FairPoint Communications 2005 Annual Report Download - page 99
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Revenues for interstate access services are based on reimbursement of costs and an allowed rate of return. A substantial portion of revenues of this nature
are received from NECA in the form of monthly settlements. Such revenues amounted to 26.7%, 25.7%, and 26.3% of the Company’s total revenues from
continuing operations for the years ended December 31, 2005, 2004, and 2003, respectively.
Certain of the Company’s telephone subsidiaries participate in revenue-sharing arrangements with other telephone companies for interstate revenue-
sharing arrangements and for certain intrastate revenue. Such sharing arrangements are funded by toll revenue and/or access charges within state jurisdiction
and by access charges in the interstate market. Revenues earned through the various sharing arrangements are initially recorded based on the Company’s
estimates. The Company recognized $3.3 million, $3.1 million, and $3.0 million of revenue for settlements and adjustments related to prior years during
2005, 2004, and 2003, respectively.
(a) Operating Leases
Future minimum lease payments under noncancelable operating leases as of December 31, 2005 are as follows (in thousands):
Year ending December 31:
2006 $1,143 $1,196
2007 1,076 —
2008 1,029 —
2009 887 —
2010 444 —
Thereafter 2,313 —
Total minimum lease payments $6,892 1,196
Less estimated rentals to be received under subleases —
Estimated minimum lease payments included in liabilities
of discontinued operations $1,196
In January 2006, the Company reached an agreement to amend the remaining lease related to its discontinued operations; therefore, as of January 2006,
there are no longer any sublease arrangements in place. Total rent expense from continuing operations was $3.5 million, $3.2 million, and $3.1 million in
2005, 2004, and 2003, respectively.
The Company does not have any leases with contingent rental payments or any leases with contingency renewal, purchase options, or escalation clauses.
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