10-KPeriod: FY2010

VERIZON COMMUNICATIONS INC Annual Report, Year Ended Dec 31, 2010

Filed February 28, 2011For Securities:VZ

Summary

Verizon Communications Inc. (VZ) filed its annual report for the fiscal year ended December 31, 2010, on February 27, 2011. The report highlights a strong operational year, with the company continuing to invest heavily in its network infrastructure, particularly in the rollout of its 4G LTE technology. This strategic investment is aimed at enhancing data services and maintaining its competitive edge in the rapidly evolving telecommunications market. Financially, Verizon reported significant revenues driven by its two primary segments: Domestic Wireless and Wireline. The Domestic Wireless segment, largely driven by Verizon Wireless, represented the larger portion of revenues, showcasing robust demand for wireless voice and data services. The Wireline segment, encompassing broadband, video, and enterprise services, also contributed substantially, with a strategic focus on expanding its fiber-optic FiOS services and cloud-based enterprise solutions. The company's ongoing efforts to diversify its revenue streams and enhance its service offerings position it for continued growth and market leadership.

Financial Highlights

51 data points
Beta

Revenue

$106.56B

58.6% Gross Margin

Net Income

$2.55B

2.4% Net Margin

EPS (Diluted)

$0.90

Total Assets

$220.00B

Cash & Equivalents

$6.67B

Free Cash Flow

$33.36B

Financial Statements
Beta
Revenue$106.56B
Cost of Revenue$44.15B
Gross Profit$62.42B
SG&A Expenses$31.37B
Operating Expenses$91.92B
Operating Income$14.64B
Interest Expense$2.52B
Net Income$2.55B
EPS (Basic)$0.90
EPS (Diluted)$0.90
Shares Outstanding (Basic)2.83B
Shares Outstanding (Diluted)2.83B

Key Highlights

  • 1Verizon's Domestic Wireless segment generated $63.4 billion in revenue, accounting for approximately 60% of total company revenue, underscoring the strength of its wireless operations.
  • 2The company is aggressively deploying its 4G LTE network, having launched in 38 major metropolitan areas by the end of 2010, with plans for significant expansion in 2011 and 2013.
  • 3The Wireline segment generated $41.2 billion in revenue, with a strategic focus on expanding its high-speed FiOS Internet and FiOS TV services, and on growing its Global Enterprise business.
  • 4Verizon completed the spin-off of certain rural landline assets and merged them with Frontier Communications, further sharpening its focus on its high-growth FiOS business.
  • 5The company is actively pursuing strategic acquisitions, announcing its intent to acquire Terremark Worldwide, Inc. for approximately $1.4 billion to enhance its IT infrastructure and cloud services offerings for enterprise and government clients.
  • 6Verizon continued to emphasize customer service and retention as key differentiators in both its wireless and wireline businesses, implementing various programs to enhance customer satisfaction and reduce churn.
  • 7The company faces significant competition across both its wireless and wireline segments from established players and emerging technologies, necessitating continuous investment in network upgrades and service innovation.

Frequently Asked Questions

Verizon's primary reportable segments are Domestic Wireless and Wireline. The Domestic Wireless segment provides wireless voice and data services and equipment sales across the U.S. The Wireline segment offers voice, internet access, broadband video and data, IP network services, and other services to consumers, businesses, and carriers in the U.S. and internationally.

Verizon is making substantial investments in deploying its 4G LTE network, viewing it as a key technology for future growth. By the end of 2010, the 4G LTE network was deployed in 38 major metropolitan areas and over 60 airports. The company planned to expand this deployment to an additional 140 markets by the end of 2011 and cover virtually its entire current 3G network footprint by the end of 2013, aiming to provide higher data throughput and improved network efficiencies.

Verizon faces intense competition from AT&T, Sprint, and T-Mobile, as well as regional providers and resellers. To compete, Verizon focuses on network reliability, coverage, and capacity, as well as competitive pricing, product and service development (especially in data services), customer service, and efficient sales and distribution channels. The company also highlights its capital resources as a factor in its competitive strategy.

The announced acquisition of Terremark Worldwide, Inc. for approximately $1.4 billion is a strategic move to bolster Verizon's IT infrastructure and cloud services. This acquisition is expected to enhance Verizon's offerings to its government and large enterprise customers, aligning with the trend towards cloud computing and managed IT services.