FairPoint Communications 2010 Annual Report Download - page 33

Table of Contents
protection. These projections were included in the disclosure statement approved by the Bankruptcy Court in March 2010 and reflected numerous
assumptions concerning anticipated future performance and anticipated market and economic conditions that were and continue to be beyond our control and
that may not materialize. These projections were revised in connection with a subsequent review of our financial forecast, and as a result of this review of our
financial forecast, in December 2010 we provided notice of certain changes to the forecasted financial results to the classes of creditors entitled to vote on the
Plan, which notice was filed with the Bankruptcy Court.
Projections are inherently subject to uncertainties and to a wide variety of significant business, economic and competitive risks. Our actual results may
vary from those contemplated by the projections for a variety of reasons. The projections have not been incorporated by reference into this report and neither
these projections nor any version of the disclosure statement or the notice referred to above should be considered or relied upon in connection with any
investment decision concerning our Common Stock.
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

Our bankruptcy proceedings, which improved our capital structure, contemplated that we would refine and implement our strategy and business plan
based upon assumptions and analyses developed by us in light of our experience and perception of historical trends, current conditions and expected future
developments, as well as other factors that we considered appropriate under the circumstances. Whether actual future results and developments will be
consistent with our expectations and assumptions depends on a number of factors, including but not limited to (i) our ability to obtain adequate liquidity and
financing sources; (ii) our ability to restore customers’ confidence in our viability as a continuing entity and to attract and retain sufficient customers; (iii) our
ability to retain key employees; (iv) changes in consumer demand for, and acceptance of, our services; and (v) the overall strength and stability of general
economic conditions and of the financial industry. The failure of any of these factors could materially adversely affect the successful execution of our strategy
and business plan and the stated goals of the Plan may not be achieved, which could have a material adverse impact on our business, financial condition,
results of operations, liquidity and/or the market price of our Common Stock.



Upon our emergence from Chapter 11 on January 24, 2011, we adopted fresh start accounting in accordance with guidance under the applicable
reorganization accounting rules, pursuant to which our reorganization value, which represents the fair value of the entity before considering liabilities and
approximates the amount a willing buyer would pay for the assets of the entity immediately after the reorganization, has been allocated to the fair value of
assets in conformity with guidance under the applicable accounting rules for business combinations, using the purchase method of accounting for business
combinations. The amount remaining after allocation of the reorganization value to the fair value of identified tangible and intangible assets will be reflected as
goodwill, which is subject to periodic evaluation for impairment. In addition to fresh start accounting, our future consolidated financial statements will reflect
all effects of the transactions contemplated by the Plan; therefore our future consolidated statements of financial position and consolidated statements of
operations will not be comparable in many respects to our consolidated statements of financial position and consolidated statements of operations for periods
prior to our adoption of fresh start accounting and prior to accounting for the effects of the reorganization, including the financial statements contained herein.
As a result, our financial and operating results for the year ended December 31, 2010 may not be indicative of future financial performance.
In addition, as the Chapter 11 Cases remain open, our consolidated balance sheet upon our emergence from Chapter 11 will include accruals for
unresolved claims related to the Chapter 11 Cases. These accruals are based on management’s best estimate of future settlements of such unresolved claims
and are subject to adjustment subsequent to the Effective Date. To the extent that our negotiations result in favorable or unfavorable settlements in relation to the
amount accrued, we will recognize gains and/or losses in our consolidated statement of operations subsequent to the Effective Date.
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