Segment Information

6 Months Ended

Jun. 30, 2013

Segment Information

8. Segment Information

Reportable Segments

We have two reportable segments, which we operate and manage as strategic business units and organize by products and services. We measure and evaluate our reportable segments based on segment operating income, consistent with the chief operating decision maker’s assessment of segment performance.

Corporate, eliminations and other includes unallocated corporate expenses, intersegment eliminations recorded in consolidation, the results of other businesses, such as our investments in unconsolidated businesses, pension and other employee benefit related costs, lease financing, as well as other adjustments and gains and losses that are not allocated in assessing segment performance due to their non-operational nature. Although such transactions are excluded from the business segment results, they are included in reported consolidated earnings. Gains and losses that are not individually significant are included in all segment results as these items are included in the chief operating decision maker’s assessment of segment performance.

Our segments and their principal activities consist of the following:

Segment	Description
Wireless	Wireless’ communications products and services include wireless voice and data services and equipment sales, which are provided to consumer, business and government customers across the United States.
Wireline	Wireline’s voice, data and video communications products and enhanced services include local and long distance voice, broadband Internet access and video, corporate networking solutions, data center and cloud services and security and managed network services. We provide these products and services to consumers in the United States, as well as to carriers, businesses and government customers both in the United States and in over 150 other countries around the world.

The following table provides operating financial information for our two reportable segments:

	Three Months Ended June 30,						Six Months Ended June 30,
(dollars in millions)	2013			2012			2013			2012
External Operating Revenues
Wireless
Retail service	$	16,408		$	15,215		$	32,563		$	30,087
Other service		656			544			1,213			1,068
Service revenue		17,064			15,759			33,776			31,155
Equipment		1,949			1,766			3,758			3,601
Other		939			1,030			1,914			2,049
Total Wireless		19,952			18,555			39,448			36,805
Wireline
Consumer retail		3,642			3,478			7,232			6,919
Small business		647			664			1,295			1,323
Mass Markets		4,289			4,142			8,527			8,242
Strategic services		2,079			1,983			4,166			3,952
Core		1,549			1,837			3,209			3,719
Global Enterprise		3,628			3,820			7,375			7,671
Global Wholesale		1,437			1,562			2,908			3,154
Other		115			130			218			253
Total Wireline		9,469			9,654			19,028			19,320
Total segments		29,421			28,209			58,476			56,125
Corporate, eliminations and other		365			343			730			669
Total consolidated – reported	$	29,786		$	28,552		$	59,206		$	56,794
Intersegment Revenues
Wireless	$	24		$	22		$	51		$	45
Wireline		265			277			536			556
Total segments		289			299			587			601
Corporate, eliminations and other		(289	)		(299	)		(587	)		(601	)
Total consolidated – reported	$	–		$	–		$	–		$	–
Total Operating Revenues
Wireless	$	19,976		$	18,577		$	39,499		$	36,850
Wireline		9,734			9,931			19,564			19,876
Total segments		29,710			28,508			59,063			56,726
Corporate, eliminations and other		76			44			143			68
Total consolidated – reported	$	29,786		$	28,552		$	59,206		$	56,794
Operating Income
Wireless	$	6,464		$	5,713		$	12,882		$	10,930
Wireline		74			188			87			345
Total segments		6,538			5,901			12,969			11,275
Reconciling items		17			(250	)		(192	)		(429	)
Total consolidated – reported	$	6,555		$	5,651		$	12,777		$	10,846

(dollars in millions)	At June 30, 2013			At December 31, 2012
Assets
Wireless	$	142,997		$	142,485
Wireline		85,549			84,815
Total segments		228,546			227,300
Reconciling items		(5,200	)		(2,078	)
Total consolidated – reported	$	223,346		$	225,222

A reconciliation of the total of the reportable segments’ operating income to consolidated income before provision for income taxes is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(dollars in millions)	2013			2012			2013			2012
Total segment operating income	$	6,538		$	5,901		$	12,969		$	11,275
Pension remeasurement (Note 6)		237			–			237			–
Corporate, eliminations and other		(220	)		(250	)		(429	)		(429	)
Total consolidated operating income		6,555			5,651			12,777			10,846
Equity in earnings of unconsolidated businesses		120			72			115			175
Other income, net		25			34			64			53
Interest expense		(514	)		(679	)		(1,051	)		(1,364	)
Income Before Provision For Income Taxes	$	6,186		$	5,078		$	11,905		$	9,710

We generally account for intersegment sales of products and services and asset transfers at current market prices. No single customer accounted for more than 10% of our total operating revenues during the three and six months ended June 30, 2013 and 2012.