FairPoint Communications 2009 Annual Report Download - page 166

Table of Contents
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(a) Leases
Future minimum lease payments under capital leases and non-cancelable operating leases as of December 31, 2009 are as follows (in thousands):
Total rent expense was $16.7 million, $30.1 million and $63.2 million in 2009, 2008 and 2007, respectively.
The Company does not have any leases with contingent rental payments or any leases with contingency renewal, purchase options, or escalation
clauses.
(b) Legal Proceedings
From time to time, the Company is involved in litigation and regulatory proceedings arising out of its operations. With the exception of the
Chapter 11 Cases, the Company's management believes that it is not currently a party to any legal or regulatory proceedings, the adverse outcome of
which, individually or in the aggregate, would have a material adverse effect on the Company's financial position or results of operations. To the extent
the Company is currently involved in any litigation and/or regulatory proceedings, such proceedings have been stayed as a result of the filing of the
Chapter 11 Cases. For a discussion of the Chapter 11 Cases, see "Item. 1—Business—Chapter 11 Cases."
(c) Service Quality Penalties
The Company is subject to certain service quality requirements in the states of Maine, New Hampshire and Vermont. Failure to meet these
requirements in any of these states may result in penalties being assessed by the respective state regulatory body. As of December 31, 2009, the
Company has recognized an estimated liability for service quality penalties based on metrics defined by the state regulatory authorities in Maine, New
Hampshire and Vermont. Applicable orders provide that any penalties assessed by the states be paid by the Company in the form of credits applied to
customer
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Year ending December 31:
2010 $ 3,033 $ 11,007
2011 1,988 9,100
2012 1,761 7,628
2013 1,561 6,227
2014 1,534 3,971
Thereafter 105 7,651
Total minimum lease payments $ 9,982 $ 45,584
Less interest and executory cost (2,355)
Present value of minimum lease payments 7,627
Less amounts subject to compromise (7,627)
Long-term obligations at December 31, 2009 $ —