Industry Segment and Geographic Information Industry Segment and Geographic Information (Tables)

12 Months Ended

Dec. 31, 2019

Information about our segment results for the years ended December 31, 2019, 2018, and 2017 were as follows:



Year ended December 31, 2019
	Business			Consumer			Total
Revenues
Service revenues	$	719,514		$	340,462		$	1,059,976
Access and product revenues (1)	46,232			264			46,496
Service, access and product revenues	765,746			340,726			1,106,472
USF revenues	38,134			44,740			82,874
Total revenues	803,880			385,466			1,189,346

Cost of revenues
Service cost of revenues (2)	336,045			34,677			370,722
Access and product cost of revenues (1)	53,455			4,033			57,488
Service, access and product cost of revenues	389,500			38,710			428,210
USF cost of revenues	38,134			44,740			82,874
Total cost of revenues	427,634			83,450			511,084

Segment gross margin
Service margin	383,469			305,785			689,254
Access and product margin	(7,223		)	(3,769		)	(10,992		)
Gross margin ex-USF (Service, access and product margin)	376,246			302,016			678,262
USF margin	—			—			—
Segment gross margin	$	376,246		$	302,016		$	678,262



Segment gross margin %
Service margin %	53.3	%	89.8	%	65.0	%
Gross margin ex-USF (Service, access and product margin) %	49.1	%	88.6	%	61.3	%
Segment gross margin %	46.8	%	78.4	%	57.0	%

(1) Includes customer premise equipment, access, professional services, and shipping and handling.

(2) Excludes depreciation and amortization of $33,484, $4,683, and $38,167, respectively.



Year ended December 31, 2018
	Business			Consumer			Total
Revenues
Service revenues	$	526,707		$	394,389		$	921,096
Access and product revenues (1)	50,068			559			50,627
Service, access and product revenues	576,775			394,948			971,723
USF revenues	31,369			45,690			77,059
Total revenues	608,144			440,638			1,048,782

Cost of revenues
Service cost of revenues (2)	239,096			47,439			286,535
Access and product cost of revenues (1)	58,081			5,289			63,370
Service, access and product cost of revenues	297,177			52,728			349,905
USF cost of revenues	31,374			45,716			77,090
Total cost of revenues	328,551			98,444			426,995

Segment gross margin
Service margin	287,611			346,950			634,561
Access and product margin	(8,013		)	(4,730		)	(12,743		)
Gross margin ex-USF (Service, access and product margin)	279,598			342,220			621,818
USF margin	(5		)	(26		)	(31		)
Segment gross margin	$	279,593		$	342,194		$	621,787



Segment gross margin %
Service margin %	54.6	%	88.0	%	68.9	%
Gross margin ex-USF (Service, access and product margin) %	48.5	%	86.6	%	64.0	%
Segment gross margin %	46.0	%	77.7	%	59.3	%

(1) Includes customer premise equipment, access, and shipping and handling.

(2) Excludes depreciation and amortization of $22,554, $5,200, and $27,754, respectively.



Year ended December 31, 2017
	Business			Consumer			Total
Revenues
Service revenues	$	417,118		$	454,340		$	871,458
Access and product revenues (1)	54,971			525			55,496
Service, access and product revenues	472,089			454,865			926,954
USF revenues	26,833			48,499			75,332
Total revenues	498,922			503,364			1,002,286

Cost of revenues
Service cost of revenues (2)	184,054			80,454			264,508
Access and product cost of revenues (1)	57,906			7,208			65,114
Service and product cost of revenues	241,960			87,662			329,622
USF cost of revenues	26,833			48,499			75,332
Total cost of revenues	268,793			136,161			404,954

Segment gross margin
Service margin	233,064			373,886			606,950
Access and product margin	(2,935		)	(6,683		)	(9,618		)
Gross margin ex-USF (Service, access and product margin)	230,129			367,203			597,332
USF margin	—			—			—
Segment gross margin	$	230,129		$	367,203		$	597,332



Segment gross margin %
Service margin %	55.9	%	82.3	%	69.6	%
Gross margin ex-USF (Service, access and product margin) %	48.7	%	80.7	%	64.4	%
Segment gross margin %	46.1	%	72.9	%	59.6	%

(1) Includes customer premise equipment, access, and shipping and handling.

(2) Excludes depreciation and amortization of $20,100, $7,208, and $27,308, respectively.

A reconciliation of the total of the reportable segments' gross margin to consolidated income before provision for income taxes is as follows:



	Years Ended December 31,
	2019			2018			2017
Total reportable gross margin	$	678,262		$	621,787		$	597,332
Sales and marketing	363,111			311,433			313,251
Engineering and development	69,460			52,139			29,630
General and administrative	152,672			135,324			122,537
Depreciation and amortization	86,256			70,980			72,523
Income from operations	$	6,763		$	51,911		$	59,391

Interest expense	$	(32,821	)	$	(15,068	)	$	(14,868	)
Other income (expense), net	(50		)	(318		)	1,270
Income before income taxes	$	(26,108	)	$	36,525		$	45,793

Information about our operations by geographic location is as follows:

(1) No individual other international country represented greater than 10% of total revenue during the periods presented.