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Press Release -- August 2nd, 2012
Source: FairPoint Communications
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FAIRPOINT COMMUNICATIONS REPORTS 2012 SECOND QUARTER RESULTS

• Unlevered Free Cash Flow1 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 EBITDAR2 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
Charlotte, N.C. (August 2, 2012) – FairPoint Communications, Inc. (NasdaqCM: FRP) (“FairPoint” or the “Company”),
a leading communications provider, today announced its financial results for the quarter ended June 30, 2012. As
previously announced, the Company will host a conference call and simultaneous webcast to discuss its results at 8:30
a.m. (EDT) on Friday, August 3, 2012.

“We’re pleased to report a very strong quarter,” said Paul 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."
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 million of revenue in the second quarter of 2012 as compared to $9.0 million in the first
quarter of 2012 and $2.6 million in 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 ended June 30, 2012, is less than half the 6.9% loss FairPoint
experienced for the twelve months ended June 30, 2011. Business voice access lines declined only 0.8% sequentially
versus March 31, 2012.

Regulatory Highlights
“We were thrilled with the legislation passed in New Hampshire in 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 in
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.
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Maine and the new Incentive Regulation Plan in Vermont, 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.
On June 11, 2012, Governor Lynch of New Hampshire signed 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 million per 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 at June 30, 2012.
Voice access line loss slowed for the ninth consecutive quarter, reaching 7.8% year-over-year and 1.8% sequentially.
As of June 30, 2012, FairPoint had approximately 3,410 employees, a decrease of 3.7% and 15.4% from Dec. 31, 2011
and Dec. 31, 2010, respectively.
Financial Highlights
Second Quarter 2012 as compared to First Quarter 2012
Revenue was $243.5 million in the second quarter of 2012 as compared to $248.5 million in 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 million beneficial 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 million increase in data and Internet services revenue.
Operating expenses, excluding depreciation, amortization and reorganization, were $190.7 million in the second quarter of
2012 as compared to $210.9 million in the first quarter of 2012. The Company recorded its annual vacation expense
accrual of $13.8 million in 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 million sequentially due
primarily to decreases in employee expenses, contracted services and cost of goods sold.
Consolidated EBITDAR was $70.2 million in the second quarter of 2012 as compared to $55.3 million in 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 million in the second quarter of 2012 as compared to a net loss of $46.7 million in 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 million in the second quarter of 2012 as compared to $26.3 million in 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 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 grew to $43.8 million as of June 30, 2012, as compared to $35.8 million as of March 31, 2012
and $17.4 million as of Dec. 31, 2011. Cash grew to $43.8 million in the quarter even after a cash interest payment of
approximately $16.5 million, principal repayment of $2.5 million and cash pension contributions of $5.7 million. 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.
Second Quarter 2012 as compared to Second Quarter 2011
Revenue was $243.5 million in the second quarter of 2012 as compared to $262.6 million a 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 million
beneficial impact in the second quarter of 2011. Access revenue declined versus a year earlier, which was primarily
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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 million in the second quarter of
2012 as compared to $202.8 million a 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 million in the second quarter of 2012 as compared to $70.5 million a year earlier.
Operating expense reductions more than offset the impact of the revenue decline and a cash pension contribution of $5.7
million made 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 million in the second quarter of 2012 as compared to $52.1 million a 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 million in the second quarter of 2012 as compared to net loss of $27.1 million in 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 million for the full year, including the $11.5 million contributed 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 million in 2012 through a continued focus on improving
Consolidated EBITDAR margins and disciplined capital spending. FairPoint expects to pay approximately $68 million in
interest and $10 million in 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 ended June 30, 2012, which will be filed with the SEC on or prior to
August 9, 2012. The Company's results for the quarter ended June 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. For purposes of 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
will 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 at 8:30 a.m. (EDT) on Friday, August 3, 2012.
Participants should call (866) 578-5747 (US/Canada) or (617) 213-8054 (international) at 8:20 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 from Friday, August 3, 2012, at 10:30 a.m. (EDT) through Friday, August 10, 2012, at 11:59 p.m.
(EDT).
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.
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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 VantagePointSM 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
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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.
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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

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