Document and Entity Information
| Document and Entity Information | |
| 3 Months Ended
Mar. 31, 2010 | |
| Document Type | 10-Q |
| Amendment Flag | false |
| Document Period End Date | 2010-03-31 |
| Document Fiscal Year Focus | 2,010 |
| Document Fiscal Period Focus | Q1 |
| Entity Registrant Name | VERIZON COMMUNICATIONS INC |
| Entity Central Index Key | 0000732712 |
| Current Fiscal Year End Date | --12-31 |
| Trading Symbol | vz |
| Entity Filer Category | Large Accelerated Filer |
| Entity Common Stock, Shares Outstanding | 2,826,732,438 |
Condensed Consolidated Statemen
| Condensed Consolidated Statements of Income (USD $) | ||
| In Millions, except Per Share data | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
| Operating Revenues | $26,913 | $26,591 |
| Operating Expenses | ||
| Cost of services and sales (exclusive of items shown below) | 10,717 | 10,308 |
| Selling, general and administrative expense | 7,724 | 7,561 |
| Depreciation and amortization expense | 4,121 | 4,028 |
| Total Operating Expenses | 22,562 | 21,897 |
| Operating Income | 4,351 | 4,694 |
| Equity in earnings of unconsolidated businesses | 133 | 128 |
| Other income and (expense), net | 45 | 53 |
| Interest expense | (680) | (925) |
| Income Before Provision For Income Taxes | 3,849 | 3,950 |
| Provision for income taxes | (1,565) | (740) |
| Net Income | 2,284 | 3,210 |
| Net income attributable to noncontrolling interest | 1,875 | 1,565 |
| Net income attributable to Verizon | 409 | 1,645 |
| Net Income | $2,284 | $3,210 |
| Basic Earnings Per Common Share | ||
| Net income attributable to Verizon | 0.14 | 0.58 |
| Weighted-average shares outstanding (in millions) | 2,836 | 2,841 |
| Diluted Earnings Per Common Share | ||
| Net income attributable to Verizon | 0.14 | 0.58 |
| Weighted-average shares outstanding (in millions) | 2,837 | 2,841 |
| Dividends declared per common share | 0.475 | 0.46 |
Condensed Consolidated Balance
| Condensed Consolidated Balance Sheets (USD $) | ||
| In Millions | Mar. 31, 2010
| Dec. 31, 2009
|
| Assets | ||
| Cash and cash equivalents | $3,037 | $2,009 |
| Short-term investments | 520 | 490 |
| Accounts receivable, net of allowances of $995 and $976 | 11,969 | 12,573 |
| Inventories | 1,113 | 1,426 |
| Prepaid expenses and other | 5,766 | 5,247 |
| Total current assets | 22,405 | 21,745 |
| Plant, property and equipment | 231,771 | 229,381 |
| Less accumulated depreciation | 139,937 | 137,052 |
| Plant, property and equipment, net | 91,834 | 92,329 |
| Investments in unconsolidated businesses | 3,685 | 3,535 |
| Wireless licenses | 72,256 | 72,067 |
| Goodwill | 22,472 | 22,472 |
| Other intangible assets, net | 6,510 | 6,764 |
| Other assets | 8,185 | 8,339 |
| Total assets | 227,347 | 227,251 |
| Liabilities and Equity | ||
| Debt maturing within one year | 7,129 | 7,205 |
| Accounts payable and accrued liabilities | 14,569 | 15,223 |
| Other | 6,365 | 6,708 |
| Total current liabilities | 28,063 | 29,136 |
| Long-term debt | 54,424 | 55,051 |
| Employee benefit obligations | 31,770 | 32,622 |
| Deferred income taxes | 21,665 | 19,310 |
| Other liabilities | 6,773 | 6,765 |
| Equity | ||
| Series preferred stock ($.10 par value; none issued) | 0 | 0 |
| Common stock ($.10 par value; 2,967,610,119 shares issued in both periods) | 297 | 297 |
| Contributed capital | 40,108 | 40,108 |
| Reinvested earnings | 16,658 | 17,592 |
| Accumulated other comprehensive loss | (11,442) | (11,479) |
| Common stock in treasury, at cost | (5,277) | (5,000) |
| Deferred compensation - employee stock ownership plans and other | 118 | 88 |
| Noncontrolling interest | 44,190 | 42,761 |
| Total equity | 84,652 | 84,367 |
| Total liabilities and equity | $227,347 | $227,251 |
1_Condensed Consolidated Balanc
| Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | ||
| In Millions, except Share data | Mar. 31, 2010
| Dec. 31, 2009
|
| Accounts receivable, allowances | $995 | $976 |
| Series preferred stock, par value | 0.1 | 0.1 |
| Series preferred stock, shares issued | 0 | 0 |
| Common stock, par value | 0.1 | 0.1 |
| Common stock, shares issued | 2,967,610,119 | 2,967,610,119 |
2_Condensed Consolidated Statem
| Condensed Consolidated Statements of Cash Flows (USD $) | ||
| In Millions | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
| Cash Flows from Operating Activities | ||
| Net Income | $2,284 | $3,210 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization expense | 4,121 | 4,028 |
| Employee retirement benefits | 667 | 502 |
| Deferred income taxes | 2,389 | 604 |
| Provision for uncollectible accounts | 371 | 358 |
| Equity in earnings of unconsolidated businesses, net of dividends received | (120) | (117) |
| Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses | (1,043) | (393) |
| Other, net | (1,552) | (1,570) |
| Net cash provided by operating activities | 7,117 | 6,622 |
| Cash Flows from Investing Activities | ||
| Capital expenditures (including capitalized software) | (3,456) | (3,707) |
| Acquisitions of licenses, investments and businesses, net of cash acquired | (274) | (5,118) |
| Net change in short-term investments | (40) | 80 |
| Other, net | 114 | (14) |
| Net cash used in investing activities | (3,656) | (8,759) |
| Cash Flows from Financing Activities | ||
| Proceeds from long-term borrowings | 0 | 7,052 |
| Repayments of long-term borrowings and capital lease obligations | (519) | (16,865) |
| Increase (decrease) in short-term obligations, excluding current maturities | (97) | 7,908 |
| Dividends paid | (1,347) | (1,307) |
| Other, net | (470) | (454) |
| Net cash used in financing activities | (2,433) | (3,666) |
| Increase (decrease) in cash and cash equivalents | 1,028 | (5,803) |
| Cash and cash equivalents, beginning of period | 2,009 | 9,782 |
| Cash and cash equivalents, end of period | $3,037 | $3,979 |
Basis of Presentation
| Basis of Presentation | |
| 3 Months Ended
Mar. 31, 2010 | |
| Basis of Presentation | 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared based upon Securities and Exchange Commission (SEC) rules that permit reduced disclosure for interim periods. For a more complete discussion of significant accounting policies and certain other information, you should refer to the financial statements included in the Verizon Communications Inc. (Verizon or the Company) Annual Report on Form 10-K for the year ended December 31, 2009. These financial statements reflect all adjustments that are necessary for a fair presentation of results of operations and financial condition for the interim periods shown including normal recurring accruals and other items. The results for the interim periods are not necessarily indicative of results for the full year. We have reclassified prior year amounts to conform to the current year presentation. Recently Adopted Accounting Standards In January 2010, we adopted the accounting standard regarding consolidation accounting for variable interest entities. This standard requires an enterprise to perform an analysis to determine whether the entitys variable interest or interests give it a controlling interest in a variable interest entity. The adoption of this accounting standard update did not have a material impact on our condensed consolidated financial statements. In January 2010, we adopted the accounting standard update regarding fair value measurements and disclosures, which requires additional disclosures regarding assets and liabilities measured at fair value. The adoption of this accounting standard update did not have a material impact on our condensed consolidated financial statements. Recent Accounting Standards In September 2009, the accounting standard update regarding revenue recognition for multiple deliverable arrangements was issued. This update requires the use of the relative selling price method when allocating revenue in these types of arrangements. This method allows a vendor to use its best estimate of selling price if neither vendor specific objective evidence nor third party evidence of selling price exists when evaluating multiple deliverable arrangements. This standard update is effective January 1, 2011 and may be adopted prospectively for revenue arrangements entered into or materially modified after the date of adoption or retrospectively for all revenue arrangements for all periods presented. We are currently evaluating the impact that this standard update will have on our consolidated financial statements. In September 2009, the accounting standard update regarding revenue recognition for arrangements that include software elements was issued. This update requires tangible products that contain software and non-software elements that work together to deliver the products essential functionality to be evaluated under the accounting standard regarding multiple deliverable arrangements. This standard update is effective January 1, 2011 and may be adopted prospectively for revenue arrangements entered into or materially modified after the date of adoption or re |
Dispositions and Other
| Dispositions and Other | |
| 3 Months Ended
Mar. 31, 2010 | |
| Dispositions and Other | 2. Dispositions and Other Telephone Access Line Spin-off On May 13, 2009, we announced plans to spin off a newly formed subsidiary of Verizon (Spinco) to our stockholders. Spinco will hold defined assets and liabilities of the local exchange business and related landline activities of Verizon in Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia and Wisconsin, and in portions of California bordering Arizona, Nevada and Oregon, including Internet access and long distance services and broadband video provided to designated customers in those areas. Immediately following the spin-off, Spinco plans to merge with Frontier Communications Corporation (Frontier) pursuant to a definitive agreement with Frontier, and Frontier will be the surviving corporation. The transactions do not involve any assets or liabilities of Verizon Wireless. The merger will result in Frontier acquiring approximately 4 million access lines and certain related businesses from Verizon, which collectively generated annual revenues of approximately $4 billion for Verizons Wireline segment during 2009. Depending on the trading prices of Frontier common stock prior to the closing of the merger, Verizon stockholders will collectively own between approximately 66% and 71% of Frontiers outstanding equity immediately following the closing of the merger, and Frontier stockholders will collectively own between approximately 34% and 29% of Frontiers outstanding equity immediately following the closing of the merger (in each case, before any closing adjustments). The actual number of shares of common stock to be issued by Frontier in the merger will be calculated based upon several factors, including the average trading price of Frontier common stock during a pre-closing measuring period (subject to a collar, which is a ceiling and floor on the trading price) and other closing adjustments. Verizon will not own any shares of Frontier after the merger. Both the spin-off and merger are expected to qualify as tax-free transactions, except to the extent that cash is paid to Verizon stockholders in lieu of fractional shares. In connection with the spin-off, Verizon expects to receive approximately $3.3 billion in value through a combination of cash payments to Verizon and a reduction in Verizons consolidated indebtedness. In the merger, Verizon stockholders are expected to receive approximately $5.3 billion of Frontier common stock, assuming the average trading price of Frontier common stock during the pre-closing measuring period is within the collar and no closing adjustments. On April 12, 2010, Spinco completed a financing of $3.2 billion in principal amount of notes. The gross proceeds of the offering were deposited into an escrow account. Spinco intends to use the net proceeds from the offering to fund the special cash payment to Verizon in connection with the spin-off of Spinco to Verizons shareholders and the subsequent merger of Spinco with and into Frontier. The net proceeds from the offering are sufficient to fund the entire special cash payment, which is one of the |
Wireless Licenses, Goodwill and
| Wireless Licenses, Goodwill and Other Intangible Assets | |
| 3 Months Ended
Mar. 31, 2010 | |
| Wireless Licenses, Goodwill and Other Intangible Assets | 3. Wireless Licenses, Goodwill and Other Intangible Assets Wireless Licenses Changes in the carrying amount of Wireless licenses are as follows: (dollars in millions) Balance at December31, 2009 $72,067 Capitalized interest on wireless licenses 182 Reclassifications, adjustments and other 7 Balance at March31, 2010 $72,256 As of March 31, 2010, and December 31, 2009, $12.1 billion and $12.2 billion, respectively, of wireless licenses were under development for commercial service for which we are capitalizing interest costs. Goodwill There were no changes in the carrying amount of goodwill during the three months ended March 31, 2010. Other Intangible Assets The following table displays the composition of Other intangible assets: At March31, 2010 At December31, 2009 (dollars in millions) GrossAmount AccumulatedAmortization NetAmount GrossAmount AccumulatedAmortization NetAmount Other intangible assets: Customer lists (6 to 8 years) $3,124 $(1,142) $1,982 $3,134 $(1,012) $2,122 Non-network internal-use software (2 to 7 years) 8,159 (4,141) 4,018 8,455 (4,346) 4,109 Other (1 to 25 years) 884 (374) 510 865 (332) 533 Total $12,167 $(5,657) $6,510 $12,454 $(5,690) $6,764 The amortization expense for Other intangible assets was as follows: Three Months Ended March31, (dollarsinmillions) 2010 $457 2009 475 Estimated annual amortization expense for Other intangible assets is as follows: Years (dollarsinmillions) 2010 $1,398 2011 1,527 2012 1,235 2013 998 2014 614 |
Debt
| Debt | |
| 3 Months Ended
Mar. 31, 2010 | |
| Debt | 4. Debt The table that follows presents changes during the three months ended March 31, 2010 related to Debt maturing within one year and Long-term debt. (dollars in millions) Debt MaturingwithinOneYear Long-termDebt Total Balance at January1, 2010 $7,205 $55,051 $62,256 Repayments of long-term borrowings and capital leases obligations (519 ) (519 ) Decrease in short-term obligations, excluding current maturities (97 ) (97 ) Reclassifications of long-term debt 500 (500 ) Other 40 (127 ) (87 ) Balance at March31, 2010 $7,129 $54,424 $61,553 During the first quarter of 2010, $0.3 billion of 6.125% Verizon New York Inc. and $0.2 billion of 6.375% Verizon North Inc. debentures matured and were repaid. Verizon Wireless On April 16, 2010, Verizon Wireless repaid $0.8 billion of borrowings under a three-year term loan facility, reducing the outstanding borrowings under this facility to approximately $3.2 billion. Guarantees We guarantee the debt obligations of GTE Corporation (but not the debt of its subsidiary or affiliate companies) that were issued and outstanding prior to July 1, 2003. As of March 31, 2010, $1.7 billion principal amount of these obligations remain outstanding. Debt Covenants We and our consolidated subsidiaries are in compliance with all of our debt covenants. Credit Facility On April 14, 2010, we terminated all commitments under our previous $5.3 billion 364-day credit facility with a syndicate of lenders and entered into a new $6.2 billion three-year credit facility with a group of major financial institutions. As of March 31, 2010, the unused borrowing capacity under the 364-day credit facility was approximately $5.2 billion. Approximately $0.1 billion of stand-by letters of credit are outstanding under the new credit facility. |
Fair Value Measurements
| Fair Value Measurements | |
| 3 Months Ended
Mar. 31, 2010 | |
| Fair Value Measurements | 5. Fair Value Measurements The following table presents the balances of assets measured at fair value on a recurring basis as of March 31, 2010: (dollars in millions) Asset Category Level 1(1) Level 2(2) Level 3(3) Total Short-term investments: Equity securities $248 $ $ $248 Fixed income securities 17 255 272 Investments in unconsolidated businesses: Equity securities 263 263 Fixed income securities 194 194 Other Assets: Fixed income securities 766 766 Derivative contracts: Interest rate swaps 230 230 Cross currency swaps 170 170 Total $722 $1,421 $ $2,143 (1) quoted prices in active markets for identical assets or liabilities (2) observable inputs other than quoted prices in active markets for identical assets and liabilities (3) no observable pricing inputs in the market Equity securities consist of investments in common stock of domestic and international corporations in a variety of industry sectors and are generally measured using quoted prices in active markets and are classified as Level 1. Fixed income securities consist primarily of investments in U.S. Treasuries and agencies, as well as municipal bonds. We use quoted prices in active markets for our U.S. Treasury securities, and therefore these securities are classified as Level 1. For all other fixed income securities that do not have quoted prices in active markets, we use alternative matrix pricing as a practical expedient resulting in these debt securities being classified as Level 2. Derivative contracts primarily include interest rate swaps and cross currency swaps. Derivative contracts are valued using models based on readily observable market parameters for all substantial terms of our derivative contracts and thus are classified within Level 2. We use mid-market pricing for fair value measurements of our derivative instruments. We recognize transfers of assets between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers of assets within the fair value hierarchy during the three months ended March 31, 2010. Fair Value of Short-term and Long-term Debt The fair value of our short-term and long-term debt, excluding capital leases, is determined based on market quotes for similar terms and maturities or future cash flows discounted at current rates. The fair value of our short-term and long-term debt, excluding capital leases, was as follows: (dollars in millions) At March31, 2010 At December31, 2009 CarryingAmount FairValue CarryingAmount FairValue Short- and long-term debt, excluding capital leases $61,180 $66,942 $61,859 $67,359 Derivative Instruments We have entered into deri |
Stock-Based Compensation
| Stock-Based Compensation | |
| 3 Months Ended
Mar. 31, 2010 | |
| Stock-Based Compensation | 6. Stock-Based Compensation Verizon Communications Long-Term Incentive Plan The 2009 Verizon Communications Inc. Long-Term Incentive Plan (the Plan) permits the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance stock units and other awards. The maximum number of shares available for awards from the Plan is 115 million shares. Restricted Stock Units The Plan provides for grants of Restricted Stock Units (RSUs) that generally vest at the end of the third year after the grant. The RSUs outstanding at January 1, 2010 are classified as liability awards because the RSUs will be paid in cash upon vesting. The RSU award liability is measured at its fair value at the end of each reporting period and, therefore, will fluctuate based on the performance of Verizon common stock. The RSUs granted during the first quarter of 2010 are classified as equity awards because these RSUs will be paid in Verizon common stock upon vesting. Compensation expense for RSUs classified as equity awards is measured based on the market price of Verizon common stock at the date of grant and is recognized over the vesting period. Dividend equivalent units are also paid to participants at the time the RSU award is paid, and in the same proportion as the RSU award. The following table summarizes Verizons Restricted Stock Unit activity: (shares in thousands) RestrictedStockUnits Weighted-AverageGrant-Date Fair Value Outstanding, beginning of year 19,443 $35.50 Granted 6,082 28.99 Payments (6,737 ) 38.00 Cancelled/Forfeited (26 ) 34.52 Outstanding, March31, 2010 18,762 32.49 Performance Stock Units The Plan also provides for grants of Performance Stock Units (PSUs) that generally vest at the end of the third year after the grant. As defined by the Plan, the Human Resources Committee of the Board of Directors determines the number of PSUs a participant earns based on the extent to which the corresponding goals have been achieved over the three-year performance cycle. All payments are subject to approval by the Human Resources Committee. The PSUs are classified as liability awards because the PSU awards are paid in cash upon vesting. The PSU award liability is measured at its fair value at the end of each reporting period and, therefore, will fluctuate based on the price of Verizon common stock as well as performance relative to the targets. Dividend equivalent units are also paid to participants at the time that the PSU award is determined and paid, and in the same proportion as the PSU award. The following table summarizes Verizons Performance Stock Unit activity: (shares in thousands) PerformanceStockUnits Weighted-AverageGrant-Date Fair Value Outstanding, beginning of year 29,895 $35.52 Granted 13,735 31.62 Payments (14,364 ) 38.00 Cancelled/Forfeited (114 ) 36.82 |
Employee Benefits
| Employee Benefits | |
| 3 Months Ended
Mar. 31, 2010 | |
| Employee Benefits | 7. Employee Benefits We maintain non-contributory defined benefit pension plans for many of our employees. In addition, we maintain postretirement health care and life insurance plans for our retirees and their dependents, which are both contributory and non-contributory, and include a limit on the Companys share of cost for certain recent and future retirees. Net Periodic Benefit (Income) Cost The following table summarizes the benefit (income) cost related to our pension and postretirement health care and life insurance plans: (dollars in millions) Pension HealthCareandLife Three Months Ended March31, 2010 2009 2010 2009 Service cost $91 $96 $78 $78 Interest cost 453 481 412 441 Expected return on plan assets (653 ) (734 ) (76 ) (76) Amortization of prior service cost 28 28 94 100 Actuarial loss, net 60 28 44 60 Net periodic benefit (income) cost (21 ) (101 ) 552 603 Settlement loss 136 Total (income) cost $115 $(101 ) $552 $603 Severance, Pension and Benefit Charges During the three months ended March 31, 2010, we recorded non-cash pension settlement losses of $136 million related to employees that received lump-sum distributions, primarily resulting from our previously announced separation plans in which prescribed payment thresholds were reached. Employer Contributions During the three months ended March 31, 2010, we contributed $1 million to our qualified pension trusts, $50 million to our nonqualified pension plans and $446 million to our other postretirement benefit plans. The anticipated qualified pension trust contributions for 2010 disclosed in Verizons Annual Report on Form 10-K for the year ended December 31, 2009 have not changed. Our estimate of the amount and timing of required qualified pension trust contributions for 2010 is based on current proposed Internal Revenue Service regulations under the Pension Protection Act of 2006. Severance Benefits During the three months ended March 31, 2010, we paid severance benefits of $164 million. At March 31, 2010, we had a remaining severance liability of $1,500 million, a portion of which includes future contractual payments to employees separated as of March 31, 2010. Medicare Part D Subsidy Under the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, both of which became law in March 2010 (collectively the Health Care Act), beginning in 2013, Verizon and other companies that receive a subsidy under Medicare Part D to provide retiree prescription drug coverage will no longer receive a federal income tax deduction for the expenses incurred in connection with providing the subsidized coverage to the extent of the subsidy received. Because future anticipated retiree prescrip |
Equity and Comprehensive Income
| Equity and Comprehensive Income | |
| 3 Months Ended
Mar. 31, 2010 | |
| Equity and Comprehensive Income | 8. Equity and Comprehensive Income Equity Changes in the components of Total equity were as follows: Three Months Ended March31, 2010 (dollars in millions) Attributableto Verizon NoncontrollingInterest TotalEquity Balance at beginning of period $41,606 $42,761 $84,367 Net income 409 1,875 2,284 Other comprehensive income 37 4 41 Comprehensive income 446 1,879 2,325 Dividends declared (1,343 ) (1,343) Common stock in treasury (Note 5) (277 ) (277) Distributions and other 30 (450 ) (420) Balance at end of period $40,462 $44,190 $84,652 Noncontrolling interests included in our condensed consolidated financial statements primarily include Vodafone Group Plc.s 45% ownership interest in our Verizon Wireless joint venture. Comprehensive Income Comprehensive income (loss) consists of net income and other gains and losses affecting equity that, under generally accepted accounting principles, are excluded from net income. Significant changes in the components of Other comprehensive income (loss), net of income tax expense (benefit), are described below. ThreeMonthsEndedMarch31, (dollars in millions) 2010 2009 Net income $2,284 $3,210 Other Comprehensive Income (Loss), Net of Taxes Foreign currency translation adjustments (194 ) (158) Net unrealized gain on cash flow hedges 3 38 Unrealized gain (loss) on marketable securities 16 (15) Defined benefit pension and postretirement plans 212 120 Other comprehensive income (loss) attributable to Verizon 37 (15) Other comprehensive income attributable to noncontrolling interest 4 36 Total Comprehensive Income $2,325 $3,231 Comprehensive income attributable to noncontrolling interest $1,879 $1,601 Comprehensive income attributable to Verizon 446 1,630 Total Comprehensive Income $2,325 $3,231 Other comprehensive income attributable to noncontrolling interest primarily reflects activity related to the cross currency swaps (see Note 5). The components of Accumulated other comprehensive loss were as follows: (dollars in millions) AtMarch31,2010 AtDecember31,2009 Foreign currency translation adjustments $820 $1,014 Net unrealized gain on cash flow hedges 40 37 Unrealized gain on marketable securities 66 50 Defined benefit pension and postretirement plans (12,368 ) (12,580) Accumulated Other Comprehensive Loss $(11,442 ) $(11,479) Foreign Currency Translation Adjustments The change in Foreign currency |
Segment Information
| Segment Information | |
| 3 Months Ended
Mar. 31, 2010 | |
| Segment Information | 9. 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 makers 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, lease financing, 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 makers assessment of segment performance. Our segments and their principal activities consist of the following: Segment Description DomesticWireless Domestic Wirelesss products and services include wireless voice and data services and equipment sales across the U.S. Wireline Wirelines communications products and services include voice, Internet access, broadband video and data, next generation Internet protocol (IP) network services, network access, long distance and other services. We provide these products and services to consumers in the U.S., as well as to carriers, businesses and government customers both in the U.S. and in 150 other countries around the world. The following table provides operating financial information for our two reportable segments: ThreeMonthsEndedMarch31, (dollars in millions) 2010 2009 External Operating Revenues Domestic Wireless Service revenue $13,825 $13,057 Equipment and other 1,932 2,039 Total Domestic Wireless 15,757 15,096 Wireline Mass Markets 4,582 4,586 Global Enterprise 3,993 4,049 Global Wholesale 2,011 2,113 Other 292 491 Total Wireline 10,878 11,239 Total segments 26,635 26,335 Corporate, eliminations and other 278 256 Total consolidated reported $26,913 $26,591 Intersegment Revenues Domestic Wireless $26 $26 Wireline 354 328 Total segments 380 354 Corporate, eliminations and other (380 ) (354) Total consolidated reported $ $ Total Operating Revenues Domestic Wireless $15,783 $15,122 Wireline 11,232 11,567 Total segments 27,015 26,689 Corporate, eliminations and other (102 |
Commitments and Contingencies
| Commitments and Contingencies | |
| 3 Months Ended
Mar. 31, 2010 | |
| Commitments and Contingencies | 10. Commitments and Contingencies Several state and federal regulatory proceedings may require our telephone operations to pay penalties or to refund to customers a portion of the revenues collected in the current and prior periods. There are also various legal actions pending to which we are a party and claims which, if asserted, may lead to other legal actions. We have established reserves for specific liabilities in connection with regulatory and legal actions, including environmental matters that we currently deem to be probable and estimable. We do not expect that the ultimate resolution of pending regulatory and legal matters in future periods, including the Hicksville matter described below, will have a material effect on our financial condition, but it could have a material effect on our results of operations for a given reporting period. During 2003, under a government-approved plan, remediation commenced at the site of a former Sylvania facility in Hicksville, New York that processed nuclear fuel rods in the 1950s and 1960s. Remediation beyond original expectations proved to be necessary and a reassessment of the anticipated remediation costs was conducted. A reassessment of costs related to remediation efforts at several other former facilities was also undertaken. In September 2005, the Army Corps of Engineers (ACE) accepted the Hicksville site into the Formerly Utilized Sites Remedial Action Program. This may result in the ACE performing some or all of the remediation effort for the Hicksville site with a corresponding decrease in costs to Verizon. To the extent that the ACE assumes responsibility for remedial work at the Hicksville site, an adjustment to a reserve previously established for the remediation may be made. Adjustments to the reserve may also be made based upon actual conditions discovered during the remediation at this or any other site requiring remediation. In connection with the execution of agreements for the sales of businesses and investments, Verizon ordinarily provides representations and warranties to the purchasers pertaining to a variety of nonfinancial matters, such as ownership of the securities being sold, as well as indemnity from certain financial losses. Subsequent to the sale of Verizon Information Services Canada in 2004, we continue to provide a guarantee to publish directories, which was issued when the directory business was purchased in 2001 and had a 30-year term (before extensions). The preexisting guarantee continues, without modification, despite the subsequent sale of Verizon Information Services Canada and the spin-off of our domestic print and Internet yellow pages directories business. The possible financial impact of the guarantee, which is not expected to be adverse, cannot be reasonably estimated since a variety of the potential outcomes available under the guarantee result in costs and revenues or benefits that may offset each other. In addition, performance under the guarantee is not likely. |