Segment Information

6 Months Ended

Jun. 30, 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 by our Verizon Fios product portfolio 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, including data, video and conferencing 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: Small and Medium Business, Global Enterprise, 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						Six Months Ended
	June 30,						June 30,
(dollars in millions)	2020		2019		2020		2019
External Operating Revenues
Consumer
Service	$	15,898	$	16,350	$	32,241	$	32,611
Wireless equipment	3,209		3,904		6,586		8,070
Other	1,946		1,680		3,932		3,350
Total Consumer	21,053		21,934		42,759		44,031

Business
Small and Medium Business	2,597		2,781		5,395		5,485
Global Enterprise	2,587		2,673		5,217		5,363

Public Sector and Other	1,523		1,492		2,997		2,963
Wholesale	756		810		1,516		1,650
Total Business	7,463		7,756		15,125		15,461
Total reportable segments	$	28,516	$	29,690	$	57,884	$	59,492

Intersegment Revenues
Consumer	$	60	$	61	$	119	$	112
Business	19		12		38		26
Total reportable segments	$	79	$	73	$	157	$	138

Total Operating Revenues
Consumer	$	21,113	$	21,995	$	42,878	$	44,143
Business⁽¹⁾	7,482		7,768		15,163		15,487
Total reportable segments	$	28,595	$	29,763	$	58,041	$	59,630

Operating Income
Consumer	$	7,064	$	7,336	$	14,346	$	14,586
Business	946		1,071		1,900		2,119
Total reportable segments	$	8,010	$	8,407	$	16,246	$	16,705

⁽¹⁾ Service and other revenues included in our Business segment amounted to approximately $7.0 billion for both the three months ended June 30, 2020 and 2019. Service and other revenues included in our Business segment amounted to approximately $13.9 billion for both the six months ended June 30, 2020 and 2019. Wireless equipment revenues included in our Business segment amounted to approximately $546 million and $1.3 billion for the three and six months ended June 30, 2020, respectively, and approximately $814 million and $1.6 billion for the three and six months ended June 30, 2019, respectively.

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


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(dollars in millions)	2020		2019		2020		2019
Consumer	$	2,754	$	2,772	$	5,553	$	5,536
Business	260		239		522		482
Total Fios revenue	$	3,014	$	3,011	$	6,075	$	6,018

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


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(dollars in millions)	2020		2019		2020		2019
Consumer	$	13,087	$	13,456	$	26,563	$	26,813
Business	2,861		2,775		5,742		5,469
Total Wireless service revenue	$	15,948	$	16,231	$	32,305	$	32,282

Reconciliation to Consolidated Financial Information

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


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(dollars in millions)	2020		2019		2020		2019
Total reportable segment operating revenues	$	28,595	$	29,763	$	58,041	$	59,630
Corporate and other	1,967		2,412		4,239		4,747
Eliminations	(115)		(104)		(223)		(178)

Total consolidated operating revenues	$	30,447	$	32,071	$	62,057	$	64,199

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


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(dollars in millions)	2020		2019		2020		2019
Total reportable segment operating income	$	8,010	$	8,407	$	16,246	$	16,705
Corporate and other	(445)		(354)		(704)		(740)

Other components of net periodic benefit charges (Note 8)	(204)		(203)		(407)		(406)
Loss on spectrum license transaction (Note 3)	—		—		(1,195)		—





Total consolidated operating income	7,361		7,850		13,940		15,559

Equity in losses of unconsolidated businesses	(13)		(13)		(25)		(19)
Other income (expense), net	(72)		(1,312)		71		(1,017)
Interest expense	(1,089)		(1,215)		(2,123)		(2,425)
Income Before Provision For Income Taxes	$	6,187	$	5,310	$	11,863	$	12,098

No single customer accounted for more than 10% of our total operating revenues during the three and six months ended June 30, 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.