CenturyLink 2015 Annual Report Download - page 113

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Certain statements in our Annual Report constitute forward-looking statements. See “Special Note
Regarding Forward-Looking Statements and Related Matters” in Item 1 of our Annual Report on Form 10-K for
the year ended December 31, 2015 for factors relating to these statements and “Risk Factors” in Item 1A of our
Annual Report on Form 10-K for the year ended December 31, 2015 for a discussion of certain risk factors
applicable to our business, financial condition, results of operations, liquidity or prospects.
OVERVIEW
We are an integrated communications company engaged primarily in providing an array of communications
services to our residential and business customers. Our communications services include local and long-distance
voice, high-speed Internet, Multi-Protocol Label Switching (“MPLS”), private line (including special access),
data integration, Ethernet, colocation, managed hosting (including cloud hosting), network, public access, video,
wireless and other ancillary services. We strive to maintain our customer relationships by, among other things,
bundling our service offerings to provide our customers with a complete offering of integrated communications
services.
At December 31, 2015, we operated approximately 11.7 million access lines in 37 states and served
approximately 6.0 million high-speed Internet subscribers and 285 thousand Prism TV subscribers. We also
operated 59 data centers throughout North America, Europe and Asia. Our methodology for counting access
lines, high-speed Internet subscribers and data centers, which is described further in the operational metrics table
below under “Results of Operations”, may not be comparable to those of other companies.
Our consolidated financial statements include the accounts of CenturyLink, Inc. and its majority-owned
subsidiaries (“CenturyLink”).
We are organized into operating segments based on customer type, business and consumer. These operating
segments are our two reportable segments in our consolidated financial statements:
•Business Segment. Consists generally of providing strategic, legacy and data integration products and
services to small, medium and enterprise business, wholesale and governmental customers, including
other communication providers. Our strategic products and services offered to these customers include
our MPLS, private line (including special access), Ethernet, high-speed Internet, colocation, managed
hosting, cloud hosting and other ancillary services. Our legacy services offered to these customers
primarily include switched access, local and long-distance voice services, including the sale of
unbundled network elements (“UNEs”) which allow our wholesale customers to use all or part of our
network to provide voice and data services to their customers. Our data integration offerings include
the sale of telecommunications equipment located on customers’ premises and related professional
services. These services include network management, installation and maintenance of data equipment
and the building of proprietary fiber-optic broadband networks; and
•Consumer Segment. Consists generally of providing strategic and legacy products and services to
residential customers. Our strategic products and services offered to these customers include our high-
speed Internet, video (including our Prism TV services) and wireless services. Our legacy services
offered to these customers include local and long-distance voice service.
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