FairPoint Communications 2013 Annual Report Download - page 29

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Natural catastrophes or terrorism may damage our network or adversely affect the financial markets.
A major earthquake, hurricane, tornado, flood, fire, terrorist attack, cyber-attack or other similar disruption could damage
our network, network operations centers, call centers, data centers, central offices, corporate headquarters or other facilities. Such
an event could interrupt our services, adversely affect service quality, overwhelm customer support and ultimately harm our
business and reputation. Although we have implemented measures that are designed to mitigate the effects of such events, we
cannot predict all of the potential impacts of such events. We maintain insurance coverage for some of these events; however, the
potential liabilities associated with these events could exceed the insurance coverage we maintain. Our inability to operate our
networks or operate key systems as a result of such events, even for a limited period of time, may result in significant expenses
or loss of customers and associated revenue.
Even if the major event does not directly impact us, these events could more broadly cause consumer confidence and spending
to decrease or result in increased volatility in the United States and world financial markets and economy, which would adversely
affect our business.
Because our post-emergence consolidated financial statements reflect fresh start accounting adjustments made upon emergence
from bankruptcy and because of the effects of the transactions that became effective pursuant to the Plan, financial information
in our post-emergence financial statements is not comparable to our financial information from prior periods, including certain
statements contained herein.
Upon our emergence from the Chapter 11 bankruptcy proceedings, we adopted fresh start accounting in accordance with
guidance under the applicable reorganization accounting rules, pursuant to which our reorganization value was allocated to our
assets in conformity with guidance requiring use of the purchase method of accounting for business combinations. In addition to
fresh start accounting, our consolidated financial statements reflect all effects of the transactions contemplated by the Plan.
Therefore, our consolidated statements of financial position and consolidated statements of operations subsequent to the Effective
Date are not comparable in many respects to our consolidated statements of financial position and consolidated statements of
operations for periods prior to the Effective Date.
Our actual operating results may differ significantly from our guidance.
From time to time, we have released and may continue to release guidance regarding our future performance that represents
our management's best estimates as of the date the guidance is provided. This guidance, which consists of forward-looking
statements, is prepared by our management and is qualified by, and subject to, the assumptions and the other information contained
or referred to in the release. Our guidance is not prepared with a view toward compliance with the published guidelines of the
American Institute of Certified Public Accountants, and neither our independent registered public accounting firm nor any other
independent expert or outside party compiles or examines the guidance and, accordingly, no such person expresses any opinion
or any other form of assurance with respect thereto.
Guidance is based upon a number of assumptions and estimates that, while presented with numerical specificity, are inherently
subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control
and are based upon specific assumptions with respect to future business decisions, some of which will change. We generally state
possible outcomes as high and low ranges which are intended to provide a sensitivity analysis as variables are changed but are
not intended to represent our actual results which could fall outside of the suggested ranges. The principal reason that we release
this data is to provide a basis for our management to discuss our business outlook with analysts and investors. Notwithstanding
this, we do not accept any responsibility for any projections or reports published by any such outside analysts or investors.
Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions or the guidance
furnished by us will not materialize or will vary significantly from actual results. Accordingly, our guidance is only an estimate
of what management believes is realizable as of the date the guidance is provided. Actual results may differ from the guidance
and the differences may be material. Investors should also recognize that the reliability of any forecasted financial data diminishes
the farther in the future that the data is forecast. In light of the foregoing, users of this guidance are urged to put the guidance in
context and not to place undue reliance on any such guidance.
Any inability to successfully implement our operating strategy or the occurrence of any of the events or circumstances
discussed therein could result in the actual operating results being different than the guidance, and such differences may be material.
Our success will depend on our ability to attract and retain qualified management and other personnel.
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 outstanding securities.