Segment Information (Tables)

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

Schedule of segment results

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

	Three Months Ended March 31,
	2017			2016
	(Dollars in millions)
Total segment revenues	$	3,768		3,931
Total segment expenses	1,930			1,930
Total segment income	$	1,838		2,001
Total margin percentage	49		%	51	%
Enterprise segment:
Revenues	$	2,356		2,442
Expenses	1,321			1,319
Income	$	1,035		1,123
Margin percentage	44		%	46	%
Consumer segment:
Revenues	$	1,412		1,489
Expenses	609			611
Income	$	803		878
Margin percentage	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 March 31,
	2017		2016
	(Dollars in millions)
Strategic services
Enterprise high-bandwidth data services (1)	$	769	738
Other enterprise strategic services (2)	315		315
IT and managed services (3)	152		162
Consumer broadband services (4)	661		667
Other consumer strategic services (5)	103		107
Total strategic services revenues	2,000		1,989
Legacy services
Enterprise voice services (6)	573		622
Enterprise low-bandwidth data services (7)	314		365
Other enterprise legacy services (8)	268		287
Consumer voice services (6)	575		634
Other consumer legacy services (9)	73		80
Total legacy services revenues	1,803		1,988
Data integration
Enterprise data integration	117		115
IT and managed services data integration	1		—
Consumer data integration	—		1
Total data integration revenues	118		116
Other revenues
High-cost support revenue (10)	168		174
Other revenue (11)	120		134
Total other revenues	288		308
Total revenues	$	4,209	4,401

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(1)	Includes MPLS and Ethernet revenue
(2)	Includes primarily colocation, broadband, VOIP and video revenue
(3)	Includes primarily IT services, managed hosting, cloud hosting and hosting area network 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 total reportable segment income to net income:

	Three Months Ended March 31,
	2017			2016
	(Dollars in millions)
Total reportable segment income	$	1,838		2,001
Non-reportable segment revenues	153			162
Other operating revenues	288			308
Depreciation and amortization	(880		)	(976	)
Other operating expenses	(768		)	(807	)
Interest expense and other (expense) income, net	(324		)	(308	)
Income before income tax expense	307			380
Income tax expense	(144		)	(144	)
Net income	$	163		236