FairPoint Communications 2011 Annual Report Download - page 101

Table of Contents
payment if the variable rate was below the fixed rate, or it received a payment if the variable rate was above the fixed rate. At December 31, 2010 and 2009, the
carrying value of the Swaps was a net liability of approximately $98.8 million, all of which was included in liabilities subject to compromise as a result of the
filing of the Chapter 11 Cases. The Company recognized no gain or loss on derivative instruments on the consolidated statement of operations during the year
ended December 31, 2010. The Company recognized a $12.3 million gain on derivative instruments as a result of changes in the fair value of the Swaps
during the year ended December 31, 2009. In addition, during the year ended December 31, 2009, the Company recognized a loss of approximately $10.3
million through reorganization items related to the termination of the swaps as a result of the event of default due to failure to make payments of $14.0 million
due under the Swaps on September 30, 2009 and lack of compliance with the interest coverage ratio maintenance covenant and the leverage ratio maintenance
covenant at June 30, 2009. The $98.8 million carrying value of the Swaps represented the termination value of the Swaps as determined by the respective
counterparties following the filing of the Chapter 11 Cases. The Swaps were terminated on the Effective Date.
The Company had determined that the Swaps did not meet the criteria for hedge accounting. Therefore, changes in fair value of the Swaps were recorded
as other income (expense) on the consolidated statement of operations. Following the filing of the Chapter 11 Cases, the Swaps retained their termination value
and no gain or loss on derivative instruments was recorded to the consolidated statement of operations.

Long-term debt for the Company at December 31, 2011 and 2010 is shown below (in thousands):








Senior secured credit facility, variable rates ranging from 6.75% to 7.00% 
 at December 31, 2010, due 2014 to 2015 $ — $1,970,963
Senior secured credit facility, variable rate of 6.50% 
 at December 31, 2011, due 2016 1,000,000 —
Senior notes, 13.125%, due 2018 — 549,996
Total outstanding long-term debt 1,000,000 2,520,959
Less amounts subject to compromise — (2,520,959)
Total long-term debt, net of amounts subject to compromise $1,000,000 $ —
Less current portion (10,000) —
Total long-term debt, net of current portion $990,000 $ —
The estimated fair value of the Company’s long-term debt at December 31, 2011 and 2010 was approximately $795.0 million and $1,539.7 million
respectively, based on market prices of the Company’s debt securities at the respective balance sheet dates.
As of December 31, 2011, the Company had $62.6 million, net of $12.4 million outstanding letters of credit, available for additional borrowing under
the Revolving Facility.
As a result of the filing of the Chapter 11 Cases (see note 2), all pre-petition debts owed by the Company under the Pre-Petition Credit Facility and the
Pre-Petition Notes were classified as liabilities subject to compromise in the consolidated balance sheet as of December 31, 2010.
Pursuant to the Plan, the Company did not make any principal or interest payments on its pre-petition debt during the pendency of the Chapter 11
Cases. In accordance with the Reorganizations Topic of the ASC, as interest on the Pre-Petition Notes subsequent to the Petition Date was not expected to be an
allowed claim, the Company did not accrue interest expense on the Pre-Petition Notes during the pendency of the Chapter 11 Cases. Accordingly, $4.8 million,
$72.2 million and $13.4 million, respectively, of interest on unsecured debts, at the stated contractual rates, was not accrued during the 24 days ended
January 24, 2011, the year ended December 31, 2010 and the sixty-six days ended December 31, 2009. The Company continued to accrue interest expense on
the Pre-Petition Credit Facility, as such interest was considered an allowed claim per the Plan.
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