What is FairPoint Communications Probability of Financial Distress (%)?
Probability of Financial Distress (%) measures the probability that a company will go bankrupt in the upcoming year given its current financial position. A higher ratio indicates a larger probability of bankruptcy for the company, while a lower ratio indicates a healthier fundamental. As of today, FairPoint Communications's Probability of Financial Distress (%) is 0.00%.
Like the Altman Z-Score, the PFD measures a company's bankruptcy risk. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.
Competitive Comparison of FairPoint Communications's Probability of Financial Distress (%)
For the Telecom Services subindustry, FairPoint Communications's Probability of Financial Distress (%), along with its competitors' market caps and Probability of Financial Distress (%) data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
FairPoint Communications's Probability of Financial Distress (%) Distribution in the Telecommunication Services Industry
For the Telecommunication Services industry and Communication Services sector, FairPoint Communications's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where FairPoint Communications's Probability of Financial Distress (%) falls into.
FairPoint Communications Probability of Financial Distress (%) Calculation
Probability of Financial Distress (%) (PFD) was developed by John Campbell, Jens Hilscher and Jan Szilagyi in their Search of Distress Risk. It measures the probability that a company will go bankrupt within the next 12 months given its current financial position.
The Probability of Financial Distress (%) was obtained by a logit probability model based on eight explanatory variables. The logit formula to compute the probability of financial distress (LPFD) is given below:
| LPFD | = | -20.12 * NIMTAAVG | + | 1.60 * TLMTA | - | 7.88 * EXRETAVG | + | 1.55 * SIGMA | - | 0.005 * RSIZE | - | 2.27 * CASHMTA | + | 0.070 * MB | - | 0.09 * PRICE | - | 8.87 |
| = | 0.00 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.00% |
The eight explanatory variables are:
1. NIMTAAVG = Net Income to Market Total Assets
*Note that for companies reported quarterly, geometrically declining weighted quarterly Net Income data in latest four quarters are used.
2. TLMTA = Total liabilities to Market Total Assets
3. CASHMTA = Cash to Market Total Assets
For non-financial companies, CASHMTA is measured as:
4. EXRETAVG = Excess Return compared to the S&P 500
EXRETAVG is the weighted excess return compared to the S&P 500 in past 12 month. Geometrically declining weights are imposed on the monthly excess return to reflect lagged information. The weight is halved each quarter.
5. SIGMA = Standard Deviation of Daily Returns
For sigma, we use the annualized standard deviation of a company's returns over the past 92 days (or 63 trading days).
6. RSIZE = Relative Size
| RSIZE | = | log (Market Cap | / | Total Market Cap of S&P 500 companies) |
7. MB = Market to Adjusted Book Equity Ratio
8. PRICE
PRICE is measured as the log of the stock price, capped at log(15).
FairPoint Communications (FairPoint Communications) Business Description
Traded in Other Exchanges
N/A
Address
521 East Morehead Street, Suite 500, Charlotte, NC, USA, 28202
FairPoint is the seventh- largest local telephone firm in the United States, following its acquisition of Verizon's northern New England assets. It operates in 18 states serving 1.4 million access lines, though nearly 90% of these are in Maine, New Hampshire, and Vermont. The firm was founded in 1991 and has its headquarters in Charlotte, N.C.
Executives
| Peter D Aquino |
director |
MOTIENT CORP, 300 KNIGHTBRIDGE PARKWAY, LINCOLNSHIRE IL 60069 |
| David L Treadwell |
director |
222 S 15TH STREET, SUITE 600 N, OMAHA NE 68102 |
| Edward D Horowitz |
director |
C/O EDSLINK LLC, 670 WEST END AVE, NEW YORK NY 10025 |
| Wayne Wilson |
director |
29 LAKE AVE., SUNAPEE NH 03782 |
| Ajay Sabherwal |
officer: EVP & CFO |
C/O FAIRPOINT COMMUNICATIONS, INC., 521 E. MOREHEAD STREET, SUITE 500, CHARLOTTE NC 28202 |
| Angelo Gordon & Co Lp/ny |
10 percent owner |
245 PARK AVENUE, 26TH FLOOR, NEW YORK NY 10167 |
| Michael L Gordon |
10 percent owner |
C/O ANGELO GORDON & CO, 245 PARK AVE 26TH FL, NEW YORK NY 10167 |
| John M Angelo |
10 percent owner |
C/O ANGELO GORDON & CO, 245 PARK AVE 26TH FL, NEW YORK NY 10167 |
| Marathon Asset Management Lp |
10 percent owner |
ONE BRYANT PARK, 38TH FLOOR, NEW YORK NY 10036 |
| David L Hauser |
other: Former Officer and Director |
704-731-1522, CHARLOTTE NC 28209-4674 |
| Lehman Brothers Holdings Inc |
10 percent owner |
1271 AVENUE OF THE AMERICAS, NEW YORK NY 10020 |
| Thl Equity Advisors Iv Llc |
10 percent owner |
C/O THOMAS H. LEE PARTNERS, 100 FEDERAL STREET, 35TH FLOOR, BOSTON MA 02110 |
| Thomas H. Lee Advisors, Llc |
10 percent owner |
C/O THOMAS H. LEE PARTNERS, L.P., 100 FEDERAL STREET, 35TH FLOOR, BOSTON MA 02110 |
| Frank K Bynum |
director, 10 percent owner |
C/O KELSO & CO, 320 PARK AVENUE 24TH FLOOR, NEW YORK NY 10022 |
| Michael B Goldberg |
10 percent owner |
|
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