Verizon Wireless 2012 Annual Report Download - page 79

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
77
NOTE 13
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 mea-
sure 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 seg-
ment 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 seg-
ment performance.
The reconciliation of segment operating revenues and expenses to con-
solidated 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 proper-
ties 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 voice, data and video communications products
and enhanced services include local and long distance voice,
broadband Internet access and video, corporate networking
solutions, data center and cloud services and security and
managed network 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)
2012 Verizon Wireless Wireline Total Segments
External Operating Revenues
Retail service $ 61,383 $ – $ 61,383
Other service 2,290 – 2,290
Service revenue 63,673 – 63,673
Equipment 8,010 – 8,010
Other 4,096 – 4,096
Consumer retail – 14,043 14,043
Small business – 2,648 2,648
Mass Markets – 16,691 16,691
Strategic services – 8,052 8,052
Core – 7,240 7,240
Global Enterprise – 15,292 15,292
Global Wholesale – 6,177 6,177
Other – 508 508
Intersegment revenues 89 1,112 1,201
Total operating revenues 75,868 39,780 115,648
Cost of services and sales 24,490 22,413 46,903
Selling, general and administrative expense 21,650 8,883 30,533
Depreciation and amortization expense 7,960 8,424 16,384
Total operating expenses 54,100 39,720 93,820
Operating income $ 21,768 $ 60 $ 21,828
Assets $ 142,485 $ 84,815 $ 227,300
Plant, property and equipment, net 34,545 52,911 87,456
Capital expenditures 8,857 6,342 15,199