Segment Information

9 Months Ended

Sep. 30, 2011

Segment Information [Abstract]

Segment Information

NOTE 10: 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's Alteva and USA Datanet businesses are part of the Online segment.

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 nine months ended September 30, 2011 and 2010 is set forth below:

			2011		2010
	Segment operating revenues
		Telephone	$	14,727	$	14,402
		Online		6,027		5,352
		Eliminations		(1,936)		(1,557)
	Total operating revenues		$	18,818	$	18,197
	Segment operating expenses, exclusive of depreciation and amortization
		Telephone	$	17,238	$	14,388
		Online		7,174		5,613
		Eliminations		(1,726)		(1,346)
	Total operating expenses, exclusive of depreciation and amortization		$	22,686	$	18,655
	Segment operating loss, exclusive of depreciation and amortization
		Telephone	$	(2,511)	$	14
		Online		(1,147)		(261)
		Eliminations		(210)		(211)
	Total operating loss, exclusive of depreciation and amortization		$	(3,868)	$	(458)
The following table reconciles segment operating loss to net income before taxes for the nine months ended September 30, 2011 and 2010:
			2011		2010
	Operating loss		$	(3,868)	$	(458)
	Total depreciation and amortization			(4,103)		(4,210)
	Interest income (expense), net			4		23
	Income from equity investments, net			6,744		9,105
	Other income, net			46		212
	Income (loss) before income taxes		$	(1,177)	$	4,672

Certain regulatory revenue, which includes Universal Service Funds ("USF") and National Exchange Carrier Association ("NECA") pool settlements, accounted for 12% and 16% of the Company's revenues for the nine months ended September 30, 2011 and 2010, respectively. Accounts receivable for certain regulatory revenue represents 7% and 12% of consolidated accounts receivable at September 30, 2011 and 2010, respectively. Accounts Payable for certain carrier costs represents 16% and 18% of consolidated accounts payable at September 30, 2011 and 2010, respectively.

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

			2011		2010
	Segment operating revenues
		Telephone	$	4,881	$	5,149
		Online		2,618		1,748
		Eliminations		(670)		(647)
	Total operating revenues		$	6,829	$	6,250
	Segment operating expenses, exclusive of depreciation and amortization
		Telephone	$	7,146	$	5,022
		Online		2,986		2,061
		Eliminations		(1,225)		(577)
	Total operating expenses, exclusive of depreciation and amortization		$	8,907	$	6,506
	Segment operating loss, exclusive of depreciation and amortization
		Telephone	$	(2,265)	$	127
		Online		(368)		(313)
		Eliminations		555		(70)
	Total operating loss, exclusive of depreciation and amortization		$	(2,078)	$	(256)
The following table reconciles segment operating loss to net income before taxes for the three months ended September 30, 2011 and 2010:
			2,011		2010
	Operating loss		$	(2,078)	$	(256)
	Total depreciation and amortization			(1,365)		(1,370)
	Interest income (expense), net			(55)		37
	Income from equity investments, net			1,328		3,362
	Other (expenses) income, net			31		81
	Income (loss) before income taxes		$	(2,139)	$	1,854

Certain regulatory revenue, which includes USF and NECA pool settlements, accounts for 9% and 18% of the Company's revenues for the three months ended September 30, 2011 and 2010, respectively.