FairPoint Communications 2013 Annual Report Download - page 48

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46
Credit Facility had an outstanding balance of $2.0 billion with a weighted average interest rate of 6.94%. The Old Credit Agreement
Loans during the same period of 2012 had an outstanding balance of $1.0 billion with a weighted average interest rate of 6.5%.
As stated above, we paid down $43.0 million of principal payments on our Old Term Loan in 2012, of which $33.0 million exceeded
the scheduled payments and was allocated to the final payment due at maturity.
For further information regarding the New Credit Agreement Loans and the Notes, see "—Liquidity and Capital Resources
—Debt" herein and note (8) "Long-term Debt" to our consolidated financial statements in "Item 8. Financial Statements and
Supplementary Data" included elsewhere in this Annual Report.
Loss on Debt Refinancing
On February 14, 2013, we completed the Refinancing and paid all amounts outstanding under the Old Credit Agreement.
In connection with this Refinancing, we incurred $5.6 million in related fees and wrote off $1.2 million of debt issue costs and
other prepayments related to the Old Credit Agreement.
Other Income
Other income generally includes non-operating gains and losses such as those incurred on the sale or disposal of assets.
During the years ended December 31, 2013, 2012 and 2011, we recognized other income, net of other expenses, of $4.9 million,
$0.7 million and $1.7 million, respectively. The increase in fiscal 2013 compared to fiscal 2012 is due to a one-time settlement.
Reorganization Items
Reorganization items represent income or expense amounts that have been recognized as a direct result of the Chapter 11
Cases, prior to the Effective Date. For details of items within Reorganization items, see note (4) "Reorganization Under Chapter
11—Financial Reporting in Reorganization—Reorganization Items" to our consolidated financial statements in "Item 8. Financial
Statement and Supplementary Data" included elsewhere in this Annual Report.
Income Taxes
The effective income tax rate for the years ended December 31, 2013, 2012 and 2011 was 46.6% benefit, 38.4% benefit and
56.9% expense, respectively.
The effective tax rate for 2013 was primarily impacted by state taxes, as well as a decrease to the valuation allowance.
The effective tax rate for 2012 was primarily impacted by state taxes, as well as a favorable provision to return permanent
adjustments, partially offset by an increase to the valuation allowance for deferred tax assets.
The effective tax rate for 2011 was primarily impacted by the impairment charge to reduce our goodwill to zero and from
certain non-taxable cancellation of indebtedness income resulting from our emergence from Chapter 11 bankruptcy protection.
For 2014, our annualized effective income tax benefit rate is expected to range from 39% to 41%, excluding one-time discrete
items. Changes in the relative profitability of our business, as well as recent and proposed changes to federal and state tax laws,
may cause the rate to change from historical rates. See note (12) "Income Taxes" to our consolidated financial statements in "Item
8. Financial Statements and Supplementary Data" included elsewhere in this Annual Report for further discussion on income taxes.
Gain on Sale of Discontinued Operations, Net of Tax
On January 31, 2013, we completed the sale of our capital stock in our Idaho-based operations to Blackfoot
Telecommunications Group for $30.5 million in cash. The operating results of these Idaho-based operations are immaterial and,
accordingly, have not been segregated as discontinued operations for reporting purposes. A gain, before $6.7 million of income
taxes, of $16.7 million was recorded upon the closing of the transaction, which is reported within discontinued operations in the
consolidated statement of operations for the year ended December 31, 2013.
For details of our Idaho-based operations' operating results, see note (19) "Assets Held for Sale and Discontinued Operations"
to our consolidated financial statements in "Item 8. Financial Statements and Supplementary Data" included elsewhere in this
Annual Report.
Non-GAAP Financial Measures
We report our financial results in accordance with accounting principles generally accepted in the United States ("U.S.
GAAP" or "GAAP"). The table below includes certain non-GAAP financial measures and the adjustments to the most directly
comparable U.S. GAAP measure used to determine the non-GAAP measures. Management believes that the non-GAAP measures,