10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 ______________________________________________________________________

FORM 10-Q

________________________________________________________________

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to         

Commission File Number 001-32408

______________________________________________________________________

FairPoint Communications, Inc.

(Exact name of registrant as specified in its charter)

 ______________________________________________________________________

Delaware	13-3725229
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
521 East Morehead Street, Suite 500 Charlotte, North Carolina	28202
(Address of principal executive offices)	(Zip Code)

(704) 344-8150

(Registrant's telephone number, including area code)

______________________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	x
Non-accelerated filer	o  (Do not check if a smaller reporting company)	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o    No  x

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes  x    No  o

As of October 30, 2015, there were 26,905,398 shares of the registrant's common stock, par value $0.01 per share, outstanding.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of September 30, 2015 (Unaudited) and December 31, 2014	5
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2015 and 2014 (Unaudited)	6
	Condensed Consolidated Statements of Comprehensive Income/(Loss) for the three and nine months ended September 30, 2015 and 2014 (Unaudited)	7
	Condensed Consolidated Statement of Stockholders' Equity/(Deficit) for the nine months ended September 30, 2015 (Unaudited)	8
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 and 2014 (Unaudited)	9
	Notes to Condensed Consolidated Financial Statements (Unaudited)	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46
Item 4.	Controls and Procedures	47
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	48
Item 1A.	Risk Factors	48
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 3.	Defaults Upon Senior Securities	48
Item 4.	Mine Safety Disclosures	48
Item 5.	Other Information	48
Item 6.	Exhibits	48
	Signatures	49

2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some statements in this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015 (this "Quarterly Report") are known as "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements include, but are not limited to, statements about our plans, objectives, expectations and intentions and other statements contained in this Quarterly Report that are not historical facts. When used in this Quarterly Report, the words “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates”, "projects", "should", "could", "may", "will" and similar expressions are generally intended to identify forward-looking statements. Because these forward-looking statements involve known and unknown risks and uncertainties, there are important factors that could cause actual results, events or developments to differ materially from those expressed or implied by these forward-looking statements, including factors discussed under “Item 1A. Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2014 (the "2014 Annual Report") and other parts of this Quarterly Report and the factors set forth below:

• future performance generally and our share price as a result thereof;

• any change in strategic direction, including as a result of mergers, acquisitions or dispositions;

• restrictions imposed by the agreements governing our indebtedness;

• our ability to satisfy certain financial covenants included in the agreements governing our indebtedness;

• financing sources and availability, and future interest expense;

• our ability to repay or refinance our indebtedness;

• our ability to fund substantial capital expenditures;

• anticipated business development activities and future capital expenditures;

• the effects of regulation, including changes in federal and state regulatory policies, procedures and mechanisms including but not limited to the availability and levels of regulatory support payments, the imposition of penalties related to service quality, outages or other matters, and the remaining restrictions and obligations imposed by federal and state regulators as a condition to the approval of the Merger (as defined hereinafter) and the Plan (as defined hereinafter);

• our ability to satisfy our Connect America Fund ("CAF") Phase II obligations;

• adverse changes in economic and industry conditions, and any resulting financial or operational impact, in the markets we serve;

• labor matters, including workforce levels, our workforce reduction initiatives, labor negotiations and any resulting financial or operational impact;

• material technological developments and changes in the communications industry, including declines in access lines and disruption of our third party suppliers' provisioning of critical products or services;

• change in preference and use by customers of alternative technologies;

• the effects of competition on our business and market share;

• our ability to overcome changes to or pressures on pricing and their impact on our profitability;

• intellectual property infringement claims by third parties;

• failure of, or attack on, our information technology infrastructure;

• risks related to our reported financial information and operating results;

• availability of net operating loss ("NOL") carryforwards to offset anticipated tax liabilities;

• the impact of changes in assumptions on our ability to meet obligations to our company-sponsored qualified pension plans and other post-employment benefit plans;

• the impact of lump sum payments related to lump sum benefits under certain of our company-sponsored qualified pension plans on future pension contributions;

• the effects of severe weather events, such as hurricanes, tornadoes and floods, terrorist attacks, cyber-attacks or other natural or man-made disasters; and

• changes in accounting assumptions that regulatory agencies, including the Securities and Exchange Commission (the "SEC"), may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings.

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You should not place undue reliance on such forward-looking statements, which are based on the information currently available to us and speak only as of the date on which this Quarterly Report was filed with the SEC. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changes in our expectations or otherwise, except as required by law. However, your attention is directed to any further disclosures made on related subjects in our subsequent reports filed with the SEC on Forms 10-K, 10-Q and 8-K.

Except as otherwise required by the context, references in this Quarterly Report to:

• "FairPoint Communications" refers to FairPoint Communications, Inc., excluding its subsidiaries.

• "FairPoint," the "Company," "we," "us" or "our" refer to the combined business of FairPoint Communications, Inc. and all of its subsidiaries after giving effect to the merger on March 31, 2008 with Northern New England Spinco Inc., a subsidiary of Verizon Communications Inc. ("Verizon"), which transaction is referred to herein as the "Merger".

• "Northern New England operations" refers to the local exchange business acquired from Verizon and certain of its subsidiaries after giving effect to the Merger.

• "Telecom Group" refers to FairPoint, exclusive of our acquired Northern New England operations.

4

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

September 30, 2015 and December 31, 2014

(in thousands, except share data)

	September 30, 2015			December 31, 2014
	(unaudited)
Assets:
Cash	$	17,033		$	37,587
Accounts receivable (net of $9.7 million and $9.9 million allowance for doubtful accounts, respectively)	64,525			71,545
Prepaid expenses	27,807			25,360
Other current assets	5,311			5,406
Deferred income tax, net	14,633			7,638
Total current assets	129,309			147,536
Property, plant and equipment (net of $1,229.9 million and $1,085.4 million accumulated depreciation, respectively)	1,138,549			1,213,729
Intangible assets (net of $52.0 million and $43.7 million accumulated amortization, respectively)	86,629			94,879
Restricted cash	651			651
Other assets	3,013			3,214
Total assets	$	1,358,151		$	1,460,009
Liabilities and Stockholders’ Equity/(Deficit):
Current portion of long-term debt	$	6,400		$	6,400
Current portion of capital lease obligations	838			627
Accounts payable	29,983			62,985
Claims payable and estimated claims accrual	216			216
Accrued interest payable	3,421			9,978
Accrued payroll and related expenses	28,874			25,218
Other accrued liabilities	51,353			47,147
Total current liabilities	121,085			152,571
Capital lease obligations	1,214			962
Accrued pension obligations	144,875			212,806
Accrued other post-employment benefit obligations	101,173			735,351
Deferred income taxes	40,026			35,231
Other long-term liabilities	23,741			21,131
Long-term debt, net of current portion	900,634			902,241
Total long-term liabilities	1,211,663			1,907,722
Total liabilities	1,332,748			2,060,293
Commitments and contingencies (See Note 13)
Stockholders’ equity/(deficit):
Common stock, $0.01 par value, 37,500,000 shares authorized, 26,905,398 and 26,710,569 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively	269			267
Additional paid-in capital	520,921			516,080
Retained deficit	(749,902		)	(798,008		)
Accumulated other comprehensive income/(loss)	254,115			(318,623		)
Total stockholders’ equity/(deficit)	25,403			(600,284		)
Total liabilities and stockholders’ equity/(deficit)	$	1,358,151		$	1,460,009

See accompanying notes to condensed consolidated financial statements (unaudited).

5

FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

Three and Nine Months endedSeptember 30, 2015 and 2014

(Unaudited)

(in thousands, except per share data)

	Three Months ended September 30,						Nine Months ended September 30,
	2015			2014			2015			2014
Revenues	$	221,569		$	228,120		$	649,641		$	684,274
Operating expenses:
Cost of services and sales, excluding depreciation and amortization	100,718			104,643			333,067			321,870
Other post-employment benefit and pension expense	(57,568		)	19,832			(116,926		)	56,317
Selling, general and administrative expense	49,688			75,937			158,968			200,844
Depreciation and amortization	56,296			56,618			167,420			165,769
Reorganization related expense	6			12			33			77
Total operating expenses	149,140			257,042			542,562			744,877
Income/(loss) from operations	72,429			(28,922		)	107,079			(60,603		)
Other income/(expense):
Interest expense	(20,186		)	(20,195		)	(59,979		)	(60,226		)
Other	153			90			425			81
Total other expense	(20,033		)	(20,105		)	(59,554		)	(60,145		)
Income/(loss) before income taxes	52,396			(49,027		)	47,525			(120,748		)
Income tax benefit	658			11,249			581			28,053
Net income/(loss)	$	53,054		$	(37,778	)	$	48,106		$	(92,695	)
Weighted average shares outstanding:
Basic	26,676			26,472			26,640			26,440
Diluted	27,004			26,472			26,952			26,440
Income/(loss) per share, basic	$	1.99		$	(1.43	)	$	1.81		$	(3.51	)
Income/(loss) per share, diluted	$	1.96		$	(1.43	)	$	1.78		$	(3.51	)

See accompanying notes to condensed consolidated financial statements (unaudited).

6

FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income/(Loss)

Three and Nine Months endedSeptember 30, 2015 and 2014

(Unaudited)

(in thousands)

	Three Months ended September 30,						Nine Months ended September 30,
	2015			2014			2015			2014
Net income/(loss)	$	53,054		$	(37,778	)	$	48,106		$	(92,695	)
Other comprehensive income/(loss), net of taxes:
Interest rate swaps (net of$0.2 million, ($0.1) million, $0.6 million and $0.5 million tax benefit/(expense), respectively)	(274		)	155			(897		)	(682		)
Qualified pension and other post-employment benefit plans (net of $0.0 million, $1.2 million, $0.0 million and $2.4 million tax expense, respectively)	(41,698		)	1,752			573,635			3,500
Total other comprehensive income/(loss)	(41,972		)	1,907			572,738			2,818
Comprehensive income/(loss)	$	11,082		$	(35,871	)	$	620,844		$	(89,877	)

See accompanying notes to condensed consolidated financial statements (unaudited).

7

FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Stockholders' Equity/(Deficit)

Nine Months ended September 30, 2015

(Unaudited)

(in thousands)

	Common Stock			Additional paid-in capital			Retained deficit			Accumulated other comprehensive income/(loss)			Total stockholders' equity/(deficit)
	Shares	Amount
Balance at December 31, 2014	26,711	$	267	$	516,080		$	(798,008	)	$	(318,623	)	$	(600,284	)
Net income/(loss)	—	—		—			48,106			—			48,106
Stock-based compensation issued, net	194	2		(465		)	—			—			(463		)
Stock-based compensation expense	—	—		5,306			—			—			5,306
Interest rate swaps other comprehensive loss	—	—		—			—			(897		)	(897		)
Employee benefit other comprehensive income before reclassifications	—	—		—			—			690,453			690,453
Employee benefit amounts reclassified from accumulated other comprehensive income	—	—		—			—			(116,818		)	(116,818		)
Balance at September 30, 2015	26,905	$	269	$	520,921		$	(749,902	)	$	254,115		$	25,403

See accompanying notes to condensed consolidated financial statements (unaudited).

8

FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

Nine Months ended September 30, 2015 and 2014

(Unaudited) (in thousands)

	Nine Months ended September 30,
	2015			2014
Cash flows from operating activities:
Net income/(loss)	$	48,106		$	(92,695	)
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
Deferred income taxes	(1,603		)	(28,907		)
Provision for uncollectible revenue	5,606			6,840
Depreciation and amortization	167,420			165,769
Other post-employment benefits	(127,356		)	38,348
Qualified pension	(2,001		)	(6,447		)
Stock-based compensation	5,306			3,527
Other non-cash items	3,114			1,091
Changes in assets and liabilities arising from operations:
Accounts receivable	1,415			5,141
Prepaid and other assets	(2,354		)	2,694
Restricted cash	—			463
Accounts payable and accrued liabilities	(27,139		)	(6,660		)
Accrued interest payable	(6,557		)	(6,561		)
Other assets and liabilities, net	3,535			(3,567		)
Total adjustments	19,386			171,731
Net cash provided by operating activities	67,492			79,036
Cash flows from investing activities:
Net capital additions	(82,921		)	(91,775		)
Distributions from investments and proceeds from the sale of property and equipment	230			1,101
Net cash used in investing activities	(82,691		)	(90,674		)
Cash flows from financing activities:
Repayments of long-term debt	(4,800		)	(4,800		)
Proceeds from exercise of stock options	13			32
Repayment of capital lease obligations	(568		)	(1,067		)
Net cash used in financing activities	(5,355		)	(5,835		)
Net change	(20,554		)	(17,473		)
Cash, beginning of period	37,587			42,700
Cash, end of period	$	17,033		$	25,227
Supplemental disclosure of cash flow information:
Capital additions included in accounts payable	$	7,848		$	7,015
Acquisition of property and equipment by capital lease	1,030			1,135

See accompanying notes to condensed consolidated financial statements (unaudited).

9

FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (Unaudited)

(1) Organization and Principles of Consolidation

Organization

FairPoint is a leading provider of advanced communications services to business, wholesale and residential customers within its service territories. FairPoint offers its customers a suite of advanced data services such as Ethernet, high capacity data transport and other IP-based services over an extensive fiber network with more than 20,000 miles of fiber optic cable, including approximately 17,000 miles of fiber optic cable in Maine, New Hampshire and Vermont, in addition to Internet access, high-speed data ("HSD") and local and long distance voice services. As of September 30, 2015, FairPoint's service territory spanned 17 states where it is the incumbent communications provider, primarily serving rural communities and small urban markets. Many of its local exchange carriers ("LECs") have served their respective communities for more than 80 years. As of September 30, 2015, the Company operated with approximately 314,000 broadband subscribers, approximately 14,000 Ethernet circuits and approximately 424,000 residential voice lines.

Principles of Consolidation

The condensed 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 the Company demonstrates significant influence, but does not have a controlling financial interest. Intercompany accounts and transactions have been eliminated upon consolidation.

Reorganization

On October 26, 2009, the Company and substantially all of its direct and indirect subsidiaries filed voluntary petitions for relief under Chapter 11 of Title 11 ("Chapter 11") of the United States Code. These cases were jointly administered under the caption In re FairPoint Communications, Inc. (collectively, the "Chapter 11 Cases") in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"). On January 24, 2011 (the "Effective Date"), the Company substantially consummated its reorganization through a series of transactions contemplated by its Third Amended Joint Plan of Reorganization Under Chapter 11 of the United States Code (as confirmed by the Bankruptcy Court, the "Plan").

(2) Accounting Policies

(a) Presentation and Use of Estimates

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, which require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of results of operations and financial condition for the interim periods shown, including normal recurring accruals and other items.

Examples of significant estimates include the allowance for doubtful accounts, revenue reserves, the depreciation of property, plant and equipment, valuation of intangible assets, qualified pension and other post-employment benefit plan assumptions, stock-based compensation and income taxes.

(b) Revenue Recognition

Revenues are recognized as services are rendered and are primarily derived from the usage of the Company's networks and facilities or under wholesale arrangements with other communications carriers. Revenues are primarily derived from: voice services, access (including pooling), certain CAF receipts, Internet and broadband services and other miscellaneous services. Local access charges are billed to local end users under tariffs approved by each state's Public Utilities Commission ("PUC") or by rates, terms and conditions determined by the Company. Access revenues are derived for the intrastate jurisdiction by billing access charges to interexchange carriers, wireless carriers and to other LECs. These charges are billed based on toll or access tariffs approved by the local state's PUC. Access charges for the interstate jurisdiction are billed in accordance with tariffs filed by the National Exchange Carrier Association ("NECA") or by the individual company and approved by the Federal Communications Commission (the "FCC").

10

Revenues are determined on a bill-and-keep basis or a pooling basis. If on a bill-and-keep basis, the Company bills the charges to either the wholesale provider or the end user and keeps the revenue. If the Company participates in a pooling environment (interstate or intrastate), the toll or access billed is contributed to a revenue pool. The revenue is then distributed to individual companies based on their company-specific revenue requirement or similar distribution methods. This distribution is based on individual state PUC's (intrastate) or the FCC's (interstate) approved settlement mechanisms, separation rules and rates of return. Distribution from these pools can change relative to changes made to expenses, plant investment or rate-of-return. Some companies participate in federal and certain state universal service programs that are pooling in nature but are regulated by rules separate from those described above. These rules vary by state. Revenues earned through the various pooling arrangements are initially recorded based on the Company's estimates. Rule changes associated with the FCC's CAF/ICC Order (as defined hereinafter) impact the NECA interstate pooling, in that a portion of the Company's interstate Universal Service Fund ("USF") revenues, which are administered through the NECA pools and which prior to January 1, 2012 were based on costs, are now based on rules from the FCC's CAF/ICC Order, including CAF Phase II support where FairPoint accepted CAF Phase II support, continued CAF Phase I frozen support where FairPoint did not accept CAF Phase II support and CAF/ICC rules in states where FairPoint is eligible for such support under the ICC Transition Rules for price cap and rate-of-return carriers. FairPoint accepted CAF Phase II support in all states except Kansas and Colorado.

Long distance switched retail and wholesale services can be recurring due to coverage under an unlimited calling plan or be usage sensitive. In either case, they are billed in arrears and recognized when earned. Internet and data services revenues are substantially all recurring revenues and are billed one month in advance and deferred until earned.

As of September 30, 2015 and December 31, 2014, unearned revenue of $21.5 million and $19.0 million, respectively, was included in other accrued liabilities and unearned revenue of $7.6 million and $9.3 million, respectively, was included in other long-term liabilities on the condensed consolidated balance sheets.

The majority of the Company's other miscellaneous services revenue is generated from ancillary special projects at the request of third parties, video services, directory services and late payment charges to end users and wholesale carriers. The Company requires customers to pay for ancillary special projects in advance. As of September 30, 2015 and December 31, 2014, customer deposits of $2.2 million and $2.4 million, respectively, were included in other accrued liabilities on the condensed consolidated balance sheets. Once the ancillary special project is completed or substantially complete and all project costs have been accumulated for proper accounting recognition, the advance payment is recognized as revenue with any overpayments refunded to the customer, as appropriate. The Company recognizes revenue upon the provision of video services in certain markets by reselling DirecTV and providing cable and IP television video-over-digital subscriber line services. The Company also publishes telephone directories in some of its Telecom Group markets and recognizes revenues associated with these publications evenly over the time period covered by the directory, which is typically twelve months. The Company bills late payment fees to customers who have not paid their bills in a timely manner. In general, late payment fee revenue is recognized based on collection of these charges.

Non-recurring customer activation fees, along with the related costs up to, but not exceeding, the activation fees, are deferred and amortized over the customer relationship period.

On June 26, 2014, the Maine PUC ("MPUC") adopted a final rule (Chapter 201), establishing new provider of last resort ("POLR") service quality index ("SQI") standards and reporting requirements which began August 1, 2014. Under Chapter 201, the MPUC may open an investigation into the failure to meet any of the established standards and has the authority to impose penalties of up to $500,000 per standard. On January 13, 2015, the MPUC issued a Notice of Investigation to review the Company's service quality in Maine. In addition, the Vermont Public Service Board opened an investigation into service quality on December 3, 2014 at the request of the Vermont Department of Public Service. Penalties, if any, would be recorded as a reduction to revenue.

The Company also adopted a separate performance assurance plan ("PAP") for certain services provided on a wholesale basis to competitive local exchange carriers ("CLECs") in each of the states of Maine, New Hampshire and Vermont. Pursuant to the PAPs, FairPoint was required to provide service credits in the event the Company was unable to meet the provisions of the respective PAP. Effective June 1, 2015, the PAP was retired and the Company began measuring and reporting certain wholesale local service performance results pursuant to the terms of a simplified measurement plan. The new plan, called the Wholesale Performance Plan ("WPP"), was developed collaboratively with CLECs over several years and was approved by the Maine, New Hampshire and Vermont regulatory commissions. Under the WPP, the Company is subject to significantly fewer performance criteria and its annual service credit exposure was reduced.

Revenue is recognized net of tax collected from customers and remitted to governmental authorities.

Customer arrangements that include both equipment and services are evaluated to determine whether the elements are separable. If the elements are deemed separable and separate earnings processes exist, the revenue associated with each element is allocated to each element based on the relative estimated selling price of the separate elements. The Company has estimated

11

the selling prices of each element by reference to vendor-specific objective evidence of selling prices when the elements are sold separately. The revenue associated with each element is then recognized as earned.

Management makes estimated adjustments, as necessary, to revenue and accounts receivable for billing errors, including certain disputed amounts.

(c) Impairment of Indefinite-lived Intangible Asset

In accordance with the Intangibles-Goodwill and Other Topic of the Accounting Standards Codification ("ASC"), non-amortizable intangible assets are assessed for impairment at least annually. The Company performs its annual impairment test as of the first day of the fourth fiscal quarter of each year and assesses the fair value of the trade name based on the relief from royalty method. If the carrying amount of the trade name exceeds its estimated fair value, the asset is considered impaired.

For its non-amortizable intangible asset impairment assessment of the FairPoint trade name, the Company makes certain assumptions including an estimated royalty rate, a long-term growth rate, an effective tax rate and a discount rate and applies these assumptions to projected future cash flows, exclusive of cash flows associated with wholesale revenues and other revenues not generated through brand recognition. As of October 1, 2014, the estimated fair value exceeded the carrying value in the Company's quantitative analysis; therefore, an impairment was not necessary. The Company performed another quantitative analysis as of December 31, 2014 and the estimated fair value exceeded the carrying value by approximately 4%; therefore, an impairment was not necessary. However, future changes in one or more of the assumptions discussed above may result in the recognition of an impairment loss.

(d) Accounting for Income Taxes

In accordance with the Income Taxes Topic of the ASC, income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management determines its estimates of future taxable income based upon the scheduled reversal of deferred tax liabilities and tax planning strategies. The Company establishes valuation allowances for deferred tax assets when it is estimated to be more likely than not that the tax assets will not be realized.

FairPoint Communications files a consolidated income tax return with its subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation.

(e) Operating Segments

Management views its business of providing data, video and voice communication services to residential, wholesale and business customers as one operating segment as defined in the Segment Reporting Topic of the ASC. The Company's services consist of retail and wholesale telecommunications and data services, including voice and HSD in 17 states. The Company's chief operating decision maker assesses operating performance and allocates resources based on the consolidated results.

(f) Interest Rate Swap Agreements

In the third quarter of 2013, the Company entered into interest rate swap agreements. For further information regarding these interest rate swap agreements, see note (7) "Interest Rate Swap Agreements." The interest rate swap agreements, at their inception, qualified for and were designated as cash flow hedging instruments. In accordance with the Derivatives and Hedging Topic of the ASC, the Company records its interest rate swaps on the consolidated balance sheets at fair value. The effective portion of changes in fair value are recorded in accumulated other comprehensive income/(loss) and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Any ineffective portion is recognized in earnings. Both at inception and on a quarterly basis, the Company performs an effectiveness test.

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(3) Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, which is designed to clarify the principles used to recognize revenue for entities. The accounting guidance defines how companies report revenues from contracts with customers and also requires enhanced disclosures. In July 2015, the FASB approved a one-year deferral of the effective date of ASU 2014-09. The new pronouncement will be effective for annual and interim periods beginning on or after December 15, 2017 and allows for two methods of adoption: (1) "full retrospective" adoption, meaning the standard is applied to all periods presented, or (2) "modified retrospective" adoption, meaning the cumulative effect of applying ASU 2014-09 is recognized as an adjustment to the fiscal year 2018 opening retained earnings balance. The Company is evaluating its method of adoption.

In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. ASU 2014-15 is effective for annual and interim periods beginning after December 15, 2016 with early adoption permitted. The Company does not believe the adoption of this pronouncement will have a material impact on its condensed consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. The update requires retrospective application and represents a change in accounting principle. The update is effective for fiscal years beginning after December 15, 2015 with early adoption permitted for financial statements that have not been previously issued.  The Company adopted this ASU during the quarter ended March 31, 2015.  As a result, $5.9 million was reclassified from debt issue costs, net to long-term debt, net of current portion in the consolidated balance sheet as of December 31, 2014. The adoption of this ASU had no impact on income/(loss) before income taxes or net income/(loss). In August 2015, the FASB issued ASU 2015-15 “Interest-Imputation of Interest (Subtopic 835-30) Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements”, which indicates the SEC staff would not object to an entity deferring and presenting debt issuance costs related to line-of-credit arrangements as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company adopted this ASU during the quarter ended September 30, 2015, which did not have an impact on the consolidated financial statements.

In April 2015, the FASB issued ASU 2015-04, “Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets.” For an entity that has a significant event in an interim period that calls for a remeasurement of defined benefit plan assets and obligations (for example, a settlement or curtailment), ASU 2015-04 provides a practical expedient that permits the entity to remeasure defined benefit plan assets and obligations using the month-end that is closest to the date of the significant event. The month-end remeasurement of defined benefit plan assets and obligations that is closest to the date of the significant event should be adjusted for any effects of the significant event that may or may not be captured in the month-end measurement. However, an entity should not adjust the measurement of defined benefit plan assets and obligations for other events that occur between the month-end measurement and the date of the significant event that are not caused by the entity (for example, changes in market prices or interest rates). An entity is required to disclose the accounting policy election and the date used to measure defined benefit plan assets and obligations in accordance with the amendments in this ASU. The amendments in this ASU are effective for reporting periods beginning after December 15, 2015, with early adoption permitted. Entities should apply the amendments in this ASU prospectively. This ASU was adopted in the quarter ended September 30, 2015 when the Company remeasured the plan assets and obligations at July 31, 2015 for one of its pension plans to recognize a curtailment related to a headcount reduction that occurred during that month.

(4) Dividends

The Company currently does not pay a dividend on its common stock and has no plans to pay dividends.

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(5) Income Taxes

The Company recorded a tax benefit on the net income/(loss) for the three months ended September 30, 2015 and 2014 of $0.7 million and $11.2 million, respectively, which equates to an effective tax rate of (1.2)% and 22.9%, respectively, by applying the projected full year effective rate. For the nine months ended September 30, 2015 and 2014, the Company recorded a tax benefit on net income/(loss) of $0.6 million and $28.1 million, respectively, which equates to an effective tax rate of (1.2)% and 23.2%, respectively, by applying the projected full year effective rate. For 2015, the projected annual effective tax rate differs from the 35% federal statutory rate primarily due to a decrease in the valuation allowance offset by tax expense related to state taxes. For 2014, the effective tax rate differs from the statutory rate primarily due to an increase in the valuation allowance offset by a tax benefit related to state taxes.

A reconciliation of the Company's statutory tax rate to its projected 2015 effective tax rate is presented below (in percentages):

	2015
Statutory federal income tax rate	35.0	%
State income tax, net of federal income tax	8.5
Other, net	0.9
Valuation allowance	(45.6	)
Effective income tax rate	(1.2	)%

The effective tax rate reflected in accumulated other comprehensive income for the three and nine months ended September 30, 2015 is 0%. The 0% effective tax rate in accumulated other comprehensive income is due to the tax benefit associated with the reduction in the valuation allowance offsetting tax expense on other net comprehensive income for the three and nine months ended September 30, 2015.

Deferred Income Taxes

Upon ratification of the collective bargaining agreements on February 22, 2015, a remeasurement of certain employee benefit obligations was required. See note (9) "Employee Benefit Plan" herein for additional information. For 2015, this will result in a reduction of the deferred tax asset associated with employee benefit plans of approximately $270 million as well as a reduction of the Company's valuation allowance against deferred tax assets of approximately $229 million.

At September 30, 2015, the Company had gross federal NOL carryforwards of $258.9 million after taking into consideration the NOL tax attribute reduction resulting from the Company's discharge of indebtedness upon emergence from Chapter 11 protection. The Company's remaining federal NOL carryforwards will expire from 2019 to 2035. At September 30, 2015, the Company had a net, after attribute reduction, state NOL deferred tax asset of $13.5 million. The Company's remaining state NOL carryforwards will expire from 2015 to 2035. The amount expiring in 2015 is negligible and fully reserved as part of the valuation allowance. At September 30, 2015, the Company had no alternative minimum tax credit carryover and had $4.9 million in state credit carryovers. Telecom Group completed an initial public offering on February 8, 2005, which resulted in an "ownership change" within the meaning of the United States federal income tax laws addressing NOL carryforwards, alternative minimum tax credits and other similar tax attributes. The Merger and the Company's emergence from Chapter 11 protection also resulted in ownership changes. As a result of these ownership changes, there are specific limitations on the Company's ability to use its NOL carryforwards and other tax attributes. The Company believes that it can use the NOLs even with these restrictions in place based on its current income projections.

Income Tax Returns

The Company and its eligible subsidiaries file consolidated income tax returns in the United States federal jurisdiction and certain consolidated, combined and separate entity tax returns, as required, with various state and local governments. The Company is no longer subject to United States federal, state and local, or non-United States income tax examinations by tax authorities for years prior to 2011. NOL carryovers from closed tax years may be subject to examination by federal or state taxing authorities if utilized in a year open to examination. As of September 30, 2015 and December 31, 2014, the Company does not have any significant jurisdictional income tax audits.

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(6) Long-Term Debt

Long-term debt for the Company at September 30, 2015 and December 31, 2014 is shown below (in thousands):

	September 30, 2015			December 31, 2014
Term Loan, due 2019 (weighted average rate of 7.50%)	$	624,000		$	628,800
Discount on Term Loan (a)	(11,932		)	(14,210		)
Debt issuance costs	(5,034		)	(5,949		)
Notes, 8.75%, due 2019	300,000			300,000
Total long-term debt	907,034			908,641
Less: current portion	(6,400		)	(6,400		)
Total long-term debt, net of current portion	$	900,634		$	902,241

(a) The $11.9 million and $14.2 million discount on the Term Loan (as defined below) as of September 30, 2015 and December 31, 2014, respectively, is being amortized using the effective interest method over the life of the Term Loan.

As of September 30, 2015, the Company had $58.8 million, net of $16.2 million of outstanding letters of credit, available for borrowing under the Revolving Facility (as defined below).

The approximate aggregate maturities of long-term debt, excluding the debt discount on the Term Loan (as defined below), for each of the four years subsequent to September 30, 2015 are as follows (in thousands):

Trailing twelve months ending September 30,	Balance Due
2016	$	6,400
2017	6,400
2018	6,400
2019	904,800
Total long-term debt, including current portion	$	924,000

Refinancing. On February 14, 2013 (the "Refinancing Closing Date"), FairPoint Communications refinanced its credit agreement (the "Refinancing"). In connection with the Refinancing, FairPoint Communications (i) issued $300.0 million aggregate principal amount of its 8.75% senior secured notes due 2019 (the "Notes") in a private offering exempt from registration under the Securities Act pursuant to an indenture (the "Indenture") that FairPoint Communications entered into on the Refinancing Closing Date with certain of its subsidiaries that guarantee the indebtedness under the Credit Agreement (as defined herein) (the "Subsidiary Guarantors") and U.S. Bank National Association, as trustee and collateral agent, and (ii) entered into a credit agreement (the "Credit Agreement"), dated as of the Refinancing Closing Date, with the lenders party thereto from time to time and Morgan Stanley Senior Funding, Inc., as administrative agent and letter of credit issuer. The Credit Agreement provides for a $75.0 million revolving credit facility (the ''Revolving Facility''), which has a sub-facility providing for the issuance of up to $40.0 million in letters of credit, and a $640.0 million term loan facility (the ''Term Loan'' and, together with the Revolving Facility, the ''Credit Agreement Loans"). On the Refinancing Closing Date, FairPoint Communications used the proceeds of the Notes offering, together with $640.0 million of borrowings under the Term Loan and cash on hand to (i) repay principal of $946.5 million outstanding on the old term loan, plus approximately $7.7 million of accrued interest and (ii) pay approximately $32.6 million of fees, expenses and other costs related to the Refinancing.

The Credit Agreement. The principal amount of the Term Loan and commitments under the Revolving Facility may be increased by an aggregate amount of up to $200.0 million, subject to certain terms and conditions specified in the Credit Agreement. The Term Loan will mature on February 14, 2019 and the Revolving Facility will mature on February 14, 2018, subject in each case to extensions pursuant to the terms of the Credit Agreement.

Interest Rates and Fees. Interest on borrowings under the Credit Agreement Loans accrue at an annual rate equal to either a British Bankers Association London Inter-Bank Offered Rate ("LIBOR") or the base rate, in each case plus an applicable margin. LIBOR is a per annum rate for dollar deposits with an interest period of one, two, three or six months (at FairPoint Communications' election), subject to a minimum LIBOR floor of 1.25%. The base rate is the per annum rate equal to the greatest of (x) the federal funds effective rate plus 0.50%, (y) the rate of interest publicly quoted from time to time by The Wall Street Journal as the United States ''Prime Rate'' and (z) LIBOR with an interest period of one month plus 1.00%. The applicable margin for the Term Loan is (a) 6.25% per annum with respect to term loans bearing interest based on LIBOR or (b) 5.25% per annum with respect to term loans bearing interest based on the base rate. The applicable interest rate for the Revolving Facility is, initially, (a) 5.50% with

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respect to revolving loans bearing interest based on LIBOR or (b) 4.50% per annum with respect to revolving loans bearing interest based on the base rate, in each case subject to adjustment based on FairPoint Communications' consolidated total leverage ratio, as defined in the Credit Agreement. FairPoint Communications is required to pay a quarterly letter of credit fee on the average daily amount available to be drawn under letters of credit equal to the applicable interest rate for revolving loans bearing interest based on LIBOR, plus a fronting fee of 0.125% per annum on the average daily amount available to be drawn under such letters of credit. In addition, FairPoint Communications is required to pay a quarterly commitment fee on the average daily unused portion of the New Revolving Facility, which is 0.50% initially, subject to reduction to 0.375% based on FairPoint Communications' consolidated total leverage ratio.

Security/Guarantors. All obligations under the Credit Agreement, together with certain designated hedging obligations and cash management obligations, are unconditionally guaranteed on a senior secured basis by each of the Subsidiary Guarantors and secured by a first-priority lien on substantially all personal property of FairPoint Communications and the Subsidiary Guarantors, subject to certain exclusions set forth in the related security documents, pari passu with the lien securing the obligations under the Notes.

Mandatory Repayments. FairPoint Communications is required to make quarterly repayments of the Term Loan in the amount of $1.6 million during the term of the Credit Agreement. In addition, mandatory repayments are required under the Credit Agreement with (i) a percentage, initially equal to 50% and subject to reduction to 25% based on FairPoint Communications' consolidated total leverage ratio, of FairPoint Communications' excess cash flow, as defined in the Credit Agreement, (ii) the net cash proceeds of certain asset dispositions, insurance proceeds and condemnation awards and (iii) issuances of debt not permitted to be incurred under the Credit Agreement. Optional prepayments and mandatory prepayments resulting from the incurrence of debt not permitted to be incurred under the Credit Agreement are required to be made at 101.0% of the aggregate principal amount prepaid if such prepayment is made on or prior to February 14, 2016. No premium is required to be paid for prepayments made after February 14, 2016.

Covenants. The Credit Agreement contains customary representations and warranties and affirmative and negative covenants for a transaction of this type, including two financial maintenance covenants: (i) a consolidated interest coverage ratio and (ii) a consolidated total leverage ratio. The Credit Agreement also contains a covenant limiting the amount of capital expenditures that FairPoint Communications and its subsidiaries may make in any fiscal year. As of September 30, 2015, FairPoint Communications was in compliance with all covenants under the Credit Agreement.

Events of Default. The Credit Agreement also contains customary events of default for a transaction of this type.

The Notes. On the Refinancing Closing Date, FairPoint Communications issued $300.0 million of the Notes pursuant to the Indenture in a private offering exempt from registration under the Securities Act.

The terms of the Notes are governed by the Indenture. The Notes are senior secured obligations of FairPoint Communications and are guaranteed by the Subsidiary Guarantors. The Notes and the guarantees thereof are secured by a first-priority lien on substantially all personal property of FairPoint Communications and the Subsidiary Guarantors, subject to certain exclusions set forth in the related security documents, pari passu with the lien securing the obligations under the Credit Agreement. The Notes will mature on August 15, 2019 and accrue interest at a rate of 8.75% per annum, which is payable semi-annually in arrears on February 15 and August 15 of each year.

On or after February 15, 2016, FairPoint Communications may redeem all or part of the Notes at the redemption prices set forth in the Indenture, plus accrued and unpaid interest thereon, to the applicable redemption date. At any time prior to February 15, 2016, FairPoint Communications may redeem all or part of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus a "make-whole" premium as of, and accrued and unpaid interest to, the applicable redemption date. In addition, at any time prior to February 15, 2016, FairPoint Communications may, on one or more occasions, redeem up to 35% of the original aggregate principal amount of the Notes, using net cash proceeds of certain qualified equity offerings, at a redemption price of 108.75% of the principal amount of Notes redeemed, plus accrued and unpaid interest to the applicable redemption date. Notes redeemed on or after February 15, 2016 and prior to February 15, 2017 may be redeemed at 104.375% of the aggregate principal amount; notes redeemed on or after February 15, 2017 and prior to February 15, 2018 may be redeemed at 102.188% of the aggregate principal amount; and notes redeemed on or after February 15, 2018 may be redeemed at their par value.

The holders of the Notes have the ability to require FairPoint Communications to repurchase all or any part of the Notes if FairPoint Communications experiences certain kinds of changes in control or engages in certain asset sales, in each case at the repurchase prices and subject to the terms and conditions set forth in the Indenture.

The Indenture contains certain covenants which are customary with respect to non-investment grade debt securities, including limitations on FairPoint Communications' ability to incur additional indebtedness, pay dividends on or make other distributions or repurchase FairPoint Communications' capital stock, make certain investments, enter into certain types of transactions with

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affiliates, create liens and sell certain assets or merge with or into other companies. These covenants are subject to a number of important limitations and exceptions. As of September 30, 2015, FairPoint Communications was in compliance with all covenants under the Indenture.

The Indenture also provides for customary events of default, including cross defaults to other specified debt of FairPoint Communications and certain of its subsidiaries.

(7) Interest Rate Swap Agreements

The Company uses interest rate swap agreements to protect the Company against future adverse fluctuations in interest rates by reducing its exposure to variability in cash flows relating to interest payments on a portion of its outstanding debt. The Company's interest rate swaps, which are designated as cash flow hedges, involve the receipt of variable amounts from counterparties in exchange for the Company making fixed-rate payments over the effective term of the agreements without exchange of the underlying notional amount. The Company does not hold or issue any derivative financial instruments for speculative trading purposes.

In the third quarter of 2013, the Company entered into interest rate swap agreements with a combined notional amount of $170.0 million with three counterparties that are effective for a two year period effective September 30, 2015. Each respective swap agreement requires the Company to pay a fixed rate of 2.665% and provides that the Company will receive a variable rate based on the three month LIBOR rate subject to a minimum LIBOR floor of 1.25%. Amounts payable by or due to the Company will be net settled with the respective counterparties on the last business day of each fiscal quarter, commencing on December 31, 2015.

The effect of the Company’s interest rate swap agreements on the condensed consolidated balance sheets at September 30, 2015 and December 31, 2014 is shown below (in thousands):

	As of September 30, 2015
Derivatives designated as hedging instruments:	Balance Sheet Location	Fair Value
Interest rate swaps, Current	Other accrued liabilities	$	2,384
Interest rate swaps, Long-term	Other long-term liabilities	$	1,861
	As of December 31, 2014
Derivatives designated as hedging instruments:	Balance Sheet Location	Fair Value
Interest rate swaps	Other long-term liabilities	$	2,742

The gross effect of the Company’s interest rate swap agreements on the condensed consolidated statements of comprehensive income/(loss) for the three and nine months ended September 30, 2015 and 2014 is shown below (in thousands):

	Amount of Loss/(Gain) Recognized in Other Comprehensive Income/(Loss) on Derivative (Effective Portion) (Pre-Tax)
	Three Months ended September 30, 2015		Three Months ended September 30, 2014			Nine Months ended September 30, 2015		Nine Months ended September 30, 2014
Interest rate swaps	$	460	$	(260	)	$	1,503	$	1,141

Amounts reported in accumulated other comprehensive income related to interest rate swaps will be reclassified to interest expense as interest payments are made on the Term Loan. The Company estimates that approximately $2.4 million will be reclassified as an increase to interest expense over the next four quarters.

Each interest rate swap agreement contains a provision whereby if the Company defaults on any of its indebtedness, the Company may also be declared in default under the interest rate swap agreements.

(8) Fair Value

The Fair Value Measurements and Disclosures Topic of the ASC defines fair value, establishes a framework for measuring fair value and establishes a hierarchy that categorizes and prioritizes the sources to be used to estimate fair value. The Fair Value Measurements and Disclosures Topic of the ASC also expands financial statement disclosures about fair value measurements.

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In determining fair value, the Company uses a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows:

Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2 - Valuations based on quoted prices for similar instruments in active markets or quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The Company's non-financial assets and liabilities, including its long-lived assets and indefinite-lived intangible assets, are measured and subsequently adjusted, if necessary, to fair value on a non-recurring basis. The Company periodically performs routine reviews of triggering events and/or an impairment test, as applicable. Based on these procedures, the Company did not require an adjustment to fair value to be recorded to these assets in the three months ended September 30, 2015 or 2014.

The Company's financial instruments, other than interest rate swap agreements and long-term debt, consist primarily of cash, restricted cash, accounts receivable and accounts payable. The carrying amounts of these financial instruments are estimated to approximate fair value due to the relatively short period of time to maturity for these instruments. As of September 30, 2015, interest rate swap agreements are carried at their fair value and measured on a recurring basis as follows (in thousands):

	Fair Value Measurements Using
	Level 1		Level 2		Level 3
Interest rate swaps, Current (a)	$	—	$	2,384	$	—
Interest rate swaps, Long-term (a)	$	—	$	1,861	$	—

As of December 31, 2014, interest rate swap agreements are carried at their fair value and measured on a recurring basis as follows (in thousands):

	Fair Value Measurements Using
	Level 1		Level 2	Level 3
Interest rate swaps, Long-term (a)	$	—	2,742	$	—

(a) The fair value is determined using valuation models which rely on the expected LIBOR based yield curve and estimates of counterparty and the Company’s non-performance risk.  Because each of these inputs are directly observable or can be corroborated by observable market data, the Company has categorized these interest rate swaps as Level 2 within the fair value hierarchy.

The estimated fair values of the Company's long-term debt as of September 30, 2015 and December 31, 2014 are as follows (in thousands):

	September 30, 2015				December 31, 2014
	Carrying Amount		Fair Value (a)		Carrying Amount		Fair Value (a)
Term Loan, due 2019 (b)	$	612,068	$	624,000	$	614,590	$	619,368
Notes, 8.75%, due 2019	300,000		309,000		300,000		301,890
Total	$	912,068	$	933,000	$	914,590	$	921,258

(a) The Company estimated fair value based on market prices of the Company's debt securities at the balance sheet date, which falls within Level 2 of the fair value hierarchy.

(b) The carrying amount of the Term Loan is net of the unamortized discount of $11.9 million and $14.2 million as of September 30, 2015 and December 31, 2014, respectively.

(9) Employee Benefit Plans

The Company sponsors noncontributory qualified defined benefit pension plans ("qualified pension plans") and other post-employment benefit plans which provide certain cash payments and medical, dental and life insurance benefits to eligible retired employees and their beneficiaries and covered dependents. The qualified pension plans and certain post-employment benefit plans

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were created as part of the acquisition of the Northern New England operations from Verizon and substantially replicated the prior Verizon plans available to the eligible employees in the acquired operations.

On August 2, 2014, the Company’s collective bargaining agreements with two of its labor unions expired. On August 28, 2014, the Company informed the unions that the parties were at impasse and on that date implemented the terms of its final proposals to the labor unions.

On February 22, 2015, membership of both labor unions ratified their respective collective bargaining agreements that expire in August 2018. As a result, the following changes were effective regarding the qualified pension plan available to represented employees (the "Represented Pension Plan") and the post-employment healthcare plan for represented employees (the "Represented OPEB Plan"):

• The Represented Pension Plan was closed to new participants and benefits under the prior formula were frozen as of October 14, 2014. For existing participants, future benefit accruals for service on and after February 22, 2015 are at 50% of prior rates and are capped at 30 years of total credited service. Pension plan participants on strike received no credited service from October 14, 2014 to February 21, 2015.

• The Represented OPEB Plan for active represented employees was eliminated as of August 28, 2014. A transitional monthly reimbursement arrangement for eligible represented employees who retire no later than August 22, 2017 was established (the "Reimbursement Arrangement"). To be eligible for the Reimbursement Arrangement, the represented employee must, among other criteria, have commenced a service pension under the Represented Pension Plan immediately upon termination of employment. The monthly reimbursement amount cannot exceed $800 per retiree, plus an additional $400 for a retiree’s spouse, and may only be paid for reimbursement of medical insurance premiums for coverage of the retiree and spouse. The Reimbursement Arrangement is only available until the retiree reaches the earlier of age 65, or dies, among other limitations, at which time the benefit will cease for the spouse as well. Approximately 290 active represented employees are expected to be eligible to receive benefits under the Reimbursement Arrangement.

Upon ratification of the collective bargaining agreements on February 22, 2015, a remeasurement of the net obligations of the Represented Pension Plan and the Represented OPEB Plan was required as of that date. Net periodic benefit cost for the period from February 23, 2015 to July 31, 2015 for the Represented Pension Plan was determined using the remeasured obligation as of February 22, 2015 for that plan. As the result of a workforce reduction, a curtailment occurred related to the Represented Pension Plan and a subsequent remeasurement of the net obligation was performed as of July 31, 2015. Accordingly, net periodic benefit cost from August 1, 2015 to September 30, 2015 was determined using the remeasured obligation as of July 31, 2015. Net periodic benefit cost for the period from February 23, 2015 to September 30, 2015 for the Represented OPEB Plan was determined using the remeasured obligation as of February 22, 2015 for that plan. Net periodic benefit cost for the period from January 1, 2015 to February 22, 2015 for these plans was determined using the respective net obligations as reflected in the financial statements as of December 31, 2014.

Represented retirees who were eligible to participate in the Represented OPEB Plan continued to receive benefits under that plan for the duration of 2014. During the fourth quarter of 2014, the Company amended the other post-employment benefit plan for management employees (the "Continuing OPEB Plan") to allow the existing represented retirees to participate in that plan. Effective January 1, 2015, the represented retirees were transferred to the Continuing OPEB Plan and the Represented OPEB Plan was terminated. A proportionate amount of projected benefit obligation of $91.3 million and unrecognized net actuarial loss of $29.5 million, in addition to an unamortized prior service credit of $45.3 million, for these represented retirees were transferred from the Represented OPEB Plan to the Continuing OPEB Plan as of January 1, 2015.

The remeasurement of the Represented OPEB Plan reflected the elimination of post-employment healthcare benefits for active represented employees effective August 28, 2014 and the termination of the plan effective January 1, 2015. The elimination of the post-employment healthcare benefits for active represented employees was accounted for as a negative plan amendment that reduced the projected benefit obligation with a corresponding prior service credit of $619.4 million being recognized in accumulated other comprehensive income. The elimination of future service accruals for active represented employees resulted in a curtailment gain of $5.4 million. The curtailment gain was applied against the unrecognized net actuarial loss in accumulated other comprehensive income. In addition, on February 22, 2015, an obligation of $9.8 million was established for the Reimbursement Arrangement with a corresponding amount of prior service cost in accumulated other comprehensive income. The prior service credit of $619.4 million and the $9.8 million prior service cost related to the Reimbursement Arrangement, which net to $609.6 million, are being amortized over 1.72 years for 2015 expense. The remaining unrecognized net actuarial loss related to the terminated Represented OPEB Plan of $192.2 million is being amortized over 1.50 years for 2015 expense.

The Company recognized a $40.0 million prior service credit for a negative plan amendment at remeasurement of the Represented Pension Plan related to pension bands that were frozen under the terms of the collective bargaining agreements. The prior service credit was recorded in accumulated other comprehensive income and is being amortized over 11.67 years for 2015 expense.

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The qualified pension plan which covers non-represented employees was not impacted by these changes and remains frozen. Therefore, no new benefits are being earned by participants and the plan is closed to new participants.

The Company makes contributions to the qualified pension plans to meet minimum funding requirements under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and has the ability to elect to make additional discretionary contributions. The other post-employment benefit plans are unfunded and the Company funds the benefits that are paid. Annually, and as necessary, the Company remeasures the net liabilities of its qualified pension and other post-employment benefit plans in accordance with the Compensation-Retirement Benefits Topic of the ASC.

Plan Assets, Obligations and Funded Status

A summary of plan assets, projected benefit obligation and funded status of the plans are as follows (in thousands):

	Qualified Pension Plans
	Nine Months ended September 30, 2015
Value of plan assets:
Beginning fair value of plan assets	$	195,410
Expected return on plan assets	14,445
Plan settlements	(6,416		)
Employer contributions	8,780
Benefits paid	(7,702		)
Ending value of plan assets	204,517
Projected benefit obligation:
Beginning projected benefit obligation	$	408,216
Service cost	6,822
Interest cost	11,146
Plan amendment	(40,049		)
Plan settlements	(21,847		)
Plan curtailment	(2,426		)
Benefits paid	(7,702		)
Actuarial gain	(4,768		)
Ending projected benefit obligation	349,392
Funded status	$	(144,875	)
Accumulated benefit obligation	$	349,392
Net amount recognized in long-term liabilities in the consolidated balance sheet	$	(144,875	)
Amounts recognized in accumulated other comprehensive income/(loss):
Prior service credit	$	33,772
Net actuarial loss	(98,106		)
Net amount recognized in accumulated other comprehensive income/(loss)	$	(64,334	)

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	Other Post-employment Benefit Plans
	Nine Months ended September 30, 2015
Value of plan assets:
Beginning fair value of plan assets	$	—
Employer contributions	4,092
Benefits paid	(4,092		)
Ending value of plan assets	—
Projected benefit obligation:
Beginning projected benefit obligation	$	741,372
Service cost	4,479
Interest cost	6,683
Plan amendments	(609,619		)
Plan curtailment	(5,409		)
Benefits paid	(4,092		)
Actuarial gain	(27,075		)
Ending projected benefit obligation	106,339
Funded status	$	(106,339	)
Amounts recognized in the consolidated balance sheet:
Current liabilities	$	(5,166	)
Long-term liabilities	(101,173		)
Net amount recognized in the consolidated balance sheet	$	(106,339	)
Amounts recognized in accumulated other comprehensive income/(loss):
Net prior service credit	$	439,872
Net actuarial loss	(140,607		)
Net amount recognized in accumulated other comprehensive income/(loss)	$	299,265

Net Periodic Benefit Cost. The Company capitalizes a portion of net periodic benefit cost in conjunction with its use of internal labor resources utilized on capital projects. During the three and nine months ended September 30, 2015 and the three and nine months ended September 30, 2014, the Company recognized settlement charges of $0.1 million, $0.7 million, $0.7 million and $0.7 million, respectively, in the qualified pension plan that covers non-represented employees.  The settlements were incurred when the cumulative amount of lump sums paid to participants in the respective years exceeded the expected service and interest cost for the respective years. In July 2015, as the result of a workforce reduction, the Company recognized a curtailment gain of $4.2 million in the Represented Pension Plan. Components of the net periodic benefit cost related to the Company's qualified pension plans and other post-employment benefit plans for the three and nine months ended September 30, 2015 and 2014 are as follows (in thousands):

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	Three Months ended September 30, 2015						Three Months ended September 30, 2014
	Qualified Pension Plans			Other Post- employment Benefit Plans			Qualified Pension Plans			Other Post- employment Benefit Plans
Service cost	$	1,653		$	62		$	3,514		$	6,279
Interest cost	3,702			1,005			3,862			7,897
Expected return on plan assets	(3,688		)	—			(3,368		)	—
Amortization of actuarial loss	1,570			32,775			556			1,729
Amortization of prior service cost	(863		)	(89,550		)	—			—
Plan curtailment	(4,207		)	—			—			—
Plan settlement	110			—			650			—
Net periodic benefit cost	(1,723		)	(55,708		)	5,214			15,905
Less capitalized portion	(137		)	—			(322		)	(965		)
Other post-employment benefit and pension expense	$	(1,860	)	$	(55,708	)	$	4,892		$	14,940

	Nine Months ended September 30, 2015						Nine Months ended September 30, 2014
	Qualified Pension Plans			Other Post- employment Benefit Plans			Qualified Pension Plans			Other Post- employment Benefit Plans
Service cost	$	6,822		$	4,479		$	11,664		$	18,968
Interest cost	11,146			6,683			11,788			22,520
Expected return on plan assets	(10,911		)	—			(10,179		)	—
Amortization of actuarial loss	5,311			80,649			1,634			3,576
Amortization of prior service cost	(2,070		)	(215,076		)	—			—
Plan curtailment	(4,207		)	—			—			—
Plan settlement	717			—			650			—
Net periodic benefit cost	6,808			(123,265		)	15,557			45,064
Less capitalized portion	(469		)	—			(1,112		)	(3,192		)
Other post-employment benefit and pension expense	$	6,339		$	(123,265	)	$	14,445		$	41,872

Return on Plan Assets. For the three months ended September 30, 2015 and 2014 and for the nine months ended September 30, 2015 and 2014, the actual return on the pension plan assets were annualized gains/(losses) of approximately (5.6)%, (6.1)%, (3.7)% and 4.9%, respectively.

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Other Comprehensive Income/(Loss). Other pre-tax changes in plan assets and benefit obligations recognized in other comprehensive income/(loss) are as follows (in thousands):

	Qualified Pension Plans
	Three Months ended September 30, 2015			Nine Months ended September 30, 2015
Amounts recognized in other comprehensive income/(loss):
Prior service credit	$	—		$	40,049
Net gain arising during the period	—			8,302
Amortization of prior service credit	(863		)	(2,070		)
Amortization of net actuarial loss	1,570			5,311
Plan curtailment	(1,781		)	(1,781		)
Plan settlement	16,151			16,149
Total amount recognized in other comprehensive income/(loss)	$	15,077		$	65,960
Estimated amounts that will be amortized from accumulated other comprehensive income/(loss) in the next three months:
Prior service credit	$	(863	)
Net actuarial loss	1,407
Total amount estimated to be amortized from accumulated other comprehensive income/(loss) in the next three months	$	544

	Other Post-employment Benefit Plans
	Three Months ended September 30, 2015			Nine Months ended September 30, 2015
Amounts recognized in other comprehensive income/(loss):
Prior service credit	$	—		$	619,454
Prior service cost	—			(9,835		)
Plan curtailment	—			5,409
Net gain arising during the period	—			27,075
Amortization of prior service credit	(89,550		)	(215,076		)
Amortization of net actuarial loss	32,775			80,649
Total amount recognized in other comprehensive income	$	(56,775	)	$	507,676
Estimated amounts that will be amortized from accumulated other comprehensive income/(loss) in the next three months:
Net prior service credit	$	(89,550	)
Net actuarial loss	32,775
Total amount estimated to be amortized from accumulated other comprehensive income/(loss) in the next three months	$	(56,775	)

Assumptions

The determination of the net liability and the net periodic benefit cost recognized for the qualified pension plans and other post-employment benefit plans by the Company are, in part, based on assumptions made by management. These assumptions include, among others, the discount rate applied to estimated future cash flows of the plans, the expected return on assets held by the qualified pension plans, certain demographic characteristics of the participants, such as expected retirement and mortality rates, and future inflation in healthcare costs. Certain assumptions, which include, among others, assumptions regarding increases in the amount of other post-employment benefit expenditures to be paid by the Company, reflect the Company's past practice of providing such increases to participants and therefore are considered a substantive plan under the Compensation—Retirement Benefits Topic of the ASC.

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Projected Benefit Obligation Assumptions. The weighted average assumptions used in determining projected benefit obligations for these plans at their respective measurement dates are as follows:

	September 30, 2015
Qualified Pension Plans:
Discount rate	4.34	%
Other Post-employment Benefit Plans:
Discount rate	3.77	%

Net Periodic Benefit Cost Assumptions. The weighted average assumptions used in determining net periodic benefit cost are as follows:

	Three Months ended September 30,
	2015		2014
Qualified Pension Plans:
Discount rate	4.34	%	4.92	%
Expected return on plan assets (a)	7.31	%	7.66	%
Other Post-employment Benefit Plans:
Discount rate	3.29	%	4.98	%

(a) The expected return on plan assets is the long-term rate-of-return the Company expects to earn on the plan assets. In developing the expected return on plan asset assumption, the Company evaluated historical investment performance, the plans' asset allocation strategies and return forecasts for each asset class and input from its advisors. Projected returns by such advisors were based on broad equity and fixed income indices. The expected return on plan assets is reviewed annually in conjunction with other plan assumptions and, if considered necessary, revised to reflect changes in the financial markets and the investment strategy.

Contributions and Benefit Payments

During the nine months ended September 30, 2015, we contributed $8.8 million to our Company sponsored qualified defined benefit pension plans and funded benefit payments of $4.1 million under our other post-employment benefit plans.

(10) Accumulated Other Comprehensive Income/(Loss)

Components of accumulated other comprehensive income/(loss), net of income tax, were as follows (in thousands):

	September 30, 2015
Accumulated other comprehensive income/(loss), net of taxes:
Fair value of interest rate swaps	$	(2,536	)
Qualified pension and other post-employment benefit plans	256,651
Total accumulated other comprehensive income/(loss), net of taxes	$	254,115

Other comprehensive income/(loss) for the three and nine months ended September 30, 2015 includes changes in the fair value of the Company's cash flow hedges, actuarial losses and prior service credits related to the qualified pension and other post-employment benefit plans arising during the respective periods and amortization of these actuarial losses and prior service credits. For further detail of amounts recognized in other comprehensive income/(loss) related to the cash flow hedges, see note (7) "Interest Rate Swap Agreements" herein. For further detail of amounts recognized in other comprehensive income/(loss) related to the qualified pension and other post-employment benefit plans, see note (9) "Employee Benefit Plans—Plan Assets, Obligations and Funded Status—Other Comprehensive Income/(Loss)" herein.

The following table provides a reconciliation of adjustments reclassified from accumulated other comprehensive income/(loss) to the condensed consolidated statement of operations (in thousands):

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	Three Months ended September 30, 2015			Nine Months ended September 30, 2015
Employee benefits:
Amortization of actuarial loss (1.5 years to 12.1 years) (a)	$	34,345		$	85,960
Amortization of net prior service credit (1.72 years to 24.9 years) (a)	(90,413		)	(217,146		)
Plan settlement (a)	16,151			16,149
Plan curtailment (a)	(1,781		)	(1,781		)
Total employee benefit amounts reclassified from accumulated other comprehensive income/(loss)	(41,698		)	(116,818		)
Tax benefit (b)	—			—
Total employee benefit amounts reclassified from accumulated other comprehensive income/(loss), net	$	(41,698	)	$	(116,818	)

(a) These accumulated other comprehensive income/(loss) components are included in the computation of net periodic benefit cost. See note (9) "Employee Benefit Plans" for details.

(b) See note (5) "Income Taxes" for details.

There was a nominal amount reclassified from accumulated other comprehensive income/(loss) related to interest rate swaps for the three and nine months ended September 30, 2015.

(11) Earnings Per Share

Basic earnings per share of the Company is computed by dividing net income/(loss) by the weighted average number of shares of common stock outstanding for the period. Except when the effect would be anti-dilutive, the diluted earnings per share calculation calculated using the treasury stock method includes the impact of stock units, shares of non-vested restricted stock and shares that could be issued under outstanding stock options.

Weighted average number of common shares used for basic earnings per share excludes weighted average shares of non-vested restricted stock of 226,900, 232,884, 234,370 and 236,616 for the three and nine months ended September 30, 2015 and 2014, respectively. Non-vested restricted stock is included in common shares issued and outstanding in the condensed consolidated balance sheets.

Potentially dilutive shares exclude warrants and stock options issued after repurchase under the FairPoint Communications, Inc. Amended and Restated 2010 Long Term Incentive Plan, primarily due to exercise prices exceeding the average market value. Since the Company incurred a loss for the three and nine months ended September 30, 2014, all potentially dilutive securities are anti-dilutive and, therefore, are excluded from the determination of diluted earnings per share.

The following table provides a reconciliation of the common shares used for basic earnings per share and diluted earnings per share:

	Three Months ended September 30,		Nine Months ended September 30,
	2015	2014	2015	2014
Weighted average number of common shares used for basic earnings per share	26,676,385	26,472,162	26,640,103	26,439,870
Effect of potential dilutive shares	327,448	—	312,193	—
Weighted average number of common shares and potential dilutive shares used for diluted earnings per share	27,003,833	26,472,162	26,952,296	26,439,870
Weighted average number of anti-dilutive shares outstanding at period-end that are excluded from the above reconciliation	4,146,782	4,548,565	4,148,613	4,443,933

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(12) Stockholders' Equity/(Deficit)

At September 30, 2015, 37,500,000 shares of common stock were authorized and 26,905,398 shares of common stock (including shares of non-vested restricted stock) and 3,582,402 warrants, each eligible to purchase one share of common stock, were outstanding.

The initial exercise price applicable to the warrants is $48.81 per share of common stock. The exercise price applicable to the warrants is subject to adjustment upon the occurrence of certain events described in the warrant agreement. The warrants may be exercised at any time on or before January 24, 2018.

(13) Commitments and Contingencies

(a) Leases

The Company does not have any leases with contingent rental payments or any leases with contingency renewal, purchase options or escalation clauses.

(b) Legal Proceedings

From time to time, the Company is involved in litigation and regulatory proceedings arising out of its operations. The Company's management believes that it is not currently a party to any legal or regulatory proceedings, the adverse outcome of which, individually or in the aggregate, would have a material adverse effect on the Company's financial position or results of operations.

Notwithstanding the foregoing, the Company is a defendant in approximately 16 lawsuits filed by two long distance communications companies, who have collectively filed over 60 lawsuits arising from switched access charges for calls originating and terminating within the same wireless major trading area. At this time, an estimate of the impact, if any, cannot be made.

(c) Restricted Cash

As of September 30, 2015 and December 31, 2014, the Company had $0.7 million and $0.7 million, respectively, of restricted cash, which is restricted for regulatory purposes and is included in long-term restricted cash on the balance sheets.

(d) Magnitude of Bankruptcy Claims

As of October 30, 2015, the allowance of the claims of one bankruptcy tax claimant in the amount of $0.2 million is still being litigated. All other bankruptcy claims have been resolved.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with our condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report. The following discussion includes certain forward-looking statements. For a discussion of important factors, including the continuing development of our business, actions of regulatory authorities and competitors and other factors which could cause actual results to differ materially from the results referred to in the forward-looking statements, see "Item 1A. Risk Factors" contained in the 2014 Annual Report and "Cautionary Note Regarding Forward-Looking Statements" included elsewhere in this Quarterly Report. Our discussion and analysis of financial condition and results of operations are presented in the following sections:

•Overview

•Executive Summary

•Labor Matters

•Regulatory and Legislative

•Basis of Presentation

•Results of Operations

•Non-GAAP Financial Measures

•Liquidity and Capital Resources

•Off-Balance Sheet Arrangements

•Summary of Contractual Obligations

•Critical Accounting Policies and Estimates

•New Accounting Standards

Overview

We are a leading provider of advanced communications services to business, wholesale and residential customers within our service territories. We offer our customers a suite of advanced services including Ethernet, SIP-Trunking, Hosted PBX, Managed Services, Data Center Rack Space, high capacity data transport and other IP-based services over our Next Generation Network (as hereinafter defined), in addition to Internet access, HSD, and local and long distance voice services. Our service territory spans 17 states where we are the incumbent communications provider primarily serving rural communities and small urban markets. Many of our LECs have served their respective communities for more than 80 years. As of September 30, 2015, we operated with approximately 314,000 broadband subscribers, approximately 14,000 Ethernet circuits, including over 1,900 fiber-to-the-tower connections, and approximately 424,000 residential voice lines.

We own and operate an extensive fiber network with more than 20,000 miles of fiber optic cable, including approximately 17,000 miles of fiber optic cable (the "Next Generation Network") in Maine, New Hampshire and Vermont, giving us capacity to support more HSD services and extend our fiber reach into more communities across the region. The IP/Multiple Protocol Label Switched ("IP/MPLS") network architecture of our Next Generation Network allows us to provide Ethernet, transport and other IP-based services with the highest level of reliability at a lower cost of service. This fiber network also supplies critical infrastructure for wireless carriers serving the region as their bandwidth needs increase, driven by mobile data from smartphones, tablets and other wireless devices. As of September 30, 2015, we have fiber connectivity to over 1,200 cellular telecommunications towers in our service footprint.

Executive Summary

The successful execution of our “four pillar” strategy has created a set of leveragable assets and competitive advantages that we intend to more fully exploit in the coming quarters. Our executive management team is focused on utilizing our superior network assets, outstanding operating platform and proven ability to develop and deploy relevant new products to aid in generating new revenue and sustaining existing revenue. We will enhance our network to bring new service and more robust technologies to our markets, enable effective and secure technology to ensure our product and service offering remains competitive, and provide excellent customer service to create a loyal customer base, all while maintaining a sharp focus on managing costs.

Our objective is to transform our revenue by continuing to add advanced data products and services such as Ethernet, high capacity data transport and other IP-based services over our Next Generation Network in addition to HSD services, to minimize our dependence on voice access lines. Communications companies, including FairPoint, continue to experience a decline in access

27

lines due to increased competition from wireless carriers, cable television operators and CLECs and increased availability of alternative communications services, including wireless and voice over IP ("VoIP"). We will continue our efforts to retain customers to mitigate the loss of voice access lines through bundled packages, including video and other value added services. We believe access lines as a measure of the business are increasingly less meaningful measures of trend and are being replaced by revenue generating broadband subscribers and Ethernet circuits.

Over the past few years, we have made significant capital investments in our Next Generation Network to expand our business service offerings to meet the growing data needs of our customers and to increase broadband speeds and capacity in our consumer markets. We have also focused our sales and marketing efforts on these advanced data solutions. Specifically, within the last few years, we built and launched high capacity Ethernet services to allow us to meet the capacity needs of our business customers as well as supply high capacity infrastructure to our wholesale customers. In the past year, Ethernet demand has remained strong amid increased price pressure. We continue to see a market trend, largely led by cable companies, of reduced Ethernet prices to business and wholesale customers. We continue to see growth in Ethernet units and speeds amid declining prices in the market. These advanced data services are our flagship product and are laying the foundation not only for new business but also for additional IP-based voice services in the future.

We believe that our extensive fiber network, with more than 20,000 miles of fiber optic cable, including approximately 17,000 miles of fiber optic cable in northern New England and over 1,200 cellular telecommunications towers currently served with fiber, puts us in an excellent position to serve the cellular backhaul needs in our markets. We further believe the bandwidth needs of cellular backhaul will grow with the continued adoption of bandwidth-intensive technology. As a result, we expect to see wireless carriers developing new technologies as demand increases on existing fiber-connected towers, including the use of "small cell" architecture. By satisfying additional demand for bandwidth, both traditionally and through new and evolving technology, we hope to partially offset the decline we have seen and expect to continue to see in legacy wholesale offerings, including TDM transport services, DS1s, DS3s and wholesale switched access.

Coupled with recent regulatory reform in the states of Maine, New Hampshire and Vermont that will serve to promote fair competition among communication services providers in the region, we believe that there is a significant organic growth opportunity within the business and wholesale markets given our extensive fiber network and IP-based product suite, combined with our relative low market share in these areas.

Labor Matters

Two of our collective bargaining agreements that covered approximately 1,700 employees in the aggregate in northern New England expired on August 2, 2014. On October 17, 2014, the two labor unions initiated a work stoppage. On February 22, 2015, the two unions ratified their respective agreements and returned to work on February 25, 2015.

For the three and nine months ended September 30, 2015 and 2014, we recognized $0.2 million, $17.1 million, $48.8 million and $22.3 million of labor negotiation related expenses, respectively, primarily for contracted services, contingent workforce expenses (including training) and legal, communications and public relations expenses.

On February 22, 2015, the membership of both labor unions ratified their respective collective bargaining agreements that expire in August 2018. Highlights of the collective bargaining agreements are as follows:

• The qualified defined benefit pension plan for represented employees (the "Represented Pension Plan") was closed to new participants and benefits under the prior formula were frozen as of October 14, 2014. For existing participants, future benefit accruals for service on and after February 22, 2015 are at 50% of prior rates and are capped at 30 years of total credited service. Pension plan participants on strike received no credited service from October 14, 2014 to February 21, 2015.

• Post-employment healthcare benefits available to eligible active represented employees upon retirement (the "Represented OPEB Plan") were eliminated as of August 28, 2014. A transitional monthly reimbursement arrangement for eligible represented employees who retire no later than August 22, 2017 was established (the "Reimbursement Arrangement"). To be eligible for the Reimbursement Arrangement, the represented employee must, among other criteria, have commenced a service pension under the Represented Pension Plan immediately upon termination of employment. The monthly reimbursement amount cannot exceed $800 per retiree, plus an additional $400 for a retiree’s spouse, and may only be paid for reimbursement of medical insurance premiums for coverage of the retiree and spouse. The Reimbursement Arrangement is only available until the retiree reaches the earlier of age 65, or dies, among other limitations, at which time the benefit will cease for the spouse as well. Approximately 290 active represented employees are expected to be eligible to receive benefits under the Reimbursement Arrangement.

• Represented employees may elect to participate in the National Electrical Contractors Association, Inc. and International Brotherhood of Electrical Workers multi-employer medical plan. For 2015, our contribution is expected to be approximately equal to 79% of the cost had these employees been in our management health plan.

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Upon ratification of the collective bargaining agreements on February 22, 2015, a remeasurement of the net obligations of the Represented Pension Plan and the Represented OPEB Plan was required as of that date. Net periodic benefit cost for the period from February 23, 2015 to July 31, 2015 for the Represented Pension Plan was determined using the remeasured obligation as of February 22, 2015 for that plan. As the result of a workforce reduction, a curtailment occurred related to the Represented Pension Plan and a subsequent remeasurement of the net obligation was performed as of July 31, 2015. Accordingly, net periodic benefit cost from August 1, 2015 to September 30, 2015 was determined using the remeasured obligation as of July 31, 2015. Net periodic benefit cost for the period from February 23, 2015 to September 30, 2015 for the Represented OPEB Plan was determined using the remeasured obligation as of February 22, 2015 for that plan. Net periodic benefit cost for the period from January 1, 2015 to February 22, 2015 for these plans was determined using the respective net obligations as reflected in the financial statements as of December 31, 2014. The net pension obligation was $144.9 million at September 30, 2015, or a reduction of $67.9 million from $212.8 million at December 31, 2014. The net pension obligation includes the net obligation for certain management employees, which was not affected by the collective bargaining agreements, in addition to the Represented Pension Plan.

Represented retirees who were eligible to participate in the Represented OPEB Plan continued to receive benefits under that plan for the duration of 2014. During the fourth quarter of 2014, we amended the other post-employment benefit plan for management employees (the "Continuing OPEB Plan") to allow the existing represented retirees to participate in that plan. Effective January 1, 2015, the represented retirees were transferred to the Continuing OPEB Plan and the Represented OPEB Plan was terminated. A proportionate amount of projected benefit obligation of $91.3 million and unrecognized net actuarial loss of $29.5 million, in addition to an unamortized prior service credit of $45.3 million, for these represented retirees were transferred from the Represented OPEB Plan to the Continuing OPEB Plan as of January 1, 2015. The combined obligations for the Continuing OPEB Plan and the Reimbursement Arrangement were $106.3 million at September 30, 2015 ($5.2 million in other accrued liabilities and $101.2 million in accrued other post-employment benefit obligations), or a reduction of $635.1 million from $741.4 million at December 31, 2014.

The remeasurement of the Represented OPEB Plan reflected the elimination of post-employment healthcare benefits for active represented employees effective August 28, 2014 and the termination of the plan effective January 1, 2015. The elimination of the post-employment healthcare benefits for active represented employees was accounted for as a negative plan amendment that reduced the projected benefit obligation with a corresponding prior service credit of $619.4 million being recognized in accumulated other comprehensive income. The elimination of future service accruals for active represented employees resulted in a curtailment gain of $5.4 million. The curtailment gain was applied against the unrecognized net actuarial loss in accumulated other comprehensive income. In addition, on February 22, 2015, an obligation of $9.8 million was established for the Reimbursement Arrangement with a corresponding amount of prior service cost in accumulated other comprehensive income. The prior service credit of $619.4 million and the $9.8 million prior service cost related to the Reimbursement Arrangement, which net to $609.6 million, are being amortized over 1.72 years for 2015 expense. The remaining unrecognized net actuarial loss related to the terminated Represented OPEB Plan of $192.2 million is being amortized over 1.50 years for 2015 expense.

We recognized a $40.0 million prior service credit for a negative plan amendment at remeasurement of the Represented Pension Plan related to pension bands that were frozen under the terms of the collective bargaining agreements. The prior service credit was recorded in accumulated other comprehensive income and is being amortized over 11.67 years for 2015 expense.

The qualified pension plan which covers non-represented employees was not impacted by these changes and remains frozen. Therefore, no new benefits are being earned by participants and the plan is closed to new participants.

For 2015, we expect an increase to our net long-term deferred tax liabilities on our balance sheet due to a decrease in the deferred income tax asset associated with the qualified pension and other post-employment benefit obligations, partially offset by a decrease in the valuation allowance.

We expect to recognize a net benefit of approximately $56.2 million for other post-employment benefits expense and pension expense ratably over the remainder of 2015, absent any future events that require a remeasurement. Our estimated annualized effective tax is expected to be a benefit due primarily to the impact of the decrease in the valuation allowance. Since the three months and nine months ended September 30, 2015 resulted in pre-tax income, the application of the annual effective tax rate resulted in a tax benefit for the three months and nine months ended September 30, 2015.

We do not expect a change in cash taxes or to our net operating loss carryforwards as a result of this remeasurement.

See notes (5) "Income Taxes" and (9) "Employee Benefit Plans" to our condensed consolidated financial statements in "Item 1. Financial Information" included elsewhere in this Quarterly Report for further information as well as "Results of Operations" herein.

Regulatory and Legislative

We are generally subject to common carrier regulation primarily by federal and state governmental agencies. At the federal level, the FCC generally exercises jurisdiction over communications common carriers, such as FairPoint, to the extent those carriers

29

provide, originate or terminate interstate or international communications. State regulatory commissions generally exercise jurisdiction over common carriers to the extent those carriers provide, originate or terminate intrastate communications. In addition, pursuant to the Communications Act of 1934 (the "Communications Act"), state and federal regulators share responsibility for implementing and enforcing the domestic pro-competitive policies introduced by that legislation.

We are required to comply with the Communications Act which requires, among other things, that telecommunication carriers offer telecommunication services at just and reasonable rates and on terms and conditions that are not unreasonably discriminatory. The Communications Act also contains requirements intended to promote competition in the provision of local services and lead to deregulation as markets become more competitive.

For a detailed description of the federal and state regulatory environment in which we operate and the FCC's recently promulgated CAF/ICC Order and other recent regulatory changes, as well as the effects and potential effects of such regulation on us, see "Item 1. Business—Regulatory and Legislative Environment" in our 2014 Annual Report. The impact of these changes for 2015 is described further below. However, in the long run, we are uncertain of the ultimate impact as federal and state regulations continue to evolve.

Overview of FCC CAF/ICC Order to Reform Universal Service and Intercarrier Compensation

On March 16, 2010, the FCC submitted the National Broadband Plan ("NBP") to the United States Congress. The NBP is a plan to bring high-speed Internet services to the entire country, including remote and high-cost areas. In accordance with the NBP, the FCC commenced several rulemakings that concern, among other things, reforming high-cost and low-income programs to promote universal service to make those funds more efficient while promoting broadband communications in areas that otherwise would be unserved and to address changes to interstate access charges and other forms of ICC.

On November 18, 2011, the FCC released its comprehensive landmark order to modify the nationwide system of universal support and the ICC system (the "CAF/ICC Order"). In this order, the FCC replaced all existing USF for price cap carriers with its CAF. The intent of CAF is to bring high-speed affordable broadband services to all Americans. The CAF/ICC Order fundamentally reforms the ICC process that governs how communications companies bill one another for exchanging traffic, gradually phasing down these charges.

In conjunction with the CAF/ICC Order, the FCC adopted a Notice of Proposed Rulemaking to deal with related matters, including but not limited to: (i) the actual cost model to be adopted for CAF Phase II funding, (ii) treatment of originating access charges, (iii) modifications to CAF for rate-of-return ILECs, (iv) development of CAF Phase II for mobility, (v) CAF Phase II competitive bidding rules, (vi) remote areas funding and (vii) IP to IP interconnection issues. In its Order released December 18, 2014, the FCC had stated its intention to extend its offer of CAF Phase II support to price cap carriers in early 2015 and to implement the CAF Phase II program for price cap carriers during 2015. On April 29, 2015, the FCC released a Public Notice extending the offer of CAF Phase II funding to price cap carriers, as described in more detail below. The FCC has issued competitive bidding guidelines but has not finalized rules for the competitive bidding process. It is not known how these rules may impact us.

CAF Phase I and Phase II Support. Pursuant to the CAF/ICC Order, beginning in 2012, we started receiving monthly CAF Phase I frozen support, which is based on and equal to all forms of USF high-cost support we received during 2011. This support is considered transitional funding while the FCC developed its CAF Phase II program. FCC rules require that if we continue receiving CAF Phase I frozen support beyond 2012, which we have, we will have specific broadband spending obligations starting in 2013, which we did spend and met the spending obligation. According to the FCC rules, in 2013, we were required to spend, and did spend, one-third of the frozen support to "build and operate broadband-capable networks used to offer the provider's own retail broadband service in areas substantially unserved by an unsubsidized competitor." According to the FCC rules, in 2014, we were required to spend and did spend, two-thirds of the frozen support to "build and operate broadband-capable networks used to offer the provider's own retail broadband service in areas substantially unserved by an unsubsidized competitor." For the CAF Phase I frozen support we receive in 2015, this spending obligation increases to 100% of the frozen support received in 2015 "to build and operate broadband-capable networks used to offer the provider's own retail broadband service in areas substantially unserved by an unsubsidized competitor." We expect to be in compliance with the 2015 spending obligation.

In a Public Notice released on April 29, 2015, the FCC extended an offer of CAF Phase II support to price cap carriers to fund the building and operation of voice and broadband-capable services in their service territories. In this Public Notice, the FCC offered $38.2 million of annual funding for six years to us in return for providing broadband services to 106,380 locations in eligible census blocks specified by the FCC. This compares with $39.3 million in annual CAF Phase I frozen funding that we received in 2014. On August 18, 2015, we announced our acceptance of $37.4 million in annual CAF Phase II support, which is effective retroactive to January 1, 2015. This includes support in all our operating states except Colorado and Kansas where we declined the offered CAF Phase II support.

In addition, there is a three-year transition for price cap carriers that choose to accept model-based support in states where the accepted support is less than the CAF Phase I frozen support. The determination of transition funding is made at the state

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level. From January 1, 2015 to July 31, 2015, and as prescribed by the FCC, such carriers received 100% of the difference between the annualized amount of CAF Phase II support that they accepted and the amount of CAF Phase I frozen support that they received in 2014. Beginning August 1, 2015, transitional funding stepped down to 75% of that amount. Following a transition schedule, on August 1, 2016 transitional funding steps down to 50% of the difference and on August 1, 2017 transitional funding steps down to 25% of the difference. Transitional support will terminate as of July 31, 2018, after which time carriers will receive only CAF Phase II support.

As prescribed by the FCC’s transitional plan and the transitional funding calculation, we have recognized or expect to recognize transitional funding, in addition to the $37.4 million annual funding, based on the following schedule:

• January 1, 2015 - July 31, 2015: $824,000 per month in transitional funding

• August 1, 2015 - July 31, 2016: $618,000 per month in transitional funding

• August 1, 2016 - July 31, 2017: $412,000 per month in transitional funding

• August 1, 2017 - July 31, 2018: $206,000 per month in transitional funding

• August 1, 2018 and after: no transitional funding

Following acceptance in August 2015 and as a result of the prescribed transition plan, we recognized $7.0 million of transitional funding in the third quarter of 2015 for the period from January 1, 2015 through September 30, 2015.

The specific obligations associated with CAF Phase II funding include the obligation to serve a specified number of locations in specified census blocks; to provide broadband service to those locations with speeds of 10 megabits per second down and 1 megabit per second up; to achieve latency of less than 100 milliseconds; to provide data of at least 100 gigabytes per month; and to offer pricing reasonably comparable to pricing in urban areas.

For the two states where we declined CAF Phase II support, we will continue to receive CAF Phase I frozen support until such time as the FCC conducts a competitive bidding process. The FCC intends to conduct the competitive bidding process during 2016 and has determined that price cap carriers declining CAF Phase II support can participate in the competitive bidding process along with any other interested carriers. The FCC has not yet adopted final rules governing the competitive bidding process.

FCC Rules for ICC Process. The CAF/ICC Order reformed rules associated with local, state toll and interstate toll traffic exchanged among communications carriers including ILECs, CLECs, cable companies, wireless carriers and VoIP providers. The revised rules, the majority of which were effective beginning July 1, 2012, establish separate rules for price cap carriers and rate-of-return carriers. Although the FCC order treats our rate-of-return carriers (including companies operating under average schedules) as price cap carriers for CAF funding, it treats them as rate-of-return carriers for purposes of ICC reform. For both price cap and rate-of-return carriers, the FCC established a multi-year transition of terminating traffic compensation to "bill and keep", or zero compensation. For both price cap and rate-of-return carriers, the FCC required carriers to establish fiscal year 2011 ("FY2011") baseline compensation, which was the amount of relevant compensation billed during the period beginning October 1, 2010 and ending September 30, 2011, and collected by March 31, 2012. This FY2011 revenue was used as a starting point for revenue for the transitional period, which is six years for price cap operations and nine years for rate-of-return operations. For each FairPoint ILEC, the FY2011 baseline revenue is reduced by a specified percent during each year of the transition, resulting in a target revenue for each tariff year of the transition period. At the same time, the FCC rules require reductions in ICC rates for specified services and jurisdictions. As the recoverable revenue declines and the rates decline, any target revenue which will not be covered by ICC revenue can be recovered, in part, from end users through an access recovery charge ("ARC"). Price cap ILECs are permitted to implement monthly end user ARCs with five annual increases of no more than $0.50 for residential/single-line business consumers, for a total monthly ARC of no more than $2.50 in the fifth year; and no more than $1.00 (per month) per line for multi-line business customers, for a total of $5.00 (per month) per line in the fifth year, provided that: (1) any such residential increases would not result in regulated residential end user rates that exceed the $30.00 residential rate ceiling; and (2) any multi-line business customer's total subscriber line charge ("SLC") plus ARC does not exceed $12.20. Rate-of-return ILECs are permitted to implement monthly end user ARCs with six annual increases of no more than $0.50 (per month) for residential/single-line business consumers, for a total ARC of no more than $3.00 in the sixth year; and no more than $1.00 (per month) per line for multi-line business customers for a total of $6.00 (per month) per line in the sixth year, provided that: (1) such increases would not result in regulated residential end user rates that exceed the $30.00 Residential Rate Ceiling; and (2) any multi-line business customer's total SLC plus ARC does not exceed $12.20. We began billing the ARC charges for our price cap and rate of return companies in July 2012 as outlined by the rules above. If the combination of ICC and ARC revenue is not sufficient to cover the targeted revenue, then additional funding will be provided by the CAF in certain circumstances, though there is no guarantee that the ILEC will be made whole.

Vermont Incentive Regulation Plan

Effective April 1, 2011, we entered into an Incentive Regulation Plan ("IRP") governing our Vermont service territory within our northern New England operations. The IRP includes a 2011-2015 Amended Retail Service Quality Plan ("RSQP"), which

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significantly reduced FairPoint's exposure to retail service quality index ("SQI") penalties from $10.5 million to $1.65 million. As of March 31, 2013, the RSQP and related automatic SQI penalties were eliminated in Vermont based upon our achievement of certain retail service metrics. We believe the IRP has allowed our northern New England operations' retail rates in Vermont to compete with those competitive carriers under a relatively level regulatory scheme, while preserving certain regulatory protections for consumers in areas where competition may not be adequate. The IRP was initially scheduled to expire on December 31, 2014, so, we, with the support of the Vermont Department of Public Service ("VDPS"), filed with the Vermont Public Service Board ("VPSB") for a new IRP to begin January 1, 2015.  However, the VPSB determined that it will review service quality issues in a separate docket before adopting the new IRP.  As a result, we filed for, and the VPSB approved, an extension of the IRP until after the service quality investigation.

Legislation for Maine and New Hampshire

Effective August 10, 2012, the New Hampshire legislature enacted Chapter 177 (known as Senate Bill 48) ("SB 48") in its Session Laws of 2012. SB 48 created a new class of telecommunications carriers known as "excepted local exchange carriers" ("ELECs") and our northern New England operations qualify as an ELEC in New Hampshire. SB 48 essentially leveled the regulatory scheme imposed upon New Hampshire telecommunications carriers and states that the New Hampshire Public Utilities Commission ("NHPUC") has no authority to impose or enforce any obligation on a specific ELEC that also is not applicable to all other ELECs in New Hampshire except with respect to wholesale obligations which arise from the Telecommunications Act, as well as certain obligations related to telephone poles and carrier of last resort responsibilities.

In New Hampshire, beginning with the August 10, 2012 effective date of SB 48, our exposure to annual SQI penalties was eliminated (from $12.5 million to zero) and we have pricing discretion with respect to existing and new retail telecommunications services other than basic local exchange service and certain services provided to customers who qualify for the federal lifeline discount.

Under the MPUC ("Maine Public Utilities Commission") rules (Chapter 201), which went into effect August 1, 2014, the MPUC may open an investigation regarding the failure to meet any of the established SQI penalties and has the authority to impose penalties of up to $500,000 per standard. The MPUC opened an investigation into our failure to meet some third quarter 2014 SQI benchmarks and subsequently opened an investigation into the fourth quarter 2014 results as well.

During 2014, we filed a rate case with the MPUC seeking increases in rates for POLR (Provider of Last Resort) customers and seeking Maine Universal Service Fund (MUSF) support for unrecovered costs associated with FairPoint’s obligation to provide POLR service to high cost areas. The MPUC allowed for increases to the end user POLR rates, but denied MUSF support for FairPoint. We have filed for an increase in POLR rates with the MPUC which was allowed to go into effect at the end of July, 2015.

Basis of Presentation

We view our business of providing data, voice and communications services to business, wholesale and residential customers as one reportable segment as defined in the Segment Reporting Topic of the Accounting Standards Codification ("ASC"). During the third quarter of 2015, we reclassified regulatory funding revenue from voice services and access revenues for the three and nine months ended September 30, 2015 and 2014 to be consistent with our current period presentation.

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Results of Operations

The following table sets forth our consolidated operating results reflected in our condensed consolidated statements of operations. The comparisons of financial results are not necessarily indicative of future results (in thousands, except for operating metrics):

	Three Months ended September 30,						Nine Months ended September 30,
	2015			2014			2015			2014
Revenues:
Voice services	$	81,247		$	91,402		$	246,011		$	275,297
Access	64,304			69,070			194,552			204,756
Data and Internet services	46,018			44,851			133,744			131,283
Regulatory funding	17,927			11,439			40,675			34,254
Other	12,073			11,358			34,659			38,684
Total revenues	221,569			228,120			649,641			684,274
Operating expenses:
Costs of services and sales, excluding depreciation and amortization	100,718			104,643			333,067			321,870
Other post-employment benefit and pension expense	(57,568		)	19,832			(116,926		)	56,317
Selling, general and administrative expense	49,688			75,937			158,968			200,844
Depreciation and amortization	56,296			56,618			167,420			165,769
Reorganization related expense	6			12			33			77
Total operating expenses	149,140			257,042			542,562			744,877
Income/(loss) from operations	72,429			(28,922		)	107,079			(60,603		)
Other income/(expense):
Interest expense	(20,186		)	(20,195		)	(59,979		)	(60,226		)
Other income, net	153			90			425			81
Total other expense	(20,033		)	(20,105		)	(59,554		)	(60,145		)
Income/(loss) before income taxes	52,396			(49,027		)	47,525			(120,748		)
Income tax benefit	658			11,249			581			28,053
Net income/(loss)	$	53,054		$	(37,778	)	$	48,106		$	(92,695	)
							As of September 30
Select Operating Metrics:							2015			2014
Broadband subscribers							313,982			327,793
Ethernet circuits							14,100			11,657
Residential voice lines							423,667			483,467

Voice Services Revenues

We receive revenues through the provision of local calling services to business and residential customers, generally for a fixed monthly charge and service charges for special calling features. We also generate revenue through long distance services within our service areas on our network and through resale agreements with national interexchange carriers. In addition, through our wholly-owned subsidiary, FairPoint Carrier Services, Inc., we provide wholesale long distance services to communication providers that are not affiliated with us. For the periods ended September 30, 2015 and 2014, residential voice access lines in service decreased 12.4% and 10.8% year-over-year, respectively, which directly impacts local voice services revenues and our opportunity to provide long distance services to our customers, resulting in a decrease of minutes of use. Cable competitors, in particular, have greatly reduced voice pricing, which has contributed to the decrease in residential voice access lines. There are very few areas within our northern New England footprint where cable voice service is not an alternative for our customers. In addition, business voice services revenue also declined in part because of reduced access lines as businesses shifted from traditional voice products to Ethernet or other advanced services. We expect the trend of decline in voice access lines in service, and thereby a decline in aggregate voice services revenue, to continue as customers continue to turn to the use of alternative communication services as a result of ever-increasing competition.

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Effective June 1, 2015, the Performance Assurance Plan ("PAP") that was previously adopted in each of the states of Maine, New Hampshire and Vermont was retired and we began measuring and reporting certain wholesale local service performance results pursuant to the terms of a simplified measurement plan. The new plan, called the Wholesale Performance Plan ("WPP"), was developed collaboratively with CLECs over several years and was approved by the Maine, New Hampshire and Vermont regulatory commissions. Under the WPP, we are subject to significantly fewer performance criteria and our annual service credit exposure was reduced from a maximum of $87 million to a maximum of $12 million ($4.75 million in each of Maine and New Hampshire and $2.5 million in Vermont).

The following table reflects the primary drivers of year-over-year changes in voice services revenues (dollars in millions):

	Three Months ended September 30, 2015 vs September 30, 2014					Nine Months ended September 30, 2015 vs September 30, 2014
	Increase (Decrease)			%		Increase (Decrease)			%
Local voice services revenues, excluding:	$	(7.9	)			$	(22.8	)
Increase in accrual of PAP/WPP service credits (1)	—					(0.3		)
Long distance services revenues	(2.3		)			(6.2		)
Total change in voice services revenues	$	(10.2	)	(11	)%	$	(29.3	)	(11	)%

(1) PAP and WPP service credits were negligible during both the three months ended September 30, 2015 and 2014. During the nine months ended September 30, 2015 and 2014, PAP and WPP service credits resulted in a decrease of $0.2 million and an increase of $0.1 million to local voice services revenues, respectively.

Access Revenues

We receive revenues for the provision of network access through carrier Ethernet based products and legacy access products to end user customers and long distance and other competing carriers who use our local exchange facilities to provide interexchange services to their customers. Network access can be provided to carriers and end users that buy dedicated local and interexchange capacity to support their private networks (i.e. special access) or it can be derived from fixed and usage-based charges paid by carriers for access to our local network (i.e. switched access).

Carriers are migrating from legacy access products, such as DS1, DS3, frame relay, ATM and private line, to carrier Ethernet based products. Wholesale Ethernet circuits grew by 26.8% to 7,906 circuits at September 30, 2015 compared to 6,234 circuits at September 30, 2014. These carrier Ethernet based products are more sustainable, but generally, at the outset, have lower average revenue per user of broadband capacity than the legacy products they are replacing, resulting in a decline in access revenues. We expect the decline in access revenues to continue with customer migration. This decline in legacy access products is expected to be partially offset with the increasing need for bandwidth, including cellular backhaul and demand for carrier Ethernet based products, both of which are expected to increase over time. With the entry of cable competitors into the wholesale market, we continue to experience a decline in special access connections due to this competition. However, our extensive fiber network with more than 20,000 miles of fiber optic cable (of which approximately 17,000 miles are in Maine, New Hampshire and Vermont), including over 1,200 cellular telecommunications towers currently served with fiber, puts us in a position to grow our revenue base as demand for cellular backhaul and other Ethernet services expands. We also construct new fiber routes to cellular telecommunications towers when the business case supports doing so. Additionally, we continue to evaluate new services to provide to carriers, including the selective use of dark fiber and professional services, to continue to meet carrier access needs.

As described above, we adopted a separate PAP for certain services provided on a wholesale basis to CLECs in each of the states of Maine, New Hampshire and Vermont, pursuant to which we are required to issue service credits in the event we are unable to meet the provisions of the respective PAP. These PAPs were retired effective June 1, 2015 and replaced with the WPP. Our maximum exposure to wholesale service credits has been reduced through the implementation of the WPP. The service credits are allocated to access revenues or voice services revenues based on services provided to the wholesale carrier.

In June 2014, Maine established a new POLR SQI standard, which may subject us to future SQI penalties.

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The following table reflects the primary drivers of year-over-year changes in access revenues (dollars in millions):

	Three Months ended September 30, 2015 vs September 30, 2014					Nine Months ended September 30, 2015 vs September 30, 2014
	Increase (Decrease)			%		Increase (Decrease)			%
Carrier Ethernet services (1)	$	2.7				$	7.5
Increase in accrual of PAP/WPP service credits (2)	(0.1		)			(1.2		)
Legacy access services (3)	(7.4		)			(16.5		)
Total change in access revenues	$	(4.8	)	(7	)%	$	(10.2	)	(5	)%

(1) We offer carrier Ethernet services throughout our market to our business and wholesale customers, which include Ethernet virtual circuit technology for cellular backhaul. As of September 30, 2015, we provide cellular transport on our Next Generation Network through over 1,900 fiber-to-the-tower connections compared to over 1,600 as of September 30, 2014.

(2) During the three months ended September 30, 2015, PAP and WPP service credits resulted in a decrease of $0.1 million to access revenues. PAP service credits were negligible during the three months ended September 30, 2014. During the nine months ended September 30, 2015 and 2014, PAP and WPP service credits resulted in a decrease of $1.0 million and an increase of $0.2 million to access revenues, respectively.

(3) Legacy access services include products such as DS1, DS3, frame relay, ATM and private line.

Data and Internet Services Revenues

We receive revenues from monthly recurring charges for the provision of data and Internet services to residential and business customers through DSL technology, fiber-to-the-home technology, retail Ethernet, Internet dial-up, high speed cable modem and wireless broadband.

We have invested in our broadband network to extend the reach and capacity of the network to customers who did not previously have access to data and Internet products and to offer more competitive services to existing customers, including retail Ethernet products. Retail Ethernet circuits grew by 14.2% to 6,194 at September 30, 2015 compared to 5,423 circuits at September 30, 2014. For the periods ended September 30, 2015 and 2014, broadband subscribers decreased 4.2% and 0.4% year-over-year, respectively, which directly impacts data and Internet services revenues. We expect to continue our investment in our broadband network to further grow data and Internet services revenues in the coming years.

The following table reflects the primary drivers of year-over-year changes in data and Internet services revenues (dollars in millions):

	Three Months ended September 30, 2015 vs September 30, 2014					Nine Months ended September 30, 2015 vs September 30, 2014
	Increase (Decrease)			%		Increase (Decrease)			%
Retail Ethernet services (1)	$	1.4				$	4.0
Other data and Internet technology based services (2)	(0.2		)			(1.5		)
Total change in data and Internet services revenues	$	1.2		3	%	$	2.5		2	%

(1) Retail Ethernet services revenue is comprised of data services provided through E-LAN, E-LINE and E-DIA technology on our Next Generation Network. During the three months ended September 30, 2015 and 2014 and the nine months ended September 30, 2015 and 2014, we recognized $10.8 million, $9.4 million, $31.5 million and $27.5 million, respectively, of retail Ethernet revenues from our Next Generation Network.

(2) Includes all other services such as DSL, dial-up, high-speed cable modem and wireless broadband.

Regulatory Funding Revenues

We receive certain federal and state government funding that we classify as regulatory funding, which is further described in “Regulatory and Legislative” herein, including: CAF Phase II support effective January 1, 2015 to build and operate broadband services; CAF Phase II transition funding (scheduled to phase down over three-years); CAF Phase I frozen support (for Kansas and Colorado in 2015 and until a reverse auction is completed); CAF funding under the CAF/ICC Order; and universal service fund support from certain states in which we operate. During the three months ended September 30, 2015 and 2014 and the nine

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months ended September 30, 2015 and 2014, we recognized $17.9 million, $11.4 million, $40.7 million and $34.3 million, respectively, of regulatory funding revenues. The year-over-year changes are primarily due to the transition CAF Phase II revenue we recognized during the three and nine months ended September 30, 2015. CAF Phase II support revenue does not include Colorado and Kansas. We expect the amount of regulatory funding revenue to decline as the amount of CAF Phase II transition funding decreases in 2016 and is phased out through 2018.

Other Services Revenues 

We receive revenues from other services, including special purpose construction projects on behalf of third parties, video services (including cable television and video-over-DSL), billing and collection, directory services, the sale and maintenance of customer premise equipment and certain other miscellaneous revenues. Other services revenues also include revenue we receive from late payment charges to end users and interexchange carriers. Due to the composition of other services revenues, it is difficult to predict future trends.

The following table reflects the primary drivers of year-over-year changes in other services revenues (dollars in millions):

	Three Months ended September 30, 2015 vs September 30, 2014					Nine Months ended September 30, 2015 vs September 30, 2014
	Increase (Decrease)			%		Increase (Decrease)			%
Special purpose construction projects (1)	$	0.7				$	(3.7	)
Late payment fees (2)	0.3					(0.5		)
Other (3)	(0.3		)			0.2
Total change in other services revenues	$	0.7		6	%	$	(4.0	)	(10	)%

(1) Special purpose construction projects are completed on behalf of third party requests.

(2) Late payment fees are related to customers who have not paid their bills in a timely manner.

(3) Other revenues were primarily attributable to fluctuations in directory services, billing and collections and in various other miscellaneous services revenues.

Supplementary revenue information. In addition to the revenue information discussed above, we are providing the following additional strategic revenue categorizationinformation. Management believes that providing this additional revenue information will afford better visibility into our revenue trends as a result of product and service evolution within our industry. Management believes these metrics will enhance investors' ability to evaluate our business and assist investors in their understanding of the changing composition of our revenue (in millions).

	Three Months ended September 30,				Nine Months ended September 30,
	2015		2014		2015		2014
Growth (1)
Broadband (1a)	$	34.9	$	35.7	$	101.7	$	104.3
Ethernet (1b)	24.8		20.7		71.1		59.8
Hosted and Advanced Services (1c)	3.6		2.9		9.7		9.4
Subtotal Growth	63.3		59.3		182.5		173.5
Convertible (2)
Non-Ethernet Special Access (2a)	19.6		23.6		62.0		73.5
Business Voice (2b)	31.2		33.7		96.7		101.2
Other convertible (2c)	6.0		7.1		18.4		22.5
Subtotal Convertible	56.8		64.4		177.1		197.2
Legacy (3)
Residential Voice (3a)	57.7		63.4		172.2		185.7
Switched Access and Other (3b)	17.6		21.6		56.6		63.6
Subtotal Legacy	75.3		85.0		228.8		249.3
Regulatory funding (4)	17.9		11.4		40.6		34.2
Miscellaneous (5)	8.3		8.0		20.6		30.1
Total Revenue	$	221.6	$	228.1	$	649.6	$	684.3

(1) Growth revenue is comprised of products and services that are generally viewed as in-demand by telecommunications consumers over the medium- to long-term and are expected to increase over time.

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a) Broadband revenue is comprised of both residential and business customers delivered through DSL, ADSL, VDSL or other similar services.

b) Ethernet revenue includes Ethernet over copper ("EOC") or Ethernet over fiber ("EOF") services delivered to end-users or to wholesalers, who then sell to their end-users.

c) Hosted and Advanced Services includes VoIP and other digital voice services including unified messaging and other IP features as well as revenue generated from our various advanced services including the next-generation emergency 9-1-1 contracts in several of our service territories as well as data center and managed services.

(2) Convertible revenues are revenues that could move from TDM-based technologies to Ethernet or other advanced services.

a) Non-Ethernet Special Access includes high-capacity circuits. The revenues are primarily comprised of business revenue from T1's, DS3's and SONET products.

b) Business Voice is traditional voice, long distance, ISDN and Centrex services for a business customer.

c) Other convertible revenue primarily includes Unbundled Network Element ("UNE"), Asynchronous Transfer Mode ("ATM"), Frame Relay, ISDN, Analog Private Line and Internet services such as dial-up.

(3) Legacy revenues are TDM-based voice related consumer revenue largely related to residential customers.

a) Residential Voice is comprised of TDM voice services to residential customers.

b) Switched Access and Other primarily includes Switched Transport, Local Switching, NECA pooling elements and colocation of miscellaneous equipment.

(4) Refer to the definition of "Regulatory Funding Revenues" above.

(5) Miscellaneous is comprised of special purpose projects, late payment fees from our customers and pole rental revenues among other various service revenues.

The primary drivers of the year-over-year changes in the strategic revenue categorization for the three months ended September 30, 2015 compared to the three months ended September 30, 2014 (dollars in millions) were:

• Growth revenue increased by $4.0 million as we experienced growth in Ethernet while price increases for broadband services and speed upgrades helped offset a decline in broadband subscribers.

• Convertible revenue declined by $7.6 million as customers continued to migrate from non-Ethernet circuits and businesses shifted from traditional voice products to more modern VoIP and hosted products.

• Legacy revenue was down $9.7 million resulting from the loss of voice access lines versus a year ago combined with lower long distance usage.

• Regulatory funding revenue grew $6.5 million due to our acceptance of CAF Phase II and the corresponding transitional revenue of $7.0 million associated with that program.

• Miscellaneous revenue increased $0.3 million due to higher special purpose construction projects in the third quarter of 2015.

The primary drivers of the year-over-year changes in the strategic revenue categorization for the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014 (dollars in millions) were:

• Growth revenue increased by $9.0 million as we experienced growth in Ethernet while price increases for broadband services and speed upgrades helped offset a decline in broadband subscribers.

• Convertible revenue declined by $20.1 million as customers continued to migrate from non-Ethernet circuits and businesses shifted from traditional voice products to more modern VoIP and hosted products.

• Legacy revenue was down $20.5 million resulting from the loss of voice access lines versus a year ago combined with lower long distance usage.

• Regulatory funding revenue grew $6.4 million due to our acceptance of CAF Phase II and the corresponding transitional revenue of $7.0 million associated with that program.

• Miscellaneous revenue decreased $9.5 million due to higher special purpose construction projects in the first quarter of 2014, increased PAP/WPP service credits, lower late payment fees and revenue assurance.

Cost of Services and Sales

Cost of services and sales includes the following costs directly attributable to a service or product: salaries and wages, benefits (including stock based compensation, but excluding net periodic benefit cost of other post-employment benefit plans and qualified pension plans), materials and supplies, contracted services, network access and transport costs, customer provisioning costs, computer systems support and cost of products sold. Aggregate customer care costs, which include billing and service provisioning, are allocated between cost of services and sales and selling, general and administrative expenses. We expect the cost of services and sales to fluctuate with revenue and decrease due to lower employee expenses and lower labor negotiation related expense as a result of the collective bargaining agreements described in “Labor Matters” herein. In addition, as a result of a

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workforce reduction in the second and third quarters of 2015, we expect lower employee expenses for the remainder of 2015 compared to 2014.

The following table reflects the primary drivers of year-over-year changes in cost of services and sales (dollars in millions):

	Three Months ended September 30, 2015 vs September 30, 2014					Nine Months ended September 30, 2015 vs September 30, 2014
	Increase (Decrease)			%		Increase (Decrease)			%
Labor negotiation related expense (1)	$	0.9				$	40.3
Employee expense (2)	(2.7		)			(18.0		)
Severance expense (3)	(0.4		)			2.6
Other (4)	(1.7		)			(13.7		)
Total change in cost of services and sales	$	(3.9	)	(4	)%	$	11.2		3	%

(1) Labor negotiation related expense is related primarily to contracted services incurred as a result of the work stoppage described in "Labor Matters" herein.

(2) For the three months ended September 30, 2015 and 2014 and the nine months ended September 30, 2015 and 2014, we recognized $42.4 million, $45.1 million, $121.4 million and $139.4 million, respectively, of employee expense as cost of services and sales. The decrease for the three months ended September 30, 2015 compared to the comparable period of 2014 is primarily due to a reduction in headcount partially offset by a decrease in capitalized labor associated with a reduction in labor intensive capital projects in the third quarter of 2015 versus 2014. The decrease for the first nine months of 2015 compared to the comparable period of 2014 is primarily due to the work stoppage described in "Labor Matters" herein as well as a reduction in headcount partially offset by a decrease in capitalized labor associated with a reduction in labor intensive capital projects in 2015 versus 2014.

(3) For the three months ended September 30, 2015 and 2014 and the nine months ended September 30, 2015 and 2014, we recognized $(0.4) million, $0.0 million, $2.7 million and $0.1 million of severance expense. The 2015 severance is related to a reduction in workforce in the second and third quarters.

(4) Other cost of services and sales has decreased primarily due to lower network and back-office expenses.

Other Post-Employment Benefit and Pension Expense

We expect other post-employment benefit and pension expense to decrease in 2015 compared to 2014 as we recognize a net benefit for the elimination of other post-employment healthcare benefits for active represented employees as a result of the collective bargaining agreements described in “Labor Matters” herein. As described further in note (9) "Employee Benefit Plans" to our condensed consolidated financial statements in "Item 1. Financial Information" included elsewhere in this Quarterly Report, we expect to recognize a net benefit of approximately $56.2 million for other post-employment benefits expense and pension expense ratably over the remainder of 2015, absent any future events that require a remeasurement.

The following table reflects the primary drivers of year-over-year changes in other post-employment benefit and pension expense (dollars in millions):

	Three Months ended September 30, 2015 vs September 30, 2014					Nine Months ended September 30, 2015 vs September 30, 2014
	Increase (Decrease)			%		Increase (Decrease)			%
Other post-employment benefits expense (1)	$	(70.6	)			$	(165.1	)
Pension expense (2)	(6.8		)			(8.1		)
Total change in other post-employment benefit and pension expense	$	(77.4	)	(390	)%	$	(173.2	)	(308	)%

(1) Decrease in the third quarter of 2015 net periodic benefit costs compared to the third quarter of 2014 for our other post-employment benefit plans is primarily attributable to the benefit recognized from amortization of prior service credits of $89.5 million in the third quarter of 2015 partially offset by amortization expense of the net actuarial loss of $32.8 million, a decrease in interest cost resulting from the lower obligation and a decrease in service cost due to elimination of benefits for active represented employees. Decrease in the net periodic benefit costs for the nine months ended September 30, 2015 compared to the comparable period of 2014 is primarily attributable to the benefit recognized from amortization of prior service credits of $215.1 million during the nine months ended September 30, 2015 partially offset

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by amortization expense of the net actuarial loss of $80.6 million, a decrease in interest cost resulting from the lower obligation and a decrease in service cost due to elimination of benefits for active represented employees. See note (9) "Employee Benefit Plans" to our condensed consolidated financial statements in "Item 1. Financial Information" included elsewhere in this Quarterly Report for further information on our other post-employment benefit plans.

(2) The decrease in the net periodic benefit cost for the three months ended September 30, 2015 and the nine months ended September 30, 2015 compared to the comparable periods in 2014 for our qualified pension plans is primarily attributable to lower service cost and a plan curtailment recognized in the third quarter of 2015 partially offset by settlement charges.

Selling, General and Administrative Expense

Selling, general and administrative ("SG&A") expense includes salaries and wages and benefits (including stock based compensation, but excluding net periodic benefit cost of other post-employment benefit plans and qualified pension plans) not directly attributable to a service or product, bad debt charges, taxes other than income, advertising and sales commission costs, customer billing, call center and information technology costs, professional service fees and rent for administrative space. We expect SG&A expense to decrease in 2015 compared to 2014 due to lower labor negotiation related expense as a result of the collective bargaining agreements described in “Labor Matters” herein.

The following table reflects the primary drivers of year-over-year changes in SG&A expense (dollars in millions):

	Three Months ended September 30, 2015 vs September 30, 2014					Nine Months ended September 30, 2015 vs September 30, 2014
	Increase (Decrease)			%		Increase (Decrease)			%
Labor negotiation related expense (1)	(17.8		)			(14.5		)
Employee expense (2)	(3.0		)			(11.5		)
Operating taxes (3)	(4.0		)			(4.9		)
Severance expense (4)	—					0.6
Bad debt expense (5)	(1.3		)			(1.2		)
Other (6)	(0.1		)			(10.4		)
Total change in SG&A expense	$	(26.2	)	(35	)%	$	(41.9	)	(21	)%

(1) Labor negotiation related expense is primarily related to contingent workforce expenses as well as communications and public relations, legal and training expenses.

(2) For the three months ended September 30, 2015 and 2014 and the nine months ended September 30, 2015 and 2014, we recognized $27.5 million, $30.5 million, $79.8 million and $91.3 million, respectively, of employee expense in SG&A expense. The decrease for the three months ended September 30, 2015 compared to the comparable period of 2014 is primarily due to a reduction in headcount. The decrease for the nine months ended September 30, 2015 compared to the comparable period of 2014 is primarily due to the work stoppage described in "Labor Matters" herein and reduction in headcount.

(3) Includes an operating tax settlement in the third quarter of 2015.

(4) For the three months ended September 30, 2015 and 2014 and the nine months ended September 30, 2015 and 2014, we recognized $0.3 million, $0.3 million, $1.3 million and $0.7 million of severance expense.

(5) For the three months ended September 30, 2015 and 2014 and the nine months ended September 30, 2015 and 2014, we recognized $1.5 million, $2.8 million, $5.6 million and $6.8 million, of bad debt expense, respectively.

(6) Decreases in other expenses are primarily due to lower contracted services and advertising costs.

Depreciation and Amortization

Depreciation and amortization includes depreciation of our communications network and equipment and amortization of intangible assets. We require significant capital expenditures to maintain, upgrade and enhance our network facilities and operations. Our capital expenditures in the coming years will be impacted by our CAF Phase II elections described in "Regulatory and Legislative" herein. We expect amortization expense to remain consistent throughout the remainder of our intangible assets' useful lives.

For the three months ended September 30, 2015 and 2014 and the nine months ended September 30, 2015 and 2014, we recognized $53.5 million, $53.8 million, $159.0 million and $157.4 million of depreciation expense, respectively. We recognized

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$2.8 million of amortization expense in each of the three months ended September 30, 2015 and 2014 and $8.4 million in each of the nine months ended September 30, 2015 and 2014.

Reorganization Related Income

Reorganization related income represents income or expense amounts that have been recognized as a direct result of the Chapter 11 Cases, occurring after the Effective Date. We will continue to incur expenses associated with the Chapter 11 Cases until all of the remaining claims have been closed. In addition, income may be recognized to the extent that we favorably settle outstanding claims in the claims reserve established to pay outstanding bankruptcy claims and various other bankruptcy related fees (the "Claims Reserve") or receive other payments related to the Chapter 11 Cases. As of September 30, 2015, the Claims Reserve has a balance of $0.2 million.

Interest Expense

The following table reflects a summary of interest expense (in millions):

	Three Months ended September 30,				Nine Months ended September 30,
	2015		2014		2015		2014
Credit Agreement Loans	$	12.4	$	12.5	$	36.8	$	37.1
Notes	6.6		6.6		19.7		19.7
Amortization of debt issue costs	0.3		0.3		0.9		0.8
Amortization of debt discount	0.8		0.7		2.3		2.1
Other interest expense	0.1		0.1		0.3		0.5
Total interest expense	$	20.2	$	20.2	$	60.0	$	60.2

Interest expense remained flat for the three months ended September 30, 2015 as compared to the same period in 2014 and decreased $0.2 million in the nine months ended September 30, 2015 as compared to the same period in 2014.

On February 14, 2013, we issued $300.0 million aggregate principal amount of the Notes and entered into the Credit Agreement Loans, which include the $640.0 million Term Loan ("Term Loan") outstanding and the undrawn $75.0 million Revolving Facility ("Revolving Facility"). The Notes accrue interest at a rate of 8.75% per annum. Interest on borrowings under the Credit Agreement Loans (Term Loan and together with Revolving Facility, the "Credit Agreement Loans") accrues at an annual rate equal to either LIBOR or the base rate, in each case plus an applicable margin. In addition, the Term Loan was issued at a $19.4 million discount, which is being amortized using the effective interest method. As of September 30, 2015, we were party to interest rate swap agreements; however, since the agreements were not effective until September 30, 2015, the impact on interest expense during the third quarter of 2015 was nominal.

For further information regarding the Credit Agreement Loans and the Notes, see "—Liquidity and Capital Resources—Debt" herein and note (7) "Interest Rate Swap Agreements" to our condensed consolidated financial statements in "Item 1. Financial Statements" included elsewhere in this Quarterly Report.

Income Taxes

The Company recorded a tax benefit on the net income/(loss) for the three and nine months ended September 30, 2015 and 2014 of $0.7 million, $11.2 million, $0.6 million and $28.1 million, which equates to an effective tax rate of (1.2)%, 22.9%, (1.2)% and 23.2%, respectively, by applying the projected full year effective rate. For 2015, the projected annual effective tax rate differs from the 35% federal statutory rate primarily due to a decrease in the valuation allowance offset by tax expense related to state taxes. For 2014, the effective tax rate differs from the statutory rate primarily due to an increase in the valuation allowance offset by a tax benefit related to state taxes.

Review for Potential Impairment

In accordance with the Intangibles-Goodwill and Other Topic of the ASC, non-amortizable intangible assets are assessed for impairment at least annually. We perform an annual impairment test as of the first day of the fourth fiscal quarter of each year and assess the fair value of the trade name based on the relief from royalty method. If the carrying amount of the trade name exceeds its estimated fair value, the asset is considered impaired.

For our non-amortizable intangible asset impairment assessment of the FairPoint trade name, we make certain assumptions including an estimated royalty rate, a long-term growth rate, an effective tax rate and a discount rate and apply these assumptions

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to projected future cash flows, exclusive of cash flows associated with wholesale revenues and other revenues not generated through brand recognition. As of October 1, 2014, the estimated fair value exceeded the carrying value in our quantitative analysis; therefore, an impairment was not necessary. We performed another quantitative analysis as of December 31, 2014 and the estimated fair value exceeded the carrying value by approximately 4%; therefore, an impairment was not necessary. However, future changes in one or more of the assumptions discussed above may result in the recognition of an impairment loss.

Non-GAAP Financial Measures

We report our financial results in accordance with accounting principles generally accepted in the United States ("GAAP"). The table below includes certain non-GAAP financial measures and the adjustments to the most directly comparable GAAP measure used to determine the non-GAAP measures. Management believes that the non-GAAP measures, which exclude the effect of special items, may be useful to investors in understanding period-to-period operating performance and in identifying historical and prospective trends that may not otherwise be apparent when relying solely on GAAP financial measures. In addition, management believes the non-GAAP measures are useful for investors because they enable them to view performance in a manner similar to the method used by the Company's management. Management believes earnings before interest, taxes, depreciation and amortization ("EBITDA"), as adjusted to exclude the effect of special items ("Adjusted EBITDA"), provides a useful measure of covenant compliance and Unlevered Free Cash Flow may be useful to investors in assessing the Company's ability to generate cash and meet its debt service requirements. The maintenance covenants contained in the Company's credit facility are based on Consolidated EBITDA, which is consistent with the calculation of Adjusted EBITDA below.

For purposes of calculating Adjusted EBITDA (in accordance with the definition of Consolidated EBITDA in our Credit Agreement), costs, expenses and charges related to the renegotiation of labor contracts including, but not limited to, expenses for third-party vendors and losses related to disruption of operations (including any associated penalties under service level agreements and regulatory performance plans) are permitted to be excluded from the calculation. We believe this includes, among others, the costs paid to third-parties for the contingent workforce and service quality penalties due to the disruption of operations. On October 17, 2014, two of our labor unions in northern New England initiated a work stoppage and returned to work on February 25, 2015. As a result, significant union employee and vehicle and other related expenses related to northern New England were not incurred between January 1, 2015 and February 24, 2015 (the "work stoppage period"). Therefore, to assist in the evaluation of the Company's operating performance without the impact of the work stoppage, we estimated the union employee and vehicle and other related expenses using historical data for the work stoppage period that we believe would have been incurred absent the work stoppage ("Estimated Avoided Costs"). Estimated Avoided Costs is a pro forma estimate only. Actual costs absent the strike may have been different. In the first nine months of 2015, had our incumbent workforce been in place, actual labor costs during the work stoppage period may have been higher than the $27 million recorded as Estimated Avoided Costs due to significant winter storm activity that increased our service demands; however, those incremental storm-related costs would have been an allowed add back to Adjusted EBITDA under the Credit Agreement. Estimated employee expenses avoided during the work stoppage period include salaries and wages, bonus, overtime, capitalized labor, benefits, payroll taxes, travel expenses and other employee related costs based on a trailing 12-month average calculated per striking employee per day during the work stoppage period less any actual expense incurred. Estimated vehicle fuel and maintenance expense savings, which resulted from the contingent workforce utilizing their own vehicles, for the work stoppage period were estimated based on a trailing 12-month average of historical costs less actual expense incurred. Management believes "Adjusted EBITDA minus Estimated Avoided Costs" and "Unlevered Free Cash Flow minus Estimated Avoided Costs" may be useful to investors in understanding our operating performance without the impact of the two unions' work stoppage in northern New England as described elsewhere in this Quarterly Report.

The non-GAAP financial measures, as used herein, are not necessarily comparable to similarly titled measures of other companies. Furthermore, these non-GAAP measures have limitations as analytical tools and should not be considered in isolation from, or as an alternative to, net income or loss, operating income, cash flow or other combined income or cash flow data prepared in accordance with GAAP. Because of these limitations, Adjusted EBITDA, Adjusted EBITDA minus Estimated Avoided Costs, Unlevered Free Cash Flow, Unlevered Free Cash Flow minus Estimated Avoided Costs and related ratios should not be considered as measures of discretionary cash available to invest in business growth or reduce indebtedness. The Company compensates for these limitations by relying primarily on its GAAP results and using the non-GAAP measures only supplementally.

A reconciliation of Adjusted EBITDA, Adjusted EBITDA minus Estimated Avoided Costs, Unlevered Free Cash Flow and Unlevered Free Cash Flow minus Estimated Avoided Costs to net income/(loss) is provided in the table below (in thousands):

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	Three Months ended September 30,						Nine Months ended September 30,
	2015			2014			2015			2014
Net income/(loss)	$	53,054		$	(37,778	)	$	48,106		$	(92,695	)
Income tax (benefit)/expense	(658		)	(11,249		)	(581		)	(28,053		)
Interest expense	20,186			20,195			59,979			60,226
Depreciation and amortization	56,296			56,618			167,420			165,769
Pension expense (1a)	(1,861		)	4,892			6,338			14,445
Other post-employment benefits expense (1a)	(55,707		)	14,941			(123,263		)	41,874
Compensated absences (1b)	(6,084		)	(3,829		)	2,350			4,471
Severance	(106		)	264			4,012			777
Reorganization costs (1c)	5			12			32			77
Storm expenses (1d) (3)	—			—			—			(600		)
Other non-cash items (1e)	1,441			331			5,954			1,353
Gain on sale of assets	—			170			—			423
Labor negotiation related expense (1f)	160			17,142			48,838			22,255
All other allowed adjustments, net (1f)	(35		)	(14		)	(150		)	(218		)
Adjusted EBITDA (1)	66,691			61,695			219,035			190,104
Estimated Avoided Costs (2)	—			—			(27,000		)	—
Adjusted EBITDA minus Estimated Avoided Costs (2)	$	66,691		$	61,695		$	192,035		$	190,104
Adjusted EBITDA (1)	$	66,691		$	61,695		$	219,035		$	190,104
Pension contributions	(3,958		)	(7,038		)	(8,340		)	(20,893		)
Other post-employment benefits payments	(1,457		)	(1,398		)	(4,092		)	(3,528		)
Capital expenditures	(28,193		)	(28,798		)	(82,921		)	(91,775		)
Unlevered Free Cash Flow	33,083			24,461			123,682			73,908
Estimated Avoided Costs (2)	—			—			(27,000		)	—
Unlevered Free Cash Flow minus Estimated Avoided Costs (2)	$	33,083		$	24,461		$	96,682		$	73,908

(1) For purposes of calculating Adjusted EBITDA (in accordance with the definition of Consolidated EBITDA in the Company's credit agreement), the Company adjusts net income/(loss) for interest, income taxes, depreciation and amortization, in addition to:

a) the add-back of aggregate pension and other post-employment benefits expense,

b) the add-back (or subtraction) of the adjustment to the compensated absences accrual to eliminate the impact of changes in the accrual,

c) the add-back of costs related to the reorganization, including professional fees for advisors and consultants,

d) the add-back of costs and expenses, including those imposed by regulatory authorities, with respect to casualty events, acts of God or force majeure to the extent they are not reimbursed from proceeds of insurance,

e) the add-back of other non-cash items, including stock compensation expense, except to the extent they will require a cash payment in a future period, including impairment charges, and

f) the add-back (or subtraction) of other items, including facility and office closures, labor negotiation related expenses, non-cash gains/losses and non-operating dividend and interest income and other extraordinary gains/losses.

(2) See paragraphs preceding the table above for information regarding the calculation of this non-GAAP measure.

(3) While there are no costs reflected on this line item for the first nine months of 2015, we believe the impact is captured in our labor negotiation related expense through incremental contracted service.

Liquidity and Capital Resources

Overview

Our current and future liquidity is dependent upon our operating results. We expect that our primary sources of liquidity will be net cash provided by operating activities, cash on hand and funds available under the Revolving Facility. Our short-term and long-term liquidity needs arise primarily from:

(i) interest and principal payments on our indebtedness;

(ii) capital expenditures;

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(iii) working capital requirements as may be needed to support and grow our business; and

(iv) contributions to our qualified pension plans and payments under our other post-employment benefit plans.

Based on our current and anticipated levels of operations and conditions in our markets, we believe that cash on hand, the Revolving Facility and net cash provided by operating activities will enable us to meet our working capital, capital expenditure, debt service and other funding requirements for at least the next 12 months. We were in compliance with the maintenance covenants contained in the Credit Agreement through September 30, 2015 and expect to remain in compliance for the remainder of 2015.

Cash Flows

Cash at September 30, 2015 totaled $17.0 million compared to $37.6 million at December 31, 2014, excluding restricted cash of $0.7 million and $0.7 million, respectively. During the nine months ended September 30, 2015, cash flows from operations of $67.5 million, which included outflows due to the scheduled semi-annual interest payments on the Notes and the payment of 2014 annual incentive bonuses, were partially offset by cash outflows largely associated with $82.9 million of capital expenditures. During the nine months ended September 30, 2014, cash outflows were primarily associated with $91.8 million of capital expenditures partially offset by cash flows from operations of $79.0 million, which included outflows due to the scheduled semi-annual interest payments on the Notes and the payment of 2013 annual performance bonuses.

The following table sets forth our condensed consolidated cash flow results reflected in our condensed consolidated statements of cash flows (in millions):

	Nine Months ended September 30,
Net cash flows provided by (used in):	2015			2014
Operating activities	$	67.5		$	79.0
Investing activities	(82.7		)	(90.7		)
Financing activities	(5.4		)	(5.8		)
Net (decrease) increase in cash	$	(20.6	)	$	(17.5	)

Operating activities.Net cash provided by operating activities is our primary source of funds. Net cash provided by operating activities for the nine months ended September 30, 2015 decreased $11.5 million compared to the same period in 2014, primarily due to increased labor negotiation related expenses in the first quarter of 2015 and a reduction in revenues partially offset by lower employee expenses during the strike as well as lower cash pension contributions.

Investing activities.Net cash used in investing activities for the nine months ended September 30, 2015 decreased $8.0 million compared to the same period in 2014. Capital expenditures were $82.9 million and $91.8 million for the nine months ended September 30, 2015 and 2014, respectively.

Financing activities.Net cash used in financing activities for the nine months ended September 30, 2015 decreased $0.4 million compared to the same period in 2014, primarily due to a reduction in repayments of capital lease obligations.

Pension Contributions and Other Post-Employment Benefit Plan Expenditures

During the nine months ended September 30, 2015, we contributed $8.8 million to our Company sponsored qualified defined benefit pension plans and funded benefit payments of $4.1 million under our other post-employment benefit plans.

On August 8, 2014, the Highway and Transportation Funding Act was signed into law. This Act contained a pension funding stabilization provision which allows pension plan sponsors to use higher discount rate assumptions when determining the funded status and, accordingly, the funding obligations for its pension plans.

The provisions of the Act will result in our 2015 minimum required pension plan contribution being lower than it would have been in the absence of this stabilization provision. We believe that the intent of the stabilization provision is to alter the timing of pension plan contributions, not to reduce the long-term funding of pension plans. Accordingly, the relief we receive as a result of the stabilization provision may be temporary in nature in that our near-term minimum required contributions will be less than they otherwise would have been without the passage of this Act and will increase in the medium to long-term.

In 2015, we expect our aggregate cash pension contributions and cash other post-employment benefit plan payments to be approximately $20 million. In 2016, we expect our aggregate cash pension contributions and cash other post-employment benefit plan payments to be approximately $20 million. See "Item 1A. Risk Factors in our 2014 Annual Report —The amount we are required to contribute to our qualified pension plans and other post-retirement healthcare plans is impacted by several factors that are beyond our control and changes in those factors may result in a significant increase in future cash contributions."

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Capital Expenditures

We require significant capital expenditures to maintain, upgrade and enhance our network facilities and operations. During the nine months ended September 30, 2015, our net capital expenditures totaled $82.9 million, compared to $91.8 million during the comparable period in 2014. We anticipate that we will fund future capital expenditures through cash flows from operations and cash on hand (including amounts available under the Revolving Facility). In 2015, capital expenditures are expected to be lower than in 2014 as we have a lower overall 2015 capital plan. Our capital expenditures in the coming years will be impacted by our CAF Phase II elections as further described in "Regulatory and Legislative" herein.

Debt

On February 14, 2013 (the "Refinancing Closing Date"), we completed the refinancing of our credit agreement (the "Refinancing"). In connection with the Refinancing, we (i) issued $300.0 million aggregate principal amount of 8.75% senior secured notes due in 2019 (the "Notes") in a private offering exempt from registration under the Securities Act pursuant to an indenture that we entered into on the Refinancing Closing Date (the "Indenture") and (ii) entered into a new credit agreement (the "Credit Agreement"), dated as of the Refinancing Closing Date. The Credit Agreement provides for a $75.0 million revolving credit facility, including a sub-facility for the issuance of up to $40.0 million in letters of credit (the "Revolving Facility"), and a $640.0 million term loan facility (the "Term Loan" and, together with the Revolving Facility, the " Credit Agreement Loans"). On the Refinancing Closing Date, we used the proceeds of the Notes offering, together with $640.0 million of borrowings under the Term Loan and cash on hand to (i) repay principal of $946.5 million outstanding on the old term loan, plus approximately $7.7 million of accrued interest and (ii) pay approximately $32.6 million of fees, expenses and other costs related to the Refinancing.

The Credit Agreement. In connection with the Refinancing, we entered into the Credit Agreement, which provides for the $75.0 million Revolving Facility, including a sub-facility for the issuance of up to $40.0 million in letters of credit, and the $640.0 million Term Loan. The principal amount of the Term Loan and commitments under the Revolving Facility may be increased by an aggregate amount up to $200.0 million, subject to certain terms and conditions specified in the Credit Agreement. The Term Loan will mature on February 14, 2019 and the Revolving Facility will mature on February 14, 2018, subject in each case to extensions pursuant to the terms of the Credit Agreement. As of September 30, 2015, the Company had $58.8 million, net of $16.2 million of outstanding letters of credit, available for borrowing under the Revolving Facility.

Interest Rates and Fees. Interest on borrowings under the Credit Agreement Loans accrue at an annual rate equal to either LIBOR or the base rate, in each case plus an applicable margin. LIBOR is the per annum rate for an interest period of one, two, three or six months (at our election), with a minimum LIBOR floor of 1.25% for the Term Loan. The base rate for any date is the per annum rate equal to the greatest of (x) the federal funds effective rate plus 0.50%, (y) the rate of interest publicly quoted from time to time by The Wall Street Journal as the United States ''Prime Rate'' and (z) LIBOR with an interest period of one month plus 1.00%. The applicable margin for the Term Loan is (a) 6.25% per annum with respect to term loans bearing interest based on LIBOR or (b) 5.25% per annum with respect to term loans bearing interest based on the base rate. The applicable rate for the Revolving Facility is, initially, (a) 5.50% with respect to revolving loans bearing interest based on LIBOR or (b) 4.50% per annum with respect to revolving loans bearing interest based on the base rate, in each case subject to adjustment based on our consolidated total leverage ratio, as defined in the Credit Agreement. We are required to pay a quarterly letter of credit fee on the average daily amount available to be drawn under letters of credit issued under the Revolving Facility equal to the applicable rate for revolving loans bearing interest based on LIBOR plus a fronting fee of 0.125% per annum on the average daily amount available to be drawn under such letters of credit. In addition, we are required to pay a quarterly commitment fee on the average daily unused portion of the Revolving Facility, which is 0.50% initially, subject to reduction to 0.375% based on our consolidated total leverage ratio. In the third quarter of 2013, we entered into interest rate swap agreements with a combined notional amount of $170.0 million with three counterparties that are effective for a two year period beginning on September 30, 2015 and maturing on September 30, 2017. Each respective swap agreement requires us to pay a fixed rate of 2.665% and provides that we will receive a variable rate based on the three month LIBOR rate, subject to a minimum LIBOR floor of 1.25%. Amounts payable by or due to us will be net settled with the respective counterparties on the last business day of each fiscal quarter, commencing December 31, 2015. For further information regarding these agreements, see note (7) "Interest Rate Swap Agreements" to our condensed consolidated financial statements in “Item 1. Financial Information” included elsewhere in this Quarterly Report.

Security/Guarantors. All obligations under the Credit Agreement, together with certain designated hedging obligations and cash management obligations, are unconditionally guaranteed on a senior secured basis by certain subsidiaries of FairPoint Communications (the “Subsidiary Guarantors”) and secured by a first-priority lien on substantially all personal property of FairPoint Communications and the Subsidiary Guarantors, subject to certain exclusions set forth in the related security documents, pari passu with the lien securing the obligations under the Notes.

Mandatory Repayments. We are required to make quarterly repayments of the Term Loan in a principal amount equal to $1.6 million during the term of the Credit Agreement, with such repayments being reduced based on the application of mandatory and optional prepayments of the Term Loan made from time to time. In addition, mandatory repayments are due under the Credit

44

Agreement with (i) a percentage, initially equal to 50% and subject to reduction to 25% in subsequent fiscal years based on our consolidated total leverage ratio, of our excess cash flow, as defined in the Credit Agreement, (ii) the net cash proceeds of certain asset dispositions, insurance proceeds and condemnation awards and (iii) issuances of debt not permitted to be incurred under the Credit Agreement. Optional prepayments and mandatory prepayments resulting from the incurrence of debt not permitted to be incurred under the Credit Agreement are required to be made at 101.0% of the aggregate principal amount prepaid if such prepayment is made prior to February 14, 2016. No premium is required to be paid for prepayments made after February 14, 2016. We did not make any optional or mandatory prepayments under the Credit Agreement, excluding mandatory quarterly repayments discussed above, during the nine months ended September 30, 2015.

Covenants. The Credit Agreement contains customary representations and warranties and affirmative and negative covenants for a transaction of this type, including two financial maintenance covenants: (i) a consolidated interest coverage ratio and (ii) a consolidated total leverage ratio. The Credit Agreement also contains a covenant limiting the maximum amount of capital expenditures that we and our subsidiaries may make in any fiscal year. As of September 30, 2015, we were in compliance with all covenants under the Credit Agreement.

Events of Default. The Credit Agreement also contains customary events of default for a transaction of this type.

The Notes.On the Refinancing Closing Date, we issued $300.0 million in aggregate principal amount of the Notes pursuant to the Indenture in a private offering exempt from registration under the Securities Act.

The terms of the Notes are governed by the Indenture. The Notes are senior secured obligations of FairPoint Communications and are guaranteed by the Subsidiary Guarantors. The Notes and the guarantees thereof are secured by a first-priority lien on substantially all personal property of FairPoint Communications and the Subsidiary Guarantors, subject to certain exclusions set forth in the related security documents, pari passu with the lien securing the obligations under the Credit Agreement. The Notes will mature on August 15, 2019 and accrue interest at a rate of 8.75% per annum, which is payable semi-annually in arrears on February 15 and August 15 of each year.

On or after February 15, 2016, we may redeem all or part of the Notes at the redemption prices set forth in the Indenture, plus accrued and unpaid interest thereon, to the applicable redemption date. At any time prior to February 15, 2016, we may redeem all or part of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus a "make-whole" premium as of, and accrued and unpaid interest to, the applicable redemption date. In addition, at any time prior to February 15, 2016, we may, on one or more occasions, redeem up to 35% of the original aggregate principal amount of the Notes, using net cash proceeds of certain qualified equity offerings, at a redemption price of 108.75% of the principal amount of Notes redeemed, plus accrued and unpaid interest to the applicable redemption date. Notes redeemed on or after February 15, 2016 and prior to February 15, 2017 may be redeemed at 104.375% of the aggregate principal amount; Notes redeemed on or after February 15, 2017 and prior to February 15, 2018 may be redeemed at 102.188% of the aggregate principal amount; and Notes redeemed on or after February 15, 2018 may be redeemed at their par value.

The holders of the Notes have the ability to require us to repurchase all or any part of the Notes if we experience certain kinds of changes in control or engage in certain asset sales, in each case at the repurchase prices and subject to the terms and conditions set forth in the Indenture.

The Indenture contains certain covenants which are customary with respect to non-investment grade debt securities, including limitations on our ability to incur additional indebtedness, pay dividends on or make other distributions or repurchase our capital stock, make certain investments, enter into certain types of transactions with affiliates, create liens and sell certain assets or merge with or into other companies. These covenants are subject to a number of important limitations and exceptions. As of September 30, 2015, we were in compliance with all covenants under the Indenture.

The Indenture also provides for customary events of default, including cross defaults to other specified debt of FairPoint Communications and certain of its subsidiaries.

Off-Balance Sheet Arrangements

As of September 30, 2015 and December 31, 2014 we had $16.2 million in each period, respectively, in outstanding letters of credit under the Revolving Facility and $4.0 million and $2.8 million, respectively, of surety bonds. We do not have any other off-balance sheet arrangements, other than our operating lease obligations, which are not reflected on our balance sheets. See "Summary of Contractual Obligations" herein for further details.

45

Summary of Contractual Obligations

Other than as set forth below, there have been no material changes since December 31, 2014 outside the ordinary course of business to our contractual obligations as disclosed in the 2014 Annual Report.

	Payments due by period (in thousands)
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Other long-term liabilities (a)	$	314,169	$	21,498	$	24,696	$	18,086	$	249,889

(a) Other long-term liabilities primarily include our qualified pension and other post-employment benefit obligations, and deferred tax liabilities. For more information, see notes (5) "Income Taxes" and (9) "Employee Benefit Plans" to our condensed consolidated financial statements in "Part I. Financial Information - Item I. Financial Statements" included elsewhere in this Quarterly Report. In addition,

(i) the balance excludes $3.8 million of reserves for uncertain tax positions, including interest and penalties, that were included in deferred tax liabilities at September 30, 2015 for which we are unable to make a reasonably reliable estimate as to when cash settlements with taxing authorities will occur;

(ii) the balance includes the current portion of our other post-employment benefit obligations of $5.2 million presented in the current portion of other accrued liabilities at September 30, 2015; and

(iii) our 2015 pension contribution is expected to be approximately $15 million and has been reflected as due in less than one year. Our actual contribution could differ from this estimation. Due to uncertainties in the pension funding calculation, the amount and timing of any other pension contributions are unknown and therefore the remaining accrued pension obligation has been reflected as due in more than 5 years.

Critical Accounting Policies and Estimates

Our critical accounting policies are as follows:

•Revenue recognition;

•Allowance for doubtful accounts;

•Accounting for qualified pension and other post-employment benefits;

•Accounting for income taxes;

•Depreciation of property, plant and equipment;

•Stock-based compensation; and

•Valuation of long-lived assets and indefinite-lived intangible assets.

There have been no material changes to our critical accounting policies described in the 2014 Annual Report.

New Accounting Standards

For details of recent Accounting Standards Updates and our evaluation of their adoption on our condensed consolidated financial statements, see note (3) "Recent Accounting Pronouncements" to our condensed consolidated financial statements in "Part I. Financial Information - Item I. Financial Statements" included elsewhere in this Quarterly Report.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

We are exposed to market risk in the normal course of our business operations due to ongoing investing and funding activities, including those associated with the variable interest rate in our Credit Agreement and our qualified pension plan assets. Market risk refers to the potential change in fair value of a financial instrument as a result of fluctuations in interest rates, fixed income securities and equity prices. We do not hold or issue derivative instruments, derivative commodity instruments or other financial instruments for trading or speculative purposes. Our primary market risk exposures are interest rate risk and investment risk as follows:

Interest Rate Risk - Long-Term Debt.We are exposed to interest rate risk, primarily as it relates to the variable interest rates we are charged under credit agreements to which we are a party. As of September 30, 2015, our interest rate risk exposure was attributable to the Credit Agreement, which includes the Term Loan and the Revolving Facility, each of which is subject to variable

46

interest rates. We use our variable rate debt, in addition to fixed rate debt, to finance our operations and capital expenditures and believe it is prudent to limit the variability of our interest payments on our variable rate debt. To meet this objective, from time to time, we may enter into interest rate derivative agreements to manage fluctuations in cash flows resulting from interest rate risk.

As of September 30, 2015, we were party to interest rate swap agreements in connection with borrowings under the Credit Agreement covering a combined notional amount of $170.0 million. These agreements became effective on September 30, 2015. Accordingly, on September 30, 2015, only $454.0 million principal balance of the Term Loan was subject to interest rate risk. Interest payments on the Term Loan are subject to a LIBOR floor of 1.25%. As a result, while LIBOR remains below 1.25%, we incur interest at above market rates. To the extent that LIBOR remains below 1.25%, we are buffered from the full financial impact of interest rate risk; however, as LIBOR rises, a change in interest rates could materially affect our condensed consolidated financial statements. For example, with the principal balance of the Term Loan as of September 30, 2015, a 1% increase in the interest rate above the LIBOR floor of 1.25% would unfavorably impact interest expense and pre-tax earnings by approximately $4.5 million on an annual basis.

For further information regarding the Credit Agreement, see " Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources," and note (6) "Long-Term Debt" and note (7) "Interest Rate Swap Agreements" to our condensed consolidated financial statements in "Part I. Financial Information - Item I. Financial Statements" included elsewhere in this Quarterly Report.

Interest Rate and Investment Risk - Pension Plans.We are exposed to risks related to the fair value of our pension plan assets and the discount rate used to value our pension plan liabilities and, solely in our pension plan for management employees, the amount of lump-sum payments made to certain participants. Our pension plan assets consist of a portfolio of fixed income securities, equity securities and cash. Changes in the fair value of this portfolio can occur due to changes in interest rates and the general economy. In addition, interest rates are a primary factor in the determination of our actuarially determined liabilities and, if applicable, the amount of the accrued benefit paid in the form of a lump-sum to a management pension plan retiree when requested. Our qualified pension plan assets have historically funded a large portion of the benefits paid under our qualified pension plans. Lower returns on plan assets, decreases in the fair value of plan assets and lower discount rates could negatively impact the funded status of our plans and we may be required to make larger contributions to our pension plans than currently anticipated. Due to uncertainties in the pension funding calculation, the amount and timing of pension contributions are unknown other than as disclosed in this Quarterly Report. For activity in our qualified pension plan assets, see note (9) "Employee Benefit Plans" to our condensed consolidated financial statements in "Part I. Financial Information - Item I. Financial Statements" included elsewhere in this Quarterly Report.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report, we carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our "disclosure controls and procedures" (as defined in Rule 13a-15(e) of the Exchange Act). Disclosure controls and procedures are controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.

Based upon this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of September 30, 2015.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

47

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we are involved in litigation and regulatory proceedings arising out of our operations. For details of legal proceedings, see note (13) "Commitments and Contingencies" to our condensed consolidated financial statements in "Item 1. Financial Statements" included elsewhere in this Quarterly Report. Management believes that we are not currently a party to any legal or regulatory proceedings, the adverse outcome of which, individually or in the aggregate, would have a material adverse effect on our business, financial position or results of operations.

Item 1A. Risk Factors.

There have been no material changes to the risk factors disclosed in "Item 1A. Risk Factors" of the 2014 Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities.

Period	(a) Total number of shares (or units) purchased	(b) Average price paid per share (or unit)	(c) Total number of shares (or units) purchased as part of publicly announced plans or programs	(d) Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
July 1, 2015 - July 31, 2015	—	—	—	N/A
August 1, 2015 - August 31, 2015	—	—	—	N/A
September 1, 2015 - September 30, 2015	334 (1)	$16.98	—	N/A

(1) Represents shares delivered to the Company by a Company employee upon the vesting of restricted stock for the funding of the recipient's tax withholding obligations.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Not applicable.

Item 6. Exhibits.

The exhibits filed as part of this Quarterly Report are listed in the index to exhibits immediately preceding such exhibits, which index to exhibits is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized.

			FAIRPOINT COMMUNICATIONS, INC.
Date:	November 3, 2015	By:	/s/ Ajay Sabherwal
		Name:	Ajay Sabherwal
		Title:	Executive Vice President and Chief Financial Officer
			(duly authorized officer and principal financial officer)

49

Exhibit Index

Exhibit No.	Description
2.1	Third Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code.(1)
3.1	Ninth Amended and Restated Certificate of Incorporation of FairPoint.(2)
3.2	Second Amended and Restated By Laws of FairPoint.(2)
4.1	Warrant Agreement, dated as of January 24, 2011, by and between FairPoint and The Bank of New York Mellon.(3)
4.2	Specimen Stock Certificate.(2)
4.3	Specimen Warrant Certificate.(3)
4.4	Indenture dated as February 14, 2013, among FairPoint Communications, Inc., the Subsidiary Guarantors and U.S. Bank National Association, as trustee.(4)
4.5	First Supplemental Indenture dated as of September 16, 2013, among FairPoint Communications, Inc., the Subsidiary Guarantors and U.S. Bank National Association, as trustee.(5)
10.1	First Amendment to April 9, 2013 Amended and Restated Employment Agreement, effective as of August 14, 2015, by and between FairPoint and Paul H. Sunu. † *
10.2	First Amendment to January 22, 2013 Employment Agreement, effective as of August 14, 2015, by and between FairPoint and Ajay Sabherwal. † *
10.3	First Amendment to January 22, 2013 Employment Agreement, effective as of August 14, 2015, by and between FairPoint and Shirley J. Linn. † *
10.4	First Amendment to January 22, 2013 Employment Agreement, effective as of August 14, 2015, by and between FairPoint and Peter G. Nixon. † *
10.5	First Amendment to November 15, 2012 Employment Agreement, effective as of August 14, 2015, by and between FairPoint and Anthony A. Tomae. † *
10.6	First Amendment to July 1, 2014 Employment Agreement, effective as of August 14, 2015, by and between FairPoint and John J. Lunny. † *
10.7	First Amendment to November 20, 2014 Employment Agreement, effective as of August 14, 2015, by and between FairPoint and Karen D. Turner. † *
10.8	Employment Agreement, made and entered into as of August 10, 2015, by and between FairPoint and Steven G. Rush. † *
11	Statement Regarding Computation of Per Share Earnings (included in the financial statements contained in this Quarterly Report).
31.1	Certification as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification required by 18 United States Code Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.‡
32.2	Certification required by 18 United States Code Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.‡
101.INS	XBRL Instance Document.*
101.SCH	XBRL Taxonomy Extension Schema Document.*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.*

50

* Filed herewith.

†    Indicates a management contract or compensatory plan or arrangement.

‡ Submitted herewith. Pursuant to SEC Release No. 33-8238, this certification will be treated as "accompanying" this Quarterly Report on Form 10-Q and not "filed" as part of such report for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of Section 18 of the Exchange Act and this certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

(1) Incorporated by reference to the Current Report on Form 8-K of FairPoint filed on January 14, 2011.

(2) Incorporated by reference to the Registration Statement on Form 8-A of FairPoint filed on January 24, 2011.

(3) Incorporated by reference to the Current Report on Form 8-K of FairPoint filed on January 25, 2011, Film Number 11544980.

(4) Incorporated by reference to the Current Report on Form 8-K of FairPoint filed on February 14, 2013.

(5) Incorporated by reference to the Quarterly Report on Form 10-Q of FairPoint for the period ended September 30, 2013.

51

EX-10.1

Exhibit 10.1

FIRST AMENDMENT TO APRIL 9, 2013 AMENDED AND RESTATED EMPLOYMENT AGREEMENT

FAIRPOINT COMMUNICATIONS, INC.

WHEREAS, FairPoint Communications, Inc. (the “Company”) has heretofore entered into an Amended and Restated Employment Agreement dated April 9, 2013 (the “Agreement”) by and between Paul H. Sunu (the “Executive”) and the Company and the parties thereto desire to amend the Agreement in the manner set forth below.

NOW, THEREFORE, the undersigned parties to the Agreement agree that the Agreement shall be amended as follows, and that there is mutual, adequate and lawful consideration the receipt of which each acknowledges through execution of this First Amendment.

1. The Term of Employment as defined in Section 2 of the Agreement shall be extended through August 31, 2017, unless terminated sooner as provided in the Agreement.

2. Upon execution of this First Amendment by the parties hereto, a signing bonus of Five Hundred Thousand Dollars ($500,000.00) shall be promptly paid to Executive in consideration of his extended commitment to the Company.

3. Section 4(c) of the Agreement shall be deleted in its entirety.

4. Except as specifically provided above, all terms and conditions of the Agreement shall remain in full force and effect.

Wherefore, the parties hereto agree to this First Amendment, with the foregoing changes being effective as of August 14, 2015.

FAIRPOINT COMMUNICATIONS, INC.

/s/ Shirley J. Linn                    
By:    Shirley J. Linn
Title:    Executive Vice President and General     Counsel

EXECUTIVE

/s/ Paul H. Sunu                    Paul H. Sunu

EX-10.2

Exhibit 10.2

FIRST AMENDMENT TO JANUARY 22, 2013 EMPLOYMENT AGREEMENT

FAIRPOINT COMMUNICATIONS, INC.

WHEREAS, FairPoint Communications, Inc. (the “Company”) has heretofore entered into an Employment Agreement dated January 22, 2013 (the “Agreement”) by and between Ajay Sabherwal (the “Executive”) and the Company and the parties thereto desire to amend the Agreement in the manner set forth below.

NOW, THEREFORE, the undersigned parties to the Agreement agree that the Agreement shall be amended as follows, and that there is mutual, adequate and lawful consideration the receipt of which each acknowledges through execution of this First Amendment.

1. The Term of Employment as defined in Section 2 of the Agreement shall continue through December 31, 2016, unless terminated sooner or renewed as provided in the Agreement.

2. Section 13 of the Agreement shall be amended in its entirety to read as follows:

Section 13. Additional Tax and Section 409A Provisions.

(a) If any payment or benefit Executive would receive pursuant to this Agreement (“Payment”) would constitute a “Parachute Payment” within the meaning of Section 280G of the Code and would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Executive will have the option to accept the “Reduced Amount” (as defined below) or accept the Payment in full, in which case Executive will be responsible for the payment of the Excise Tax and any other taxes that may be due as a result of his receipt of the Payment. The “Reduced Amount” will be the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax. If a reduction in payments or benefits constituting Parachute Payments is necessary so that the Payment equals the Reduced Amount, reduction shall occur as designated by the Executive.

(b) Notwithstanding any provision in this Agreement to the contrary:

(i) Any payment otherwise required to be made hereunder to Executive at any date as a result of the termination of Executive’s employment shall be delayed for such period of time as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code (the “Delay Period”). On the first business day following the expiration of the Delay Period, Executive shall be paid, in a single cash lump sum, an amount equal to the aggregate amount of all payments delayed pursuant to the preceding sentence, and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule set forth herein.

(ii) Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A of the Code.

(iii) To the extent that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified deferred compensation (within the meaning of Section 409A of the Code), (i) any such expense reimbursement shall be made by the Company no later than the last day of the taxable year following the taxable year in which such expense was incurred by Executive, (ii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (iii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year; provided,that the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect.

(iv) While the payments and benefits provided hereunder are intended to be structured in a manner to avoid the implication of any penalty taxes under Section 409A of the Code, in no event whatsoever shall the Company or any member of the Company Group be liable for any additional tax, interest, or penalties that may be imposed on Executive as a result of Section 409A of the Code or any damages for failing to comply with Section 409A of the Code (other than for withholding obligations or other obligations applicable to employers, if any, under Section 409A of the Code).

3. Except as specifically provided above, all terms and conditions of the Agreement shall remain in full force and effect.

Wherefore, the parties hereto agree to this First Amendment, with the foregoing changes being effective as of August 14, 2015.

FAIRPOINT COMMUNICATIONS, INC.

/s/ Paul H. Sunu                    
By:    Paul H. Sunu
Title:    Chief Executive Officer

EXECUTIVE

/s/ Ajay Sabherwal                    Ajay Sabherwal

2

EX-10.3

Exhibit 10.3

FIRST AMENDMENT TO JANUARY 22, 2013 EMPLOYMENT AGREEMENT

FAIRPOINT COMMUNICATIONS, INC.

WHEREAS, FairPoint Communications, Inc. (the “Company”) has heretofore entered into an Employment Agreement dated January 22, 2013 (the “Agreement”) by and between Shirley J. Linn (the “Executive”) and the Company and the parties thereto desire to amend the Agreement in the manner set forth below.

NOW, THEREFORE, the undersigned parties to the Agreement agree that the Agreement shall be amended as follows, and that there is mutual, adequate and lawful consideration the receipt of which each acknowledges through execution of this First Amendment.

1. The Term of Employment as defined in Section 2 of the Agreement shall continue through December 31, 2016, unless terminated sooner or renewed as provided in the Agreement.

2. Section 13 of the Agreement shall be amended in its entirety to read as follows:

Section 13. Additional Tax and Section 409A Provisions.

(a) If any payment or benefit Executive would receive pursuant to this Agreement (“Payment”) would constitute a “Parachute Payment” within the meaning of Section 280G of the Code and would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Executive will have the option to accept the “Reduced Amount” (as defined below) or accept the Payment in full, in which case Executive will be responsible for the payment of the Excise Tax and any other taxes that may be due as a result of her receipt of the Payment. The “Reduced Amount” will be the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax. If a reduction in payments or benefits constituting Parachute Payments is necessary so that the Payment equals the Reduced Amount, reduction shall occur as designated by the Executive.

(b) Notwithstanding any provision in this Agreement to the contrary:

(i) Any payment otherwise required to be made hereunder to Executive at any date as a result of the termination of Executive’s employment shall be delayed for such period of time as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code (the “Delay Period”). On the first business day following the expiration of the Delay Period, Executive shall be paid, in a single cash lump sum, an amount equal to the aggregate amount of all payments delayed pursuant to the preceding sentence, and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule set forth herein.

(ii) Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A of the Code.

(iii) To the extent that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified deferred compensation (within the meaning of Section 409A of the Code), (i) any such expense reimbursement shall be made by the Company no later than the last day of the taxable year following the taxable year in which such expense was incurred by Executive, (ii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (iii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year; provided,that the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect.

(iv) While the payments and benefits provided hereunder are intended to be structured in a manner to avoid the implication of any penalty taxes under Section 409A of the Code, in no event whatsoever shall the Company or any member of the Company Group be liable for any additional tax, interest, or penalties that may be imposed on Executive as a result of Section 409A of the Code or any damages for failing to comply with Section 409A of the Code (other than for withholding obligations or other obligations applicable to employers, if any, under Section 409A of the Code).

3. Except as specifically provided above, all terms and conditions of the Agreement shall remain in full force and effect.

Wherefore, the parties hereto agree to this First Amendment, with the foregoing changes being effective as of August 14, 2015.

FAIRPOINT COMMUNICATIONS, INC.

/s/ Paul H. Sunu                    
By:    Paul H. Sunu
Title:    Chief Executive Officer

EXECUTIVE

/s/ Shirley J. Linn                    Shirley J. Linn

2

EX-10.4

Exhibit 10.4

FIRST AMENDMENT TO JANUARY 22, 2013 EMPLOYMENT AGREEMENT

FAIRPOINT COMMUNICATIONS, INC.

WHEREAS, FairPoint Communications, Inc. (the “Company”) has heretofore entered into an Employment Agreement dated January 22, 2013 (the “Agreement”) by and between Peter G. Nixon (the “Executive”) and the Company and the parties thereto desire to amend the Agreement in the manner set forth below.

NOW, THEREFORE, the undersigned parties to the Agreement agree that the Agreement shall be amended as follows, and that there is mutual, adequate and lawful consideration the receipt of which each acknowledges through execution of this First Amendment.

1. The Term of Employment as defined in Section 2 of the Agreement shall continue through December 31, 2016, unless terminated sooner or renewed as provided in the Agreement.

2. Section 13 of the Agreement shall be amended in its entirety to read as follows:

Section 13. Additional Tax and Section 409A Provisions.

(a) If any payment or benefit Executive would receive pursuant to this Agreement (“Payment”) would constitute a “Parachute Payment” within the meaning of Section 280G of the Code and would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Executive will have the option to accept the “Reduced Amount” (as defined below) or accept the Payment in full, in which case Executive will be responsible for the payment of the Excise Tax and any other taxes that may be due as a result of his receipt of the Payment. The “Reduced Amount” will be the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax. If a reduction in payments or benefits constituting Parachute Payments is necessary so that the Payment equals the Reduced Amount, reduction shall occur as designated by the Executive.

(b) Notwithstanding any provision in this Agreement to the contrary:

(i) Any payment otherwise required to be made hereunder to Executive at any date as a result of the termination of Executive’s employment shall be delayed for such period of time as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code (the “Delay Period”). On the first business day following the expiration of the Delay Period, Executive shall be paid, in a single cash lump sum, an amount equal to the aggregate amount of all payments delayed pursuant to the preceding sentence, and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule set forth herein.

(ii) Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A of the Code.

(iii) To the extent that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified deferred compensation (within the meaning of Section 409A of the Code), (i) any such expense reimbursement shall be made by the Company no later than the last day of the taxable year following the taxable year in which such expense was incurred by Executive, (ii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (iii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year; provided,that the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect.

(iv) While the payments and benefits provided hereunder are intended to be structured in a manner to avoid the implication of any penalty taxes under Section 409A of the Code, in no event whatsoever shall the Company or any member of the Company Group be liable for any additional tax, interest, or penalties that may be imposed on Executive as a result of Section 409A of the Code or any damages for failing to comply with Section 409A of the Code (other than for withholding obligations or other obligations applicable to employers, if any, under Section 409A of the Code).

3. Except as specifically provided above, all terms and conditions of the Agreement shall remain in full force and effect.

Wherefore, the parties hereto agree to this First Amendment, with the foregoing changes being effective as of August 14, 2015.

FAIRPOINT COMMUNICATIONS, INC.

/s/ Paul H. Sunu                    
By:    Paul H. Sunu
Title:    Chief Executive Officer

EXECUTIVE

/s/ Peter G. Nixon                    Peter G. Nixon

2

EX-10.5

Exhibit 10.5

FIRST AMENDMENT TO NOVEMBER 15, 2012 EMPLOYMENT AGREEMENT

FAIRPOINT COMMUNICATIONS, INC.

WHEREAS, FairPoint Communications, Inc. (the “Company”) has heretofore entered into an Employment Agreement dated November 15, 2012 (the “Agreement”) by and between Anthony A. Tomae (the “Executive”) and the Company and the parties thereto desire to amend the Agreement in the manner set forth below.

NOW, THEREFORE, the undersigned parties to the Agreement agree that the Agreement shall be amended as follows, and that there is mutual, adequate and lawful consideration the receipt of which each acknowledges through execution of this First Amendment.

1. The Term of Employment as defined in Section 2 of the Agreement shall continue through December 31, 2016, unless terminated sooner or renewed as provided in the Agreement.

2. Section 13 of the Agreement shall be amended in its entirety to read as follows:

Section 13. Additional Tax and Section 409A Provisions.

(a) If any payment or benefit Executive would receive pursuant to this Agreement (“Payment”) would constitute a “Parachute Payment” within the meaning of Section 280G of the Code and would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Executive will have the option to accept the “Reduced Amount” (as defined below) or accept the Payment in full, in which case Executive will be responsible for the payment of the Excise Tax and any other taxes that may be due as a result of his receipt of the Payment. The “Reduced Amount” will be the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax. If a reduction in payments or benefits constituting Parachute Payments is necessary so that the Payment equals the Reduced Amount, reduction shall occur as designated by the Executive.

(b) Notwithstanding any provision in this Agreement to the contrary:

(i) Any payment otherwise required to be made hereunder to Executive at any date as a result of the termination of Executive’s employment shall be delayed for such period of time as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code (the “Delay Period”). On the first business day following the expiration of the Delay Period, Executive shall be paid, in a single cash lump sum, an amount equal to the aggregate amount of all payments delayed pursuant to the preceding sentence, and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule set forth herein.

(ii) Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A of the Code.

(iii) To the extent that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified deferred compensation (within the meaning of Section 409A of the Code), (i) any such expense reimbursement shall be made by the Company no later than the last day of the taxable year following the taxable year in which such expense was incurred by Executive, (ii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (iii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year; provided,that the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect.

(iv) While the payments and benefits provided hereunder are intended to be structured in a manner to avoid the implication of any penalty taxes under Section 409A of the Code, in no event whatsoever shall the Company or any member of the Company Group be liable for any additional tax, interest, or penalties that may be imposed on Executive as a result of Section 409A of the Code or any damages for failing to comply with Section 409A of the Code (other than for withholding obligations or other obligations applicable to employers, if any, under Section 409A of the Code).

3. Except as specifically provided above, all terms and conditions of the Agreement shall remain in full force and effect.

Wherefore, the parties hereto agree to this First Amendment, with the foregoing changes being effective as of August 14, 2015.

FAIRPOINT COMMUNICATIONS, INC.

/s/ Paul H. Sunu                    
By:    Paul H. Sunu
Title:    Chief Executive Officer

EXECUTIVE

/s/ Anthony A. Tomae                    Anthony A. Tomae

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EX-10.6

Exhibit 10.6

FIRST AMENDMENT TO JULY 1, 2014 EMPLOYMENT AGREEMENT

FAIRPOINT COMMUNICATIONS, INC.

WHEREAS, FairPoint Communications, Inc. (the “Company”) has heretofore entered into an Employment Agreement dated July 1, 2014 (the “Agreement”) by and between John J. Lunny (the “Executive”) and the Company and the parties thereto desire to amend the Agreement in the manner set forth below.

NOW, THEREFORE, the undersigned parties to the Agreement agree that the Agreement shall be amended as follows, and that there is mutual, adequate and lawful consideration the receipt of which each acknowledges through execution of this First Amendment.

1. Section 13 of the Agreement shall be amended in its entirety to read as follows:

Section 13. Additional Tax and Section 409A Provisions.

(a) If any payment or benefit Executive would receive pursuant to this Agreement (“Payment”) would constitute a “Parachute Payment” within the meaning of Section 280G of the Code and would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Executive will have the option to accept the “Reduced Amount” (as defined below) or accept the Payment in full, in which case Executive will be responsible for the payment of the Excise Tax and any other taxes that may be due as a result of his receipt of the Payment. The “Reduced Amount” will be the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax. If a reduction in payments or benefits constituting Parachute Payments is necessary so that the Payment equals the Reduced Amount, reduction shall occur as designated by the Executive.

(b) Notwithstanding any provision in this Agreement to the contrary:

(i) Any payment otherwise required to be made hereunder to Executive at any date as a result of the termination of Executive’s employment shall be delayed for such period of time as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code (the “Delay Period”). On the first business day following the expiration of the Delay Period, Executive shall be paid, in a single cash lump sum, an amount equal to the aggregate amount of all payments delayed pursuant to the preceding sentence, and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule set forth herein.

(ii) Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A of the Code.

(iii) To the extent that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified deferred compensation (within the meaning of Section 409A of the Code), (i) any such expense reimbursement shall be made by the Company no later than the last day of the taxable year following the taxable year in which such expense was incurred by Executive, (ii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (iii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year; provided,that the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect.

(iv) While the payments and benefits provided hereunder are intended to be structured in a manner to avoid the implication of any penalty taxes under Section 409A of the Code, in no event whatsoever shall the Company or any member of the Company Group be liable for any additional tax, interest, or penalties that may be imposed on Executive as a result of Section 409A of the Code or any damages for failing to comply with Section 409A of the Code (other than for withholding obligations or other obligations applicable to employers, if any, under Section 409A of the Code).

2. Except as specifically provided above, all terms and conditions of the Agreement shall remain in full force and effect.

Wherefore, the parties hereto agree to this First Amendment, with the foregoing changes being effective as of August 14, 2015.

FAIRPOINT COMMUNICATIONS, INC.

/s/ Paul H. Sunu                    
By:    Paul H. Sunu
Title:    Chief Executive Officer

EXECUTIVE

/s/ John J. Lunny                    John J. Lunny

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EX-10.7

Exhibit 10.7

FIRST AMENDMENT TO NOVEMBER 20, 2014 EMPLOYMENT AGREEMENT

FAIRPOINT COMMUNICATIONS, INC.

WHEREAS, FairPoint Communications, Inc. (the “Company”) has heretofore entered into an Employment Agreement dated November 20, 2014 (the “Agreement”) by and between Karen D. Turner (the “Executive”) and the Company and the parties thereto desire to amend the Agreement in the manner set forth below.

NOW, THEREFORE, the undersigned parties to the Agreement agree that the Agreement shall be amended as follows, and that there is mutual, adequate and lawful consideration the receipt of which each acknowledges through execution of this First Amendment.

1. Section 13 of the Agreement shall be amended in its entirety to read as follows:

Section 13. Additional Tax and Section 409A Provisions.

(a) If any payment or benefit Executive would receive pursuant to this Agreement (“Payment”) would constitute a “Parachute Payment” within the meaning of Section 280G of the Code and would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Executive will have the option to accept the “Reduced Amount” (as defined below) or accept the Payment in full, in which case Executive will be responsible for the payment of the Excise Tax and any other taxes that may be due as a result of her receipt of the Payment. The “Reduced Amount” will be the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax. If a reduction in payments or benefits constituting Parachute Payments is necessary so that the Payment equals the Reduced Amount, reduction shall occur as designated by the Executive.

(b) Notwithstanding any provision in this Agreement to the contrary:

(i) Any payment otherwise required to be made hereunder to Executive at any date as a result of the termination of Executive’s employment shall be delayed for such period of time as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code (the “Delay Period”). On the first business day following the expiration of the Delay Period, Executive shall be paid, in a single cash lump sum, an amount equal to the aggregate amount of all payments delayed pursuant to the preceding sentence, and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule set forth herein.

(ii) Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A of the Code.

(iii) To the extent that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified deferred compensation (within the meaning of Section 409A of the Code), (i) any such expense reimbursement shall be made by the Company no later than the last day of the taxable year following the taxable year in which such expense was incurred by Executive, (ii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (iii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year; provided,that the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect.

(iv) While the payments and benefits provided hereunder are intended to be structured in a manner to avoid the implication of any penalty taxes under Section 409A of the Code, in no event whatsoever shall the Company or any member of the Company Group be liable for any additional tax, interest, or penalties that may be imposed on Executive as a result of Section 409A of the Code or any damages for failing to comply with Section 409A of the Code (other than for withholding obligations or other obligations applicable to employers, if any, under Section 409A of the Code).

2. Except as specifically provided above, all terms and conditions of the Agreement shall remain in full force and effect.

Wherefore, the parties hereto agree to this First Amendment, with the foregoing changes being effective as of August 14, 2015.

FAIRPOINT COMMUNICATIONS, INC.

/s/ Paul H. Sunu                    
By:    Paul H. Sunu
Title:    Chief Executive Officer

EXECUTIVE

/s/ Karen D. Turner                    Karen D. Turner

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EX-10.8

Exhibit 10.8

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of this 10^th day of August, 2015 (the “Commencement Date”) by and between FairPoint Communications, Inc. (the “Company”), a Delaware corporation, and Steven G. Rush (the “Executive”).

W I T N E S S E T H :

WHEREAS, the Company desires to employ Executive and to enter into this Agreement embodying the terms of such employment, and Executive desires to enter into this Agreement and to accept such employment, subject to the terms and provisions of this Agreement.

NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are mutually acknowledged, the Company and Executive hereby agree as follows:

Section 1.Definitions.

(a)“Accrued Obligations” shall mean (i) all accrued but unpaid Base Salary through the date of termination of Executive’s employment, (ii) any unpaid or unreimbursed expenses incurred in accordance with Section 7 hereof, (iii) any benefits provided under the Company’s employee benefit plans upon a termination of employment, in accordance with the terms contained therein, and (iv) any amounts payable under the FairPoint Communications, Inc. Amended and Restated 2010 Long Term Incentive Plan (“LTIP”), in accordance with the terms contained therein.

(b)“Cause” shall mean (i) Executive’s act(s) of gross negligence or willful misconduct in the course of Executive’s employment hereunder, (ii) willful failure or refusal by Executive to perform in any material respect his duties or responsibilities, (iii) misappropriation (or attempted misappropriation) by Executive of any assets or business opportunities of the Company or any other member of the Company Group, (iv) embezzlement or fraud committed (or attempted) by Executive, or at his direction, (v) Executive’s conviction of, indictment for, or pleading “guilty” or “ no contest” to, (x) a felony or (y) any other criminal charge that has, or could be reasonably expected to have, an adverse impact on the performance of Executive’s duties to the Company or any other member of the Company Group or otherwise result in material injury to the reputation or business of the Company or any other member of the Company Group, (vi) any material violation by Executive of the policies of the Company, including but not limited to those relating to sexual harassment or business conduct, and those otherwise set forth in the manuals or statements of policy of the Company, which violation has a material adverse effect on the Company, or (vii) Executive’s material breach of this Agreement or material breach of the Non-Interference Agreement.

(c)“Change in Control” shall have the same meaning as defined in the LTIP, as in effect on the date hereof; provided, however, that there shall be no provision for any threatened or anticipated Change in Control that does not actually occur.

(d)“Disability” shall mean any physical or mental disability or infirmity of Executive that prevents the performance of Executive’s duties for a period of (i) ninety (90) consecutive days or (ii) one hundred twenty (120) non-consecutive days during any twelve (12) month period. Any question as to the existence, extent, or potentiality of Executive’s Disability upon which Executive and the Company cannot agree shall be determined by a qualified, independent physician selected by the Company and approved by Executive (which approval shall not be unreasonably withheld). The determination of any such physician shall be final and conclusive for all purposes of this Agreement.

(e) “Good Reason” shall mean, without Executive’s consent, (i) a material reduction in Base Salary set forth in Section 4(a) hereof or Annual Bonus opportunity referred to in Section 4(b) hereof, (ii) the relocation of Executive’s principal place of employment (as provided in Section 3(b) hereof) more than fifty (50) miles from its current location, or (iii) any other material breach of a provision of this Agreement by the Company (other than a provision that is covered by clause (i) or (ii) above). Executive acknowledges and agrees that his exclusive remedy in the event of any breach of this Agreement shall be to assert Good Reason pursuant to the terms and conditions of Section 8(e) hereof. Notwithstanding the foregoing, during the Term of Employment, in the event that the Board reasonably believes that Executive may have engaged in conduct that could constitute Cause hereunder, the Board may, in its sole and absolute discretion, suspend Executive from performing his duties hereunder, and in no event shall any such suspension constitute an event pursuant to which Executive may terminate employment with Good Reason or otherwise constitute a breach hereunder; provided, that no such suspension shall alter the Company’s obligations under this Agreement during such period of suspension.

(f)“Person” shall mean any individual, corporation, partnership, limited liability company, joint venture, association, joint‑stock company, trust (charitable or non-charitable), unincorporated organization, or other form of business entity.

Section 2.Acceptance and Term of Employment.

The Company agrees to employ Executive, and Executive agrees to serve the Company, on the terms and conditions set forth herein. The term of employment (the “Term of Employment”) shall commence on the Commencement Date and shall continue during the period ending on the close of business of the three (3) year anniversary of the Commencement Date, unless terminated sooner as provided in Section 8 or unless the Company has provided Executive with notice of its intention to renew the Term of Employment for a specific period of time, such notice to be given not less than one hundred twenty (120) days prior to the expiration of the three (3) year anniversary of the Commencement Date. Following the three year Term of Employment (or the applicable extension term, if any), the Executive shall continue on an at will basis until such time as the Company provides to Executive a written notice of termination pursuant to the provisions of Section 18 hereof.

Section 3.Position, Duties, and Responsibilities; Place of Performance.

(a)Position, Duties and Responsibilities. During the Term of Employment, Executive shall be employed and serve as Executive Vice President, Northern New England Operations of the Company (with such title subject to change from time to time as determined by the Board of Directors of the Company (the “Board”) together with such other position or

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positions consistent with Executive’s title as the Chief Executive Officer of the Company (the “CEO”) shall specify from time to time), and shall have such duties and responsibilities commensurate with such title. Executive also agrees to serve, at the request of the CEO, as an officer of any other direct or indirect subsidiary of the Company (each such subsidiary being, together with the Company, a member of the “Company Group”), in each case without additional compensation.

(b)Performance. Executive shall devote his full business time, attention, skill, and best efforts to the performance of his duties under this Agreement and shall not engage in any other business or occupation during the Term of Employment, including, without limitation, any activity that (x) conflicts with the interests of the Company or any other member of the Company Group, (y) interferes with the proper and efficient performance of Executive’s duties for the Company, or (z) interferes with Executive’s exercise of judgment in the Company’s best interests. Notwithstanding the foregoing, nothing herein shall preclude Executive from (i) serving, with the prior written consent of the CEO, as a member of the boards of directors or advisory boards (or their equivalents in the case of a non-corporate entity) of non-competing businesses and charitable organizations, (ii) engaging in charitable activities and community affairs, and (iii) managing personal investments and affairs; provided, however, that the activities set out in clauses (i), (ii) and (iii) shall be limited by Executive so as not to interfere, individually or in the aggregate, with the performance of his duties and responsibilities hereunder. Executive’s principal place of employment shall be in either Portland, Maine or Manchester, New Hampshire, although Executive understands and agrees that he may be required to travel from time to time for business reasons.

Section 4.Compensation.

During the Term of Employment, Executive shall be entitled to the following compensation:

(a)Base Salary. Executive shall be paid an annualized base salary (the “Base Salary”), payable in accordance with the regular payroll practices of the Company, of not less than Two Hundred Seventy-Three Thousand Dollars ($273,000.00), with increases, if any, as may be approved in writing by the Compensation Committee of the Board of Directors (the “Compensation Committee”).

(b)Annual Bonus. Executive shall be eligible for an annual incentive bonus award (the “Annual Bonus”) through participation in the Company’s Annual Incentive Plan in respect of each fiscal year during the Term of Employment, with the actual Annual Bonus payable being based upon the level of achievement of annual Company and individual performance objectives for such fiscal year, as determined by the Compensation Committee and communicated to Executive. The Annual Bonus shall be paid to Executive at the same time as annual bonuses are generally payable to other senior executives of the Company subject to Executive’s continuous employment through the payment date.

(c)Other Plans. Executive shall be eligible for consideration by the Compensation Committee to participate in the benefit and other plans made available generally to senior executives of the Company, including but not limited to the LTIP, subject to the terms and conditions as may be established from time to time by the Compensation Committee and

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communicated to Executive. Upon the occurrence of a Change in Control, all of Executive’s unvested benefits under the LTIP shall be accelerated and shall vest in full.

(d)Indemnification. The Company shall indemnify Executive and hold Executive harmless in connection with the defense of any lawsuit or other claim to which he is made a party by reason of being an officer or employee of the Company, to the fullest extent permitted by the laws of the State of Delaware, as in effect at the time of the subject act or omission; provided that any settlement, consent to judgment, or similar action taken by Executive without the prior written consent of the Company in respect of any such lawsuit or other claim shall not be subject to indemnification hereunder.

Section 5.Employee Benefits.

During the Term of Employment, Executive shall be entitled to participate in health, insurance, retirement, and other benefits provided generally to similarly situated employees of the Company. Executive shall also be entitled to the same number of holidays, vacation days, and sick days, as well as any other benefits, in each case as are generally allowed to similarly situated employees of the Company in accordance with the Company policy as in effect from time to time. Nothing contained herein shall be construed to limit the Company’s ability to amend, suspend, or terminate any employee benefit plan or policy at any time without providing Executive notice, and the right to do so is expressly reserved.

Section 6.Key-Man Insurance.

At any time during the Term of Employment, the Company shall have the right to insure the life of Executive for the sole benefit of the Company, in such amounts, and with such terms, as it may determine. All premiums payable thereon shall be the obligation of the Company. Executive shall have no interest in any such policy, but agrees to cooperate with the Company in procuring such insurance by submitting to physical examinations, supplying all information required by the insurance company, and executing all necessary documents, provided that no financial obligation is imposed on Executive by any such documents.

Section 7.Reimbursement of Business Expenses.

Executive is authorized to incur reasonable business expenses in carrying out his duties and responsibilities under this Agreement, and the Company shall promptly reimburse him for all such reasonable business expenses, subject to documentation in accordance with the Company’s policy, as in effect from time to time.

Section 8.Termination of Employment.

(a)General. The Term of Employment shall terminate upon the earliest to occur of (i) Executive’s death, (ii) a termination by reason of a Disability, (iii) a termination by the Company with or without Cause, (iv) a termination by Executive with or without Good Reason, and (v) delivery by the Company to Executive of a termination notice at any time subsequent to the close of business on the last day of the Term of Employment. Upon any termination of Executive’s employment for any reason, except as may otherwise be requested by the Company in writing and agreed upon in writing by Executive, Executive shall resign from

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any and all directorships, committee memberships, and any other positions Executive holds with the Company or any other member of the Company Group. Notwithstanding anything herein to the contrary, the payment (or commencement of a series of payments) hereunder of any nonqualified deferred compensation (within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder (the “Code”)) upon a termination of employment shall be delayed until such time as Executive has also undergone a “separation from service” as defined in Treas. Reg. 1.409A-1(h), at which time such nonqualified deferred compensation (calculated as of the date of Executive’s termination of employment hereunder) shall be paid (or commence to be paid) to Executive on the schedule set forth in this Section 8 as if Executive had undergone such termination of employment (under the same circumstances) on the date of his ultimate “separation from service.”

(b)Termination Due to Death or Disability. Executive’s employment shall terminate automatically upon his death. The Company may terminate Executive’s employment immediately upon the occurrence of a Disability, such termination to be effective upon Executive’s receipt of written notice of such termination. Upon Executive’s death or in the event that Executive’s employment is terminated due to his Disability, Executive or his estate or his beneficiaries, as the case may be, shall be entitled to:

(i)The Accrued Obligations;

(ii)Any unpaid Annual Bonus in respect of any completed fiscal year that has ended prior to the date of such termination, which amount shall be paid at such time annual bonuses are paid to other senior executives of the Company, but in no event later than the date that is 2½ months following the last day of the fiscal year in which such termination occurred.

Following Executive’s death or a termination of Executive’s employment by reason of a Disability, except as set forth in this Section 8(b), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

(c)Termination by the Company with Cause.

(i)The Company may terminate Executive’s employment at any time with Cause, effective upon Executive’s receipt of written notice of such termination; provided, however, that with respect to any Cause termination relying on clause (ii) of the definition of Cause set forth in Section 1(b) hereof, to the extent that such act or acts or failure or failures to act are curable, Executive shall be given not less than ten (10) days’ written notice by the Board of its intention to terminate him with Cause, such notice to state in detail the particular act or acts or failure or failures to act that constitute the grounds on which the proposed termination with Cause is based, and such termination shall be effective at the expiration of such ten (10) day notice period unless Executive has fully cured such act or acts or failure or failures to act that give rise to Cause during such period.

(ii)In the event that the Company terminates Executive’s employment with Cause, he shall be entitled only to the Accrued Obligations. Following such termination of Executive’s employment with Cause, except as set forth in this Section 8

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(c)(ii), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

(d)Termination by the Company without Cause or upon Delivery of a Termination Notice from the Company to the Executive. The Company may terminate Executive’s employment at any time without Cause, effective upon Executive’s receipt of written notice of such termination, or by delivery to Executive of a written notice of termination in accordance with the provisions of Section 2 above.

(i)    In the event that Executive’s employment is terminated by the Company without Cause (other than due to death or Disability) or upon the Company’s delivery of a termination notice, in either case prior to the expiration of the Term of Employment (for example, the termination must be effected or the termination notice must be delivered to Executive prior to the expiration of three (3) years from the Commencement Date), Executive shall be entitled to:

(A) The Accrued Obligations, paid as soon as practicable following Executive’s termination of employment, but in no event later than the date that is 2½ months following the last day of the fiscal year in which such termination occurred;

(B) Any unpaid Annual Bonus in respect of any completed fiscal year that has ended prior to the date of such termination, which amount shall be paid at such time annual bonuses are paid to other senior executives of the Company, but in no event later than the date that is 2½ months following the last day of the fiscal year in which such termination occurred;

(C)    An amount equal to the sum of:

(x) two (2) times the amount of Executive’s then-current Base Salary, paid as soon as practicable following Executive’s termination of employment, but in no event later than the date that is 2½ months following the last day of the fiscal year in which such termination occurred;

(y) two (2) times the amount of Executive’s average Annual Bonus where such average is determined by reference to the actual Annual Bonus paid to Executive for the immediately two (2) preceding fiscal years, paid as soon as practicable following Executive’s termination of employment, but in no event later than the date that is 2½ months following the last day of the fiscal year in which such termination occurred;

(z) the cost of continued health and disability insurance coverage for Executive and his covered dependents during the twenty four (24) months following such termination,

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based on the monthly cost of continuation coverage under COBRA as of the date of termination, as applicable, under the applicable Company benefit plans, such amounts to be paid in accordance with the Company’s regular payroll practices; and

(D) if any such termination is within six (6) months before or six (6) months after a Change in Control, the amount payable under Section 8(d)(i)(C)(y) shall be adjusted to the greater of (A) the amount payable under Section 8(d)(i)(C)(y), or (B) two (2) times the amount of Executive’s target Annual Bonus for the current fiscal year. To the extent that the amount payable under this Section 8(d)(i)(D) is greater than the amount payable under Section 8(d)(i)(C), the deficiency shall be paid at the effective time of the occurrence of a Change in Control.

(ii)    In the event that Executive’s employment is terminated by the Company without Cause (other than due to death or Disability) or upon the Company’s delivery of a termination notice, in either case after the expiration of the Term of Employment (for example, the termination is effected or the termination notice is delivered to Executive subsequent to the expiration of three (3) years from the Commencement Date, herein an “At Will Termination”), Executive shall be entitled to the Accrued Obligations only; provided, however, if the At Will Termination is effected within six (6) months prior to a Change in Control, Executive shall be entitled to each of the payments and benefits described in clauses (B), (C) and (D) above.

Notwithstanding the foregoing, the payments and benefits described in clauses (B), (C) and (D) above shall immediately terminate, and the Company shall have no further obligations to Executive with respect thereto, in the event that Executive breaches any provision of the Non-Interference Agreement.

Following such termination of Executive’s employment by the Company without Cause or upon the Company’s delivery to Executive of a termination notice, except as set forth in this Section 8(d), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

For the avoidance of doubt, Executive’s sole and exclusive remedy upon a termination of employment by the Company without Cause or upon the expiration of the Term of Employment, in either case following the Company’s delivery to Executive of a termination notice which termination is effected or where the termination notice is delivered prior to the expiration of the date that is three (3) years subsequent to the Commencement Date, shall be receipt of the Severance Benefits and the Accrued Obligations.

(e)Termination by Executive with Good Reason. Executive may terminate his employment with Good Reason by providing the Company thirty (30) days’ written notice setting forth in reasonable specificity the event that constitutes Good Reason, which written notice, to be effective, must be provided to the Company within sixty (60) days of the initial occurrence of such event. During such thirty (30) day notice period, the Company shall have a

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cure right (if curable), and if not cured within such period, Executive’s termination will be effective upon the expiration of such cure period. Executive shall be entitled to the same payments and benefits as provided in Section 8(d) hereof for a termination by the Company without Cause, subject to the same conditions on payment and benefits as described in Section 8(d) hereof; provided, however, that Executive shall also be entitled to accelerated vesting of the next tranche of benefits payable under the LTIP. Following such termination of Executive’s employment by Executive with Good Reason, except as set forth in this Section 8(e), Executive shall have no further rights to any compensation or any other benefits under this Agreement. For the avoidance of doubt, Executive’s sole and exclusive remedy upon a termination of employment with Good Reason shall be receipt of the amounts as set forth in this Section 8(e).

(f)Termination by Executive without Good Reason or upon Delivery by Executive to Company of a Termination Notice. Executive may terminate his employment without Good Reason by providing the Company thirty (30) days’ written notice of such termination or by delivery of a written termination notice in accordance with the provisions of Section 2 above. In the event of a termination of employment by Executive under this Section 8(f), Executive shall be entitled only to the Accrued Obligations. In the event of termination of Executive’s employment without Good Reason, the Company may, in its sole and absolute discretion, by written notice accelerate such date of termination without changing the characterization of such termination as a termination by Executive without Good Reason. Following such termination of Executive’s employment by Executive without Good Reason or upon Executive’s delivery to Company of a termination notice, except as set forth in this Section 8(f), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

(g)Release. Notwithstanding any provision herein to the contrary, the payment of any amount or provision of any benefit pursuant to subsection (b), (d), or (e) of this Section 8 (other than the Accrued Obligations) (collectively, the “Severance Benefits”) shall be conditioned upon Executive’s execution, delivery to the Company, and non-revocation of a release of claims (under a release of claims form, the form and content of which are acceptable to the Company, and the expiration of any revocation period contained in such release of claims) within sixty (60) days following the date of Executive’s termination of employment hereunder. If Executive fails to execute the release of claims in such a timely manner so as to permit any revocation period to expire prior to the end of such sixty (60) day period, or timely revokes his acceptance of such release following its execution, Executive shall not be entitled to any of the Severance Benefits. Further, to the extent that any of the Severance Benefits constitutes “nonqualified deferred compensation” for purposes of Section 409A of the Code, any payment of any amount or provision of any benefit otherwise scheduled to occur prior to the sixtieth (60^th) day following the date of Executive’s termination of employment hereunder, but for the condition on executing the release of claims as set forth herein, shall not be made until the first regularly scheduled payroll date following such sixtieth (60^th) day, after which any remaining Severance Benefits shall thereafter be provided to Executive according to the applicable schedule set forth herein. For the avoidance of doubt, in the event of a termination due to Executive’s death or Disability, Executive’s obligations herein to execute and not revoke the release of claims may be satisfied on his behalf by his estate or a person having legal power of attorney over his affairs.

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Section 9.Non-Interference Agreement.

As a condition to receipt of the benefits set forth under this Agreement, to which Executive acknowledges are incremental to the benefits and compensation available to Executive immediately prior to the Commencement Date, Executive shall have executed and delivered to the Company a non-interference agreement (the “Non-Interference Agreement”) in the form of the Confidentiality, Non-Interference and Invention Assignment Agreement attached hereto as Exhibit A. The parties hereto acknowledge and agree that this Agreement and the Non-Interference Agreement shall be considered separate contracts.

Section 10.Representations and Warranties of Executive.

Executive represents and warrants to the Company that:

(a)Executive is entering into this Agreement voluntarily and that his employment hereunder and compliance with the terms and conditions hereof will not conflict with or result in the breach by him of any agreement to which he is a party or by which he may be bound;

(b)Executive has not violated, and in connection with his employment with the Company will not violate, any non-solicitation, non-competition, or other similar covenant or agreement of a prior employer by which he is or may be bound; and

(c)in connection with his employment with the Company, Executive will not use any confidential or proprietary information he may have obtained in connection with employment with any prior employer.

Section 11.Taxes.

The Company may withhold from any payments made under this Agreement all applicable taxes, including but not limited to income, employment, and social insurance taxes, as shall be required by law. Executive acknowledges and represents that the Company has not provided any tax advice to him in connection with this Agreement and that he has been advised by the Company to seek tax advice from his own tax advisors regarding this Agreement and payments that may be made to him pursuant to this Agreement, including specifically, the application of the provisions of Section 409A of the Code to such payments.

Section 12.Mitigation; Company Recovery Rights.

Executive shall not be required to mitigate the amount of any payment provided pursuant to this Agreement by seeking other employment or otherwise, and the amount of any payment provided for pursuant to this Agreement shall not be reduced by any compensation earned as a result of Executive’s other employment or otherwise. Any payment pursuant to this Agreement shall, however, be subject to any rights the Company may have under Section 304(b) of the Sarbanes-Oxley Act of 2002 or Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Section 13.Additional Tax and Section 409A Provisions.

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(a)If any payment or benefit Executive would receive pursuant to this Agreement (“Payment”) would constitute a “Parachute Payment” within the meaning of Section 280G of the Code and would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Executive will have the option to accept the “Reduced Amount” (as defined below) or accept the Payment in full, in which case Executive will be responsible for the payment of the Excise Tax and any other taxes that may be due as a result of his receipt of the Payment. The “Reduced Amount” will be the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax. If a reduction in payments or benefits constituting Parachute Payments is necessary so that the Payment equals the Reduced Amount, reduction shall occur as designated by the Executive.

(b)Notwithstanding any provision in this Agreement to the contrary:

(i)Any payment otherwise required to be made hereunder to Executive at any date as a result of the termination of Executive’s employment shall be delayed for such period of time as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code (the “Delay Period”). On the first business day following the expiration of the Delay Period, Executive shall be paid, in a single cash lump sum, an amount equal to the aggregate amount of all payments delayed pursuant to the preceding sentence, and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule set forth herein.

(ii)Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A of the Code.

(iii)To the extent that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified deferred compensation (within the meaning of Section 409A of the Code), (i) any such expense reimbursement shall be made by the Company no later than the last day of the taxable year following the taxable year in which such expense was incurred by Executive, (ii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (iii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year; provided,that the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect.

(iv)While the payments and benefits provided hereunder are intended to be structured in a manner to avoid the implication of any penalty taxes under Section 409A of the Code, in no event whatsoever shall the Company or any member of the Company Group be liable for any additional tax, interest, or penalties that may be imposed on Executive as a result of Section 409A of the Code or any damages for failing to comply with Section 409A of the Code (other than for withholding obligations or other obligations applicable to employers, if any, under Section 409A of the Code).

Section 14.Successors and Assigns; No Third-Party Beneficiaries.

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(a)The Company. This Agreement shall inure to the benefit of the Company and its respective successors and assigns. Neither this Agreement nor any of the rights, obligations, or interests arising hereunder may be assigned by the Company to a Person (other than another member of the Company Group, or its or their respective successors) without Executive’s prior written consent (which shall not be unreasonably withheld, delayed, or conditioned); provided, however, that in the event of a sale of all or substantially all of the assets of the Company, the Company may provide that this Agreement will be assigned to, and assumed by, the acquiror of such assets, it being agreed that in such circumstances, Executive’s consent will not be required in connection therewith.

(b)Executive. Executive’s rights and obligations under this Agreement shall not be transferable by Executive by assignment or otherwise, without the prior written consent of the Company; provided, however, upon Executive’s death, all amounts then payable to Executive hereunder shall be paid in accordance with the terms of this Agreement to Executive’s devisee, legatee, or other designee, or if there be no such designee, to Executive’s estate.

(c)No Third-Party Beneficiaries. Except as otherwise set forth in Section 8(b) or Section 14(b) hereof, nothing expressed or referred to in this Agreement will be construed to give any Person other than the Company, the other members of the Company Group, and Executive any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement.

Section 15.Waiver and Amendments.

Any waiver, alteration, amendment, or modification of any of the terms of this Agreement shall be valid only if made in writing and signed by each of the parties hereto; provided, however, that any such waiver, alteration, amendment, or modification must be consented to on the Company’s behalf by the Board. No waiver by either of the parties hereto of their rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it is to be construed as a continuing waiver.

Section 16.Severability.

If any covenants or such other provisions of this Agreement are found to be invalid or unenforceable by a final determination of a court of competent jurisdiction, (a) the remaining terms and provisions hereof shall be unimpaired, and (b) the invalid or unenforceable term or provision hereof shall be deemed replaced by a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision hereof.

Section 17.Governing Law and Jurisdiction.

THIS AGREEMENT IS GOVERNED BY AND IS TO BE CONSTRUED UNDER THE LAWS OF THE STATE OF NORTH CAROLINA, WITHOUT REGARD TO CONFLICT OF LAWS RULES. ANY DISPUTE OR CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR CLAIM OF BREACH HEREOF SHALL BE BROUGHT EXCLUSIVELY IN FEDERAL COURT IN THE STATE OF NORTH CAROLINA.

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BY EXECUTION OF THE AGREEMENT, THE PARTIES HERETO, AND THEIR RESPECTIVE AFFILIATES, CONSENT TO THE EXCLUSIVE JURISDICTION OF SUCH COURT, AND WAIVE ANY RIGHT TO CHALLENGE JURISDICTION OR VENUE IN SUCH COURT WITH REGARD TO ANY SUIT, ACTION, OR PROCEEDING UNDER OR IN CONNECTION WITH THE AGREEMENT. EACH PARTY TO THIS AGREEMENT ALSO HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN CONNECTION WITH ANY SUIT, ACTION, OR PROCEEDING UNDER OR IN CONNECTION WITH THIS AGREEMENT.

Section 18.Notices.

(a)Place of Delivery. Every notice or other communication relating to this Agreement shall be in writing, and shall be mailed to or delivered to the party for whom or which it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided; provided, that unless and until some other address be so designated, all notices and communications by Executive to the Company shall be mailed or delivered to the Company at its principal executive office, Attention: General Counsel, and all notices and communications by the Company to Executive may be given to Executive personally or may be mailed to Executive at Executive’s last known address, as reflected in the Company’s records.

(b)Date of Delivery. Any notice so addressed shall be deemed to be given (i) if delivered by hand, on the date of such delivery, (ii) if mailed by courier or by overnight mail, on the first business day following the date of such mailing, and (iii) if mailed by registered or certified mail, on the third business day after the date of such mailing.

Section 19.Section Headings.

The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part thereof or affect the meaning or interpretation of this Agreement or of any term or provision hereof.

Section 20.Entire Agreement.

This Agreement, together with any exhibits attached hereto, constitutes the entire understanding and agreement of the parties hereto regarding the employment of Executive. This Agreement supersedes all prior negotiations, discussions, correspondence, communications, understandings, and agreements between the parties relating to the subject matter of this Agreement.

Section 21.Survival of Operative Sections.

Upon any termination of Executive’s employment, the provisions of Section 8 through Section 22 of this Agreement (together with any related definitions set forth in Section 1 hereof) shall survive to the extent necessary to give effect to the provisions thereof.

Section 22.Counterparts.

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This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. The execution of this Agreement may be by actual or facsimile signature.

Section 23.Temporary Housing Stipend.

Notwithstanding anything else provided for herein, Executive shall continue to receive a stipend in the amount of Two Thousand Five Hundred Dollars ($2,500.00) per month (net), as set forth in the Company’s letter to Executive dated December 18, 2014, pursuant to the terms and conditions thereof, so long as he is employed hereunder, through the Term of Employment, to assist him with temporary housing in either Portland, Maine or Manchester, New Hampshire.

*    *    *

[Signatures to appear on the following page.]

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

FAIRPOINT COMMUNICATIONS, INC.

/s/ Paul H. Sunu                    
By:    Paul H. Sunu
Title:    Chief Executive Officer

EXECUTIVE

/s/ Steven G. Rush                    Steven G. Rush

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Exhibit 10.8

CONFIDENTIALITY, NON-INTERFERENCE, AND INVENTION ASSIGNMENT AGREEMENT

In consideration of FairPoint Communications, Inc., a Delaware corporation (the “Company”), providing me with an employment agreement of even date herewith, and my receipt of the compensation now and hereafter paid to me by the Company, including the additional benefits and compensation provided to me under my employment agreement, I agree to the following:

Section 1.Confidential Information.

(g)Company Group Information. I acknowledge that, during the course of my employment, I will have access to information about the Company and its direct and indirect subsidiaries and affiliates (collectively, the “Company Group”) and that my employment with the Company shall bring me into close contact with confidential and proprietary information of the Company Group. In recognition of the foregoing, I agree, at all times during the term of my employment with the Company and for the three (3) year period following my termination of my employment for any reason, to hold in confidence, and not to use, except for the benefit of the Company Group, or to disclose to any person, firm, corporation, or other entity without written authorization of the Company, any Confidential Information that I obtain or create. I understand that “Confidential Information” means information that the Company Group has developed, acquired, created, compiled, discovered, or owned or will develop, acquire, create, compile, discover, or own, that has value in or to the business of the Company Group that is not generally known and that the Company wishes to maintain as confidential. I understand that Confidential Information includes, but is not limited to, any and all non-public information that relates to the actual or anticipated business and/or products, research, or development of the Company, or to the Company’s technical data, trade secrets, or know-how, including, but not limited to, research, product plans, or other information regarding the Company’s products or services and markets, customer lists, and customers (including, but not limited to, customers of the Company on whom I called or with whom I may become acquainted during the term of my employment), software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances, and other business information disclosed by the Company either directly or indirectly in writing, orally, or by drawings or inspection of premises, parts, equipment, or other Company property. Notwithstanding the foregoing, Confidential Information shall not include (i) any of the foregoing items that have become publicly known through no unauthorized disclosure by me or others who were under confidentiality obligations as to the item or items involved, (ii) any information that I am required to disclose to, or by, any governmental or judicial authority, (iii) any information known to me prior to my employment with the Company, other than information acquired in preparation for my service to the Company, or (iv) any information developed independently by me that does not relate to the business of the Company Group; provided, however, that in the event of such requirement to disclose I will give the Company prompt written notice thereof so that the Company Group may seek an appropriate protective order and/or waive in writing compliance with the confidentiality provisions of this Confidentiality, Non-Interference, and Invention Assignment Agreement (the “Non-Interference Agreement”).

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(h)Former Employer Information. I represent that my performance of all of the terms of this Non-Interference Agreement as an employee of the Company has not breached and will not breach any agreement to keep in confidence proprietary information, knowledge, or data acquired by me in confidence or trust prior or subsequent to the commencement of my employment with the Company, and I will not disclose to any member of the Company Group, or induce any member of the Company Group to use, any developments, or confidential or proprietary information or material I may have obtained in connection with employment with any prior employer in violation of a confidentiality agreement, nondisclosure agreement, or similar agreement with such prior employer.

Section 2.Developments.

(a)Developments Retained and Licensed. If, during any period during which I perform or performed services for the Company Group (the “Assignment Period”), whether as an officer, employee, director, independent contractor, consultant, or agent, or in any other capacity, I incorporate (or have incorporated) into a Company Group product or process any development, original work of authorship, improvement, or trade secret that I created or owned prior to the commencement of my employment or in which I have an interest (collectively referred to as “Prior Developments”), I hereby grant the Company, and the Company Group shall have, a non-exclusive, royalty-free, irrevocable, perpetual, transferable worldwide license (with the right to sublicense) to make, have made, copy, modify, make derivative works of, use, sell, and otherwise distribute such Prior Development as part of or in connection with such product or process.

(b)Assignment of Developments. I agree that I will, without additional compensation, promptly make full written disclosure to the Company, and will hold in trust for the sole right and benefit of the Company all developments, original works of authorship, inventions, concepts, know-how, improvements, trade secrets, and similar proprietary rights, whether or not patentable or registrable under copyright or similar laws, which I may solely or jointly conceive or develop or reduce to practice, or have solely or jointly conceived or developed or reduced to practice, or have caused or may cause to be conceived or developed or reduced to practice, during the Assignment Period, whether or not during regular working hours, provided they either (i) relate at the time of conception, development or reduction to practice to the business of any member of the Company Group, or the actual or anticipated research or development of any member of the Company Group; (ii) result from or relate to any work performed for any member of the Company Group; or (iii) are developed through the use of equipment, supplies, or facilities of any member of the Company Group, or any Confidential Information, or in consultation with personnel of any member of the Company Group (collectively referred to as “Developments”). I further acknowledge that all Developments made by me (solely or jointly with others) within the scope of and during the Assignment Period are “works made for hire” (to the greatest extent permitted by applicable law) for which I am, in part, compensated by my salary, unless regulated otherwise by law, but that, in the event any such Development is deemed not to be a work made for hire, I hereby assign to the Company, or its designee, all my right, title, and interest throughout the world in and to any such Development.

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(c)Maintenance of Records. I agree to keep and maintain adequate and current written records of all Developments made by me (solely or jointly with others) during the Assignment Period. The records may be in the form of notes, sketches, drawings, flow charts, electronic data or recordings, and any other format. The records will be available to and remain the sole property of the Company Group at all times. I agree not to remove such records from the Company’s place of business except as expressly permitted by Company Group policy, which may, from time to time, be revised at the sole election of the Company Group for the purpose of furthering the business of the Company Group.

(d)Intellectual Property Rights. I agree to assist the Company, or its designee, at the Company’s expense, in every way to secure the rights of the Company Group in the Developments and any copyrights, patents, trademarks, service marks, database rights, domain names, mask work rights, moral rights, and other intellectual property rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments, recordations, and all other instruments that the Company shall deem necessary in order to apply for, obtain, maintain, and transfer such rights and in order to assign and convey to the Company Group the sole and exclusive right, title, and interest in and to such Developments, and any intellectual property and other proprietary rights relating thereto. I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of the Assignment Period until the expiration of the last such intellectual property right to expire in any country of the world; provided, however, the Company shall reimburse me for my reasonable expenses incurred in connection with carrying out the foregoing obligation. If the Company is unable because of my mental or physical incapacity or unavailability for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Developments or original works of authorship assigned to the Company as above, then I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact to act for and in my behalf and stead to execute and file any such applications or records and to do all other lawfully permitted acts to further the application for, prosecution, issuance, maintenance, and transfer of letters patent or registrations thereon with the same legal force and effect as if originally executed by me. I hereby waive and irrevocably quitclaim to the Company any and all claims, of any nature whatsoever, that I now or hereafter have for past, present, or future infringement of any and all proprietary rights assigned to the Company.

Section 3.Returning Company Group Documents.

I agree that, at the time of termination of my employment with the Company for any reason, I will deliver to the Company (and will not keep in my possession, recreate, or deliver to anyone else) any and all Confidential Information and all other documents, materials, information, and property developed by me pursuant to my employment or otherwise belonging to the Company. I agree further that any property situated on the Company’s premises and owned by the Company (or any other member of the Company Group), including disks and other

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storage media, filing cabinets, and other work areas, is subject to inspection by personnel of any member of the Company Group at any time with or without notice.

Section 4.Disclosure of Agreement.

As long as it remains in effect, I will disclose the existence of this Non-Interference Agreement to any prospective employer, partner, co-venturer, investor, or lender prior to entering into an employment, partnership, or other business relationship with such person or entity.

Section 5.Restrictions on Interfering.

(a)Non-Competition. During the period of my employment with the Company (the “Employment Period”) and the Post-Termination Non-Compete Period, I shall not, directly or indirectly, individually or on behalf of any person, company, enterprise, or entity, or as a sole proprietor, partner, stockholder, director, officer, principal, agent, or executive, or in any other capacity or relationship, engage in any Competitive Activities.

(b)Non-Interference. During the Employment Period and the Post-Termination Non-Interference Period, I shall not, directly or indirectly for my own account or for the account of any other individual or entity, engage in Interfering Activities; provided, however, that I shall not be deemed to violate this subsection (b) to the extent that any employee of any subsequent employer of mine, in the ordinary course of business, conducts any activity described in subsection (c)(iii)(C) below as to any Business Relation, provided that I have not directed or instructed any such employee (either personally or through another) to contact any such Business Relation.

(c)Definitions. For purposes of this Non-Interference Agreement :

(i)“Business Relation” shall mean any current or prospective client, customer, licensee, or other business relation of the Company Group, or any such relation that was a client, customer, licensee, or other business relation within the six (6) month period prior to the expiration of the Employment Period, in each case, to whom I provided services, or with whom I transacted business, or whose identity became known to me in connection with my relationship with or employment by the Company and is not publicly known.

(ii)“Competitive Activities” shall mean telecommunication services provided by a rural exchange carrier business which has substantial business operations in the state of Florida, Maine, New Hampshire, North Carolina, or Vermont.

(iii)“Interfering Activities” shall mean (A) encouraging, soliciting, or inducing, or in any manner attempting to encourage, solicit, or induce, any Person employed by, or providing consulting services to, any member of the Company Group to terminate such Person’s employment or services (or in the case of a consultant, materially reducing such services) with the Company Group; (B) hiring any individual who was

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employed by the Company Group within the six (6) month period prior to the date of such proposed hiring; or (C) encouraging, soliciting, or inducing, or in any manner attempting to encourage, solicit, or induce, any Business Relation to cease doing business with or reduce the amount of business conducted with the Company Group, or in any way interfering with the relationship between any such Business Relation and the Company Group.

(iv)“Person” shall mean any individual, corporation, partnership, limited liability company, joint venture, association, joint‑stock company, trust (charitable or non-charitable), unincorporated organization, or other form of business entity.

(v)“Post-Termination Non-Compete Period” shall mean the period commencing on the date of the termination of the Employment Period for any reason and ending on the twelve (12) month anniversary of such date of termination.

(vi)“Post-Termination Non-Interference Period” shall mean the period commencing on the date of the termination of the Employment Period for any reason and ending on the twelve (12) month anniversary of such date of termination.

(d)Non-Disparagement. I agree that during the Employment Period, and at all times thereafter, I will not make any disparaging or defamatory comments regarding any member of the Company Group or its respective current or former directors, officers, or employees in any respect or make any comments concerning any aspect of my relationship with any member of the Company Group or any conduct or events which precipitated any termination of my employment from any member of the Company Group. However, my obligations under this subparagraph (d) shall not apply to disclosures required by applicable law, regulation, or order of a court or governmental agency.

Section 6.Reasonableness of Restrictions.

I acknowledge and recognize the highly competitive nature of the Company’s business, that access to Confidential Information renders me special and unique within the Company’s industry, and that I will have the opportunity to develop substantial relationships with existing and prospective clients, accounts, customers, consultants, contractors, investors, and strategic partners of the Company Group during the course of and as a result of my employment with the Company. In light of the foregoing, I recognize and acknowledge that the restrictions and limitations set forth in this Non-Interference Agreement are reasonable and valid in geographical and temporal scope and in all other respects and are essential to protect the value of the business and assets of the Company Group. I acknowledge further that the restrictions and limitations set forth in this Non-Interference Agreement will not materially interfere with my ability to earn a living following the termination of my employment with the Company and that my ability to earn a livelihood without violating such restrictions is a material condition to my employment with the Company.

Section 7.Independence; Severability; Blue Pencil.

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Each of the rights enumerated in this Non-Interference Agreement shall be independent of the others and shall be in addition to and not in lieu of any other rights and remedies available to the Company Group at law or in equity. If any of the provisions of this Non-Interference Agreement or any part of any of them is hereafter construed or adjudicated to be invalid or unenforceable, the same shall not affect the remainder of this Non-Interference Agreement, which shall be given full effect without regard to the invalid portions. If any of the covenants contained herein are held to be invalid or unenforceable because of the duration of such provisions or the area or scope covered thereby, I agree that the court making such determination shall have the power to reduce the duration, scope, and/or area of such provision to the maximum and/or broadest duration, scope, and/or area permissible by law, and in its reduced form said provision shall then be enforceable.

Section 8.Injunctive Relief.

I expressly acknowledge that any breach or threatened breach of any of the terms and/or conditions set forth in this Non-Interference Agreement may result in irreparable injury to the members of the Company Group. Therefore, I hereby agree that, in addition to any other remedy that may be available to the Company, any member of the Company Group shall be entitled to seek injunctive relief, specific performance, or other equitable relief by a court of appropriate jurisdiction in the event of any breach or threatened breach of the terms of this Non-Interference Agreement without the necessity of proving irreparable harm or injury as a result of such breach or threatened breach. Notwithstanding any other provision to the contrary, I acknowledge and agree that the Post-Termination Non-Compete Period, or Post-Termination Non-Interference Period, as applicable, shall be tolled during any period of violation of any of the covenants in Section 5 hereof.

Section 9.Cooperation.

I agree that, following any termination of my employment, I will continue to provide reasonable cooperation to the Company and/or any other member of the Company Group and its or their respective counsel in connection with any investigation, administrative proceeding, or litigation relating to any matter that occurred during my employment in which I was involved or of which I have knowledge. As a condition of such cooperation, the Company shall reimburse me for reasonable out-of-pocket expenses incurred at the request of the Company with respect to my compliance with this paragraph. I also agree that, in the event that I am subpoenaed by any person or entity (including, but not limited to, any government agency) to give testimony or provide documents (in a deposition, court proceeding, or otherwise) that in any way relates to my employment by the Company and/or any other member of the Company Group, I will give prompt notice of such request to the Company and will make no disclosure until the Company and/or the other member of the Company Group has had a reasonable opportunity to contest the right of the requesting person or entity to such disclosure.

Section 10.General Provisions.

(d)Governing Law and Jurisdiction. THIS NON-INTERFERENCE AGREEMENT IS GOVERNED BY AND IS TO BE CONSTRUED UNDER THE LAWS OF

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THE STATE OF NORTH CAROLINA, WITHOUT REGARD TO CONFLICT OF LAWS RULES. ANY DISPUTE OR CLAIM ARISING OUT OF OR RELATING TO THIS NON-INTERFERENCE AGREEMENT OR CLAIM OF BREACH HEREOF SHALL BE BROUGHT EXCLUSIVELY IN FEDERAL COURT IN THE STATE OF NORTH CAROLINA. BY EXECUTION OF THE NON-INTERFERENCE AGREEMENT, THE PARTIES HERETO, AND THEIR RESPECTIVE AFFILIATES, CONSENT TO THE EXCLUSIVE JURISDICTION OF SUCH COURT, AND WAIVE ANY RIGHT TO CHALLENGE JURISDICTION OR VENUE IN SUCH COURT WITH REGARD TO ANY SUIT, ACTION, OR PROCEEDING UNDER OR IN CONNECTION WITH THE NON-INTERFERENCE AGREEMENT. EACH PARTY TO THIS NON-INTERFERENCE AGREEMENT ALSO HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN CONNECTION WITH ANY SUIT, ACTION, OR PROCEEDING UNDER OR IN CONNECTION WITH THIS NON-INTERFERENCE AGREEMENT.

(e)Entire Agreement. This Non-Interference Agreement sets forth the entire agreement and understanding between the Company and me relating to the subject matter herein and merges all prior discussions between us. No modification or amendment to this Non-Interference Agreement, nor any waiver of any rights under this Non-Interference Agreement, will be effective unless in writing signed by the party to be charged. Any subsequent change or changes in my duties, obligations, rights, or compensation will not affect the validity or scope of this Non-Interference Agreement.

(f)No Right of Continued Employment. I acknowledge and agree that nothing contained herein shall be construed as granting me any right to continued employment by the Company, and the right of the Company to terminate my employment at any time and for any reason, with or without cause, is specifically reserved.

(g)Successors and Assigns. This Non-Interference Agreement will be binding upon my heirs, executors, administrators, and other legal representatives and will be for the benefit of the Company, its successors, and its assigns. I expressly acknowledge and agree that this Non-Interference Agreement may be assigned by the Company without my consent to any other member of the Company Group as well as any purchaser of all or substantially all of the assets or stock of the Company, whether by purchase, merger, or other similar corporate transaction, provided that the license granted pursuant to Section 2(a) may be assigned to any third party by the Company without my consent.

(h)Survival. The provisions of this Non-Interference Agreement shall survive the termination of my employment with the Company and/or the assignment of this Non-Interference Agreement by the Company to any successor in interest or other assignee.

*    *    *

I, Steven G. Rush, have executed this Confidentiality, Non-Interference, and Invention Assignment Agreement on the respective date set forth below:Date:     8/11/15            /s/ Steven G. Rush            (Signature)

7

EX-31.1

Exhibit 31.1

CERTIFICATION

PURSUANT TO 17 CFR 240.13a-14

PROMULGATED UNDER

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Paul H. Sunu, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of FairPoint Communications, Inc. (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report;

3. Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this Quarterly Report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”) Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(i) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared;

(ii) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(iii) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Quarterly Report based on such evaluation; and

(iv) disclosed in this Quarterly Report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting;

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

(i) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(ii) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: November 3, 2015

/s/ Paul H. Sunu

Paul H. Sunu

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

PURSUANT TO 17 CFR 240.13a-14

PROMULGATED UNDER

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ajay Sabherwal, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of FairPoint Communications, Inc. (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report;

3. Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this Quarterly Report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”) Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(i) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared;

(ii) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(iii) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Quarterly Report based on such evaluation; and

(iv) disclosed in this Quarterly Report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting;

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

(i) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(ii) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: November 3, 2015

/s/ Ajay Sabherwal

Ajay Sabherwal

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of FairPoint Communications, Inc. (the “Company”) for the quarter ended September 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Paul H. Sunu, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.    The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of

1934; and

2.    The information contained in the Report fairly presents, in all material respects, the financial condition and

results of operations of the Company.

/s/ Paul H. Sunu

Paul H. Sunu

Chief Executive Officer

November 3, 2015

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of FairPoint Communications, Inc. (the “Company”) for the quarter ended September 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ajay Sabherwal, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.    The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of

1934; and

2.    The information contained in the Report fairly presents, in all material respects, the financial condition and

results of operations of the Company.

/s/ Ajay Sabherwal

Ajay Sabherwal

Chief Financial Officer

November 3, 2015

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Interest Rate Swap Agreements (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Derivative [Line Items]
Amount of Loss/(Gain) Recognized in Other Comprehensive Income/(Loss) on Derivative (Effective Portion) (Pre-Tax)	$ 460	$ (260)	$ 1,503	$ 1,141
Interest rate swaps, Current | Other accrued liabilities
Derivative [Line Items]
Derivative Liability, Fair Value, Gross Liability	2,384		2,384
Interest rate swaps, Current | Other long-term liabilities
Derivative [Line Items]
Fair Value	$ 1,861		$ 1,861		$ 2,742

XML

Earnings Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Calculation of basic and diluted earnings per common share
Weighted average number of common shares used for basic earnings per share	26,676,385	26,472,162	26,640,103	26,439,870
Effect of potential dilutive shares	327,448	0	312,193
Weighted average number of common shares and potential dilutive shares used for diluted earnings per share	27,003,833	26,472,162	26,952,296	26,439,870
Anti-dilutive shares outstanding at period-end excluded from the above reconciliation.	4,146,782	4,548,565	4,148,613	4,443,933
Weighted average shares of non-vested restricted stock excluded from basic earnings per share	226,900	234,370	232,884	236,616

XML

Accumulated Other Comprehensive Income/(Loss) (Components of AOCI) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Fair value of interest rate swaps	$ (2,536)
Qualified pension and other post-employment benefit plans	256,651
Total accumulated other comprehensive income/(loss), net of taxes	$ 254,115	$ (318,623)

XML

Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2015
Income Tax Contingency [Line Items]
Income tax expense (benefit)	$ (658)	$ (11,249)	$ (581)	$ (28,053)
Effective tax rate	(1.20%)	22.90%	(1.20%)	23.20%
NOL carryforwards	$ 258,900		$ 258,900
State NOL deferred tax asset	13,500		13,500
State tax credit carryover	$ 4,900		$ 4,900
Scenario, Forecast
Income Tax Contingency [Line Items]
Effective tax rate					(1.20%)
Federal statutory rate					35.00%
Accumulated other comprehensive income/(loss)
Income Tax Contingency [Line Items]
Effective tax rate	0.00%		0.00%
Employee Benefit Plan | Scenario, Forecast
Income Tax Contingency [Line Items]
Reduction of deferred tax asset					$ 270,000
Reduction in valuation allowance against deferred tax assets					$ 229,000
Minimum
Income Tax Contingency [Line Items]
Expiration period of NOL carryforwards			Dec. 31, 2019
Maximum
Income Tax Contingency [Line Items]
Expiration period of NOL carryforwards			Dec. 31, 2035

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Interest Rate Swap Agreements (Tables)

9 Months Ended

Sep. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The effect of the Company’s interest rate swap agreements on the condensed consolidated balance sheets at September 30, 2015 and December 31, 2014 is shown below (in thousands):

	As of September 30, 2015
Derivatives designated as hedging instruments:	Balance Sheet Location	Fair Value
Interest rate swaps, Current	Other accrued liabilities	$	2,384
Interest rate swaps, Long-term	Other long-term liabilities	$	1,861
	As of December 31, 2014
Derivatives designated as hedging instruments:	Balance Sheet Location	Fair Value
Interest rate swaps	Other long-term liabilities	$	2,742

Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss)

The gross effect of the Company’s interest rate swap agreements on the condensed consolidated statements of comprehensive income/(loss) for the three and nine months ended September 30, 2015 and 2014 is shown below (in thousands):

	Amount of Loss/(Gain) Recognized in Other Comprehensive Income/(Loss) on Derivative (Effective Portion) (Pre-Tax)
	Three Months ended September 30, 2015		Three Months ended September 30, 2014			Nine Months ended September 30, 2015		Nine Months ended September 30, 2014
Interest rate swaps	$	460	$	(260	)	$	1,503	$	1,141

XML

Commitments and Contingencies (Details) $ in Millions		9 Months Ended
	Oct. 30, 2015 USD ($) Plaintiff	Sep. 30, 2015 USD ($) Plaintiff Lawsuit	Dec. 31, 2014 USD ($)
Long-term Purchase Commitment [Line Items]
Restricted cash | $		$ 0.7	$ 0.7
Subsequent Event
Long-term Purchase Commitment [Line Items]
Bankruptcy claims pending litigation	1
Claims disallowed and appealed by claimant | $	$ 0.2
IntraMTA
Long-term Purchase Commitment [Line Items]
Number of plantiffs		2
Pending Litigation
Long-term Purchase Commitment [Line Items]
Number of pending claims | Lawsuit		16
Pending Litigation | IntraMTA
Long-term Purchase Commitment [Line Items]
Number of pending claims | Lawsuit		60

XML

Employee Benefit Plans (Defined Benefit Plan) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Amounts recognized in accumulated other comprehensive income/(loss):
Net amount recognized in accumulated other comprehensive income/(loss)	$ 256,651		$ 256,651
Qualified Pension Plans
Value of plan assets:
Beginning fair value of plan assets			195,410
Expected return on plan assets			14,445
Plan settlements			(6,416)
Employer contributions			8,780
Benefits paid			(7,702)
Ending value of plan assets	204,517		204,517
Projected benefit obligation:
Beginning projected benefit obligation			408,216
Service cost	1,653	$ 3,514	6,822	$ 11,664
Interest cost	3,702	3,862	11,146	11,788
Plan amendment			(40,049)
Plan settlements			(21,847)
Benefits paid			(7,702)
Actuarial gain			(4,768)
Ending projected benefit obligation	349,392		349,392
Funded status	(144,875)		(144,875)
Accumulated benefit obligation	349,392		349,392
Amounts recognized in the consolidated balance sheet:
Long-term liabilities	(144,875)		(144,875)
Amounts recognized in accumulated other comprehensive income/(loss):
Prior service credit	33,772		33,772
Net actuarial loss	(98,106)		(98,106)
Net amount recognized in accumulated other comprehensive income/(loss)	(64,334)		(64,334)
Post-retirement Healthcare Plans
Value of plan assets:
Beginning fair value of plan assets			0
Employer contributions			4,092
Benefits paid			(4,092)
Ending value of plan assets	0		0
Projected benefit obligation:
Beginning projected benefit obligation			741,372
Service cost	62	6,279	4,479	18,968
Interest cost	1,005	$ 7,897	6,683	$ 22,520
Plan amendment			(609,619)
Plan curtailment			(5,409)
Benefits paid			(4,092)
Actuarial gain			(27,075)
Ending projected benefit obligation	106,339		106,339
Funded status	(106,339)		(106,339)
Amounts recognized in the consolidated balance sheet:
Current liabilities	(5,166)		(5,166)
Long-term liabilities	(101,173)		(101,173)
Net amount recognized in long-term liabilities in the consolidated balance sheet	106,339		106,339
Amounts recognized in accumulated other comprehensive income/(loss):
Prior service credit	439,872		439,872
Net actuarial loss	(140,607)		(140,607)
Net amount recognized in accumulated other comprehensive income/(loss)	$ 299,265		$ 299,265

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Long-Term Debt (Narrative) (Details)		2 Months Ended
	Feb. 14, 2013 USD ($) covenants	Feb. 14, 2013 USD ($) covenants	Sep. 30, 2015 USD ($)	Dec. 31, 2014 USD ($)	Feb. 15, 2013
Long Term Debt [Abstract]
Remaining borrowing capacity			$ 58,800,000
Letter of credit outstanding			16,200,000
Refinancing [Abstract]
Long-term debt			$ 907,034,000	$ 908,641,000
Repayments of debt		$ 946,500,000
Interest paid		7,700,000
Payments of debt issuance costs		32,600,000
Senior Secured Notes due 2019
Refinancing [Abstract]
Debt instrument face amount	$ 300,000,000.0	$ 300,000,000.0
Stated interest rate	8.75%	8.75%	8.75%
Revolving Credit Facility | Letter of Credit
Refinancing [Abstract]
Line of of credit facility oustanding	$ 40,000,000.0	$ 40,000,000.0
Revolving Credit Facility | Line of Credit
Refinancing [Abstract]
Line of of credit facility oustanding	75,000,000.0	75,000,000.0
Term Loan, due 2019 | Notes Payable to Banks
Refinancing [Abstract]
Long-term debt	640,000,000.0	640,000,000.0
Proceeds from line of credit	640,000,000
Maximum borrowing capacity	200,000,000.0	200,000,000.0
Senior Secured Notes Due 2019 | Senior Secured Notes due 2019
Refinancing [Abstract]
Debt instrument face amount	$ 300,000,000.0	$ 300,000,000.0
Stated interest rate	8.75%	8.75%	8.75%
Maximum | Revolving Credit Facility | Line of Credit
Refinancing [Abstract]
Stated interest rate	5.50%	5.50%
Maximum | Term Loan, due 2019 | Notes Payable to Banks
Refinancing [Abstract]
Stated interest rate	6.25%	6.25%
Minimum | Revolving Credit Facility | Line of Credit
Refinancing [Abstract]
Stated interest rate	4.50%	4.50%
Fronting fee percent	0.125%	0.125%
Minimum | Term Loan, due 2019 | Notes Payable to Banks
Refinancing [Abstract]
Stated interest rate	5.25%	5.25%
Federal Funds Effective Rate
Refinancing [Abstract]
Point in addition to base interest rate under condition	0.50%
LIBOR
Refinancing [Abstract]
Point in addition to base interest rate under condition	1.00%
LIBOR | Senior Secured Notes Due 2019 | Term Loan, due 2019
Refinancing [Abstract]
Point in addition to base interest rate under condition	1.25%
Commitment Fee, Period One | Revolving Credit Facility | Line of Credit
Refinancing [Abstract]
Percentage commitment fee on average daily unused portion of exit revolving facility	0.50%
Commitment Fee, Period Two | Revolving Credit Facility | Line of Credit
Refinancing [Abstract]
Percentage commitment fee on average daily unused portion of exit revolving facility	0.375%
Mandatory Repayments, Period One | Senior Secured Notes Due 2019 | Term Loan, due 2019 | Notes Payable to Banks
Refinancing [Abstract]
Mandatory repayments as a percent of excess cash flow	50.00%	50.00%
Mandatory Repayments, Subsequent Periods | Senior Secured Notes Due 2019 | Term Loan, due 2019 | Notes Payable to Banks
Refinancing [Abstract]
Mandatory repayments as a percent of excess cash flow	25.00%	25.00%
Redemption prior to February 15, 2016 | Senior Secured Notes Due 2019 | Senior Secured Notes due 2019
Refinancing [Abstract]
Redemption price percent	108.75%
Default redemption, percent of principal					100.00%
Maximum principal redemption percent					35.00%
Redemption on or after February 15, 2016 and prior to February 15, 2017 | Senior Secured Notes Due 2019 | Senior Secured Notes due 2019
Refinancing [Abstract]
Redemption price percent	104.375%
Redemption on or prior to February 14, 2016 | Senior Secured Notes Due 2019 | Term Loan, due 2019 | Notes Payable to Banks
Refinancing [Abstract]
Periodic principal payment	$ 1,600,000
Redemption price percent	101.00%
Redemption on or after February 15, 2017 and prior to February 15, 2018 | Senior Secured Notes Due 2019 | Senior Secured Notes due 2019
Refinancing [Abstract]
Redemption price percent	102.188%
Consolidated Total Leverage Ratio Covenant | Revolving Credit Facility | Line of Credit
Refinancing [Abstract]
Number of restrictive covenants | covenants	2	2

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Accumulated Other Comprehensive Income/(Loss) (Other - Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
ReclassificationAdjustmentOutOfAccumulatedOtherComprehensiveIncome [Line Items]
Total employee benefit amounts reclassified from accumulated other comprehensive income/(loss), net	$ (41,698)	$ 1,752	$ 573,635	$ 3,500
Minimum
ReclassificationAdjustmentOutOfAccumulatedOtherComprehensiveIncome [Line Items]
Remaining unrecognized loss to be amortized, amortization period			1 year 6 months
Remaining net prior service credit to be amortized, amortization period			1 year 8 months 19 days
Maximum
ReclassificationAdjustmentOutOfAccumulatedOtherComprehensiveIncome [Line Items]
Remaining unrecognized loss to be amortized, amortization period			12 years 1 month 6 days
Remaining net prior service credit to be amortized, amortization period			24 years 10 months 24 days
Reclassification out of Accumulated Other Comprehensive Income
ReclassificationAdjustmentOutOfAccumulatedOtherComprehensiveIncome [Line Items]
Amortization of actuarial loss	34,345		$ 85,960
Amortization of prior service credit	(90,413)		(217,146)
Plan settlement	16,151		16,149
Plan curtailment	(1,781)		(1,781)
Total employee benefit amounts reclassified from accumulated other comprehensive income/(loss)	(41,698)		(116,818)
Tax benefit	0		0
Total employee benefit amounts reclassified from accumulated other comprehensive income/(loss), net	$ 41,698		$ 116,818

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Organization and Principles of Consolidation

9 Months Ended

Sep. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Principles of Consolidation

Organization and Principles of Consolidation

Organization

FairPoint is a leading provider of advanced communications services to business, wholesale and residential customers within its service territories. FairPoint offers its customers a suite of advanced data services such as Ethernet, high capacity data transport and other IP-based services over an extensive fiber network with more than 20,000 miles of fiber optic cable, including approximately 17,000 miles of fiber optic cable in Maine, New Hampshire and Vermont, in addition to Internet access, high-speed data ("HSD") and local and long distance voice services. As of September 30, 2015, FairPoint's service territory spanned 17 states where it is the incumbent communications provider, primarily serving rural communities and small urban markets. Many of its local exchange carriers ("LECs") have served their respective communities for more than 80 years. As of September 30, 2015, the Company operated with approximately 314,000 broadband subscribers, approximately 14,000 Ethernet circuits and approximately 424,000 residential voice lines.

Principles of Consolidation

The condensed 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 the Company demonstrates significant influence, but does not have a controlling financial interest. Intercompany accounts and transactions have been eliminated upon consolidation.

Reorganization

On October 26, 2009, the Company and substantially all of its direct and indirect subsidiaries filed voluntary petitions for relief under Chapter 11 of Title 11 ("Chapter 11") of the United States Code. These cases were jointly administered under the caption In re FairPoint Communications, Inc. (collectively, the "Chapter 11 Cases") in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"). On January 24, 2011 (the "Effective Date"), the Company substantially consummated its reorganization through a series of transactions contemplated by its Third Amended Joint Plan of Reorganization Under Chapter 11 of the United States Code (as confirmed by the Bankruptcy Court, the "Plan").

XML

Employee Benefit Plans (Net Periodic Benefit Cost) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Schedule of net periodic benefit cost related to pension and post-retirement healthcare
Other post-employment benefit and pension expense	$ (57,568)	$ 19,832	$ (116,926)	$ 56,317
Qualified Pension Plans
Schedule of net periodic benefit cost related to pension and post-retirement healthcare
Service cost	1,653	3,514	6,822	11,664
Interest cost	3,702	3,862	11,146	11,788
Expected return on plan assets	(3,688)	(3,368)	(10,911)	(10,179)
Amortization of actuarial loss	1,570	556	5,311	1,634
Amortization of prior service cost	(863)	0	(2,070)	0
Plan curtailment	(4,207)	0	(4,207)	0
Plan settlement	110	650	717	650
Net periodic benefit cost	(1,723)	5,214	6,808	15,557
Less capitalized portion	(137)	(322)	(469)	(1,112)
Other post-employment benefit and pension expense	(1,860)	4,892	6,339	14,445
Post-retirement Healthcare Plans
Schedule of net periodic benefit cost related to pension and post-retirement healthcare
Service cost	62	6,279	4,479	18,968
Interest cost	1,005	7,897	6,683	22,520
Expected return on plan assets	0	0	0	0
Amortization of actuarial loss	32,775	1,729	80,649	3,576
Amortization of prior service cost	(89,550)	0	(215,076)	0
Plan curtailment	0	0	0	0
Plan settlement	0	0	0	0
Net periodic benefit cost	(55,708)	15,905	(123,265)	45,064
Less capitalized portion	0	(965)	0	(3,192)
Other post-employment benefit and pension expense	$ (55,708)	$ 14,940	$ (123,265)	$ 41,872

XML

Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Schedule of Weighted Average Number of Shares

The following table provides a reconciliation of the common shares used for basic earnings per share and diluted earnings per share:

	Three Months ended September 30,		Nine Months ended September 30,
	2015	2014	2015	2014
Weighted average number of common shares used for basic earnings per share	26,676,385	26,472,162	26,640,103	26,439,870
Effect of potential dilutive shares	327,448	—	312,193	—
Weighted average number of common shares and potential dilutive shares used for diluted earnings per share	27,003,833	26,472,162	26,952,296	26,439,870
Weighted average number of anti-dilutive shares outstanding at period-end that are excluded from the above reconciliation	4,146,782	4,548,565	4,148,613	4,443,933

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Accumulated Other Comprehensive Income/(Loss) (Tables)

9 Months Ended

Sep. 30, 2015

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

Components of accumulated other comprehensive income/(loss), net of income tax, were as follows (in thousands):

	September 30, 2015
Accumulated other comprehensive income/(loss), net of taxes:
Fair value of interest rate swaps	$	(2,536	)
Qualified pension and other post-employment benefit plans	256,651
Total accumulated other comprehensive income/(loss), net of taxes	$	254,115

Reclassification out of Accumulated Other Comprehensive Income

The following table provides a reconciliation of adjustments reclassified from accumulated other comprehensive income/(loss) to the condensed consolidated statement of operations (in thousands):

	Three Months ended September 30, 2015			Nine Months ended September 30, 2015
Employee benefits:
Amortization of actuarial loss (1.5 years to 12.1 years) (a)	$	34,345		$	85,960
Amortization of net prior service credit (1.72 years to 24.9 years) (a)	(90,413		)	(217,146		)
Plan settlement (a)	16,151			16,149
Plan curtailment (a)	(1,781		)	(1,781		)
Total employee benefit amounts reclassified from accumulated other comprehensive income/(loss)	(41,698		)	(116,818		)
Tax benefit (b)	—			—
Total employee benefit amounts reclassified from accumulated other comprehensive income/(loss), net	$	(41,698	)	$	(116,818	)

(a) These accumulated other comprehensive income/(loss) components are included in the computation of net periodic benefit cost. See note (9) "Employee Benefit Plans" for details.

(b) See note (5) "Income Taxes" for details.

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Employee Benefit Plans (Defined Benefit Plan - AOCI) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015
Qualified Pension Plans
Amounts recognized in accumulated other comprehensive income/(loss):
Prior service credit	$ 0	$ 40,049
Net gain arising during the period	0	8,302
Amortization of prior service credit	(863)	(2,070)
Amortization of net actuarial loss	1,570	5,311
Plan curtailment	(1,781)	(1,781)
Plan settlement	16,151	16,149
Total amount recognized in other comprehensive income/(loss)	15,077	65,960
Estimated amounts that will be amortized from accumulated other comprehensive income/(loss) in the next three months:
Prior service credit	(863)
Net actuarial loss	1,407
Total amount estimated to be amortized from accumulated other comprehensive income/(loss) in the next three months	544
Post-retirement Healthcare Plans
Amounts recognized in accumulated other comprehensive income/(loss):
Prior service credit	0	619,454
Prior service cost	0	(9,835)
Net gain arising during the period	0	27,075
Amortization of prior service credit	(89,550)	(215,076)
Amortization of net actuarial loss	32,775	80,649
Plan curtailment	0	5,409
Total amount recognized in other comprehensive income/(loss)	(56,775)	$ 507,676
Estimated amounts that will be amortized from accumulated other comprehensive income/(loss) in the next three months:
Prior service credit	(89,550)
Net actuarial loss	32,775
Total amount estimated to be amortized from accumulated other comprehensive income/(loss) in the next three months	$ (56,775)

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Organization and Principles of Consolidation (Details) subscriptions in Thousands, mi in Thousands	Sep. 30, 2015 subscriptions States mi
Product Information [Line Items]
Number of operating states | States	17
Communication Services
Product Information [Line Items]
Number of route miles in fiber network, more than | mi	20
Number of data subscribers	314
Communication Services | Maine, New Hampshire and Vermont
Product Information [Line Items]
Number of route miles in fiber network, more than | mi	17
Ethernet Circuits
Product Information [Line Items]
Number of data subscribers	14
Residential Voice Lines
Product Information [Line Items]
Number of data subscribers	424,000

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Accounting Policies (Details) $ in Millions	9 Months Ended
	Sep. 30, 2015 USD ($) segment States	Dec. 31, 2014 USD ($)
Revenues from External Customers and Long-Lived Assets [Line Items]
Current customer deposits	$ 2.2	$ 2.4
Estimated fair value exceeded the carrying value, percent		4.00%
Number of operating segments | segment	1
Number of operating states | States	17
Other Accrued Liabilities
Revenues from External Customers and Long-Lived Assets [Line Items]
Deferred revenue	$ 21.5	$ 19.0
Other Long Term Liabilities
Revenues from External Customers and Long-Lived Assets [Line Items]
Non-current deferred revenue	$ 7.6	$ 9.3

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net income/(loss)	$ 48,106	$ (92,695)
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
Deferred income taxes	(1,603)	(28,907)
Provision for uncollectible revenue	5,606	6,840
Depreciation and amortization	167,420	165,769
Other post-employment benefits	(127,356)	38,348
Qualified pension	(2,001)	(6,447)
Stock-based compensation	5,306	3,527
Other non-cash items	3,114	1,091
Changes in assets and liabilities arising from operations:
Accounts receivable	1,415	5,141
Prepaid and other assets	(2,354)	2,694
Restricted cash	0	463
Accounts payable and accrued liabilities	(27,139)	(6,660)
Accrued interest payable	(6,557)	(6,561)
Other assets and liabilities, net	3,535	(3,567)
Total adjustments	19,386	171,731
Net cash provided by operating activities	67,492	79,036
Cash flows from investing activities:
Net capital additions	(82,921)	(91,775)
Distributions from investments and proceeds from the sale of property and equipment	230	1,101
Net cash used in investing activities	(82,691)	(90,674)
Cash flows from financing activities:
Repayments of long-term debt	(4,800)	(4,800)
Proceeds from exercise of stock options	13	32
Repayment of capital lease obligations	(568)	(1,067)
Net cash used in financing activities	(5,355)	(5,835)
Net change	(20,554)	(17,473)
Cash, beginning of period	37,587	42,700
Cash, end of period	17,033	25,227
Supplemental disclosure of cash flow information:
Capital additions included in accounts payable	7,848	7,015
Acquisition of property and equipment by capital lease	$ 1,030	$ 1,135

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Recent Accounting Pronouncements (Details) $ in Millions	Dec. 31, 2014 USD ($)
Adjustments for New Accounting Principle, Early Adoption
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Reclassification of debt issue costs, to long-term debt	$ 5.9

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Fair Value (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014	Feb. 14, 2013
Term Loan, due 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unamortized discount	$ (11,932,000)	$ (14,210,000)
Senior Secured Notes due 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Stated interest rate	8.75%		8.75%
Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt	$ 912,068,000	914,590,000
Carrying Amount | Term Loan, due 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt	612,068,000	614,590,000
Carrying Amount | Senior Secured Notes due 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt	300,000,000	300,000,000
Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt	933,000,000	921,258,000
Fair Value | Term Loan, due 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt	624,000,000	619,368,000
Fair Value | Senior Secured Notes due 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt	309,000,000	301,890,000
Current | Interest rate swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swaps, Current	2,384,000
Current | Interest rate swaps | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swaps, Current	0
Current | Interest rate swaps | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swaps, Current	0
Long-term | Interest rate swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swaps, Long-term	1,861,000	2,742,000
Long-term | Interest rate swaps | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swaps, Long-term	0	0
Long-term | Interest rate swaps | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swaps, Long-term	$ 0	$ 0

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Assets:
Cash	$ 17,033	$ 37,587
Accounts receivable (net of $9.7 million and $9.9 million allowance for doubtful accounts, respectively)	64,525	71,545
Prepaid expenses	27,807	25,360
Other current assets	5,311	5,406
Deferred income tax, net	14,633	7,638
Total current assets	129,309	147,536
Property, plant and equipment (net of $1,229.9 million and $1,085.4 million accumulated depreciation, respectively)	1,138,549	1,213,729
Intangible assets (net of $52.0 million and $43.7 million accumulated amortization, respectively)	86,629	94,879
Restricted cash	651	651
Other assets	3,013	3,214
Total assets	1,358,151	1,460,009
Liabilities and Stockholders’ Equity/(Deficit):
Current portion of long-term debt	6,400	6,400
Current portion of capital lease obligations	838	627
Accounts payable	29,983	62,985
Claims payable and estimated claims accrual	216	216
Accrued interest payable	3,421	9,978
Accrued payroll and related expenses	28,874	25,218
Other accrued liabilities	51,353	47,147
Total current liabilities	121,085	152,571
Capital lease obligations	1,214	962
Accrued pension obligations	144,875	212,806
Accrued other post-employment benefit obligations	101,173	735,351
Deferred income taxes	40,026	35,231
Other long-term liabilities	23,741	21,131
Long-term debt, net of current portion	900,634	902,241
Total long-term liabilities	1,211,663	1,907,722
Total liabilities	$ 1,332,748	$ 2,060,293
Commitments and contingencies (See Note 13)
Stockholders’ equity/(deficit):
Common stock, $0.01 par value, 37,500,000 shares authorized, 26,905,398 and 26,710,569 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively	$ 269	$ 267
Additional paid-in capital	520,921	516,080
Retained deficit	(749,902)	(798,008)
Accumulated other comprehensive income/(loss)	254,115	(318,623)
Total stockholders’ equity/(deficit)	25,403	(600,284)
Total liabilities and stockholders’ equity/(deficit)	$ 1,358,151	$ 1,460,009

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Employee Benefit Plans (Defined Benefit Plan - Weighted Average Assumptions Used in Calculating Benefit Obligation) (Details)	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2015
Qualified Pension Plans
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract]
Discount rate		4.34%
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
Discount rate	4.92%	4.34%
Expected return on plan assets	7.66%	7.31%
Post-retirement Healthcare Plans
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract]
Discount rate		3.77%
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
Discount rate	4.98%	3.29%

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Condensed Consolidated Statements of Comprehensive Income/(Loss) (Unaudited) (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Statement of Comprehensive Income [Abstract]
Tax expense on interest rate swaps	$ 0.2	$ (0.1)	$ 0.6	$ 0.5
Tax expense on qualified pension and post-retirement healthcare plans	$ 0.0	$ 1.2	$ 0.0	$ 2.4

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Long-Term Debt (Schedule of Long-term Debt) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014	Feb. 14, 2013
Long term debt for the Company
Debt issuance costs	$ (5,034)	$ (5,949)
Total long-term debt	907,034	908,641
Less: current portion	(6,400)	(6,400)
Total long-term debt, net of current portion	900,634	902,241
Term Loan, due 2019
Long term debt for the Company
Term Loan, due 2019 (weighted average rate of 7.50%)	624,000	628,800
Discount on Term Loan	$ (11,932)	(14,210)
Weighted average interest rate	7.50%
Senior Secured Notes due 2019
Long term debt for the Company
Notes, 8.75%, due 2019	$ 300,000	$ 300,000
Stated interest rate	8.75%		8.75%

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Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The condensed 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 the Company demonstrates significant influence, but does not have a controlling financial interest. Intercompany accounts and transactions have been eliminated upon consolidation.

Presentation and use of estimates

Presentation and Use of Estimates

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, which require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of results of operations and financial condition for the interim periods shown, including normal recurring accruals and other items.

Examples of significant estimates include the allowance for doubtful accounts, revenue reserves, the depreciation of property, plant and equipment, valuation of intangible assets, qualified pension and other post-employment benefit plan assumptions, stock-based compensation and income taxes.

Revenue Recognition

Revenue Recognition

Revenues are recognized as services are rendered and are primarily derived from the usage of the Company's networks and facilities or under wholesale arrangements with other communications carriers. Revenues are primarily derived from: voice services, access (including pooling), certain CAF receipts, Internet and broadband services and other miscellaneous services. Local access charges are billed to local end users under tariffs approved by each state's Public Utilities Commission ("PUC") or by rates, terms and conditions determined by the Company. Access revenues are derived for the intrastate jurisdiction by billing access charges to interexchange carriers, wireless carriers and to other LECs. These charges are billed based on toll or access tariffs approved by the local state's PUC. Access charges for the interstate jurisdiction are billed in accordance with tariffs filed by the National Exchange Carrier Association ("NECA") or by the individual company and approved by the Federal Communications Commission (the "FCC").

Revenues are determined on a bill-and-keep basis or a pooling basis. If on a bill-and-keep basis, the Company bills the charges to either the wholesale provider or the end user and keeps the revenue. If the Company participates in a pooling environment (interstate or intrastate), the toll or access billed is contributed to a revenue pool. The revenue is then distributed to individual companies based on their company-specific revenue requirement or similar distribution methods. This distribution is based on individual state PUC's (intrastate) or the FCC's (interstate) approved settlement mechanisms, separation rules and rates of return. Distribution from these pools can change relative to changes made to expenses, plant investment or rate-of-return. Some companies participate in federal and certain state universal service programs that are pooling in nature but are regulated by rules separate from those described above. These rules vary by state. Revenues earned through the various pooling arrangements are initially recorded based on the Company's estimates. Rule changes associated with the FCC's CAF/ICC Order (as defined hereinafter) impact the NECA interstate pooling, in that a portion of the Company's interstate Universal Service Fund ("USF") revenues, which are administered through the NECA pools and which prior to January 1, 2012 were based on costs, are now based on rules from the FCC's CAF/ICC Order, including CAF Phase II support where FairPoint accepted CAF Phase II support, continued CAF Phase I frozen support where FairPoint did not accept CAF Phase II support and CAF/ICC rules in states where FairPoint is eligible for such support under the ICC Transition Rules for price cap and rate-of-return carriers. FairPoint accepted CAF Phase II support in all states except Kansas and Colorado.

Long distance switched retail and wholesale services can be recurring due to coverage under an unlimited calling plan or be usage sensitive. In either case, they are billed in arrears and recognized when earned. Internet and data services revenues are substantially all recurring revenues and are billed one month in advance and deferred until earned.

As of September 30, 2015 and December 31, 2014, unearned revenue of $21.5 million and $19.0 million, respectively, was included in other accrued liabilities and unearned revenue of $7.6 million and $9.3 million, respectively, was included in other long-term liabilities on the condensed consolidated balance sheets.

The majority of the Company's other miscellaneous services revenue is generated from ancillary special projects at the request of third parties, video services, directory services and late payment charges to end users and wholesale carriers. The Company requires customers to pay for ancillary special projects in advance. As of September 30, 2015 and December 31, 2014, customer deposits of $2.2 million and $2.4 million, respectively, were included in other accrued liabilities on the condensed consolidated balance sheets. Once the ancillary special project is completed or substantially complete and all project costs have been accumulated for proper accounting recognition, the advance payment is recognized as revenue with any overpayments refunded to the customer, as appropriate. The Company recognizes revenue upon the provision of video services in certain markets by reselling DirecTV and providing cable and IP television video-over-digital subscriber line services. The Company also publishes telephone directories in some of its Telecom Group markets and recognizes revenues associated with these publications evenly over the time period covered by the directory, which is typically twelve months. The Company bills late payment fees to customers who have not paid their bills in a timely manner. In general, late payment fee revenue is recognized based on collection of these charges.

Non-recurring customer activation fees, along with the related costs up to, but not exceeding, the activation fees, are deferred and amortized over the customer relationship period.

On June 26, 2014, the Maine PUC ("MPUC") adopted a final rule (Chapter 201), establishing new provider of last resort ("POLR") service quality index ("SQI") standards and reporting requirements which began August 1, 2014. Under Chapter 201, the MPUC may open an investigation into the failure to meet any of the established standards and has the authority to impose penalties of up to $500,000 per standard. On January 13, 2015, the MPUC issued a Notice of Investigation to review the Company's service quality in Maine. In addition, the Vermont Public Service Board opened an investigation into service quality on December 3, 2014 at the request of the Vermont Department of Public Service. Penalties, if any, would be recorded as a reduction to revenue.

The Company also adopted a separate performance assurance plan ("PAP") for certain services provided on a wholesale basis to competitive local exchange carriers ("CLECs") in each of the states of Maine, New Hampshire and Vermont. Pursuant to the PAPs, FairPoint was required to provide service credits in the event the Company was unable to meet the provisions of the respective PAP. Effective June 1, 2015, the PAP was retired and the Company began measuring and reporting certain wholesale local service performance results pursuant to the terms of a simplified measurement plan. The new plan, called the Wholesale Performance Plan ("WPP"), was developed collaboratively with CLECs over several years and was approved by the Maine, New Hampshire and Vermont regulatory commissions. Under the WPP, the Company is subject to significantly fewer performance criteria and its annual service credit exposure was reduced.

Revenue is recognized net of tax collected from customers and remitted to governmental authorities.

Customer arrangements that include both equipment and services are evaluated to determine whether the elements are separable. If the elements are deemed separable and separate earnings processes exist, the revenue associated with each element is allocated to each element based on the relative estimated selling price of the separate elements. The Company has estimated the selling prices of each element by reference to vendor-specific objective evidence of selling prices when the elements are sold separately. The revenue associated with each element is then recognized as earned.

Management makes estimated adjustments, as necessary, to revenue and accounts receivable for billing errors, including certain disputed amounts.

Impairment of Indefinite-lived Intangible Asset

Impairment of Indefinite-lived Intangible Asset

In accordance with the Intangibles-Goodwill and Other Topic of the Accounting Standards Codification ("ASC"), non-amortizable intangible assets are assessed for impairment at least annually. The Company performs its annual impairment test as of the first day of the fourth fiscal quarter of each year and assesses the fair value of the trade name based on the relief from royalty method. If the carrying amount of the trade name exceeds its estimated fair value, the asset is considered impaired.

For its non-amortizable intangible asset impairment assessment of the FairPoint trade name, the Company makes certain assumptions including an estimated royalty rate, a long-term growth rate, an effective tax rate and a discount rate and applies these assumptions to projected future cash flows, exclusive of cash flows associated with wholesale revenues and other revenues not generated through brand recognition. As of October 1, 2014, the estimated fair value exceeded the carrying value in the Company's quantitative analysis; therefore, an impairment was not necessary. The Company performed another quantitative analysis as of December 31, 2014 and the estimated fair value exceeded the carrying value by approximately 4%; therefore, an impairment was not necessary. However, future changes in one or more of the assumptions discussed above may result in the recognition of an impairment loss.

Accounting for Income Taxes

Accounting for Income Taxes

In accordance with the Income Taxes Topic of the ASC, income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management determines its estimates of future taxable income based upon the scheduled reversal of deferred tax liabilities and tax planning strategies. The Company establishes valuation allowances for deferred tax assets when it is estimated to be more likely than not that the tax assets will not be realized.

FairPoint Communications files a consolidated income tax return with its subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation.

Operating Segments

Operating Segments

Management views its business of providing data, video and voice communication services to residential, wholesale and business customers as one operating segment as defined in the Segment Reporting Topic of the ASC. The Company's services consist of retail and wholesale telecommunications and data services, including voice and HSD in 17 states. The Company's chief operating decision maker assesses operating performance and allocates resources based on the consolidated results.

Interest Rate Swap Agreements

Interest Rate Swap Agreements

In the third quarter of 2013, the Company entered into interest rate swap agreements. For further information regarding these interest rate swap agreements, see note (7) "Interest Rate Swap Agreements." The interest rate swap agreements, at their inception, qualified for and were designated as cash flow hedging instruments. In accordance with the Derivatives and Hedging Topic of the ASC, the Company records its interest rate swaps on the consolidated balance sheets at fair value. The effective portion of changes in fair value are recorded in accumulated other comprehensive income/(loss) and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Any ineffective portion is recognized in earnings. Both at inception and on a quarterly basis, the Company performs an effectiveness test.

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Long-Term Debt (Maturities of Long-term Debt) (Details) $ in Thousands	Sep. 30, 2015 USD ($)
Approximate Aggregate Maturities of Long-term Debt
2016	$ 6,400
2017	6,400
2018	6,400
2019	904,800
Total long-term debt, including current portion	$ 924,000

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2015

Debt Disclosure [Abstract]

Schedule of Long-term Debt Balances

Long-term debt for the Company at September 30, 2015 and December 31, 2014 is shown below (in thousands):

	September 30, 2015			December 31, 2014
Term Loan, due 2019 (weighted average rate of 7.50%)	$	624,000		$	628,800
Discount on Term Loan (a)	(11,932		)	(14,210		)
Debt issuance costs	(5,034		)	(5,949		)
Notes, 8.75%, due 2019	300,000			300,000
Total long-term debt	907,034			908,641
Less: current portion	(6,400		)	(6,400		)
Total long-term debt, net of current portion	$	900,634		$	902,241

(a) The $11.9 million and $14.2 million discount on the Term Loan (as defined below) as of September 30, 2015 and December 31, 2014, respectively, is being amortized using the effective interest method over the life of the Term Loan.

Schedule of Maturities of Long-term Debt

The approximate aggregate maturities of long-term debt, excluding the debt discount on the Term Loan (as defined below), for each of the four years subsequent to September 30, 2015 are as follows (in thousands):

Trailing twelve months ending September 30,	Balance Due
2016	$	6,400
2017	6,400
2018	6,400
2019	904,800
Total long-term debt, including current portion	$	924,000

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Condensed Consolidated Statement of Stockholders' Equity/(Deficit) (Unaudited) - 9 months ended Sep. 30, 2015 - USD ($) $ in Thousands	Total	Common Stock	Additional paid-in capital	Retained deficit	Accumulated other comprehensive income/(loss)
Beginning Balance, Shares at Dec. 31, 2014	26,710,569	26,711,000
Beginning Balance at Dec. 31, 2014	$ (600,284)	$ 267	$ 516,080	$ (798,008)	$ (318,623)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income/(loss)	48,106			48,106
Stock-based compensation issued, net, Shares		194,000
Stock-based compensation issued, net	(463)	$ 2	(465)
Stock-based compensation expense	5,306		5,306
Interest rate swaps other comprehensive loss	(897)				(897)
Employee benefit other comprehensive income before reclassifications	690,453				690,453
Employee benefit amounts reclassified from accumulated other comprehensive income	$ (116,818)				(116,818)
Ending Balance, Shares at Sep. 30, 2015	26,905,398	26,905,000
Ending Balance at Sep. 30, 2015	$ 25,403	$ 269	$ 520,921	$ (749,902)	$ 254,115

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 9.7	$ 9.9
Property, plant and equipment, accumulated depreciation	1,229.9	1,085.4
Intangible assets, accumulated amortization	$ 52.0	$ 43.7
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	37,500,000	37,500,000
Common stock, shares issued	26,905,398	26,710,569
Common stock, shares outstanding	26,905,398	26,710,569

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Employee Benefit Plans

9 Months Ended

Sep. 30, 2015

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

Employee Benefit Plans

The Company sponsors noncontributory qualified defined benefit pension plans ("qualified pension plans") and other post-employment benefit plans which provide certain cash payments and medical, dental and life insurance benefits to eligible retired employees and their beneficiaries and covered dependents. The qualified pension plans and certain post-employment benefit plans were created as part of the acquisition of the Northern New England operations from Verizon and substantially replicated the prior Verizon plans available to the eligible employees in the acquired operations.

On August 2, 2014, the Company’s collective bargaining agreements with two of its labor unions expired. On August 28, 2014, the Company informed the unions that the parties were at impasse and on that date implemented the terms of its final proposals to the labor unions.

On February 22, 2015, membership of both labor unions ratified their respective collective bargaining agreements that expire in August 2018. As a result, the following changes were effective regarding the qualified pension plan available to represented employees (the "Represented Pension Plan") and the post-employment healthcare plan for represented employees (the "Represented OPEB Plan"):

• The Represented Pension Plan was closed to new participants and benefits under the prior formula were frozen as of October 14, 2014. For existing participants, future benefit accruals for service on and after February 22, 2015 are at 50% of prior rates and are capped at 30 years of total credited service. Pension plan participants on strike received no credited service from October 14, 2014 to February 21, 2015.

• The Represented OPEB Plan for active represented employees was eliminated as of August 28, 2014. A transitional monthly reimbursement arrangement for eligible represented employees who retire no later than August 22, 2017 was established (the "Reimbursement Arrangement"). To be eligible for the Reimbursement Arrangement, the represented employee must, among other criteria, have commenced a service pension under the Represented Pension Plan immediately upon termination of employment. The monthly reimbursement amount cannot exceed $800 per retiree, plus an additional $400 for a retiree’s spouse, and may only be paid for reimbursement of medical insurance premiums for coverage of the retiree and spouse. The Reimbursement Arrangement is only available until the retiree reaches the earlier of age 65, or dies, among other limitations, at which time the benefit will cease for the spouse as well. Approximately 290 active represented employees are expected to be eligible to receive benefits under the Reimbursement Arrangement.

Upon ratification of the collective bargaining agreements on February 22, 2015, a remeasurement of the net obligations of the Represented Pension Plan and the Represented OPEB Plan was required as of that date. Net periodic benefit cost for the period from February 23, 2015 to July 31, 2015 for the Represented Pension Plan was determined using the remeasured obligation as of February 22, 2015 for that plan. As the result of a workforce reduction, a curtailment occurred related to the Represented Pension Plan and a subsequent remeasurement of the net obligation was performed as of July 31, 2015. Accordingly, net periodic benefit cost from August 1, 2015 to September 30, 2015 was determined using the remeasured obligation as of July 31, 2015. Net periodic benefit cost for the period from February 23, 2015 to September 30, 2015 for the Represented OPEB Plan was determined using the remeasured obligation as of February 22, 2015 for that plan. Net periodic benefit cost for the period from January 1, 2015 to February 22, 2015 for these plans was determined using the respective net obligations as reflected in the financial statements as of December 31, 2014.

Represented retirees who were eligible to participate in the Represented OPEB Plan continued to receive benefits under that plan for the duration of 2014. During the fourth quarter of 2014, the Company amended the other post-employment benefit plan for management employees (the "Continuing OPEB Plan") to allow the existing represented retirees to participate in that plan. Effective January 1, 2015, the represented retirees were transferred to the Continuing OPEB Plan and the Represented OPEB Plan was terminated. A proportionate amount of projected benefit obligation of $91.3 million and unrecognized net actuarial loss of $29.5 million, in addition to an unamortized prior service credit of $45.3 million, for these represented retirees were transferred from the Represented OPEB Plan to the Continuing OPEB Plan as of January 1, 2015.

The remeasurement of the Represented OPEB Plan reflected the elimination of post-employment healthcare benefits for active represented employees effective August 28, 2014 and the termination of the plan effective January 1, 2015. The elimination of the post-employment healthcare benefits for active represented employees was accounted for as a negative plan amendment that reduced the projected benefit obligation with a corresponding prior service credit of $619.4 million being recognized in accumulated other comprehensive income. The elimination of future service accruals for active represented employees resulted in a curtailment gain of $5.4 million. The curtailment gain was applied against the unrecognized net actuarial loss in accumulated other comprehensive income. In addition, on February 22, 2015, an obligation of $9.8 million was established for the Reimbursement Arrangement with a corresponding amount of prior service cost in accumulated other comprehensive income. The prior service credit of $619.4 million and the $9.8 million prior service cost related to the Reimbursement Arrangement, which net to $609.6 million, are being amortized over 1.72 years for 2015 expense. The remaining unrecognized net actuarial loss related to the terminated Represented OPEB Plan of $192.2 million is being amortized over 1.50 years for 2015 expense.

The Company recognized a $40.0 million prior service credit for a negative plan amendment at remeasurement of the Represented Pension Plan related to pension bands that were frozen under the terms of the collective bargaining agreements. The prior service credit was recorded in accumulated other comprehensive income and is being amortized over 11.67 years for 2015 expense.

The qualified pension plan which covers non-represented employees was not impacted by these changes and remains frozen. Therefore, no new benefits are being earned by participants and the plan is closed to new participants.

The Company makes contributions to the qualified pension plans to meet minimum funding requirements under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and has the ability to elect to make additional discretionary contributions. The other post-employment benefit plans are unfunded and the Company funds the benefits that are paid. Annually, and as necessary, the Company remeasures the net liabilities of its qualified pension and other post-employment benefit plans in accordance with the Compensation-Retirement Benefits Topic of the ASC.

Plan Assets, Obligations and Funded Status

A summary of plan assets, projected benefit obligation and funded status of the plans are as follows (in thousands):

	Qualified Pension Plans
	Nine Months ended September 30, 2015
Value of plan assets:
Beginning fair value of plan assets	$	195,410
Expected return on plan assets	14,445
Plan settlements	(6,416		)
Employer contributions	8,780
Benefits paid	(7,702		)
Ending value of plan assets	204,517
Projected benefit obligation:
Beginning projected benefit obligation	$	408,216
Service cost	6,822
Interest cost	11,146
Plan amendment	(40,049		)
Plan settlements	(21,847		)
Plan curtailment	(2,426		)
Benefits paid	(7,702		)
Actuarial gain	(4,768		)
Ending projected benefit obligation	349,392
Funded status	$	(144,875	)
Accumulated benefit obligation	$	349,392
Net amount recognized in long-term liabilities in the consolidated balance sheet	$	(144,875	)
Amounts recognized in accumulated other comprehensive income/(loss):
Prior service credit	$	33,772
Net actuarial loss	(98,106		)
Net amount recognized in accumulated other comprehensive income/(loss)	$	(64,334	)

	Other Post-employment Benefit Plans
	Nine Months ended September 30, 2015
Value of plan assets:
Beginning fair value of plan assets	$	—
Employer contributions	4,092
Benefits paid	(4,092		)
Ending value of plan assets	—
Projected benefit obligation:
Beginning projected benefit obligation	$	741,372
Service cost	4,479
Interest cost	6,683
Plan amendments	(609,619		)
Plan curtailment	(5,409		)
Benefits paid	(4,092		)
Actuarial gain	(27,075		)
Ending projected benefit obligation	106,339
Funded status	$	(106,339	)
Amounts recognized in the consolidated balance sheet:
Current liabilities	$	(5,166	)
Long-term liabilities	(101,173		)
Net amount recognized in the consolidated balance sheet	$	(106,339	)
Amounts recognized in accumulated other comprehensive income/(loss):
Net prior service credit	$	439,872
Net actuarial loss	(140,607		)
Net amount recognized in accumulated other comprehensive income/(loss)	$	299,265

Net Periodic Benefit Cost. The Company capitalizes a portion of net periodic benefit cost in conjunction with its use of internal labor resources utilized on capital projects. During the three and nine months ended September 30, 2015 and the three and nine months ended September 30, 2014, the Company recognized settlement charges of $0.1 million, $0.7 million, $0.7 million and $0.7 million, respectively, in the qualified pension plan that covers non-represented employees.  The settlements were incurred when the cumulative amount of lump sums paid to participants in the respective years exceeded the expected service and interest cost for the respective years. In July 2015, as the result of a workforce reduction, the Company recognized a curtailment gain of $4.2 million in the Represented Pension Plan. Components of the net periodic benefit cost related to the Company's qualified pension plans and other post-employment benefit plans for the three and nine months ended September 30, 2015 and 2014 are as follows (in thousands):

	Three Months ended September 30, 2015						Three Months ended September 30, 2014
	Qualified Pension Plans			Other Post- employment Benefit Plans			Qualified Pension Plans			Other Post- employment Benefit Plans
Service cost	$	1,653		$	62		$	3,514		$	6,279
Interest cost	3,702			1,005			3,862			7,897
Expected return on plan assets	(3,688		)	—			(3,368		)	—
Amortization of actuarial loss	1,570			32,775			556			1,729
Amortization of prior service cost	(863		)	(89,550		)	—			—
Plan curtailment	(4,207		)	—			—			—
Plan settlement	110			—			650			—
Net periodic benefit cost	(1,723		)	(55,708		)	5,214			15,905
Less capitalized portion	(137		)	—			(322		)	(965		)
Other post-employment benefit and pension expense	$	(1,860	)	$	(55,708	)	$	4,892		$	14,940

	Nine Months ended September 30, 2015						Nine Months ended September 30, 2014
	Qualified Pension Plans			Other Post- employment Benefit Plans			Qualified Pension Plans			Other Post- employment Benefit Plans
Service cost	$	6,822		$	4,479		$	11,664		$	18,968
Interest cost	11,146			6,683			11,788			22,520
Expected return on plan assets	(10,911		)	—			(10,179		)	—
Amortization of actuarial loss	5,311			80,649			1,634			3,576
Amortization of prior service cost	(2,070		)	(215,076		)	—			—
Plan curtailment	(4,207		)	—			—			—
Plan settlement	717			—			650			—
Net periodic benefit cost	6,808			(123,265		)	15,557			45,064
Less capitalized portion	(469		)	—			(1,112		)	(3,192		)
Other post-employment benefit and pension expense	$	6,339		$	(123,265	)	$	14,445		$	41,872

Return on Plan Assets. For the three months ended September 30, 2015 and 2014 and for the nine months ended September 30, 2015 and 2014, the actual return on the pension plan assets were annualized gains/(losses) of approximately (5.6)%, (6.1)%, (3.7)% and 4.9%, respectively.

Other Comprehensive Income/(Loss). Other pre-tax changes in plan assets and benefit obligations recognized in other comprehensive income/(loss) are as follows (in thousands):

	Qualified Pension Plans
	Three Months ended September 30, 2015			Nine Months ended September 30, 2015
Amounts recognized in other comprehensive income/(loss):
Prior service credit	$	—		$	40,049
Net gain arising during the period	—			8,302
Amortization of prior service credit	(863		)	(2,070		)
Amortization of net actuarial loss	1,570			5,311
Plan curtailment	(1,781		)	(1,781		)
Plan settlement	16,151			16,149
Total amount recognized in other comprehensive income/(loss)	$	15,077		$	65,960
Estimated amounts that will be amortized from accumulated other comprehensive income/(loss) in the next three months:
Prior service credit	$	(863	)
Net actuarial loss	1,407
Total amount estimated to be amortized from accumulated other comprehensive income/(loss) in the next three months	$	544

	Other Post-employment Benefit Plans
	Three Months ended September 30, 2015			Nine Months ended September 30, 2015
Amounts recognized in other comprehensive income/(loss):
Prior service credit	$	—		$	619,454
Prior service cost	—			(9,835		)
Plan curtailment	—			5,409
Net gain arising during the period	—			27,075
Amortization of prior service credit	(89,550		)	(215,076		)
Amortization of net actuarial loss	32,775			80,649
Total amount recognized in other comprehensive income	$	(56,775	)	$	507,676
Estimated amounts that will be amortized from accumulated other comprehensive income/(loss) in the next three months:
Net prior service credit	$	(89,550	)
Net actuarial loss	32,775
Total amount estimated to be amortized from accumulated other comprehensive income/(loss) in the next three months	$	(56,775	)

Assumptions

The determination of the net liability and the net periodic benefit cost recognized for the qualified pension plans and other post-employment benefit plans by the Company are, in part, based on assumptions made by management. These assumptions include, among others, the discount rate applied to estimated future cash flows of the plans, the expected return on assets held by the qualified pension plans, certain demographic characteristics of the participants, such as expected retirement and mortality rates, and future inflation in healthcare costs. Certain assumptions, which include, among others, assumptions regarding increases in the amount of other post-employment benefit expenditures to be paid by the Company, reflect the Company's past practice of providing such increases to participants and therefore are considered a substantive plan under the Compensation—Retirement Benefits Topic of the ASC.

Projected Benefit Obligation Assumptions. The weighted average assumptions used in determining projected benefit obligations for these plans at their respective measurement dates are as follows:

	September 30, 2015
Qualified Pension Plans:
Discount rate	4.34	%
Other Post-employment Benefit Plans:
Discount rate	3.77	%

Net Periodic Benefit Cost Assumptions. The weighted average assumptions used in determining net periodic benefit cost are as follows:

	Three Months ended September 30,
	2015		2014
Qualified Pension Plans:
Discount rate	4.34	%	4.92	%
Expected return on plan assets (a)	7.31	%	7.66	%
Other Post-employment Benefit Plans:
Discount rate	3.29	%	4.98	%

(a) The expected return on plan assets is the long-term rate-of-return the Company expects to earn on the plan assets. In developing the expected return on plan asset assumption, the Company evaluated historical investment performance, the plans' asset allocation strategies and return forecasts for each asset class and input from its advisors. Projected returns by such advisors were based on broad equity and fixed income indices. The expected return on plan assets is reviewed annually in conjunction with other plan assumptions and, if considered necessary, revised to reflect changes in the financial markets and the investment strategy.

Contributions and Benefit Payments

During the nine months ended September 30, 2015, we contributed $8.8 million to our Company sponsored qualified defined benefit pension plans and funded benefit payments of $4.1 million under our other post-employment benefit plans.

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Oct. 30, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	FAIRPOINT COMMUNICATIONS INC
Entity Central Index Key	0001062613
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		26,905,398

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Accumulated Other Comprehensive Income/(Loss)

9 Months Ended

Sep. 30, 2015

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income/(Loss)

Accumulated Other Comprehensive Income/(Loss)

Components of accumulated other comprehensive income/(loss), net of income tax, were as follows (in thousands):

	September 30, 2015
Accumulated other comprehensive income/(loss), net of taxes:
Fair value of interest rate swaps	$	(2,536	)
Qualified pension and other post-employment benefit plans	256,651
Total accumulated other comprehensive income/(loss), net of taxes	$	254,115

Other comprehensive income/(loss) for the three and nine months ended September 30, 2015 includes changes in the fair value of the Company's cash flow hedges, actuarial losses and prior service credits related to the qualified pension and other post-employment benefit plans arising during the respective periods and amortization of these actuarial losses and prior service credits. For further detail of amounts recognized in other comprehensive income/(loss) related to the cash flow hedges, see note (7) "Interest Rate Swap Agreements" herein. For further detail of amounts recognized in other comprehensive income/(loss) related to the qualified pension and other post-employment benefit plans, see note (9) "Employee Benefit Plans—Plan Assets, Obligations and Funded Status—Other Comprehensive Income/(Loss)" herein.

The following table provides a reconciliation of adjustments reclassified from accumulated other comprehensive income/(loss) to the condensed consolidated statement of operations (in thousands):

	Three Months ended September 30, 2015			Nine Months ended September 30, 2015
Employee benefits:
Amortization of actuarial loss (1.5 years to 12.1 years) (a)	$	34,345		$	85,960
Amortization of net prior service credit (1.72 years to 24.9 years) (a)	(90,413		)	(217,146		)
Plan settlement (a)	16,151			16,149
Plan curtailment (a)	(1,781		)	(1,781		)
Total employee benefit amounts reclassified from accumulated other comprehensive income/(loss)	(41,698		)	(116,818		)
Tax benefit (b)	—			—
Total employee benefit amounts reclassified from accumulated other comprehensive income/(loss), net	$	(41,698	)	$	(116,818	)

(a) These accumulated other comprehensive income/(loss) components are included in the computation of net periodic benefit cost. See note (9) "Employee Benefit Plans" for details.

(b) See note (5) "Income Taxes" for details.

There was a nominal amount reclassified from accumulated other comprehensive income/(loss) related to interest rate swaps for the three and nine months ended September 30, 2015.

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Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Statement [Abstract]
Revenues	$ 221,569	$ 228,120	$ 649,641	$ 684,274
Operating expenses:
Cost of services and sales, excluding depreciation and amortization	100,718	104,643	333,067	321,870
Other post-employment benefit and pension expense	(57,568)	19,832	(116,926)	56,317
Selling, general and administrative expense	49,688	75,937	158,968	200,844
Depreciation and amortization	56,296	56,618	167,420	165,769
Reorganization related expense	6	12	33	77
Total operating expenses	149,140	257,042	542,562	744,877
Income/(loss) from operations	72,429	(28,922)	107,079	(60,603)
Interest expense	(20,186)	(20,195)	(59,979)	(60,226)
Other	153	90	425	81
Total other expense	(20,033)	(20,105)	(59,554)	(60,145)
Income/(loss) before income taxes	52,396	(49,027)	47,525	(120,748)
Income tax benefit	658	11,249	581	28,053
Net income/(loss)	$ 53,054	$ (37,778)	$ 48,106	$ (92,695)
Weighted average shares outstanding:
Basic, in shares	26,676,385	26,472,162	26,640,103	26,439,870
Diluted, in shares	27,003,833	26,472,162	26,952,296	26,439,870
Income/(loss) per share, basic	$ 1.99	$ (1.43)	$ 1.81	$ (3.51)
Income/(loss) per share, diluted	$ 1.96	$ (1.43)	$ 1.78	$ (3.51)

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Dividends

9 Months Ended

Sep. 30, 2015

Dividends [Abstract]

Dividends

Dividends

The Company currently does not pay a dividend on its common stock and has no plans to pay dividends.

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Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2015

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, which is designed to clarify the principles used to recognize revenue for entities. The accounting guidance defines how companies report revenues from contracts with customers and also requires enhanced disclosures. In July 2015, the FASB approved a one-year deferral of the effective date of ASU 2014-09. The new pronouncement will be effective for annual and interim periods beginning on or after December 15, 2017 and allows for two methods of adoption: (1) "full retrospective" adoption, meaning the standard is applied to all periods presented, or (2) "modified retrospective" adoption, meaning the cumulative effect of applying ASU 2014-09 is recognized as an adjustment to the fiscal year 2018 opening retained earnings balance. The Company is evaluating its method of adoption.

In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. ASU 2014-15 is effective for annual and interim periods beginning after December 15, 2016 with early adoption permitted. The Company does not believe the adoption of this pronouncement will have a material impact on its condensed consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. The update requires retrospective application and represents a change in accounting principle. The update is effective for fiscal years beginning after December 15, 2015 with early adoption permitted for financial statements that have not been previously issued.  The Company adopted this ASU during the quarter ended March 31, 2015.  As a result, $5.9 million was reclassified from debt issue costs, net to long-term debt, net of current portion in the consolidated balance sheet as of December 31, 2014. The adoption of this ASU had no impact on income/(loss) before income taxes or net income/(loss). In August 2015, the FASB issued ASU 2015-15 “Interest-Imputation of Interest (Subtopic 835-30) Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements”, which indicates the SEC staff would not object to an entity deferring and presenting debt issuance costs related to line-of-credit arrangements as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company adopted this ASU during the quarter ended September 30, 2015, which did not have an impact on the consolidated financial statements.

In April 2015, the FASB issued ASU 2015-04, “Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets.” For an entity that has a significant event in an interim period that calls for a remeasurement of defined benefit plan assets and obligations (for example, a settlement or curtailment), ASU 2015-04 provides a practical expedient that permits the entity to remeasure defined benefit plan assets and obligations using the month-end that is closest to the date of the significant event. The month-end remeasurement of defined benefit plan assets and obligations that is closest to the date of the significant event should be adjusted for any effects of the significant event that may or may not be captured in the month-end measurement. However, an entity should not adjust the measurement of defined benefit plan assets and obligations for other events that occur between the month-end measurement and the date of the significant event that are not caused by the entity (for example, changes in market prices or interest rates). An entity is required to disclose the accounting policy election and the date used to measure defined benefit plan assets and obligations in accordance with the amendments in this ASU. The amendments in this ASU are effective for reporting periods beginning after December 15, 2015, with early adoption permitted. Entities should apply the amendments in this ASU prospectively. This ASU was adopted in the quarter ended September 30, 2015 when the Company remeasured the plan assets and obligations at July 31, 2015 for one of its pension plans to recognize a curtailment related to a headcount reduction that occurred during that month.

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2015

Income Tax Disclosure [Abstract]

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the Company's statutory tax rate to its projected 2015 effective tax rate is presented below (in percentages):

	2015
Statutory federal income tax rate	35.0	%
State income tax, net of federal income tax	8.5
Other, net	0.9
Valuation allowance	(45.6	)
Effective income tax rate	(1.2	)%

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Earnings Per Share

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic earnings per share of the Company is computed by dividing net income/(loss) by the weighted average number of shares of common stock outstanding for the period. Except when the effect would be anti-dilutive, the diluted earnings per share calculation calculated using the treasury stock method includes the impact of stock units, shares of non-vested restricted stock and shares that could be issued under outstanding stock options.

Weighted average number of common shares used for basic earnings per share excludes weighted average shares of non-vested restricted stock of 226,900, 232,884, 234,370 and 236,616 for the three and nine months ended September 30, 2015 and 2014, respectively. Non-vested restricted stock is included in common shares issued and outstanding in the condensed consolidated balance sheets.

Potentially dilutive shares exclude warrants and stock options issued after repurchase under the FairPoint Communications, Inc. Amended and Restated 2010 Long Term Incentive Plan, primarily due to exercise prices exceeding the average market value. Since the Company incurred a loss for the three and nine months ended September 30, 2014, all potentially dilutive securities are anti-dilutive and, therefore, are excluded from the determination of diluted earnings per share.

The following table provides a reconciliation of the common shares used for basic earnings per share and diluted earnings per share:

	Three Months ended September 30,		Nine Months ended September 30,
	2015	2014	2015	2014
Weighted average number of common shares used for basic earnings per share	26,676,385	26,472,162	26,640,103	26,439,870
Effect of potential dilutive shares	327,448	—	312,193	—
Weighted average number of common shares and potential dilutive shares used for diluted earnings per share	27,003,833	26,472,162	26,952,296	26,439,870
Weighted average number of anti-dilutive shares outstanding at period-end that are excluded from the above reconciliation	4,146,782	4,548,565	4,148,613	4,443,933

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Interest Rate Swap Agreements

9 Months Ended

Sep. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Interest Rate Swap Agreements

Interest Rate Swap Agreements

The Company uses interest rate swap agreements to protect the Company against future adverse fluctuations in interest rates by reducing its exposure to variability in cash flows relating to interest payments on a portion of its outstanding debt. The Company's interest rate swaps, which are designated as cash flow hedges, involve the receipt of variable amounts from counterparties in exchange for the Company making fixed-rate payments over the effective term of the agreements without exchange of the underlying notional amount. The Company does not hold or issue any derivative financial instruments for speculative trading purposes.

In the third quarter of 2013, the Company entered into interest rate swap agreements with a combined notional amount of $170.0 million with three counterparties that are effective for a two year period effective September 30, 2015. Each respective swap agreement requires the Company to pay a fixed rate of 2.665% and provides that the Company will receive a variable rate based on the three month LIBOR rate subject to a minimum LIBOR floor of 1.25%. Amounts payable by or due to the Company will be net settled with the respective counterparties on the last business day of each fiscal quarter, commencing on December 31, 2015.

The effect of the Company’s interest rate swap agreements on the condensed consolidated balance sheets at September 30, 2015 and December 31, 2014 is shown below (in thousands):

	As of September 30, 2015
Derivatives designated as hedging instruments:	Balance Sheet Location	Fair Value
Interest rate swaps, Current	Other accrued liabilities	$	2,384
Interest rate swaps, Long-term	Other long-term liabilities	$	1,861
	As of December 31, 2014
Derivatives designated as hedging instruments:	Balance Sheet Location	Fair Value
Interest rate swaps	Other long-term liabilities	$	2,742

The gross effect of the Company’s interest rate swap agreements on the condensed consolidated statements of comprehensive income/(loss) for the three and nine months ended September 30, 2015 and 2014 is shown below (in thousands):

	Amount of Loss/(Gain) Recognized in Other Comprehensive Income/(Loss) on Derivative (Effective Portion) (Pre-Tax)
	Three Months ended September 30, 2015		Three Months ended September 30, 2014			Nine Months ended September 30, 2015		Nine Months ended September 30, 2014
Interest rate swaps	$	460	$	(260	)	$	1,503	$	1,141

Amounts reported in accumulated other comprehensive income related to interest rate swaps will be reclassified to interest expense as interest payments are made on the Term Loan. The Company estimates that approximately $2.4 million will be reclassified as an increase to interest expense over the next four quarters.

Each interest rate swap agreement contains a provision whereby if the Company defaults on any of its indebtedness, the Company may also be declared in default under the interest rate swap agreements.

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Income Taxes

9 Months Ended

Sep. 30, 2015

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company recorded a tax benefit on the net income/(loss) for the three months ended September 30, 2015 and 2014 of $0.7 million and $11.2 million, respectively, which equates to an effective tax rate of (1.2)% and 22.9%, respectively, by applying the projected full year effective rate. For the nine months ended September 30, 2015 and 2014, the Company recorded a tax benefit on net income/(loss) of $0.6 million and $28.1 million, respectively, which equates to an effective tax rate of (1.2)% and 23.2%, respectively, by applying the projected full year effective rate. For 2015, the projected annual effective tax rate differs from the 35% federal statutory rate primarily due to a decrease in the valuation allowance offset by tax expense related to state taxes. For 2014, the effective tax rate differs from the statutory rate primarily due to an increase in the valuation allowance offset by a tax benefit related to state taxes.

A reconciliation of the Company's statutory tax rate to its projected 2015 effective tax rate is presented below (in percentages):

	2015
Statutory federal income tax rate	35.0	%
State income tax, net of federal income tax	8.5
Other, net	0.9
Valuation allowance	(45.6	)
Effective income tax rate	(1.2	)%

The effective tax rate reflected in accumulated other comprehensive income for the three and nine months ended September 30, 2015 is 0%. The 0% effective tax rate in accumulated other comprehensive income is due to the tax benefit associated with the reduction in the valuation allowance offsetting tax expense on other net comprehensive income for the three and nine months ended September 30, 2015.

Deferred Income Taxes

Upon ratification of the collective bargaining agreements on February 22, 2015, a remeasurement of certain employee benefit obligations was required. See note (9) "Employee Benefit Plan" herein for additional information. For 2015, this will result in a reduction of the deferred tax asset associated with employee benefit plans of approximately $270 million as well as a reduction of the Company's valuation allowance against deferred tax assets of approximately $229 million.

At September 30, 2015, the Company had gross federal NOL carryforwards of $258.9 million after taking into consideration the NOL tax attribute reduction resulting from the Company's discharge of indebtedness upon emergence from Chapter 11 protection. The Company's remaining federal NOL carryforwards will expire from 2019 to 2035. At September 30, 2015, the Company had a net, after attribute reduction, state NOL deferred tax asset of $13.5 million. The Company's remaining state NOL carryforwards will expire from 2015 to 2035. The amount expiring in 2015 is negligible and fully reserved as part of the valuation allowance. At September 30, 2015, the Company had no alternative minimum tax credit carryover and had $4.9 million in state credit carryovers. Telecom Group completed an initial public offering on February 8, 2005, which resulted in an "ownership change" within the meaning of the United States federal income tax laws addressing NOL carryforwards, alternative minimum tax credits and other similar tax attributes. The Merger and the Company's emergence from Chapter 11 protection also resulted in ownership changes. As a result of these ownership changes, there are specific limitations on the Company's ability to use its NOL carryforwards and other tax attributes. The Company believes that it can use the NOLs even with these restrictions in place based on its current income projections.

Income Tax Returns

The Company and its eligible subsidiaries file consolidated income tax returns in the United States federal jurisdiction and certain consolidated, combined and separate entity tax returns, as required, with various state and local governments. The Company is no longer subject to United States federal, state and local, or non-United States income tax examinations by tax authorities for years prior to 2011. NOL carryovers from closed tax years may be subject to examination by federal or state taxing authorities if utilized in a year open to examination. As of September 30, 2015 and December 31, 2014, the Company does not have any significant jurisdictional income tax audits.

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Long-Term Debt

9 Months Ended

Sep. 30, 2015

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

Long-term debt for the Company at September 30, 2015 and December 31, 2014 is shown below (in thousands):

	September 30, 2015			December 31, 2014
Term Loan, due 2019 (weighted average rate of 7.50%)	$	624,000		$	628,800
Discount on Term Loan (a)	(11,932		)	(14,210		)
Debt issuance costs	(5,034		)	(5,949		)
Notes, 8.75%, due 2019	300,000			300,000
Total long-term debt	907,034			908,641
Less: current portion	(6,400		)	(6,400		)
Total long-term debt, net of current portion	$	900,634		$	902,241

(a) The $11.9 million and $14.2 million discount on the Term Loan (as defined below) as of September 30, 2015 and December 31, 2014, respectively, is being amortized using the effective interest method over the life of the Term Loan.

As of September 30, 2015, the Company had $58.8 million, net of $16.2 million of outstanding letters of credit, available for borrowing under the Revolving Facility (as defined below).

The approximate aggregate maturities of long-term debt, excluding the debt discount on the Term Loan (as defined below), for each of the four years subsequent to September 30, 2015 are as follows (in thousands):

Trailing twelve months ending September 30,	Balance Due
2016	$	6,400
2017	6,400
2018	6,400
2019	904,800
Total long-term debt, including current portion	$	924,000

Refinancing. On February 14, 2013 (the "Refinancing Closing Date"), FairPoint Communications refinanced its credit agreement (the "Refinancing"). In connection with the Refinancing, FairPoint Communications (i) issued $300.0 million aggregate principal amount of its 8.75% senior secured notes due 2019 (the "Notes") in a private offering exempt from registration under the Securities Act pursuant to an indenture (the "Indenture") that FairPoint Communications entered into on the Refinancing Closing Date with certain of its subsidiaries that guarantee the indebtedness under the Credit Agreement (as defined herein) (the "Subsidiary Guarantors") and U.S. Bank National Association, as trustee and collateral agent, and (ii) entered into a credit agreement (the "Credit Agreement"), dated as of the Refinancing Closing Date, with the lenders party thereto from time to time and Morgan Stanley Senior Funding, Inc., as administrative agent and letter of credit issuer. The Credit Agreement provides for a $75.0 million revolving credit facility (the ''Revolving Facility''), which has a sub-facility providing for the issuance of up to $40.0 million in letters of credit, and a $640.0 million term loan facility (the ''Term Loan'' and, together with the Revolving Facility, the ''Credit Agreement Loans"). On the Refinancing Closing Date, FairPoint Communications used the proceeds of the Notes offering, together with $640.0 million of borrowings under the Term Loan and cash on hand to (i) repay principal of $946.5 million outstanding on the old term loan, plus approximately $7.7 million of accrued interest and (ii) pay approximately $32.6 million of fees, expenses and other costs related to the Refinancing.

The Credit Agreement. The principal amount of the Term Loan and commitments under the Revolving Facility may be increased by an aggregate amount of up to $200.0 million, subject to certain terms and conditions specified in the Credit Agreement. The Term Loan will mature on February 14, 2019 and the Revolving Facility will mature on February 14, 2018, subject in each case to extensions pursuant to the terms of the Credit Agreement.

Interest Rates and Fees. Interest on borrowings under the Credit Agreement Loans accrue at an annual rate equal to either a British Bankers Association London Inter-Bank Offered Rate ("LIBOR") or the base rate, in each case plus an applicable margin. LIBOR is a per annum rate for dollar deposits with an interest period of one, two, three or six months (at FairPoint Communications' election), subject to a minimum LIBOR floor of 1.25%. The base rate is the per annum rate equal to the greatest of (x) the federal funds effective rate plus 0.50%, (y) the rate of interest publicly quoted from time to time by The Wall Street Journal as the United States ''Prime Rate'' and (z) LIBOR with an interest period of one month plus 1.00%. The applicable margin for the Term Loan is (a) 6.25% per annum with respect to term loans bearing interest based on LIBOR or (b) 5.25% per annum with respect to term loans bearing interest based on the base rate. The applicable interest rate for the Revolving Facility is, initially, (a) 5.50% with respect to revolving loans bearing interest based on LIBOR or (b) 4.50% per annum with respect to revolving loans bearing interest based on the base rate, in each case subject to adjustment based on FairPoint Communications' consolidated total leverage ratio, as defined in the Credit Agreement. FairPoint Communications is required to pay a quarterly letter of credit fee on the average daily amount available to be drawn under letters of credit equal to the applicable interest rate for revolving loans bearing interest based on LIBOR, plus a fronting fee of 0.125% per annum on the average daily amount available to be drawn under such letters of credit. In addition, FairPoint Communications is required to pay a quarterly commitment fee on the average daily unused portion of the New Revolving Facility, which is 0.50% initially, subject to reduction to 0.375% based on FairPoint Communications' consolidated total leverage ratio.

Security/Guarantors. All obligations under the Credit Agreement, together with certain designated hedging obligations and cash management obligations, are unconditionally guaranteed on a senior secured basis by each of the Subsidiary Guarantors and secured by a first-priority lien on substantially all personal property of FairPoint Communications and the Subsidiary Guarantors, subject to certain exclusions set forth in the related security documents, pari passu with the lien securing the obligations under the Notes.

Mandatory Repayments. FairPoint Communications is required to make quarterly repayments of the Term Loan in the amount of $1.6 million during the term of the Credit Agreement. In addition, mandatory repayments are required under the Credit Agreement with (i) a percentage, initially equal to 50% and subject to reduction to 25% based on FairPoint Communications' consolidated total leverage ratio, of FairPoint Communications' excess cash flow, as defined in the Credit Agreement, (ii) the net cash proceeds of certain asset dispositions, insurance proceeds and condemnation awards and (iii) issuances of debt not permitted to be incurred under the Credit Agreement. Optional prepayments and mandatory prepayments resulting from the incurrence of debt not permitted to be incurred under the Credit Agreement are required to be made at 101.0% of the aggregate principal amount prepaid if such prepayment is made on or prior to February 14, 2016. No premium is required to be paid for prepayments made after February 14, 2016.

Covenants. The Credit Agreement contains customary representations and warranties and affirmative and negative covenants for a transaction of this type, including two financial maintenance covenants: (i) a consolidated interest coverage ratio and (ii) a consolidated total leverage ratio. The Credit Agreement also contains a covenant limiting the amount of capital expenditures that FairPoint Communications and its subsidiaries may make in any fiscal year. As of September 30, 2015, FairPoint Communications was in compliance with all covenants under the Credit Agreement.

Events of Default. The Credit Agreement also contains customary events of default for a transaction of this type.

The Notes. On the Refinancing Closing Date, FairPoint Communications issued $300.0 million of the Notes pursuant to the Indenture in a private offering exempt from registration under the Securities Act.

The terms of the Notes are governed by the Indenture. The Notes are senior secured obligations of FairPoint Communications and are guaranteed by the Subsidiary Guarantors. The Notes and the guarantees thereof are secured by a first-priority lien on substantially all personal property of FairPoint Communications and the Subsidiary Guarantors, subject to certain exclusions set forth in the related security documents, pari passu with the lien securing the obligations under the Credit Agreement. The Notes will mature on August 15, 2019 and accrue interest at a rate of 8.75% per annum, which is payable semi-annually in arrears on February 15 and August 15 of each year.

On or after February 15, 2016, FairPoint Communications may redeem all or part of the Notes at the redemption prices set forth in the Indenture, plus accrued and unpaid interest thereon, to the applicable redemption date. At any time prior to February 15, 2016, FairPoint Communications may redeem all or part of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus a "make-whole" premium as of, and accrued and unpaid interest to, the applicable redemption date. In addition, at any time prior to February 15, 2016, FairPoint Communications may, on one or more occasions, redeem up to 35% of the original aggregate principal amount of the Notes, using net cash proceeds of certain qualified equity offerings, at a redemption price of 108.75% of the principal amount of Notes redeemed, plus accrued and unpaid interest to the applicable redemption date. Notes redeemed on or after February 15, 2016 and prior to February 15, 2017 may be redeemed at 104.375% of the aggregate principal amount; notes redeemed on or after February 15, 2017 and prior to February 15, 2018 may be redeemed at 102.188% of the aggregate principal amount; and notes redeemed on or after February 15, 2018 may be redeemed at their par value.

The holders of the Notes have the ability to require FairPoint Communications to repurchase all or any part of the Notes if FairPoint Communications experiences certain kinds of changes in control or engages in certain asset sales, in each case at the repurchase prices and subject to the terms and conditions set forth in the Indenture.

The Indenture contains certain covenants which are customary with respect to non-investment grade debt securities, including limitations on FairPoint Communications' ability to incur additional indebtedness, pay dividends on or make other distributions or repurchase FairPoint Communications' capital stock, make certain investments, enter into certain types of transactions with affiliates, create liens and sell certain assets or merge with or into other companies. These covenants are subject to a number of important limitations and exceptions. As of September 30, 2015, FairPoint Communications was in compliance with all covenants under the Indenture.

The Indenture also provides for customary events of default, including cross defaults to other specified debt of FairPoint Communications and certain of its subsidiaries.

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Fair Value

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

The Fair Value Measurements and Disclosures Topic of the ASC defines fair value, establishes a framework for measuring fair value and establishes a hierarchy that categorizes and prioritizes the sources to be used to estimate fair value. The Fair Value Measurements and Disclosures Topic of the ASC also expands financial statement disclosures about fair value measurements.

In determining fair value, the Company uses a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows:

Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2 - Valuations based on quoted prices for similar instruments in active markets or quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The Company's non-financial assets and liabilities, including its long-lived assets and indefinite-lived intangible assets, are measured and subsequently adjusted, if necessary, to fair value on a non-recurring basis. The Company periodically performs routine reviews of triggering events and/or an impairment test, as applicable. Based on these procedures, the Company did not require an adjustment to fair value to be recorded to these assets in the three months ended September 30, 2015 or 2014.

The Company's financial instruments, other than interest rate swap agreements and long-term debt, consist primarily of cash, restricted cash, accounts receivable and accounts payable. The carrying amounts of these financial instruments are estimated to approximate fair value due to the relatively short period of time to maturity for these instruments. As of September 30, 2015, interest rate swap agreements are carried at their fair value and measured on a recurring basis as follows (in thousands):

	Fair Value Measurements Using
	Level 1		Level 2		Level 3
Interest rate swaps, Current (a)	$	—	$	2,384	$	—
Interest rate swaps, Long-term (a)	$	—	$	1,861	$	—

As of December 31, 2014, interest rate swap agreements are carried at their fair value and measured on a recurring basis as follows (in thousands):

	Fair Value Measurements Using
	Level 1		Level 2	Level 3
Interest rate swaps, Long-term (a)	$	—	2,742	$	—

(a) The fair value is determined using valuation models which rely on the expected LIBOR based yield curve and estimates of counterparty and the Company’s non-performance risk.  Because each of these inputs are directly observable or can be corroborated by observable market data, the Company has categorized these interest rate swaps as Level 2 within the fair value hierarchy.

The estimated fair values of the Company's long-term debt as of September 30, 2015 and December 31, 2014 are as follows (in thousands):

	September 30, 2015				December 31, 2014
	Carrying Amount		Fair Value (a)		Carrying Amount		Fair Value (a)
Term Loan, due 2019 (b)	$	612,068	$	624,000	$	614,590	$	619,368
Notes, 8.75%, due 2019	300,000		309,000		300,000		301,890
Total	$	912,068	$	933,000	$	914,590	$	921,258

(a) The Company estimated fair value based on market prices of the Company's debt securities at the balance sheet date, which falls within Level 2 of the fair value hierarchy.

(b) The carrying amount of the Term Loan is net of the unamortized discount of $11.9 million and $14.2 million as of September 30, 2015 and December 31, 2014, respectively.

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Income Taxes (Effective Rate Reconciliation) (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2015
Income Tax Contingency [Line Items]
Effective income tax rate	(1.20%)	22.90%	(1.20%)	23.20%
Scenario, Forecast
Income Tax Contingency [Line Items]
Statutory federal income tax rate					35.00%
State income tax, net of federal income tax					8.50%
Other, net					0.90%
Valuation allowance					(45.60%)
Effective income tax rate					(1.20%)

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

(a) Leases

The Company does not have any leases with contingent rental payments or any leases with contingency renewal, purchase options or escalation clauses.

(b) Legal Proceedings

From time to time, the Company is involved in litigation and regulatory proceedings arising out of its operations. The Company's management believes that it is not currently a party to any legal or regulatory proceedings, the adverse outcome of which, individually or in the aggregate, would have a material adverse effect on the Company's financial position or results of operations.

Notwithstanding the foregoing, the Company is a defendant in approximately 16 lawsuits filed by two long distance communications companies, who have collectively filed over 60 lawsuits arising from switched access charges for calls originating and terminating within the same wireless major trading area. At this time, an estimate of the impact, if any, cannot be made.

(c) Restricted Cash

As of September 30, 2015 and December 31, 2014, the Company had $0.7 million and $0.7 million, respectively, of restricted cash, which is restricted for regulatory purposes and is included in long-term restricted cash on the balance sheets.

(d) Magnitude of Bankruptcy Claims

As of October 30, 2015, the allowance of the claims of one bankruptcy tax claimant in the amount of $0.2 million is still being litigated. All other bankruptcy claims have been resolved.

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Fair Value (Tables)

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value Measurements, Recurring and Nonrecurring

As of September 30, 2015, interest rate swap agreements are carried at their fair value and measured on a recurring basis as follows (in thousands):

	Fair Value Measurements Using
	Level 1		Level 2		Level 3
Interest rate swaps, Current (a)	$	—	$	2,384	$	—
Interest rate swaps, Long-term (a)	$	—	$	1,861	$	—

As of December 31, 2014, interest rate swap agreements are carried at their fair value and measured on a recurring basis as follows (in thousands):

	Fair Value Measurements Using
	Level 1		Level 2	Level 3
Interest rate swaps, Long-term (a)	$	—	2,742	$	—

(a) The fair value is determined using valuation models which rely on the expected LIBOR based yield curve and estimates of counterparty and the Company’s non-performance risk.  Because each of these inputs are directly observable or can be corroborated by observable market data, the Company has categorized these interest rate swaps as Level 2 within the fair value hierarchy.

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The estimated fair values of the Company's long-term debt as of September 30, 2015 and December 31, 2014 are as follows (in thousands):

	September 30, 2015				December 31, 2014
	Carrying Amount		Fair Value (a)		Carrying Amount		Fair Value (a)
Term Loan, due 2019 (b)	$	612,068	$	624,000	$	614,590	$	619,368
Notes, 8.75%, due 2019	300,000		309,000		300,000		301,890
Total	$	912,068	$	933,000	$	914,590	$	921,258

(a) The Company estimated fair value based on market prices of the Company's debt securities at the balance sheet date, which falls within Level 2 of the fair value hierarchy.

(b) The carrying amount of the Term Loan is net of the unamortized discount of $11.9 million and $14.2 million as of September 30, 2015 and December 31, 2014, respectively.

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Stockholders' Equity/(Deficit) (Details) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Class of Warrant or Right [Line Items]
Common stock, shares authorized	37,500,000	37,500,000
Common stock, shares outstanding	26,905,398	26,710,569
Warrants, outstanding	3,582,402
Common Stock
Class of Warrant or Right [Line Items]
Exercise price of warrants (in dollars per share)	$ 48.81

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Employee Benefit Plans (Narrative) (Details)			3 Months Ended		9 Months Ended		12 Months Ended
	Feb. 22, 2015 USD ($)	Aug. 28, 2014 USD ($) employee	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)	Aug. 02, 2014 collective_bargaining_agreement
Defined Benefit Plan Disclosure [Line Items]
Actual return for qualified pension plan assets			(5.60%)	(6.10%)	(3.70%)	4.90%
Qualified Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Plan settlement			$ 110,000	$ 650,000	$ 717,000	$ 650,000
Benefit obligation			349,392,000		349,392,000		$ 408,216,000
Net actuarial loss			(1,407,000)
Prior service credit			(863,000)
Curtailment gain			4,207,000	$ 0	4,207,000	0
Amortization of net actuarial loss			1,570,000		$ 5,311,000
Weighted average annualized expected return on qualified pension plan assets				7.66%	7.31%
Employer contributions					$ 8,780,000
Post-retirement Healthcare Plans
Defined Benefit Plan Disclosure [Line Items]
Plan settlement			0	$ 0	0	0
Benefit obligation			106,339,000		106,339,000		$ 741,372,000
Net actuarial loss			(32,775,000)
Prior service credit			(89,550,000)
Curtailment gain			0	$ 0	0	$ 0
Amortization of net actuarial loss			32,775,000		80,649,000
Employer contributions					4,092,000
Pension Plans, Defined Benefit, Represented Employees | Qualified Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Agreements with labor unions | collective_bargaining_agreement								2
Benefit accrual rate, percent of prior rate	50.00%
Length of credited service, maximum							30 years
Maximum monthly medical reimbursement per employee		$ 800
Maximum medical reimbursement per employee spouse		$ 400
Medical insurance premiums reimbursement, maximum age of beneficiary							65 years
Number of participants | employee		290
Continuing OPEB Plan | Post-retirement Healthcare Plans
Defined Benefit Plan Disclosure [Line Items]
Benefit obligation			91,300,000		91,300,000
Net actuarial loss					29,500,000
Prior service credit					45,300,000
Curtailment gain					5,400,000
Amortization of net actuarial loss	$ 9,800,000
Remaining gross prior service credit to be amortized			619,400,000		619,400,000
Remaining gross prior service cost to be amortized			9,800,000		9,800,000
Remaining net prior service cost to be amortized			609,600,000		$ 609,600,000
Remaining net prior service credit to be amortized, amortization period					1 year 8 months 19 days
Prior service credit recognized from plan amendment					$ 40,000,000
Continuing OPEB Plan | Post-retirement Healthcare Plans | Accumulated other comprehensive income/(loss)
Defined Benefit Plan Disclosure [Line Items]
Remaining net prior service credit to be amortized, amortization period					11 years 8 months 1 day
OPEB Plan | Post-retirement Healthcare Plans
Defined Benefit Plan Disclosure [Line Items]
Remaining unrecognized loss to be amortized			$ 192,200,000		$ 192,200,000
Remaining unrecognized loss to be amortized, amortization period					1 year 6 months

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Condensed Consolidated Statements of Comprehensive Income/(Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Statement of Comprehensive Income [Abstract]
Net income/(loss)	$ 53,054	$ (37,778)	$ 48,106	$ (92,695)
Other comprehensive income/(loss), net of taxes:
Interest rate swaps (net of $0.2 million, ($0.1) million, $0.6 million and $0.5 million tax benefit/(expense), respectively)	(274)	155	(897)	(682)
Qualified pension and other post-employment benefit plans (net of $0.0 million, $1.2 million, $0.0 million and $2.4 million tax expense, respectively)	(41,698)	1,752	573,635	3,500
Total other comprehensive income/(loss)	(41,972)	1,907	572,738	2,818
Comprehensive income/(loss)	$ 11,082	$ (35,871)	$ 620,844	$ (89,877)

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Accounting Policies

9 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Accounting Policies

Accounting Policies

(a) Presentation and Use of Estimates

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, which require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of results of operations and financial condition for the interim periods shown, including normal recurring accruals and other items.

Examples of significant estimates include the allowance for doubtful accounts, revenue reserves, the depreciation of property, plant and equipment, valuation of intangible assets, qualified pension and other post-employment benefit plan assumptions, stock-based compensation and income taxes.

(b) Revenue Recognition

Revenues are recognized as services are rendered and are primarily derived from the usage of the Company's networks and facilities or under wholesale arrangements with other communications carriers. Revenues are primarily derived from: voice services, access (including pooling), certain CAF receipts, Internet and broadband services and other miscellaneous services. Local access charges are billed to local end users under tariffs approved by each state's Public Utilities Commission ("PUC") or by rates, terms and conditions determined by the Company. Access revenues are derived for the intrastate jurisdiction by billing access charges to interexchange carriers, wireless carriers and to other LECs. These charges are billed based on toll or access tariffs approved by the local state's PUC. Access charges for the interstate jurisdiction are billed in accordance with tariffs filed by the National Exchange Carrier Association ("NECA") or by the individual company and approved by the Federal Communications Commission (the "FCC").

Revenues are determined on a bill-and-keep basis or a pooling basis. If on a bill-and-keep basis, the Company bills the charges to either the wholesale provider or the end user and keeps the revenue. If the Company participates in a pooling environment (interstate or intrastate), the toll or access billed is contributed to a revenue pool. The revenue is then distributed to individual companies based on their company-specific revenue requirement or similar distribution methods. This distribution is based on individual state PUC's (intrastate) or the FCC's (interstate) approved settlement mechanisms, separation rules and rates of return. Distribution from these pools can change relative to changes made to expenses, plant investment or rate-of-return. Some companies participate in federal and certain state universal service programs that are pooling in nature but are regulated by rules separate from those described above. These rules vary by state. Revenues earned through the various pooling arrangements are initially recorded based on the Company's estimates. Rule changes associated with the FCC's CAF/ICC Order (as defined hereinafter) impact the NECA interstate pooling, in that a portion of the Company's interstate Universal Service Fund ("USF") revenues, which are administered through the NECA pools and which prior to January 1, 2012 were based on costs, are now based on rules from the FCC's CAF/ICC Order, including CAF Phase II support where FairPoint accepted CAF Phase II support, continued CAF Phase I frozen support where FairPoint did not accept CAF Phase II support and CAF/ICC rules in states where FairPoint is eligible for such support under the ICC Transition Rules for price cap and rate-of-return carriers. FairPoint accepted CAF Phase II support in all states except Kansas and Colorado.

Long distance switched retail and wholesale services can be recurring due to coverage under an unlimited calling plan or be usage sensitive. In either case, they are billed in arrears and recognized when earned. Internet and data services revenues are substantially all recurring revenues and are billed one month in advance and deferred until earned.

As of September 30, 2015 and December 31, 2014, unearned revenue of $21.5 million and $19.0 million, respectively, was included in other accrued liabilities and unearned revenue of $7.6 million and $9.3 million, respectively, was included in other long-term liabilities on the condensed consolidated balance sheets.

The majority of the Company's other miscellaneous services revenue is generated from ancillary special projects at the request of third parties, video services, directory services and late payment charges to end users and wholesale carriers. The Company requires customers to pay for ancillary special projects in advance. As of September 30, 2015 and December 31, 2014, customer deposits of $2.2 million and $2.4 million, respectively, were included in other accrued liabilities on the condensed consolidated balance sheets. Once the ancillary special project is completed or substantially complete and all project costs have been accumulated for proper accounting recognition, the advance payment is recognized as revenue with any overpayments refunded to the customer, as appropriate. The Company recognizes revenue upon the provision of video services in certain markets by reselling DirecTV and providing cable and IP television video-over-digital subscriber line services. The Company also publishes telephone directories in some of its Telecom Group markets and recognizes revenues associated with these publications evenly over the time period covered by the directory, which is typically twelve months. The Company bills late payment fees to customers who have not paid their bills in a timely manner. In general, late payment fee revenue is recognized based on collection of these charges.

Non-recurring customer activation fees, along with the related costs up to, but not exceeding, the activation fees, are deferred and amortized over the customer relationship period.

On June 26, 2014, the Maine PUC ("MPUC") adopted a final rule (Chapter 201), establishing new provider of last resort ("POLR") service quality index ("SQI") standards and reporting requirements which began August 1, 2014. Under Chapter 201, the MPUC may open an investigation into the failure to meet any of the established standards and has the authority to impose penalties of up to $500,000 per standard. On January 13, 2015, the MPUC issued a Notice of Investigation to review the Company's service quality in Maine. In addition, the Vermont Public Service Board opened an investigation into service quality on December 3, 2014 at the request of the Vermont Department of Public Service. Penalties, if any, would be recorded as a reduction to revenue.

The Company also adopted a separate performance assurance plan ("PAP") for certain services provided on a wholesale basis to competitive local exchange carriers ("CLECs") in each of the states of Maine, New Hampshire and Vermont. Pursuant to the PAPs, FairPoint was required to provide service credits in the event the Company was unable to meet the provisions of the respective PAP. Effective June 1, 2015, the PAP was retired and the Company began measuring and reporting certain wholesale local service performance results pursuant to the terms of a simplified measurement plan. The new plan, called the Wholesale Performance Plan ("WPP"), was developed collaboratively with CLECs over several years and was approved by the Maine, New Hampshire and Vermont regulatory commissions. Under the WPP, the Company is subject to significantly fewer performance criteria and its annual service credit exposure was reduced.

Revenue is recognized net of tax collected from customers and remitted to governmental authorities.

Customer arrangements that include both equipment and services are evaluated to determine whether the elements are separable. If the elements are deemed separable and separate earnings processes exist, the revenue associated with each element is allocated to each element based on the relative estimated selling price of the separate elements. The Company has estimated the selling prices of each element by reference to vendor-specific objective evidence of selling prices when the elements are sold separately. The revenue associated with each element is then recognized as earned.

Management makes estimated adjustments, as necessary, to revenue and accounts receivable for billing errors, including certain disputed amounts.

(c) Impairment of Indefinite-lived Intangible Asset

In accordance with the Intangibles-Goodwill and Other Topic of the Accounting Standards Codification ("ASC"), non-amortizable intangible assets are assessed for impairment at least annually. The Company performs its annual impairment test as of the first day of the fourth fiscal quarter of each year and assesses the fair value of the trade name based on the relief from royalty method. If the carrying amount of the trade name exceeds its estimated fair value, the asset is considered impaired.

For its non-amortizable intangible asset impairment assessment of the FairPoint trade name, the Company makes certain assumptions including an estimated royalty rate, a long-term growth rate, an effective tax rate and a discount rate and applies these assumptions to projected future cash flows, exclusive of cash flows associated with wholesale revenues and other revenues not generated through brand recognition. As of October 1, 2014, the estimated fair value exceeded the carrying value in the Company's quantitative analysis; therefore, an impairment was not necessary. The Company performed another quantitative analysis as of December 31, 2014 and the estimated fair value exceeded the carrying value by approximately 4%; therefore, an impairment was not necessary. However, future changes in one or more of the assumptions discussed above may result in the recognition of an impairment loss.

(d) Accounting for Income Taxes

In accordance with the Income Taxes Topic of the ASC, income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management determines its estimates of future taxable income based upon the scheduled reversal of deferred tax liabilities and tax planning strategies. The Company establishes valuation allowances for deferred tax assets when it is estimated to be more likely than not that the tax assets will not be realized.

FairPoint Communications files a consolidated income tax return with its subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation.

(e) Operating Segments

Management views its business of providing data, video and voice communication services to residential, wholesale and business customers as one operating segment as defined in the Segment Reporting Topic of the ASC. The Company's services consist of retail and wholesale telecommunications and data services, including voice and HSD in 17 states. The Company's chief operating decision maker assesses operating performance and allocates resources based on the consolidated results.

(f) Interest Rate Swap Agreements

In the third quarter of 2013, the Company entered into interest rate swap agreements. For further information regarding these interest rate swap agreements, see note (7) "Interest Rate Swap Agreements." The interest rate swap agreements, at their inception, qualified for and were designated as cash flow hedging instruments. In accordance with the Derivatives and Hedging Topic of the ASC, the Company records its interest rate swaps on the consolidated balance sheets at fair value. The effective portion of changes in fair value are recorded in accumulated other comprehensive income/(loss) and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Any ineffective portion is recognized in earnings. Both at inception and on a quarterly basis, the Company performs an effectiveness test.

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Employee Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2015

Compensation and Retirement Disclosure [Abstract]

Schedule of Defined Benefit Plans Disclosures

A summary of plan assets, projected benefit obligation and funded status of the plans are as follows (in thousands):

	Qualified Pension Plans
	Nine Months ended September 30, 2015
Value of plan assets:
Beginning fair value of plan assets	$	195,410
Expected return on plan assets	14,445
Plan settlements	(6,416		)
Employer contributions	8,780
Benefits paid	(7,702		)
Ending value of plan assets	204,517
Projected benefit obligation:
Beginning projected benefit obligation	$	408,216
Service cost	6,822
Interest cost	11,146
Plan amendment	(40,049		)
Plan settlements	(21,847		)
Plan curtailment	(2,426		)
Benefits paid	(7,702		)
Actuarial gain	(4,768		)
Ending projected benefit obligation	349,392
Funded status	$	(144,875	)
Accumulated benefit obligation	$	349,392
Net amount recognized in long-term liabilities in the consolidated balance sheet	$	(144,875	)
Amounts recognized in accumulated other comprehensive income/(loss):
Prior service credit	$	33,772
Net actuarial loss	(98,106		)
Net amount recognized in accumulated other comprehensive income/(loss)	$	(64,334	)

	Other Post-employment Benefit Plans
	Nine Months ended September 30, 2015
Value of plan assets:
Beginning fair value of plan assets	$	—
Employer contributions	4,092
Benefits paid	(4,092		)
Ending value of plan assets	—
Projected benefit obligation:
Beginning projected benefit obligation	$	741,372
Service cost	4,479
Interest cost	6,683
Plan amendments	(609,619		)
Plan curtailment	(5,409		)
Benefits paid	(4,092		)
Actuarial gain	(27,075		)
Ending projected benefit obligation	106,339
Funded status	$	(106,339	)
Amounts recognized in the consolidated balance sheet:
Current liabilities	$	(5,166	)
Long-term liabilities	(101,173		)
Net amount recognized in the consolidated balance sheet	$	(106,339	)
Amounts recognized in accumulated other comprehensive income/(loss):
Net prior service credit	$	439,872
Net actuarial loss	(140,607		)
Net amount recognized in accumulated other comprehensive income/(loss)	$	299,265

Schedule of Net Periodic Benefit Costs of Pension and Post-Retirement Healthcare

Components of the net periodic benefit cost related to the Company's qualified pension plans and other post-employment benefit plans for the three and nine months ended September 30, 2015 and 2014 are as follows (in thousands):

	Three Months ended September 30, 2015						Three Months ended September 30, 2014
	Qualified Pension Plans			Other Post- employment Benefit Plans			Qualified Pension Plans			Other Post- employment Benefit Plans
Service cost	$	1,653		$	62		$	3,514		$	6,279
Interest cost	3,702			1,005			3,862			7,897
Expected return on plan assets	(3,688		)	—			(3,368		)	—
Amortization of actuarial loss	1,570			32,775			556			1,729
Amortization of prior service cost	(863		)	(89,550		)	—			—
Plan curtailment	(4,207		)	—			—			—
Plan settlement	110			—			650			—
Net periodic benefit cost	(1,723		)	(55,708		)	5,214			15,905
Less capitalized portion	(137		)	—			(322		)	(965		)
Other post-employment benefit and pension expense	$	(1,860	)	$	(55,708	)	$	4,892		$	14,940

	Nine Months ended September 30, 2015						Nine Months ended September 30, 2014
	Qualified Pension Plans			Other Post- employment Benefit Plans			Qualified Pension Plans			Other Post- employment Benefit Plans
Service cost	$	6,822		$	4,479		$	11,664		$	18,968
Interest cost	11,146			6,683			11,788			22,520
Expected return on plan assets	(10,911		)	—			(10,179		)	—
Amortization of actuarial loss	5,311			80,649			1,634			3,576
Amortization of prior service cost	(2,070		)	(215,076		)	—			—
Plan curtailment	(4,207		)	—			—			—
Plan settlement	717			—			650			—
Net periodic benefit cost	6,808			(123,265		)	15,557			45,064
Less capitalized portion	(469		)	—			(1,112		)	(3,192		)
Other post-employment benefit and pension expense	$	6,339		$	(123,265	)	$	14,445		$	41,872

Schedule of Defined Benefit Plan Amounts Recognized in Other Comprehensive Income (Loss)

Other Comprehensive Income/(Loss). Other pre-tax changes in plan assets and benefit obligations recognized in other comprehensive income/(loss) are as follows (in thousands):

	Qualified Pension Plans
	Three Months ended September 30, 2015			Nine Months ended September 30, 2015
Amounts recognized in other comprehensive income/(loss):
Prior service credit	$	—		$	40,049
Net gain arising during the period	—			8,302
Amortization of prior service credit	(863		)	(2,070		)
Amortization of net actuarial loss	1,570			5,311
Plan curtailment	(1,781		)	(1,781		)
Plan settlement	16,151			16,149
Total amount recognized in other comprehensive income/(loss)	$	15,077		$	65,960
Estimated amounts that will be amortized from accumulated other comprehensive income/(loss) in the next three months:
Prior service credit	$	(863	)
Net actuarial loss	1,407
Total amount estimated to be amortized from accumulated other comprehensive income/(loss) in the next three months	$	544

	Other Post-employment Benefit Plans
	Three Months ended September 30, 2015			Nine Months ended September 30, 2015
Amounts recognized in other comprehensive income/(loss):
Prior service credit	$	—		$	619,454
Prior service cost	—			(9,835		)
Plan curtailment	—			5,409
Net gain arising during the period	—			27,075
Amortization of prior service credit	(89,550		)	(215,076		)
Amortization of net actuarial loss	32,775			80,649
Total amount recognized in other comprehensive income	$	(56,775	)	$	507,676
Estimated amounts that will be amortized from accumulated other comprehensive income/(loss) in the next three months:
Net prior service credit	$	(89,550	)
Net actuarial loss	32,775
Total amount estimated to be amortized from accumulated other comprehensive income/(loss) in the next three months	$	(56,775	)

Schedule of Assumptions Used

Projected Benefit Obligation Assumptions. The weighted average assumptions used in determining projected benefit obligations for these plans at their respective measurement dates are as follows:

	September 30, 2015
Qualified Pension Plans:
Discount rate	4.34	%
Other Post-employment Benefit Plans:
Discount rate	3.77	%

Net Periodic Benefit Cost Assumptions. The weighted average assumptions used in determining net periodic benefit cost are as follows:

	Three Months ended September 30,
	2015		2014
Qualified Pension Plans:
Discount rate	4.34	%	4.92	%
Expected return on plan assets (a)	7.31	%	7.66	%
Other Post-employment Benefit Plans:
Discount rate	3.29	%	4.98	%

(a) The expected return on plan assets is the long-term rate-of-return the Company expects to earn on the plan assets. In developing the expected return on plan asset assumption, the Company evaluated historical investment performance, the plans' asset allocation strategies and return forecasts for each asset class and input from its advisors. Projected returns by such advisors were based on broad equity and fixed income indices. The expected return on plan assets is reviewed annually in conjunction with other plan assumptions and, if considered necessary, revised to reflect changes in the financial markets and the investment strategy.

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Interest Rate Swap Agreements (Narrative) (Details) $ in Millions	Sep. 30, 2015 USD ($) counterparties
Interest rate swaps, Current
Derivative [Line Items]
Notional amount	$ 170.0
Number of counterparties | counterparties	3
Fixed rate	2.665%
LIBOR | Interest rate swaps, Current
Derivative [Line Items]
Floor interest rate	1.25%
Reclassification out of Accumulated Other Comprehensive Income
Derivative [Line Items]
Interest reclassified	$ 2.4

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Stockholders' Deficit

9 Months Ended

Sep. 30, 2015

Stockholders' Equity Note [Abstract]

Stockholders' Equity/(Deficit)

Stockholders' Equity/(Deficit)

At September 30, 2015, 37,500,000 shares of common stock were authorized and 26,905,398 shares of common stock (including shares of non-vested restricted stock) and 3,582,402 warrants, each eligible to purchase one share of common stock, were outstanding.

The initial exercise price applicable to the warrants is $48.81 per share of common stock. The exercise price applicable to the warrants is subject to adjustment upon the occurrence of certain events described in the warrant agreement. The warrants may be exercised at any time on or before January 24, 2018.