FairPoint Communications Reports 2012 Third Quarter Results

         FairPoint Communications Reports 2012 Third Quarter Results

- Unlevered Free Cash Flow[1] of $28.0 million in the quarter and $95.2
million year-to-date

- Adjusted EBITDA[1], a newly introduced measure, of $73.7 million in the
quarter

- Net loss of $37.3 million in the quarter

- Cash of $22.1 million at Sept. 30, 2012, after a $25.0 million voluntary
debt prepayment

PR Newswire

CHARLOTTE, N.C., Nov. 1, 2012

CHARLOTTE, N.C., Nov. 1, 2012 /PRNewswire/ --FairPoint Communications, Inc.
(NasdaqCM: FRP) ("FairPoint" or the "Company"), a leading communications
provider, today announced its financial results for the quarter ended Sept.
30, 2012. As previously announced, the Company will host a conference call
and simultaneous webcast to discuss its results at 8:30 a.m. (ET) on Friday,
Nov. 2, 2012.

"We're pleased to report another solid quarter," said Paul H. Sunu, CEO of
FairPoint. "It is clear from this quarter's results that our 'four pillar'
strategy is taking hold. We expect to exceed our full year guidance and we
are generating free cash flow. As a result, we were able to make a $25
million voluntary prepayment of debt in the quarter reflecting our desire to
delever and increase shareholder value."

Operating Highlights

FairPoint continues to see positive momentum in its growth-oriented business
and broadband products. Data and Internet services revenue grew 12% versus a
year ago and products like FairPoint's Ethernet service offerings continue 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 $10.7 million of revenue in the third
quarter of 2012 as compared to $10.2 million in the second quarter of 2012 and
$4.2 million in the third 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 3.3% for the twelve months ended Sept. 30,
2012, is nearly half the 6.3% loss FairPoint experienced for the twelve months
ended Sept. 30, 2011. Business voice access lines declined only 0.9%
sequentially versus June 30, 2012.

Broadband subscribers grew 3.2% year-over-year and 0.5% sequentially.
FairPoint added more than 10,000 broadband subscribers in the last twelve
months, as penetration reached 33.1% of voice access lines at Sept. 30, 2012.

Voice access line loss slowed for the tenth consecutive quarter, reaching 7.8%
year-over-year and 2.1% sequentially.

As of Sept. 30, 2012, FairPoint had approximately 3,400 employees, a decrease
of 4.0% and 15.7% from Dec. 31, 2011 and Dec. 31, 2010, respectively.

As FairPoint previously reported, the Company's retail products and services
have been substantially deregulated in Maine, New Hampshire and Vermont. This
deregulation went into full effect during the third quarter of 2012. The
Company believes it can now compete on a more level playing field in all three
northern New England states as it expands its sales efforts to transform its
revenue composition. In addition, a dramatic reduction in retail service
quality penalty exposure serves to de-risk the business going forward.

Financial Highlights

Third Quarter 2012 as compared to Second Quarter 2012

Revenue was $242.1 million in the third quarter of 2012 as compared to $243.5
million in the second quarter of 2012. The change was due primarily to a loss
of voice access lines in the quarter, which led to decreases in voice services
and access revenue. The decline in voice services revenue was partially
offset by revenue assurance activities in the quarter. A decrease in switched
access revenue was partially offset by growth in special access products like
wholesale Ethernet. Increases in broadband subscribers and retail Ethernet
product revenues led to an increase in data and Internet services revenue.

Operating expenses, excluding depreciation, amortization and reorganization,
were $186.4 million in the third quarter of 2012 as compared to $190.7 million
in the second quarter of 2012. The decrease was primarily the result of a
decrease in employee expenses, cost of goods sold and bad debt.

Adjusted EBITDA was $73.7 million in the third quarter of 2012 as compared to
$76.1 million in the second quarter of 2012. The decline was primarily the
result of a decrease in revenue along with the benefit received during the
second quarter of 2012 from the favorable settlement of certain bankruptcy
claims.

Net loss was flat sequentially, with $37.3 million reported for the third
quarter of 2012 as compared to a net loss of $37.1 million in the second
quarter of 2012.

Capital expenditures were $37.7 million in the third quarter of 2012 as
compared to $32.1 million in the second quarter of 2012. FairPoint continues
to expand its broadband footprint in New Hampshire in accordance with a
regulatory commitment to reach 95% of its customers in the state by March 31,
2013.

FairPoint's cash position was $22.1 million as of Sept. 30, 2012, as compared
to $43.8 million as of June 30, 2012 and $17.4 million as of Dec. 31, 2011.
The Company made a voluntary prepayment of $25.0 million on its Term Loan
during the quarter. Adjusting for the voluntary debt prepayment, cash would
have been flat sequentially even after a cash interest payment of
approximately $16.3 million and a cash pension contribution of $8.4 million.
FairPoint does not expect to make any more contributions to the pension fund
in 2012. The Company's $75 million revolving credit facility is undrawn, with
$62.6 million available for additional borrowing after applying $12.4 million
for outstanding letters of credit.

Third Quarter 2012 as compared to Third Quarter 2011

Revenue was $242.1 million in the third quarter of 2012 as compared to $257.9
million a year earlier. The change was due primarily to a loss of voice
access lines, which led to decreases in voice services and access revenue.
The decrease in voice access lines led to a decline in switched access minutes
of use and a corresponding decline in switched access revenue. In addition,
special access revenue declined as customers migrated from legacy access
products such as DS1, DS3, frame relay and private line to wholesale
Ethernet-based products, which tend to have a lower average revenue per unit.
Data and Internet services revenue grew as broadband subscribers and retail
Ethernet product revenues increased year-over-year.

Operating expenses, excluding depreciation, amortization and reorganization,
were $186.4 million in the third quarter of 2012 as compared to $213.5 million
a year earlier. The decrease was primarily the result of decreases in
employee expenses, bad debt, contracted services and other expenses.

Adjusted EBITDA was $73.7 million in the third quarter of 2012 as compared to
$67.0 million a year earlier. FairPoint implemented a number of cost
reduction initiatives in the second half of 2011 and throughout 2012. As a
result, reductions in operating expenses have more than offset the decline in
revenue.

Capital expenditures were $37.7 million in the third quarter of 2012 as
compared to $35.2 million a year earlier. The Company continues to expand its
broadband footprint in New Hampshire as discussed above.

Net loss was $37.3 million in the third quarter of 2012 as compared to a net
loss of $279.4 million in the third quarter of 2011, when FairPoint recognized
a non-cash impairment of intangible assets and goodwill.

2012 Guidance

FairPoint generated Unlevered Free Cash Flow (after cash pension contributions
and OPEB payments) of $95.2 million during the first nine months of 2012 and
expects to exceed its guidance of $90 million to $100 million for the full
year.

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 ended Sept. 30, 2012, which will be filed with the SEC on or
prior to Nov. 9, 2012. The Company's results for the quarter ended Sept. 30,
2012 are subject to the completion of its quarterly report for such period.

Fresh Start Accounting

On Jan. 24, 2011, the Company emerged from Chapter 11 bankruptcy protection
and its Plan of Reorganization became effective. In accordance with generally
accepted accounting principles, the Company adopted fresh start accounting as
of Jan. 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 after
Jan. 24, 2011 are not 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 third quarter 2012 results at 8:30 a.m.
(ET) on Friday, Nov. 2, 2012.

Participants should call (866) 543-6408 (US/Canada) or (617) 213-8899
(international) at 8:20 a.m. (ET) and enter the passcode 73625655 when
prompted. The title of the call is the Q3 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 35730646 when prompted. The
recording will be available from Friday, Nov. 2, 2012, at 10:30 a.m. (ET)
through Friday, Nov. 9, 2012, at 11:59 p.m. (ET).

A live broadcast of the earnings conference call will be available online at
www.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 Adjusted EBITDA, Consolidated EBITDAR (as defined in the
Company's credit facility), Unlevered Free Cash Flow and adjustments to GAAP
and non-GAAP measures to exclude the effect of special items. Management
believes that Adjusted EBITDA provides a useful measure of operational and
financial performance and removes variability related to pension contributions
and payments for other post-employment benefits and that Unlevered Free Cash
Flow may be useful to investors in assessing the Company's ability to generate
cash and meet its debt service requirements. The maintenance covenants
contained in the Company's credit facility are based on Consolidated 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,
Adjusted EBITDA, 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, Adjusted EBITDA, 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 Adjusted EBITDA, Consolidated EBITDAR
and Unlevered Free Cash Flow only supplementally. A reconciliation of
Adjusted EBITDA, 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
VantagePoint^SM services 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 at
www.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 and Adjusted EBITDA are non-GAAP financial
measures. Additional information regarding the calculation of Unlevered Free
Cash Flow and Adjusted EBITDA and a reconciliation to net income are contained
in the attachment to this press release.



FAIRPOINT COMMUNICATIONS, INC.
Supplemental Financial Information
(Unaudited)
(in thousands, except per unit)
                       3Q12        2Q12       1Q12       4Q11       3Q11
Summary Income
Statement:
Revenue:
 Voice services       $        $        $       $       $   
                       111,337     111,525   114,777    118,580    117,583
 Access               82,015      84,686     86,823     90,204     94,646
 Data and Internet    36,793      36,118     33,332     32,418     32,854
services
 Other services       11,907      11,124     13,542     12,960     12,829
Total revenue          242,052     243,453    248,474    254,162    257,912
Operating expenses:
 Operating expenses,
excluding
depreciation,          186,417     190,672    210,903    203,717    213,483
amortization and
reorganization
 Depreciation and     89,782      93,780     93,207     91,951     91,547
amortization
 Reorganization
expense (income)       172         (2,823)    (1,392)    (1,743)    (3,735)
(post-emergence)
 Impairment of
intangible assets and  -           -          -          -          262,019
goodwill
Total operating        276,371     281,629    302,718    293,925    563,314
expenses
Loss from operations   (34,319)    (38,176)   (54,244)   (39,763)   (305,402)
Other income
(expense):
 Interest expense     (16,991)    (16,983)   (17,028)   (17,173)   (17,147)
 Other income         548         (125)      302        472        488
(expense), net
Total other income     (16,443)    (17,108)   (16,726)   (16,701)   (16,659)
(expense)
Loss before income     (50,762)    (55,284)   (70,970)   (56,464)   (322,061)
taxes
Income tax benefit     13,433      18,211     24,258     (27,520)   42,620
(expense)
Net loss               $        $        $       $       $  
                       (37,329)    (37,073)  (46,712)   (83,984)   (279,441)
Reconciliation of Adjusted EBITDA, Consolidated EBITDAR
and
Unlevered Free Cash
Flow:
Net loss               $        $        $       $       $  
                       (37,329)    (37,073)  (46,712)   (83,984)   (279,441)
 Income tax (benefit) (13,433)    (18,211)   (24,258)   27,520     (42,620)
expense
 Interest expense     16,991      16,983     17,028     17,173     17,147
 Depreciation and     89,782      93,780     93,207     91,951     91,547
amortization
 Pension expense (1a) 4,166       4,573      5,065      3,313      3,108
 OPEB expense (1a)    11,729      13,373     13,874     10,153     13,062
 Other non-cash       1,211       395        (156)      (53)       260,518
items, net (1b)
 Restructuring costs  338         276        463        275        844
(1c)
 All other allowed    234         2,050      2,771      4,112      2,866
adjustments, net (1d)
Adjusted EBITDA        $        $       $       $       $   
                       73,689     76,146     61,282    70,460    67,031
 Adjusted EBITDA      30.4%       31.3%      24.7%      27.7%      26.0%
margin
 Pension              $        $       $       $      $   
contributions (1e)     (7,344)    (5,156)    (5,350)       0  (6,178)
 OPEB payments (1e)   (656)       (794)      (608)      (482)      (400)
Consolidated EBITDAR   $        $       $       $       $   
                       65,689     70,196     55,324    69,978    60,453
Capital expenditures   $        $       $       $       $   
                       37,669     32,070     26,257    35,110    35,169
Unlevered Free Cash    $        $       $       $       $   
Flow                   28,020     38,126     29,067    34,868    25,284
Select Operating and
Financial Metrics:
Residential access     602,530     619,240    631,724    645,453    662,562
lines
Business access lines  303,904     306,682    309,078    311,241    314,290
Wholesale access lines 67,886      69,375     72,233     76,065     80,025
(2)
Total switched access  974,320     995,297    1,013,035  1,032,759  1,056,877
lines
       % change y-o-y  -7.8%       -7.8%      -8.1%      -8.4%      -8.8%
       % change q-o-q  -2.1%       -1.8%      -1.9%      -2.3%      -2.1%
Broadband subscribers  322,551     320,812    318,510    314,135    312,475
(3)
       % change y-o-y  3.2%        5.1%       7.1%       8.4%       8.2%
       % change q-o-q  0.5%        0.7%       1.4%       0.5%       2.4%
       penetration of  33.1%       32.2%      31.4%      30.4%      29.6%
       access lines
Access line            1,296,871   1,316,109  1,331,545  1,346,894  1,369,352
equivalents
       % change y-o-y  -5.3%       -5.0%      -4.9%      -5.0%      -5.4%
       % change q-o-q  -1.5%       -1.2%      -1.1%      -1.6%      -1.1%
(1)    For purposes of calculating Consolidated EBITDAR, FairPoint's credit
       facility allows for:
       a) the add-back of aggregate pension and other post-employment
       benefits (OPEB) expense,
       b) the add-back of other non-cash items except to the extent they will
       require a cash payment in a future period,
       c) the add-back of costs related to the restructuring, including
       professional fees for advisors and consultants,
       d) the add-back (or subtraction) of other items including success
       bonuses, severance, non-cash gains/losses, non-operating dividend and
       interest income and other extraordinary gains/losses, and
       (e) the subtraction of net pension contributions and OPEB cash benefit
       payments in the period.
(2)    Wholesale access lines include Resale and UNE-P, but exclude UNE-L and
       special access circuits.
       Broadband subscribers include DSL, fiber-to-the-premise, cable modem
(3)    and fixed wireless broadband, but exclude Ethernet and other
       high-capacity circuits.



FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
September 30, 2012 and December 31, 2011
(in thousands, except share data)
                                              September 30,  December 31,
                                              2012           2011
Assets                                        (unaudited)
Current assets:
   Cash                                       $  22,080      $  17,350
   Restricted cash                               10,792         24,446
   Accounts receivable, net                      102,263        104,298
   Prepaid expenses                              21,173         18,346
   Other current assets                          2,850          3,312
   Deferred income tax, net                      12,949         17,915
Total current assets                             172,107        185,667
Property, plant and equipment (net of $537.6
million and $280.5
   million accumulated depreciation,             1,493,504      1,663,065
   respectively)
Intangible assets (net of $18.8 million and
$10.4 million accumulated
   amortization, respectively)                   119,780        128,145
Debt issue costs, net                            1,278          1,779
Restricted cash                                  651            651
Other assets                                     10,678         10,338
Total assets                                  $  1,797,998   $  1,989,645
Liabilities and Stockholders' Deficit
   Current portion of long-term debt          $  10,000      $  10,000
   Current portion of capital lease              1,222          1,252
   obligations
   Accounts payable                              52,853         65,184
   Claims payable and estimated claims           1,303          22,839
   accrual
   Accrued interest payable                      670            508
   Other accrued liabilities                     74,987         54,348
       Total current liabilities                 141,035        154,131
   Capital lease obligations                     1,782          2,690
   Accrued pension obligation                    153,705        157,961
   Employee benefit obligations                  566,941        531,634
   Deferred income taxes                         183,700        245,369
   Other long-term liabilities                   11,526         14,003
   Long-term debt, net of current portion        960,000        990,000
       Total long-term liabilities               1,877,654      1,941,657
Total liabilities                                2,018,689      2,095,788
Commitments and contingencies
Stockholders' deficit:
   Common stock, $0.01 par value, 37,500,000
   shares authorized,
       26,240,614 and 26,197,142 shares
       issued and outstanding at
       September 30, 2012 and December 31,       262            262
       2011, respectively
   Additional paid-in capital                    505,209        502,034
   Retained deficit                              (536,059)      (414,945)
   Accumulated other comprehensive loss          (190,103)      (193,494)
Total stockholders' deficit                      (220,691)      (106,143)
Total liabilities and stockholders' deficit   $  1,797,998   $  1,989,645



FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
Three Months ended September 30, 2012 and 2011, Nine Months ended September 30,
2012,
Two Hundred Forty-Nine Days ended September 30, 2011 and Twenty-Four Days ended
January 24, 2011
(Unaudited)
(in thousands, except per share data)
                                                       Two          Predecessor
                                                       Hundred      Company
                                           Nine        Forty-Nine   Twenty-Four
                                           Months
                                           Ended       Days Ended
                   Three Months Ended                               Days Ended
                   September 30,           September   September    January 24,
                                           30,         30,
                   2012       2011         2012        2011         2011
Revenues         $ 242,052  $ 257,912    $ 733,979   $ 708,950    $ 66,378
Operating
expenses:
 Cost of
 services and
 sales,
  excluding
  depreciation     105,502    120,149      330,937     321,790      38,766
  and
  amortization
 Selling,
 general and
  administrative
  expense,
  excluding        80,915     93,334       257,055     245,132      27,161
  depreciation
  and
  amortization
 Depreciation
 and               89,782     91,547       276,769     244,940      21,515
 amortization
 Reorganization
 related expense   172        (3,735)      (4,043)     1,511        —
 (income)
 Impairment of
 intangible        -          262,019      -           262,019      —
 assets and
 goodwill
Total operating    276,371    563,314      860,718     1,075,392    87,442
expenses
Loss from          (34,319)   (305,402)    (126,739)   (366,442)    (21,064)
operations
Other income
(expense):
 Interest          (16,991)   (17,147)     (51,002)    (46,634)     (9,321)
 expense
 Other             548        488          725         1,319        (132)
Total other        (16,443)   (16,659)     (50,277)    (45,315)     (9,453)
expense
Loss before
reorganization     (50,762)   (322,061)    (177,016)   (411,757)    (30,517)
items and income
taxes
Reorganization     —          —            —           —            897,313
items
(Loss) income
before income      (50,762)   (322,061)    (177,016)   (411,757)    866,796
taxes
Income tax
benefit            13,433     42,620       55,902      80,796       (279,889)
(expense)
Net (loss)       $ (37,329) $ (279,441)  $ (121,114) $ (330,961)  $ 586,907
income
Weighted average
shares
outstanding:
 Basic             25,993     25,843       25,970      25,836       89,424
 Diluted           25,993     25,843       25,970      25,836       89,695
(Loss) earnings
per share:
 Basic           $ (1.44)   $ (10.81)    $ (4.66)    $ (12.81)    $ 6.56
 Diluted         $ (1.44)   $ (10.81)    $ (4.66)    $ (12.81)    $ 6.54



FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2012, Two Hundred Forty-Nine Days Ended
September 30, 2011
and Twenty-Four Days Ended January 24, 2011
(Unaudited)
(in thousands)
                                                  Two Hundred    Predecessor
                                                                 Company
                                   Nine Months    Forty-Nine     Twenty-Four
                                   Ended          Days Ended     Days Ended
                                   September      September      January 24,
                                   30,            30,            2011
                                   2012           2011
Cash flows from operating
activities:
 Net (loss) income               $ (121,114)    $ (330,961)    $ 586,907
Adjustments to reconcile net
(loss)
 income to net cash provided
 by(used in) operating
 activities:
  Deferred income taxes            (56,743)       (80,119)       279,868
  Provision for uncollectible      2,951          15,713         3,454
  revenue
  Depreciation and amortization    276,769        244,940        21,515
  Post-retirement healthcare       36,919         25,512         2,654
  Qualified pension                (4,047)        1,709          986
  Impairment of intangible         —              262,019        —
  assets and goodwill
  Other non cash items             1,497          (150)          97
  Changes in assets and
  liabilities arising from
  operations:
   Accounts receivable             (861)          1,839          (7,752)
   Prepaid and other assets        (2,937)        2,030          (3,423)
   Restricted cash                 (7,796)        —              —
   Accounts payable and accrued    732            (2,636)        26,627
   liabilities
   Accrued interest payable        162            183            9,017
   Other assets and liabilities,   (2,082)        268            177
   net
  Reorganization adjustments:
   Non-cash reorganization         (5,119)        (5,290)        (917,358)
   income
   Claims payable and estimated    (8,803)        (64,091)       (1,096)
   claims accrual
   Restricted cash - cash claims   20,291         56,544         (82,764)
   reserve
        Total adjustments          250,933        458,471        (667,998)
               Net cash provided
               by (used in)        129,819        127,510        (81,091)
               operating
               activities
Cash flows from investing
activities:
 Net capital additions             (95,996)       (128,538)      (12,477)
 Distributions from investments    634            636            —
  Net cash used in investing       (95,362)       (127,902)      (12,477)
  activities
Cash flows from financing
activities:
 Loan origination costs            —              (884)          (1,500)
 Repayments of long-term debt      (30,000)       —              —
 Restricted cash                   1,158          1,675          34
 Proceeds from exercise of stock   53             —              —
 options
 Repayment of capital lease        (938)          (809)          (201)
 obligations
  Net cash used in financing       (29,727)       (18)           (1,667)
  activities
  Net change                       4,730          (410)          (95,235)
Cash, beginning of period          17,350         10,262         105,497
Cash, end of period              $ 22,080       $ 9,852        $ 10,262
Supplemental disclosure of cash
flow information:
  Capital additions included in
   accounts payable or claims
   payable and estimated claims  $ —            $ 2,777        $ 1,818
   accrual at period-end
  Reorganization costs paid      $ 621          $ 19,282       $ 11,110
  Non-cash settlement of claims  $ 7,668        $ —            $ —
  payable



SOURCE FairPoint Communications, Inc.

Website: http://www.fairpoint.com
Contact: Investor Relations, Lee Newitt, +1-704-344-8150,
lnewitt@fairpoint.com, or Media, Sabina Haskell, +1-802-658-7351,
shaskell@fairpoint.com