Segment Information (Tables)

9 Months Ended

Sep. 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 September 30,					Nine Months Ended September 30,
	2018			2017		2018		2017
	(Dollars in millions)
Total reportable segment revenues	$	5,640		3,845		17,119		11,789
Total reportable segment expenses	2,969			2,197		9,244		6,572
Total reportable segment adjusted EBITDA	$	2,671		1,648		7,875		5,217
Total margin percentage	47		%	43	%	46	%	44	%
Business segment:
Revenues	$	4,285		2,425		13,033		7,485
Expenses	2,446			1,537		7,540		4,641
Adjusted EBITDA	$	1,839		888		5,493		2,844
Margin percentage	43		%	37	%	42	%	38	%
Consumer segment:
Revenues	$	1,355		1,420		4,086		4,304
Expenses	523			660		1,704		1,931
Adjusted EBITDA	$	832		760		2,382		2,373
Margin percentage	61		%	54	%	58	%	55	%

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 September 30,			Nine Months Ended September 30,
	2018		2017	2018	2017
	(Dollars in millions)
Business segment
IP and data services (1)	$	1,726	755	5,212	2,256
Transport and infrastructure (2)	1,331		735	4,021	2,426
Voice and collaboration (3)	1,075		765	3,324	2,319
IT and managed services (4)	153		170	476	484
Total business segment revenues	4,285		2,425	13,033	7,485
Consumer segment
IP and data services (5)	70		98	249	308
Transport and infrastructure (6)	720		697	2,171	2,063
Voice and collaboration (3)	565		625	1,666	1,933
Total consumer segment revenues	1,355		1,420	4,086	4,304
Non-segment revenues
Regulatory revenues (7)	178		189	546	544
Total non-segment revenues	178		189	546	544
Total revenues	$	5,818	4,034	17,665	12,333

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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 September 30,					Nine Months Ended September 30,
	2018			2017		2018		2017
	(Dollars in millions)
Total reportable segment adjusted EBITDA	$	2,671		1,648		7,875		5,217
Regulatory revenues	178			189		546		544
Depreciation and amortization	(1,285		)	(910	)	(3,858	)	(2,739	)
Other operating expenses	(670		)	(440	)	(2,152	)	(1,537	)
Total other expense, net	(565		)	(348	)	(1,609	)	(999	)
Income before income tax expense	329			139		802		486
Income tax expense	57			47		123		214
Net income	$	272		92		679		272