Frontier Communications 2011 Annual Report Download - page 49

FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
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number of the Company’s HSI subscribers for our Frontier legacy operations increased by approximately 16,200, or 3%,
since December 31, 2009. Nonswitched access revenue for our Frontier legacy operations for 2010 increased $13.0 million to
$294.6 million as compared to 2009, primarily due to growth in the number of those circuits.
Other
Other revenue for 2011 increased $62.7 million, or 24%, to $329.7 million, as compared with 2010. Other revenue for 2011
increased $87.1 million as a result of the additional six months of revenue in 2011 attributable to the Acquired Business.
Excluding the additional six months of revenue related to the Acquired Business, other revenue decreased $24.4 million, or
9%, as compared with 2010. Directory services revenue for 2011, excluding the additional six months of revenue related to
the Acquired Business, decreased $16.8 million, or 16%, as compared with 2010, primarily due to a decline in yellow pages
advertising. All other revenue for 2011, excluding the additional six months of revenue related to the Acquired Business,
decreased $7.6 million, or 5%, primarily due to the reduction in customers for FiOS video service.
Other revenue for 2010 increased $94.6 million, or 55%, to $266.9 million, as compared with 2009. Other revenue for 2010
increased $93.9 million as a result of the Acquired Business. Directory services revenue for 2010, excluding the additional
six months of revenue related to the Acquired Business, decreased $13.6 million, or 13%, as compared with 2009, primarily
due to a decline in yellow pages advertising. All other revenue for our Frontier legacy operations increased $14.3 million, or
22%, as compared with 2009, primarily due to reduced DISH video credits and lower bad debt expenses that are charged
against revenue, partially offset by decreases in “bill and collect” fee revenue.
Switched Access and Subsidy
Switched access and subsidy revenue for 2011 increased $121.4 million, or 24%, to $619.1 million, as compared with 2010.
Switched access and subsidy revenue increased $169.3 million as a result of the additional six months of revenue in 2011
attributable to the Acquired Business. Excluding the additional six months of revenue related to the Acquired Business,
switched access and subsidy revenue decreased $47.9 million, or 10%, as compared with 2010.
Switched access revenue, excluding the additional six months of revenue related to the Acquired Business, for 2011 of $245.0
million, or 7% of our revenues, decreased $40.5 million, or 14%, as compared with $285.5 million, or 8% of our revenues in
2010. These decreases were primarily due to the impact of a decline in minutes of use related to access line losses and the
displacement of minutes of use by wireless, email and other communications services. Switched access and subsidy revenue
includes subsidy payments we receive from federal and state agencies, including surcharges billed to customers that are
remitted to the FCC. Subsidy revenue, excluding the additional six months of revenue related to the Acquired Business, for
2011 of $204.8 million, decreased $7.4 million, or 3%, as compared with 2010, primarily due to decreased support for local
switching, the Federal Universal Service Fund and the Federal High Cost Fund. We expect a further decline in switched
access and subsidy revenue in 2012.
Federal and state subsidies and surcharges (which are billed to customers and remitted to the FCC) for the Company were
$154.0 million, $41.6 million and $104.5 million, respectively, and $300.1 million in total, or 6% of our revenues, for 2011.
The federal and state subsidy revenue for 2011 represents 4% of our consolidated revenues. Total federal and state subsidies
and surcharges were $212.3 million, or 6% of our consolidated revenues, for 2010.
Switched access and subsidy revenue for 2010 increased $138.1 million, or 38%, to $497.8 million as compared with 2009.
For 2010, switched access and subsidy revenue represented 13% of our total revenue. Switched access and subsidy revenue
for 2010 increased $169.9 million as a result of the Acquired Business.
Consolidated switched access revenue was $285.5 million in 2010, or 8% of our revenues, up from $246.3 million in 2009, or
12% of our revenues. Federal and state subsidy revenue, including surcharges of $73.8 million billed to customers which are
remitted to the FCC, was $212.3 million in 2010, or 6% of our revenues, up from $113.3 million in 2009, or 5% of our
revenues.
Switched access revenue for our Frontier legacy operations for 2010 of $213.9 million decreased $32.5 million, or 13%, as
compared with 2009. This decrease was primarily due to the impact of a decline in minutes of use related to access line losses
and the displacement of minutes of use by wireless, email and other communications services. Subsidy revenue for our
Frontier legacy operations, including surcharges billed to customers of $41.1 million, for 2010 of $114.0 million increased
$0.7 million, or 1%, as compared with 2009.