Windstream 2015 Annual Report Download - page 219

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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F-89
15. Segment Information, Continued:
Segment revenues are based upon each customer’s classification to an individual segment and include all services provided to that
customer. Certain operating revenues are derived from activities that are centrally-managed by us and, accordingly, these revenues
are not included in any of our four segments presented below. These other operating revenues include revenue from federal and
state universal service funds, CAF Phase II support, and funds received from federal access recovery mechanisms. We also generate
other service revenues from providing switched access services, which include usage-based revenues from long-distance companies
and other carriers for access to our network to complete long distance calls, as well as reciprocal compensation received from
wireless and other local connecting carriers for the use of network facilities. Other operating revenues also include certain surcharges
assessed to our customers, including billings for our required contributions to federal and state USF programs. Revenues attributable
to the sold data center and directory publishing businesses, as well as the consumer CLEC business transferred to CS&L are not
assigned to the segments and are also included in other service revenues for all periods prior to the dates of disposal.
Segment expenses include specific expenses incurred as a direct result of providing services and products to segment customers;
selling, general and administrative expenses that are directly associated with specific segment customers or activities; and certain
allocated expenses which include network expenses, facilities expenses and other expenses, such as vehicle and real estate-related
expenses. We do not assign depreciation and amortization expense, merger and integration costs, restructuring charges, stock-
based compensation and pension costs to our segments, because these expenses are centrally managed and are not monitored by
or reported to the chief operating decision maker (“CODM”) by segment. Similarly, certain centrally-managed administrative
functions, such as accounting and finance, information technology, legal and human resources, are not assigned to our segments.
Interest expense and loss on early extinguishment of debt have also been excluded from segment operating results because we
manage our financing activities on a total company basis and have not assigned any long-term debt obligations to the segments.
Other income (expense), net and income tax (benefit) expense are not monitored as a part of our segment operations and, therefore,
these items also have been excluded from our segment operating results.
Asset information by segment is not monitored or reported to the CODM and therefore has not been presented. All of our customers
are located in the United States and we do not have any single customer that provides more than 10 percent of our total consolidated
revenues and sales.
The following table summarizes our segment results for the years ended December 31:
(Millions) 2015 2014 2013
Consumer and Small Business - ILEC:
Revenues and sales $ 1,605.5 $ 1,644.4 $ 1,667.4
Costs and expenses 671.0 696.9 725.0
Segment income 934.5 947.5 942.4
Carrier:
Revenues 687.9 729.7 779.1
Costs and expenses 185.6 172.5 176.5
Segment income 502.3 557.2 602.6
Enterprise:
Revenues and sales 2,067.2 2,003.0 1,937.0
Costs and expenses 1,826.6 1,757.4 1,677.3
Segment income 240.6 245.6 259.7
Small Business - CLEC:
Revenues 559.0 658.3 765.5
Costs and expenses 378.2 408.7 465.6
Segment income 180.8 249.6 299.9
Total segment revenues and sales 4,919.6 5,035.4 5,149.0
Total segment costs and expenses 3,061.4 3,035.5 3,044.4
Total segment income $ 1,858.2 $ 1,999.9 $ 2,104.6