Segment Information (Tables)

9 Months Ended

Sep. 30, 2019

The following table summarizes our segment results and operating revenue detail for our product and services for the three months ended September 30, 2019.



	Three Months Ended September 30, 2019
	International and Global Accounts		Enterprise	Small and Medium Business	Wholesale	Consumer	Total Segments	Operations and Other		Total
	(Dollars in millions)
Revenue:
IP and Data Services	$	417	691	295	357	—	1,760	—		1,760
Transport and Infrastructure	331		405	106	467	—	1,309	—		1,309
Voice and Collaboration	96		395	322	200	—	1,013	—		1,013
IT and Managed Services	55		59	11	1	—	126	—		126
Broadband	—		—	—	—	718	718	—		718
Voice	—		—	—	—	462	462	—		462
Regulatory	—		—	—	—	157	157	—		157
Other	—		—	—	—	61	61	—		61
Total Revenue	899		1,550	734	1,025	1,398	5,606	—		5,606
Expenses:
Cost of services and products	269		544	155	144	80	1,192	1,398		2,590
Selling, general and administrative	65		134	112	21	102	434	397		831
Less: share-based compensation	—		—	—	—	—	—	(38	)	(38	)
Total expense	334		678	267	165	182	1,626	1,757		3,383
Total adjusted EBITDA	$	565	872	467	860	1,216	3,980	(1,757	)	2,223

The following table summarizes our segment results and operating revenue detail for our product and services for the three months ended September 30, 2018.



	Three Months Ended September 30, 2018
	International and Global Accounts		Enterprise	Small and Medium Business	Wholesale	Consumer	Total Segments	Operations and Other		Total
	(Dollars in millions)
Revenue:
IP and Data Services	$	423	659	294	348	—	1,724	—		1,724
Transport and Infrastructure	317		374	117	537	—	1,345	—		1,345
Voice and Collaboration	90		395	361	210	—	1,056	—		1,056
IT and Managed Services	62		77	13	2	—	154	—		154
Broadband	—		—	—	—	702	702	—		702
Voice	—		—	—	—	565	565	—		565
Regulatory	—		—	—	—	181	181	—		181
Other	—		—	—	—	91	91	—		91
Total Revenue	892		1,505	785	1,097	1,539	5,818	—		5,818
Expenses:
Cost of services and products	254		491	154	158	115	1,172	1,500		2,672
Selling, general and administrative	62		141	129	18	124	474	493		967
Less: share-based compensation	—		—	—	—	—	—	(49	)	(49	)
Total expense	316		632	283	176	239	1,646	1,944		3,590
Total adjusted EBITDA	$	576	873	502	921	1,300	4,172	(1,944	)	2,228

The following table summarizes our segment results and operating revenue detail for our product and services for the nine months ended September 30, 2019.



	Nine Months Ended September 30, 2019
	International and Global Accounts		Enterprise	Small and Medium Business	Wholesale	Consumer	Total Segments	Operations and Other		Total
	(Dollars in millions)
Revenue:
IP and Data Services	$	1,257	2,060	885	1,037	—	5,239	—		5,239
Transport and Infrastructure	984		1,137	319	1,450	—	3,890	—		3,890
Voice and Collaboration	284		1,182	986	589	—	3,041	—		3,041
IT and Managed Services	167		199	35	4	—	405	—		405
Broadband	—		—	—	—	2,158	2,158	—		2,158
Voice	—		—	—	—	1,428	1,428	—		1,428
Regulatory	—		—	—	—	474	474	—		474
Other	—		—	—	—	196	196	—		196
Total Revenue	2,692		4,578	2,225	3,080	4,256	16,831	—		16,831
Expenses:
Cost of services and products	786		1,537	455	430	244	3,452	4,104		7,556
Selling, general and administrative	201		426	364	62	321	1,374	1,349		2,723
Less: share-based compensation	—		—	—	—	—	—	(114	)	(114	)
Total expense	987		1,963	819	492	565	4,826	5,339		10,165
Total adjusted EBITDA	$	1,705	2,615	1,406	2,588	3,691	12,005	(5,339	)	6,666

The following table summarizes our segment results and operating revenue detail for our product and services for the nine months ended September 30, 2018.



	Nine Months Ended September 30, 2018
	International and Global Accounts		Enterprise	Small and Medium Business	Wholesale	Consumer	Total Segments	Operations and Other		Total
	(Dollars in millions)
Revenue:
IP and Data Services	$	1,294	1,991	884	1,036	—	5,205	—		5,205
Transport and Infrastructure	947		1,154	362	1,614	—	4,077	—		4,077
Voice and Collaboration	285		1,203	1,101	667	—	3,256	—		3,256
IT and Managed Services	204		227	41	6	—	478	—		478
Broadband	—		—	—	—	2,119	2,119	—		2,119
Voice	—		—	—	—	1,668	1,668	—		1,668
Regulatory	—		—	—	—	549	549	—		549
Other	—		—	—	—	313	313	—		313
Total Revenue	2,730		4,575	2,388	3,323	4,649	17,665	—		17,665
Expenses:
Cost of services and products	789		1,505	454	501	397	3,646	4,559		8,205
Selling, general and administrative	194		438	392	65	395	1,484	1,707		3,191
Less: share-based compensation	—		—	—	—	—	—	(144	)	(144	)
Total expense	983		1,943	846	566	792	5,130	6,122		11,252
Total adjusted EBITDA	$	1,747	2,632	1,542	2,757	3,857	12,535	(6,122	)	6,413

Summary of USF surcharges and transaction taxes

The following table provides the amount of USF surcharges and transaction taxes:



	Three Months Ended September 30,			Nine Months Ended September 30,
	2019		2018	2019	2018
	(Dollars in millions)
USF surcharges and transaction taxes	$	270	221	750	698

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

The following table reconciles total segment adjusted EBITDA to net income (loss):



	Three Months Ended September 30,					Nine Months Ended September 30,
	2019			2018		2019		2018
	(Dollars in millions)
Total segment adjusted EBITDA	$	3,980		4,172		12,005		12,535
Depreciation and amortization	(1,235		)	(1,285	)	(3,619	)	(3,858	)
Impairment of goodwill	—			—		(6,506	)	—
Other operating expenses	(1,757		)	(1,944	)	(5,339	)	(6,122	)
Stock-based compensation	(38		)	(49	)	(114	)	(144	)
Operating income (loss)	950			894		(3,573	)	2,411
Total other expense, net	(540		)	(565	)	(1,542	)	(1,609	)
Income (loss) before income taxes	410			329		(5,115	)	802
Income tax expense	108			57		377		123
Net income (loss)	$	302		272		(5,492	)	679