Segment Information (Tables)

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Schedule of segment results

The results of our two reportable segments, business and consumer, are summarized below:

	Three Months Ended June 30,					Six Months Ended June 30,
	2018			2017		2018		2017
	(Dollars in millions)
Total reportable segment revenues	$	5,717		3,907		11,479		7,944
Total reportable segment expenses	3,093			2,169		6,275		4,375
Total reportable segment adjusted EBITDA	$	2,624		1,738		5,204		3,569
Total margin percentage	46		%	44	%	45	%	45	%
Business segment:
Revenues	$	4,365		2,470		8,748		5,060
Expenses	2,524			1,538		5,094		3,104
Adjusted EBITDA	$	1,841		932		3,654		1,956
Margin percentage	42		%	38	%	42	%	39	%
Consumer segment:
Revenues	$	1,352		1,437		2,731		2,884
Expenses	569			631		1,181		1,271
Adjusted EBITDA	$	783		806		1,550		1,613
Margin percentage	58		%	56	%	57	%	56	%

Schedule of operating revenues by products and services

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

	Three Months Ended June 30,			Six Months Ended June 30,
	2018		2017	2018	2017
	(Dollars in millions)
Business segment
IP and data services (1)	$	1,748	744	3,485	1,501
Transport and infrastructure (2)	1,342		797	2,691	1,691
Voice and collaboration (3)	1,111		767	2,247	1,554
IT and managed services (4)	164		162	325	314
Total business segment revenues	4,365		2,470	8,748	5,060
Consumer segment
IP and data services (1)	85		107	179	210
Transport and infrastructure (2)	722		683	1,451	1,366
Voice and collaboration (3)	545		647	1,101	1,308
Total consumer segment revenues	1,352		1,437	2,731	2,884
Non-segment revenues
Regulatory revenues (7)	185		183	368	355
Total non-segment revenues	185		183	368	355
Total revenues	$	5,902	4,090	11,847	8,299

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(1)	Includes primarily VPN data network, Ethernet, IP, video and ancillary revenues.
(2)	Includes primarily broadband, private line (including business data services), colocation and data centers, wavelength and ancillary revenues.
(3)	Includes local, long-distance and other ancillary revenues.
(4)	Includes IT services and managed services revenues.
(5)	Includes retail video revenues (including our facilities-based video revenues).
(6)	Includes primarily broadband and equipment sales and professional services revenues.
(7)	Includes CAF Phase I, CAF Phase 2, federal and state USF support revenue, sublease rental income and failed-sale leaseback income.

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

The following table reconciles total reportable segment adjusted EBITDA to net income:

	Three Months Ended June 30,					Six Months Ended June 30,
	2018			2017		2018		2017
	(Dollars in millions)
Total reportable segment adjusted EBITDA	$	2,624		1,738		5,204		3,569
Regulatory revenues	185			183		368		355
Depreciation and amortization	(1,290		)	(949	)	(2,573	)	(1,829	)
Other operating expenses	(752		)	(605	)	(1,482	)	(1,097	)
Total other expense, net	(530		)	(327	)	(1,044	)	(651	)
Income before income tax expense	237			40		473		347
Income tax (benefit) expense	(55		)	23		66		167
Net income	$	292		17		407		180