10-KPeriod: FY2015

VERIZON COMMUNICATIONS INC Annual Report, Year Ended Dec 31, 2015

Filed February 23, 2016For Securities:VZ

Summary

Verizon Communications Inc. (VZ) in its 2015 10-K filing, released on February 23, 2016, presents a robust picture of its operations, primarily driven by its dominant Wireless segment. The company highlights its extensive 4G LTE network coverage across the U.S., positioning it as a key competitive advantage. Significant focus is placed on strategic initiatives, including the development of 5G technology and expansion into the Internet of Things (IoT) and digital media with the acquisition of AOL. The Wireline segment, while smaller, continues to offer broadband, video, and enterprise solutions, though a significant portion of its local exchange business in California, Florida, and Texas was slated for sale to Frontier Communications, indicating a strategic shift to focus on core strengths. The company emphasizes its commitment to network investment and innovation to meet growing data demands and maintain its market leadership.

Financial Highlights

55 data points
Beta

Revenue

$131.62B

82.4% Gross Margin

Net Income

$17.88B

13.6% Net Margin

EPS (Diluted)

$4.37

Total Assets

$244.18B

Cash & Equivalents

$4.47B

Free Cash Flow

$39.03B

Financial Statements
Beta
Revenue$131.62B
Cost of Revenue$23.12B
Gross Profit$108.50B
SG&A Expenses$29.99B
Operating Expenses$98.56B
Operating Income$33.06B
Interest Expense$4.92B
Net Income$17.88B
EPS (Basic)$4.38
EPS (Diluted)$4.37
Shares Outstanding (Basic)4.08B
Shares Outstanding (Diluted)4.09B

Key Highlights

  • 1Verizon Wireless is the largest wireless service provider in the U.S., with 112.1 million retail connections and revenues of approximately $91.7 billion in 2015, representing about 70% of total company revenues.
  • 2The company possesses the most extensive 4G LTE network in the U.S., covering over 98% of the population.
  • 3Verizon announced its commitment to developing and deploying 5G wireless technology, with field trials planned for 2016.
  • 4A strategic divestiture of the local exchange business in California, Florida, and Texas was underway, including Fios Internet and video customers, to focus on core operations.
  • 5The acquisition of AOL Inc. in June 2015 was highlighted as a move to strengthen digital content and advertising capabilities.
  • 6Significant capital expenditure is directed towards expanding network capacity and density, with an eye on future technologies like 5G.
  • 7The company continued to invest in its wireline infrastructure, including its Fios fiber-to-the-home network, to meet increasing broadband demand.

Frequently Asked Questions

Verizon's primary revenue driver is its Wireless segment, which generated approximately $91.7 billion in 2015 and accounted for about 70% of the company's total revenue. It is positioned as the largest wireless service provider in the U.S. based on retail connections and revenue, supported by its extensive 4G LTE network coverage.

Key strategic initiatives include the development and deployment of 5G wireless technology, expansion into the Internet of Things (IoT) and digital media through acquisitions like AOL, and continued investment in its high-speed broadband networks (Fios and global IP). The company also aims to simplify IoT adoption through its ThingSpace platform and enhance its digital media services.

Verizon is strategically divesting its local exchange business in California, Florida, and Texas, which includes Fios Internet and video subscribers. This move allows the company to focus on its core businesses and streamline operations, while continuing to offer advanced wireline services to enterprise and mass-market customers in other regions.

Verizon actively participates in FCC spectrum auctions, as demonstrated by its significant investment in AWS-3 band spectrum in 2015. The company also engages in spectrum swaps with other providers to optimize its holdings and anticipates future auctions, such as the upcoming incentive auction for 600 MHz spectrum, to meet increasing demand for wireless broadband services.