Frontier Communications 2004 Annual Report Download - page 31

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CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
29
ELI
ELI revenue for the years ended December 31, 2004 and 2003 decreased $9.4 million, or 6%, and $9.7 million, or 6%,
respectively, primarily due to lower demand and prices for long-haul services and lower reciprocal compensation revenues.
Gas revenue
We did not have any gas operations in the year ended December 31, 2004. Gas revenue for the year ended December 31,
2003 decreased $78.8 million, or 36%, as compared with the prior year due to the sales of The Gas Company in Hawaii and
our Arizona gas division, which were sold on August 8, 2003 and August 11, 2003, respectively.
Electric revenue
Electric revenue for the year ended December 31, 2004 decreased $91.2 million, or 90%, as compared with the prior year.
We completed the sale of our remaining electric utility property on April 1, 2004. We have sold all of our electric operations
and as a result will have no operating results in future periods for these businesses.
Electric revenue for the year ended December 31, 2003 decreased $113.9 million, or 53%, as compared with the prior year
primarily due to the sales of our Arizona electric division and Kauai Electric. Included in electric revenue for the year ended
December 31, 2002 is approximately $183.5 million of revenue from our Arizona electric division and Kauai Electric, which
were sold on August 11, 2003 and November 1, 2002, respectively. We had just one remaining electric utility property as of
December 31, 2003.
Network access
Network access expenses for the year ended December 31, 2004 decreased $23.9 million, or 11%, as compared with the prior
year primarily due to decreased costs in long distance access expense related to rate changes partially offset by increased
circuit expense associated with additional data product sales in the ILEC sector. ELI costs have declined due to a drop in
demand coupled with improved network cost efficiencies. If we continue to increase our sales of data products such as high-
speed internet or expand the availability of our unlimited calling plans, our network access expense could increase.
Network access expenses for the year ended December 31, 2003 decreased $11.9 million, or 5%, as compared with the prior
year primarily due to decreased costs in long distance access expense related to rate changes partially offset by increased
circuit expense associated with additional data product sales in the ILEC sector. ELI costs have declined due to a drop in
demand coupled with improved network cost efficiencies.
Gas purchased
We did not have any gas operations in the year ended December 31, 2004. Gas purchased for the year ended December 31,
2003 decreased $40.6 million, or 33%, as compared with the prior year primarily due to the sales of The Gas Company in
Hawaii and our Arizona gas division.
($ in thousands) 2002
Amount $ Change % Change Amount $ Change % Change Amount
Network access 199,643$ (23,904)$ -11% 223,547$ (11,915)$ -5% 235,462$
Gas purchased - (82,311) -100% 82,311 (40,604) -33% 122,915
Electric energy and fuel oil purchased 5,523 (58,308) -91% 63,831 (54,712) -46% 118,543
205,166$ (164,523)$ -45% 369,689$ (107,231)$ -22% 476,920$
2004
COST OF SERVICES
2003
($ in thousands) 2002
Amount $ Change % Change Amount $ Change % Change Amount
Gas revenue -$ (137,686)$ -100% 137,686$ (78,831)$ -36% 216,517$
Electric revenue 9,735$ (91,193)$ -90% 100,928$ (113,903)$ -53% 214,831$
GAS AND ELECTRIC REVENUE
20032004