America Online 2015 Annual Report Download - page 73

Note13
Segment Information
Reportable Segments
We have two reportable segments, Wireless and Wireline, 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 and other includes the operations of AOL and related businesses, unallocated corporate expenses, the results of other businesses,
such as our investments in unconsolidated businesses, pension and other employee benefit related costs and lease financing. 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 and other. The impact of this reclassification was not material to our consolidated financial
statements or our segment results of operations. Corporate and other also includes the historical results of divested operations and 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.
On July1, 2014, our Wireline segment sold a non- strategic business (see Note2). Accordingly, the historical Wireline results for these operations
have been reclassified to Corporate and other to reflect comparable segment operating results.
The reconciliation of segment operating revenues and expenses to consolidated operating revenues and expenses below also includes those
items of a non- operational nature. We exclude from segment results the effects of certain items that management does not consider in assessing
segment performance, primarily because of their non- operational nature.
We have adjusted prior period consolidated and segment information, where applicable, to conform to current year presentation.
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 around the world.
The following table provides operating financial information for our two reportable segments:
(dollars in millions)
2015 Wireless Wireline Total Segments
External Operating Revenues
Service revenue $ 70,305 $ – $ 70,305
Equipment 16,924 – 16,924
Other 4,294 – 4,294
Consumer retail – 16,123 16,123
Small business – 2,350 2,350
Mass Markets – 18,473 18,473
Strategic services – 8,164 8,164
Core – 4,777 4,777
Global Enterprise – 12,941 12,941
Global Wholesale – 4,958 4,958
Other – 322 322
Intersegment revenues 157 1,026 1,183
Total operating revenues 91,680 37,720 129,400
Cost of services 7,803 20,878 28,681
Wireless cost of equipment 23,119 – 23,119
Selling, general and administrative expense 21,805 7,989 29,794
Depreciation and amortization expense 8,980 6,678 15,658
Total operating expenses 61,707 35,545 97,252
Operating income $ 29,973 $ 2,175 $ 32,148
Assets $ 185,406 $ 78,316 $ 263,722
Plant, property and equipment, net 40,911 41,044 81,955
Capital expenditures 11,725 5,049 16,774
71Verizon Communications Inc. and Subsidiaries
Notes to Consolidated Financial Statements continued