FairPoint Communications 2010 Annual Report Download - page 49

Table of Contents
result, for the year ended December 31, 2008, financial information derived from the statement of operations reflects the consolidated financial results of the
Company by including the financial results of the Verizon Northern New England business for the three months ended March 31, 2008, the financial results
of Spinco for the nine months ended December 31, 2008 and the financial results of Legacy FairPoint for the nine months ended December 31, 2008. Financial
information derived from the statement of operations for all periods prior to April 1, 2008 reflects the actual results of the Verizon Northern New England
business for such periods. Financial information derived from the balance sheet reflects the consolidated assets and liabilities of Legacy FairPoint and Spinco
at December 31, 2008.
As of the Effective Date, we adopted fresh start accounting in accordance with the Reorganizations Topic of the Accounting Standards Codification
(“ASC”), 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 Business Combinations Topic of the ASC, 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 statements of financial position and 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.
On the Effective Date, in accordance with the Plan, all equity compensation plans in effect at the end of the most recently completed fiscal year were
terminated and all awards thereunder were cancelled and extinguished. In addition, on the Effective Date, in accordance with the Plan, (i) certain of our
employees and a consultant of ours received New Common Stock awards, consisting of restricted shares of New Common Stock and/or options to purchase
shares of New Common Stock, pursuant to the terms of the Long Term Incentive Plan, and (ii) members of the New Board received restricted shares of New
Common Stock and options to purchase New Common Stock pursuant to the terms of the Long Term Incentive Plan. As of March 25, 2011, we had
26,197,432 shares of Common Stock outstanding.
The following financial information should be read in conjunction with “Item 7. Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and our consolidated financial statements and notes thereto contained elsewhere in this Annual Report. Amounts are in thousands,
except access lines and per share data.
48