Segment Information

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Segment Information

Segment Information

We report our results within two segments: Business and Mass Markets.

Under our Business segment we provide products and services to meet the needs of our enterprise and wholesale customers under four distinct sales channels: Large Enterprise, Mid-Market Enterprise, Public Sector and Wholesale. For Business segment revenue, we report the following product categories: Grow, Nurture, Harvest and Other, in each case through the sales channels outlined above. The Business segment included the results of our Latin American, ILEC and EMEA businesses prior to their sales on August 1, 2022, October 3, 2022 and November 1, 2023, respectively.

Under our Mass Markets Segment, we provide products and services to residential and small business customers. We report the following product categories: Fiber Broadband, Other Broadband and Voice and Other. The Mass Markets segment included the results of our ILEC business prior to its sale on October 3, 2022.

See detailed descriptions of these product and service categories in Note 4—Revenue Recognition.

As described in more detail below, our segments are managed based on the direct costs of providing services to their customers and directly associated selling, general and administrative costs (primarily salaries and commissions). Shared costs are managed separately and included in "other unallocated expense" in the table included below "—Revenue and Expenses". As referenced above, we reclassified certain prior period amounts to conform to the current period presentation. See Note 1—Background and Summary of Significant Accounting Policies for additional detail on these changes.

The following tables summarize our segment results for 2023, 2022 and 2021 based on the segment categorization we were operating under at December 31, 2023.

	Year Ended December 31, 2023
	Business		Mass Markets
	(Dollars in millions)
Segment revenue	$	11,535	3,022
Segment expense
Cost of services and products	3,138		92
Selling, general and administrative	1,232		1,341
Total expense	4,370		1,433
Total segment adjusted EBITDA	$	7,165	1,589

	Year Ended December 31, 2022
	Business		Mass Markets
	(Dollars in millions)
Segment revenue	$	13,041	4,437
Segment expense
Cost of services and products	3,257		124
Selling, general and administrative	1,215		1,623
Total expense	4,472		1,747
Total segment adjusted EBITDA	$	8,569	2,690

	Year Ended December 31, 2021
	Business		Mass Markets
	(Dollars in millions)
Segment revenue	$	14,119	5,568
Segment expense
Cost of services and products	3,488		153
Selling, general and administrative	1,273		1,685
Total expense	4,761		1,838
Total segment adjusted EBITDA	$	9,358	3,730

Revenue and Expenses

Our segment revenue includes all revenue from our two 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. We have not allocated assets or debt to specific segments.

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 and centrally managed expenses such as Finance, Human Resources, Legal, Marketing, Product Management and IT, all of which are reported as "other unallocated expense" in the table below;

•depreciation and amortization expense;

•goodwill or other impairments;

•interest expense;

•stock-based compensation; and

•other income and expense items.

The following table reconciles total segment adjusted EBITDA to net (loss) income for the years ended December 31, 2023, 2022 and 2021:

	Years Ended December 31,
	2023		2022	2021
	(Dollars in millions)
Total segment adjusted EBITDA	$	8,754	11,259	13,088
Depreciation and amortization	(2,985)		(3,239)	(4,019)
Goodwill impairment	(10,693)		(3,271)	—
Other unallocated expense	(4,608)		(4,556)	(4,664)
Stock-based compensation	(52)		(98)	(120)
Operating (loss) income	(9,584)		95	4,285
Total other expense, net	(653)		(1,086)	(1,584)
(Loss) income before income taxes	(10,237)		(991)	2,701
Income tax expense	61		557	668
Net (loss) income	$	(10,298)	(1,548)	2,033

We do not have any single customer that comprises 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. comprises less than 10% of our total operating revenue.