributable to our existing operations. We derived our revenues from the following sources:
 Local calling service revenues increased $7.1 million from $56.1 million in 2003 to $63.2 million in 2004. Revenue from our
existing operations increased $4.2 million. Of this increase, $3.6 million is attributable to the implementation of Basic Service Calling Areas in the state of
Maine, which changes and expands basic service calling areas and has the effect of shifting revenues from intrastate access to local services. The remaining
increase of $0.6 million in local revenues from existing operations is due to increases in local calling features and local interconnection revenues, despite a
2.9% decline in net voice access lines. The remaining increase in local calling service revenues was attributable to the Maine acquisition.
 Universal Service Fund high cost loop payments increased $3.3 million to $22.2 million in 2004
from $18.9 million in 2003. Our existing operations accounted for all of this increase. A reclassification of plant increased our Universal Service Fund
payments in our Maine and Idaho companies which more than offset a drop in payments from the Universal Service Fund related to increases in the national
average cost per loop.
Interstate access revenues increased $3.7 million from $66.6 million in 2003 to $70.3 million in 2004. Of the increase, $3.1 million
was attributable to the Maine acquisition. Our existing operations accounted for the remaining $0.6 million increase. This increase was due to expense
increases from our regulated operations that resulted in higher interstate revenue requirements.
 Intrastate access revenues decreased from $44.0 million in 2003 to $42.4 million in 2004. The decrease from our existing operations
was $2.6 million before being offset by $1.0 million in revenues contributed by the Maine acquisition. The decrease was mainly attributable to the Basic
Service Calling Areas plan implemented in Maine as discussed above in local calling services.
 Long distance services revenues increased $2.3 million from $15.4 million in 2003 to $17.7 million in 2004. This increase
was all attributable to our existing operations as a result of promotional efforts and bundles with unlimited long distance designed to generate more revenue.
 Data and internet services revenues increased $5.7 million from $13.4 million in 2003 to $19.1 million in 2004. The
increase is due primarily to increases in DSL customers as we aggressively marketed our high speed data products. Our high speed data subscriber customer
base increased to 34,824 subscribers as of December 31, 2004, a 78% increase during the year. The Maine acquisition contributed the remaining revenue
increase of $0.6 million.
 Other services revenues increased from $17.0 million in 2003 to $17.8 million in 2004. Of the increase, $0.6 million was attributable
to the Maine acquisition. An increase of $0.2 million from existing operations was due to a $1.2 million one-time sale and installation of E911 system
equipment. This
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