Business Segment Information

12 Months Ended

Dec. 31, 2011

Segment Reporting [Abstract]

Business Segment Information [Text Block]

Business Segment Information

The Company operates in four business segments: Wireline, Wireless, Data Center Colocation, and IT Services and Hardware, as described below. The Company’s segments are strategic business units that offer distinct products and services and are aligned with its internal management structure and reporting.

The Wireline segment provides local voice, data, long distance, entertainment, voice over internet protocol ("VoIP"), and other services over its owned and other wireline networks. Local voice services include local telephone service, switched access, and value-added services such as caller identification, voicemail, call waiting, and call return. Data services include high-speed internet using digital subscriber line technology and over fiber using its gigabit passive optical network. Data services also provide data transport for businesses, including local area network services, dedicated network access, and metro ethernet and dense wavelength division multiplexing ("DWDM")/optical wave data transport, which principally are used to transport large amounts of data over private networks. Long distance and VoIP services include long distance voice, audio conferencing, VoIP and other broadband services including private line and multi-protocol label switching, a technology that enables a business customer to privately interconnect voice and data services at its locations. Entertainment services are comprised of television through our Fioptics product suite, which covers about 20% of Greater Cincinnati, and DirecTV® commissioning over the Company’s entire operating area. Other services primarily include inside wire installation for business enterprises, rental revenue, public payphones and clearinghouse services. These services are primarily provided to customers in southwestern Ohio, northern Kentucky, and southeastern Indiana. In 2011, the Company sold substantially all of the assets associated with its home security monitoring business and recognized a pretax gain of $8.4 million. Wireline recognized restructuring charges of $7.7 million, $8.2 million, and $12.6 million in 2011, 2010, and 2009, respectively, for employee separation, lease abandonments, and special termination benefits.

The Wireless segment provides advanced digital wireless voice and data communications services and sales of related handset equipment to customers in the Greater Cincinnati and Dayton, Ohio operating areas. In 2011, the Wireless segment recognized a goodwill impairment loss of $50.3 million and other asset impairment losses of $1.1 million. In 2010, the Wireless segment incurred restructuring charges of $1.0 million. In 2009, the Company sold 196 towers for $99.9 million of cash proceeds. Also in 2009, the Wireless segment sold almost all of its owned wireless licenses for areas outside of its Cincinnati and Dayton, Ohio operating territories. These licenses, which were primarily for the Indianapolis, Indiana region, were sold for $6.0 million, resulting in a loss on sale of the spectrum asset of $4.8 million, included in “Gain/(loss) on sale of assets” in the Consolidated Statements of Operations.

The Data Center Colocation segment provides data center colocation services to primarily large businesses. As of December 31, 2011, the Company owns or maintains 20 data centers in Texas, Ohio, Kentucky, Indiana, Michigan, Illinois, England, and Singapore. On June 11, 2010, the Company purchased CyrusOne, a data center operator based in Texas, for approximately $526 million, net of cash acquired. In 2010, a restructuring charge of $1.4 million was incurred to conform the Cincinnati-based operation’s commission incentive program to the CyrusOne program. No restructuring charges were incurred in 2011 or 2009.

The IT Services and Hardware segment provides a range of fully managed and outsourced IT and telecommunications services along with the sale, installation, and maintenance of major branded IT and telephony equipment. During 2011 and 2010, the IT Services and Hardware segment incurred employee separation charges of $1.9 million and $2.8 million, respectively, associated with the elimination of certain functions due to product consolidation and integration within the Wireline segment. No restructuring charges were incurred in 2009.

Corporate operating results include acquisition costs of $2.6 million in 2011 and $9.1 million in 2010. Corporate recognized restructuring charges of $2.6 million and $0.3 million in 2011 and 2010, respectively. No restructuring charges were recognized in 2009.

Our business segment information is as follows:

	Year Ended December 31,
(dollars in millions)	2011			2010			2009
Revenue
Wireline	$	732.1		$	742.5		$	763.1
Wireless	277.6			289.2			307.0
Data Center Colocation	184.7			125.3			71.8
IT Services and Hardware	300.5			254.7			231.3
Intersegment	(32.5		)	(34.7		)	(37.2		)
Total revenue	$	1,462.4		$	1,377.0		$	1,336.0
Intersegment revenue
Wireline	$	23.0		$	24.4		$	25.7
Wireless	2.3			2.6			3.4
Data Center Colocation	2.1			1.8			0.9
IT Services and Hardware	5.1			5.9			7.2
Total intersegment revenue	$	32.5		$	34.7		$	37.2
Operating income
Wireline	$	228.5		$	233.5		$	255.6
Wireless	3.3			56.3			33.0
Data Center Colocation	46.4			34.2			17.0
IT Services and Hardware	9.8			4.3			10.7
Corporate	(28.5		)	(29.0		)	(20.8		)
Total operating income	$	259.5		$	299.3		$	295.5
Expenditures for long-lived assets
Wireline	$	112.6		$	98.7		$	133.5
Wireless	17.6			11.7			34.9
Data Center Colocation	118.5			557.4			23.3
IT Services and Hardware	6.8			8.6			6.4
Corporate	—			—			0.4
Total expenditures for long-lived assets	$	255.5		$	676.4		$	198.5
Depreciation and amortization
Wireline	$	102.4		$	103.9		$	103.9
Wireless	33.5			33.4			39.4
Data Center Colocation	54.8			34.6			15.0
IT Services and Hardware	8.4			7.3			6.2
Corporate	0.4			0.3			0.4
Total depreciation and amortization	$	199.5		$	179.5		$	164.9
	As of December 31,
(dollars in millions)	2011			2010			2009
Assets
Wireline	$	713.6		$	694.1		$	704.9
Wireless	295.2			359.3			383.4
Data Center Colocation	964.0			857.2			279.6
IT Services and Hardware	36.6			34.7			23.2
Corporate and eliminations	705.3			708.3			673.2
Total assets	$	2,714.7		$	2,653.6		$	2,064.3

Details of our service and product revenues including eliminations are as follows:

	Year Ended December 31,
(dollars in millions)	2011		2010		2009
Service revenue
Wireline	$	703.3	$	710.9	$	729.7
Wireless	250.8		267.1		281.1
Data Center Colocation	182.6		123.5		70.9
IT Services and Hardware	114.1		97.8		88.2
Total service revenue	$	1,250.8	$	1,199.3	$	1,169.9
Product revenue
Handsets and accessories	$	30.3	$	19.5	$	22.5
IT, telephony and other equipment	181.3		158.2		143.6
Total product revenue	$	211.6	$	177.7	$	166.1

The reconciliation of the Consolidated Statements of Cash Flows to expenditures for long-lived assets is as follows:

	Year Ended December 31,
(dollars in millions)	2011		2010		2009
Per Consolidated Statements of Cash Flows:
Capital expenditures	$	255.5	$	149.7	$	195.1
Acquisitions of businesses, net of cash acquired	—		526.7		3.4
Total expenditures for long-lived assets	$	255.5	$	676.4	$	198.5