Segment Information (Tables)

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Schedule of segment results

Our segment results are summarized below:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2014			2013		2014		2013
	(Dollars in millions)
Total segment revenues	$	4,264		4,267		12,836		12,799
Total segment expenses	2,161			2,089		6,378		6,056
Total segment income	$	2,103		2,178		6,458		6,743
Total margin percentage	49		%	51	%	50	%	53	%
Consumer:
Revenues	$	1,491		1,503		4,500		4,508
Expenses	611			605		1,793		1,728
Income	$	880		898		2,707		2,780
Margin percentage	59		%	60	%	60	%	62	%
Business:
Revenues	$	1,569		1,544		4,692		4,574
Expenses	997			932		2,935		2,701
Income	$	572		612		1,757		1,873
Margin percentage	36		%	40	%	37	%	41	%
Wholesale:
Revenues	$	843		878		2,571		2,694
Expenses	285			293		844		868
Income	$	558		585		1,727		1,826
Margin percentage	66		%	67	%	67	%	68	%
Hosting:
Revenues	$	361		342		1,073		1,023
Expenses	268			259		806		759
Income	$	93		83		267		264
Margin percentage	26		%	24	%	25	%	26	%

Schedule of operating revenues by products and services

Our operating revenues for our products and services consisted of the following categories:

	Three Months Ended September 30,			Nine Months Ended September 30,
	2014		2013	2014	2013
	(Dollars in millions)
Strategic services	$	2,310	2,212	6,889	6,562
Legacy services	1,769		1,892	5,401	5,767
Data integration	185		163	546	470
Other	250		248	757	754
Total operating revenues	$	4,514	4,515	13,593	13,553

Reconciliation of operating profit (loss) from segments to consolidated net income

The following table reconciles segment income to net income:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2014			2013		2014		2013
	(Dollars in millions)
Total segment income	$	2,103		2,178		6,458		6,743
Other operating revenues	250			248		757		754
Depreciation and amortization	(1,097		)	(1,135	)	(3,297	)	(3,375	)
Impairment of goodwill	—			(1,100	)	—		(1,100	)
Other unassigned operating expenses	(637		)	(876	)	(1,991	)	(2,210	)
Other income (expense)	(320		)	(320	)	(974	)	(918	)
Income tax expense	(111		)	(40	)	(369	)	(372	)
Net income (loss)	$	188		(1,045	)	584		(478	)