Note 6.

Segments

Our operations are reported in three segments: (i) Fiber and Data, (ii) Equipment and (iii) Telecom.

Our Fiber and Data Segment serves wholesale, enterprise and commercial business customers with advanced data, Internet, voice and voice over Internet Protocol ("VoIP") services. With our IP network and communication expertise, we are able to provide both custom and broad network solutions which can be extended beyond our regional network through interconnections to provide end-to-end national connectivity. The Fiber and Data Segment includes revenue from Ethernet, Private Line, Multiprotocol Label Switching ("MPLS"), Data Center, Dedicated Internet and our hosted VoIP SingleLink services. We own, lease or utilize long-term indefeasible rights of use ("IRU") agreements for the operation of our network. Fiber and Data services are marketed throughout our core regions: northern Minnesota and the Minneapolis-Saint Paul metropolitan area, southern Minnesota, Des Moines, Iowa and Fargo, North Dakota.

Our Equipment Segment provides equipment solutions and support for a broad spectrum of business customers ranging in size from medium to large enterprise. We design and implement networks utilizing leading technology including: TelePresence Video, Unified Communications and Data Center solutions in collaboration with industry-leading partners. We provide a comprehensive set of services including: Advisory, Implementation, Development and Support. Our Total Care support team provides a proactive approach to monitor and support customer networks, unified communications environment and data centers as well as a single-point-of-contact for the support of applications, systems and infrastructure. Equipment sales and services are marketed primarily in our Minnesota core regions and specifically the Minneapolis-Saint Paul metropolitan area.

Our Telecom Segment provides bundled residential and business services including high-speed Internet, broadband services, digital TV, local voice and long distance services in our legacy telecom service area. Telecom is comprised of the operation of both Incumbent Local Exchange Carrier ("ILEC") and Competitive Local Exchange Carrier ("CLEC") operations. Our ILEC operations provide services in 13 south central Minnesota communities and 13 rural northwest Iowa communities. Our CLEC operation provides services in south central Minnesota and near Des Moines, Iowa. We own our network in both the ILEC and CLEC exchanges.

Our presentation of segments has changed from previous filings to portray how we report internally and how our chief operating decision-maker bases his decisions. In 2013, we shifted the strategic direction of our data processing and billing services and as a result we reclassified these operations from Telecom to Corporate and Other. The segment information below has been reclassified to reflect these changes.

Segment information for the years ended December 31, 2013, 2012 and 2011 is as follows:

(Dollars in thousands) For Year Ended December 31 2013	Fiber and Data		Equipment		Telecom		Corporate and Other (2)			Consolidated
Revenue from unaffiliated customers	$	67,026	$	61,683	$	56,310	$	4,181		$	189,200
Intersegment revenue		869		-		1,636		(2,505	)		-
Total operating revenue		67,895		61,683		57,946		1,676			189,200

Asset impairment		638		-		-		-			638
Depreciation and amortization		11,992		477		14,852		2,001			29,322
Operating income (loss)		7,726		3,363		7,518		(989	)		17,618
Interest expense		-		-		-		4,619			4,619
Income taxes		3,030		1,305		2,919		(1,968	)		5,286
Net income (loss)		4,700		2,058		4,603		(3,629	)		7,732
Total assets		116,366		20,639		106,622		23,253			266,880
Property, plant and equipment, net		97,841		1,958		76,366		5,161			181,326
Additions to property, plant and equipment (1)		15,662		992		9,782		1,556			27,992

(Dollars in thousands)
For Year Ended December 31 2012	Fiber and Data		Equipment		Telecom		Corporate and Other (2)			Consolidated
Revenue from unaffiliated customers	$	60,109	$	60,133	$	58,632	$	4,322		$	183,196
Intersegment revenue		831		-		1,454		(2,285	)		-
Total operating revenue		60,940		60,133		60,086		2,037			183,196

Depreciation and amortization		9,923		300		15,150		1,373			26,746
Operating income (loss)		9,801		2,507		7,788		(710	)		19,386
Interest expense		3		-		2		5,744			5,749
Income taxes		3,865		984		3,061		(2,527	)		5,383
Net income (loss)		5,933		1,523		4,743		(3,901	)		8,298
Total assets		113,855		20,866		111,429		22,154			268,304
Property, plant and equipment, net		94,375		1,430		81,547		5,607			182,959
Additions to property, plant and equipment (1)		19,812		364		7,560		2,650			30,386

For Year Ended December 31 2011	Fiber and Data		Equipment		Telecom		Corporate and Other (2)			Consolidated
Revenue from unaffiliated customers	$	45,149	$	48,932	$	65,143	$	4,314		$	163,538
Intersegment revenue		773		-		1,427		(2,200	)		-
Total operating revenue		45,922		48,932		66,570		2,114			163,538

Depreciation and amortization		6,394		302		15,164		1,196			23,056
Operating income (loss)		7,346		2,746		10,250		(687	)		19,655
Interest expense		2		-		5		6,268			6,275
Income taxes		2,922		1,094		4,076		(3,050	)		5,042
Net income (loss)		4,423		1,651		6,176		(3,849	)		8,401
Total assets (3)		73,953		22,455		120,144		27,434			243,986
Property, plant and equipment, net		59,858		1,383		88,698		4,315			154,254
Additions to property, plant and equipment (1)		11,553		428		8,554		905			21,440

(1)

Net of Broadband Stimulus Funds received and does not include changes in materials and supplies.

(2)

Includes intersegment eliminations.

(3)

Breakout of total assets between the Fiber and Data and Equipment Segments is based on estimates for 2011 as the two segments were not accounted for separately. Estimated total assets for the Equipment Segment in 2011 do not include goodwill or other intangible assets.