FairPoint Communications 2007 Annual Report Download - page 54

Table of Contents
The following summarizes our revenues and percentage of revenues from continuing operations from these sources:
 
     
 
Local calling services $69,655 $ 67,656 $ 65,846 24% 25% 25%
Universal Service Fund high cost loop 19,090 20,046 19,737 7 7 7
Interstate access 71,558 72,404 75,292 25 27 29
Intrastate access 41,418 37,340 39,262 15 14 15
Long distance services 30,157 24,051 20,940 11 9 8
Data and Internet services 33,576 28,199 24,176 12 10 9
Other services 18,008 20,373 17,590 6 8 7
Total $283,462 $270,069 $262,843 100% 100% 100%
(1) Beginning in the second quarter of 2007, we re-categorized certain revenues to more accurately reflect the nature of those revenues.
Prior year amounts were re-categorized to be presented on a comparable basis.
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Our operating expenses are categorized as operating expenses and depreciation and amortization.
• Operating expenses include cash expenses incurred in connection with the operation of our central offices and outside plant
facilities and related operations. In addition to the operational costs of owning and operating our own facilities, we also purchase
long distance services from the regional Bell Operating Companies, large independent telephone companies and third party long
distance providers. In addition, our operating expenses include expenses relating to sales and marketing, customer service and
administration and corporate and personnel administration. Also included in operating expenses are non-cash expenses related to
stock based compensation. Stock based compensation consists of compensation charges incurred in connection with the
employee stock options, stock units and non-vested stock granted to our executive officers and directors. Operating expenses also
include certain costs associated with the merger.
• Depreciation and amortization includes depreciation of our communications network and equipment and amortization of
intangible assets.
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• On July 31, 2007, we completed the sale of the assets of Yates City Telephone Company, or Yates, for $2.5 million. Yates is
located in Yates City, Illinois and had less than 500 access lines at the time of the sale. We recognized a gain on the sale of
$2.2 million.
• On January 15, 2007, we entered into the merger agreement pursuant to which the Company and Spinco will merge, with the
Company continuing as the surviving corporation for legal purposes. Spinco is a newly formed wholly-owned subsidiary of
Verizon that will own or indirectly own Verizon’s local exchange and related business activities in Maine, New Hampshire and
Vermont. For accounting purposes, we expect that we will be the acquiree. Consequently, merger related costs have been expensed
as incurred and our assets and liabilities will be recorded at fair value at acquisition.
• On November 15, 2006, we completed a merger with The Germantown Independent Telephone Company, or GITC. The merger
consideration was $10.7 million (or $9.2 million net of cash acquired). GITC is a single exchange rural incumbent local
exchange carrier located in the Village of Germantown, Ohio, which served approximately 4,400 access line equivalents as of the
date of acquisition.
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