Segment Information (Tables)

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Schedule of segment results

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

	Three Months Ended June 30,					Six Months Ended June 30,
	2016			2015		2016		2015
	(Dollars in millions)
Total segment revenues	$	4,091		4,161		8,184		8,355
Total segment expenses	2,141			2,140		4,192		4,211
Total segment income	$	1,950		2,021		3,992		4,144
Total margin percentage	48		%	49	%	49	%	50	%
Business segment:
Revenues	$	2,597		2,658		5,201		5,355
Expenses	1,487			1,504		2,914		2,967
Income	$	1,110		1,154		2,287		2,388
Margin percentage	43		%	43	%	44	%	45	%
Consumer segment:
Revenues	$	1,494		1,503		2,983		3,000
Expenses	654			636		1,278		1,244
Income	$	840		867		1,705		1,756
Margin percentage	56		%	58	%	57	%	59	%

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,
	2016		2015	2016	2015
	(Dollars in millions)
Strategic services
Business high-bandwidth data services (1)	$	753	697	1,491	1,384
Business hosting services (2)	305		319	612	637
Other business strategic services (3)	172		155	342	315
Consumer broadband services (4)	682		652	1,349	1,287
Other consumer strategic services (5)	118		106	225	209
Total strategic services revenues	2,030		1,929	4,019	3,832
Legacy services
Business voice services (6)	611		648	1,233	1,318
Business low-bandwidth data services (7)	352		403	718	822
Other business legacy services (8)	281		293	567	597
Consumer voice services (6)	615		675	1,249	1,363
Other consumer legacy services (9)	79		70	159	140
Total legacy services revenues	1,938		2,089	3,926	4,240
Data integration
Business data integration	123		143	238	282
Consumer data integration	—		—	1	1
Total data integration revenues	123		143	239	283
Other revenues
High-cost support revenue (10)	173		132	347	266
Other revenue (11)	134		126	268	249
Total other revenues	307		258	615	515
Total revenues	$	4,398	4,419	8,799	8,870

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(1)	Includes MPLS and Ethernet revenue
(2)	Includes colocation, hosting (including cloud hosting and managed hosting) and hosting area network revenue
(3)	Includes primarily broadband, VoIP, video and IT services revenue
(4)	Includes broadband and related services revenue
(5)	Includes video and other revenue
(6)	Includes local and long-distance voice revenue
(7)	Includes private line (including special access) revenue
(8)	Includes UNEs, public access, switched access and other ancillary revenue
(9)	Includes other ancillary revenue
(10)	Includes CAF Phase 1, CAF Phase 2 and federal and state USF support revenue
(11)	Includes USF surcharges

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

The following table reconciles segment income to net income:

	Three Months Ended June 30,					Six Months Ended June 30,
	2016			2015		2016		2015
	(Dollars in millions)
Total segment income	$	1,950		2,021		3,992		4,144
Other operating revenues	307			258		615		515
Depreciation and amortization	(987		)	(1,048	)	(1,963	)	(2,088	)
Other unassigned operating expenses	(620		)	(682	)	(1,300	)	(1,373	)
Interest expense and other income, net	(333		)	(315	)	(647	)	(641	)
Income tax expense	(121		)	(91	)	(265	)	(222	)
Net income	$	196		143		432		335