Segment Information

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Segment Information

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				Nine Months Ended
	September 30,				September 30,
(dollars in millions)	2020		2019		2020		2019
External Operating Revenues
Consumer
Service	$	16,255	$	16,432	$	48,496	$	49,043
Wireless equipment	3,403		4,256		9,989		12,326
Other	2,014		1,953		5,946		5,303
Total Consumer	21,672		22,641		64,431		66,672
Business
Small and Medium Business	2,737		2,894		8,132		8,379
Global Enterprise	2,594		2,714		7,811		8,077
Public Sector and Other	1,639		1,472		4,636		4,435
Wholesale	763		790		2,279		2,440
Total Business	7,733		7,870		22,858		23,331
Total reportable segments	$	29,405	$	30,511	$	87,289	$	90,003
Intersegment Revenues
Consumer	$	64	$	65	$	183	$	177
Business	16		15		54		41
Total reportable segments	$	80	$	80	$	237	$	218
Total Operating Revenues
Consumer	$	21,736	$	22,706	$	64,614	$	66,849
Business(1)	7,749		7,885		22,912		23,372
Total reportable segments	$	29,485	$	30,591	$	87,526	$	90,221
Operating Income
Consumer	$	7,437	$	7,489	$	21,783	$	22,075
Business	923		977		2,823		3,096
Total reportable segments	$	8,360	$	8,466	$	24,606	$	25,171

⁽¹⁾ Service and other revenues included in our Business segment amounted to approximately $7.0 billion for both the three months ended

September 30, 2020 and 2019. Service and other revenues included in our Business segment amounted to approximately $20.9 billion for both the nine months ended September 30, 2020 and 2019. Wireless equipment revenues included in our Business segment amounted to approximately $709 million and $2.0 billion for the three and nine months ended September 30, 2020, respectively, and approximately $880 million and $2.5 billion for the three and nine months ended September 30, 2019, respectively.

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(dollars in millions)	2020		2019		2020		2019
Consumer	$	2,773	$	2,811	$	8,326	$	8,347
Business	263		243		785		725
Total Fios revenue	$	3,036	$	3,054	$	9,111	$	9,072

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(dollars in millions)	2020		2019		2020		2019
Consumer	$	13,442	$	13,533	$	40,005	$	40,346
Business	2,990		2,850		8,732		8,319
Total Wireless service revenue	$	16,432	$	16,383	$	48,737	$	48,665

Reconciliation to Consolidated Financial Information

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(dollars in millions)	2020		2019		2020		2019
Total reportable segment operating revenues	$	29,485	$	30,591	$	87,526	$	90,221
Corporate and other	2,203		2,400		6,442		7,147
Eliminations	(145)		(97)		(368)		(275)
Total consolidated operating revenues	$	31,543	$	32,894	$	93,600	$	97,093

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(dollars in millions)	2020		2019		2020		2019
Total reportable segment operating income	$	8,360	$	8,466	$	24,606	$	25,171
Corporate and other	(479)		(344)		(1,183)		(1,083)
Other components of net periodic benefit charges (Note 8)	(203)		(203)		(610)		(610)
Loss on spectrum license transaction (Note 3)	—		—		(1,195)		—
Net gain from dispositions of assets and businesses	—		261		—		261
Total consolidated operating income	7,678		8,180		21,618		23,739
Equity in losses of unconsolidated businesses	(9)		(1)		(34)		(20)
Other expense, net	(774)		(110)		(703)		(1,127)
Interest expense	(1,044)		(1,146)		(3,167)		(3,571)
Income Before Provision For Income Taxes	$	5,851	$	6,923	$	17,714	$	19,021

No single customer accounted for more than 10% of our total operating revenues during the three and nine months ended September 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.