10-KPeriod: FY2018

VERIZON COMMUNICATIONS INC Annual Report, Year Ended Dec 31, 2018

Filed February 15, 2019For Securities:VZ

Summary

Verizon Communications Inc. (VZ) in its 2018 10-K filing presented a robust business primarily driven by its Wireless segment, which accounted for approximately 70% of total revenues. The company highlighted its extensive U.S. wireless network, serving 118.0 million retail connections at year-end 2018. The Wireline segment, while smaller, is strategically focused on growing areas like fiber-optic services (Fios) for consumers and advanced networking solutions for businesses. Verizon is actively investing in future technologies, particularly 5G deployment, with commercial launches of 5G Home services and plans for mobile 5G in 2019. The company operates in a highly competitive telecommunications landscape, emphasizing network reliability, pricing, customer service, and product innovation as key differentiators. Despite a significant debt load of approximately $103 billion, Verizon is committed to capital expenditures for network expansion and technological advancement. The filing also touches upon strategic acquisitions and divestitures, regulatory challenges, and the ongoing evolution of the media and IoT sectors within the company's operations.

Financial Highlights

50 data points
Beta

Revenue

$130.86B

Net Income

$15.53B

11.9% Net Margin

EPS (Diluted)

$3.76

Total Assets

$264.83B

Cash & Equivalents

$2.75B

Free Cash Flow

$34.34B

Financial Statements
Beta
Revenue$130.86B
SG&A Expenses$31.08B
Operating Expenses$108.58B
Operating Income$22.28B
Interest Expense$4.83B
Net Income$15.53B
EPS (Basic)$3.76
EPS (Diluted)$3.76
Shares Outstanding (Basic)4.13B
Shares Outstanding (Diluted)4.13B

Key Highlights

  • 1The Wireless segment is the primary revenue driver, contributing approximately 70% of total revenues in 2018, with 118.0 million retail connections.
  • 2Verizon is actively deploying and expanding its 5G network, having launched 5G Home service and preparing for mobile 5G in 2019.
  • 3The Wireline segment is pivoting towards fiber-optic services (Fios) for consumers and advanced enterprise solutions, despite the decline in traditional copper-based services.
  • 4The company faces intense competition across all segments from national carriers, cable companies, and technology providers.
  • 5Verizon reported approximately $103 billion in outstanding unsecured indebtedness as of December 31, 2018.
  • 6The company is expanding into the Internet of Things (IoT) and Telematics sectors through acquisitions and service development, notably the Verizon Connect platform.
  • 7A goodwill impairment charge of $4.6 billion was recognized in the fourth quarter of 2018 for the Media reporting unit.

Frequently Asked Questions

Verizon operates primarily through two main segments: Wireless, which provides wireless voice and data services and equipment sales; and Wireline, which offers video, data, corporate networking, security, managed network, and voice services. The company also previously operated a Media segment (under the 'Oath' brand) and has a growing presence in the Internet of Things (IoT) sector.

Verizon is investing heavily in 5G technology, viewing it as a key driver for future growth. They have begun deploying 5G with commercial launches of 5G Home service in select markets and planned mobile 5G services for 2019. The company is acquiring necessary spectrum and densifying its network to support 5G capabilities, aiming for higher speeds, lower latency, and increased device connectivity.

Verizon faces significant competition. Its strategy relies on maintaining network reliability, coverage, and speed as key differentiators. The company also focuses on competitive pricing, enhancing customer service, developing innovative products and services, and optimizing its sales and distribution channels. Strategic investments in new technologies like 5G and expansion into areas like IoT are also crucial competitive tactics.

As of December 31, 2018, Verizon reported approximately $103 billion in outstanding unsecured indebtedness. While this is a substantial figure, the company also has unused borrowing capacity under its credit facility. The debt level requires significant cash flow for servicing and impacts financial flexibility, but it is also a common characteristic of capital-intensive industries like telecommunications.