FairPoint Communications 2010 Annual Report Download - page 66
Download and view the complete annual report
Please find page 66 of the 2010 FairPoint Communications annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56 -
57 -
58 -
59 -
60 -
61 -
62 -
63 -
64 -
65 -
66 -
67 -
68 -
69 -
70 -
71 -
72 -
73 -
74 -
75 -
76 -
77
-
78
-
79
-
80
-
81
-
82
-
83
-
84
-
85
-
86
-
87
-
88
-
89
-
90
-
91
-
92
-
93
-
94
-
95
-
96
-
97
-
98
-
99
-
100
-
101
-
102
-
103
-
104
-
105
-
106
-
107
-
108
-
109
-
110
-
111
-
112
-
113
-
114
-
115
-
116
-
117
-
118
-
119
-
120
-
121
-
122
-
123
-
124
-
125
-
126
-
127
-
128
-
129
-
130
-
131
-
132
-
133
-
134
-
135
-
136
-
137
-
138
-
139
-
140
-
141
-
142
-
143
-
144
-
145
-
146
-
147
-
148
-
149
-
150
-
151
-
152
-
153
-
154
-
155
-
156
-
157
-
158
-
159
-
160
-
161
-
162
-
163
-
164
-
165
-
166
-
167
-
168
-
169
-
170
-
171
-
172
-
173
-
174
-
175
-
176
-
177
-
178
-
179
-
180
-
181
-
182
-
183
-
184
-
185
-
186
-
187
-
188
-
189
-
190
-
191
-
192
-
193
-
194
-
195
 |
 |
Table of Contents
The following table discloses aggregate information about our derivative financial instruments as of December 31, 2010, the source of carrying value of
these instruments and their maturities.
Source of fair value:
Derivative financial
instruments(1)(2) $ (98,833) $ (98,833) $ — $ — $ —
(1) Upon filing for Chapter 11 bankruptcy protection, the derivative financial instruments were terminated by the counterparties. Accordingly, the carrying
value of the Swaps at December 31, 2010 represents the termination value of the Swaps as determined by the respective counterparties following the
event of default described herein. See note 8 to the consolidated financial statements for more information.
(2) The Swaps have been classified as liabilities subject to compromise in the consolidated financial statements. See note 8 to the consolidated financial
statements for more information.
Our critical accounting policies are as follows:
Revenue recognition;
Allowance for doubtful accounts;
Accounting for pension and other post-retirement benefits;
Accounting for income taxes;
Depreciation of property, plant and equipment;
Valuation of long-lived assets, including goodwill;
Accounting for software development costs; and
Purchase accounting.
We recognize service revenues based upon usage of our local exchange network and facilities and contract fees. Fixed fees for voice
services, Internet services and certain other services are recognized in the month the service is provided. Revenue from other services that are not fixed fee or
that exceed contracted amounts is recognized when those services are provided. Non-recurring customer activation fees, along with the related costs up to, but
not exceeding, the activation fees are deferred and amortized over the customer relationship period. SQI penalties and certain PAP penalties are settled by
crediting customer accounts and are recorded as a reduction to revenue. We make estimated adjustments, as necessary, to revenue or accounts receivable for
billing errors, including certain disputed amounts. At December 31, 2010 and 2009, we recorded revenue reserves of $19.6 million and $22.6 million,
respectively. See note 3(b) to the consolidated financial statements for further information.
65