10-KPeriod: FY2020

VERIZON COMMUNICATIONS INC Annual Report, Year Ended Dec 31, 2020

Filed February 25, 2021For Securities:VZ

Summary

Verizon Communications Inc. reported consolidated revenues of $128.3 billion for the year ended December 31, 2020, a decrease of 2.7% compared to 2019, primarily impacted by the COVID-19 pandemic. The company's operations were affected by reduced customer activity, government-imposed restrictions, and a global economic slowdown. Despite these challenges, Verizon maintained a strong balance sheet with $22.2 billion in cash and cash equivalents at year-end. The company continued its strategic focus on network investments, particularly in 5G technology, and operational efficiency initiatives aimed at long-term value creation. Operationally, Verizon saw a decrease in both its Consumer and Business segments, with wireless equipment revenue declining significantly due to an elongated upgrade cycle and pandemic-related impacts. The company also experienced fluctuations in its media business. Verizon demonstrated resilience through various customer support measures during the pandemic, including waiving late fees and providing additional data. Looking ahead, Verizon remains committed to network leadership, customer experience enhancement, and shareholder returns through dividends and potential share repurchases, while navigating ongoing competitive pressures and technological advancements in the telecommunications industry.

Financial Highlights

51 data points
Beta

Revenue

$128.29B

Net Income

$17.80B

13.9% Net Margin

EPS (Diluted)

$4.30

Total Assets

$316.48B

Cash & Equivalents

$22.17B

Free Cash Flow

$41.77B

Financial Statements
Beta
Revenue$128.29B
SG&A Expenses$31.57B
Operating Expenses$99.49B
Operating Income$28.80B
Interest Expense$4.25B
Net Income$17.80B
EPS (Basic)$4.30
EPS (Diluted)$4.30
Shares Outstanding (Basic)4.14B
Shares Outstanding (Diluted)4.14B

Key Highlights

  • 1Consolidated revenues decreased by 2.7% to $128.3 billion in 2020, primarily due to the COVID-19 pandemic's impact on customer activity and the economy.
  • 2The Consumer segment's revenues declined 2.8% to $88.5 billion, largely driven by a 14.2% drop in wireless equipment revenue.
  • 3The Business segment's revenues decreased by 1.5% to $31.0 billion.
  • 4Verizon Media revenues decreased by 5.6% to $7.0 billion.
  • 5Capital expenditures totaled $18.2 billion, with a significant portion allocated to 5G network deployment.
  • 6The company maintained a strong liquidity position with $22.2 billion in cash and cash equivalents as of December 31, 2020.
  • 7Verizon continued its dividend payments, increasing the quarterly dividend by 2.0% in 2020, marking the fourteenth consecutive annual increase.

Frequently Asked Questions

The COVID-19 pandemic significantly impacted Verizon's financial performance in 2020, leading to a 2.7% decrease in consolidated revenues. This was primarily due to reduced customer activity, such as lower roaming revenues and decreased wireless equipment sales, along with impacts on the Verizon Media segment's advertising revenue. The company implemented several measures to support customers, including waiving late fees and extending payment terms.

Verizon's strategic priorities include leveraging its network leadership (especially in 5G), retaining and growing its customer base while focusing on profitability, enhancing ecosystems in growth businesses, and driving monetization of its networks, platforms, and solutions. The company is committed to significant capital investments to support these strategies, particularly in acquiring and deploying wireless spectrum and upgrading its network infrastructure.

Verizon is making substantial investments in its network to deploy 5G technology. By the end of 2020, it had launched its 5G Ultra Wideband Network in 61 U.S. markets and its 5G Nationwide Network in over 2,700 cities. These investments include acquiring spectrum licenses, densifying its network with small cell technology, and evolving its network architecture to an 'Intelligent Edge Network' to improve efficiency and enable new services.

Verizon has a significant level of debt, with approximately $118.5 billion in outstanding unsecured indebtedness as of December 31, 2020. The company manages its debt through a mix of fixed and variable rate instruments and employs hedging strategies. While the debt level is substantial, Verizon's cash flow generation and access to capital markets are considered sufficient to meet its obligations. The company's credit ratings remained stable throughout 2020.