-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GCkAajo6znWl+nSXb7Dg1Xt0U6mwQZEYxGQw2OAEdzprEZtpBqcloc7Ck3QY46jN bC/GQf0je7uvmW7xsUO+wQ== 0001047469-03-010175.txt : 20030326 0001047469-03-010175.hdr.sgml : 20030325 20030325180330 ACCESSION NUMBER: 0001047469-03-010175 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030325 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030326 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FAIRPOINT COMMUNICATIONS INC CENTRAL INDEX KEY: 0001062613 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 133725229 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-56365 FILM NUMBER: 03616636 BUSINESS ADDRESS: STREET 1: 521 EAST MOREHEAD ST STREET 2: STE 250 CITY: CHARLOTTE STATE: NC ZIP: 28202 BUSINESS PHONE: 7043448150 FORMER COMPANY: FORMER CONFORMED NAME: MJD COMMUNICATIONS INC DATE OF NAME CHANGE: 19980527 8-K 1 a2106710z8-k.txt 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): MARCH 24, 2003 ---------------- FAIRPOINT COMMUNICATIONS, INC. ------------------------------------------------------ (Exact Name of Registrant as specified in its charter) DELAWARE 333-56365 13-3725229 - ---------------------------- ---------------- ------------------- (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) 521 EAST MOREHEAD STREET, SUITE 250, CHARLOTTE, NORTH CAROLINA 28202 -------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (704) 344-8150 -------------- N/A -------------------------------------------------------------- (Former name or former address, if changed since last report): Item 5. Other Events and Regulation FD Disclosure. On March 24, 2003, FairPoint Communications, Inc. issued the press release attached hereto as exhibit 99.1. Item 7. Financial Statements and Exhibits (c) Exhibits *99.1 Press release issued March 24, 2003, entitled, "FairPoint Announces Solid Year End and Fourth Quarter Operating Results and Successful Debt Refinancing" - -------- * Filed herewith. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. FAIRPOINT COMMUNICATIONS, INC. By: /s/ Walter E. Leach, Jr. ----------------------------------------- Name: Walter E. Leach, Jr. Title: Senior Vice President and Chief Financial Officer Date: March 25, 2003 EX-99.1 3 a2106710zex-99_1.txt EXHIBIT 99.1 Exhibit 99.1 [FAIRPOINT COMMUNICATIONS, INC. LOGO] FOR IMMEDIATE RELEASE CONTACT: Timothy W. Henry Telephone: (704) 344.8150 Email: Thenry@fairpoint.com FAIRPOINT ANNOUNCES SOLID YEAR END AND FOURTH QUARTER OPERATING RESULTS AND SUCCESSFUL DEBT REFINANCING CHARLOTTE, N.C. (March 24, 2003) - FairPoint Communications, Inc. ("FairPoint") today announced its full year and fourth-quarter financial results. FairPoint also announced that on March 6, 2003, it successfully completed a $225 million offering of Senior Notes and amended and restated its Credit Facility. Highlights of FairPoint's financial results from continuing operations for the year and the quarter ended Dec. 31, 2002 include: o Consolidated revenues in 2002 were basically unchanged from year 2001. o Consolidated 2002 earnings before interest, taxes, depreciation and amortization (EBITDA) increased 6.0 percent to $121.1 million. o Adjusted rural local exchange carrier (RLEC) EBITDA increased 7.4 percent to $132.7 million from 2001. o Fourth-quarter revenues increased 6.3 percent from the same period a year ago. o Fourth-quarter adjusted RLEC EBITDA increased 11.1 percent to $33.1 million from the prior year. RESULTS FOR THE YEAR ENDED DEC. 31, 2002 FairPoint reported consolidated revenues from continuing operations of $235.9 million, a 0.3 percent increase compared to $235.2 million for the prior year. Revenues from FairPoint's rural local exchange carrier (RLEC) companies were $228.5 million, an increase of 1.5 percent compared to $225.1 million for the prior year. This increase in RLEC revenues was primarily from the 2002 full year operations by the RLECs acquired during 2001. The RLEC companies owned prior to 2001 reported comparable revenues of $222.8 million for 2002, a 0.3 percent decrease from $223.5 million in 2001. FairPoint's wholesale long distance carrier services subsidiary, FairPoint Carrier Services, Inc. (Carrier Services), reported revenues of $7.3 million, a 27.7 percent decrease compared to $10.1 million in 2001. Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations were $121.1 million for 2002, a 6.0 percent increase from $114.2 million for the same period in 2001. RLEC EBITDA adjusted to exclude non-cash expenses was $132.7 million, an increase of 7.4 percent from $123.6 million for the same period in 2001. For the companies owned prior to 2001, EBITDA was $128.9 million, a 5.1 percent increase from $122.6 million in the prior year. Carrier Services reported EBITDA of $1.2 million. For the year ended Dec. 31, 2002, FairPoint reported consolidated net income after taxes of $13.2 million. Approximately $19.5 million of the net income is mainly attributable to extinguishment of debt related to the discontinuation of the CLEC business operated by Carrier Services. For the year ended Dec. 31, 2002, consolidated net losses from continuing operations were $6.3 million, compared with losses of $23.3 million in 2001. RESULTS FOR THE FOURTH-QUARTER ENDED DEC. 31, 2002 FairPoint reported fourth-quarter consolidated revenues from continuing operations of $61.6 million, a 6.4% increase compared to $57.9 million for the three months ended Dec. 31, 2001. The RLEC companies reported revenues of $60.2 million, an increase of 9.7 percent compared to $54.9 million for the same period in 2001. Carrier Services reported revenues of $1.4 million, a 53.3 percent decrease compared to $3.06 million for the fourth-quarter of 2001. Consolidated EBITDA from continuing operations was $28.3 million in the fourth-quarter 2002, a 7.2 percent decrease from $30.5 million for the same period in 2001. This decrease was primarily related to impairment charges regarding investments in non-core assets. RLEC EBITDA adjusted to exclude non-cash expenses was $33.1 million in the fourth-quarter, an 11.1 percent increase from $29.8 million for the same period in 2001. Carrier Services reported EBITDA of $0.4 million in the fourth quarter of 2002, unchanged from the same period in 2001. FairPoint reported consolidated net losses after taxes of $4.2 million in the fourth-quarter of 2002. Approximately $0.5 million of losses were from discontinued operations of the CLEC business of Carrier Services. The consolidated net losses from continuing operations were $3.7 million, compared with losses of $2.7 million for the comparable period in 2001. FAIRPOINT SUCCESSFULLY COMPLETES REFINANCING PLAN On March 6, 2003, FairPoint issued $225.0 million of 11-7/8% Senior Notes due 2010. Also, FairPoint amended and restated its Credit Facility to provide for a $70 million (of which $60 million was committed) revolving facility, and a $30 million tranche A Term Loan. These loans mature on March 31, 2007. In addition, the financial covenants were adjusted to provide additional financial flexibility and the tranche C Term Loan amortization was reset with a final payment due on March 31, 2007. Proceeds from the Senior Note and A Term Loan were primarily used to repay existing debt and repurchase, at a discount, a small amount of subordinated debt and preferred stock. "With our refinancing completed, we have gained much greater financial and operating flexibility," said Gene Johnson, Chairman and CEO. "This removes the pending September 2004 refinancing uncertainties and measurably improves our financial profile. We are pleased with the improved credit ratings received from the rating agencies following the successful completion of this refinancing, which reflect the solid capital structure now in place." ABOUT FAIRPOINT FairPoint Communications, Inc. is one of the leading providers of telecommunications services to rural communities across the country. Incorporated in 1991, FairPoint's mission is to acquire and operate telecommunications companies that set the standard of excellence for the delivery of service to rural communities. Today, FairPoint owns and operates 29 rural local exchange companies located in 18 states. FairPoint serves customers with more than 243,000 access lines and offers an array of services including local voice, long distance, data and Internet. FORWARD LOOKING STATEMENT The statements in this news release that are not historical facts are forward-looking statements that are subject to material risks and uncertainties. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties, and that actual results or developments may differ materially from those in the forward-looking statements as a result of various factors which are discussed in previous FairPoint Communications, Inc., filings with the Securities and Exchange Commission. These risks and uncertainties include, but are not limited to, uncertainties relating to economic conditions, acquisitions and divestitures, growth and expansion risks, the availability of equipment, materials, inventories and programming, product acceptance, and the ability to construct, expand and upgrade its services and facilities. FairPoint does not undertake to update any forward-looking statements in this news release or with respect to matters described herein. # # # Attachments FAIRPOINT COMMUNICATIONS, INC. CONSOLIDATED AND RURAL LOCAL EXCHANGE FINANCIAL INFORMATION FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2002 AND 2001
Three-Months Three-Months ($ million) Ended Ended 12/31/02 12/31/01 --------- --------- CONSOLIDATED RESULTS FROM CONTINUING OPERATIONS: Revenues $ 61,587 $ 57,910 Operating expenses 44,442 45,330 --------- --------- Income from operations 17,145 12,580 Other income (expense) (20,794)(1),(4),(7),(8) (15,785)(3) --------- --------- Loss from continuing operations before income taxes (3,649) (3,205) Income (loss) from discontinued operations (534) (99,456) Income taxes (94) 516 Minority Interest in income of subsidiaries (1) -- ========= ========= Net income (loss) $ (4,278) $(102,145) ========= ========= EBITDA $ 33,505 $ 29,944 Free Cash Flow (6,644) (5,073) Other information: Gross property, plant and equipment $ 635,575 $ 610,571 Capital expenditures 19,780 14,871 Interest expense (excluding FASB 133 & amortization) 18,905 18,735 RURAL LOCAL EXCHANGE OPERATIONS: Revenues $ 60,181 $ 54,918 Operating expenses 43,420 42,727 --------- --------- Income from operations 16,761 12,191 Other income (expense) (19,464)(4) (15,776)(3) --------- --------- Earnings (Loss) before income taxes (2,703) (3,585) Income taxes (94) 516 Minority Interest in income of subsidiaries (1) -- ========= ========= Net income (loss) $ (2,798) $ (3,069) ========= ========= EBITDA $ 33,126 $ 29,792 Free Cash Flow (6,437) (1,132) OTHER INFORMATION: Gross property, plant and equipment $ 635,500 $ 610,496 Capital expenditures 19,780 10,778 Interest expense (excluding FASB 133 & amortization) 18,319 18,735 Twelve-Months Twelve-Months ($ million) Ended Ended 12/31/02 12/31/01 --------- --------- CONSOLIDATED RESULTS FROM CONTINUING OPERATIONS: Revenues $ 235,860 $ 235,213 Operating expenses 160,256 175,202 --------- --------- Income from operations 75,604 60,011 Other income (expense) (81,345)(2),(5),(9),(10) (82,927)(6) --------- --------- Loss from continuing operations before income taxes (5,741) (22,916) Income (loss) from discontinued operations 19,500 (188,251) Income taxes (518) (431) Minority Interest in income of subsidiaries (2) (2) Net income (loss) $ 13,239 $(211,600) ========= ========= EBITDA $ 133,907 $ 123,670 Free Cash Flow 12,342 (3,601) OTHER INFORMATION: Gross property, plant and equipment $ 635,575 $ 610,571 Capital expenditures 39,454 43,701 Interest expense (excluding FASB 133 & amortization) 76,131 77,037 RURAL LOCAL EXCHANGE OPERATIONS: Revenues $ 228,543 $ 225,070 Operating expenses 154,175 166,648 --------- --------- Income from operations 74,368 58,422 Other income (expense) (71,659)(5) (82,878)(6) --------- --------- Earnings (loss) before income taxes 2,709 (24,456) Income taxes (518) (431) Minority Interest in income of subsidiaries (2) (2) --------- --------- Net income (loss) $ 2,189 $ (24,889) ========= ========= EBITDA $ 132,685 $ 123,564 Free Cash Flow 12,602 (3,707) OTHER INFORMATION: Gross property, plant and equipment $ 635,500 $ 610,496 Capital expenditures 39,454 43,701 Interest expense excluding FASB 133 & amortization) 74,649 77,037 Access lines 243,408 244,626
Footnotes: (1) Includes $0.6 million interest expense on FairPoint Solutions long term debt for the three months ended December 31, 2002 (2) Includes $1.5 million interest expense on FairPoint Solutions long term debt for the twelve months ended December 31, 2002 (3) Includes FASB 133 expense reduction of $1.9 million for the three months ended December 31, 2001 (4) Includes FASB 133 expense reduction of $1.1 million for the three months ended December 31, 2002 (5) Includes FASB 133 expense reduction of $0.7 million for the twelve months ended December 31, 2002 (6) Includes FASB 133 interest expense of $8.1 million for the twelve months ended December 31, 2001 (7) Includes $0.8 million loss on write-down of Choice One stock for the three months ended December 31, 2002 (8) Includes $4.4 million loss on impairment of equity method investments for the three months ended December 31, 2002 (9) Includes $8.2 million loss on write-down of Choice One stock for the twelve months ended December 31, 2002 (10) Includes $4.4 million loss on impairment of equity method investments for the twelve months ended December 31, 2002 FAIRPOINT COMMUNICATIONS, INC. SEQUENTIAL FINANCIAL INFORMATION FOR THE QUARTERS ENDING DECEMBER 31, SEPTEMBER 30, JUNE 30 AND MARCH 31, 2002
Three-Months Three-Months Three-Months Three-Months ($ million) Ended Ended Ended Ended 12/31/02 09/30/02 06/30/02 03/31/02 --------- --------- --------- --------- CONSOLIDATED RESULTS: Revenues $ 61,587 $ 59,068 $ 56,780 $ 58,425 Operating expenses 44,442 38,323 39,381 38,110 --------- --------- --------- --------- Income from operations 17,145 20,745 17,399 20,315 Other income (expense) (20,794) (21,469) (24,479) (14,603) --------- --------- --------- --------- Earnings (loss) from continuing operations before income taxes (3,649) (724) (7,080) 5,712 Income (loss) from discontinued operations (534) 1,726 18,308 -- Income taxes (94) (69) (144) (211) Minority interest in income of subsidiaries (1) -- (1) -- --------- --------- --------- --------- Net income (loss) $ (4,278) $ 933 $ 11,083 $ 5,501 ========= ========= ========= ========= Adjusted EBITDA $ 33,505 $ 34,487 $ 31,312 $ 34,603 Free Cash Flow (6,644) 3,950 4,720 10,316 OTHER INFORMATION: Gross property, plant and equipment $ 635,575 $ 624,732 $ 616,298 $ 611,953 Capital expenditures 19,780 9,722 5,916 4,036 Interest expense (exluding FASB 133 & amortization) 18,905 19,392 19,155 18,679 =============================================================================================================================== Three-Months Three-Months Three-Months Three-Months ($ million) Ended Ended Ended Ended 12/31/02 09/30/02 06/30/02 03/31/02 --------- --------- --------- --------- RURAL LOCAL EXCHANGE OPERATIONS: Revenues $ 60,182 $ 57,674 $ 55,683 $ 55,004 Operating expenses 43,421 37,159 38,343 35,253 --------- --------- --------- --------- Income from operations 16,761 20,515 17,340 19,751 Other income (expense) (19,464) (19,064) (18,534) (14,597) --------- --------- --------- --------- Earnings (loss) before income taxes (2,703) 1,451 (1,194) 5,154 Income taxes (94) (69) (144) (211) Minority inerest in income of subsidiaries (1) 0 (1) 0 --------- --------- --------- --------- Net income (loss) $ (2,798) $ 1,382 $ (1,339) $ 4,943 ========= ========= ========= ========= Adjusted EBITDA $ 33,126 $ 34,261 $ 31,024 $ 34,274 Free Cash Flow (6,437) 4,303 4,749 9,987 OTHER INFORMATION: Gross property, plant and equipment $ 635,500 $ 624,657 $ 616,223 $ 611,878 Capital expenditures 19,780 9,722 5,916 4,036 Interest expense (excluding FASB 133 & amortization) 18,319 18,813 18,838 18,679 Access Lines 243,408 245,075 245,996 245,051
FAIRPOINT COMMUNICATIONS, INC. EBITDA AND FREE CASH FLOW RECONCILIATION FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2002 AND 2001
Three-Months Ended Three-Months Ended 12/31/02 12/31/01 --------- --------- CONSOLIDATED RESULTS: Loss from continuing operations $ (3,744) $ (2,689) Add: Income tax expense 94 (516) Interesttexpensexpense 20,019 19,622 Stock-basedbcompensation,tnet,ofeforfeiturestures 1,121 1,337 FASB 133 (1,067) (1,925) Impairment of investments 5,127 -- Depreciationaandnamortizationation 11,955 14,115 --------- --------- Consolidated EBITDA 33,505 29,944 Less: Scheduled principal payments 1,370 1,927 Interest expense (excluding FASB 133 & amortization) 18,905 18,735 Capital expenditures 19,780 14,871 Income taxes 94 (516) --------- --------- Consolidated free cash flow $ (6,644) $ (5,073) ========= ========= RURAL LOCAL EXCHANGE OPERATIONS: Income (loss) from continuing operations $ (2,798) $ (2,837) Add: Income tax expense 94 (516) Interesttexpensexpense 19,432 19,622 Stock-basedbcompensation,tnet,ofeforfeiturestures 1,121 1,337 FASB 133 (1,067) (1,925) Impairment of investments 4,392 -- Depreciationaandnamortizationation 11,952 14,111 --------- --------- Rural Local Exchange EBITDA 33,126 29,792 Less: Scheduled principal payments 1,370 1,927 Interest expense (excluding FASB 133 & amortization) 18,319 18,735 Capital expenditures 19,780 10,778 Income taxes 94 (516) --------- --------- Rural Local Exchange Free Cash Flow $ (6,437) $ (1,132) ========= ========= Twelve-Months Ended Twelve-Months Ended 12/31/02 12/31/01 --------- --------- CONSOLIDATED RESULTS: Loss from continuing operations $ (6,261) $ (23,349) Add: Income tax expense 518 431 Interesttexpensexpense 79,796 81,053 Stock-basedbcompensation,tnet,ofeforfeiturestures 924 1,337 FASB 133 (698) 8,134 Impairment of investments 12,568 -- Depreciationaandnamortizationation 47,060 56,064 --------- --------- Consolidated EBITDA 133,907 123,670 Less: Scheduled principal payments 5,462 6,102 Interest expense (excluding FASB 133 & amortization) 76,131 77,037 Capital expenditures 39,454 43,701 Income taxes 518 431 --------- --------- Consolidated Free Cash Flow $ 12,342 $ (3,601) ========= ========= RURAL LOCAL EXCHANGE OPERATIONS: Income (loss) from continuing operations $ 2,188 $ (23,441) Add: Income tax expense 518 431 Interesttexpensexpense 78,314 81,053 Stock-basedbcompensation,tnet,ofeforfeiturestures 924 1,337 FASB 133 (698) 8,134 Impairment of investments 4,392 -- Depreciationaandnamortizationation 47,047 56,050 --------- --------- Rural Local Exchange EBITDA 132,685 123,564 Less: Scheduled principal payments 5,462 6,102 Interest expense (excluding FASB 133 & amortization) 74,649 77,037 Capital expenditures 39,454 43,701 Income taxes 518 431 --------- --------- Rural Local Exchange Free Cash Flow $ 12,602 $ (3,707) ========= =========
FAIRPOINT COMMUNICATIONS, INC. SEQUENTIAL QTR/QTR FREE CASH FLOW
Three-Months Three-Months Three-Months Three-Months Ended Ended Ended Ended 12/31/02 09/30/02 06/30/02 03/31/02 -------- -------- -------- -------- CONSOLIDATED RESULTS: Consolidated EBITDA $ 33,505 $ 34,487 $ 31,312 $ 34,603 Less: Scheduled principal payments 1,370 1,354 1,377 1,361 Interest Expense (excluding FASB 133 & amortization) 18,905 19,392 19,155 18,679 Capital expenditures 19,780 9,722 5,916 4,036 Income taxes 94 69 144 211 -------- -------- -------- -------- Consolidated Free Cash Flow $ (6,644) $ 3,950 $ 4,720 $ 10,316 ======== ======== ======== ======== ================================================================================================================ RURAL LOCAL EXCHANGE OPERATIONS: Rural Local Exchange EBITDA $ 33,126 $ 34,261 $ 31,024 $ 34,274 Less: Scheduled principal payments 1,370 1,354 1,377 1,361 Interest Expense (excluding FASB 133 & amortization) 18,319 18,813 18,838 18,679 Capital expenditures 19,780 9,722 5,916 4,036 Income taxes 94 69 144 211 -------- -------- -------- -------- Rural Local Exchange Free Cash Flow $ (6,437) $ 4,303 $ 4,749 $ 9,987 ======== ======== ======== ========
FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2002 2001 (UNAUDITED) ASSETS - ---------------------------------------------------------------------------------------------- (DOLLARS IN THOUSANDS) Current assets: Cash $ 5,572 3,063 Accounts receivable 25,454 30,949 Other 5,554 7,098 Assets of discontinued operations 806 25,997 - ---------------------------------------------------------------------------------------------- Total current assets 37,386 67,107 - ---------------------------------------------------------------------------------------------- Property, plant, and equipment, net 276,717 283,280 - ---------------------------------------------------------------------------------------------- Other assets: Investments 44,022 48,941 Goodwill, net of accumulated amortization 454,306 454,306 Deferred charges and other assets 16,822 21,381 - ---------------------------------------------------------------------------------------------- Total other assets 515,150 524,628 - ---------------------------------------------------------------------------------------------- Total assets $ 829,253 875,015 ============================================================================================== LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 21,011 20,018 Current portion of long-term debt and other long-term liabilities 6,240 6,759 Demand notes payable 427 464 Accrued interest payable 10,501 10,882 Other accrued liabilities 21,500 12,042 Liabilities of discontinued operations 5,065 160,376 - ---------------------------------------------------------------------------------------------- Total current liabilities 64,744 210,541 - ---------------------------------------------------------------------------------------------- Long-term liabilities: Long-term debt, net of current portion 798,486 776,279 Liabilities of discontinued operations 5,265 9,735 - ---------------------------------------------------------------------------------------------- Deferred credits and other long-term liabilities 13,449 23,817 - ---------------------------------------------------------------------------------------------- Total long-term liabilities 817,200 809,831 - ---------------------------------------------------------------------------------------------- Minority interest 16 17 - ---------------------------------------------------------------------------------------------- Common stock subject to put options 3,136 4,136 - ---------------------------------------------------------------------------------------------- Redeemable preferred stock 90,307 -- - ---------------------------------------------------------------------------------------------- Stockholders' deficit: Common stock 499 499 Additional paid-in capital 206,942 217,936 Accumulated other comprehensive loss (1,132) (2,247) Accumulated deficit (352,459) (365,698) - ---------------------------------------------------------------------------------------------- Total stockholders' deficit (146,150) (149,510) - ---------------------------------------------------------------------------------------------- Total liabilities and stockholders' deficit $ 829,253 875,015 ==============================================================================================
FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three months ended Twelve months ended December 31, December 31, 2002 2001 2002 2001 - ------------------------------------------------------------------------------------------------------------------- (DOLLARS IN THOUSANDS) Revenues $ 61,587 57,910 235,860 235,213 - ------------------------------------------------------------------------------------------------------------------- Operating expenses: Operating expenses, excluding depreciation and amortization and stock-based compensation 31,366 29,878 112,272 117,801 Depreciation and amortization 11,955 14,115 47,060 56,064 Stock-based compensation 1,121 1,337 924 1,337 - ------------------------------------------------------------------------------------------------------------------- Total operating expenses 44,442 45,330 160,256 175,202 - ------------------------------------------------------------------------------------------------------------------- Income from operations 17,145 12,580 75,604 60,011 - ------------------------------------------------------------------------------------------------------------------- Other income (expense): Net gain (loss) on sale of investments and other assets 124 48 34 (648) Interest and dividend income 451 275 1,898 1,990 Interest expense (20,019) (19,621) (79,796) (81,053) Impairment on investments (5,127) -- (12,568) -- Equity in net earnings of investees 2,298 1,654 7,903 4,995 Other nonoperating, net 1,479 1,859 1,184 (8,211) - ------------------------------------------------------------------------------------------------------------------- Total other expense (20,794) (15,785) (81,345) (82,927) - ------------------------------------------------------------------------------------------------------------------- Loss from continuing operations before income taxes (3,649) (3,205) (5,741) (22,916) Income tax expense (94) 516 (518) (431) Minority interest in income of subsidiaries (1) -- (2) (2) - ------------------------------------------------------------------------------------------------------------------- Loss from continuing operations (3,744) (2,689) (6,261) (23,349) - ------------------------------------------------------------------------------------------------------------------- Discontinued operations: Loss from discontinued competitive communications operations -- (4,172) -- (92,967) Income (loss) on disposal of competitive communications operations (534) (95,284) 19,500 (95,284) - ------------------------------------------------------------------------------------------------------------------- Income (loss) from discontinued operations (534) (99,456) 19,500 (188,251) - ------------------------------------------------------------------------------------------------------------------- Net income (loss) (4,278) (102,145) 13,239 (211,600) Redeemable preferred stock dividends and accretion (4,802) -- (11,918) -- - ------------------------------------------------------------------------------------------------------------------- Net income (loss) attributed to common shareholders $ (9,080) (102,145) 1,321 (211,600) ===================================================================================================================
FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
- ------------------------------------------------------------------------------------------------------------- Twelve months ended December 31, 2002 2001 - ------------------------------------------------------------------------------------------------------------- (DOLLARS IN THOUSANDS) Cash flows from operating activities: Net income (loss) $ 13,239 (211,600) - ------------------------------------------------------------------------------------------------------------- Adjustments to reconcile net income (loss) to net cash provided by operating activities of continuing operations: (Income) loss from discontinued operations (19,500) 188,251 Amortization of debt issue costs 3,664 4,018 Depreciation and amortization 47,060 56,064 Other non cash items 7,518 5,629 Changes in assets and liabilities arising from operations: Accounts receivable and other current assets 3,749 (175) Accounts payable and accrued expenses 3,140 (3,960) Income taxes 379 306 Other assets/liabilities (497) 224 - ------------------------------------------------------------------------------------------------------------- Total adjustments 45,513 250,357 - ------------------------------------------------------------------------------------------------------------- Net cash provided by operating activities of continuing operations 58,752 38,757 - ------------------------------------------------------------------------------------------------------------- Cash flows from investing activities of continuing operations: Net capital additions (39,077) (43,570) Acquisitions of telephone properties -- (18,862) Other, net 7,898 4,488 - ------------------------------------------------------------------------------------------------------------- Net cash used in investing activities of continuing operations (31,179) (57,944) - ------------------------------------------------------------------------------------------------------------- Cash flows from financing activities of continuing operations: Loan origination costs (63) (2,322) Proceeds from issuance of long-term debt 129,080 316,215 Repayments of long-term debt (140,560) (211,973) Other, net (1,003) (686) - ------------------------------------------------------------------------------------------------------------- Net cash (used in) provided by financing activities of continuing operations (12,546) 101,234 - ------------------------------------------------------------------------------------------------------------- Net cash contributed from continuing operations to discontinued operations (12,518) (83,114) - ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in cash 2,509 (1,067) Cash, beginning of period 3,063 4,130 - ------------------------------------------------------------------------------------------------------------- Cash, end of period $ 5,572 3,063 ============================================================================================================= Supplemental disclosures of noncash financing activities: Redemmable preferred stock issued in connection with long-term debt settlement $ 93,861 -- - ------------------------------------------------------------------------------------------------------------- Long-term debt forgiveness in connection with Carrier Services' debt settlement $ 2,000 -- - ------------------------------------------------------------------------------------------------------------- Redeemable preferred stock dividends $ 10,918 -- - ------------------------------------------------------------------------------------------------------------- Accretion of redeemable preferred stock $ 1,000 -- Long-term debt issued in connection with Carrier Services' interest rate swap settlement $ 3,003 -- - ------------------------------------------------------------------------------------------------------------- Long-term debt issued in connection with Carrier Services' Tranche B interest payment $ 887 -- =============================================================================================================
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