Summary
Verizon Communications Inc. (VZ) has filed a Form 8-K to retroactively adjust certain financial information previously reported in its 2017 10-K. These adjustments are primarily driven by the adoption of new accounting standards and a reclassification of regulatory fees. The most significant changes involve how net periodic pension and postretirement benefit costs are presented, with the 'other components' now shown below operating income, distinct from 'service cost' which remains within operating expenses. Additionally, the company is updating its cash flow statement presentation to include changes in restricted cash and to classify certain deferred purchase price collections from wireless device payment plan agreements as investing activities rather than operating activities. Investors should note that these changes do not alter the company's underlying business performance but provide a more standardized and transparent financial presentation. These recasts are effective starting in the first quarter of 2018 and will impact all periods presented in revised financial statements. Verizon emphasizes that other than these specific updates, the previously filed 2017 10-K remains substantially unchanged. The filing also includes revised financial data, management's discussion and analysis, and consolidated financial statements for the years ended December 31, 2017, 2016, and 2015, superseding the prior versions. Investors seeking to understand Verizon's financial position and performance should refer to these updated documents for the most accurate historical context.
Key Highlights
- 1Verizon is recasting financial information from its 2017 10-K due to adopting new accounting standards (ASU 2017-07, ASU 2016-18, ASU 2016-15) and reclassifying regulatory fees.
- 2Net periodic pension and postretirement benefit costs will be presented differently: 'other components' moved below operating income (in 'Other income (expense), net'), while 'service cost' remains in operating expenses.
- 3The statement of cash flows will now reflect changes in restricted cash and restricted cash equivalents, providing a more comprehensive view of cash movements.
- 4Collections of deferred purchase price from wireless device payment plan agreements are now classified as investing cash inflows, shifting from previous treatment as operating cash inflows.
- 5Regulatory fees have been reclassified from Selling, general and administrative expense to Cost of services for all periods presented.
- 6The financial statements and related disclosures in this 8-K supersede those in the original 2017 10-K for the periods presented.
- 7Revised financial data, MD&A, and consolidated financial statements for 2017, 2016, and 2015 are included as exhibits.