notes to consolidated financial statements

Note 13 (1 of 3)

Segment Information

Reportable Segments

We have two reportable segments, which we operate and manage as strategic business units and organize by products and services. We measure and evaluate our reportable segments based on segment operating income, consistent with the chief operating decision maker’s assessment of segment performance.

Corporate, eliminations and other includes unallocated corporate expenses, intersegment eliminations recorded in consolidation, the results of other businesses, such as our investments in unconsolidated businesses, pension and other employee benefit related costs, lease financing, as well as the historical results of divested operations and other adjustments and gains and losses that are not allocated in assessing segment performance due to their non-operational nature. Although such transactions are excluded from the business segment results, they are included in reported consolidated earnings. Gains and losses that are not individually significant are included in all 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 also includes those items of a non-recurring or non-operational nature. We exclude from segment results the effects of certain items that management does not consider in assessing segment performance, primarily because of their non-recurring or non-operational nature.

In order to comply with regulatory conditions related to the acquisition of Alltel in January 2009, Verizon Wireless divested overlapping properties in 105 operating markets in 24 states during the first half of 2010. In addition, on July 1, 2010, certain of Verizon’s local exchange business and related activities in 14 states were spun off (see Note 2). Accordingly, the historical Verizon Wireless and Wireline results for these operations have been reclassified to Corporate and Other to reflect comparable segment operating results.

We have adjusted prior-period consolidated and segment information, where applicable, to conform to current year presentation.

Our segments and their principal activities consist of the following:

Segment

Description

Verizon Wireless

Verizon Wireless’ communications products and services include wireless voice and data services and equipment sales, which are provided to consumer, business and government customers across the United States.

 

 

Wireline

Wireline’s communications products and services include voice, Internet access, broadband video and data, Internet protocol network services, network access, long distance and other services. We provide these products and services to consumers in the United States, as well as to carriers, businesses and government customers both in the United States and in over 150 other countries around the world.

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

(dollars in millions)

2011

 

Verizon
Wireless

 

Wireline

 

Total
Segments

 

External Operating Revenues

 

 

 

 

 

 

 

 

 

Retail service

$

56,601

 

$

 

$

56,601

 

Other service

 

2,497

 

 

 

 

2,497

 

Service revenue

 

59,098

 

 

 

 

59,098

 

 

 

 

 

 

 

 

 

 

 

Equipment

 

7,446

 

 

 

 

7,446

 

Other

 

3,517

 

 

 

 

3,517

 

 

 

 

 

 

 

 

 

 

 

Consumer retail

 

 

 

13,605

 

 

13,605

 

Small business

 

 

 

2,720

 

 

2,720

 

Mass Markets

 

 

 

16,325

 

 

16,325

 

 

 

 

 

 

 

 

 

 

 

Strategic services

 

 

 

7,607

 

 

7,607

 

Other

 

 

 

8,014

 

 

8,014

 

Global Enterprise

 

 

 

15,621

 

 

15,621

 

 

 

 

 

 

 

 

 

 

 

Global Wholesale

 

 

 

6,795

 

 

6,795

 

Other

 

 

 

704

 

 

704

 

Intersegment revenues

 

93

 

 

1,237

 

 

1,330

 

Total operating revenues

 

70,154

 

 

40,682

 

 

110,836

 

 

 

 

 

 

 

 

 

 

 

Cost of services and sales

 

24,086

 

 

22,158

 

 

46,244

 

Selling, general and administrative expense

 

19,579

 

 

9,107

 

 

28,686

 

Depreciation and amortization expense

 

7,962

 

 

8,458

 

 

16,420

 

Total operating expenses

 

51,627

 

 

39,723

 

 

91,350

 

Operating income

$

18,527

 

$

959

 

$

19,486

 

 

 

 

 

 

 

 

 

 

 

Assets

$

147,378

 

$

86,185

 

$

233,563

 

Plant, property and equipment, net

 

33,451

 

 

54,149

 

 

87,600

 

Capital expenditures

 

8,973

 

 

6,399

 

 

15,372