Cincinnati Bell 2011 Annual Report Download - page 153

Form 10-K Part II Cincinnati Bell Inc.
Wireline, continued
(dollars in millions, except for operating metrics) 2011 2010
$ Change
2011 vs.
2010
% Change
2011 vs.
2010 2009
$ Change
2010 vs.
2009
% Change
2010 vs.
2009
Revenue:
Voice — local service ............. $280.3 $311.9 $(31.6) (10)% $347.7 $(35.8) (10)%
Data ........................... 291.5 283.3 8.2 3% 284.3 (1.0) 0%
Long distance and VoIP ........... 111.3 104.4 6.9 7% 97.1 7.3 8%
Entertainment ................... 26.6 16.7 9.9 59% 7.7 9.0 117%
Other .......................... 22.4 26.2 (3.8) (15)% 26.3 (0.1) 0%
Total revenue .................... 732.1 742.5 (10.4) (1)% 763.1 (20.6) (3)%
Operating costs and expenses:
Cost of services and products ....... 270.0 256.8 13.2 5% 251.6 5.2 2%
Selling, general and administrative . . . 126.7 140.1 (13.4) (10)% 147.0 (6.9) (5)%
Depreciation and amortization ...... 102.4 103.9 (1.5) (1)% 103.9 — 0%
Restructuring charges ............. 7.7 8.2 (0.5) (6)% 12.6 (4.4) (35)%
Curtailment loss (gain) ............ 4.2 — 4.2 n/m (7.6) 7.6 n/m
Gain on sale of assets ............. (8.4) — (8.4) n/m — — n/m
Impairment of assets .............. 1.0 — 1.0 n/m — — n/m
Total operating costs and expenses . . . 503.6 509.0 (5.4) (1)% 507.5 1.5 0%
Operating income .................. $228.5 $233.5 $ (5.0) (2)% $255.6 $(22.1) (9)%
Operating margin ................... 31.2% 31.4% (0.2) pts 33.5% (2.1) pts
Capital expenditures ................ $112.6 $ 98.6 $14.0 14% $133.0 $(34.4) (26)%
Metrics information (in thousands):
Local access lines ................ 621.3 674.1 (52.8) (8)% 723.5 (49.4) (7)%
High-speed internet subscribers
DSL subscribers ................ 218.0 228.9 (10.9) (5)% 233.8 (4.9) (2)%
Fioptics internet subscribers ...... 39.3 27.2 12.1 44% 13.8 13.4 97%
257.3 256.1 1.2 0% 247.6 8.5 3%
Long distance lines ............... 447.4 482.8 (35.4) (7)% 508.3 (25.5) (5)%
Fioptics entertainment subscribers . . . 39.6 28.1 11.5 41% 15.2 12.9 85%
2011 Compared to 2010
Revenues
Voice local service revenue includes local service, value added services, digital trunking, switched access,
and information services. Voice local service revenue was $280.3 million in 2011, down $31.6 million, or 10%,
compared to 2010. These revenues have declined primarily due to fewer local access lines in use. Access lines
were 621,300 at December 31, 2011, down 52,800, or 8%, compared to a year earlier. The decline in access lines
resulted from several factors, including customers electing to solely use wireless service in lieu of traditional
local wireline service, Company-initiated disconnections of customers with credit problems, and customers
electing to use service from other providers.
Data revenue consists of Fioptics high-speed internet access, DSL high-speed internet access, dial-up
internet access, data transport, and LAN interconnection services. Data revenue was $291.5 million in 2011, up
$8.2 million, or 3%, compared to 2010. Revenue from Fioptics high-speed internet service increased to $15.8
million in 2011, up from $10.2 million in the prior year. As of December 31, 2011, high-speed internet Fioptics
customers were 39,300, which is 44% higher than a year ago. LAN service revenue also increased by $5.6
million on a year-over-year basis. Lower DSL revenue partially offset these increases. DSL subscribers of
218,000 at the end of 2011 decreased by 5% from 2010.
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Form 10-K