FairPoint Communications 2010 Annual Report Download - page 93
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Table of Contents
The Company’s intangible assets consist of customer lists, non-compete agreement and trade names as follows (in thousands):
Gross carrying amount $ 208,504 $ 208,504
Less accumulated amortization (62,073) (39,501)
Net customer lists 146,431 169,003
Gross carrying amount 42,816 42,816
$189,247 $211,819
The estimated weighted average useful lives of the intangible assets are 9.7 years for the customer relationships and an indefinite useful life for trade
names. Amortization expense was $22.6 million, $22.6 million and $17.2 million for the years ended December 31, 2010, 2009 and 2008, respectively, and
is expected to be approximately $22.6 million per year.
A summary of property, plant, and equipment is shown below (in thousands):
Land — $ 23,880 $ 23,871
Buildings and leasehold improvements 2 — 45 328,822 313,766
Central office equipment 5 — 11 2,467,286 2,388,216
Outside communications plant 15 — 50 3,009,886 2,908,287
Furniture, vehicles and other work equipment 3 — 15 350,242 326,157
Plant under construction — 50,619 144,541
Other — 43,877 35,359
Total property, plant, and equipment 6,274,612 6,140,197
Accumulated depreciation (4,414,912) (4,189,762)
Net property, plant, and equipment $ 1,859,700 $ 1,950,435
Depreciation expense, excluding amortization of intangible assets, for the years ended December 31, 2010, 2009, and 2008 was $267.3 million,
$252.7 million, and $237.8 million, respectively. Depreciation expense includes amortization of assets recorded under capital leases.
The Company assesses interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact
expected future cash flows and by evaluating hedging opportunities. The Company maintains risk management control systems to monitor interest rate cash
flow risk attributable to both the Company’s outstanding and forecasted debt obligations. The risk management control systems involve the use of analytical
techniques, including cash flow sensitivity analysis, to estimate the expected impact of changes in interest rates on the Company’s future cash flows.
The Company uses variable-rate debt to finance its operations, capital expenditures and acquisitions. The variable-rate debt obligations expose the
Company to variability in interest payments due to changes in interest rates. The Company believes it is
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