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XO Holdings, Inc.
Notes to Consolidated Financial Statements
16. COMMITMENTS AND CONTINGENCIES − (continued)
Holding’s 2011 Proposal including allegations that the Special Committee lacked independence to consider
and review ACF Holding’s 2011 Proposal and that defendants placed personal interests of the individual board
members and/or the interests of the Chairman ahead of the interests of the shareholders. The case is under
consideration and the effect of this case on the Company, if any, is not known at this time.
Other Contingencies
The Universal Service Administrative Company (‘‘USAC’’) performed an audit of the Company’s
compliance with universal service contribution reporting obligations in connection with services provided
during 2007. The Company received the final audit report on November 2, 2010 and subsequently appealed
the USAC final audit decision to the FCC. On March 1, 2011, USAC sought guidance from the FCC relating
to one of the audit matters. The Company does not believe the impact will be material to the Company’s
financial position, results of operations, cash flows or disclosures.
17. UNAUDITED SELECTED QUARTERLY DATA
The following tables illustrate selected quarterly financial data for 2010 and 2009 (in thousands except
per share amounts). Results of any one or more quarters are not necessarily indicative of annual results or
continuing trends. Income (loss) per common share was calculated for each three-month period on a stand-
alone basis. As a result of stock transactions during the periods, the sum of the loss per common share for the
four quarters of each year may not equal the loss per common share for the twelve month periods.
Quarters Ended 2010
March 31 June 30
(a)
September 30 December 31
(b)
Revenue ......................... $369,549 $383,646 $385,701 $390,345
Cost of service* .................... $208,475 $218,867 $218,345 $223,683
Income (loss) from operations........... $(16,335) $ (6,154) $ 13,909 $ (10,182)
Net (loss) income ................... $(16,605) $ (1,189) $ 12,425 $ (6,473)
Net loss allocable to common shareholders . . $ (36,760) $ (18,914) $ (5,098) $ (24,342)
Net loss allocable to common shareholders
per common share, basic and diluted .... $ (0.20) $ (0.10) $ (0.03) $ (0.14)
Quarters Ended 2009
March 31 June 30 September 30
(c)
December 31
(d)
Revenue ......................... $377,825 $385,624 $382,000 $375,839
Cost of service* .................... $220,004 $229,565 $217,712 $212,698
Loss from operations................. $(17,054) $ (16,817) $ (243) $ (13,118)
Net (loss) income ................... $ (4,468) $ (5,994) $ 19,032 $ 13,265
Net loss allocable to common shareholders . . $ (23,976) $ (25,868) $ (910) $ (7,053)
Net loss allocable to common shareholders
per common share, basic and diluted .... $ (0.13) $ (0.14) $ — $ (0.04)
* Cost of service is presented exclusive of depreciation and amortization in all periods.
(a) June 2010 quarterly Net loss and Net loss allocable to common shareholders offset by $5.4 million, or
$0.03 per share, related to net investment gains.
(b) December 2010 quarterly Net loss and Net loss allocable to common shareholders was impacted by
$20.0 million, or $0.11 per share, related to an impairment charge taken on our LMDS licenses.
(c) September 2009 quarterly Net income and Net loss allocable to common shareholders was impacted by
$16.3 million, or $0.09 per share, related to net investment gains.
(d)
December 2009 quarterly Net income and Net loss income allocable to common shareholders was impacted
by $25.7 million, or $0.14 per share, related to net investment gains. This increase was offset by a decrease
of $8.2 million, or $0.05 per share, related to an impairment charge taken on our LMDS licenses.
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