8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549	OMB APPROVAL
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FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported )				March 26, 2007
		FairPoint Communications, Inc.
(Exact name of registrant as specified in its charter)
Delaware			333-56365				13-3725229
(State or other jurisdiction of incorporation)			(Commission File Number)				(IRS Employer Identification No.)
	521 East Morehead Street, Suite 250, Charlotte, North Carolina					28202
	(Address of principal executive offices)					(Zip Code)
Registrant's telephone number, including area code					(704) 344-8150
N/A
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

ý Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure.

On March 26, 2007, John P. Crowley, the Executive Vice President and Chief Financial Officer of FairPoint Communications, Inc. (the “Company”), will participate in the Lehman Brothers High Yield Bond and Syndicated Loan Conference (the “Presentation”). A copy of the Presentation is attached hereto as Exhibit 99.1.

Item 8.01 Other Events.

A copy of the Presentation is being furnished by being attached hereto as Exhibit 99.1. Such material may be deemed soliciting material in connection with the meeting of the Company’s stockholders to be held pursuant to the Agreement and Plan of Merger, dated as of January 15, 2007 (the “Merger Agreement”), by and among the Company, Verizon Communications Inc. (“Verizon”) and Northern New England Spinco Inc. (“Spinco”), a newly formed, wholly-owned subsidiary of Verizon, and a prospectus in connection with the issuance of common stock of the Company to stockholders of Spinco in the merger contemplated by the Merger Agreement (the “Merger”).

The Company intends to file a registration statement, including a proxy statement, and other materials with the Securities and Exchange Commission (“SEC”) in connection with the Merger. The Company urges investors to read these documents when they become available because they will contain important information. Investors will be able to obtain free copies of the registration statement and proxy statement, as well as other filed documents containing information about the Company and the Merger, at www.sec.gov, the SEC’s website. Investors may also obtain free copies of these documents and the Company’s SEC filings at www.fairpoint.com under the Investor Relations section, or by written request to FairPoint Communications, Inc., 521 E. Morehead Street, Suite 250, Charlotte, NC 28202, Attention: Investor Relations.

The Company, Verizon and the Company’s directors, executive officers and other employees may be deemed to be participants in the solicitation of proxies from Company stockholders with respect to the Merger and related transactions. Information about the Company’s directors and executive officers is available in the Company’s proxy statement for its 2006 annual meeting of stockholders on April 24, 2006. Additional information regarding the interests of potential participants will be included in the registration statement and proxy statement and other materials to be filed by the Company with the SEC.

This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits

Exhibit Number	Description
99.1	Presentation

The information in this Current Report, including the exhibits attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section. Such information in this Current Report, including the exhibits, shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any incorporation by reference language in any such filing.

SIGNATURES

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

FAIRPOINT COMMUNICATIONS, INC.

By: /s/ John P. Crowley                           

Name: John P. Crowley

Title: Executive Vice President and

Chief Financial Officer

Date:  March 26, 2007

 

EX-99

Exhibit 99.1

FairPoint Communications, Inc.Lehman Brothers High Yield Bond
and Syndicated Loan Conference
March 26, 2007

Presenter

John P. Crowley –Executive Vice President, Chief Financial Officer

Forward-Looking Statement

Page 2

This presentation may contain forward-looking statements that are
not based on historical fact, including without limitation, statements containing
the words “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,”
“estimates” and similar expressions and statements including those relating to
potential cost savings and synergies expected to be realized in the proposed
merger with the northeast wireline operations of Verizon Communications Inc.
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. Such factors include those risks described from
time to time in FairPoint Communications, Inc.’s filings with the Securities and
Exchange Commission, including, without limitation, the risks described in
FairPoint’s most recent Annual Report on Form 10-K on file with the Securities and
Exchange Commission. These factors should be considered carefully and you are
cautioned not to place undue reliance on such forward-looking statements. All
information is current as of the date of this presentation, and FairPoint
Communications, Inc. undertakes no duty to update this information.

Company Overview

Page 4

Historical High Yield Activity

$125 million 9.5% senior
notes (1998)

$75 million floating rate
notes at a rate of LIBOR
plus 4.1875% (1998)

$200 million 12.5% senior
subordinated notes (2000)

$225 million 11.875%
senior subordinated notes
(2003)

Page 5

Overview of FairPoint
Significantly greater scope and scale

(1) As of December 31, 2006.

(2) Includes 149,998 wholesale access lines.

Pre-merger FairPoint⁽¹⁾

311,150 total access line equivalents

194,119 residential voice access lines

57,587 business voice access lines

59,444 HSD subscribers (including DSL,
cable modem and WBB)

Post-merger⁽¹⁾

2,005,843 total access line equivalents⁽²⁾

1,160,386 residential voice access lines

447,966 business voice access lines

247,493 HSD subscribers (including DSL,
cable modem and WBB)

Page 6

FairPoint Profile

(1) Includes acquired lines.

(2) Includes voice access lines and high speed data lines (DSL, cable modem and wireless broadband).

A leading provider of communications
services in rural and small urban communities

Established in 1991 to acquire Rural Local Exchange Carriers (“RLECs”)

A leading acquirer of RLEC properties, with 35 acquisitions completed
since 1993. Recent acquisitions include:

Cass County Telephone Company – closed in 3rd Quarter of 2006

Unite Communications – closed in 3rd Quarter of 2006

The Germantown Independent Telephone Company –
closed in 4th Quarter of 2006

Merger with Verizon’s Maine, Vermont and New Hampshire
wireline operations – expected to close in January 2008

Currently operate 31 local exchange companies in 18 states

311,150⁽¹⁾ access line equivalents⁽²⁾ as of December 31, 2006,
up from 289,658 ⁽¹⁾ access line equivalents as of December 31, 2005

Page 7

Investment Thesis

Attractive, sustainable cash flow

Completed initial public offering in February 2005

Regulated businesses have historically provided
relatively stable revenue base

Organic growth from non-regulated businesses: high
speed data and long distance products

External growth through acquisitions with low   
integration risk

Attractive dividend yield: current quarterly dividend of
$0.39781 per share (or $1.59 annually)

Page 8

Strengthening Communities
through Communications

A leading provider of communications services in
rural and small urban communities

Average density – approximately 13 access lines per square mile
(our most rural areas have one access line per square mile)

Favorable rural market dynamics

Loyal, stable customer base

Fundamentally better wireline trends than most non-rural carriers

Technologically advanced infrastructure

92% of our access lines are high speed data capable

Use multiple technologies for high speed data
(DSL, Cable, Wireless Broadband)

Use multiple technologies for video
(IPTV, Cable, DirecTV partnerships)

Page 9

Key Financial Metrics

(1) Adjusted EBITDA is a non-GAAP financial measure (i.e., it is not a measure of financial performance under generally accepted accounting principles) and should not be considered in isolation or as a substitute for consolidated statements of operations and cash flows data prepared in accordance with GAAP.  In addition, the non-GAAP financial measures used by FairPoint may not be comparable to similarly titled measures of other companies.  For further information, definitions and reconciliations, see the Company’s earnings release for the fourth quarter of 2006 filed on Form 8-K with the Securities and Exchange Commission on February 23, 2007.  

Results for the year ended December 31, 2006

Consolidated Revenues $270.1 million

Adjusted EBITDA⁽¹⁾$133.2 million

Net Income$31.1 million

Access Line Equivalents311,150

HSD Subscribers59,444

Total Long Term Debt$608.0 million

(90% at fixed rates, via swaps)

Pending Merger

Page 11

Rationale For The Merger
Compelling benefits for stakeholders, customers and employees

Benefits stakeholders

Pro forma leverage improves to approximately
4.1 times EBITDA(2)

Pro forma dividend payout ratio expected
to improve to 60%–70% after anticipated
cost-savings

Improves financial flexibility

Improves revenue mix

Improves dividend sustainability (FairPoint intends to
maintain its dividend at $1.59 per share annually(1))

Benefits customers and employees

Stronger competitive operations

Increased focus on customers

Significant DSL / broadband expansion in region

Expanded employee base enhances core capabilities

Opening three scalable service centers in the region

Constructive relationships with employees, unions and policymakers

(1)  Subject to declaration by the board of directors and compliance with Delaware law and covenants in agreements governing indebtedness.

(2)  Estimate at closing of merger.  Calculated using combined EBITDA for 2005 and combined net debt at closing.

Page 12

Long-term Strategic Flexibility
Increased opportunities to generate value

Provides multiple opportunities for value creation

Improves revenue opportunities

New product bundles

Increased broadband availability

Increased focus on local sales and marketing

Enhances operational efficiencies

Economies of scale

Investment in state-of-the-art systems

Greater operating flexibility

Improves financial strength

De-leverages balance sheet

Improves access to capital / lowers cost of capital

Increases free cash flow

Reduces reliance on access and USF revenues

Page 13

Favorable Contribution Metrics
Shareholders receive significant stake in combined entity

FRP shareholders
own approximately
40% of the
combined company

FRP contribution

14% of total
access lines

18% of total revenue

24% of total EBITDA

(1)  Based on 2005 audited financial results, net of adjustments to pension and other postretirement benefit expenses and certain one time items.

(2)  Based on access lines at September 30, 2006.

Page 14

Attractive Financial Characteristics
With defined opportunities for improvement

(1)  Earnings before interest, taxes, depreciation and amortization.

(2)  Based on 2005 audited financial results, net of adjustments to pension and other postretirement benefit expenses and certain one time items.  

       2005 EBITDA was $395 million but included certain expenses relating to liabilities which will not be assumed in the merger.

(3)  Excludes depreciation and amortization.  Includes $240 million of allocated expenses from Verizon affiliates.

Expected cost savings and
synergies of $60 - $75 million
annually

Full effect of synergies begins
12 months after closing

Planned investment of $200
million in strategic systems

6.3x

EBITDA multiple (based on 2005 EBITDA)⁽¹⁾⁽²⁾

$2,715M

Total Transaction Value

$1,700M

Plus Assumed Debt

$1,015M

Implied Equity Value (@ $18.88 per share)

53.8 Million FairPoint Shares issued to Verizon Stockholders

$775 million

$431 million

Operating expenses⁽³⁾

EBITDA

$1,206 million

Revenue

Verizon’s Maine, New Hampshire and
Vermont operations ⁽²⁾ :

Page 15

87%

Payout ratio⁽¹⁾

4.5x

Leverage⁽¹⁾⁽⁵⁾

35.1 million

Shares Outstanding⁽⁴⁾

$1.59 per share

Annual Dividend

$602 million

Net Debt⁽³⁾

$135 million

EBITDA⁽¹⁾

$263 million

Revenue⁽¹⁾

FairPoint (pre-merger):

(1)Based on 2005 results which are the most recent full year audited financial
statements publicly available for both companies.

(2)Based on 2005 audited financial results, net of adjustments to pension and
other postretirement benefit expenses and certain one time items.

(3)Long-term debt net of cash and cash equivalents as of December 31, 2005.

(4)As of September 30, 2006.

(5)Defined as net debt/EBITDA.

(6)Pro-forma payout ratio after realization of anticipated cost savings and
synergies of $60-75 million

(7)Calculated using 2005 combined EBITDA and estimated net debt closing.

Summary Financial Comparison
Enhanced financial strength

60 – 70%

Payout ratio⁽⁶⁾

4.1x (at closing)

Leverage⁽⁷⁾

88.9 million

Shares Outstanding

$1.59 per share

Annual Dividend

$2,334 million

Net Debt⁽³⁾

$566 million

EBITDA⁽²⁾

$1,469 million

Revenue⁽²⁾

Pro forma FairPoint Consolidated:

Expected cost savings / synergies
of $60 - $75 million annually

Full effect of synergies begins
12 months after closing

Planned investment of $200
million in strategic systems

Page 16

Favorable Rural CharacteristicsFocus on rural / small urban markets

Continuing focus
on lower-density
markets after
transaction

36 lines / sq. mile

More than 80% of local
exchanges will
serve 5,000
customers or less

Notes

1.

Pro forma for CenturyTel’s acquisition of Madison River

2.

Pro forma for Citizens’ acquisition of Commonwealth

2.

Pro forma for Fairpoint's aquisition of Verizon's New England access lines

Source

SEC filings and

investor presentations

Access Lines/Square Mile

Page 17

Access Line Trends/Metrics
Opportunity for improvement

$29.70

39.7%

12.7%

6.4%

VZ ME, VT and
    NH

$42.02

45.2%

23.6%

3.4%

FairPoint⁽¹⁾

HSD ARPU⁽⁴⁾

Long Distance
Penetration⁽³⁾

HSD
Penetration⁽³⁾

Access Line
Losses⁽²⁾

Note:  All numbers based on December 31, 2006 information.

(1)

Access lines losses excludes acquired lines.

(2)

Comparison of December 31, 2006 to December 31, 2005.

(3)

Shown as a percentage of voice access lines.

(4)

Represents average revenue per unit (ARPU) for the fourth quarter of 2006.

Page 18

Transition Planning
Existing Credit Agreement amended to facilitate a successful transition

Getting ahead -

Integration plan based upon investing $200 million for systems
development and integration (of which, approximately $95 -
$110 million invested before closing)

Verizon to pay for up to $40 million of these pre-closing transition costs

FRP expects to generate $55 million through the sale of its investment in
Orange County –Poughkeepsie to Verizon Wireless

Credit Agreement Amended to:

Consent to the sale of Orange-Poughkeepsie and exclude proceeds from
Distributable Cash Flow

Amend definition of Consolidated Capital Expenditures and EBITDA to
allow for add-back of expenditures associated with the transition not to
exceed $72.9 million

Increase leverage and dividend suspension covenants to 5.5x and 5.25x
respectively

Page 19

Merger FinancingObtained $2.1 billion commitment for bank financing⁽¹⁾

Total debt issuance at closing will approximate FairPoint’s
outstanding debt plus $1.7 billion assumed from Verizon

Bank financing

Payoff FairPoint’s existing credit facility

Finance special dividend to Verizon up to amount of existing tax basis

Terms

Revolver - 6 year maturity

Term Loan B - 8 year maturity (1% amortization beginning year 3)

Covenants

Total leverage of 5.75x in year one and 5.5x thereafter

Interest coverage ratio of 2.25x

Proposed high-yield financing⁽¹⁾

Difference between $1.7 billion in assumed debt and Spinco tax basis
will be issued in unsecured bonds

(1)  Offering size subject to change based on final tax basis of Spinco assets.

Summary

Page 21

SummaryStrategic win for stakeholders, employees and customers

Benefits stakeholders

Attractive valuation

Results in cash flow accretion

Enhances financial strength

Benefits customers and employees

Support services return to Maine, New Hampshire
and Vermont

FairPoint’s strong commitment to and success in
broadband Accelerates economies of scale

Leverages FairPoint’s management team

Creates multiple opportunities for
ongoing value creation

Improves revenue opportunities

Enhances operating efficiencies

Questions and Answers
March 26, 2007