01—Abstract
Summary
Summary of the 10-K filed February 11, 2022. Cited figures are marked; the original filing is the authoritative source.
Verizon Communications Inc. reported strong revenue growth in 2021, primarily driven by its Consumer segment, which saw a 7.6% increase in operating revenues to $95.3 billiona.
This growth was bolstered by increased service revenue from wireless and Fios internet, as well as a significant rise in wireless equipment sales, partly due to demand for 5G devices. The Business segment experienced modest revenue growth of 0.3%, reaching $31.0 billionb, with Small and Medium Business revenues showing a notable increase of 5.8%. The company made significant strategic moves during the year, including the sale of its media business and the acquisition of TracFone Wireless, Inc. These actions are expected to reshape Verizon's business focus and customer base.
Financially, Verizon saw a substantial increase in capital expenditures, largely driven by its ongoing 5G network deployment and C-Band spectrum acquisition, totaling $20.3 billionc. Despite these investments, the company demonstrated solid financial health, with free cash flow remaining robust. Looking ahead, Verizon is focused on leveraging its network leadership, particularly its 5G capabilities, to drive future growth.
The company aims to enhance customer relationships, expand its ecosystem of products and services, and maintain operational efficiencies. Investors will want to monitor the integration of TracFone, the continued rollout of 5G, and the company's ability to manage its significant debt load while continuing to return capital to shareholders through dividends.
02—Key points
Key Highlights
- Consumer segment operating revenues increased by 7.6% to $95.3 billion in 2021, driven by wireless service and equipment sales.
- The acquisition of TracFone Wireless, Inc. was completed in November 2021, expanding Verizon's prepaid and value mobile services.
- Capital expenditures increased to $20.3 billion in 2021, primarily focused on 5G network deployment and C-Band spectrum acquisition.
- Verizon completed the sale of its media business (Verizon Media) on September 1, 2021.
- The Business segment's revenue grew by 0.3% to $31.0 billion, with Small and Medium Businesses showing a 5.8% revenue increase.
- Free cash flow for 2021 was $19.3 billion, a decrease from $23.6 billion in 2020, primarily due to increased capital expenditures.
- The company continued its commitment to shareholder returns by increasing its quarterly dividend by 2.0% in 2021, marking the fifteenth consecutive year of dividend increases.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 11, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $133.61B$128.29B | +4.1% |
| SG&A Expenses | $28.66B$31.57B | −9.2% |
| Operating Expenses | $101.17B$99.49B | +1.7% |
| Operating Income | $32.45B$28.80B | +12.7% |
| Interest Expense | $3.48B$4.25B | −17.9% |
| Net Income | $22.62B$17.80B | +27.1% |
| EPS (Basic) | $5.32$4.30 | +23.7% |
| EPS (Diluted) | $5.32$4.30 | +23.7% |
| Shares Outstanding (Basic) | 4.15B4.14B | +0.2% |
| Shares Outstanding (Diluted) | 4.15B4.14B | +0.2% |
05—Questions
Frequently Asked Questions
What were Verizon's key strategic developments in 2021?
In 2021, Verizon's key strategic developments included the completion of the sale of its media business (Verizon Media) to an affiliate of Apollo Global Management Inc. and the acquisition of TracFone Wireless, Inc., a major provider of prepaid and value mobile services in the U.S. These moves are part of Verizon's strategy to focus on its core communications and connectivity businesses.
How did Verizon's network investments perform in 2021?
Verizon significantly increased its capital expenditures in 2021 to $20.3 billion, with a substantial portion allocated to 5G network deployment and the acquisition of C-Band spectrum. The company reported that its 5G Ultra Wideband service was available in parts of 87 U.S. cities by year-end, and in January 2022, it successfully deployed C-Band spectrum reaching approximately 100 million people in the U.S.
What is the financial health and outlook for Verizon based on this report?
Verizon generated $39.5 billion in cash flow from operating activities in 2021 and reported $19.3 billion in free cash flow. While capital expenditures were high due to network investments, the company maintained a strong balance sheet and continued to increase its dividend. The outlook emphasizes continued investment in 5G and network expansion, alongside efforts to improve operational efficiencies and grow its customer base across both Consumer and Business segments.
How did the acquisition of TracFone impact Verizon's financial results?
The acquisition of TracFone, completed in late November 2021, contributed approximately $680 million to Verizon's Consumer segment's operating revenues in the fourth quarter. The company expects to grow the TracFone customer base over time by increasing investment and product offerings within that business. The acquisition also added approximately 20 million prepaid connections to Verizon's network.
06—Continue