FairPoint Communications 2011 Annual Report Download - page 122
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Table of Contents
Revenue $270,801 $271,563 $260,630 $267,992
Net loss $(86,330) $ (54,178) $ (66,084) $ (74,987)
Loss per share:
Basic $(0.97) $(0.61) $(0.74) $(0.84)
Diluted $(0.97) $(0.61) $(0.74) $(0.84)
The Fair Value Measurements and Disclosures Topic of the ASC defines fair value, establishes a framework for measuring fair value and establishes a
hierarchy that categorizes and prioritizes the sources to be used to estimate fair value. The Fair Value Measurements and Disclosures Topic of the ASC also
expands financial statement disclosures about fair value measurements.
In determining fair value, the Company uses a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and
minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy is broken down into three levels
based on the reliability of inputs as follows:
Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.
Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
At December 31, 2010, the Company had $595.1 million of goodwill and $42.8 million of indefinite life intangible assets. During the 341 days ended
December 31, 2011, the Company recorded a goodwill impairment of $243.2 million and an intangible asset impairment of $18.8 million. The fair value
measurement related to the impairments were generated using the discounted cash flow method and were based on level 3 inputs.
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 for more information.
At the Effective Date, with the exception of deferred taxes and assets and liabilities associated with pension and post-retirement healthcare plans, all
assets and liabilities were remeasured at fair value under fresh start accounting. See note 2.
Geographic
As of December 31, 2011, approximately 85% of the Company’s access line equivalents were located in Maine, New Hampshire and Vermont. As a
result of this geographic concentration, the Company’s financial results will depend significantly upon economic conditions in these markets. A deterioration
or recession in any of these markets could result in a decrease in demand for the Company’s services and resulting loss of access line equivalents which could
have a material adverse effect on the Company’s business, financial condition, results of operations, liquidity and the market price of the Company’s
Common Stock.
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