FairPoint Communications 2010 Annual Report Download - page 36

Table of Contents


We are a holding company and conduct no operations. Accordingly, our cash flow and our ability to make payments on, or repay or refinance, our
indebtedness and to fund planned capital expenditures and other cash needs will depend largely upon the cash flows of our operating subsidiaries and the
payment of funds by those subsidiaries to us in the form of repayment of loans, dividends, management fees or otherwise. Distributions to us from our
subsidiaries will depend on their respective operating results and will be subject to restrictions under, among other things,
 the laws of their jurisdiction of organization;
 the rules and regulations of state and federal regulatory authorities;
 agreements of those subsidiaries, including agreements governing their indebtedness; and
 regulatory restrictions.
Our subsidiaries have no obligation, contingent or otherwise, to make funds available, whether in the form of loans, dividends or other distributions to us.
Any inability to receive distributions from our subsidiaries could have a material adverse impact on our business, financial condition, results of operations,
liquidity and/or the market price of our Common Stock.



Our ability to make payments on, or repay or refinance, our indebtedness, and to fund planned capital expenditures, unanticipated capital expenditures
and other cash needs will depend largely upon our future operating performance, including our ability to execute on our business plan. Our future operating
performance, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. In
addition, our ability to borrow funds in the future to make payments on our indebtedness will depend on the satisfaction of the covenants in the agreements
governing our indebtedness. Specifically, we will need to maintain specified financial ratios and satisfy financial condition tests. In addition, the limitations
imposed by any financing arrangements on our ability to incur additional debt and to take other actions might significantly impair our ability to obtain other
financing.
In addition, we can provide no assurance that we would be able to refinance any of our indebtedness on commercially reasonable terms, or at all. If we are
unable to make payments or refinance our debt or obtain new financing under these circumstances, we would have to consider other options, including:
 sales of assets;
 reduction or delay of capital expenditures, strategic acquisitions, investments and alliances; or
 negotiations with our lenders to restructure the applicable debt.
The agreements governing our indebtedness may restrict, or market or business conditions may limit, our ability to take some of these actions or the
effectiveness of these actions.
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