Frontier Communications 2007 Annual Report Download - page 35

CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
Telecommunications Revenue
2007 2006 2005
($ in thousands) As Reported Acquisitions
Citizens
(excluding
CTE and
GVN) $ Change % Change Amount $ Change % Change Amount
Local services ........... $ 875,762 $ 95,197 $ 780,565 $(29,019) -4% $ 809,584 $(20,101) -2% $ 829,685
Data and internet
services .............. 543,764 58,934 484,830 60,621 14% 424,209 58,596 16% 365,613
Access services .......... 479,462 70,235 409,227 (18,732) -4% 427,959 (3,380) -1% 431,339
Long distance services .... 180,525 27,070 153,455 183 0% 153,272 (16,224) -10% 169,496
Directory services ........ 114,586 1,264 113,322 (816) -1% 114,138 1,046 1% 113,092
Other .................. 93,916 13,908 80,008 (16,197) -17% 96,205 (11,611) -11% 107,816
$2,288,015 $266,608 $2,021,407 $ (3,960) 0% $2,025,367 $ 8,326 0% $2,017,041
Local Services
Local services revenue for the year ended December 31, 2007 increased $66.2 million, or 8%, to $875.8
million as compared with the prior year. Excluding the additional local services revenue due to the CTE and
GVN acquisitions of $95.2 million, local services revenue for the year ended December 31, 2007 decreased
$29.0 million, or 4%, to $780.6 million as compared with the prior year. The loss of access lines accounted for
$28.7 million of the decline in local revenue, partially offset by rate increases in Rochester, New York on
residential lines that became effective August of 2006 and 2007.
Local services revenue for the year ended December 31, 2006 decreased $20.1 million, or 2%, as compared
with the prior year. Local revenue decreased $25.9 million, primarily due to continued losses of access lines
partially offset by a local rate increase on some of our Rochester residential access lines effective August 2006.
2005 reflected a reserve of $4.0 million associated with a state rate of return limitation on earnings. Enhanced
services revenue increased $5.8 million, primarily due to sales of additional feature packages.
Economic conditions and/or increasing competition could make it more difficult to sell our packages and
bundles and cause us to lower our prices for those products and services, which would adversely affect our
revenues, profitability and cash flow.
Data and Internet Services
Data and internet services revenue for the year ended December 31, 2007 increased $119.6 million, or 28%,
to $543.8 million as compared to the prior year. Excluding the additional data and internet services revenue due
to the CTE and GVN acquisitions of $58.9 million, data and internet services revenue for the years ended
December 31, 2007 and 2006 increased $60.6 million, or 14%, and $58.6 million, or 16%, respectively, as
compared with the prior year, primarily due to growth in data and high-speed internet services. As of
December 31, 2007, the number of the Company’s high-speed internet subscribers increased by 66,700, or 17%,
since December 31, 2006. Data and internet services also includes revenue from data transmission services to
other carriers and high-volume commercial customers with dedicated high-capacity circuits like DS-1’s and
DS-3’s. Revenue from these dedicated high-capacity circuits increased $19.8 million in 2007 and $9.1 million in
2006, primarily due to growth in the number of those circuits.
Access Services
Access services revenue for the year ended December 31, 2007 increased $51.5 million, or 12%, to $479.5
million as compared to the prior year. Excluding the additional access services revenue due to the CTE and GVN
acquisitions of $70.2 million, access services revenue for the year ended December 31, 2007 decreased $18.7
million, or 5%, as compared with the prior year. Switched access revenue of $284.6 million increased $21.2
million, or 8%, as compared with the prior year, primarily due to the settlement in the first quarter of a dispute
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