FairPoint Communications 2007 Annual Report Download - page 140

ORANGE COUNTY — POUGHKEEPSIE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS — (Continued)
and operating costs incurred by the General Partner on behalf of the Partnership are charged to the Partnership through this account.
Interest expense/income is based on the average monthly outstanding balance in this account and is calculated by applying Cellco’s
average cost of borrowing from Verizon Global Funding, a wholly owned subsidiary of Verizon Communications. The cost of borrowing
was approximately 5.4%, 5.4%, and 4.8% for the years ended December 31, 2007, 2006 and 2005, respectively. Included in Interest
Income, Net is net interest income related to the Due from General Partner balance of $1,345, $693 and $782 for the years ended
December 31, 2007, 2006 and 2005, respectively.
Distributions — Distributions are made to partners at the discretion of the General Partner based upon the Partnership’s operating
results, cash availability and financing needs as determined by the General Partner at the date of distribution.
Recently Issued Accounting Pronouncements — In September 2006, the FASB issued SFAS No. 157, Fair Value
Measurement. SFAS No. 157 defines fair value, expands disclosures about fair value measurements, establishes a framework for
measuring fair value in generally accepted accounting principles and establishes a hierarchy that categorizes and prioritizes the sources to
be used to estimate fair value. The Partnership is required to adopt SFAS No. 157 effective January 1, 2008 on a prospective basis,
except for those items where the Partnership has elected a partial deferral under the provisions of FASB Staff Position (“FSP”)
No. FAS 157-b, “Effective Date of FASB Statement No. 157,” which was issued during the first quarter of 2008. FSP 157-b permits
deferral of the effective date of SFAS 157 for one year, for all nonfinancial assets and nonfinancial liabilities, except those that are
recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The deferral applies to
measurements of fair value used when testing wireless licenses, other intangible assets, and other long-lived assets for impairment. The
Partnership does not expect this standard to have an impact on the financial statements.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities.
SFAS No. 159 permits entities to choose to measure eligible items at fair value, and to report unrealized gains and losses in earnings on
items for which the fair value option has been elected. The Partnership is required to adopt SFAS No. 159 effective January 1, 2008. The
Partnership does not expect this standard to have an impact on the financial statements.
In June 2006, the EITF reached a consensus on EITF No. 06-3, How Taxes Collected from Customers and Remitted to
Governmental Authorities Should Be Presented in the Income Statement. EITF No. 06-3 permits that such taxes may be presented on
either a gross basis or a net basis as long as that presentation is used consistently. The adoption of EITF No. 06-3 on January 1, 2007 did
not impact the financial statements. We present the taxes within the scope of EITF No. 06-3 on a net basis.
3. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment, net, consists of the following as of December 31, 2007 and 2006:
Useful Lives 2007 2006
Buildings 10-40 years $ 15,714 $ 14,367
Wireless plant equipment 3-15 years 61,626 61,795
Furniture, fixtures and equipment 2-5 years 24 18
Leasehold Improvements 5 years 3,174 2,460
80,538 78,640
Less accumulated depreciation (41,391) (39,723)
Property, plant and equipment, net $ 39,147 $ 38,917
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