FairPoint Communications, Inc. (NasdaqCM: FRP), Vermont's largest telecom provider, announced after the markets closed Thursday its financial results for the quarter endedJune 30, 2012. Shares closed at $6.07 Thursday and shares fell in after-market trading, opening Friday at $5.75. In early trading Friday, shares had rebounded somewhat to $5.90. FRP in recent weeks has been trading in the upper half of its 52-week high/low range ($3.13 - $7.41).
"We're pleased to report a very strong quarter," saidPaul H. Sunu, CEO of FairPoint. "We continue to make great strides on our 'four pillar' strategy to improve operations, level the regulatory playing field, transform our revenue composition and align our human resources. Our operational and regulatory achievements pave the way for our revenue strategy."
-- Unlevered Free Cash Flow[1] of $38.1 million in the quarter and $67.2 million year-to-date
-- Cash balance grew to $43.8 million at June 30, 2012 from $35.8 million at March 31, 2012
-- Consolidated EBITDAR[2] of $70.2 million in the quarter
-- Net loss narrows to $37.1 million in the quarter
-- Landmark deregulation in New Hampshire, joining Maine and Vermont
Revenue Highlights
FairPoint continues to see positive momentum in its growth-oriented business and broadband products. Data and Internet services revenue grew 8.4% sequentially and new products, such as FairPoint's Ethernet service offerings, continued to attract new customers. Growth in business and broadband products is a key element of FairPoint's strategy to transform its revenue composition and offset continued erosion in the Company's residential voice base. Ethernet services contributed approximately$10.2 millionof revenue in the second quarter of 2012 as compared to$9.0 millionin the first quarter of 2012 and$2.6 millionin the second quarter of 2011. Growth in the Company's Ethernet products is expected to continue as regional banks, healthcare networks and wireless carriers transition away from legacy technologies like frame relay.
FairPoint continues to see a steady improvement in its ability to attract and retain business customers, which contributed to an improvement in the rate of business voice access line loss in the quarter. The rate of loss in business voice access lines, which stood at 3.4% for the twelve months endedJune 30, 2012, is less than half the 6.9% loss FairPoint experienced for the twelve months endedJune 30, 2011. Business voice access lines declined only 0.8% sequentially versusMarch 31, 2012.
Regulatory Highlights
"We were thrilled with the legislation passed inNew Hampshirein the quarter, which provides for the substantial deregulation of retail products and services in the state," said Sunu. "When combined with the retail legislation passed inMaineand the new Incentive Regulation Plan inVermont, FairPoint can now compete on a more level playing field in all three northern New England states as we expand our sales efforts and transform our revenue composition," Sunu said.
OnJune 11, 2012, Governor Lynch ofNew Hampshiresigned into law historic legislation that substantially deregulates FairPoint's retail operations in the state. Among other benefits, FairPoint now has greater regulatory flexibility for all products and services except unbundled basic local voice calling. The regulatory framework has been dramatically simplified and retail service quality penalties have been eliminated entirely in New Hampshire’reducing FairPoint's exposure to such penalties by$12.5 millionper year and further de-risking the business.
Operating and Human Resource Highlights
Broadband subscribers grew 5.1% year-over-year and 0.7% sequentially. FairPoint has added more than 15,000 broadband subscribers in the last twelve months, as penetration reached 32.2% of voice access lines atJune 30, 2012.
Voice access line loss slowed for the ninth consecutive quarter, reaching 7.8% year-over-year and 1.8% sequentially.
As ofJune 30, 2012, FairPoint had approximately 3,410 employees, a decrease of 3.7% and 15.4% fromDec. 31, 2011andDec. 31, 2010, respectively.
Financial Highlights
Second Quarter 2012 as compared to First Quarter 2012
Revenue was$243.5 millionin the second quarter of 2012 as compared to$248.5 millionin the first quarter of 2012. The change was due primarily to a loss of voice access lines in the quarter and the impact of service quality penalty reversals which had a$1.2 millionbeneficial impact in the first quarter of 2012. Access revenue was down slightly, as growth in special access largely offset continued declines in switched access. Other revenue declined versus the first quarter of 2012 due primarily to a decline in late payment fees. Increases in broadband subscribers and Ethernet product revenues led to a$2.8 millionincrease in data and Internet services revenue.
Operating expenses, excluding depreciation, amortization and reorganization, were$190.7 millionin the second quarter of 2012 as compared to$210.9 millionin the first quarter of 2012. The Company recorded its annual vacation expense accrual of$13.8 millionin the first quarter of 2012, which will be amortized over the balance of the year as vacation is used. Adjusting for the impact of the annual vacation accrual, operating expenses declined$6.4 millionsequentially due primarily to decreases in employee expenses, contracted services and cost of goods sold.
Consolidated EBITDAR was$70.2 millionin the second quarter of 2012 as compared to$55.3 millionin the first quarter of 2012. Adjusting for the impact of the annual vacation expense, Consolidated EBITDAR was up slightly versus the first quarter of 2012, as operating expense reductions offset declines in revenue.
Net loss was$37.1 millionin the second quarter of 2012 as compared to a net loss of$46.7 millionin the first quarter of 2012. Adjusting for the impact of the annual vacation accrual, net loss was flat versus the first quarter of 2012.
Capital expenditures were$32.1 millionin the second quarter of 2012 as compared to$26.3 millionin the first quarter of 2012. While FairPoint will continue to be diligent in its approach to capital spending, the Company expects capital expenditures will increase for the remainder of 2012 as the Company expands its broadband footprint inNew Hampshirein accordance with a regulatory commitment to reach 95% of its customers in the state byMarch 31, 2013.
FairPoint's cash position grew to$43.8 millionas ofJune 30, 2012, as compared to$35.8 millionas ofMarch 31, 2012and$17.4 millionas ofDec. 31, 2011. Cash grew to$43.8 millionin the quarter even after a cash interest payment of approximately$16.5 million, principal repayment of$2.5 millionand cash pension contributions of$5.7 million. The Company's$75 millionrevolving credit facility is undrawn, with$62.6 millionavailable for additional borrowing after applying$12.4 millionfor outstanding letters of credit.
Second Quarter 2012 as compared to Second Quarter 2011
Revenue was$243.5 millionin the second quarter of 2012 as compared to$262.6 milliona year earlier. The change was due primarily to a loss of voice access lines and the impact of service quality penalty reversals which had a$4.0 millionbeneficial impact in the second quarter of 2011. Access revenue declined versus a year earlier, which was primarily caused by the decline in voice access lines leading to fewer switched access minutes of use. Data and Internet services revenue grew as broadband subscribers and Ethernet product revenues increased year-over-year.
Operating expenses, excluding depreciation, amortization and reorganization, were$190.7 millionin the second quarter of 2012 as compared to$202.8 milliona year earlier. Decreases in employee expenses, bad debt and other expenses were partially offset by an increase in pension and OPEB expense.
Consolidated EBITDAR was$70.2 millionin the second quarter of 2012 as compared to$70.5 milliona year earlier. Operating expense reductions more than offset the impact of the revenue decline and a cash pension contribution of$5.7 millionmade during the second quarter of 2012. FairPoint did not make a cash pension contribution in the second quarter of 2011.
Capital expenditures were$32.1 millionin the second quarter of 2012 as compared to$52.1 milliona year earlier, when the Company was aggressively building fiber to towers and completing its regulatory commitment for broadband expansion in Vermont. As discussed above, FairPoint expects capital expenditures will increase for the remainder of 2012.
Net loss was$37.1 millionin the second quarter of 2012 as compared to net loss of$27.1 millionin the second quarter of 2011.
2012 Guidance
The Company plans to make cash contributions to its pension plan on a quarterly basis in 2012 and expects to contribute approximately$19.8 millionfor the full year, including the$11.5 millioncontributed in the first and second quarters combined. As the Company stated in its previous earnings release, FairPoint expects to generate Unlevered Free Cash Flow (after cash pension contributions) of$90 million to $100 millionin 2012 through a continued focus on improving Consolidated EBITDAR margins and disciplined capital spending. FairPoint expects to pay approximately$68 millionin interest and$10 millionin loan amortization in 2012.
Quarterly Report
The information in this press release should be read in conjunction with the financial statements and footnotes contained in the Company's quarterly report for the quarter endedJune 30, 2012, which will be filed with the SEC on or prior toAugust 9, 2012. The Company's results for the quarter endedJune 30, 2012are subject to the completion of its quarterly report for such period.
Fresh Start Accounting
OnJan. 24, 2011, the Company emerged from Chapter 11 bankruptcy protection and its Plan of Reorganization became effective. For purposes of generally accepted accounting principles, the Company adopted fresh start accounting as ofJan. 24, 2011, whereby the Company's assets and liabilities were marked to their fair value as of the date of emergence. Accordingly, the Company's consolidated statements of financial position and operations for periods afterJan. 24, 2011will not be comparable in many respects to periods prior to the adoption of fresh start accounting.
Conference Call Information
As previously announced, FairPoint will host a conference call and simultaneous webcast to discuss its second quarter 2012 results at8:30 a.m. (EDT)onFriday, August 3, 2012.
Participants should call (866) 578-5747 (US/Canada) or (617) 213-8054 (international) at8:20 a.m. (EDT)and enter the passcode 88153752 when prompted. The title of the call is the Q2 2012 FairPoint Communications, Inc. Earnings Conference Call.
A telephonic replay will be available for anyone unable to participate in the live call. To access the replay, call (888) 286-8010 (US/Canada) or (617) 801-6888 (international) and enter the passcode 88754734 when prompted. The recording will be available fromFriday, August 3, 2012, at10:30 a.m. (EDT)throughFriday, August 10, 2012, at11:59 p.m. (EDT).
A live broadcast of the earnings conference call will be available online atwww.fairpoint.com/investors. An online replay will be available shortly thereafter.
Use of Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures, including but not limited to Consolidated EBITDAR, Unlevered Free Cash Flow and adjustments to GAAP and non-GAAP measures to exclude the effect of special items. Management believes that Consolidated EBITDAR and Unlevered Free Cash Flow may be useful to investors in assessing the Company's operating performance and its ability to meet its debt service requirements. The maintenance covenants contained in the Company's credit facility are based on Consolidated EBITDAR. In addition, management believes that the adjustments to GAAP and non-GAAP measures to 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.
However, the non-GAAP financial measures, as used herein, are not necessarily comparable to similarly titled measures of other companies. Furthermore, Consolidated EBITDAR and Unlevered Free Cash Flow 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, Consolidated EBITDAR, Unlevered Free Cash Flow 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 Consolidated EBITDAR and Unlevered Free Cash Flow only supplementally. A reconciliation of Consolidated EBITDAR and Unlevered Free Cash Flow to net income is contained in the attachments to this press release.
About FairPoint Communications, Inc.
FairPoint Communications, Inc. (NasdaqCM: FRP) is a leading communications provider of broadband Internet access, local and long-distance phone, television and other high-capacity data services to customers in communities across 18 states. Through its fast, reliable fiber network, FairPoint delivers high-quality data and voice networking communications solutions to residential, business and wholesale customers. FairPoint delivers VantagePointSMservices through its resilient IP-based network in northern New England. This state-of-the-art fiber network provides carrier Ethernet connections to support the surging bandwidth and performance requirements for cloud-based applications like network storage, disaster recovery, distance learning, medical imaging, video conferencing and CAD/CAM along with traditional voice, VoIP, video and Internet access solutions. Additional information about FairPoint products and services is available atwww.FairPoint.com.
Cautionary Note Regarding Forward-looking Statements
Some statements herein or discussed on our earnings conference call are known as "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, but are not limited to, statements about the Company's plans, objectives, expectations and intentions and other statements contained herein that are not historical facts. When used herein, the words "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" 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 the Company's plans, objectives, expectations and intentions and other factors. 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 hereof. The Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. However, your attention is directed to any further disclosures made on related subjects in the Company's subsequent reports filed with the SEC.
Certain information contained herein or discussed on our earnings conference call may constitute guidance as to projected financial results and the Company's future performance that represent management's estimates as of the date hereof. This guidance, which consists of forward-looking statements, is prepared by the Company's management and is qualified by, and subject to, certain assumptions. Guidance is not prepared with a view toward compliance with published guidelines of the American Institute of Certified Public Accountants, and neither the Company's independent registered public accounting firm nor any other independent expert or outside party compiles or examines the guidance and, accordingly, no such person expresses any opinion or any other form of assurance with respect thereto. Guidance is based upon a number of assumptions and estimates that, while presented with numerical specificity, are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company's control and are based upon specific assumptions with respect to future business decisions, some of which will change. Management generally states possible outcomes as high and low ranges which are intended to provide a sensitivity analysis as variables are changed but are not intended to represent actual results, which could fall outside of the suggested ranges. The principal reason that the Company releases this data is to provide a basis for management to discuss the Company's business outlook with analysts and investors. The Company does not accept any responsibility for any projections or reports published by any such outside analysts or investors. Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions of the guidance furnished by us will not materialize or will vary significantly from actual results. Accordingly, the Company's guidance is only an estimate of what management believes is realizable as of the date hereof. Actual results will vary from the guidance and the variations may be material. Investors should also recognize that the reliability of any forecasted financial data diminishes the farther in the future that the data is forecast. In light of the foregoing, investors are urged to put the guidance in context and not to place undue reliance on it.
[1]Unlevered Free Cash Flow means Consolidated EBITDAR minus capital expenditures. Unlevered Free Cash Flow is a non-GAAP financial measure. A reconciliation of Unlevered Free Cash Flow to net income is contained in the attachments to this press release.
[2]Consolidated EBITDAR means earnings before interest, taxes, depreciation, amortization and restructuring items as defined in the Company's credit facility. Consolidated EBITDAR is a non-GAAP financial measure. A reconciliation of Consolidated EBITDAR to net income is contained in the attachments to this press release.
FAIRPOINT COMMUNICATIONS, INC.
Supplemental Financial Information
(Unaudited)
(in thousands, except per unit)
2Q12
1Q12
4Q11
3Q11
2Q11
Summary Income Statement:
Revenue:
Voice services (1)
$ 111,525
$ 114,777
$ 118,580
$ 117,583
$ 124,676
Access
84,686
86,823
90,204
94,646
93,128
Data and Internet services (1)
36,118
33,332
32,418
32,854
32,258
Other services
11,124
13,542
12,960
12,829
12,574
Total revenue
243,453
248,474
254,162
257,912
262,636
Operating expenses:
Operating expenses, excluding depreciation, amortization and reorganization
190,672
210,903
203,717
213,483
202,784
Depreciation and amortization
93,780
93,207
91,951
91,547
90,614
Reorganization (income) expense (post-emergence)
(2,823)
(1,392)
(1,743)
(3,735)
2,510
Impairment of intangible assets and goodwill
-
-
-
262,019
-
Total operating expenses
281,629
302,718
293,925
563,314
295,908
Loss from operations
(38,176)
(54,244)
(39,763)
(305,402)
(33,272)
Other income (expense):
Interest expense
(16,983)
(17,028)
(17,173)
(17,147)
(16,996)
Other income (expense), net
(125)
302
472
488
350
Total other income (expense)
(17,108)
(16,726)
(16,701)
(16,659)
(16,646)
Loss before reorganization items and income taxes
(55,284)
(70,970)
(56,464)
(322,061)
(49,918)
Income tax benefit (expense)
18,211
24,258
(27,520)
42,620
22,821
Net loss
$ (37,073)
$ (46,712)
$ (83,984)
$ (279,441)
$ (27,097)
Consolidated EBITDAR and Unlevered Free Cash Flow Reconciliation:
Net loss
$ (37,073)
$ (46,712)
$ (83,984)
$ (279,441)
$ (27,097)
Income tax (benefit) expense
(18,211)
(24,258)
27,520
(42,620)
(22,821)
Interest expense
16,983
17,028
17,173
17,147
16,996
Depreciation and amortization
93,780
93,207
91,951
91,547
90,614
Non-cash pension and OPEB expense (2a)
11,996
12,981
12,984
9,592
10,583
Other non-cash items, net (2b)
395
(156)
(53)
260,518
(138)
Restructuring costs (2c)
276
463
275
844
2,608
All other allowed adjustments, net (2d)
2,050
2,771
4,112
2,866
(246)
Consolidated EBITDAR
$ 70,196
$ 55,324
$ 69,978
$ 60,453
$ 70,499
Consolidated EBITDAR margin
28.8%
22.3%
27.5%
23.4%
26.8%
Capital expenditures
$ 32,070
$ 26,257
$ 35,110
$ 35,169
$ 52,121
Unlevered Free Cash Flow
$ 38,126
$ 29,067
$ 34,868
$ 25,284
$ 18,378
Select Operating and Financial Metrics:
Residential access lines
619,240
631,724
645,453
662,562
680,189
Business access lines
306,682
309,078
311,241
314,290
317,584
Wholesale access lines (3)
69,375
72,233
76,065
80,025
82,231
Total switched access lines
995,297
1,013,035
1,032,759
1,056,877
1,080,004
% change y-o-y
-7.8%
-8.1%
-8.4%
-8.8%
-9.3%
% change q-o-q
-1.8%
-1.9%
-2.3%
-2.1%
-2.1%
Broadband subscribers (4)
320,812
318,510
314,135
312,475
305,155
% change y-o-y
5.1%
7.1%
8.4%
8.2%
5.4%
% change q-o-q
0.7%
1.4%
0.5%
2.4%
2.6%
penetration of access lines
32.2%
31.4%
30.4%
29.6%
28.3%
Access line equivalents
1,316,109
1,331,545
1,346,894
1,369,352
1,385,159
% change y-o-y
-5.0%
-4.9%
-5.0%
-5.4%
-6.4%
% change q-o-q
-1.2%
-1.1%
-1.6%
-1.1%
-1.1%
(1)
FairPoint reclassified certain revenues from voice services to data and Internet services to more accurately reflect the underlying nature of services provided.
(2)
For purposes of calculating Consolidated EBITDAR, FairPoint's credit facility allows it to adjust for:
a) aggregate pension and other post-employment benefits expense (OPEB), net of pension contributions and
OPEB cash benefit payments in the period,
b) other non-cash items except to the extent they will require a cash payment in a future period,
c) costs related to the restructuring, including professional fees for advisors and consultants, and
d) other items including success bonuses, severance, non-cash gains/losses, non-operating dividend and
interestincome and other extraordinary gains/losses.
(3)
Wholesale access lines include Resale and UNE-P, but exclude UNE-L and special access circuits.
(4)
Broadband subscribers include DSL, fiber-to-the-premise, cable modem and fixed wireless broadband, but exclude Ethernet and other high-capacity circuits.
FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
June 30, 2012 and December 31, 2011
(in thousands, except share data)
June 30,
December 31,
2012
2011
Assets
(unaudited)
Current assets:
Cash
$
43,770
$
17,350
Restricted cash
13,889
24,446
Accounts receivable, net
102,654
104,298
Prepaid expenses
19,464
18,346
Other current assets
3,201
3,312
Deferred income tax, net
16,425
17,915
Total current assets
199,403
185,667
Property, plant and equipment (net of $463.2 million and $280.5
million accumulated depreciation, respectively)
1,543,062
1,663,065
Intangible assets (net of $16.0 million and $10.4 million accumulated
amortization, respectively)
122,568
128,145
Debt issue costs, net
1,446
1,779
Restricted cash
651
651
Other assets
10,309
10,338
Total assets
$
1,877,439
$
1,989,645
Liabilities and Stockholders' Deficit
Current portion of long-term debt
$
10,000
$
10,000
Current portion of capital lease obligations
1,224
1,252
Accounts payable
61,836
65,184
Claims payable and estimated claims accrual
2,753
22,839
Accrued interest payable
502
508
Other accrued liabilities
71,453
54,348
Total current liabilities
147,768
154,131
Capital lease obligations
2,085
2,690
Accrued pension obligation
156,107
157,961
Employee benefit obligations
556,305
531,634
Deferred income taxes
200,796
245,369
Other long-term liabilities
13,784
14,003
Long-term debt, net of current portion
985,000
990,000
Total long-term liabilities
1,914,077
1,941,657
Total liabilities
2,061,845
2,095,788
Commitments and contingencies
Stockholders' deficit:
Common stock, $0.01 par value, 37,500,000 shares authorized,
26,232,652 and 26,197,142 shares issued and outstanding at
June 30, 2012 and December 31, 2011, respectively
262
262
Additional paid-in capital
504,217
502,034
Retained deficit
(498,730)
(414,945)
Accumulated other comprehensive loss
(190,155)
(193,494)
Total stockholders' deficit
(184,406)
(106,143)
Total liabilities and stockholders' deficit
$
1,877,439
$
1,989,645
FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
Three Months ended June 30, 2012 and 2011, Six Months ended June 30, 2012,
One Hundred Fifty-Seven Days ended June 30, 2011 and Twenty-Four Days ended January 24, 2011
(Unaudited)
(in thousands, except per share data)
Predecessor
Company
OneHundred
SixMonths
Fifty-Seven
Twenty-Four
ThreeMonthsEndedJune30,
Ended
Days Ended
Days Ended
2012
2011
June30,2012
June30,2011
January24,2011
Revenues
$
243,453
$
262,636
$
491,927
$
451,038
$
66,378
Operating expenses:
Cost of services and sales, excluding depreciation
and amortization
103,960
114,468
225,435
201,641
38,766
Selling, general and administrative expense, excluding
depreciation and amortization
86,712
88,316
176,140
151,798
27,161
Depreciation and amortization
93,780
90,614
186,987
153,393
21,515
Reorganization related (income) expense
(2,823)
2,510
(4,215)
5,246
‘
Total operating expenses
281,629
295,908
584,347
512,078
87,442
Loss from operations
(38,176)
(33,272)
(92,420)
(61,040)
(21,064)
Other income (expense):
Interest expense
(16,983)
(16,996)
(34,011)
(29,487)
(9,321)
Other
(125)
350
177
831
(132)
Total other expense
(17,108)
(16,646)
(33,834)
(28,656)
(9,453)
Loss before reorganization items and income taxes
(55,284)
(49,918)
(126,254)
(89,696)
(30,517)
Reorganization items
‘
‘
‘
‘
897,313
(Loss) income before income taxes
(55,284)
(49,918)
(126,254)
(89,696)
866,796
Income tax benefit (expense)
18,211
22,821
42,469
38,176
(279,889)
Net (loss) income
$
(37,073)
$
(27,097)
$
(83,785)
$
(51,520)
$
586,907
Weighted average shares outstanding:
Basic
25,984
25,840
25,958
25,831
89,424
Diluted
25,984
25,840
25,958
25,831
89,695
(Loss) earnings per share:
Basic
$
(1.43)
$
(1.05)
$
(3.23)
$
(1.99)
$
6.56
Diluted
$
(1.43)
$
(1.05)
$
(3.23)
$
(1.99)
$
6.54
FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30, 2012, One Hundred Fifty-Seven Days Ended June 30, 2011
and Twenty-Four Days Ended January 24, 2011
(Unaudited)
(in thousands)
OneHundred
Predecessor
Company
Six Months
Fifty-Seven
Twenty-Four
Ended
Days Ended
Days Ended
June30,2012
June30,2011
January24,2011
Cash flows from operating activities:
Net (loss) income
$
(83,785)
$
(51,520)
$
586,907
Adjustments to reconcile net (loss) income to net cash provided by
(used in) operating activities:
Deferred income taxes
(43,315)
(35,213)
279,868
Provision for uncollectible revenue
1,297
10,070
3,454
Depreciation and amortization
186,987
153,393
21,515
Post-retirement healthcare
25,846
12,850
2,654
Qualified pension
(869)
4,779
986
Other non cash items
457
22
97
Changes in assets and liabilities arising from operations:
Accounts receivable
401
(619)
(7,752)
Prepaid and other assets
(1,269)
4,921
(3,423)
Restricted cash
(9,966)
‘
‘
Accounts payable and accrued liabilities
6,389
7,790
26,627
Accrued interest payable
(6)
183
9,017
Other assets and liabilities, net
(440)
(1,457)
177
Reorganization adjustments:
Non-cash reorganization income
(4,954)
(709)
(917,358)
Claims payable and estimated claims accrual
(7,518)
(55,858)
(1,096)
Restricted cash - cash claims reserve
20,041
46,932
(82,764)
Total adjustments
173,081
147,084
(667,998)
Net cash provided by (used in) operating activities
89,296
95,564
(81,091)
Cash flows from investing activities:
Net capital additions
(58,327)
(93,369)
(12,477)
Distributions from investments
572
618
‘
Net cash used in investing activities
(57,755)
(92,751)
(12,477)
Cash flows from financing activities:
Loan origination costs
‘
(884)
(1,500)
Repayments of long-term debt
(5,000)
‘
‘
Restricted cash
483
1,372
34
Proceeds from exercise of stock options
30
‘
‘
Repayment of capital lease obligations
(634)
(505)
(201)
Net cash used in financing activities
(5,121)
(17)
(1,667)
Net change
26,420
2,796
(95,235)
Cash, beginning of period
17,350
10,262
105,497
Cash, end of period
$
43,770
$
13,058
$
10,262
Supplemental disclosure of cash flow information:
Capital additions included in accounts payable or claims
payable and estimated claims accrual at period-end
$
‘
$
3,297
$
1,818
Reorganization costs paid
$
620
$
16,857
$
11,110
Non-cash settlement of claims payable
$
7,668
$
‘
$
‘
SOURCE FairPoint Communications, Inc.CHARLOTTE, N.C.,Aug. 2, 2012/PRNewswire/