Segment Information

6 Months Ended

Jun. 30, 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 family of 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 Other, 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 Other 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 device insurance programs, 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				Six Months Ended
	June 30,				June 30,
(dollars in millions)	2023		2022		2023		2022
External Operating Revenues
Consumer
Service	$	18,641	$	18,149	$	37,097	$	36,275
Wireless equipment	4,430		5,708		9,308		11,082
Other(1)	1,435		1,696		2,909		3,438
Total Consumer	24,506		25,553		49,314		50,795
Business
Enterprise and Public Sector	3,784		3,867		7,571		7,844
Business Markets and Other(2)	3,104		3,125		6,203		6,197
Wholesale	587		623		1,186		1,270
Total Business	7,475		7,615		14,960		15,311
Total reportable segments	$	31,981	$	33,168	$	64,274	$	66,106
Intersegment Revenues
Consumer	$	52	$	51	$	101	$	101
Business	8		11		17		24
Total reportable segments	$	60	$	62	$	118	$	125
Total Operating Revenues
Consumer	$	24,558	$	25,604	$	49,415	$	50,896
Business(3)	7,483		7,626		14,977		15,335
Total reportable segments	$	32,041	$	33,230	$	64,392	$	66,231
Operating Income
Consumer	$	7,330	$	7,150	$	14,429	$	14,469
Business	533		675		1,084		1,348
Total reportable segments	$	7,863	$	7,825	$	15,513	$	15,817

(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) Referred to as Business Markets and SaaS in the first quarter of 2023.

(3) Service and other revenues included in our Business segment were approximately $6.6 billion and $6.7 billion for the three months ended June 30, 2023 and 2022, respectively, and $13.2 billion and $13.4 billion for the six months ended June 30, 2023 and 2022, respectively. Wireless equipment revenues included in our Business segment were $847 million and $966 million for the three months ended June 30, 2023 and 2022, respectively, and $1.7 billion and $1.9 billion for the six months ended June 30, 2023 and 2022, 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)	2023		2022		2023		2022
Consumer	$	2,886	$	2,895	$	5,775	$	5,806
Business	308		298		615		593
Total Fios revenue	$	3,194	$	3,193	$	6,390	$	6,399

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)	2023		2022		2023		2022
Consumer	$	15,762	$	15,236	$	31,361	$	30,453
Business	3,351		3,182		6,641		6,307
Total Wireless service revenue	$	19,113	$	18,418	$	38,002	$	36,760

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				Six Months Ended
	June 30,				June 30,
(dollars in millions)	2023		2022		2023		2022
Total reportable segment operating revenues	$	32,041	$	33,230	$	64,392	$	66,231
Corporate and other	621		623		1,238		1,241
Eliminations	(66)		(64)		(122)		(129)
Total consolidated operating revenues	$	32,596	$	33,789	$	65,508	$	67,343

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)	2023		2022		2023		2022
Total reportable segment operating income	$	7,863	$	7,825	$	15,513	$	15,817
Corporate and other	(344)		(190)		(348)		(214)
Severance charges	(237)		—		(237)		—
Other components of net periodic benefit charges (Note 8)	(62)		(83)		(124)		(255)
Total consolidated operating income	7,220		7,552		14,804		15,348
Equity in earnings (losses) of unconsolidated businesses	(33)		41		(24)		38
Other income (expense), net	210		49		324		(875)
Interest expense	(1,285)		(785)		(2,492)		(1,571)
Income Before Provision For Income Taxes	$	6,112	$	6,857	$	12,612	$	12,940

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