Segment Information

3 Months Ended

Mar. 31, 2023

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, TracFone brands and through wholesale and other arrangements. We also provide fixed wireless access (FWA) broadband through our wireless networks. 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 through 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 also provide FWA broadband through our wireless networks. 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. During the first quarter of 2023, Verizon reorganized the customer groups within its Business segment. Previously, this segment was comprised of four customer groups: Small and Medium Business, Global Enterprise, Public Sector and Other, and Wholesale. Following the reorganization, there are now three customer groups: Enterprise and Public Sector, Business Markets and SaaS, and Wholesale. Enterprise and Public Sector combines the customers previously included in Global Enterprise and Public Sector and Other (excluding BlueJeans and Connect customers) as well as the commercial wireline customers previously included in Small and Medium Business. Business Markets and SaaS combines the customers previously included in Small and Medium Business (excluding commercial wireline customers), the BlueJeans customers previously

included in Global Enterprise and Public Sector and Other, and the Connect customers previously included in Public Sector and Other. The Wholesale customer group remained unchanged. Prior period operating revenue results within the Business segment have been recast for these reorganized customer groups. There was no change to the composition of our reportable segments and total segment results, nor the determination of segment profit.

Corporate and other primarily includes insurance captives, investments in unconsolidated businesses and development stage businesses that support our strategic initiatives, as well as 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 following table provides operating financial information for our two reportable segments:

	Three Months Ended
	March 31,
(dollars in millions)	2023		2022
External Operating Revenues
Consumer
Service	$	18,456	$	18,126
Wireless equipment	4,878		5,374
Other(1)	1,474		1,742
Total Consumer	24,808		25,242
Business
Enterprise and Public Sector	3,787		3,977
Business Markets and SaaS	3,099		3,072
Wholesale	599		647
Total Business	7,485		7,696
Total reportable segments	$	32,293	$	32,938
Intersegment Revenues
Consumer	$	49	$	50
Business	9		13
Total reportable segments	$	58	$	63
Total Operating Revenues
Consumer	$	24,857	$	25,292
Business(2)	7,494		7,709
Total reportable segments	$	32,351	$	33,001
Operating Income
Consumer	$	7,099	$	7,319
Business	551		673
Total reportable segments	$	7,650	$	7,992

(1) Other revenue includes fees that partially recover the direct and indirect costs of complying with regulatory and industry obligations and programs, revenues associated with certain products included in our device protection offerings, leasing and interest when equipment is sold to the customer by an authorized agent under a device payment plan agreement.

(2) Service and other revenues and Wireless equipment revenues included in our Business segment were approximately $6.6 billion and $882 million, respectively, for the three months ended March 31, 2023, and were approximately $6.7 billion and $962 million, respectively, for the three months ended March 31, 2022.

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

	Three Months Ended
	March 31,
(dollars in millions)	2023		2022
Consumer	$	2,889	$	2,911
Business	307		295
Total Fios revenue	$	3,196	$	3,206

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

	Three Months Ended
	March 31,
(dollars in millions)	2023		2022
Consumer	$	15,599	$	15,217
Business	3,290		3,125
Total Wireless service revenue	$	18,889	$	18,342

Reconciliation to Consolidated Financial Information

The reconciliation of segment operating revenues and operating income to consolidated operating revenues and operating income 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.

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

	Three Months Ended
	March 31,
(dollars in millions)	2023		2022
Total reportable segment operating revenues	$	32,351	$	33,001
Corporate and other	617		618
Eliminations	(56)		(65)
Total consolidated operating revenues	$	32,912	$	33,554

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)	2023		2022
Total reportable segment operating income	$	7,650	$	7,992
Corporate and other	(4)		(24)
Other components of net periodic benefit charges (Note 8)	(62)		(172)
Total consolidated operating income	7,584		7,796
Equity in earnings (losses) of unconsolidated businesses	9		(3)
Other income (expense), net	114		(924)
Interest expense	(1,207)		(786)
Income Before Provision For Income Taxes	$	6,500	$	6,083

No single customer accounted for more than 10% of our total operating revenues during the three months ended March 31, 2023 or 2022.

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