Segment Information

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Segment Information

Segment Information

As described in more detail below, our segments are managed based on the direct costs of providing services to their customers and the associated selling, general and administrative costs (primarily salaries and commissions). Shared costs are managed separately and included in "Operations and Other" in the tables below. We reclassified certain prior period amounts to conform to the current period presentation. See Note 1— Background and Summary of Significant Accounting Policies for further detail on these changes.

At December 31, 2020, we had the following five reportable segments:

•International and Global Accounts Management ("IGAM") Segment. Under our IGAM segment, we provide our products and services to approximately 200 global enterprise customers and to enterprises and carriers in three operating regions: Europe Middle East and Africa, Latin America and Asia Pacific;

•Enterprise Segment. Under our enterprise segment, we provide our products and services to large and regional domestic and global enterprises, as well as public sector, which includes the U.S. federal government, state and local governments and research and education institutions;

•Small and Medium Business ("SMB") Segment. Under our SMB segment, we provide our products and services to small and medium businesses directly and indirectly through our channel partners;

•Wholesale Segment. Under our wholesale segment, we provide our products and services to a wide range of other communication providers across the wireline, wireless, cable, voice and data center sectors. Our wholesale customers range from large global telecom providers to small regional providers; and

•Consumer Segment. Under our consumer segment, we provide our products and services to residential customers. Additionally, Connect America Fund ("CAF") federal support revenue, and other revenue from leasing and subleasing are reported in our consumer segment as regulatory revenue.

Product and Service Categories

At December 31, 2020, we categorized our products and services revenue among the following four categories for the IGAM, Enterprise, SMB and Wholesale segments:

•IP and Data Services, which includes primarily VPN data networks, Ethernet, IP, content delivery and other ancillary services;

•Transport and Infrastructure, which includes wavelengths, dark fiber, private line, colocation and data center services, including cloud, hosting and application management solutions, professional services and other ancillary services;

•Voice and Collaboration, which includes primarily local and long-distance voice, including wholesale voice, and other ancillary services, as well as VoIP services; and

•IT and Managed Services, which includes information technology services and managed services, which may be purchased in conjunction with our other network services.

At December 31, 2020, we categorized our products and services revenue among the following four categories for the Consumer segment:

•Broadband, which includes high-speed, fiber based and lower speed DSL broadband services;

•Voice, which includes local and long-distance services;

•Regulatory Revenue, which consists of (i) CAF and other support payments designed to reimburse us for various costs related to certain telecommunications services and (ii) other operating revenue from the leasing and subleasing of space; and

•Other, which includes retail video services (including our linear and TV services), professional services and other ancillary services.

The following tables summarize our segment results for 2020, 2019 and 2018 based on the segment categorization we were operating under at December 31, 2020.

	Year Ended December 31, 2020
	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	$	1,556	2,474	1,062	1,280	—	6,372	—	6,372
Transport and Infrastructure	1,265		1,608	352	1,764	—	4,989	—	4,989
Voice and Collaboration	368		1,424	1,098	731	—	3,621	—	3,621
IT and Managed Services	216		216	45	2	—	479	—	479
Broadband	—		—	—	—	2,909	2,909	—	2,909
Voice	—		—	—	—	1,622	1,622	—	1,622
Regulatory	—		—	—	—	615	615	—	615
Other	—		—	—	—	105	105	—	105
Total revenue	3,405		5,722	2,557	3,777	5,251	20,712	—	20,712
Expenses:
Cost of services and products	935		1,878	382	489	173	3,857	5,077	8,934
Selling, general and administrative	242		510	406	67	466	1,691	1,773	3,464
Less: share-based compensation	—		—	—	—	—	—	(175)	(175)
Total expense	1,177		2,388	788	556	639	5,548	6,675	12,223
Total adjusted EBITDA	$	2,228	3,334	1,769	3,221	4,612	15,164	(6,675)	8,489

	Year Ended December 31, 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	$	1,627	2,538	1,091	1,365	—	6,621	—	6,621
Transport and Infrastructure	1,268		1,479	365	1,907	—	5,019	—	5,019
Voice and Collaboration	354		1,423	1,226	763	—	3,766	—	3,766
IT and Managed Services	227		256	45	7	—	535	—	535
Broadband	—		—	—	—	2,876	2,876	—	2,876
Voice	—		—	—	—	1,837	1,837	—	1,837
Regulatory	—		—	—	—	632	632	—	632
Other	—		—	—	—	172	172	—	172
Total revenue	3,476		5,696	2,727	4,042	5,517	21,458	—	21,458
Expenses:
Cost of services and products	920		1,768	399	535	197	3,819	5,315	9,134
Selling, general and administrative	261		545	459	58	521	1,844	1,871	3,715
Less: share-based compensation	—		—	—	—	—	—	(162)	(162)
Total expense	1,181		2,313	858	593	718	5,663	7,024	12,687
Total adjusted EBITDA	$	2,295	3,383	1,869	3,449	4,799	15,795	(7,024)	8,771

	Year Ended December 31, 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	$	1,682	2,485	1,078	1,369	—	6,614	—	6,614
Transport and Infrastructure	1,230		1,484	424	2,118	—	5,256	—	5,256
Voice and Collaboration	365		1,495	1,366	865	—	4,091	—	4,091
IT and Managed Services	266		301	50	8	—	625	—	625
Broadband	—		—	—	—	2,824	2,824	—	2,824
Voice	—		—	—	—	2,127	2,127	—	2,127
Regulatory	—		—	—	—	727	727	—	727
Other	—		—	—	—	316	316	—	316
Total revenue	3,543		5,765	2,918	4,360	5,994	22,580	—	22,580
Expenses:
Cost of services and products	940		1,844	416	567	356	4,123	5,876	9,999
Selling, general and administrative	249		567	490	62	617	1,985	2,180	4,165
Less: share-based compensation	—		—	—	—	—	—	(186)	(186)
Total expense	1,189		2,411	906	629	973	6,108	7,870	13,978
Total adjusted EBITDA	$	2,354	3,354	2,012	3,731	5,021	16,472	(7,870)	8,602

Revenue and Expenses

Our segment revenue includes all revenue from our five segments as described in more detail above. Our segment revenue is based upon each customer's classification. We report our segment revenue based upon all services provided to that segment's customers. Our segment expenses include specific cost of service expenses incurred as a direct result of providing services and products to segment customers, along with selling, general and administrative expenses that are directly associated with specific segment customers or activities.

The following items are excluded from our segment results, because they are centrally managed and not monitored by or reported to our chief operating decision maker by segment:

•network expenses not incurred as a direct result of providing services and products to segment customers;

•centrally managed expenses such as Operations, Finance, Human Resources, Legal, Marketing, Product Management and IT, which are reported as "Other operating expenses" in the table below;

•depreciation and amortization expense or impairments;

•interest expense, because we manage our financing on a consolidated basis and have not allocated assets or debt to specific segments;

•stock-based compensation; and

•other income and expense items are not monitored as a part of our segment operations.

The following table reconciles total segment adjusted EBITDA to net loss for the years ended December 31, 2020, 2019 and 2018:

	Years Ended December 31,
	2020		2019	2018
	(Dollars in millions)
Total segment adjusted EBITDA	$	15,164	15,795	16,472
Depreciation and amortization	(4,710)		(4,829)	(5,120)
Goodwill impairment	(2,642)		(6,506)	(2,726)
Other operating expenses	(6,675)		(7,024)	(7,870)
Share-based compensation	(175)		(162)	(186)
Operating income (loss)	962		(2,726)	570
Total other expense, net	(1,744)		(2,040)	(2,133)
Loss before income taxes	(782)		(4,766)	(1,563)
Income tax expense	450		503	170
Net loss	$	(1,232)	(5,269)	(1,733)

We do not have any single customer that provides more than 10% of our consolidated total operating revenue.

The assets we hold outside of the U.S. represent less than 10% of our total assets. Revenue from sources outside of the U.S. is responsible for less than 10% of our total operating revenue.