FairPoint Communications 2011 Annual Report Download - page 34

Table of Contents
• disruptions beyond our control; and
• capacity limitations resulting from changes in our customers’ usage patterns.
From time to time, in the ordinary course of business, we have experienced and in the future may experience short disruptions in our service due to
factors such as cable damage, inclement weather and service failures of our third-party service providers. We could experience more significant disruptions in
the future. In addition, certain portions of our network may lack adequate redundancy to allow for expedient recovery of service to affected customers.
Disruptions may cause interruptions in service or reduced capacity for customers, either of which could cause us to lose customers and incur expenses, which
could have a material adverse impact on our business, financial condition, results of operations, liquidity and/or the market price of our Common Stock.



Attempts by others to gain unauthorized access to organizations’ IT systems are becoming more sophisticated and are sometimes successful. These
attempts include covertly introducing malware to companies’ computers and networks and impersonating authorized users, among others. We seek to detect
and investigate all security incidents and to prevent their recurrence, but in some cases, we might be unaware of an incident or its magnitude and effects. The
theft, unauthorized use or publication of our intellectual property and/or confidential business information could harm our competitive position, reduce the
value of our investment in research and development and other strategic initiatives or otherwise adversely affect our business. To the extent that any security
breach results in inappropriate disclosure of our customers’ or licensees’ confidential information, we may incur liability as a result.

Our success depends upon the talents and efforts of our senior management team. The loss of any member of our senior management team, due to
retirement or otherwise, and the inability to attract and retain highly qualified technical and management personnel in the future, could have a material adverse
effect on our business, financial condition, results of operations, liquidity and/or the market price of our Common Stock.

We recently announced a workforce reduction and will continue to evaluate the need for additional reductions in the future. Reductions in our workforce
could adversely impact our ability to operate effectively and, therefore, could adversely impact our customer service, result in higher regulatory penalties
and/or reduce our ability to achieve our operational goals.




As of December 31, 2011, 2,254 of our 3,541 employees were covered by fourteen collective bargaining agreements. Disputes with regard to the terms of
these agreements or our potential inability to negotiate acceptable contracts with these unions in the future as our current contracts expire could result in, among
other things, strikes, work stoppages or other slowdowns by the affected workers. If unionized workers were to engage in a strike, work stoppage or other
slowdown, or other employees were to become unionized, we could experience a significant disruption of our operations or higher ongoing labor costs, either of
which could have a material adverse effect on our business, financial condition, results of operations, liquidity and/or the market price of our Common
Stock. Additionally, future renegotiation of labor agreements or provisions of labor agreements could adversely impact our service reliability and significantly
increase our costs for healthcare, wages and other benefits, which could have a material adverse impact on our business, financial condition, results of
operations, liquidity and/or the market price of our Common Stock.
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