Segment Information

12 Months Ended

Dec. 31, 2012

Segment Information [Abstract]

Segment Information

NOTE 9: SEGMENT INFORMATION

The Company's segments are strategic business units that offer different products and services and are managed as Unified Communications and Telephone services. The Company evaluates the performance of the segments based upon factors such as revenue growth, expense containment, market share and operating results.

In the beginning of fiscal 2012, the Company realigned its segment reporting (internal and external) and renamed the Online segment Unified Communications. The Company made these changes to take into account the changes in their business resulting from the Alteva transaction. The acquisition was part of the Company's strategy to become a leading provider of a world-class UC solutions strategy. Accordingly, Broadband Internet, dial-up Internet access services and TV services, which previously were included in the Company's Online segment, became part of the Company's Telephone segment. Concurrently, to align the segments with the Company's revised management structure and operating model, the Company moved Wholesale carrier services and Conference services out of the Telephone segment and into the Unified Communications segment.

The segment results presented below are not necessarily indicative of the results of operations these segments would have achieved had they operated as stand-alone entities during the periods presented.

Segment statement of operations information for the years ended December 31:

		2012			2011			2010
					($ in thousands)
Segment operating revenues
Unified Communications	$	13,569		$	8,360		$	4,527
Telephone		14,373			17,576			19,899
Total segment operating revenues	$	27,942		$	25,936		$	24,426
Depreciation and amortization
Unified Communications	$	2,037		$	1,132		$	1,007
Telephone		3,439			4,134			4,773
Total depreciation and amortization	$	5,476		$	5,266		$	5,780
Operating loss
Unified Communications	$	(12,517	)	$	(9,156	)	$	(2,450	)
Telephone		(2,853	)		(2,433	)		(3,938	)
Total segment operating loss, exclusive of impairment loss	$	(15,370	)	$	(11,589	)	$	(6,388	)

The following table reconciles segment operating loss, exclusive of impairment loss to income before income taxes for the years ended December 31, 2012, 2011 and 2010:

		2012			2011			2010
Segment operating loss	$	(15,370	)	$	(11,589	)	$	(6,388	)
Impairment loss assets		(8,883	)		-			(2,283	)
Interest income, (expense), net		(415	)		(64	)		33
Income from equity investments		11,021			7,898			12,578
Other (expenses) income, net		(286	)		(51	)		261
Income (loss) before income taxes	$	(13,933	)	$	(3,806	)	$	4,201

Certain regulatory revenue which includes USF and NECA pool settlements, has accounted for $2.2 million or 8%, $2.8 million or 11%, and $3.9 million or 16% of the Company's revenues for the years ended December 31, 2012, 2011 and 2010, respectively. Accounts receivable for certain regulatory revenue represents 6% and 7% of consolidated accounts receivable at December 31, 2012 and 2011, respectively.

Segment balance sheet information as of December 31:

($ in thousands)		2012		2011
Assets
Unified communications	$	23,500	$	21,485
Telephone		19,945		36,431
Total assets	$	43,445	$	57,916