10.	Segment Information

 

Reportable Segments

We have two reportable segments, Wireless and Wireline, which we operate and manage as strategic business units and organize by products and services, and customer groups, respectively. 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
Wireless		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 voice, data and video communications products and enhanced services include broadband video and data, corporate networking solutions, data center and cloud services, security and managed network services and local and long distance voice 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 around the world.

Corporate and other includes the results of our media, including AOL, telematics and other businesses, investments in unconsolidated businesses, unallocated corporate expenses, pension and other employee benefit related costs and lease financing. Corporate and other also includes 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.

On April 1, 2016, we completed the sale (Access Line Sale) of our local exchange business and related landline activities in California, Florida and Texas, including Fios Internet and video customers, switched and special access lines and high-speed Internet service and long distance voice accounts in these three states to Frontier Communications Corporation (Frontier). The transaction, which included the acquisition by Frontier of the equity interests of Verizon’s incumbent local exchange carriers (ILECs) in California, Florida and Texas, did not involve any assets or liabilities of Verizon Wireless. The results of operations for this divestiture is included within Corporate and other for all periods presented to reflect comparable segment operating results consistent with the information regularly reviewed by our chief operating decision maker.

In addition, Corporate and other includes the results of our telematics businesses for all periods presented, which were reclassified from our Wireline segment effective April 1, 2016. The impact of this reclassification was not material to our condensed consolidated financial statements or our segment results of operations.

During the first quarter of 2017, Verizon reorganized the customer groups within its Wireline segment. Previously, the customer groups in the Wireline segment consisted of Mass Markets (which included Consumer Retail and Small Business subgroups), Global Enterprise and Global Wholesale. Pursuant to the reorganization, there are now four customer groups within the Wireline segment: Consumer Markets, which includes the customers previously included in Consumer Retail; Enterprise Solutions, which includes the large business customers, including multinational corporations, and federal government customers previously included in Global Enterprise; Partner Solutions, which includes the customers previously included in Global Wholesale; and Business Markets, a new customer group, which includes U.S.-based small business customers previously included in Mass Markets and U.S.-based medium business customers, state and local government customers and educational institutions previously included in Global Enterprise.

The reconciliation of segment operating revenues and expenses to consolidated operating revenues and expenses below also includes those items of a 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-operational nature.

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

 

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

 

		Three Months Ended March 31,
(dollars in millions)		2017				2016
External Operating Revenues
Wireless
Service		$	15,730			$	16,769
Equipment			3,764				3,954
Other			1,282				1,196
Total Wireless			20,776				21,919
Wireline
Consumer Markets			3,201				3,180
Enterprise Solutions			2,466				2,501
Partner Solutions			1,016				1,053
Business Markets			890				870
Other			62				82
Total Wireline			7,635				7,686
Total reportable segments		$	28,411			$	29,605
Intersegment Revenues
Wireless		$	102			$	85
Wireline			241				237
Total reportable segments		$	343			$	322
Total Operating Revenues
Wireless		$	20,878			$	22,004
Wireline			7,876				7,923
Total reportable segments		$	28,754			$	29,927
Operating Income (Loss)
Wireless		$	7,076			$	7,880
Wireline			293				(67	)
Total reportable segments		$	7,369			$	7,813

 

(dollars in millions)		At March 31, 2017				At December 31, 2016
Assets
Wireless		$	215,206			$	211,345
Wireline			68,376				66,679
Total reportable segments			283,582				278,024
Corporate and other			221,012				213,787
Eliminations			(257,863	)			(247,631	)
Total consolidated – reported		$	246,731			$	244,180

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

 

		Three Months Ended March 31,
(dollars in millions)		2017				2016
Total reportable segment operating revenues		$	28,754			$	29,927
Corporate and other			1,460				1,309
Eliminations			(400	)			(345	)
Impact of divested operations			–				1,280
Total consolidated operating revenues		$	29,814			$	32,171

Fios revenues are included within our Wireline segment and amounted to approximately $2.9 billion and $2.8 billion, respectively for the three months ended March 31, 2017 and 2016.

A reconciliation of the total of the reportable segments’ operating income to consolidated income before provision for income taxes is as follows:

 

		Three Months Ended March 31,
(dollars in millions)		2017				2016
Total reportable segment operating income		$	7,369			$	7,813
Corporate and other			(314	)			(509	)
Severance, pension and benefit charges (Note 8)			–				(165	)
Gain on spectrum license transaction (Note 2)			126				142
Impact of divested operations			–				661
Total consolidated operating income			7,181				7,942
Equity in losses of unconsolidated businesses			(21	)			(20	)
Other income and (expense), net			(846	)			32
Interest expense			(1,132	)			(1,188	)
Income Before Provision For Income Taxes		$	5,182			$	6,766

No single customer accounted for more than 10% of our total operating revenues during the three months ended March 31, 2017 and 2016.