Segment Information

6 Months Ended

Jun. 30, 2011

Segment Information

Segment Information

NOTE 7:  SEGMENT INFORMATION

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

The Telephone segment provides telecommunications services including local, network access, wholesale, conferencing, long distance services, wireless and directory services.  The Online segment provides high speed and dial-up Internet services, VoIP, DIRECTV and video.

The Company evaluates depreciation, amortization, impairment charges and interest expense on a total company basis because the Company does not allocate assets or debt to specific segments.  As a result, these items, along with other non-operating income or expenses, are not assigned to any segment.  Therefore, 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 income statement information for the six months ended June 30, 2011 and 2010 is set forth below: 

			2011		2010
	Segment operating revenues
		Telephone	$	9,846	$	9,253
		Online		3,409		3,604
		Eliminations		(1,266)		(910)
	Total operating revenues		$	11,989	$	11,947
	Segment operating expenses, exclusive of depreciation and amortization
		Telephone	$	10,092	$	9,367
		Online		4,188		3,552
		Eliminations		(501)		(770)
	Total operating expenses, exclusive of depreciation and amortization		$	13,779	$	12,149
	Segment operating loss, exclusive of depreciation and amortization
		Telephone	$	(246)	$	(114)
		Online		(779)		52
		Eliminations		(765)		(140)
	Total operating loss, exclusive of depreciation and amortization		$	(1,790)	$	(202)
The following table reconciles segment operating loss to net income before taxes for the six months ended June 30, 2011 and 2010:
			2011		2010
	Operating loss		$	(1,790)	$	(202)
	Total depreciation and amortization			(2,738)		(2,840)
	Interest income (expense), net			59		(14)
	Income from equity investments, net			5,416		5,743
	Other income, net			15		131
	Income before income taxes		$	962	$	2,818

Certain regulatory revenue, which includes Universal Service funds ("USF") and National Exchange Carrier Association ("NECA") pool settlements, accounted for 13% and 15% of the Company's revenues for the six months ended June 30, 2011 and 2010, respectively. Accounts receivable for certain regulatory revenue represents 13% and 14% of consolidated accounts receivable at June 30, 2011 and 2010, respectively.

Segment income statement information for the three months ended June 30, 2011 and 2010 is set forth below:

			2011		2010
	Segment operating revenues
		Telephone	$	4,729	$	4,552
		Online		1,719		1,779
		Eliminations		(637)		(443)
	Total operating revenues		$	5,811	$	5,888
	Segment operating expenses, exclusive of depreciation and amortization
		Telephone	$	4,780	$	4,601
		Online		2,209		1,810
		Eliminations		58		(373)
	Total operating expenses, exclusive of depreciation and amortization		$	7,047	$	6,038
	Segment operating loss, exclusive of depreciation and amortization
		Telephone	$	(51)	$	(49)
		Online		(490)		(31)
		Eliminations		(695)		(70)
	Total operating loss, exclusive of depreciation and amortization		$	(1,236)	$	(150)
The following table reconciles segment operating loss to net income before taxes for the three months ended June 30, 2011 and 2010:
			2,011		2010
	Operating loss		$	(1,236)	$	(150)
	Total depreciation and amortization			(1,341)		(1,428)
	Interest income (expense), net			2		(2)
	Income from equity investments, net			2,198		2,937
	Other (expenses) income, net			9		(1)
	Income (loss) before income taxes		$	(368)	$	1,356

Certain regulatory revenue, which includes Universal Service funds ("USF") and National Exchange Carrier Association ("NECA") pool settlements, accounts for 13% and 15% of the Company's revenues for the three months ended June 30, 2011 and 2010, respectively.