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1、2023/7/23 17:42vz-20230331https:/ of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-Q(Mark one)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended March 31,2023ORTRANSITION REPORT PURSUANT TO SECTION
2、 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to Commission file number:1-8606Verizon Communications Inc.(Exact name of registrant as specified in its charter)Delaware 23-2259884(State or other jurisdictionof incorporation or organization)(I.R.S.Employer Identifica
3、tion No.)1095 Avenue of the Americas10036New York,New York(Address of principal executive offices)(Zip Code)Registrants telephone number,including area code:(212)395-1000Securities registered pursuant to Section 12(b)of the Act:2023/7/23 17:42vz-20230331https:/ of Each ClassTrading Symbol(s)Name of
4、Each Exchange on Which RegisteredCommon Stock,par value$0.10VZNew York Stock ExchangeCommon Stock,par value$0.10VZThe Nasdaq Global Select Market1.625%Notes due 2024VZ 24BNew York Stock Exchange4.073%Notes due 2024VZ 24CNew York Stock Exchange0.875%Notes due 2025VZ 25New York Stock Exchange3.25%Note
5、s due 2026VZ 26New York Stock Exchange1.375%Notes due 2026VZ 26BNew York Stock Exchange0.875%Notes due 2027VZ 27ENew York Stock Exchange1.375%Notes due 2028VZ 28New York Stock Exchange1.125%Notes due 2028VZ 28ANew York Stock Exchange2.350%Fixed Rate Notes due 2028VZ 28CNew York Stock Exchange1.875%N
6、otes due 2029VZ 29BNew York Stock Exchange0.375%Notes due 2029VZ 29DNew York Stock Exchange1.250%Notes due 2030VZ 30New York Stock Exchange1.875%Notes due 2030VZ 30ANew York Stock Exchange4.250%Notes due 2030VZ 30DNew York Stock Exchange2.625%Notes due 2031VZ 31New York Stock Exchange2.500%Notes due
7、 2031VZ 31ANew York Stock Exchange3.000%Fixed Rate Notes due 2031VZ 31DNew York Stock Exchange0.875%Notes due 2032VZ 32New York Stock Exchange0.750%Notes due 2032VZ 32ANew York Stock Exchange1.300%Notes due 2033VZ 33BNew York Stock Exchange4.75%Notes due 2034VZ 34New York Stock Exchange2023/7/23 17:
8、42vz-20230331https:/ of ContentsSecurities registered pursuant to Section 12(b)of the Act(continued):Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered4.750%Notes due 2034VZ 34CNew York Stock Exchange3.125%Notes due 2035VZ 35New York Stock Exchange1.125%Notes due 2035VZ 35
9、ANew York Stock Exchange3.375%Notes due 2036VZ 36ANew York Stock Exchange2.875%Notes due 2038VZ 38BNew York Stock Exchange1.875%Notes due 2038VZ 38CNew York Stock Exchange1.500%Notes due 2039VZ 39CNew York Stock Exchange3.50%Fixed Rate Notes due 2039VZ 39DNew York Stock Exchange1.850%Notes due 2040V
10、Z 40New York Stock Exchange3.850%Fixed Rate Notes due 2041VZ 41CNew York Stock ExchangeIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the SecuritiesExchange Act of 1934 during the preceding 12 months(or for such shorter period that
11、 the registrant was required to file suchreports),and(2)has been subject to such filing requirements for the past 90 days.Yes NoIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submittedpursuant to Rule 405 of Regulation S-T(232.40
12、5 of this chapter)during the preceding 12 months(or for such shorter period thatthe registrant was required to submit such files).Yes NoIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smallerreporting company,or an emerging gr
13、owth company.See the definitions of large accelerated filer,accelerated filer,smallerreporting company,and emerging growth company in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth comp
14、any,indicate by check mark if the registrant has elected not to use the extended transition period forcomplying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in
15、Rule 12b-2 of the Exchange Act).Yes NoAt March 31,2023,4,203,991,483 shares of the registrants common stock were outstanding,after deducting 87,442,163 sharesheld in treasury.2023/7/23 17:42vz-20230331https:/ of ContentsTABLE OF CONTENTSItem No.PagePART I-FINANCIAL INFORMATIONItem 1.Financial Statem
16、ents(Unaudited)Condensed Consolidated Statements of Income4Three months ended March 31,2023 and 2022Condensed Consolidated Statements of Comprehensive Income5Three months ended March 31,2023 and 2022Condensed Consolidated Balance Sheets6At March 31,2023 and December 31,2022Condensed Consolidated Sta
17、tements of Cash Flows7Three months ended March 31,2023 and 2022Notes to Condensed Consolidated Financial Statements8Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations30Item 3.Quantitative and Qualitative Disclosures About Market Risk49Item 4.Controls and Proc
18、edures50PART II-OTHER INFORMATIONItem 1.Legal Proceedings50Item 1A.Risk Factors50Item 2.Unregistered Sales of Equity Securities and Use of Proceeds50Item 6.Exhibits51Signature52Certifications2023/7/23 17:42vz-20230331https:/ 17:42vz-20230331https:/ of ContentsPart I-Financial InformationItem 1.Finan
19、cial Statements(Unaudited)Condensed Consolidated Statements of IncomeVerizon Communications Inc.and SubsidiariesThree Months Ended March 31,(dollars in millions,except per share amounts)(unaudited)20232022Operating RevenuesService revenues and other$27,152$27,218 Wireless equipment revenues5,760 6,3
20、36 Total Operating Revenues32,912 33,554 Operating ExpensesCost of services(exclusive of items shown below)7,078 7,227 Cost of wireless equipment6,426 7,123 Selling,general and administrative expense7,506 7,172 Depreciation and amortization expense4,318 4,236 Total Operating Expenses25,328 25,758 Op
21、erating Income7,584 7,796 Equity in earnings(losses)of unconsolidated businesses9(3)Other income(expense),net114(924)Interest expense(1,207)(786)Income Before Provision For Income Taxes6,500 6,083 Provision for income taxes(1,482)(1,372)Net Income$5,018$4,711 Net income attributable to noncontrollin
22、g interests$109$131 Net income attributable to Verizon4,909 4,580 Net Income$5,018$4,711 Basic Earnings Per Common ShareNet income attributable to Verizon$1.17$1.09 Weighted-average shares outstanding(in millions)4,207 4,201 Diluted Earnings Per Common ShareNet income attributable to Verizon$1.17$1.
23、09 Weighted-average shares outstanding(in millions)4,211 4,202 See Notes to Condensed Consolidated Financial Statements42023/7/23 17:42vz-20230331https:/ of ContentsCondensed Consolidated Statements of Comprehensive IncomeVerizon Communications Inc.and Subsidiaries Three Months EndedMarch 31,(dollar
24、s in millions)(unaudited)20232022Net Income$5,018$4,711 Other Comprehensive Income(Loss),Net of Tax(Expense)BenefitForeign currency translation adjustments,net of tax of$3 and$(6)26(29)Unrealized gain on cash flow hedges,net of tax of$(7)and$(72)21 207 Unrealized loss on fair value hedges,net of tax
25、 of$103 and$0(302)Unrealized gain(loss)on marketable securities,net of tax of$(1)and$54(18)Defined benefit pension and postretirement plans,net of tax of$15 and$48(61)(139)Other comprehensive income(loss)attributable to Verizon(312)21 Total Comprehensive Income$4,706$4,732 Comprehensive income attri
26、butable to noncontrolling interests$109$131 Comprehensive income attributable to Verizon4,597 4,601 Total Comprehensive Income$4,706$4,732 See Notes to Condensed Consolidated Financial Statements52023/7/23 17:42vz-20230331https:/ of ContentsCondensed Consolidated Balance SheetsVerizon Communications
27、 Inc.and SubsidiariesAt March 31,At December 31,(dollars in millions,except per share amounts)(unaudited)20232022AssetsCurrent assetsCash and cash equivalents$2,234$2,605 Accounts receivable23,748 25,332 Less Allowance for credit losses892 826 Accounts receivable,net22,856 24,506 Inventories2,381 2,
28、388 Prepaid expenses and other8,251 8,358 Total current assets35,722 37,857 Property,plant and equipment310,519 307,689 Less Accumulated depreciation203,532 200,255 Property,plant and equipment,net106,987 107,434 Investments in unconsolidated businesses1,052 1,071 Wireless licenses150,485 149,796 Go
29、odwill28,674 28,671 Other intangible assets,net11,246 11,461 Operating lease right-of-use assets25,947 26,130 Other assets17,603 17,260 Total assets$377,716$379,680 Liabilities and EquityCurrent liabilitiesDebt maturing within one year$12,081$9,963 Accounts payable and accrued liabilities19,273 23,9
30、77 Current operating lease liabilities4,177 4,134 Other current liabilities12,237 12,097 Total current liabilities47,768 50,171 Long-term debt140,772 140,676 Employee benefit obligations12,750 12,974 Deferred income taxes43,667 43,441 Non-current operating lease liabilities21,303 21,558 Other liabil
31、ities17,237 18,397 Total long-term liabilities235,729 237,046 Commitments and Contingencies(Note 12)EquitySeries preferred stock($0.10 par value;250,000,000 shares authorized;none issued)Common stock($0.10 par value;6,250,000,000 shares authorized in each period;4,291,433,646 shares issued in each p
32、eriod)429 429 Additional paid in capital13,523 13,420 Retained earnings84,543 82,380 Accumulated other comprehensive loss(2,177)(1,865)Common stock in treasury,at cost(87,442,163 and 91,572,258 shares outstanding)(3,832)(4,013)Deferred compensation employee stock ownership plans(ESOPs)and other397 7
33、93 Noncontrolling interests1,336 1,319 Total equity94,219 92,463 Total liabilities and equity$377,716$379,680 See Notes to Condensed Consolidated Financial Statements62023/7/23 17:42vz-20230331https:/ 17:42vz-20230331https:/ of ContentsCondensed Consolidated Statements of Cash FlowsVerizon Communica
34、tions Inc.and SubsidiariesThree Months Ended March 31,(dollars in millions)(unaudited)20232022Cash Flows from Operating ActivitiesNet Income$5,018$4,711 Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization expense4,318 4,236 Employee retireme
35、nt benefits54(210)Deferred income taxes331 627 Provision for expected credit losses530 328 Equity in losses of unconsolidated businesses,net of dividends received10 7 Changes in current assets and liabilities,net of effects from acquisition/disposition ofbusinesses(774)(3,492)Other,net(1,198)614 Net
36、 cash provided by operating activities8,289 6,821 Cash Flows from Investing ActivitiesCapital expenditures(including capitalized software)(5,958)(5,821)Acquisitions of wireless licenses(598)(1,838)Collateral repayments(payments)related to derivative contracts,net367(277)Other,net79(59)Net cash used
37、in investing activities(6,110)(7,995)Cash Flows from Financing ActivitiesProceeds from long-term borrowings504 3,604 Proceeds from asset-backed long-term borrowings1,754 3,545 Net proceeds from short-term commercial paper342 3,791 Repayments of long-term borrowings and finance lease obligations(1,32
38、5)(6,556)Repayments of asset-backed long-term borrowings(931)(1,650)Dividends paid(2,744)(2,654)Other,net17 165 Net cash provided by(used in)financing activities(2,383)245 Decrease in cash,cash equivalents and restricted cash(204)(929)Cash,cash equivalents and restricted cash,beginning of period4,11
39、1 4,161 Cash,cash equivalents and restricted cash,end of period(Note 1)$3,907$3,232 See Notes to Condensed Consolidated Financial Statements72023/7/23 17:42vz-20230331https:/ of ContentsNotes to Condensed Consolidated Financial Statements(Unaudited)Verizon Communications Inc.and SubsidiariesNote 1.B
40、asis of PresentationVerizon Communications Inc.(the Company)is a holding company that,acting through its subsidiaries(together with the Company,collectively,Verizon),is one of the worlds leading providers of communications,technology,information and entertainment productsand services to consumers,bu
41、sinesses and government entities.With a presence around the world,we offer data,video and voiceservices and solutions on our networks and platforms that are designed to meet customers demand for mobility,reliable networkconnectivity,security and control.The accompanying unaudited condensed consolida
42、ted financial statements have been prepared in accordance with generallyaccepted accounting principles(GAAP)in the United States(U.S.)and based upon Securities and Exchange Commission rules thatpermit reduced disclosure for interim periods.For a more complete discussion of significant accounting pol
43、icies and certain otherinformation,you should refer to the financial statements included in the Companys Annual Report on Form 10-K for the year endedDecember 31,2022.These financial statements reflect all adjustments that are necessary for a fair presentation of results ofoperations and financial c
44、ondition for the interim periods shown,including normal recurring accruals and other items.The results forthe interim periods are not necessarily indicative of results for the full year.During the first quarter of 2023,Verizon reorganized the customer groups within its Business segment.See Note 10 f
45、or additionalinformation.Certain amounts have been reclassified to conform to the current periods presentation.Earnings Per Common ShareThere were a total of approximately 3.6 million outstanding dilutive securities,primarily consisting of performance stock units andrestricted stock units,included i
46、n the computation of diluted earnings per common share for the three months ended March 31,2023.There were a total of approximately 1.5 million outstanding dilutive securities,primarily consisting of restricted stock units,included in the computation of diluted earnings per common share for the thre
47、e months ended March 31,2022.Cash,Cash Equivalents and Restricted CashWe consider all highly liquid investments with an original maturity of 90 days or less when purchased to be cash equivalents.Cashequivalents are stated at cost,which approximates quoted market value and includes amounts held in mo
48、ney market funds.Cash collections on the receivables collateralizing our asset-backed debt securities are required at certain specified times to beplaced into segregated accounts.Deposits to the segregated accounts are considered restricted cash and are included in Prepaidexpenses and other and Othe
49、r assets in our condensed consolidated balance sheets.Cash,cash equivalents and restricted cash are included in the following line items in the condensed consolidated balance sheets:At March 31,At December 31,Increase/(Decrease)(dollars in millions)20232022Cash and cash equivalents$2,234$2,605$(371)
50、Restricted cash:Prepaid expenses and other1,509 1,343 166 Other assets164 163 1 Cash,cash equivalents and restricted cash$3,907$4,111$(204)Note 2.Revenues and Contract CostsWe earn revenue from contracts with customers,primarily through the provision of telecommunications and other services andthrou
51、gh the sale of wireless equipment.Revenue by CategoryWe have two reportable segments that we operate and manage as strategic business units,Consumer and Business.Revenue isdisaggregated by products and services within Consumer,and customer groups(Enterprise and Public Sector,Business Marketsand Soft
52、ware as a Service(SaaS),and Wholesale)within Business.See Note 10 for additional information on revenue by segment.Corporate and other primarily includes insurance captive revenues.We also earn revenues that are not accounted for under Accounting Standards Update(ASU)2014-09,Revenue from Contractswi
53、th Customers(Topic 606)from leasing arrangements(such as those for towers and equipment),captive reinsurance2023/7/23 17:42vz-20230331https:/ primarily related to wireless device insurance and the interest when equipment is sold to the customer by an82023/7/23 17:42vz-20230331https:/ of Contentsauth
54、orized agent under a device payment plan agreement.As allowed by the practical expedient within ASU 2016-02,Leases(Topic 842),we have elected to combine the lease and non-lease components for those arrangements of customerpremise equipment where we are the lessor as components accounted for under To
55、pic 606.During the three months endedMarch 31,2023 and March 31,2022,revenues from arrangements that were not accounted for under Topic 606 were approximately$749 million and$830 million,respectively.Remaining Performance ObligationsWhen allocating the total contract transaction price to identified
56、performance obligations,a portion of the total transaction price mayrelate to service performance obligations which were not satisfied or are partially satisfied as of the end of the reporting period.Below we disclose information relating to these unsatisfied performance obligations.We apply the pra
57、ctical expedient availableunder Topic 606 that provides the option to exclude the expected revenues arising from unsatisfied performance obligations relatedto contracts that have an original expected duration of one year or less.This situation primarily arises with respect to certain month-to-month
58、service contracts.At March 31,2023,month-to-month service contracts represented approximately 94%of our wirelesspostpaid contracts and approximately 92%of our wireline Consumer and Business Markets and SaaS contracts,compared toMarch 31,2022,for which month-to-month service contracts represented app
59、roximately 94%of our wireless postpaid contracts and88%of our wireline Consumer and our Business Markets and SaaS contracts.Additionally,certain contracts provide customers the option to purchase additional services.The fees related to these additionalservices are recognized when the customer exerci
60、ses the option(typically on a month-to-month basis).Contracts for wireless services,with or without promotional credits that require maintenance of service,are generally either month-to-month and cancellable at any time,or considered to contain terms ranging from greater than one month to up to thir
61、ty-six months(typically under a device payment plan),or contain terms ranging from greater than one month to up to twenty-four months(typicallyunder a fixed-term plan).Additionally,customers may incur charges based on usage or additional optional services purchased inconjunction with entering into a
62、 contract that can be cancelled at any time and therefore are not included in the transaction price.The transaction price allocated to service performance obligations,which are not satisfied or are partially satisfied as of the end ofthe reporting period,are generally related to contracts that are n
63、ot accounted for as month-to-month contracts.Our Consumer group customers also include traditional wholesale resellers that purchase and resell wireless service under theirown brands to their respective customers.Reseller arrangements generally include a stated contract term,which typically extendsl
64、onger than two years and,in some cases,include a periodic minimum revenue commitment over the contract term for whichrevenues will be recognized in future periods.Consumer customer contracts for wireline services are generally month-to-month;however,they may have a service term of twoyears or shorte
65、r than twelve months.Certain contracts with Business customers for wireline services extend into future periods,contain fixed monthly fees and usage-based fees,and can include annual commitments in each year of the contract orcommitments over the entire specified contract term;however,a significant
66、number of contracts for wireline services with ourBusiness customers have a contract term that is twelve months or less.Additionally,there are certain contracts with Business customers for wireline services that have a contractual minimum fee over thetotal contract term.We cannot predict the time pe
67、riod when revenue will be recognized related to those contracts;thus,they areexcluded from the time bands below.These contracts have varying terms spanning over approximately nine years ending in April2032 and have aggregate contract minimum payments totaling$1.4 billion.At March 31,2023,the transac
68、tion price related to unsatisfied performance obligations that are expected to be recognized for theremainder of 2023,2024 and thereafter was$17.8 billion,$17.3 billion and$11.4 billion,respectively.Remaining performanceobligation estimates are subject to change and are affected by several factors,i
69、ncluding terminations and changes in the timing andscope of contracts,arising from contract modifications.Accounts Receivable and Contract BalancesThe timing of revenue recognition may differ from the time of billing to our customers.Receivables presented in our condensedconsolidated balance sheets
70、represent an unconditional right to consideration.Contract balances represent amounts from anarrangement when either Verizon has performed,by transferring goods or services to the customer in advance of receiving all orpartial consideration for such goods and services from the customer,or the custom
71、er has made payment to Verizon in advance ofobtaining control of the goods and/or services promised to the customer in the contract.Contract assets primarily relate to our rights to consideration for goods or services provided to customers but for which we do nothave an unconditional right at the re
72、porting date.Under a fixed-term plan,total contract revenue is allocated between wirelessservice and equipment revenues.In conjunction with these arrangements,a contract asset is created,which represents thedifference between the amount of equipment revenue recognized upon sale and the amount of con
73、sideration received from thecustomer when the performance obligation related to the transfer of control of the equipment is satisfied.The contract asset isreclassified to accounts receivable as wireless services are provided and billed.We have the right to bill the customer as service isprovided ove
74、r time,which results in our right to the payment being unconditional.The contract asset balances are presented in2023/7/23 17:42vz-20230331https:/ 17:42vz-20230331https:/ of Contentsour condensed consolidated balance sheets as Prepaid expenses and other and Other assets.We recognize the allowance fo
75、rcredit losses at inception and reassess quarterly based on managements expectation of the assets collectability.Contract liabilities arise when we bill our customers and receive consideration in advance of providing the goods or servicespromised in the contract.We typically bill service one month i
76、n advance,which is the primary component of the contract liabilitybalance.Contract liabilities are recognized as revenue when services are provided to the customer.The contract liability balancesare presented in our condensed consolidated balance sheets as Other current liabilities and Other liabili
77、ties.The following table presents information about receivables from contracts with customers:At March 31,At January 1,At March 31,At January 1,(dollars in millions)2023202320222022Receivables$9,969$11,274$10,419$10,758 Device payment plan agreement receivables16,955 16,648 13,478 12,888 Balances do
78、 not include receivables related to the following contracts:leasing arrangements(such as those for towers andequipment),captive reinsurance arrangements primarily related to wireless device insurance and the interest when equipment issold to the customer by an authorized agent under a device payment
79、 plan agreement.Included in device payment plan agreement receivables presented in Note 6.Receivables derived from the sale of equipment ona device payment plan through an authorized agent are excluded.The following table presents information about contract balances:At March 31,At January 1,At March
80、 31,At January 1,(dollars in millions)2023202320222022Contract asset$777$863$909$934 Contract liability8,423 8,234 7,504 7,229 Revenue recognized related to contract liabilities existing at January 1,2023 and January 1,2022 were$4.3 billion for both thethree months ended March 31,2023 and March 31,2
81、022.The balances of contract assets and contract liabilities recorded in our condensed consolidated balance sheets were as follows:At March 31,At December 31,(dollars in millions)20232022AssetsPrepaid expenses and other$580$656 Other assets197 207 Total$777$863 LiabilitiesOther current liabilities$6
82、,693$6,583 Other liabilities1,730 1,651 Total$8,423$8,234 Contract CostsTopic 606 requires the recognition of an asset for incremental costs to obtain a customer contract,which are then amortized toexpense over the respective periods of expected benefit.We recognize an asset for incremental commissi
83、on expenses paid tointernal and external sales personnel and agents in conjunction with obtaining customer contracts.We only defer these costs whenwe have determined the commissions are incremental costs that would not have been incurred absent the customer contract andare expected to be recoverable
84、.Costs to obtain a contract are amortized and recorded ratably as commission expense over theperiod representing the transfer of goods or services to which the assets relate.Costs to obtain wireless contracts are amortizedover both of our Consumer and Business customers estimated upgrade cycles,as s
85、uch costs are typically incurred each time acustomer upgrades.Costs to obtain wireline contracts are amortized as expense over the estimated customer relationship period forour Consumer customers.Incremental costs to obtain wireline contracts for our Business customers are insignificant.Costs toobta
86、in contracts are recorded in Selling,general and administrative expense.We also defer costs incurred to fulfill contracts that:(1)relate directly to the contract;(2)are expected to generate resources that willbe used to satisfy our performance obligation under the contract;and(3)are expected to be r
87、ecovered through revenue generatedunder the contract.Contract fulfillment costs are expensed as we satisfy our performance obligations and recorded in Cost ofservices.These costs principally relate to direct costs that enhance our wireline business resources,such as costs incurred to installcircuits
88、.(1)(2)(1)(2)(1)(1)2023/7/23 17:42vz-20230331https:/ determine the amortization periods for our costs incurred to obtain or fulfill a customer contract at a portfolio level due to thesimilarities within these customer contract portfolios.102023/7/23 17:42vz-20230331https:/ of ContentsOther costs,suc
89、h as general costs or costs related to past performance obligations,are expensed as incurred.Collectively,costs to obtain a contract and costs to fulfill a contract are referred to as deferred contract costs,and amortized over aone-to seven-year period.Deferred contract costs are classified as curre
90、nt or non-current within Prepaid expenses and other andOther assets,respectively.The balances of deferred contract costs included in our condensed consolidated balance sheets were as follows:At March 31,At December 31,(dollars in millions)20232022AssetsPrepaid expenses and other$2,629$2,629 Other as
91、sets2,453 2,475 Total$5,082$5,104 For the three months ended March 31,2023 and March 31,2022,we recognized expense of$795 million and$749 million,respectively,associated with the amortization of deferred contract costs,primarily within Selling,general and administrative expensein our condensed conso
92、lidated statements of income.We assess our deferred contract costs for impairment on a quarterly basis.We recognize an impairment charge to the extent thecarrying amount of a deferred cost exceeds the remaining amount of consideration we expect to receive in exchange for the goodsand services relate
93、d to the cost,less the expected costs related directly to providing those goods and services that have not yetbeen recognized as expenses.There have been no impairment charges recognized for the three months ended March 31,2023 orMarch 31,2022.Note 3.Acquisitions and DivestituresSpectrum License Tra
94、nsactionsIn February 2021,the Federal Communications Commission(FCC)concluded Auction 107 for C-Band wireless spectrum.Inaccordance with the rules applicable to the auction,Verizon is required to make payments for our allocable share of clearing costsincurred by,and incentive payments due to,the inc
95、umbent license holders associated with the auction,which are estimated to be$7.7 billion.During the three months ended March 31,2023 and March 31,2022,we made payments of$114 million and$1.4 billion,respectively,for obligations related to clearing costs and accelerated clearing incentives.We expect
96、to continue to makepayments related to clearing cost and incentive payment obligations through 2024,which we expect to be$4.7 billion.Thesepayments are dependent on the incumbent license holders accelerated clearing of the spectrum for Verizons use and,therefore,the final timing and amounts could di
97、ffer based on the incumbent holders execution of their clearing process.In accordance with theFCC order,the clearing must be completed by December 2025.The carrying value of the wireless spectrum won in Auction 107consists of all payments required to participate and purchase licenses in the auction,
98、including Verizons allocable share of clearingcosts incurred by,and incentive payments due to,the incumbent license holders associated with the auction that we are obligated topay in order to acquire the licenses,as well as capitalized interest to the extent qualifying activities have occurred.In Ma
99、rch 2022,Verizon signed agreements with satellite operators in which operators agreed to clear C-Band spectrum in certainmarkets and frequencies ahead of the previously expected timeframe.This early clearance accelerated Verizons access to morespectrum in a number of key markets to support its fifth
100、-generation(5G)network initiatives.TracFone Wireless,Inc.On November 23,2021(the Acquisition Date),we completed the acquisition of TracFone Wireless,Inc.(TracFone),a leadingprovider of prepaid and value mobile services in the U.S.Verizon acquired all of TracFones outstanding stock in exchange forapp
101、roximately$3.5 billion in cash,net of cash acquired and working capital and other adjustments,57,596,544 shares of Verizoncommon stock valued at approximately$3.0 billion,and up to an additional$650 million in future cash contingent considerationrelated to the achievement of certain performance meas
102、ures and other commercial arrangements.The fair value of the Verizoncommon stock was determined on the basis of its closing market price on the Acquisition Date.The estimated fair value of thecontingent consideration as of the Acquisition Date was approximately$560 million and represents a Level 3 m
103、easurement asdefined in ASC 820,Fair Value Measurements and Disclosures.See Note 7 for additional information.The contingent considerationpayable is based on the achievement of certain revenue and operational targets,measured over a two-year earn out period.Duringthe three months ended March 31,2023
104、,Verizon made a payment of$102 million related to the contingent consideration,which isreflected in Cash flows from financing activities in our condensed consolidated statements of cash flows.Contingent considerationpayments are expected to continue through 2024.2023/7/23 17:42vz-20230331https:/ 17:
105、42vz-20230331https:/ of ContentsNote 4.Wireless Licenses,Goodwill,and Other Intangible AssetsWireless LicensesThe carrying amounts of our Wireless licenses are as follows:At March 31,At December 31,(dollars in millions)20232022Wireless licenses$150,485$149,796 At March 31,2023 and 2022,approximately
106、$38.9 billion and$53.2 billion,respectively,of wireless licenses were underdevelopment for commercial service for which we were capitalizing interest costs.We recorded approximately$449 million and$452 million of capitalized interest on wireless licenses for the three months ended March 31,2023 and
107、2022,respectively.During the three months ended March 31,2023,we renewed various wireless licenses in accordance with FCC regulations.Theaverage renewal period for these licenses was 15 years.GoodwillChanges in the carrying amount of Goodwill are as follows:(dollars in millions)ConsumerBusinessOther
108、TotalBalance at January 1,2023$21,142$7,502$27$28,671 Reclassifications,adjustments and other 3 3 Balance at March 31,2023$21,142$7,505$27$28,674 Other Intangible AssetsThe following table displays the composition of Other intangible assets,net as well as the respective amortization periods:At March
109、 31,2023At December 31,2022(dollars in millions)GrossAmountAccumulatedAmortizationNetAmountGrossAmountAccumulatedAmortizationNetAmountCustomer lists(5 to 13 years)$4,335$(1,776)$2,559$4,335$(1,646)$2,689 Non-network internal-usesoftware(7 years)23,838(16,835)7,003 23,421(16,397)7,024 Other(4 to 25 y
110、ears)2,817(1,133)1,684 2,806(1,058)1,748 Total$30,990$(19,744)$11,246$30,562$(19,101)$11,461 The amortization expense for Other intangible assets was as follows:Three Months Ended(dollars in millions)March 31,2023$647 2022635 The estimated future amortization expense for Other intangible assets for
111、the remainder of the current year and next 5 years is asfollows:Years(dollars in millions)Remainder of 2023$1,903 20242,317 20252,121 20261,879 20271,318 2028902 Note 5.DebtSignificant Debt TransactionsDebt or equity financing may be needed to fund additional investments or development activities or
112、 to maintain an appropriatecapital structure to ensure our financial flexibility.2023/7/23 17:42vz-20230331https:/ following table shows the significant transactions involving the senior unsecured debt securities of Verizon and its subsidiariesthat occurred during the three months ended March 31,202
113、3.122023/7/23 17:42vz-20230331https:/ of ContentsRepayments and Repurchases(dollars in millions)Principal Repaid/RepurchasedAmount Paid Verizon 3.500%notes and floating rate notes due 2023 A$1,050$850 Open market repurchases of various Verizon notes$260 190 Total$1,040 Represents amount paid to repa
114、y or repurchase,including any accrued interest.In addition,for securities denominated in acurrency other than the U.S.dollar,amount paid is shown on a U.S.dollar equivalent basis.U.S.dollar amount paid represents the amount payable at maturity per the derivatives entered into in connection with thet
115、ransaction.See Note 7 for additional information on cross currency swap transactions related to the repayment.Short-Term Borrowing and Commercial Paper ProgramIn March 2023,we entered into and fully drew from a$500 million short-term revolving credit facility.As of March 31,2023,the$500 million borr
116、owed under the facility remains outstanding.During the three months ended March 31,2023,we issued$4.9 billion in commercial paper and we repaid$4.6 billion ofcommercial paper.As of March 31,2023,we had$500 million of commercial paper outstanding.These transactions are reflectedwithin Cash flows from
117、 financing activities in our condensed consolidated statements of cash flows.Asset-Backed DebtAs of March 31,2023,the carrying value of our asset-backed debt was$20.8 billion.Our asset-backed debt includes Asset-BackedNotes(ABS Notes)issued to third-party investors(Investors)and loans(ABS Financing
118、Facilities)received from banks and theirconduit facilities(collectively,the Banks).Our consolidated asset-backed debt bankruptcy remote legal entities(each,an ABS Entity,or collectively,the ABS Entities)issue the debt or are otherwise party to the transaction documentation in connection with our ass
119、et-backed debt transactions.Under the terms of our asset-backed debt,Cellco Partnership(Cellco),a wholly-owned subsidiary of theCompany,and certain other Company affiliates(collectively,the Originators)transfer device payment plan agreement receivablesand certain other receivables(collectively refer
120、red to as certain receivables)to one of the ABS Entities,which in turn transfers suchreceivables to another ABS Entity that issues the debt.Verizon entities retain the equity interests and residual interests,asapplicable,in the ABS Entities,which represent the rights to all funds not needed to make
121、required payments on the asset-backeddebt and other related payments and expenses.Our asset-backed debt is secured by the transferred receivables and future collections on such receivables.These receivablestransferred to the ABS Entities and related assets,consisting primarily of restricted cash,wil
122、l only be available for payment of asset-backed debt and expenses related thereto,payments to the Originators in respect of additional transfers of certain receivables,andother obligations arising from our asset-backed debt transactions,and will not be available to pay other obligations or claims of
123、Verizons creditors until the associated asset-backed debt and other obligations are satisfied.The Investors or Banks,as applicable,which hold our asset-backed debt have legal recourse to the assets securing the debt,but do not have any recourse to Verizon withrespect to the payment of principal and
124、interest on the debt.Under a parent support agreement,the Company has agreed toguarantee certain of the payment obligations of Cellco and the Originators to the ABS Entities.Cash collections on the receivables collateralizing our asset-backed debt securities are required at certain specified times t
125、o beplaced into segregated accounts.Deposits to the segregated accounts are considered restricted cash and are included in Prepaidexpenses and other and Other assets in our condensed consolidated balance sheets.Proceeds from our asset-backed debt transactions are reflected in Cash flows from financi
126、ng activities in our condensedconsolidated statements of cash flows.The asset-backed debt issued is included in Debt maturing within one year and Long-termdebt in our condensed consolidated balance sheets.ABS NotesDuring the three months ended March 31,2023,we completed the following ABS Notes trans
127、actions:(dollars in millions)Interest Rates%ExpectedWeighted-averageLife to Maturity(inyears)Principal AmountIssuedJanuary 2023A Senior class notes4.4902.98$891 B Junior class notes4.7402.98 C Junior class notes4.9802.9841 Total$932(1)(2)(1)(2)2023/7/23 17:42vz-20230331https:/ 17:42vz-20230331https:
128、/ of ContentsUnder the terms of each series of ABS Notes outstanding as of March 31,2023,there is a revolving period of 18 months,two yearsor up to three years,as applicable,during which we may transfer additional receivables to the ABS Entity.During the three monthsended March 31,2023,we made aggre
129、gate principal repayments of$931 million on ABS Notes that have entered the amortizationperiod,including principal payments made in connection with any clean-up redemptions.In April 2023,we issued$1.2 billion aggregate principal amount of two series of senior and junior ABS Notes,with a blended inte
130、restrate of approximately 4.751%and 4.911%,through an ABS Entity.In April 2023,in connection with an optional acquisition ofreceivables and redemption of ABS Notes,we made a principal payment,in whole,for$104 million.ABS Financing FacilitiesIn March 2023,we borrowed an additional$325 million under t
131、he loan agreements outstanding in connection with the ABSFinancing Facility that we originally entered into in 2021 and previously renewed in 2022(2021 ABS Financing Facility).Theaggregate outstanding balance under the 2021 ABS Financing Facility was$8.3 billion as of March 31,2023.In April 2023,wep
132、repaid an aggregate of$700 million of the loan agreements outstanding in connection with the 2021 ABS Financing Facility.In March 2023,we borrowed an additional$500 million under the loan agreement outstanding in connection with the ABS FinancingFacility that we originally entered into in 2022(2022
133、ABS Financing Facility).The aggregate outstanding balance under the 2022ABS Financing Facility was$2.5 billion as of March 31,2023.Variable Interest Entities(VIEs)The ABS Entities meet the definition of a VIE for which we have determined that we are the primary beneficiary as we have both thepower t
134、o direct the activities of the entity that most significantly impact the entitys performance and the obligation to absorb lossesor the right to receive benefits of the entity.Therefore,the assets,liabilities and activities of the ABS Entities are consolidated in ourfinancial results and are included
135、 in amounts presented on the face of our condensed consolidated balance sheets.The assets and liabilities related to our asset-backed debt arrangements included in our condensed consolidated balance sheetswere as follows:At March 31,At December 31,(dollars in millions)20232022AssetsAccounts receivab
136、le,net$14,255$13,906 Prepaid expenses and other1,573 1,409 Other assets11,011 9,894 LiabilitiesAccounts payable and accrued liabilities23 22 Debt maturing within one year6,409 6,809 Long-term debt14,426 13,199 See Note 6 for additional information on certain receivables used to secure asset-backed d
137、ebt.Long-Term Credit FacilitiesAt March 31,2023(dollars in millions)MaturitiesFacilityCapacityUnusedCapacityPrincipalAmountOutstandingVerizon revolving credit facility 2026$9,500$9,438$Various export credit facilities ,000 486 6,985 Total$20,500$9,924$6,985 The revolving credit facility d
138、oes not require us to comply with financial covenants or maintain specified credit ratings,and itpermits us to borrow even if our business has incurred a material adverse change.The revolving credit facility provides for theissuance of letters of credit.As of March 31,2023,there have been no drawing
139、s against the$9.5 billion revolving credit facilitysince its inception.During the three months ended March 31,2023 and 2022,we drew down$515 million and$2.0 billion,respectively,from thesefacilities.Borrowings under certain of these facilities are amortized semi-annually in equal installments up to
140、the applicablematurity dates.Maturities reflect maturity dates of principal amounts outstanding.Any amounts borrowed under these facilitiesand subsequently repaid cannot be reborrowed.(1)(2)(1)(2)2023/7/23 17:42vz-20230331https:/ 17:42vz-20230331https:/ of ContentsNon-Cash TransactionsDuring the thr
141、ee months ended March 31,2023 and 2022,we financed,primarily through alternative financing arrangements,thepurchase of approximately$284 million and$150 million,respectively,of long-lived assets consisting primarily of networkequipment.As of March 31,2023 and December 31,2022,$1.9 billion and$1.7 bi
142、llion,respectively,relating to these financingarrangements,including those entered into in prior years and liabilities assumed through acquisitions,remained outstanding.Thesepurchases are non-cash financing activities and therefore are not reflected within Capital expenditures in our condensedconsol
143、idated statements of cash flows.Net Debt Extinguishment Gains(Losses)During the three months ended March 31,2023,we recorded debt extinguishment gains of$70 million.During the three monthsended March 31,2022,we recorded debt extinguishment losses of$1.2 billion.The gains and losses are recorded in O
144、ther income(expense),net in our condensed consolidated statements of income.The total gains and losses are reflected within Other,net cashflow from operating activities,and the portion of the gains and losses representing cash payments are reflected within Other,netcash flow from financing activitie
145、s in our condensed consolidated statements of cash flows.GuaranteesWe guarantee the debentures of our operating telephone company subsidiaries.As of March 31,2023,$614 million aggregateprincipal amount of these obligations remained outstanding.Each guarantee will remain in place for the life of the
146、obligation unlessterminated pursuant to its terms,including the operating telephone company no longer being a wholly-owned subsidiary of theCompany.Debt CovenantsWe and our consolidated subsidiaries are in compliance with all of our restrictive covenants in our debt agreements.Note 6.Device Payment
147、Plan Agreement and Wireless Service ReceivablesThe following table presents information about accounts receivable,net of allowances,recorded in our condensed consolidatedbalance sheet:At March 31,2023(dollars in millions)Devicepayment planagreementWirelessserviceOtherreceivablesTotalAccounts receiva
148、ble$13,065$4,989$5,694$23,748 Less Allowance for credit losses478 179 235 892 Accounts receivable,net of allowance$12,587$4,810$5,459$22,856 Other receivables primarily include wireline receivables and other receivables,the allowances for which are individuallyinsignificant.Included in Other assets
149、and Accounts receivable at March 31,2023 and December 31,2022,are net device payment planagreement receivables and net wireless service receivables of$25.1 billion and$23.6 billion,respectively,which have beentransferred to ABS Entities and continue to be reported in our condensed consolidated balan
150、ce sheets.See Note 5 for additionalinformation.We believe the carrying value of these receivables approximate their fair value using a Level 3 expected cash flowmodel.Under the Verizon device payment program,our eligible wireless customers purchase wireless devices under a device paymentplan agreeme
151、nt.Customers that activate service on devices purchased under the device payment program pay lower service feesas compared to those under our fixed-term service plans,and their device payment plan charge is included on their wirelessmonthly bill.We no longer offer Consumer customers new fixed-term,s
152、ubsidized service plans for devices;however,we continue tooffer subsidized plans to our Business customers.We also continue to service existing plans for customers who have not yetpurchased and activated devices under the Verizon device payment program.(1)(1)152023/7/23 17:42vz-20230331https:/ of Co
153、ntentsWireless Device Payment Plan Agreement ReceivablesThe following table displays device payment plan agreement receivables,net,recognized in our condensed consolidated balancesheets:At March 31,At December 31,(dollars in millions)20232022Device payment plan agreement receivables,gross$26,586$26,
154、188 Unamortized imputed interest(538)(479)Device payment plan agreement receivables,at amortized cost26,048 25,709 Allowance(932)(881)Device payment plan agreement receivables,net$25,116$24,828 Classified in our condensed consolidated balance sheets:Accounts receivable,net$12,587$12,929 Other assets
155、12,529 11,899 Device payment plan agreement receivables,net$25,116$24,828 Includes allowance for both short-term and long-term device payment plan agreement receivables.For indirect channel wireless contracts with customers,we impute risk adjusted interest on the device payment plan agreementreceiva
156、bles.We record the imputed interest as a reduction to the related accounts receivable.The associated interest income,which is included within Service revenues and other in our condensed consolidated statements of income,is recognized over thefinanced device payment term.PromotionsIn connection with
157、certain device payment plan agreements,we may offer a promotion to allow our customers to upgrade to a newdevice after paying down a certain specified portion of the required device payment plan agreement amount as well as trading intheir device in good working order.When a customer enters into a de
158、vice payment plan agreement with the right to upgrade to anew device,we account for this trade-in right as a guarantee obligation.We recognize a liability measured at fair value for thecustomers right to trade in the device which is determined by considering several factors,including the weighted-av
159、erage sellingprices obtained in recent resales of similar devices eligible for trade-in.At March 31,2023 and December 31,2022,the amount ofthe guarantee liability was insignificant and$54 million,respectively.We may offer certain promotions that allow a customer to trade in their owned device in con
160、nection with the purchase of a newdevice.Under these types of promotions,the customer receives a credit for the value of the trade-in device.At March 31,2023 andDecember 31,2022,the amount of trade-in liability was$527 million and$562 million,respectively.In addition,we may provide the customer with
161、 additional future billing credits that will be applied against the customers monthly billas long as service is maintained.These future billing credits are accounted for as consideration payable to a customer and areincluded in the determination of total transaction price,resulting in a contract lia
162、bility.Device payment plan agreement receivables,net,does not reflect the trade-in liability,additional future credits or the guaranteeliability.Origination of Device Payment Plan AgreementsWhen originating device payment plan agreements,we use internal and external data sources to create a credit r
163、isk score tomeasure the credit quality of a customer and to determine eligibility for the device payment program.Verizons experience has beenthat the payment attributes of longer tenured customers are highly predictive for estimating their reliability to make future payments.Customers with longer te
164、nures tend to exhibit similar risk characteristics to other customers with longer tenures,and receivablesdue from customers with longer tenures tend to perform better than receivables from customers that have not previously beenVerizon customers.As a result of this experience,we make initial lending
165、 decisions based upon whether the customers areestablished customers or short-tenured customers.If a Consumer customer has been a customer for 45 days or more,or if aBusiness customer has been a customer for 12 months or more,the customer is considered an established customer.Forestablished customer
166、s,the credit decision and ongoing credit monitoring processes rely on a combination of internal and externaldata sources.If a Consumer customer has been a customer less than 45 days,or a Business customer has been a customer forless than 12 months,the customer is considered a short-tenured customer.
167、For short-tenured customers,the credit decision andcredit monitoring processes rely more heavily on external data sources.Available external credit data from credit reporting agencies along with internal data are used to create custom credit risk scores forConsumer customers.The custom credit risk s
168、core is generated automatically from the applicants credit data using proprietarycustom credit models.The credit risk score measures the likelihood that the potential customer will become severely delinquent andbe disconnected for non-payment.For a small portion of short-tenured customer application
169、s,a traditional credit report is notavailable from one of the national credit reporting agencies because the potential customer does not have sufficient(1)(1)2023/7/23 17:42vz-20230331https:/ 17:42vz-20230331https:/ of Contentscredit history.In those instances,alternative credit data is used for the
170、 risk assessment.For Business customers,we also verify theexistence of the business with external data sources.Based on the custom credit risk score,we assign each customer a credit class,each of which has specified offers of credit.Thisincludes an account level spending limit and a maximum amount o
171、f credit allowed per device for Consumer customers or a requireddown payment percentage for Business customers.Credit Quality InformationSubsequent to origination,we assess indicators for the quality of our wireless device payment plan agreement portfolio using twomodels,one for new customers and on
172、e for existing customers.The model for new customers pools all Consumer and Businesswireless customers based on less than 210 days as new customers.The model for existing customers pools all Consumer andBusiness wireless customers based on 210 days or more as existing customers.The following table p
173、resents device payment plan agreement receivables,at amortized cost,and gross write-offs recorded,as ofand for the three months ended March 31,2023,by credit quality indicator and year of origination:Year of Origination(dollars in millions)202320222021 and priorTotalDevice payment plan agreement rec
174、eivables,atamortized costNew customers$877$2,352$601$3,830 Existing customers3,977 14,455 3,786 22,218 Total$4,854$16,807$4,387$26,048 Gross write-offsNew customers$12$144$28$184 Existing customers 59 44 103 Total$12$203$72$287 Includes accounts that have been suspended at a point in time.The data p
175、resented in the table above was last updated on March 31,2023.We assess indicators for the quality of our wireless service receivables portfolio as one overall pool.The following table presentswireless service receivables,at amortized cost,and gross write-offs recorded,as of and for the three months
176、 ended March 31,2023,by year of origination:Year of Origination(dollars in millions)20232022 and priorTotalWireless service receivables,at amortized cost$4,735$254$4,989 Gross Write-offs9 93 102 The data presented in the table above was last updated on March 31,2023.Allowance for Credit LossesThe cr
177、edit quality indicators are used in determining the estimated amount and the timing of expected credit losses for the devicepayment plan agreement and wireless service receivables portfolios.For device payment plan agreement receivables,we record bad debt expense based on a default and loss calculat
178、ion using ourproprietary loss model.The expected loss rate is determined based on customer credit scores and other qualitative factors as notedabove.The loss rate is assigned individually on a customer by customer basis and the custom credit scores are then aggregated byvintage and used in our propr
179、ietary loss model to calculate the weighted-average loss rate used for determining the allowancebalance.We monitor the collectability of our wireless service receivables as one overall pool.Wireline service receivables are disaggregatedand pooled by the following types of customers and related contr
180、acts:consumer,small and medium business,enterprise,publicsector and wholesale.For wireless service receivables and wireline consumer and small and medium business receivables,theallowance is calculated based on a 12 month rolling average write-off balance multiplied by the average life-cycle of an a
181、ccountfrom billing to write-off.The risk of loss is assessed over the contractual life of the receivables and is adjusted based on thehistorical loss amounts for current and future conditions based on managements qualitative considerations.For enterprise,publicsector and wholesale wireline receivabl
182、es,the allowance for credit losses is based on historical write-off experience and individualcustomer credit risk,if applicable.(1)(1)2023/7/23 17:42vz-20230331https:/ 17:42vz-20230331https:/ of ContentsActivity in the allowance for credit losses by portfolio segment of receivables was as follows:(d
183、ollars in millions)Device PaymentPlan AgreementReceivablesWireless ServicePlan ReceivablesBalance at January 1,2023$881$143 Current period provision for expected credit losses330 130 Write-offs charged against the allowance(287)(102)Recoveries collected8 8 Balance at March 31,2023$932$179 Includes a
184、llowance for both short-term and long-term device payment plan agreement receivables.We monitor delinquency and write-off experience based on the quality of our device payment plan agreement and wireless servicereceivables portfolios.The extent of our collection efforts with respect to a particular
185、customer are based on the results of ourproprietary custom internal scoring models that analyze the customers past performance to predict the likelihood of the customerfalling further delinquent.These custom scoring models assess a number of variables,including origination characteristics,customer a
186、ccount history and payment patterns.Since our customers behaviors may be impacted by general economic conditions,we analyzed whether changes in macroeconomic conditions impact our credit loss experience and have concluded that our creditloss estimates are generally not materially impacted by reasona
187、ble and supportable forecasts of future economic conditions.Basedon the score derived from these models,accounts are grouped by risk category to determine the collection strategy to be applied tosuch accounts.For device payment plan agreement receivables and wireless service receivables,we consider
188、an account to bedelinquent and in default status if there are unpaid charges remaining on the account on the day after the bills due date.The riskclass determines the speed and severity of the collections effort including initiatives taken to facilitate customer payment.The balance and aging of the
189、device payment plan agreement receivables,at amortized cost,were as follows:At March 31,(dollars in millions)2023Unbilled$24,826 Billed:Current989 Past due233 Device payment plan agreement receivables,at amortized cost$26,048(1)(1)182023/7/23 17:42vz-20230331https:/ of ContentsNote 7.Fair Value Meas
190、urements and Financial InstrumentsRecurring Fair Value MeasurementsThe following table presents the balances of assets and liabilities measured at fair value on a recurring basis as of March 31,2023:(dollars in millions)Level 1Level 2Level 3TotalAssets:Prepaid expenses and other:Fixed income securit
191、ies$59$59 Cross currency swaps 47 47 Foreign exchange forwards 2 2 Interest rate caps 58 58 Other assets:Fixed income securities 292 292 Cross currency swaps 252 252 Interest rate caps 16 16 Total$726$726 Liabilities:Other current liabilities:Interest rate swaps$862$862 Cross currency swaps 325 325
192、Foreign exchange forwards 2 2 Interest rate caps 58 58 Contingent consideration 218 218 Other liabilities:Interest rate swaps 3,030 3,030 Cross currency swaps 3,216 3,216 Interest rate caps 16 16 Total$7,509$218$7,727 Quoted prices in active markets for identical assets or liabilities.Observable inp
193、uts other than quoted prices in active markets for identical assets and liabilities.Unobservable pricing inputs in the market.(1)(2)(3)(1)(2)(3)192023/7/23 17:42vz-20230331https:/ of ContentsThe following table presents the balances of assets and liabilities measured at fair value on a recurring bas
194、is as of December 31,2022:(dollars in millions)Level 1Level 2Level 3TotalAssets:Prepaid expenses and other:Fixed income securities$37$37 Cross currency swaps 42 42 Foreign exchange forwards 6 6 Interest rate caps 63 63 Other assets:Fixed income securities 349 349 Cross currency swaps 263 263 Interes
195、t rate caps 30 30 Total$790$790 Liabilities:Other current liabilities:Interest rate swaps$731$731 Cross currency swaps 346 346 Interest rate caps 63 63 Foreign exchange forwards 1 1 Contingent consideration 274 274 Other liabilities:Interest rate swaps 3,902 3,902 Cross currency swaps 3,295 3,295 In
196、terest rate caps 30 30 Contingent consideration 43 43 Total$8,368$317$8,685 Quoted prices in active markets for identical assets or liabilities.Observable inputs other than quoted prices in active markets for identical assets and liabilities.Unobservable pricing inputs in the market.Certain of our e
197、quity investments do not have readily determinable fair values and are excluded from the tables above.Suchinvestments are measured at cost,less any impairment,plus or minus changes resulting from observable price changes in orderlytransactions for an identical or similar investment of the same issue
198、r and are included in Investments in unconsolidated businessesin our condensed consolidated balance sheets.As of March 31,2023 and December 31,2022,the carrying amount of ourinvestments without readily determinable fair values was$795 million and$804 million,respectively.During the three months ende
199、dMarch 31,2023,there were insignificant adjustments due to observable price changes and there were insignificant impairmentcharges.As of March 31,2023,cumulative adjustments due to observable price changes and impairment charges wereapproximately$164 million and$88 million,respectively.Verizon has a
200、 liability for contingent consideration related to its acquisition of TracFone,completed in November 2021.The fairvalue is calculated using a probability-weighted discounted cash flow model and represents a Level 3 measurement.Level 3instruments include valuation based on unobservable inputs reflect
201、ing our own assumptions,consistent with reasonably availableassumptions made by other market participants.Subsequent to the Acquisition Date,at each reporting date,the contingentconsideration liability is remeasured to fair value.During the three months ended March 31,2023,we made a payment of$102 m
202、illion related to the contingent consideration.See Note 3 for additional information.Fixed income securities consist primarily of investments in municipal bonds.The valuation of the fixed income securities is based onthe quoted prices for similar assets in active markets or identical assets in inact
203、ive markets or models that apply inputs fromobservable market data.The valuation determines that these securities are classified as Level 2.Derivative contracts are valued using models based on readily observable market parameters for all substantial terms of ourderivative contracts and thus are cla
204、ssified within Level 2.We use mid-market pricing for fair value measurements of our derivativeinstruments.Our derivative instruments are recorded on a gross basis.We recognize transfers between levels of the fair value hierarchy as of the end of the reporting period.(1)(2)(3)(1)(2)(3)2023/7/23 17:42
205、vz-20230331https:/ 17:42vz-20230331https:/ of ContentsFair Value of Short-term and Long-term DebtThe fair value of our debt is determined using various methods,including quoted prices for identical debt instruments,which is aLevel 1 measurement,as well as quoted prices for similar debt instruments w
206、ith comparable terms and maturities,which is aLevel 2 measurement.The fair value of our short-term and long-term debt,excluding finance leases,was as follows:Fair Value(dollars in millions)CarryingAmountLevel 1Level 2Level 3TotalAt December 31,2022$148,906$84,385$54,656$139,041 At March 31,2023150,9
207、71 86,908 58,014 144,922 Derivative InstrumentsWe enter into derivative transactions primarily to manage our exposure to fluctuations in foreign currency exchange rates andinterest rates.We employ risk management strategies,which may include the use of a variety of derivatives including interest rat
208、eswaps,cross currency swaps,forward starting interest rate swaps,treasury rate locks,interest rate caps,swaptions and foreignexchange forwards.We do not hold derivatives for trading purposes.The following table sets forth the notional amounts of our outstanding derivative instruments:At March 31,At
209、December 31,(dollars in millions)20232022Interest rate swaps$26,071$26,071 Cross currency swaps34,138 34,976 Foreign exchange forwards980 920 The following tables summarize the activities of our designated derivatives:Three Months EndedMarch 31,(dollars in millions)20232022Interest Rate Swaps:Notion
210、al value entered into$6,655 Notional value settled 863 Pre-tax loss recognized in Interest expense(1)Cross Currency Swaps:Notional value entered into Notional value settled838 Pre-tax loss recognized in Other comprehensive income(loss)N/A(430)Pre-tax gain on cross currency swaps recognized in Intere
211、st expense355 N/APre-tax loss on hedged debt recognized in Interest expense(355)N/AExcluded components recognized in Other comprehensive income(loss)(378)N/A Initial value of the excluded component amortized into Interest expense27 N/AForward Starting Interest Rate Swaps:Notional value entered into
212、Notional value settled 400 Pre-tax gain recognized in Other comprehensive income(loss)128 N/A-not applicable Represents amounts recorded under the cash flow hedge model.These instruments were re-designated as fair value hedges onMarch 31,2022.Three Months EndedMarch 31,(dollars in millions)20232022O
213、ther,net Cash Flows from Operating Activities:Cash received for settlement of interest rate swaps$40 Cash paid for settlement of forward starting interest rate swaps(76)Other,net Cash Flows from Financing Activities:Cash paid for settlement of cross currency swaps(117)(1)(1)2023/7/23 17:42vz-2023033
214、1https:/ 17:42vz-20230331https:/ of ContentsThe following table displays the amounts recorded in Long-term debt in our condensed consolidated balance sheets related tocumulative basis adjustments for fair value hedges.The cumulative amounts exclude cumulative basis adjustments related toforeign exch
215、ange risk.At March 31,At December 31,(dollars in millions)20232022Carrying amount of hedged liabilities$22,467$21,741 Cumulative amount of fair value hedging adjustment included in the carryingamount of the hedged liabilities(3,771)(4,512)Cumulative amount of fair value hedging adjustment remaining
216、for which hedgeaccounting has been discontinued466 488 Interest Rate SwapsWe enter into interest rate swaps to achieve a targeted mix of fixed and variable rate debt.We principally receive fixed rates andpay variable rates,resulting in a net increase or decrease to Interest expense.These swaps are d
217、esignated as fair value hedgesand hedge against interest rate risk exposure of designated debt issuances.We record the interest rate swaps at fair value in ourcondensed consolidated balance sheets as assets and liabilities.Changes in the fair value of the interest rate swaps are recordedto Interest
218、expense,which are primarily offset by changes in the fair value of the hedged debt due to changes in interest rates.Cross Currency SwapsWe have entered into cross currency swaps previously designated as cash flow hedges through March 31,2022 to exchange ourBritish Pound Sterling,Euro,Swiss Franc,Can
219、adian Dollar and Australian Dollar-denominated cash flows into U.S.dollars and to fixour cash payments in U.S.dollars,as well as to mitigate the impact of foreign currency transaction gains or losses.A portion of theloss recognized in Other comprehensive income(loss)was reclassified to Interest expe
220、nse to offset the related pre-tax foreigncurrency transaction gain or loss on the underlying hedged item.On March 31,2022,we elected to de-designate our cross currency swaps as cash flow hedges and re-designated these swaps asfair value hedges.For these hedges,we have elected to exclude the change i
221、n fair value of the cross currency swaps related toboth time value and cross currency basis spread from the assessment of hedge effectiveness(the excluded components).Theinitial value of the excluded components of$1.0 billion as of March 31,2022 will continue to be amortized into Interest expense ov
222、erthe remaining life of the hedging instruments.We estimate that$109 million will be amortized into Interest expense within the next12 months.In addition to the previously mentioned cross currency swaps,we have executed additional cross currency swaps to exchangeEuro-denominated cash flows into U.S.
223、dollars to fix our cash payments in U.S.dollars.These swaps are designated as fair valuehedges.We record the cross currency swaps at fair value in our condensed consolidated balance sheets as assets and liabilities.Changes in the fair value of the cross currency swaps attributable to changes in the
224、spot rate of the hedged item and changes in therecorded value of the hedged debt due to changes in spot rates are recorded in the same income statement line item.We presentexchange gains and losses from the conversion of foreign currency denominated debt as a part of Interest expense.During thethree
225、 months ended March 31,2023,these amounts completely offset each other and no net gain or loss was recorded.Changes in the fair value of cross currency swaps attributable to time value and cross currency basis spread are initially recorded toOther comprehensive income(loss).Unrealized gains or losse
226、s on excluded components are recorded in Other comprehensiveincome(loss)and are recognized into Interest expense on a systematic and rational basis through the swap accrual over the life ofthe hedging instrument.The amount remaining in Accumulated other comprehensive loss related to cash flow hedges
227、 on the date oftransition will be reclassified to earnings when the hedged item is recognized in earnings or when it becomes probable that theforecasted transactions will not occur.During the three months ended March 31,2023,the amortization of the initial value of theexcluded component completely o
228、ffset the amortization related to the amount remaining in Other comprehensive income(loss)related to cash flow hedges.See Note 9 for additional information.Forward Starting Interest Rate SwapsFrom time to time we enter into forward starting interest rate swaps designated as cash flow hedges in order
229、 to manage ourexposure to interest rate changes on future forecasted transactions.We hedge our exposure to the variability in future cash flowsbased on the expected maturities of the related forecasted debt issuance.We recognize gains and losses resulting from interestrate movements in Other compreh
230、ensive income(loss).Treasury Rate LocksWe have entered into treasury rate locks designated as cash flow hedges to mitigate our interest rate risk on future transactions.Werecognize gains and losses resulting from interest rate movements in Other comprehensive income(loss).2023/7/23 17:42vz-20230331h
231、ttps:/ 17:42vz-20230331https:/ of ContentsIn April 2023,we entered into treasury rate locks designated as cash flow hedges for a total notional amount of$500 million.Net Investment HedgesWe have designated certain foreign currency debt instruments as net investment hedges to mitigate foreign exchang
232、e exposurerelated to non-U.S.dollar net investments in certain foreign subsidiaries against changes in foreign exchange rates.The notionalamount of Euro-denominated debt designated as a net investment hedge was 750 million as of both March 31,2023 andDecember 31,2022.Undesignated DerivativesWe also
233、have the following derivative contracts which we use as economic hedges but for which we have elected not to applyhedge accounting.The following table summarizes the activity of our derivatives not designated in hedging relationships:Three Months EndedMarch 31,(dollars in millions)20232022Foreign Ex
234、change Forwards:Notional value entered into$2,655$2,646 Notional value settled2,595 2,603 Pre-tax gain(loss)recognized in Other income(expense),net10(28)Swaptions:Notional value sold 1,000 Notional value settled 1,000 Pre-tax loss recognized in Interest expense(33)Foreign Exchange ForwardsWe enter i
235、nto British Pound Sterling and Euro foreign exchange forwards to mitigate our foreign exchange rate risk related to non-functional currency denominated monetary assets and liabilities of international subsidiaries.SwaptionsWe enter into swaptions to achieve a targeted mix of fixed and variable rate
236、debt.Concentrations of Credit RiskFinancial instruments that subject us to concentrations of credit risk consist primarily of temporary cash investments,short-term andlong-term investments,trade receivables,including device payment plan agreement receivables,certain notes receivable,includinglease r
237、eceivables,and derivative contracts.Counterparties to our derivative contracts are major financial institutions with whom we have negotiated derivatives agreements(ISDA master agreements)and credit support annex(CSA)agreements which provide rules for collateral exchange.The CSAagreements contain rat
238、ing based thresholds such that we or our counterparties may be required to hold or post collateral basedupon changes in outstanding positions as compared to established thresholds and changes in credit ratings.We do not offset fairvalue amounts recognized for derivative instruments and fair value am
239、ounts recognized for the right to reclaim cash collateral or theobligation to return cash collateral arising from derivative instruments recognized at fair value.At March 31,2023,we did not holdany collateral.At March 31,2023,we posted$1.9 billion of collateral related to derivative contracts under
240、collateral exchangeagreements,which was recorded as Prepaid expenses and other in our condensed consolidated balance sheet.At December 31,2022,we did not hold any collateral.At December 31,2022,we posted$2.3 billion of collateral related to derivative contracts undercollateral exchange arrangements,
241、which was recorded as Prepaid expenses and other in our condensed consolidated balancesheet.While we may be exposed to credit losses due to the nonperformance of our counterparties,we consider the risk remote anddo not expect that any such nonperformance would result in a significant effect on our r
242、esults of operations or financial conditiondue to our diversified pool of counterparties.Note 8.Employee BenefitsWe maintain non-contributory defined benefit pension plans for certain employees.In addition,we maintain postretirement healthcare and life insurance plans for certain retirees and their
243、dependents,which are both contributory and non-contributory,and includea limit on our share of the cost for certain current and future retirees.In accordance with our accounting policy for pension and otherpostretirement benefits,operating expenses include service costs associated with pension and o
244、ther postretirement benefits whileother credits and/or charges based on actuarial assumptions,including projected discount rates,an estimated return on plan assets,and impact from health care trend rates are reported in Other income(expense),net.These estimates are updated in the fourthquarter or up
245、on a remeasurement event,to reflect actual return on plan assets and updated2023/7/23 17:42vz-20230331https:/ 17:42vz-20230331https:/ of Contentsactuarial assumptions.The adjustment is recognized in the income statement during the fourth quarter or upon a remeasurementevent pursuant to our accountin
246、g policy for the recognition of actuarial gains and losses.Net Periodic Benefit Cost(Income)The following table summarizes the components of net periodic benefit cost(income)related to our pension and postretirementhealth care and life insurance plans:(dollars in millions)PensionHealth Care and Life
247、Three Months Ended March 31,2023202220232022Service cost-Cost of services$46$58$11$19 Service cost-Selling,general and administrative expense7 8 2 4 Service cost$53$66$13$23 Amortization of prior service cost(credit)$28$15$(105)$(203)Expected return on plan assets(253)(297)(7)(7)Interest cost188 110
248、 136 83 Other components$(37)$(172)$24$(127)Total$16$(106)$37$(104)The service cost component of net periodic benefit cost(income)is recorded in Cost of services and Selling,general andadministrative expense in the condensed consolidated statements of income while the other components,including mark
249、-to-marketadjustments,if any,are recorded in Other income(expense),net.Severance PaymentsDuring the three months ended March 31,2023,we paid severance benefits of$140 million.At March 31,2023,we had a remainingseverance liability of$521 million,a portion of which includes future contractual payments
250、 to separated employees.Employer ContributionsDuring the three months ended March 31,2023 and March 31,2022,we made no contributions to our qualified pension plans andmade insignificant contributions to our nonqualified pension plans.No mandatory qualified pension plans contributions are expectedor
251、required through December 31,2023.In April 2023,we made a discretionary contribution of$200 million to one of our qualifiedpension plans.There have been no significant changes with respect to the nonqualified pension and other postretirement benefitplans contributions in 2023.242023/7/23 17:42vz-202
252、30331https:/ of ContentsNote 9.Equity and Accumulated Other Comprehensive LossEquityChanges in the components of Total equity were as follows:(dollars in millions,except per share amounts,and shares in thousands)Three months ended March 31,20232022SharesAmountSharesAmountCommon StockBalance at begin
253、ning of period4,291,434$429 4,291,434$429 Balance at end of period4,291,434 429 4,291,434 429 Additional Paid In CapitalBalance at beginning of period13,420 13,861 Other103 13 Balance at end of period13,523 13,874 Retained EarningsBalance at beginning of period82,380 71,993 Net income attributable t
254、o Verizon4,909 4,580 Dividends declared($0.6525,$0.6400 per share)(2,746)(2,692)Other 10 Balance at end of period84,543 73,891 Accumulated Other Comprehensive LossBalance at beginning of period attributable to Verizon(1,865)(927)Foreign currency translation adjustments26(29)Unrealized gain on cash f
255、low hedges21 207 Unrealized loss on fair value hedges(302)Unrealized gain(loss)on marketable securities4(18)Defined benefit pension and postretirement plans(61)(139)Other comprehensive income(loss)(312)21 Balance at end of period attributable to Verizon(2,177)(906)Treasury StockBalance at beginning
256、of period(91,572)(4,013)(93,635)(4,104)Employee plans4,127 181 1,842 81 Shareholder plans3 3 Balance at end of period(87,442)(3,832)(91,790)(4,023)Deferred Compensation-ESOPs and OtherBalance at beginning of period793 538 Restricted stock equity grant(14)109 Amortization(382)(150)Balance at end of p
257、eriod397 497 Noncontrolling InterestsBalance at beginning of period1,319 1,410 Total comprehensive income109 131 Distributions and other(92)(128)Balance at end of period1,336 1,413 Total Equity$94,219$85,175 Common StockVerizon did not repurchase any shares of the Companys common stock through its p
258、reviously authorized share buyback programduring the three months ended March 31,2023.At March 31,2023,the maximum number of shares that could be purchased by oron behalf of Verizon under our share buyback program was 100 million.2023/7/23 17:42vz-20230331https:/ 17:42vz-20230331https:/ of ContentsC
259、ommon stock has been used from time to time to satisfy some of the funding requirements of employee and shareowner plans,including 4.1 million shares of common stock issued from Treasury stock during the three months ended March 31,2023.Accumulated Other Comprehensive LossThe changes in the balances
260、 of Accumulated other comprehensive loss by component were as follows:(dollars in millions)Foreign currencytranslationadjustmentsUnrealizedgain(loss)oncash flowhedgesUnrealizedloss on fairvalue hedgesUnrealizedgain(loss)onmarketablesecuritiesDefined benefitpension andpostretirementplansTotalBalance
261、at January 1,2023$(698)$(1,150)$(431)$(9)$423$(1,865)Excluded componentsrecognized in othercomprehensive income (282)(282)Other comprehensiveincome26 4 30 Amounts reclassified to netincome 21(20)(61)(60)Net other comprehensiveincome(loss)26 21(302)4(61)(312)Balance at March 31,2023$(672)$(1,129)$(73
262、3)$(5)$362$(2,177)The amounts presented above in Net other comprehensive income(loss)are net of taxes.The amounts reclassified to net incomerelated to unrealized gain(loss)on cash flow hedges and unrealized loss on fair value hedges in the table above are included inOther income(expense),net and Int
263、erest expense in our condensed consolidated statements of income.See Note 7 for additionalinformation.The amounts reclassified to net income related to unrealized gain(loss)on marketable securities in the table above areincluded in Other income(expense),net in our condensed consolidated statements o
264、f income.The amounts reclassified to netincome related to defined benefit pension and postretirement plans in the table above are included in Other income(expense),netin our condensed consolidated statements of income.See Note 8 for additional information.Note 10.Segment InformationReportable Segmen
265、tsWe have two reportable segments that we operate and manage as strategic business units-Consumer and Business.We measureand evaluate our reportable segments based on segment operating income,consistent with the chief operating decision makersassessment of segment performance.Our segments and their
266、principal activities consist of the following:SegmentDescriptionVerizonConsumer GroupOur Consumer segment provides consumer-focused wireless and wireline communications services andproducts.Our wireless services are provided across one of the most extensive wireless networks in the U.S.under the Ver
267、izon brand,TracFone brands and through wholesale and other arrangements.We also providefixed wireless access(FWA)broadband through our wireless networks.Our wireline services are provided innine states in the Mid-Atlantic and Northeastern U.S.,as well as Washington D.C.,over our 100%fiber-opticnetwo
268、rk through our Verizon Fios product portfolio and over a traditional copper-based network to customerswho are not served by Fios.VerizonBusiness GroupOur Business segment provides wireless and wireline communications services and products,including data,video and conferencing services,corporate netw
269、orking solutions,security and managed network services,local and long distance voice services and network access to deliver various IoT services and products.Wealso provide FWA broadband through our wireless networks.We provide these products and services tobusinesses,government customers and wirele
270、ss and wireline carriers across the U.S.and select productsand services to customers around the world.Our Consumer segments wireless and wireline products and services are available to our retail customers,as well as resellers thatpurchase wireless network access from us on a wholesale basis.Our Bus
271、iness segments wireless and wireline products and services are organized by the primary customer groups targeted bythese 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
272、and Medium Business,Global Enterprise,Public Sector and Other,andWholesale.Following the reorganization,there are now three customer groups:Enterprise and Public Sector,Business Markets andSaaS,and Wholesale.Enterprise and Public Sector combines the customers previously included in Global Enterprise
273、 and PublicSector and Other(excluding BlueJeans and Connect customers)as well as the commercial wireline customers previously includedin Small and Medium Business.Business Markets and SaaS combines the customers previously included in Small and MediumBusiness(excluding commercial wireline customers)
274、,the BlueJeans customers previously2023/7/23 17:42vz-20230331https:/ 17:42vz-20230331https:/ of Contentsincluded in Global Enterprise and Public Sector and Other,and the Connect customers previously included in Public Sector andOther.The Wholesale customer group remained unchanged.Prior period opera
275、ting revenue results within the Business segmenthave been recast for these reorganized customer groups.There was no change to the composition of our reportable segments andtotal segment results,nor the determination of segment profit.Corporate and other primarily includes insurance captives,investme
276、nts in unconsolidated businesses and development stagebusinesses that support our strategic initiatives,as well as unallocated corporate expenses,certain pension and other employeebenefit related costs and interest and financing expenses.Corporate and other also includes the historical results of di
277、vestedbusinesses and other adjustments and gains and losses that are not allocated in assessing segment performance due to theirnature.Although such transactions are excluded from the business segment results,they are included in reported consolidatedearnings.Gains and losses from these transactions
278、 that are not individually significant are included in segment results as theseitems are included in the chief operating decision makers assessment of segment performance.The following table provides operating financial information for our two reportable segments:Three Months EndedMarch 31,(dollars
279、in millions)20232022External Operating RevenuesConsumerService$18,456$18,126 Wireless equipment4,878 5,374 Other1,474 1,742 Total Consumer24,808 25,242 BusinessEnterprise and Public Sector3,787 3,977 Business Markets and SaaS3,099 3,072 Wholesale599 647 Total Business7,485 7,696 Total reportable seg
280、ments$32,293$32,938 Intersegment RevenuesConsumer$49$50 Business9 13 Total reportable segments$58$63 Total Operating RevenuesConsumer$24,857$25,292 Business7,494 7,709 Total reportable segments$32,351$33,001 Operating IncomeConsumer$7,099$7,319 Business551 673 Total reportable segments$7,650$7,992 O
281、ther revenue includes fees that partially recover the direct and indirect costs of complying with regulatory and industryobligations and programs,revenues associated with certain products included in our device protection offerings,leasing andinterest when equipment is sold to the customer by an aut
282、horized agent under a device payment plan agreement.Service and other revenues and Wireless equipment revenues included in our Business segment were approximately$6.6 billionand$882 million,respectively,for the three months ended March 31,2023,and were approximately$6.7 billion and$962 million,respe
283、ctively,for the three months ended March 31,2022.The following table provides Fios revenue for our two reportable segments:Three Months EndedMarch 31,(dollars in millions)20232022Consumer$2,889$2,911 Business307 295 Total Fios revenue$3,196$3,206(1)(2)(1)(2)2023/7/23 17:42vz-20230331https:/ 17:42vz-
284、20230331https:/ of ContentsThe following table provides Wireless service revenue for our reportable segments and includes intersegment activity:Three Months EndedMarch 31,(dollars in millions)20232022Consumer$15,599$15,217 Business3,290 3,125 Total Wireless service revenue$18,889$18,342 Reconciliati
285、on to Consolidated Financial InformationThe reconciliation of segment operating revenues and operating income to consolidated operating revenues and operating incomebelow includes the effects of special items that the chief operating decision maker does not consider in assessing segmentperformance,p
286、rimarily because of their nature.A reconciliation of the reportable segment operating revenues to consolidated operating revenues is as follows:Three Months Ended March 31,(dollars in millions)20232022Total reportable segment operating revenues$32,351$33,001 Corporate and other617 618 Eliminations(5
287、6)(65)Total consolidated operating revenues$32,912$33,554 A reconciliation of the total reportable segments operating income to consolidated income before provision for income taxes is asfollows:Three Months EndedMarch 31,(dollars in millions)20232022Total reportable segment operating income$7,650$7
288、,992 Corporate and other(4)(24)Other components of net periodic benefit charges(Note 8)(62)(172)Total consolidated operating income7,584 7,796 Equity in earnings(losses)of unconsolidated businesses9(3)Other income(expense),net114(924)Interest expense(1,207)(786)Income Before Provision For Income Tax
289、es$6,500$6,083 No single customer accounted for more than 10%of our total operating revenues during the three months ended March 31,2023 or2022.The chief operating decision maker does not review disaggregated assets on a segment basis;therefore,such information is notpresented.Depreciation and amort
290、ization included in the measure of segment profitability is primarily allocated based onproportional usage,and is included within Total reportable segment operating income.Note 11.Additional Financial InformationWe maintain a voluntary supplier finance program(SFP)with a financial institution which
291、provides certain suppliers the option,attheir sole discretion,to participate in the program and sell their receivables due from Verizon to the financial institution on a non-recourse basis.The eligible suppliers negotiate the terms directly with the financial institution and we have no involvement i
292、nestablishing those terms nor are we a party to these agreements.Our payments associated with the invoices from the suppliers participating in the SFP are made to the financial institution accordingto the original invoice terms generally at 90 days from the invoice date and for the original invoice
293、amount.No additional paymentsare exchanged between Verizon and the financial institution related to the SFP.Verizon does not pledge any assets nor provide anyguarantees to the financial institution in connection with the SFP.The SFP can be terminated by Verizon or the financial institutionwith a 60-
294、day notice period.2023/7/23 17:42vz-20230331https:/ obligations outstanding related to suppliers participating in the SFP are recorded within Accounts payable and accruedliabilities in our condensed consolidated balance sheets and the associated payments are reflected in the operating activitiessect
295、ion of our condensed consolidated statements of cash flows.As of March 31,2023 and December 31,2022,282023/7/23 17:42vz-20230331https:/ of Contents$705 million and$1.0 billion,respectively,remained as confirmed obligations outstanding related to suppliers participating in theSFP.Note 12.Commitments
296、and ContingenciesIn the ordinary course of business,Verizon is involved in various commercial litigation and regulatory proceedings at the state andfederal level.Where it is determined,in consultation with counsel based on litigation and settlement risks,that a loss is probableand estimable in a giv
297、en matter,Verizon establishes an accrual.In none of the currently pending matters is the amount of accrualmaterial.An estimate of the reasonably possible loss or range of loss in excess of the amounts already accrued cannot be made atthis time due to various factors typical in contested proceedings,
298、including:(1)uncertain damage theories and demands;(2)a lessthan complete factual record;(3)uncertainty concerning legal theories and their resolution by courts or regulators;and(4)theunpredictable nature of the opposing party and its demands.We continuously monitor these proceedings as they develop
299、 andadjust any accrual or disclosure as needed.We do not expect that the ultimate resolution of any pending regulatory or legal matterin future periods will have a material effect on our financial condition,but it could have a material effect on our results of operationsfor a given reporting period.
300、Verizon is currently involved in approximately 25 federal district court actions alleging that Verizon is infringing various patents.Mostof these cases are brought by non-practicing entities and effectively seek only monetary damages;a small number are brought bycompanies that have sold products and
301、 could seek injunctive relief as well.These cases have progressed to various stages and asmall number may go to trial in the coming 12 months if they are not otherwise resolved.In connection with the execution of agreements for the sales of businesses and investments,Verizon ordinarily providesrepre
302、sentations and warranties to the purchasers pertaining to a variety of nonfinancial matters,such as ownership of the securitiesbeing sold,as well as indemnity from certain financial losses.From time to time,counterparties may make claims under theseprovisions,and Verizon will seek to defend against
303、those claims and resolve them in the ordinary course of business.As of March 31,2023,Verizon had 25 renewable energy purchase agreements(REPAs)with third parties.Each of the REPAs isbased on the expected operation of a renewable energy-generating facility and has a fixed price term of 12 to 20 years
304、 from thecommencement of the facilitys entry into commercial operation.The REPAs generally are expected to be financially settled basedon the prevailing market price as energy is generated by the facilities.292023/7/23 17:42vz-20230331https:/ of ContentsItem 2.Managements Discussion and Analysis of
305、Financial Condition and Results of OperationsOverviewVerizon Communications Inc.(the Company)is a holding company that,acting through its subsidiaries(together with the Company,collectively,Verizon),is one of the worlds leading providers of communications,technology,information and entertainment pro
306、ductsand services to consumers,businesses and government entities.With a presence around the world,we offer data,video and voiceservices and solutions on our networks and platforms that are designed to meet customers demand for mobility,reliable networkconnectivity,security and control.To compete ef
307、fectively in todays dynamic marketplace,we are focused on the capabilities of our high-performing networks to drivegrowth based on delivering what customers want and need in the digital world.In 2023,we are focused on maintaining the reliabilityand resilience of our network,retaining and growing our
308、 high-quality customer base while balancing profitability in challengingmarket conditions,and driving monetization of our networks,platforms and solutions.We are creating business value by earning thetrust of our stakeholders,limiting our environmental impact and supporting our customer base growth
309、while creating social benefitthrough our products and services.Our strategy requires significant capital investments primarily to acquire wireless spectrum,putthe spectrum into service,provide additional capacity for growth in our networks,invest in the fiber that supports our businesses,evolve and
310、maintain our networks and develop and maintain significant advanced information technology systems and data systemcapabilities.We believe that our C-Band spectrum,together with our industry leading millimeter wave spectrum holding,fourth-generation(4G)Long-Term Evolution(LTE)network and fiber infras
311、tructure,will drive innovative products and services and fuel ourgrowth.We are consistently deploying new network architecture and technologies to secure our leadership in both 4G and fifth-generation(5G)wireless networks.We expect that our next-generation multi-use platform,which we call the Intell
312、igent Edge Network,willsimplify operations by eliminating legacy network elements,speed the deployment of 5G wireless technology and create newopportunities in the business market in a cost efficient manner.Our network quality is the hallmark of our brand and the foundationfor the connectivity,platf
313、orms and solutions upon which we build our competitive advantage.Highlights of Our Financial Results for the Three Months Ended March 31,2023 and 2022(dollars in millions)2023/7/23 17:42vz-20230331https:/ 17:42vz-20230331https:/ of ContentsBusiness OverviewWe have two reportable segments that we ope
314、rate and manage as strategic business units-Verizon Consumer Group(Consumer)and Verizon Business Group(Business).Revenue by Segment for the Three Months Ended March 31,2023 and 2022Note:Excludes eliminations.Verizon Consumer GroupOur Consumer segment provides consumer-focused wireless and wireline c
315、ommunications services and products.Our wirelessservices are provided across one of the most extensive wireless networks in the United States(U.S.)under the Verizon brand,TracFone Wireless,Inc.(TracFone)brands and through wholesale and other arrangements.We also provide fixed wireless access(FWA)bro
316、adband through our wireless networks.Our wireline services are provided in nine states in the Mid-Atlantic andNortheastern U.S.,as well as Washington D.C.,over our 100%fiber-optic network through our Verizon Fios product portfolio andover a traditional copper-based network to customers who are not s
317、erved by Fios.Our Consumer segments wireless and wirelineproducts and services are available to our retail customers,as well as resellers that purchase wireless network access from us on awholesale basis.Customers can obtain our wireless services on a postpaid or prepaid basis.Our postpaid service i
318、s generally billed one month inadvance for a monthly access charge in return for access to and usage of network services.Our prepaid service is offered only toConsumer customers and enables individuals to obtain wireless services without credit verification by paying for all services inadvance.The C
319、onsumer segment also offers several categories of wireless equipment to customers,including a variety ofsmartphones and other handsets,wireless-enabled internet devices,such as tablets,and other wireless-enabled connecteddevices,such as smart watches.In addition to the wireless services and equipmen
320、t discussed above,the Consumer segment sells residential fixed connectivitysolutions,including internet,video and voice services,and wireless network access to resellers on a wholesale basis.TheConsumer segments operating revenues for the three months ended March 31,2023 totaled$24.9 billion,represe
321、nting a decreaseof 1.7%compared to the similar period in 2022.See Segment Results of Operations for additional information regarding ourConsumer segments operating performance and selected operating statistics.Verizon Business GroupOur Business segment provides wireless and wireline communications s
322、ervices and products,including data,video andconferencing services,corporate networking solutions,security and managed network services,local and long distance voiceservices and network access to deliver various Internet of Things(IoT)services and products,including solutions that support fleettrack
323、ing management,compliance management,field service management,asset tracking and other types of mobile resourcemanagement.We also provide FWA broadband through our wireless networks.We provide these products and services tobusinesses,government customers and wireless and wireline carriers across the
324、 U.S.and select products and services tocustomers around the world.The Business segments operating revenues for the three months ended March 31,2023 totaled$7.5 billion,representing a decrease of 2.8%compared to the similar period in 2022.See Segment Results of Operations foradditional information r
325、egarding our Business segments operating performance and selected operating statistics.2023/7/23 17:42vz-20230331https:/ 17:42vz-20230331https:/ of ContentsCorporate and OtherCorporate and other primarily includes insurance captives,investments in unconsolidated businesses and development stagebusin
326、esses that support our strategic initiatives,as well as unallocated corporate expenses,certain pension and other employeebenefit related costs and interest and financing expenses.Corporate and other also includes the historical results of divestedbusinesses and other adjustments and gains and losses
327、 that are not allocated in assessing segment performance due to theirnature.Although such transactions are excluded from the business segment results,they are included in reported consolidatedearnings.Gains and losses from these transactions that are not individually significant are included in segm
328、ent results as theseitems are included in the chief operating decision makers assessment of segment performance.See Consolidated Results ofOperations for additional information regarding Corporate and other results.Capital Expenditures and InvestmentsWe continue to invest in our wireless networks,hi
329、gh-speed fiber and other advanced technologies to position ourselves at thecenter of growth trends for the future.During the three months ended March 31,2023,these investments included$6.0 billion forcapital expenditures.See Cash Flows Used in Investing Activities for additional information.We have
330、substantially completed theaccelerated$10 billion capital program related to our C-Band spectrum deployment.The ongoing C-Band deployment will be fundedthrough our capital expenditure program.Capital expenditures for 2023 are expected to be in the range of$18.25 billion to$19.25billion.We believe th
331、at our investments aimed at expanding our portfolio of products and services will provide our customers with anefficient,reliable infrastructure for participating in the information economy.Global Network and TechnologyWe are focusing our capital investment on adding capacity and density to our 4G L
332、TE network,while also building our nextgeneration 5G network.We are densifying our networks by utilizing macro and small cell technology,in-building solutions anddistributed antenna systems.Network densification enables us to add capacity to address increasing mobile video consumption andthe growing
333、 demand for IoT products and services on our 4G LTE and 5G networks.Over the past several years,we have beenleading the development of 5G wireless technology industry standards and the ecosystems for fixed and mobile 5G wirelessservices.5G technology enables higher throughput and lower latency than 4G LTE technology and allows our networks to handlemore traffic as the number of internet-connected