FairPoint Communications 2013 Annual Report Download - page 25

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also make it more difficult for us to obtain additional capital by selling equity securities in the future at a time and at a price that
we deem appropriate.
As of February 28, 2014, we had 26,681,024 shares of common stock outstanding. All such shares are freely traded except
for any shares of our common stock that may be held or acquired by our directors, executive officers, employee insiders and other
affiliates, as that term is defined in the Securities Act, which will be restricted securities under the Securities Act. Restricted
securities may not be sold in the public market unless the sale is registered under the Securities Act or an exemption from registration
is available. In addition, Angelo Gordon & Co., L.P. ("Angelo Gordon") and entities advised by Angelo Gordon have certain
registration rights with respect to the common stock they hold or may acquire in the future.
We may issue shares of our common stock, or other securities, from time to time as consideration for future acquisitions
and investments. In the event any such acquisition or investment is significant, the number of shares of our common stock, or the
number or aggregate principal amount, as the case may be, of other securities that we may issue may in turn be significant. We
may also grant registration rights covering these shares or other securities in connection with any such acquisitions and investments.
We do not expect to pay any cash dividends for the foreseeable future.
We do not anticipate that we will pay any cash dividends on shares of our common stock for the foreseeable future. Because
we are a holding company, our ability to pay dividends depends on our receipt of dividends from our operating subsidiaries. Any
determination to pay dividends in the future will be at the discretion of our board of directors and will depend upon limitations
imposed by results of operations, financial condition, contractual restrictions contained in the New Credit Agreement and the
Indenture or indebtedness we may incur in the future, restrictions imposed by applicable law and other factors our board of directors
may then deem relevant.
Risks Related to Our Business
We provide services to customers over access lines, and since we have been losing access lines, if our efforts to mitigate this
decline and transition to alternative revenue is not successful, our business, financial condition, results of operations, liquidity
and/or the market price of our outstanding securities may be materially adversely affected.
We, along with the telecommunications industry in general, have experienced a decline in access lines and network access
revenues and will be further unfavorably impacted in the long-term by the FCC's recent CAF/ICC Order on intercarrier
compensation. See "—Risks Relating to Our Regulatory Environment" for specific risks associated with the impact of regulatory
reform. We generate revenue primarily by delivering voice and data services over access lines. During the years ended December 31,
2013 and 2012, we experienced access line equivalent loss of 4.9% and 5.0%, respectively, on a pro forma basis after giving effect
to the divestiture of our operations in Idaho. These losses resulted mainly from competition, including competition from bundled
offerings by cable companies, the use of alternate technologies, including wireless, as well as challenging economic conditions
and the offering of DSL services.
We expect to continue to experience net access line losses. Our strategy of providing broadband and advanced data services,
such as Ethernet over fiber and copper plant, may not be sufficient to offset the revenue impact of continued voice access line
loss. Our inability to retain access lines and successfully offset such losses with alternative revenue could adversely affect our
business, financial condition, results of operations, liquidity and/or the market price of our outstanding securities.
We provide access services to other communications companies, and if these companies were to find alternative means of
providing services, become insolvent or experience substantial financial difficulties, our business, financial condition, results
of operations, liquidity and/or the market price of our outstanding securities may be materially adversely affected.
We originate and terminate calls on behalf of long distance carriers and other interexchange carriers over our network in
exchange for payment of switched access charges. Interstate and intrastate access charges represented approximately 34.3% of
our total revenues during the twelve months ended December 31, 2013. Terminating switched access rates are scheduled to decline
under the FCC's recent CAF/ICC Order. See "—Risks Relating to Our Regulatory Environment" for specific risks associated with
the impact of regulatory reform. We may not be successful in offsetting these declines through regulatory replacement mechanisms
or operational means. Further, should one or more of these carriers find alternative means of providing services, loss of revenues
from these carriers could have a material adverse impact on our business, financial condition, results of operations, liquidity and/
or the market price of our outstanding securities. In addition, should one or more of the carriers that we do business with become
insolvent or experience substantial financial difficulties, our inability to timely collect access charges from them could have a
material adverse impact on our business, financial condition, results of operations, liquidity and/or the market price of our
outstanding securities.