Earthlink 2012 Annual Report Download - page 53

Download and view the complete annual report

Please find page 53 of the 2012 Earthlink annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 133

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133

Table of Contents
launches over the past year; partially offset by continued declines in revenues for certain legacy products, including traditional voice, web
hosting and lower-end, single site broadband services. The increase in Business Services revenues during the year ended
December 31, 2012
compared to the prior year was primarily due the inclusion of revenues from One Communications beginning in April 2011; revenues from our
growth products, including MPLS, hosted voice and IT services; partially offset by continued declines in revenues for legacy products. For more
detail, please see discussion under "Revenues" in "Consolidated Results of Operations" elsewhere in this section.
The increase in Business Services operating income during the year ended December 31, 2011 compared to the prior year was primarily
due to the inclusion of revenues from ITC^DeltaCom beginning in December 2010 and One Communications beginning in April 2011. The
decrease in Business Services operating income during the year ended December 31, 2012
compared to the prior year was primarily due to the
declines in revenues for legacy products, offset by the inclusion of segment operating income from One Communications beginning in April
2011.
Consumer Services Segment
Consumer Services Operating Metrics
The following table sets forth subscriber and operating data for our Consumer Services segment for the years ended December 31,
2010, 2011 and 2012 :
(a) Subscriber counts do not include new nonpaying 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.
(b) Average subscribers is calculated by averaging the ending monthly subscribers or accounts for the thirteen
months preceding and including
the end of the year.
(c) ARPU represents the average monthly revenue per user (subscriber). ARPU is computed by dividing average monthly revenue for the period
by the average number of subscribers for the period. Average monthly revenue used to calculate ARPU includes recurring service revenue as
well as nonrecurring revenues associated with equipment and other one-time charges associated with initiating or discontinuing services.
(d) Churn rate is used to measure the rate at which subscribers discontinue service on a voluntary or involuntary basis. Churn rate is computed
by dividing the average monthly number of subscribers that discontinued service during the period by the average subscribers for the period.
46
Year Ended December 31,
2010
2011
2012
Consumer Subscriber Activity
Subscribers at beginning of period
2,029,000
1,636,000
1,350,000
Gross organic subscriber additions
265,000
184,000
160,000
Churn
(658,000)
(470,000)
(358,000)
Subscribers at end of period (a)
1,636,000
1,350,000
1,152,000
Consumer Metrics
Average narrowband subscribers (b)
1,065,000
830,000
678,000
Average broadband subscribers (b)
752,000
654,000
569,000
Average consumer subscribers (b)
1,817,000
1,484,000
1,247,000
ARPU (c)
21.16
$
21.10
21.23
Churn rate (d)
3.0
%
2.6
%
2.4
%