FairPoint Communications 2011 Annual Report Download - page 76
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Table of Contents
Organization
FairPoint is a leading provider of communications services in rural and small urban communities offering an array of services, including high speed
data (“HSD”), Internet access, voice, television and broadband product offerings, to residential, business and wholesale customers. FairPoint operates in 18
states with approximately 1.3 million access line equivalents (including voice access lines and HSD, which includes digital subscriber lines (“DSL”), wireless
broadband, cable modem and fiber-to-the-premises) as of December 31, 2011.
Principles of Consolidation
The consolidated financial statements include all majority-owned subsidiaries of the Company. Partially owned equity affiliates are accounted for under
the cost method or equity method when we demonstrate significant influence, but do not have a controlling financial interest. Intercompany accounts and
transactions have been eliminated.
Basis of Financial Reporting in Reorganization
On October 26, 2009 (the “Petition Date”), the Company and substantially all of its direct and indirect subsidiaries (collectively, the “Debtors”) filed
voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code” or “Chapter 11”) in the United States Bankruptcy
Court for the Southern District of New York (the “Bankruptcy Court”). The cases are being jointly administered under the caption
, Case No. 09-16335 (the “Chapter 11 Cases”). On January 13, 2011, the bankruptcy judge confirmed the Company’s Third
Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (as confirmed, the “Plan”) and on January 24, 2011 (the “Effective Date”)
the Company emerged from Chapter 11 protection. On June 30, 2011, the Bankruptcy Court entered a final decree closing certain of
the Company’s bankruptcy cases due to the closed cases being fully administered. See note 2 for details of the remaining open cases.
The Company has applied the Reorganizations Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) effective as of the Petition Date. See note 2.
Upon the Effective Date, the Company was required to adopt fresh start accounting in accordance with guidance under the applicable reorganization
accounting rules, pursuant to which the Company’s reorganization value, which represented the fair value of the entity before considering liabilities and
approximated the amount a willing buyer would pay for the assets of the entity
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