| Segment Information |
Reportable
Segments
We have two
reportable segments, which we operate and manage as strategic
business units and organize by products and services. We measure
and evaluate our reportable segments based on segment operating
income, consistent with the chief operating decision maker’s
assessment of segment performance.
Corporate,
eliminations and other includes unallocated corporate expenses,
intersegment eliminations recorded in consolidation, the results of
other businesses, such as our investments in unconsolidated
businesses, pension and other employee benefit related costs, lease
financing, as well as other adjustments and gains and losses that
are not allocated in assessing segment performance due to their
non-operational nature. Although such transactions are excluded
from the business segment results, they are included in reported
consolidated earnings. Gains and losses that are not individually
significant are included in all segment results as these items are
included in the chief operating decision maker’s assessment
of segment performance. Effective January 1, 2014, we have
also reclassified the results of certain businesses, such as
development stage businesses that support our strategic
initiatives, from our Wireline segment to Corporate, eliminations
and other. The impact of this reclassification was not material to
our condensed consolidated financial statements or our segment
results of operations.
Our segments and their
principal activities consist of the following:
|
|
|
|
Segment |
|
Description |
| Wireless |
|
Wireless’ communications products and services include
wireless voice and data services and equipment sales, which are
provided to consumer, business and government customers across the
United States.
|
|
|
| Wireline |
|
Wireline’s voice, data and video communications products
and enhanced services include broadband video and data, corporate
networking solutions, data center and cloud services, security and
managed network services and local and long distance voice
services. We provide these products and services to consumers in
the United States, as well as to carriers, businesses and
government customers both in the United States and in over 150
other countries around the world.
|
The following table provides
operating financial information for our two reportable
segments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
(dollars in
millions) |
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
External Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireless
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail service
|
|
$ |
17,276 |
|
|
$ |
16,408 |
|
|
$ |
34,509 |
|
|
$ |
32,563 |
|
|
Other service
|
|
|
784 |
|
|
|
656 |
|
|
|
1,519 |
|
|
|
1,213 |
|
|
|
|
|
|
|
Service revenue
|
|
|
18,060 |
|
|
|
17,064 |
|
|
|
36,028 |
|
|
|
33,776 |
|
|
|
|
|
|
|
Equipment
|
|
|
2,387 |
|
|
|
1,949 |
|
|
|
4,256 |
|
|
|
3,758 |
|
|
Other
|
|
|
1,006 |
|
|
|
939 |
|
|
|
2,020 |
|
|
|
1,914 |
|
|
|
|
|
|
|
Total Wireless
|
|
|
21,453 |
|
|
|
19,952 |
|
|
|
42,304 |
|
|
|
39,448 |
|
|
|
|
|
|
|
Wireline
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer retail
|
|
|
3,864 |
|
|
|
3,669 |
|
|
|
7,704 |
|
|
|
7,285 |
|
|
Small business
|
|
|
621 |
|
|
|
635 |
|
|
|
1,245 |
|
|
|
1,270 |
|
|
|
|
|
|
|
Mass Markets
|
|
|
4,485 |
|
|
|
4,304 |
|
|
|
8,949 |
|
|
|
8,555 |
|
|
|
|
|
|
|
Strategic
services
|
|
|
2,120 |
|
|
|
2,059 |
|
|
|
4,223 |
|
|
|
4,132 |
|
|
Core
|
|
|
1,459 |
|
|
|
1,582 |
|
|
|
2,955 |
|
|
|
3,273 |
|
|
|
|
|
|
|
Global Enterprise
|
|
|
3,579 |
|
|
|
3,641 |
|
|
|
7,178 |
|
|
|
7,405 |
|
|
|
|
|
|
|
Global Wholesale
|
|
|
1,327 |
|
|
|
1,413 |
|
|
|
2,672 |
|
|
|
2,856 |
|
|
Other
|
|
|
122 |
|
|
|
111 |
|
|
|
247 |
|
|
|
212 |
|
|
|
|
|
|
|
Total Wireline
|
|
|
9,513 |
|
|
|
9,469 |
|
|
|
19,046 |
|
|
|
19,028 |
|
|
|
|
|
|
|
Total segments
|
|
|
30,966 |
|
|
|
29,421 |
|
|
|
61,350 |
|
|
|
58,476 |
|
|
Corporate, eliminations and
other
|
|
|
517 |
|
|
|
365 |
|
|
|
951 |
|
|
|
730 |
|
|
|
|
|
|
|
Total consolidated –
reported
|
|
$ |
31,483 |
|
|
$ |
29,786 |
|
|
$ |
62,301 |
|
|
$ |
59,206 |
|
|
|
|
|
|
|
|
|
|
|
|
Intersegment
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireless
|
|
$ |
30 |
|
|
$ |
24 |
|
|
$ |
58 |
|
|
$ |
51 |
|
|
Wireline
|
|
|
246 |
|
|
|
265 |
|
|
|
503 |
|
|
|
536 |
|
|
|
|
|
|
|
Total segments
|
|
|
276 |
|
|
|
289 |
|
|
|
561 |
|
|
|
587 |
|
|
Corporate, eliminations and
other
|
|
|
(276 |
) |
|
|
(289 |
) |
|
|
(561 |
) |
|
|
(587 |
) |
|
|
|
|
|
|
Total consolidated –
reported
|
|
$ |
– |
|
|
$ |
– |
|
|
$ |
– |
|
|
$ |
– |
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireless
|
|
$ |
21,483 |
|
|
$ |
19,976 |
|
|
$ |
42,362 |
|
|
$ |
39,499 |
|
|
Wireline
|
|
|
9,759 |
|
|
|
9,734 |
|
|
|
19,549 |
|
|
|
19,564 |
|
|
|
|
|
|
|
Total segments
|
|
|
31,242 |
|
|
|
29,710 |
|
|
|
61,911 |
|
|
|
59,063 |
|
|
Corporate, eliminations and
other
|
|
|
241 |
|
|
|
76 |
|
|
|
390 |
|
|
|
143 |
|
|
|
|
|
|
|
Total consolidated –
reported
|
|
$ |
31,483 |
|
|
$ |
29,786 |
|
|
$ |
62,301 |
|
|
$ |
59,206 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireless
|
|
$ |
6,985 |
|
|
$ |
6,464 |
|
|
$ |
14,303 |
|
|
$ |
12,882 |
|
|
Wireline
|
|
|
259 |
|
|
|
74 |
|
|
|
406 |
|
|
|
87 |
|
|
|
|
|
|
|
Total segments
|
|
|
7,244 |
|
|
|
6,538 |
|
|
|
14,709 |
|
|
|
12,969 |
|
|
Reconciling items
|
|
|
441 |
|
|
|
17 |
|
|
|
136 |
|
|
|
(192 |
) |
|
|
|
|
|
|
Total consolidated –
reported
|
|
$ |
7,685 |
|
|
$ |
6,555 |
|
|
$ |
14,845 |
|
|
$ |
12,777 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in
millions) |
|
At June 30,
2014 |
|
|
At December 31,
2013 |
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Wireless
|
|
$ |
153,374 |
|
|
$ |
146,429 |
|
|
Wireline
|
|
|
79,662 |
|
|
|
84,573 |
|
|
|
|
|
|
|
Total segments
|
|
|
233,036 |
|
|
|
231,002 |
|
|
Corporate, eliminations and
other
|
|
|
(8,609 |
) |
|
|
43,096 |
|
|
|
|
|
|
|
Total consolidated –
reported
|
|
$ |
224,427 |
|
|
$ |
274,098 |
|
|
|
|
|
|
Corporate,
eliminations and other at December 31, 2013 is primarily
comprised of cash and cash equivalents which were used to complete
the Wireless Transaction on February 21, 2014.
A reconciliation of the
total of the reportable segments’ operating income to
consolidated income before provision for income taxes is as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
(dollars in
millions) |
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
Total segment operating
income
|
|
$ |
7,244 |
|
|
$ |
6,538 |
|
|
$ |
14,709 |
|
|
$ |
12,969 |
|
|
Gain on spectrum license
transactions (Note 2)
|
|
|
707 |
|
|
|
– |
|
|
|
707 |
|
|
|
– |
|
|
Pension remeasurement (Note
8)
|
|
|
– |
|
|
|
237 |
|
|
|
– |
|
|
|
237 |
|
|
Corporate, eliminations and
other
|
|
|
(266 |
) |
|
|
(220 |
) |
|
|
(571 |
) |
|
|
(429 |
) |
|
|
|
|
|
|
Total consolidated operating
income
|
|
|
7,685 |
|
|
|
6,555 |
|
|
|
14,845 |
|
|
|
12,777 |
|
|
|
|
|
|
|
Equity in earnings (losses)
of unconsolidated businesses
|
|
|
(43 |
) |
|
|
120 |
|
|
|
1,859 |
|
|
|
115 |
|
|
Other income and (expense),
net
|
|
|
66 |
|
|
|
25 |
|
|
|
(828 |
) |
|
|
64 |
|
|
Interest expense
|
|
|
(1,164 |
) |
|
|
(514 |
) |
|
|
(2,378 |
) |
|
|
(1,051 |
) |
|
|
|
|
|
|
Income Before Provision
For Income Taxes
|
|
$ |
6,544 |
|
|
$ |
6,186 |
|
|
$ |
13,498 |
|
|
$ |
11,905 |
|
|
|
|
|
|
We generally
account for intersegment sales of products and services and asset
transfers at current market prices. No single customer accounted
for more than 10% of our total operating revenues during the three
and six months ended June 30, 2014 and 2013.
|