Earthlink 2015 Annual Report Download - page 47

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Table of Contents
Previous Segment Results
Business Services Segment
The following table presents operating results for our legacy Business Services segment for the years ended December 31, 2013, 2014 and 2015 :
Year Ended December 31,
2014 vs 2013
2015 vs 2014
2013
2014
2015
$ Change
% Change
$ Change
% Change
(dollars in thousands)
Revenues $ 964,227
$ 930,931
$ 877,912
$ (33,296)
(3)%
$ (53,019)
(6)%
Segment operating income 115,352
115,426
138,926
74
—%
23,500
20 %
Business Services operating income was relatively flat during the years ended December 31, 2013 and 2014 due to efforts to protect our revenue base, such as
targeted price increases and re-terms, and efforts to manage cost of revenues and operating expenses. Revenues for traditional voice and data products have been
declining, which has been partially offset by an increase in revenues from our growth products. Business Services operating income increased during the year
ended December 31, 2015 compared to the prior year due to continued efforts to protect our revenue base, such as targeted price increases, and efforts to manage
cost of revenues and operating expenses. The increase in Business Services operating income during the year ended December 31, 2015 was partially offset by the
allocation of certain expenses historically recorded in our Consumer Services segment to our legacy Business Services segment and to corporate expenses.
Consumer Services Segment
Consumer Services Operating Metrics
The following table presents subscriber and operating data for our Consumer Services segment for the years ended December 31, 2013, 2014 and 2015 :
Year Ended December 31,
2013
2014
2015
Consumer Subscriber Activity
Subscribers at beginning of year 1,139,000
976,000
821,000
Gross organic subscriber additions 105,000
75,000
62,000
Adjustment (a) —
—
19,000
Churn (268,000)
(230,000)
(173,000)
Subscribers at end of year (b) 976,000
821,000
729,000
Consumer Metrics
Average dial-up subscribers (c) 582,000
511,000
466,000
Average high-speed subscribers (c) 473,000
385,000
307,000
Average consumer subscribers (c) 1,055,000
896,000
773,000
ARPU (d) $ 21.83
$ 22.89
$ 23.57
Churn rate (e) 2.1%
2.1%
1.9%
(a) During the year ended December 31, 2015, we began reporting approximately 19,000 subscribers in our paying subscriber count as a result of price increases
implemented during the period. These subscribers were previously counted as non-paying subscribers because their monthly fee was below a certain threshold.
(b) Subscriber counts do not include new non-paying customers. Customers receiving service under promotional programs that include periods of free service at
inception are not included in subscriber counts until they become paying customers.
(c) Average subscribers is calculated by averaging the ending monthly subscribers or accounts for the thirteen months preceding and including the end of the year.
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