11. Revenues, Expenses, and Investment
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11. Revenues, Expenses, and Investment This section provides information on revenues, expenses, and investment by major local telephone companies. The information included in this section is calculated from some of the summary information in the Commission’s Automated Reporting Management Information Systems’ (ARMIS) 43-01 Reports. The original data plus more detailed data can be found in the ARMIS 43-01 Reports. These reports, along with the other seven ARMIS reports, are available for public inspection on the ARMIS Internet site at www.fcc.gov/wcb/eafs/. The source of the data in this section is the ARMIS 43-01, Annual Summary Report, filed by every incumbent local exchange carrier with operating revenues that exceed a specified threshold.1 The report is filed on a study area basis and includes data on revenues, expenses, and investment to enable the Commission to monitor the carriers' operations.2 For this section, information was derived from ARMIS 43-01 data for 2005 for the following tables: Table 11.1 - Revenues and Other Operating Items. Table 11.2 - Expenses and Taxes. Table 11.3 - Gross Investment. Table 11.4 - Total Investment Reserves (Row 1890 of the ARMIS 43-01 Report). Table 11.5 - Net Income (which is the difference between Table 11.1, Revenues and Other Operating Items, and Table 11.2, Expenses and Taxes). Table 11.6 - Average Net Investment (Row 1910 of the ARMIS 43-01 Report which is the difference between Table 11.3, Gross Investment, and Table 11.4, Total Investment Reserves). Table 11.7 - Total Operating Revenues (Row 1090 of the ARMIS 43-01 Report). Table 11.8 - Other Operating Income or Losses (Row 1290 of the ARMIS 43-01 Report). Tables 11.7 and 11.8 show the detailed items that when aggregated constitute Table 11.1, Revenues and Other Operating Items. 1 For year 2005 data, the threshold was year 2004 revenues in excess of $125 million. These carriers are classified as Tier 1 (Class A) carriers. 2 In year 2005, thirteen Tier 1 carriers furnished the data used in this report for 124 study areas. The data are for 48 states (all except Alaska and Hawaii), the District of Columbia, and the Commonwealth of Puerto Rico. Smaller carriers that, in the aggregate, serve about 8% of the nation’s ILEC telephone lines do not file ARMIS data. 11 - 1 Table 11.9 - Total Operating Expenses (Row 1190 of the ARMIS 43-01 Report). Table 11.10 - Total Non-operating Items (Row 1390 of the ARMIS 43-01 Report). Table 11.11 – Taxes -- Federal, State, and Other (Rows 1490, 1590, and 1595 of the ARMIS 43-01 Report).3 Tables 11.9 through 11.11 show the detailed items that when aggregated constitute Table 11.2, Expenses and Taxes. Table 11.12 - Total Plant In-Service (Row 1690 of the ARMIS 43-01 Report). Table 11.13 - Total Other Investments (Row 1790 of the ARMIS 43-01 Report). Tables 11.12 and 11.13 show the detailed items that when aggregated constitute Table 11.3, Gross Investments. Each table in this section contains columns headed “Subject to Separations”, “Intrastate”, and “Interstate”.4 The “subject to separations” column reflects the total amount that is subject to separations allocations between the state and interstate jurisdictions pursuant to Part 36 of the Commission's rules. The “interstate” and “intrastate” columns reflect the amounts allocated to the interstate and state jurisdictions pursuant to those rules. In some instances, the “interstate” column also reflects FCC prescribed adjustments made after the separations process. These adjustments are made only at the interstate level; consequently, the “intrastate” and “interstate” columns may not necessarily add up to the “subject to separations” column. Each table also contains a column headed “Percent Interstate”. The data in this column are calculated by dividing the data in the “interstate” column by the data in the “subject to separations” column. Table 11.6 - Average Net Investment - has one additional column headed “Interstate Rate of Return”. The data in this column are calculated by dividing the data in the “interstate” column of Table 11.5 - Net Income - by the data in the “interstate” column of Table 11.6. 3 Beginning in 1999, mid-sized companies (incumbent carriers other than the Bell operating companies and GTE subsidiaries) no longer report taxes to different governments separately. Therefore, Table 11.11 shows the sum of rows 1490 and 1590 for the BellSouth, Qwest, SBC, and Verizon subsidiaries and row 1595 for the mid-sized companies. 4 These are reported in columns (f), (g), and (h) in the ARMIS 43-01 Reports. The numbers are in thousands of dollars. 11 - 2 Table 11.1 Revenues and Other Operating Items ($000) - 2005 State Subject to Percent Study Area Interstate Intrastate Code Separations Interstate All Reporting Local Exchange Companies $95,665,415 $62,608,456 $33,056,955 34.55 Bell Operating Companies 87,334,432 56,843,794 30,490,631 34.91 Other Reporting Local Exchange Companies 8,330,983 5,764,662 2,566,324 30.80 CenturyTel of Alabama, LLC - Northern Alabama AL 97,103 71,494 25,609 26.37 CenturyTel of Alabama, LLC - Southern Alabama AL 127,012 88,331 38,681 30.45 BellSouth - Alabama AL 1,307,355 907,322 400,033 30.60 Verizon California - Contel - Arizona AZ 7,993 5,266 2,727 34.12 Qwest - Arizona AZ 1,428,719 845,013 583,707 40.86 AT&T - Southwestern Bell - Arkansas AR 684,519 473,787 210,731 30.79 Verizon California - Contel - California CA 291,986 189,145 102,841 35.22 Citizens Telecom. of California - Shasta - California CA 122,573 64,529 58,044 47.35 Verizon - Northwest - West Coast California CA 8,011 6,738 1,272 15.88 Verizon California - GTE - California CA 2,585,822 1,656,558 929,264 35.94 AT&T - Pacific Telesis - Pacific Bell - California CA 8,130,139 5,528,414 2,601,725 32.00 SureWest Telephone CA 134,331 97,944 36,388 27.09 Qwest - Colorado CO 1,793,022 1,075,999 717,023 39.99 AT&T - Southern New England Telephone CT 1,413,138 944,678 468,459 33.15 Verizon Delaware DE 329,148 188,371 140,778 42.77 Verizon Washington, D.C. DC 601,189 353,990 247,199 41.12 Verizon Florida FL 1,473,015 907,156 565,859 38.42 BellSouth - Florida FL 4,138,724 2,697,265 1,441,459 34.83 Sprint - Florida FL 1,285,039 837,703 447,337 34.81 ALLTEL Georgia Communications GA 240,062 178,479 61,583 25.65 BellSouth - Georgia GA 2,943,076 1,875,116 1,067,960 36.29 Verizon - Northwest - Idaho ID 107,362 57,130 50,232 46.79 Qwest - Idaho South ID 306,822 182,444 124,378 40.54 Qwest - Idaho North ID 19,152 11,355 7,796 40.71 Verizon North - Contel/Illinois IL 78,600 48,427 30,174 38.39 Verizon South - Illinois IL 18,744 12,485 6,259 33.39 Verizon North - Illinois IL 376,425 241,169 135,256 35.93 AT&T - Ameritech - Illinois Bell IL 3,224,576 2,240,702 983,874 30.51 Verizon North - Contel/Indiana IN 120,955 76,250 44,706 36.96 Verizon North - Indiana IN 468,143 294,855 173,288 37.02 AT&T - Ameritech - Indiana Bell IN 1,114,461 782,588 331,874 29.78 Sprint - United Telephone Company of Indiana IN 156,364 106,955 49,409 31.60 Iowa Telecommunications Services - Iowa IA 60,124 43,004 17,120 28.47 Iowa Telecommunications Services - Iowa North IA 78,975 59,050 19,925 25.23 Iowa Telecommunications Services - Iowa System IA 51,007 38,448 12,560 24.62 Qwest - Iowa IA 569,230 343,317 225,913 39.69 AT&T - Southwestern Bell - Kansas KS 701,394 439,741 261,652 37.30 Kentucky ALLTEL - London KY 67,151 48,156 18,995 28.29 Kentucky ALLTEL - Lexington KY 292,015 194,218 97,796 33.49 Cincinnati Bell Telephone - Kentucky KY 132,272 110,677 21,596 16.33 BellSouth - Kentucky KY 785,821 538,979 246,843 31.41 BellSouth - Louisiana LA 1,395,188 972,540 422,647 30.29 Verizon New England - Maine ME 444,494 296,025 148,470 33.40 Verizon Maryland MD 2,172,020 1,366,091 805,929 37.11 Verizon New England - Massachusetts MA 2,364,011 1,463,890 900,121 38.08 Verizon North - Michigan MI 400,462 285,135 115,327 28.80 AT&T - Ameritech - Michigan Bell MI 2,496,495 1,766,479 730,017 29.24 Qwest - Minnesota MN 1,084,764 662,507 422,256 38.93 BellSouth - Mississippi MS 1,023,209 751,317 271,892 26.57 CenturyTel of Missouri - Central Missouri MO 60,515 37,722 22,793 37.67 CenturyTel of Missouri - Belle-Hermann MO 3,332 1,949 1,383 41.51 CenturyTel of Missouri - Southern Missouri MO 19,331 13,666 5,665 29.31 CenturyTel of Missouri - Southwest Missouri MO 174,221 119,775 54,446 31.25 AT&T - Southwestern Bell - Missouri MO 1,483,565 977,604 505,961 34.10 Sprint - United Telephone of Missouri MO 181,456 126,144 55,312 30.48 Qwest - Montana MT 231,520 148,670 82,849 35.78 ALLTEL - Nebraska NE 173,951 124,320 49,631 28.53 Qwest - Nebraska NE 329,923 201,092 128,831 39.05 Sprint - Central Telephone - Nevada NV 463,946 300,071 163,875 35.32 Verizon - Contel Nevada NV 26,765 13,516 13,249 49.50 AT&T - Pacific Telesis - Nevada Bell NV 197,379 120,942 76,436 38.73 11 - 3 Table 11.1 Revenues and Other Operating Items - Continued ($000) - 2005 State Subject to Percent Study Area Interstate Intrastate Code Separations Interstate Verizon New England - New Hampshire NH $433,773 $265,098 $168,674 38.89 Verizon New Jersey NJ 3,264,850 1,918,106 1,346,744 41.25 Sprint - United Telephone Company of New Jersey NJ 128,889 76,634 52,255 40.54 Qwest - New Mexico NM 525,573 315,244 210,328 40.02 Valor Telecommunications of Texas - New Mexico 1 NM 33,454 20,606 12,849 38.41 Valor Telecommunications of Texas - New Mexico 2 NM 33,911 21,439 12,472 36.78 Citizens Telecom.