01—Abstract
Summary
Summary of the 10-K/A filed June 3, 2002. Cited figures are marked; the original filing is the authoritative source.
Verizon Communications Inc. reported significant revenue growth for the year ended December 31, 2001, with operating revenues reaching $67.19 billiona, an increase from the previous year.
However, net income available to common shareholders saw a substantial decrease, falling to $389 millionb from $11.79 billion in 2000. This decline was heavily influenced by "special items," including substantial losses on investments in companies like Genuity, Cable & Wireless, and NTL, along with significant merger transition costs and severance charges. The Domestic Wireless segment demonstrated strong revenue growth, driven by customer additions.
Conversely, the Domestic Telecom segment experienced a slight revenue decline due to economic pressures and mandated price reductions, although data transport and long-distance services showed resilience. The company's financial position shows total assets of $170.8 billionc and long-term debt of $45.7 billion.
02—Key points
Key Highlights
- Operating revenues increased by 3.8% to $67.19 billion in 2001.
- Net income available to common shareholders significantly decreased to $389 million in 2001, down from $11.79 billion in 2000.
- Domestic Wireless segment revenue grew by 22.2% in 2001, driven by a nearly 10% increase in its customer base.
- Domestic Telecom segment revenues saw a slight decrease of 0.6% in 2001, impacted by economic slowdown and regulatory price reductions.
- The company incurred substantial special charges in 2001, including $4.69 billion in losses on investments and $1.6 billion in severance and pension enhancement costs.
- Total assets grew to $170.8 billion, while long-term debt increased to $45.7 billion at the end of 2001.
- Cash flow from operating activities increased to $19.77 billion in 2001.
03—Questions
Frequently Asked Questions
What caused the significant drop in net income in 2001 compared to 2000?
The substantial decrease in net income from $11.79 billion in 2000 to $389 million in 2001 was primarily due to significant 'special items.' These included large impairment losses on investments in companies like Genuity, Cable & Wireless, and NTL, totaling $4.69 billion. Additionally, the company incurred substantial merger transition costs ($1.04 billion) and severance and pension enhancement charges ($1.6 billion).
How did the different business segments perform in 2001?
The Domestic Wireless segment showed strong performance with a 22.2% revenue increase, fueled by customer growth. The Information Services segment also saw revenue growth of 4.1%. However, the Domestic Telecom segment experienced a slight revenue decline of 0.6%, impacted by economic conditions and regulatory price cuts, though its data and long-distance services remained strong. The International segment reported revenue growth of 18.3%, driven by wireless operations.
What is the company's debt situation?
Verizon Communications had total assets of $170.8 billion at the end of 2001. Long-term debt stood at $45.7 billion, an increase from $42.5 billion in 2000. The debt-to-equity ratio was 66.4% at year-end 2001. The company has access to significant unused lines of credit.
What impact did the September 11th attacks have on Verizon's financial results?
The September 11th terrorist attacks resulted in costs of $285 million pretax ($172 million after-tax) primarily related to service restoration efforts in New York City. The company accrued an estimated insurance recovery of approximately $400 million in 2001, of which $130 million had been received by year-end.
04—Continue