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Table of Contents
control. Costs excluded from segment income from operations include various corporate expenses (consisting of certain costs such as corporate
management, human resources, finance and legal), depreciation and amortization, impairment of goodwill and intangible assets, restructuring
and acquisition-related costs and stock-based compensation expense, as they are not considered in the measurement of segment performance.
Business Services Segment
Business Services Operating Metrics
We utilize certain non-
financial and operating measures to assess our financial performance. The following table sets forth subscriber and
operating data for the years ended December 31, 2009, 2010 and 2011:
(a)
Legacy EarthLink business metrics consist of metrics related to services in EarthLink's Business Services segment prior to our
recent acquisitions.
(b)
As of December 31, 2010, includes 12,559 route miles owned or obtained through indefeasible rights to use (IRU) and 3,945
marketed and managed route miles. As of December 31, 2011, includes 24,859 route miles owned or obtained through
indefeasible rights to use (IRU) and 3,945 marketed and managed route miles.
Business Services Operating Results
The following table sets forth operating results for our Business Services segment for the years ended December 31, 2009, 2010 and 2011:
The increase in Business Services revenues from the year ended December 31, 2009 to the year ended December 31, 2010 was primarily
due to the inclusion of ITC^DeltaCom revenues for the period December 8, 2010 through December 31, 2010. The increase in Business Services
revenues from the year ended December 31, 2010 to the year ended December 31, 2011 was primarily due to the inclusion of a full year of
ITC^DeltaCom revenues, and the inclusion of revenues from our other acquired businesses including One Communications and STS Telecom.
This was partially offset by a decrease in revenues for certain legacy products, including web hosting and lower-
end, single site broadband
services.
The decrease in Business Services segment operating income from the year ended December 31, 2009 to the year ended December 31, 2010
was primarily due to the inclusion of ITC^DeltaCom results of
58
December 31,
2009
December 31,
2010
December 31,
2011
Legacy EarthLink Business Metrics (a)
Narrowband access subscribers
8,000
7,000
5,000
Broadband access subscribers
54,000
53,000
51,000
Web hosting accounts
75,000
66,000
58,000
EarthLink Business Metrics
Total fiber optic route miles (b)
—
16,504
28,804
Colocations
—
294
1,415
Voice and data switches
—
20
56
Year Ended December 31, 2010 vs. 2009 2011 vs. 2010
2009
2010
2011
$ Change
% Change
$ Change
% Change
(dollars in thousands)
Segment
revenues
148,317
$
160,764
$
938,259
12,447
%
777,495
484
%
Segment
operating
income
25,648
19,991
166,126
(5,657
)
-
22
%
146,135
731
%