FairPoint reports $8.8 million loss in first quarter

first_imgFairPoint Communications, Inc. (NYSE: FRP) has announced its financial results for the three months ended March 31, 2009. The landline telephone company reported a loss of $8.8 million on $311.6 million in revenues, compared to a pro forma loss of $9.5 million for the same period in 2008 on $349,418 in revenues. The first quarter loss is less than losses stretching back to the last profitable period in quarter two of 2008 of $23,114. The company lost $76,072 in quarter four of 2008, and lost $25,109 in quarter three of 2008. Revenues from the fourth quarter of 2008 to the first quarter of 2009 fell $7.6 million, and have fallen every quarter over the last 12 months.FairPoint completed its acquisition of Verizon Communication’s wireline and related operations in Maine, New Hampshire and Vermont (the “Northern New England business”) on March 31, 2008. As a result of that transaction, which was treated as a “reverse acquisition” for accounting purposes, the statement of operations for the three months ended March 31, 2008 reflects the operating results of the Northern New England business only. For purposes of analysis, the statement of operations for the three months ended March 31, 2008 is presented on a pro forma basis, assuming the acquisition and related transactions had occurred on January 1, 2008.Operational HighlightsOperational trends continue to improve following the early February systems cutover for the northern New England operations. Bill cycles are current and processing on a normal schedule; provisioning of new orders has increased steadily, although a sizable backlog remains; and call center volumes are nearly at pre-cutover levels.The rate of decline in access line equivalents in the northern New England operations continued to improve as access lines declined by 1.3% in the first quarter of 2009 (or 1.8% normalizing for a one-time adjustment to access lines identified during the systems cutover) compared with a decline of 2.7% in the fourth quarter of 2008.Total high-speed data (HSD) subscribers increased by 1.9% (or 1.3% normalizing for a one-time cutover related adjustment) in the first quarter compared with a 0.4% increase in the final quarter of 2008. HSD subscribers reached nearly 301,000 and penetration increased to 21.5% on a consolidated basis as of March 31, 2009.Revenue totaled $311.6 million for the first quarter of 2009, a decline of 2.4% compared with $319.3 million in the fourth quarter of 2008.Adjusted EBITDA (a non-GAAP financial measure as defined herein) totaled $123.2 million for the first quarter of 2009, compared with $137.5 million in the fourth quarter of 2008. For purposes of the covenants contained in the Company’s credit facility, Adjusted EBITDA totaled $125.1 million in the first quarter of 2009.”During the first quarter of 2009, we completed an unprecedented cutover to our new systems for the northern New England operations,” stated Gene Johnson, Chairman and CEO of FairPoint. “While the systems cutover has resulted in a disruption to our operations and has negatively impacted or inconvenienced many of our customers, over the past several months, measurable progress has been achieved in key areas and we expect to largely return to a normal level of operations by the end of the second quarter. After some initial delay, billing cycles are up to date and are now being processed on a normal schedule, provisioning of new orders has increased steadily and we are making progress in reducing the initial cutover driven backlog. Also, call volumes into our customer service centers have declined significantly and are nearly at pre-cutover levels,” Johnson continued.”Our financial performance was negatively impacted during the first quarter as we continued to incur substantial cutover-related costs and assumed responsibility for all services previously performed by Verizon under the transition services agreement. Looking ahead, we expect to continue to incur cutover related costs, at a declining rate, during the second quarter as we strive to return to normal operating levels. We continue to expect improved results in the second half of the year as we turn our focus to growing revenue and improving our cost structure,” concluded Johnson.First Quarter ResultsRevenue for the first quarter of 2009 was $311.6 million, compared with $319.3 million for the fourth quarter of 2008 and pro forma revenue of $349.4 million for the first quarter of 2008. Revenue declined 2.4% compared to the fourth quarter of 2008 reflecting the continued decrease in access line equivalents, the effects of seasonality in the Company’s northern New England operations, and the weak economic environment. First quarter 2009 revenue has been reduced by $1.7 million for the estimated effect of pending disconnects that had not been processed through the Company’s systems on a timely basis as a result of the systems cutover and to give effect to anticipated billing adjustments and credits that had not yet been processed as of March 31, 2009.Operating expenses, excluding depreciation, for the first quarter of 2009 totaled $237.6 million, a decline of $31.2 million compared to the fourth quarter of 2008. The improvement in operating expenses was driven primarily by a decrease in costs incurred under the transition services agreement (“TSA”) with Verizon which was terminated at the end of January. Excluding transition services and other cutover related costs, operating expenses increased by $10.0 million, primarily reflecting the additional costs incurred by the Company for services that were previously covered under the TSA with Verizon.Adjusted EBITDA was $123.2 million for the three months ended March 31, 2009, compared with $137.5 million for the fourth quarter of 2008 and pro forma Adjusted EBITDA of $134.3 million for the three months ended March 31, 2008. The decline in Adjusted EBITDA from the fourth quarter of 2008 primarily reflects the reduced level of revenue and the higher operating expenses incurred for services previously provided under the TSA with Verizon.For purposes of the covenants contained in the Company’s credit facility, Adjusted EBITDA totaled $125.1 million in the first quarter of 2009, including income of $15.0 million related to the transition agreement reached with Verizon onJanuary 30, 2009. The one-time gain from the settlement with Verizon was largely offset by costs incurred in connection with the northern New England systems cutover which exceeded the cumulative cap for allowed cutover related add-backs as provided by the Company’s credit agreement. For additional information, refer to the attached reconciliation of Adjusted EBITDA.Operating MetricsDuring the first quarter of 2009, the northern New England operations experienced a 1.3% decline in access line equivalents compared with a 2.7% decline in the fourth quarter of 2008. Access line equivalents for FairPoint’s operations prior to the acquisition of the Northern New England business (“Legacy FairPoint”) declined by 0.8% in the first quarter compared with a decrease of 2.6% in the fourth quarter of 2008. The improvement in the trend for access line equivalents primarily reflected growth in HSD subscribers, reduced business access line losses, and the impact of higher seasonal disconnects experienced in the fourth quarter of 2008. Also impacting access line equivalents were approximately 6,500 lines which were identified as a result of the cutover from Verizon systems. These access lines were incorrectly categorized by Verizon and as a result were not previously reported in the Company’s access line count. Excluding the impact of this one-time increase in access lines, the quarter over quarter decline in access line equivalents would have been 1.8% for the northern New England operations compared with 2.7% in the fourth quarter of 2008. Access line equivalents in northern New England have been adjusted for pending disconnect orders that had not been processed through the Company’s systems on a timely basis as of March 31, 2009 as a result of the systems cutover. No adjustments have been made for pending new orders that have not been processed, which will be reflected in the access line counts once they are placed in service and are being billed.Total access line equivalents were 1,700,673 at March 31, 2009 compared with 1,865,747 at March 31, 2008, a decline of 8.8%. During the first quarter, total access line equivalents declined by 1.2%, or 1.6% after normalizing for the 6,500 access lines identified during the systems cutover, compared with a decline of 2.7% during the fourth quarter of 2008.During the first quarter of 2009, HSD subscribers in the northern New England operations increased by 1.6% compared with an increase of 0.7% during the fourth quarter of 2008. Excluding the impact of additional lines identified during the systems cutover, the quarter over quarter increase in HSD subscribers for the northern New England operations would have been 0.8%. HSD subscribers in Legacy FairPoint’s properties increased by 2.8% compared with a decrease of 0.3% during the fourth quarter of 2008.Total combined HSD subscribers reached 300,882 as of March 31, 2009, an increase of 1.9% (or 1.3% normalizing for the one-time adjustment resulting from the systems cutover) compared with 295,360 at December 31, 2008 and 1.8% compared with 295,578 at March 31, 2008. Total HSD penetration was 21.5% as of March 31, 2009, compared with 20.7% at December 31, 2008 and 18.8% at March 31, 2008.Long distance subscribers totaled 623,497 at March 31, 2009, down 1.3% from 631,458 as of December 31, 2008and down 7.1% from March 31, 2008. Long distance penetration was 44.5% at March 31, 2009, compared with 44.3% as of December 31, 2008 and 42.8% a year ago.Access Line Equivalents % change % change 3/31/08 to 12/31/08 to 3/31/2009 12/31/2008 3/31/2008 3/31/09 3/31/09 Residential access lines ———————— Legacy FairPoint 162,059 165,409 178,659 (9.3%) (2.0%) Northern New England 741,906 761,201 851,961 (12.9%) (2.5%) ——- ——- ——- 903,965 926,610 1,030,620 (12.3%) (2.4%) Business access lines ————- Legacy FairPoint 51,344 52,402 54,692 (6.1%) (2.0%) Northern New England 339,074 340,094 365,307 (7.2%) (0.3%) ——- ——- ——- 390,418 392,496 419,999 (7.0%) (0.5%) Wholesale access lines 105,408 107,243 119,550 (11.8%) (1.7%) ———- ——— ———- ——- —— Total voice access lines 1,399,791 1,426,349 1,570,169 (10.9%) (1.9%) ———- ——— ———- ——- —— HSD subscribers ————— Legacy FairPoint 76,619 74,524 70,168 9.2% 2.8% Northern New England 224,263 220,836 225,410 (0.5%) 1.6% ——- ——- ——- Total HSD subscribers 300,882 295,360 295,578 1.8% 1.9% Total access line equivalents 1,700,673 1,721,709 1,865,747 (8.8%) (1.2%) ========= ========= ========= ======= ======= Long distance subscribers 623,497 631,458 671,278 (7.1%) (1.3%) ========= ========= ========= ======= =======Cutover UpdateAs previously reported, the Company began to operate the northern New England operations on its new systems onFebruary 9, 2009. During the period from January 23, 2009 until January 30, 2009, all retail orders were taken manually and following cutover were entered into the new systems. From February 2, 2009 through February 9, 2009, the Company manually processed only emergency orders, although the Company continued to provide repair and maintenance services to all customers. Following the cutover to its new systems, the Company experienced increased handle time by customer service representatives for new orders, reduced levels of order flow across the systems which caused delays in provisioning and installation, delays in processing bill cycles and collection treatment efforts, and significantly higher call volumes into its customer service centers. While many of these issues were anticipated, the magnitude of difficulties experienced was greater than the Company’s expectations.Since that time, the Company has continued to work diligently in each of these key areas and has made measurable progress. Order handle time, although still above pre-cutover levels, has been reduced significantly; provisioning of new orders has increased steadily, although a sizable cutover related backlog still remains; all bill cycles have been caught up and bills are now being processed on a normal schedule and call volumes into the customer service centers have been substantially reduced and are nearly at pre-cutover levels. Collection efforts, however, are hampered by a lack of systems functionality which adversely impacts liquidity. Based upon the progress made to date and our current plans, the Company continues to expect that it will largely return to normal operations by the end of the second quarter of 2009.Cash Flow and LiquidityCash flow from operations totaled $46.1 million for the three months ended March 31, 2009, while capital expenditures totaled $57.7 million for the three months ended March 31, 2009.In the first quarter of 2009, operating cash flow of $46.1 million was reduced by payments totaling $19.9 millionrelated to the transition services and other agreements with Verizon and costs related to the systems cutover activities totaling $19.4 million. Normalizing for these non-recurring payments, net cash provided by operating activities for the first quarter of 2009 would have been $85.4 million.As previously disclosed, on January 30, 2009, the Company entered into an agreement (the “Transition Agreement”) with Verizon providing for the acceleration of $30.0 million of payments that could have been owed to FairPoint, pursuant to regulatory orders, based on access line losses during the first two years following the March 31, 2008acquisition ($15 million of which would have been due on March 31, 2009 with the remaining $15 million potentially due on March 31, 2010). Verizon also waived any potential refund of these amounts and agreed to provide credits totaling $7.7 million against amounts owed by FairPoint under the TSA and related agreements. These amounts were used to offset the approximately $45.4 million owed by the Company to Verizon under these agreements, including a one-time fee of $34.0 million due at cutover, with the balance related to the purchase of certain internet access hardware. As a result, the Company made a final payment to Verizon of approximately $7.7 million onFebruary 20, 2009. The settlements set forth in the Transition Agreement resulted in a $22.7 million improvement in the Company’s cash flow and income of $15.0 million related to the acceleration and recognition of the potential 2010 payment in the first quarter of 2009.On January 21, 2009, as reported previously, FairPoint executed an amendment to its Credit Agreement pursuant to which Bank of America, N.A. was appointed as administrative agent replacing Lehman Commercial Paper Inc. In addition, among other things, the amendment clarifies that FairPoint may increase the annual dividend back to $1.03per share, subject to certain conditions. The amendment also permits the repurchase of FairPoint’s 13-1/8% senior notes due 2018, subject to certain conditions, including compliance with its tax sharing agreement with Verizon. Subsequently, the Company obtained approval from Verizon permitting the repurchase of its senior notes.During the first quarter, the Company repurchased $8.0 million aggregate principal amount of its senior notes for$2.2 million in cash. In addition, the Company also prepaid $3.3 million of borrowings under its term loan credit facility. In total, the Company retired $11.3 million of outstanding debt during the quarter, in compliance with regulatory orders in Maine, New Hampshire and Vermont.During the first quarter, the Company drew down $50.0 million under its $170 million revolving credit facility. As ofMarch 31, 2009, the Company had $4.7 million remaining available under its revolving credit facility, net of letters of credit totaling $15.3 million. At March 31, 2009, the Company also had pending commitments for additional letters of credit totaling $3.7 million.Cash and cash equivalents at March 31, 2009 totaled $92.5 million (excluding restricted cash totaling an additional$55.2 million). As of March 31, 2009, the Company was in compliance with the financial covenants contained in its credit facility. On April 1, 2009, the Company made its semi-annual interest payment on the senior notes totaling$35.6 million. Cash and cash equivalents at April 30, 2009 totaled approximately $69 million. While the Company currently believes that cash generated from operations and cash on hand should be sufficient to meet its cash obligations for the next twelve months, any delays or disruptions in cash flow would place further strains on the Company’s liquidity position.In addition, the continuing adverse general economic conditions, the operational difficulties experienced following the systems cutover, the additional incremental costs incurred to operate the business following cutover and the resulting inability to fully execute on the Company’s 2009 operating plan and compete effectively in the marketplace, are causing the Company to be at risk of failing to comply with the interest coverage covenant contained in its credit facility as early as the covenant measurement period ending June 30, 2009. In the event of noncompliance, the Company would seek to obtain a waiver from its lenders or seek to amend the covenants. There can be no assurance that such a waiver or amendment could be obtained at all or on terms, including any costs or fees associated therewith, reasonably acceptable to the Company in light of its current liquidity position and expected future cash flows.FairPoint is considering engaging a financial advisor to evaluate its current capital structure and to explore options with respect to a potential restructuring. In addition, the Company intends to seek from time to time to repurchase a portion of its 13-1/8% notes. Such repurchases, if any, will depend on prevailing market conditions, the Company’s liquidity needs, contractual restrictions, including those contained in the tax sharing agreement with Verizon, and the agreements governing the Company’s indebtedness, and other factors.Conference Call and WebcastAs previously announced, FairPoint will host a conference call and simultaneous webcast to discuss its first quarter results at 8:30 a.m. EDT on May 6, 2009. Participants should call (888) 562-3356 (US/Canada) or (973) 582-2700 (international) at 8:20 a.m. (EDT) and request the FairPoint Communications First Quarter 2009 Earnings Call or Conference ID# 97880446. A telephonic replay will be available for anyone unable to participate in the live call. To access the replay, call (800) 642-1687 (US/Canada) or (706) 645-9291 (international) and enter confirmation code 97880446. The recording will be available from Wednesday, May 6, 2009 at 11:30 a.m. (EDT) through Wednesday, May 13, 2009 at 11:59 p.m. (EDT).A live broadcast of the earnings conference call will be available via the Internet at www.fairpoint.com(link is external) under the Investors section. An online replay will be available beginning later in the morning on May 6, 2009 and will remain available for one year.During the conference call, representatives of the Company may discuss and answer one or more questions concerning the Company’s business and financial matters. The responses to these questions may contain information that has not been previously disclosed.The information in this press release should be read in conjunction with the financial statements and footnotes contained in FairPoint’s Quarterly Report on Form 10-Q which will be filed with the Securities and Exchange Commission (“SEC”). FairPoint’s results for the quarter ended March 31, 2009 are subject to the completion and filing with the SEC of its Quarterly Report on Form 10-Q.Non-GAAP Financial MeasuresAdjusted EBITDA (including Adjusted EBITDA as calculated under FairPoint’s credit facility) 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 flow 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 a definition of and additional information regarding Adjusted EBITDA, and a reconciliation of such measure to the most comparable financial measure calculated in accordance with GAAP, please see the attachments to this press release.FairPoint believes Adjusted EBITDA is useful to investors because Adjusted EBITDA is commonly used in the communications industry to analyze companies on the basis of operating performance, liquidity and leverage. FairPoint believes Adjusted EBITDA allows a standardized comparison between companies in the industry, while minimizing the differences from depreciation policies, financial leverage and tax strategies. In addition, certain covenants in FairPoint’s credit facility and the indenture governing its senior notes as well as the regulatory orders issued in connection with the acquisition of the Northern New England business contain ratios based on Adjusted EBITDA. The restricted payment covenants in such agreements and orders regulating the payment of dividends on FairPoint’s common stock are also based on Adjusted EBITDA. If FairPoint’s Adjusted EBITDA were to decline below certain levels, covenants in FairPoint’s credit facility that are based on Adjusted EBITDA may be violated and could cause, among other things, a default under such credit facility. In addition, such a decline could result in FairPoint’s inability to pay dividends on its common stock in the future.While FairPoint uses Adjusted EBITDA in managing and analyzing its business and financial condition and believes it is useful to its management and investors for the reasons described above, Adjusted EBITDA has certain shortcomings. In particular, Adjusted EBITDA does not represent the residual cash flows available for discretionary expenditures, since items such as debt repayment and interest payments are not deducted from such measure. FairPoint’s management compensates for the shortcomings of Adjusted EBITDA by utilizing it in conjunction with its comparable GAAP financial measures.About FairPointFairPoint Communications, Inc. is an industry leading provider of communications services to communities across the country. Today, FairPoint owns and operates local exchange companies in 18 states offering advanced communications with a personal touch, including local and long distance voice, data, Internet, television and broadband services. FairPoint is traded on the New York Stock Exchange under the symbol FRP. Learn more atwww.fairpoint.com(link is external)This press release may contain forward-looking statements by FairPoint 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. 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’s filings with the SEC, including, without limitation, the risks described in FairPoint’s most recent Annual Report on Form 10-K on file with the SEC. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. All information is current as of the date this press release is issued, and FairPoint undertakes no duty to update this information. FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES Unaudited Condensed Consolidated Balance Sheets March 31, December 31, 2009 2008 —- —- (Dollars in thousands) Assets Current assets: Cash $92,542 $70,325 Restricted cash 4,407 8,144 Accounts receivable, net 192,403 173,589 Materials and supplies 36,032 38,694 Other 26,802 28,747 Deferred income tax, net 33,792 31,418 —— —— Total current assets 385,978 350,917 ——- ——- Property, plant, and equipment, net 2,014,700 2,013,515 Intangibles assets, net 228,748 234,481 Prepaid pension asset 9,225 8,708 Debt issue costs, net 24,695 26,047 Restricted cash 50,796 60,359 Other assets 16,470 21,094 Goodwill 595,120 619,372 ——- ——- Total assets $3,325,732 $3,334,493 ========== ========== Liabilities and Stockholders’ Equity Current liabilities: Current portion of long-term debt $45,000 $45,000 Current portion of capital lease obligations 1,999 2,231 Accounts payable 169,993 147,778 Dividends payable – 23,008 Accrued interest payable 36,634 18,844 Interest rate swaps 39,860 41,274 Other non-operating accrued liability – 19,000 Other accrued liabilities 70,556 70,887 —— —— Total current liabilities 364,042 368,022 ——- ——- Long-term liabilities: Capital lease obligations 7,107 7,522 Accrued pension obligation 48,154 46,801 Employee benefit obligations 233,012 225,840 Deferred income taxes 128,862 154,757 Unamortized investment tax credits 5,204 5,339 Other long-term liabilities 28,332 35,492 Long-term debt, net of current portion 2,464,306 2,425,253 Interest rate swap agreements 30,197 41,681 —— —— Total long-term liabilities 2,945,174 2,942,685 ——— ——— Stockholders’ equity: Common stock 895 890 Additional paid-in capital 735,865 735,719 Retained earnings (deficit) (587,096) (578,319) Accumulated other comprehensive loss (133,148) (134,504) ——– ——– Total stockholders’ equity 16,516 23,786 —— —— Total liabilities and stockholders’ equity $3,325,732 $3,334,493 ========== ========== FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Operations Three months ended March 31, ——— 2009 2008 ————————————————————— (Dollars in thousands) Revenues $311,630 $282,414 ————————————————————— Operating expenses: Cost of services and sales, excluding depreciation and amortization 145,147 135,837 Selling, general and administrative expense, excluding depreciation and amortization 92,412 63,116 Depreciation and amortization 67,867 53,925 ————————————————————— Total operating expenses 305,426 252,878 ————————————————————— Income from operations 6,204 29,536 ————————————————————— Other income (expense): Interest expense (53,479) (14,522) Gain on derivative instruments 12,898 – Gain on early retirement of debt 4,863 – Other 15,915 986 ————————————————————— Total other expense (19,803) (13,536) ————————————————————— Income (loss) before income taxes (13,599) 16,000 Income tax (expense) benefit 4,822 (6,457) ————————————————————— Net income (loss) $(8,777) $9,543 ————————————————————— Weighted average shares outstanding: Basic 89,151 53,761 ————————————————————— Diluted 89,151 53,761 ————————————————————— Earnings per share: Basic $(0.10) $0.18 ————————————————————— Diluted (0.10) 0.18 ————————————————————— FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Cash Flows Three months ended March 31, ———- 2009 2008 —- —- (Dollars in thousands) Cash flows from operating activities: Net income $(8,777) $9,543 ——- —— Adjustments to reconcile net income to net cash provided by operating activities of continuing operations excluding impact of acquisitions: Deferred income taxes (4,925) 16,021 Provision for uncollectible revenue 5,569 3,874 Depreciation and amortization 67,867 53,925 SFAS 106 post-retirement accruals 7,732 22,522 Gain on derivative instruments (12,898) – Gain on early retirement of debt (4,863) – Other non cash items 2,557 (27,956) Changes in assets and liabilities arising from operations: Accounts receivable (22,201) (8,067) Prepaid and other assets 2,068 (20,332) Accounts payable and other accrued liabilities 14,126 (37,870) Other assets and liabilities, net (176) (11,956) ——- ——- Total adjustments 54,856 (9,839) ——- ——- Net cash provided by operating activities of continuing operations 46,079 (296) ——- ——- Cash flows from investing activities of continuing operations: Acquired cash balance, net – 11,552 Net capital additions (57,660) (24,604) Net proceeds from sales of investments and other assets 110 – ——- ——- Net cash used in investing activities of continuing operations (57,550) (13,052) ——- ——- Cash flows from financing activities of continuing operations: Loan origination costs (494) (29,238) Proceeds from issuance of long-term debt 50,000 1,635,500 Repayments of long-term debt (5,475) (685,441) Contributions from Verizon – 344,629 Restricted cash 13,300 (80,886) Repayment of capital lease obligations (647) (255) Dividends paid to stockholders (22,996) (1,160,000) ——- ——- Net cash provided by (used in) financing activities of continuing operations 33,688 24,309 ——- ——- Net increase in cash 22,217 10,961 Cash, beginning of period 70,325 – ——- ——- Cash, end of period $92,542 $10,961 ======= ======= FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES Unaudited Pro Forma Combined Statement of Operations (Non-GAAP) For the Three Months Ended March 31, 2008 (in thousands, except per share data) Northern Pro Forma New Merger Results for England Legacy Related Pro Forma Combined business (A) FairPoint (B) Costs (C) Adjustments Businesses ———————————————————— Revenues $282,414 67,927 – (923)(D) $349,418 ———————————————————— Operating expenses: Cost of services and sales, excluding depreciation and amort- ization 135,837 27,511 – (10,131)(D)(E) 153,217 Selling, general and adminis- trative expense 63,116 12,010 47,000 (50,286)(E)(F) 71,840 Depreciation and amort- ization 53,925 13,299 – 5,436(G) 72,660 Gain on sale of operating assets – – – – – ———————————————————— Total operating expenses 252,878 52,820 47,000 (54,981) 297,717 ———————————————————— Income from operations 29,536 15,107 (47,000) 54,058 51,701 ———————————————————— Other income (expense): Interest expense (14,522) (11,083) – (21,510)(H) (47,115) Interest and dividend income – 713 – – 713 Loss on derivative instruments – (22,259) – -(I) (22,259) Other nonoperating, net 986 (32,419) – 32,419 986 ———————————————————— Total other expense (13,536) (65,048) – 10,909 (67,675) ———————————————————— Income before income taxes 16,000 (49,941) (47,000) 64,967 (15,974) Income tax (expense) benefit (6,457) 6,567 25,000(J) (18,650)(J) 6,460 ———————————————————— Net income $9,543 (43,374) (22,000) 46,317 ($9,514) ============================================================ Basic weighted average shares outstanding 53,761.0 34,770.0 89,025.0 Diluted weighted average shares outstanding 53,761.0 34,770.0 89,025.0 Basic earnings per common share: Continuing operations $0.18 ($0.11) Diluted earnings per common share: Continuing operations $0.18 ($0.11) Note: The unaudited pro forma combined financial statements have been prepared using the purchase method of accounting as if the transaction with Verizon had been completed as of January 1, 2008. The unaudited pro forma combined financial statements give effect to (1) the contribution by Verizon of assets comprising its local exchange business in Maine, New Hampshire and Vermont to Spinco, a subsidiary of Verizon, (2) the spin-off of Spinco to Verizon stockholders and (3) the merger of Spinco with FairPoint accounted for as a reverse acquisition of FairPoint by Spinco, with Spinco considered the accounting acquirer. The accompanying notes are an integral part of these unaudited pro forma combined condensed financial statements. (A) Reflects the standalone results for the Northern New England business for the quarter ended March 31, 2008. (B) Reflects the standalone results for the Legacy FairPoint business for the quarter ended March 31, 2008. (C) Reflects nonrecurring transition and transaction costs incurred by FairPoint prior to the closing of the merger. (D) Reflects revenues and expenses of approximately $2 million associated with VOIP and wireless directory assistance services as well as customers of VSSI-CPE FairPoint. (E) Reflects an actuarially determined reduction of $10 million of pension and OPEB expense related to employees not transferred to Spinco. Of this amount, $8 million was included in cost of services and sales and $2 million was included in selling, general and administrative expense. (F) Reflects the elimination of nonrecurring transition and transaction costs related to the merger (see Note C above). (G) Reflects the amortization of customer relationship intangible assets acquired in the merger. Such intangibles are being amortized over a weighted average estimated useful life of 9.7 years. (H) Reflects additional interest expense related to the debt structure of FairPoint following completion of the merger, net of $17 million of interest expense allocated by Verizon to the Northern New England business. (I) Reflects the elimination of Legacy FairPoint’s loss on derivative instruments related to forward interest rate swap agreements that were contingent upon completion of the merger. (J) Reflects the income tax effects associated with the adjustments described above. FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES Revenue and Operating Metrics (unaudited) (Dollars in thousands) Three Months Ended —————— Pro Forma (1) March 31, December 31, September 30, June 30, March 31, 2009 2008 2008 2008 2008 ———————————————————— Revenues: ——— Local calling services $129,032 $135,610 $143,415 $149,591 $149,654 Network access (2)(3) 97,038 96,295 94,094 101,402 108,538 Long distance services 45,375 46,312 50,161 49,090 48,624 Data and Internet services 28,405 29,461 32,873 30,552 30,653 Other services(3) 11,780 11,582 7,712 14,055 11,949 ————————————————————- Total revenue $311,630 $319,260 $328,255 $344,690 $349,418 ============================================================= Operating Metrics: ——— Residential voice access lines 903,965 926,610 958,324 996,531 1,030,620 Business voice access lines 390,418 392,496 403,939 412,633 419,999 Wholesale access lines 105,408 107,243 112,131 116,731 119,550 ————————————————————- Total voice access lines 1,399,791 1,426,349 1,474,394 1,525,895 1,570,169 HSD subscribers 300,882 295,360 294,134 294,412 295,578 ————————————————————- Total access lines equivalents 1,700,673 1,721,709 1,768,528 1,820,307 1,865,747 ============================================================= Long distance subscribers 623,497 631,458 643,844 656,599 671,278 ============================================================= (1) FairPoint acquired Verizon’s wireline and related operations in Maine, New Hampshire and Vermont (the Northern New England business) on March 31, 2008. The pro forma results have been prepared using the purchase method of accounting as if the transaction had been completed as of January 1, 2008. (2) During the first quarter of 2009, the Company reclassified certain revenues from network access revenues to local calling services revenue. Prior period revenues were also reclassified for comparison purposes. (3) During the third and fourth quarters of 2008, the Company recorded certain revenue adjustments/reclassifications that relate to prior periods. The table below shows the revenue for the affected category as if the adjustments were reflected in the appropriate period: Three Months Ended —————— Normalized Normalized Normalized December 31, September 30, June 30, 2008 2008 2008 ——— ——— ————- Revenues: Local calling services $135,610 $143,415 $149,591 Network access 96,295 96,094 99,402 Long distance services 46,312 50,161 49,090 Data and Internet services 30,814 31,520 30,552 Other services 11,582 10,994 10,773 ——- ——- ——- Total revenue $320,613 $332,184 $339,408 ======= ======= ======= FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES Unaudited Reconciliation of Net Income under GAAP to Adjusted EBITDA (Non-GAAP) (Dollars in thousands) Three Months Ended —————— Pro Forma (1) March 31, December 31, September 30, June 30, March 31, 2009 2008 2008 2008 2008 ———————————————————— Net Income $(8,777) $(76,072) $(25,109) $23,114 $(9,514) Depreciation and amort- ization 67,867 70,598 60,768 69,741 72,660 Interest expense 53,479 52,730 49,665 45,123 47,115 Income taxes (4,822) (46,598) (17,176) 13,909 (6,460) ————————————————————- 107,747 658 68,148 151,887 103,801 ————————————————————- (Gain) loss on derivatives (12,898) 49,909 5,014 (43,123) 22,259 Gain on repurchase of debt (4,863) – – – – Transition services agreement 15,895 49,597 49,550 49,476 – Other merger and cutover related costs(2) 9,618 26,871 15,191 10,095 – Non-cash items(3) 9,589 9,128 5,723 5,723 8,200 ————————————————————- Adjusted EBITDA (Covenant) (4) $125,088 $136,163 $143,626 $174,058 $134,260 ============================================================= Other adjustments to EBITDA: Cutover costs in excess of cumulative cap(5) 9,743 – – – – Severance 451 – – – – Non-cash accrual for compensated absences(6) 2,966 – – – – Revenue and expense adjustments related to prior periods(7) – 1,353 4,956 (6,309) – Other income(8) (15,000) – – – – ————————————————————- Adjusted EBITDA $123,248 $137,516 $148,582 $167,749 $134,260 ============================================================== (1) FairPoint acquired Verizon’s wireline and related operations in Maine, New Hampshire and Vermont (the Northern New England business) on March 31, 2008. The pro forma results have been prepared using the purchase method of accounting as if the transaction had been completed as of January 1, 2008. (2) Other one-time items related to the merger and systems cutover primarily include training costs, recruiting and relocation costs, brand and promotional marketing costs, systems development costs and travel costs. (3) Includes non-cash pension, OPEB and stock based compensation expenses. (4) Adjusted EBITDA is defined in FairPoint’s credit facility as net income (loss) before interest expense and provision (benefit) for income taxes and depreciation and amortization, excluding unusual or one-time non-recurring items (including costs related to the use of Verizon’s systems and services under the Transition Services Agreement as well as other costs related to the cutover to FairPoint’s newly developed systems platform), non-cash items related to pension and OPEB, stock based compensation and other costs and adjustments related to the acquisition of the Northern New England business. (5) Represents one-time costs incurred in connection with the systems cutover which exceeded the cumulative cap of $61 million for allowed cutover related add-backs as provided in the Company’s credit facility. (6) Represents the non-cash accrual for vacation pay for the remainder of 2009 for employees of the northern New England operations which fully vested on January 1, 2009. (7) Includes certain revenue and expense adjustments related to prior quarters. (8) Other income for the three months ended March 31, 2009 represents a gain resulting from the one-time payment made by Verizon to the Company pursuant to the Transition Agreement entered into on January 30, 2009.Source: FairPoint. CHARLOTTE, N.C., May 5 /PRNewswire-FirstCall/ —last_img read more

Feels extremely honoured for nomination of Khel Ratna Award: Rani

first_imgBENGALURU: India women’s hockey captain Rani on Wednesday stated that she feels extremely honoured for being nominated for the prestigious Rajiv Gandhi Khel Ratna Award.”I feel very honoured for being nominated for the prestigious Rajiv Gandhi Khel Ratna Award. I am overwhelmed that Hockey India has recommended my name for the top award and their continued support always encourages the team and I to do well,” expressed Rani, who is also a recipient of the Padma Shri Award. Hockey India has also recommended the names of Vandana Katariya, Monika and Harmanpreet Singh for the Arjuna Award. Extending her congratulations to her compatriots Rani said, “It is fantastic that we have two players from the women’s team being nominated for the Arjuna Award. I congratulate both Vandana and Monika, they are very deserving of this recognition. I also feel that two players being nominated goes to show that women’s hockey is moving in the right direction and this will only motivate us to do better on the world stage.” Rani has led the Indian eves to historic victories in the Women’s Asia Cup in 2017, silver at the 2018 Asian Games and played a critical role in the Olympic Qualifiers in 2019 by scoring the deciding goal that helped in India’s qualification for the Tokyo Olympics. The team also climbed to a career-best world ranking of nine. (IANS) Also watch: Powerful IED recovered in Digboilast_img read more

Skaneateles, Marcellus, J-E tennis win in Class C sectionals

first_imgJ-E, relatively new to sectional tournament pressure, traveled to no. 6 seed Holland Patent and knocked off the Golden Knights 3-2 to earn a quarterfinal berth against Marcellus.Anisa Bort prevailed in singles over Julia Cucci 6-1, 6-4, while Meghan Whalen topped Emma Shoemaker 7-5, 6-2. Needing just one doubles point, the Eagles earned it when Katelyn Precourt and Gabby Skotinski beat Bella Adamo and Madison Parks 6-4, 6-2.Elsewhere in local tennis, Westhill relied on its singles players to beat Mexico 4-3, with Sophia Frost shutting out Caitlyn Hackett 6-0, 6-0 as Mikayla Carroll beat Grace Schipper 6-2, 6-1 and Katie Hagrman handling Amy Gilbert 6-0, 6-1.The lone doubles point needed came when Sophie Langdon and Grace Lesselroth rallied past Juliana Hernandez and Alivia Kelsey 4-6, 6-2, 6-0. Jillian Eckert and Bridget Thornton lost a 6-1, 4-6, 6-3 decision to Mia Morris and Juliana Smith as Delaney Carroll and Hannah Johnston lost to Paige Masrouri and Shelby Schumacher 6-3, 4-6, 10-1.A day later, Westhill got another 4-3 win, this one over Bishop Grimes, largely because the Cobras had to forfeit three of the matches.Thornton and Madison Thomas earned the Warriors’ lone win on the court 6-2, 6-3 over Brina Deppoliti and Nadia Fenu. Frost had a 2-6, 6-2, 6-1 loss to Katie Knittel as Langdon and Lesselroth, one game from a victory, fell 3-6, 7-6, 7-3 to Sarah Falgiatano and Sofia Ziankoski.But when Westhill went to the sectional Class B tournament as the no. 10 seed, it lost 5-2 to no. 7 seed Cortland last Friday, the only points gained when Lesselroth and Carroll earned straight-set singles wins.Twice in doubles, the Warriors led but could not hold on as Eckert and Thomas fell 4-6, 6-2, 6-4 to Lelyzaveta Antonova and Oumou Diakite, while Isabel Dickinson-Cimonili and Kaley Richmond lost to Ellen Conlon and Arianna DeFranco 4-6, 6-0, 6-2.West Genesee, who did not enter the sectional Class A team tournament, took on Auburn last Monday afternoon and defeated the Maroons 5-2. Katie Viau and Angelina Llanos both played singles, and both won with ease as Viau beat Makayla Huntley 6-0, 6-1 and Llanos blanked Erin Calkins 6-0, 6-0.Alyssa Congel and Margaret Mello beat Kathryn Brown and Alexis Calkins 6-1, 6-4. In three sets, Kara Chawgo and Isabelle Wells held off Taylor Chadderdon and Gabrielle McGinn 6-4, 4-6, 6-1, with Madelyn Chuff and Olivia Grome overcoming an early deficit to beat Sophie Lesch and Lillianna Spin 4-6, 6-0, 6-2.A day later, though, WG lost, 4-3, to the same Liverpool team it beat 5-2 on Sept. 12, the turnaround mostly based on the Warriors winning three of four doubles matches.Chuff and Aislin Down did beat Lea Prusinowski and Kaia Wallingford 2-6, 6-4, 6-3, with Viau and Llanos both taking singles matches. Liverpool earned the rest, including a doubles match where Chawgo and Wells fell to Kelly Geiwitz and Megan Polhamus 6-2, 2-6, 6-3.WG did prevail 7-0 over Syracuse East as Lowry beat Roshika Sharma 6-0, 6-1 in singles, while Katie Anson got past Eh Hso 6-2, 6-4 and Angelina Allen won 6-4, 6-2 over Hsar Eh Se. Four doubles teams lost just two games in eight combined sets. In singles, Isabella Kroon beat Hannah Babcock 6-1, 6-3, with Lily Miller blanking Mia Moukaiel 6-0, 6-0. Skaneateles, who beat Phoenix 6-1 earlier in the week in its regular-season finale, will face Manlius-Pebble Hill in the quarterfinals.Marcellus, who had two matches postponed earlier in the week, was refreshed for its first-round sectional battle with no. 12 seed General Brown and proceeded to shut out the Lions 5-0.Danielle Copp’s 6-4, 6-7, 10-4 singles win over Willow Boyce was the only three-set battle for the Mustangs. Kathleen DeMarle beat Maria Covey 6-0, 6-0 as Colleen Marsh beat Natalie Sheen 6-0, 6-1, while in doubles the teams of Elaina Mahoney-Megan Mitchell and Katilyn Kemp-Morgan Walsh both prevailed, too. Each of the area’s high school girls tennis teams fit in matches during the last week of the regular season before it was time for the Section III team tournaments.Once the sectional Class C tournament started, Skaneateles held the no. 3 seed in Class C, Marcellus had the no. 5 seed and Jordan-Elbridge the no. 11 seed – and each of them won their opening-round matches last Friday afternoon.The Lakers prevailed 4-1 over no. 14 seed South Jefferson as the teams of Ella Danforth-Emma Miller and Sofia Capozza-Sophia Soderberge each won in two sets. Share this:FacebookTwitterLinkedInRedditComment on this Story Tags: J-EMarcellusskaneatelesTennisWest Geneseelast_img read more