10-KPeriod: FY2009

VERIZON COMMUNICATIONS INC Annual Report, Year Ended Dec 31, 2009

Filed February 26, 2010For Securities:VZ

Summary

Verizon Communications Inc.'s 2010 10-K filing for the year ended December 31, 2009, highlights the company's strong position in the telecommunications industry, particularly in its Domestic Wireless segment, which accounted for approximately 58% of total revenues. The acquisition of Alltel in January 2009 significantly bolstered Verizon Wireless's market leadership, making it the largest wireless provider in the U.S. by customer count and revenue. The company is actively integrating this acquisition, realizing cost savings, and divesting overlapping properties as required by regulators. The Wireline segment, while a smaller contributor to revenue (approximately 43%), is undergoing strategic changes, including the planned spin-off and merger of certain landline assets with Frontier Communications, expected to close in Q2 2010. Verizon is also investing heavily in network infrastructure, including the development and planned 2010 launch of its 4G LTE wireless broadband network and continued expansion of its fiber-optic FiOS network for wireline customers. Verizon emphasizes its commitment to network reliability, customer service, and product innovation across both segments. The company faces intense competition from traditional and emerging players, and its future performance will depend on its ability to adapt to technological advancements, manage regulatory environments, and effectively integrate its operations and capitalize on growth opportunities in data services and next-generation technologies.

Financial Highlights

54 data points
Beta

Revenue

$107.81B

58.6% Gross Margin

Net Income

$4.89B

4.5% Net Margin

EPS (Diluted)

$1.72

Total Assets

$226.91B

Cash & Equivalents

$2.01B

Free Cash Flow

$31.39B

Financial Statements
Beta
Revenue$107.81B
Cost of Revenue$44.58B
Gross Profit$63.23B
SG&A Expenses$30.72B
Operating Expenses$91.83B
Operating Income$15.98B
Interest Expense$3.10B
Net Income$4.89B
EPS (Basic)$1.72
EPS (Diluted)$1.72
Shares Outstanding (Basic)2.84B
Shares Outstanding (Diluted)2.84B

Key Highlights

  • 1Completed the acquisition of Alltel in January 2009, solidifying Verizon Wireless's position as the largest U.S. wireless provider by customer count and revenue.
  • 2Actively integrating the Alltel acquisition, achieving cost savings and operational efficiencies, while divesting overlapping assets in specific markets.
  • 3Announced plans to spin off certain wireline assets to form a new subsidiary, which will then merge with Frontier Communications, expected to close in Q2 2010.
  • 4Investing in and preparing for the 2010 launch of its 4G LTE wireless broadband network, aiming for broad coverage by 2013.
  • 5Expanding its fiber-optic network (FiOS) for wireline customers, offering high-speed Internet, broadband video, and interactive services.
  • 6Focusing on enhancing network reliability, customer service, and developing innovative data and multimedia services to drive revenue growth.
  • 7Facing significant competition across both wireless and wireline segments, necessitating continuous adaptation to new technologies and market dynamics.

Frequently Asked Questions

The acquisition of Alltel in January 2009 was a significant event, making Verizon Wireless the largest wireless service provider in the United States based on total customers and revenue. The integration of Alltel's operations has resulted in cost savings from reduced roaming, eliminated redundancies, and is expected to yield further efficiencies in capital expenditures. However, as a condition of regulatory approval, Verizon is divesting overlapping properties in certain markets.

Verizon announced plans to spin off certain wireline assets, primarily local exchange and related landline activities in several states, to a new subsidiary (Spinco). This Spinco is then expected to merge with Frontier Communications, with Frontier being the surviving corporation. This transaction, subject to regulatory approvals, is anticipated to close in the second quarter of 2010 and will result in Frontier acquiring approximately 4 million access lines from Verizon.

Verizon is actively developing and preparing for the deployment of its fourth-generation (4G) wireless broadband network using Long Term Evolution (LTE) technology. The company plans to launch its LTE network in 25 to 30 markets in 2010, with the goal of covering virtually its entire current 3G network footprint by the end of 2013. This technology is expected to provide higher throughput performance and improved efficiencies for wireless voice and data services.

Verizon faces significant competition in both its wireless and wireline segments from national and regional carriers, cable companies, and other technology providers. The company's strategy to combat this competition includes focusing on network reliability and coverage, offering competitive pricing and service plans, enhancing customer service, and driving product innovation, particularly in data services and next-generation technologies like 4G LTE and FiOS.