FairPoint Communications 2011 Annual Report Download - page 123
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Table of Contents
In addition, if state regulators in Maine, New Hampshire or Vermont were to take an action that is adverse to the Company’s operations in those states,
the Company could suffer greater harm from that action by state regulators than it would from action in other states because of the concentration of operations
in those states.
Labor
As of December 31, 2011, we employed a total of 3,541 employees, 2,254, or 64%, of whom were covered by fourteen collective bargaining agreements.
As of December 31, 2011, 72 of our employees were covered by four collective bargaining agreements that expire during the next calendar year.
During the 341 days ended December 31, 2011, the Company announced plans to reduce its workforce to ensure that the Company is staffed
appropriately to serve its customers well, while prudently managing expenses. The reduction eliminated approximately 400 positions. In connection with this
plan, the Company recognized $7.9 million in restructuring charges, consisting of severance and one-time incentive payments, which are included within cost
of services and sales and selling, general and administrative expense in the consolidated statement of operations.
(a) Leases
The Company currently leases real estate and fleet vehicles under capital and operating leases expiring through the year ending 2020. The Company
accounts for leases using the straight-line method, which amortizes contracted total payments evenly over the lease term
Future minimum lease payments under capital leases and non-cancelable operating leases as of December 31, 2011 are as follows (in thousands):
Year ending December 31:
2012 $1,679 $9,871
2013 1,499 8,471
2014 1,493 6,080
2015 105 3,455
2016 — 2,246
Thereafter — 2,257
Total minimum lease payments $4,776 $32,380
Less interest and executory cost (834)
Present value of minimum lease payments 3,942
Less current installments (1,252)
Long-term obligations at December 31, 2011 $2,690
Total rent expense was $14.5 million, $1.0 million, $15.6 million and $16.7 million for the 341 days ended December 31, 2011, the 24 days ended
January 24, 2011 and the years ended December 31, 2010 and 2009, respectively.
The Company does not have any leases with contingent rental payments or any leases with contingency renewal, purchase options, or escalation
clauses.
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