Segment Information

3 Months Ended

Mar. 31, 2020

Note 10. Segment Information

Reportable Segments

We have two reportable segments that we operate and manage as strategic business units - Consumer and Business. We measure and evaluate our reportable segments based on segment operating income, consistent with the chief operating decision maker’s assessment of segment performance.

Our segments and their principal activities consist of the following:



Segment		Description
Verizon Consumer Group		Our Consumer segment provides consumer-focused wireless and wireline communications services and products. Our wireless services are provided across one of the most extensive wireless networks in the U.S. under the Verizon brand and through wholesale and other arrangements. Our wireline services are provided in nine states in the Mid-Atlantic and Northeastern U.S., as well as Washington D.C., over our 100% fiber-optic network under the Fios brand and over a traditional copper-based network to customers who are not served by Fios.

Verizon Business Group		Our Business segment provides wireless and wireline communications services and products, video and data services, corporate networking solutions, security and managed network services, local and long distance voice services and network access to deliver various IoT services and products. We provide these products and services to businesses, government customers and wireless and wireline carriers across the U.S. and select products and services to customers around the world.

Our Consumer segment’s wireless and wireline products and services are available to our retail customers, as well as resellers that purchase wireless network access from us on a wholesale basis. Our Business segment’s wireless and wireline products and services are organized by the primary customer groups targeted by these offerings: Global Enterprise, Small and Medium Business, Public Sector and Other, and Wholesale.

Corporate and other includes the results of our media business, Verizon Media, and other businesses, investments in unconsolidated businesses, unallocated corporate expenses, certain pension and other employee benefit related costs and interest and financing expenses. Corporate and other also includes the historical results of divested businesses and other adjustments and gains and losses that are not allocated in assessing segment performance due to their nature. Although such transactions are excluded from the business segment results, they are included in reported

consolidated earnings. Gains and losses from these transactions that are not individually significant are included in segment results as these items are included in the chief operating decision maker’s assessment of segment performance.

The reconciliation of segment operating revenues and expenses to consolidated operating revenues and expenses below includes the effects of special items that the chief operating decision maker does not consider in assessing segment performance, primarily because of their nature.

The following table provides operating financial information for our two reportable segments:



	Three Months Ended
	March 31,
(dollars in millions)	2020		2019
External Operating Revenues
Consumer
Service	$	16,343	$	16,261
Wireless equipment	3,377		4,166
Other	1,986		1,671
Total Consumer	21,706		22,098

Business
Global Enterprise	2,630		2,690
Small and Medium Business	2,798		2,704
Public Sector and Other	1,474		1,471
Wholesale	760		841
Total Business	7,662		7,706
Total reportable segments	$	29,368	$	29,804

Intersegment Revenues
Consumer	$	59	$	50
Business	19		13
Total reportable segments	$	78	$	63

Total Operating Revenues
Consumer	$	21,765	$	22,148
Business⁽¹⁾	7,681		7,719
Total reportable segments	$	29,446	$	29,867

Operating Income
Consumer	$	7,282	$	7,250
Business	954		1,048
Total reportable segments	$	8,236	$	8,298

⁽¹⁾ Service and other revenues and Wireless equipment revenues included in our Business segment amounted to approximately $6.9 billion and $752 million, respectively, for the three months ended March 31, 2020, and approximately $6.9 billion and $765 million, respectively, for the three months ended March 31, 2019.

The following table provides Fios revenue for our two reportable segments:



	Three Months Ended
	March 31,
(dollars in millions)	2020		2019
Consumer	$	2,799	$	2,764
Business	262		243
Total Fios revenue	$	3,061	$	3,007

The following table provides Wireless service revenue for our reportable segments and includes intersegment activity:



	Three Months Ended
	March 31,
(dollars in millions)	2020		2019
Consumer	$	13,476	$	13,357
Business	2,881		2,694
Total Wireless service revenue	$	16,357	$	16,051

Reconciliation to Consolidated Financial Information

A reconciliation of the reportable segment operating revenues to consolidated operating revenues is as follows:



	Three Months Ended
	March 31,
(dollars in millions)	2020			2019
Total reportable segment operating revenues	$	29,446		$	29,867
Corporate and other	2,272			2,335
Eliminations	(108		)	(74		)
Total consolidated operating revenues	$	31,610		$	32,128

A reconciliation of the total reportable segment's operating income to consolidated income before provision for income taxes is as follows:



	Three Months Ended
	March 31,
(dollars in millions)	2020			2019
Total reportable segment operating income	$	8,236		$	8,298
Corporate and other	(259		)	(386		)
Other components of net periodic benefit charges (Note 8)	(203		)	(203		)
Loss on spectrum license transaction (Note 3)	(1,195		)	—
Total consolidated operating income	6,579			7,709

Equity in losses of unconsolidated businesses	(12		)	(6		)
Other income, net	143			295
Interest expense	(1,034		)	(1,210		)
Income Before Provision For Income Taxes	$	5,676		$	6,788

No single customer accounted for more than 10% of our total operating revenues during the three months ended March 31, 2020 and 2019.

The chief operating decision maker does not review disaggregated assets on a segment basis; therefore, such information is not presented. Depreciation included in the measure of segment profitability is primarily allocated based on proportional usage.