(Mark one)
|
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the quarterly period ended March 31, 2019
|
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
|
|
For the transition period from to
|
|
Delaware
|
|
23-2259884
|
(State or other jurisdiction
of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
1095 Avenue of the Americas
New York, New York
|
|
10036
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
|
|||||
|
|
|
|
|
|
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
|
|||||
|
|
|
|
|
|
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
|
|||||
|
|
|
|
|
|
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
|
Emerging growth company
|
☐
|
|
|
|
|
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
|
|||||
|
|
|
|
|
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
|
|||||
|
|
|
|
|
|
At March 31, 2019, 4,135,706,646 shares of the registrant’s common stock were outstanding, after deducting 155,727,000 shares held in treasury.
|
TABLE OF CONTENTS
|
Item No.
|
|
Page
|
|
|
|
|
||
|
|
|
Item 1.
|
|
|
|
|
|
|
||
|
Three months ended March 31, 2019 and 2018
|
|
|
|
|
|
||
|
Three months ended March 31, 2019 and 2018
|
|
|
|
|
|
||
|
At March 31, 2019 and December 31, 2018
|
|
|
|
|
|
||
|
Three months ended March 31, 2019 and 2018
|
|
|
|
|
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
|
||
|
|
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 6.
|
||
|
|
|
|
|
|
|
Part I - Financial Information
|
Item 1. Financial Statements (Unaudited)
|
Condensed Consolidated Statements of Income
Verizon Communications Inc. and Subsidiaries
|
|
Three Months Ended
|
|
|||||
|
March 31,
|
|
|||||
(dollars in millions, except per share amounts) (unaudited)
|
2019
|
|
|
2018
|
|
||
|
|
|
|
||||
Operating Revenues
|
|
|
|
||||
Service revenues and other
|
$
|
27,197
|
|
|
$
|
26,732
|
|
Wireless equipment revenues
|
4,931
|
|
|
5,040
|
|
||
Total Operating Revenues
|
32,128
|
|
|
31,772
|
|
||
|
|
|
|
||||
Operating Expenses
|
|
|
|
||||
Cost of services (exclusive of items shown below)
|
7,792
|
|
|
7,946
|
|
||
Wireless cost of equipment
|
5,198
|
|
|
5,309
|
|
||
Selling, general and administrative expense
|
7,198
|
|
|
6,844
|
|
||
Depreciation and amortization expense
|
4,231
|
|
|
4,324
|
|
||
Total Operating Expenses
|
24,419
|
|
|
24,423
|
|
||
|
|
|
|
||||
Operating Income
|
7,709
|
|
|
7,349
|
|
||
Equity in losses of unconsolidated businesses
|
(6
|
)
|
|
(19
|
)
|
||
Other income (expense), net
|
295
|
|
|
(75
|
)
|
||
Interest expense
|
(1,210
|
)
|
|
(1,201
|
)
|
||
Income Before Provision For Income Taxes
|
6,788
|
|
|
6,054
|
|
||
Provision for income taxes
|
(1,628
|
)
|
|
(1,388
|
)
|
||
Net Income
|
$
|
5,160
|
|
|
$
|
4,666
|
|
|
|
|
|
||||
Net income attributable to noncontrolling interests
|
$
|
128
|
|
|
$
|
121
|
|
Net income attributable to Verizon
|
5,032
|
|
|
4,545
|
|
||
Net Income
|
$
|
5,160
|
|
|
$
|
4,666
|
|
|
|
|
|
||||
Basic Earnings Per Common Share
|
|
|
|
||||
Net income attributable to Verizon
|
$
|
1.22
|
|
|
$
|
1.11
|
|
Weighted-average shares outstanding (in millions)
|
4,138
|
|
|
4,104
|
|
||
|
|
|
|
||||
Diluted Earnings Per Common Share
|
|
|
|
||||
Net income attributable to Verizon
|
$
|
1.22
|
|
|
$
|
1.11
|
|
Weighted-average shares outstanding (in millions)
|
4,140
|
|
|
4,107
|
|
Condensed Consolidated Statements of Comprehensive Income
Verizon Communications Inc. and Subsidiaries
|
|
Three Months Ended
|
|
|||||
|
March 31,
|
|
|||||
(dollars in millions) (unaudited)
|
2019
|
|
|
2018
|
|
||
|
|
|
|
||||
Net Income
|
$
|
5,160
|
|
|
$
|
4,666
|
|
Other Comprehensive Income (Loss), Net of Tax (Expense) Benefit
|
|
|
|
||||
Foreign currency translation adjustments, net of tax of $(5) and $(6)
|
24
|
|
|
93
|
|
||
Unrealized gain (loss) on cash flow hedges, net of tax of $5 and $(180)
|
(13
|
)
|
|
501
|
|
||
Unrealized gain (loss) on marketable securities, net of tax of $(2) and $1
|
4
|
|
|
(5
|
)
|
||
Defined benefit pension and postretirement plans, net of tax of $56 and $60
|
(169
|
)
|
|
(173
|
)
|
||
Other comprehensive income (loss) attributable to Verizon
|
(154
|
)
|
|
416
|
|
||
Total Comprehensive Income
|
$
|
5,006
|
|
|
$
|
5,082
|
|
|
|
|
|
||||
Comprehensive income attributable to noncontrolling interests
|
$
|
128
|
|
|
$
|
121
|
|
Comprehensive income attributable to Verizon
|
4,878
|
|
|
4,961
|
|
||
Total Comprehensive Income
|
$
|
5,006
|
|
|
$
|
5,082
|
|
Condensed Consolidated Balance Sheets
Verizon Communications Inc. and Subsidiaries
|
|
At March 31,
|
|
|
At December 31,
|
|
||
(dollars in millions, except per share amounts) (unaudited)
|
2019
|
|
|
2018
|
|
||
|
|
|
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,322
|
|
|
$
|
2,745
|
|
Accounts receivable, net of allowances of $744 and $765
|
24,469
|
|
|
25,102
|
|
||
Inventories
|
1,417
|
|
|
1,336
|
|
||
Prepaid expenses and other
|
5,189
|
|
|
5,453
|
|
||
Total current assets
|
33,397
|
|
|
34,636
|
|
||
|
|
|
|
||||
Property, plant and equipment
|
254,457
|
|
|
252,835
|
|
||
Less accumulated depreciation
|
166,608
|
|
|
163,549
|
|
||
Property, plant and equipment, net
|
87,849
|
|
|
89,286
|
|
||
|
|
|
|
||||
Investments in unconsolidated businesses
|
674
|
|
|
671
|
|
||
Wireless licenses
|
94,237
|
|
|
94,130
|
|
||
Goodwill
|
24,635
|
|
|
24,614
|
|
||
Other intangible assets, net
|
9,608
|
|
|
9,775
|
|
||
Operating lease right-of-use assets
|
23,105
|
|
|
—
|
|
||
Other assets
|
10,442
|
|
|
11,717
|
|
||
Total assets
|
$
|
283,947
|
|
|
$
|
264,829
|
|
|
|
|
|
||||
Liabilities and Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Debt maturing within one year
|
$
|
8,614
|
|
|
$
|
7,190
|
|
Accounts payable and accrued liabilities
|
18,664
|
|
|
22,501
|
|
||
Current operating lease liabilities
|
2,997
|
|
|
—
|
|
||
Other current liabilities
|
8,332
|
|
|
8,239
|
|
||
Total current liabilities
|
38,607
|
|
|
37,930
|
|
||
|
|
|
|
||||
Long-term debt
|
105,045
|
|
|
105,873
|
|
||
Employee benefit obligations
|
17,888
|
|
|
18,599
|
|
||
Deferred income taxes
|
34,344
|
|
|
33,795
|
|
||
Non-current operating lease liabilities
|
18,971
|
|
|
—
|
|
||
Other liabilities
|
11,632
|
|
|
13,922
|
|
||
Total long-term liabilities
|
187,880
|
|
|
172,189
|
|
||
|
|
|
|
||||
Commitments and Contingencies (Note 12)
|
|
|
|
||||
|
|
|
|
||||
Equity
|
|
|
|
||||
Series preferred stock ($0.10 par value; 250,000,000 shares authorized; none issued)
|
—
|
|
|
—
|
|
||
Common stock ($0.10 par value; 6,250,000,000 shares authorized in each period; 4,291,433,646 issued in each period)
|
429
|
|
|
429
|
|
||
Additional paid in capital
|
13,418
|
|
|
13,437
|
|
||
Retained earnings
|
46,493
|
|
|
43,542
|
|
||
Accumulated other comprehensive income
|
2,216
|
|
|
2,370
|
|
||
Common stock in treasury, at cost (155,727,000 and 159,400,267 shares outstanding)
|
(6,825
|
)
|
|
(6,986
|
)
|
||
Deferred compensation – employee stock ownership plans and other
|
125
|
|
|
353
|
|
||
Noncontrolling interests
|
1,604
|
|
|
1,565
|
|
||
Total equity
|
57,460
|
|
|
54,710
|
|
||
Total liabilities and equity
|
$
|
283,947
|
|
|
$
|
264,829
|
|
Condensed Consolidated Statements of Cash Flows
Verizon Communications Inc. and Subsidiaries
|
|
Three Months Ended
|
|
|||||
|
March 31,
|
|
|||||
(dollars in millions) (unaudited)
|
2019
|
|
|
2018
|
|
||
|
|
|
|
||||
Cash Flows from Operating Activities
|
|
|
|
||||
Net Income
|
$
|
5,160
|
|
|
$
|
4,666
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization expense
|
4,231
|
|
|
4,324
|
|
||
Employee retirement benefits
|
(195
|
)
|
|
(151
|
)
|
||
Deferred income taxes
|
459
|
|
|
702
|
|
||
Provision for uncollectible accounts
|
319
|
|
|
239
|
|
||
Equity in losses of unconsolidated businesses, net of dividends received
|
21
|
|
|
30
|
|
||
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses
|
(2,702
|
)
|
|
(2,033
|
)
|
||
Discretionary employee benefits contributions
|
(300
|
)
|
|
(1,000
|
)
|
||
Other, net
|
88
|
|
|
(129
|
)
|
||
Net cash provided by operating activities
|
7,081
|
|
|
6,648
|
|
||
|
|
|
|
||||
Cash Flows from Investing Activities
|
|
|
|
||||
Capital expenditures (including capitalized software)
|
(4,268
|
)
|
|
(4,552
|
)
|
||
Acquisitions of businesses, net of cash acquired
|
(25
|
)
|
|
(32
|
)
|
||
Acquisitions of wireless licenses
|
(104
|
)
|
|
(970
|
)
|
||
Other, net
|
(406
|
)
|
|
269
|
|
||
Net cash used in investing activities
|
(4,803
|
)
|
|
(5,285
|
)
|
||
|
|
|
|
||||
Cash Flows from Financing Activities
|
|
|
|
||||
Proceeds from long-term borrowings
|
2,131
|
|
|
1,956
|
|
||
Proceeds from asset-backed long-term borrowings
|
1,117
|
|
|
1,178
|
|
||
Repayments of long-term borrowings and finance lease obligations
|
(2,963
|
)
|
|
(2,984
|
)
|
||
Repayments of asset-backed long-term borrowings
|
(813
|
)
|
|
—
|
|
||
Dividends paid
|
(2,489
|
)
|
|
(2,407
|
)
|
||
Other, net
|
360
|
|
|
941
|
|
||
Net cash used in financing activities
|
(2,657
|
)
|
|
(1,316
|
)
|
||
|
|
|
|
||||
Increase (decrease) in cash, cash equivalents and restricted cash
|
(379
|
)
|
|
47
|
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
3,916
|
|
|
2,888
|
|
||
Cash, cash equivalents and restricted cash, end of period (Note 1)
|
$
|
3,537
|
|
|
$
|
2,935
|
|
Notes to Condensed Consolidated Financial Statements (Unaudited)
Verizon Communications Inc. and Subsidiaries
|
Note 1. Basis of Presentation
|
|
At March 31,
|
|
|
At December 31,
|
|
|
Increase / (Decrease)
|
|
|||
(dollars in millions)
|
2019
|
|
|
2018
|
|
|
|||||
Cash and cash equivalents
|
$
|
2,322
|
|
|
$
|
2,745
|
|
|
$
|
(423
|
)
|
Restricted cash:
|
|
|
|
|
|
||||||
Prepaid expenses and other
|
1,091
|
|
|
1,047
|
|
|
44
|
|
|||
Other assets
|
124
|
|
|
124
|
|
|
—
|
|
|||
Cash, cash equivalents and restricted cash
|
$
|
3,537
|
|
|
$
|
3,916
|
|
|
$
|
(379
|
)
|
(dollars in millions)
|
At December 31, 2018
|
|
|
Adjustments due to
Topic 842
|
|
|
At January 1, 2019
|
|
|||
Prepaid expenses and other
|
$
|
5,453
|
|
|
$
|
(329
|
)
|
|
$
|
5,124
|
|
Operating lease right-of-use assets
|
—
|
|
|
23,241
|
|
|
23,241
|
|
|||
Other assets
|
11,717
|
|
|
(2,048
|
)
|
|
9,669
|
|
|||
Accounts payable and accrued liabilities
|
22,501
|
|
|
(3
|
)
|
|
22,498
|
|
|||
Other current liabilities
|
8,239
|
|
|
(2
|
)
|
|
8,237
|
|
|||
Current operating lease liabilities
|
—
|
|
|
2,931
|
|
|
2,931
|
|
|||
Deferred income taxes
|
33,795
|
|
|
139
|
|
|
33,934
|
|
|||
Non-current operating lease liabilities
|
—
|
|
|
19,203
|
|
|
19,203
|
|
|||
Other liabilities
|
13,922
|
|
|
(1,815
|
)
|
|
12,107
|
|
|||
Retained earnings
|
43,542
|
|
|
410
|
|
|
43,952
|
|
|||
Noncontrolling interests
|
1,565
|
|
|
1
|
|
|
1,566
|
|
Note 2. Revenues and Contract Costs
|
|
At January 1,
|
|
|
At March 31,
|
|
|
At January 1,
|
|
|
At March 31,
|
|
||||
(dollars in millions)
|
2019
|
|
|
2019
|
|
|
2018
|
|
|
2018
|
|
||||
Receivables(1)
|
$
|
12,104
|
|
|
$
|
11,601
|
|
|
$
|
12,073
|
|
|
$
|
11,028
|
|
Device payment plan agreement receivables(2)
|
8,940
|
|
|
9,687
|
|
|
1,461
|
|
|
3,630
|
|
(1)
|
Balances do not include receivables related to the following contracts: leasing arrangements (such as towers), captive reinsurance arrangements primarily related to wireless device insurance and the interest on equipment financed on a device payment plan agreement when sold to the customer by an authorized agent.
|
(2)
|
Included in device payment plan agreement receivables presented in Note 7. Balances do not include receivables related to contracts completed prior to January 1, 2018 and receivables derived from the sale of equipment on a device payment plan through an authorized agent.
|
|
At January 1,
|
|
|
At March 31,
|
|
|
At January 1,
|
|
|
At March 31,
|
|
||||
(dollars in millions)
|
2019
|
|
|
2019
|
|
|
2018
|
|
|
2018
|
|
||||
Contract asset
|
$
|
1,003
|
|
|
$
|
1,021
|
|
|
$
|
1,170
|
|
|
$
|
1,106
|
|
Contract liability (1)
|
4,943
|
|
|
4,973
|
|
|
4,452
|
|
|
4,571
|
|
|
At March 31,
|
|
|
At December 31,
|
|
||
(dollars in millions)
|
2019
|
|
|
2018
|
|
||
Assets
|
|
|
|
||||
Prepaid expenses and other
|
$
|
770
|
|
|
$
|
757
|
|
Other assets
|
251
|
|
|
246
|
|
||
Total
|
$
|
1,021
|
|
|
$
|
1,003
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Other current liabilities
|
$
|
4,255
|
|
|
$
|
4,207
|
|
Other liabilities
|
718
|
|
|
736
|
|
||
Total
|
$
|
4,973
|
|
|
$
|
4,943
|
|
|
|
At March 31,
|
|
|
At December 31,
|
|
||
(dollars in millions)
|
Amortization Period
|
2019
|
|
|
2018
|
|
||
Wireless
|
2 to 3 years
|
$
|
3,084
|
|
|
$
|
2,989
|
|
Wireline
|
2 to 5 years
|
868
|
|
|
850
|
|
||
Corporate
|
2 to 3 years
|
69
|
|
|
56
|
|
||
Total
|
|
$
|
4,021
|
|
|
$
|
3,895
|
|
|
At March 31,
|
|
|
At December 31,
|
|
||
(dollars in millions)
|
2019
|
|
|
2018
|
|
||
Assets
|
|
|
|
||||
Prepaid expenses and other
|
$
|
2,230
|
|
|
$
|
2,083
|
|
Other assets
|
1,791
|
|
|
1,812
|
|
||
Total
|
$
|
4,021
|
|
|
$
|
3,895
|
|
Note 3. Acquisitions and Divestitures
|
Note 4. Wireless Licenses, Goodwill, and Other Intangible Assets
|
|
At March 31,
|
|
At December 31,
|
|
||
(dollars in millions)
|
2019
|
|
2018
|
|
||
Wireless licenses
|
$
|
94,237
|
|
$
|
94,130
|
|
(dollars in millions)
|
Wireless
|
|
|
Wireline
|
|
|
Other
|
|
|
Total
|
|
||||
Balance at January 1, 2019 (1)
|
$
|
18,397
|
|
|
$
|
3,871
|
|
|
$
|
2,346
|
|
|
$
|
24,614
|
|
Acquisitions (Note 3)
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
||||
Reclassifications, adjustments and other
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Balance at March 31, 2019 (1)
|
$
|
18,397
|
|
|
$
|
3,892
|
|
|
$
|
2,346
|
|
|
$
|
24,635
|
|
|
At March 31, 2019
|
|
|
At December 31, 2018
|
|
||||||||||||||||||
(dollars in millions)
|
Gross
Amount
|
|
|
Accumulated
Amortization
|
|
|
Net
Amount
|
|
|
Gross
Amount
|
|
|
Accumulated
Amortization
|
|
|
Net
Amount
|
|
||||||
Customer lists (8 to 13 years)
|
$
|
3,953
|
|
|
$
|
(1,213
|
)
|
|
$
|
2,740
|
|
|
$
|
3,951
|
|
|
$
|
(1,121
|
)
|
|
$
|
2,830
|
|
Non-network internal-use software (3 to 7 years)
|
18,958
|
|
|
(13,192
|
)
|
|
5,766
|
|
|
18,603
|
|
|
(12,785
|
)
|
|
5,818
|
|
||||||
Other (2 to 25 years)
|
1,999
|
|
|
(897
|
)
|
|
1,102
|
|
|
1,988
|
|
|
(861
|
)
|
|
1,127
|
|
||||||
Total
|
$
|
24,910
|
|
|
$
|
(15,302
|
)
|
|
$
|
9,608
|
|
|
$
|
24,542
|
|
|
$
|
(14,767
|
)
|
|
$
|
9,775
|
|
|
Three Months Ended
|
|
|
(dollars in millions)
|
March 31,
|
|
|
2019
|
$
|
555
|
|
2018
|
534
|
|
Years
|
(dollars in millions)
|
|
|
Remainder of 2019
|
$
|
1,603
|
|
2020
|
1,837
|
|
|
2021
|
1,544
|
|
|
2022
|
1,276
|
|
|
2023
|
1,004
|
|
|
2024
|
749
|
|
Note 5. Leasing Arrangements
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
(dollars in millions)
|
Classification
|
2019
|
|
|
Operating lease cost (1)
|
Cost of services
Selling, general and administrative expense
|
$
|
1,170
|
|
Finance lease cost:
|
|
|
||
Amortization of right-of-use assets
|
Depreciation and amortization expense
|
86
|
|
|
Interest on lease liabilities
|
Interest expense
|
9
|
|
|
Short-term lease cost (1)
|
Cost of services
Selling, general and administrative expense
|
16
|
|
|
Variable lease cost (1)
|
Cost of services
Selling, general and administrative expense |
57
|
|
|
Sublease income
|
Service revenues and other
|
(67
|
)
|
|
Total net lease cost
|
|
$
|
1,271
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
(dollars in millions)
|
2019
|
|
|
Cash Flows from Operating Activities
|
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
|
||
Operating cash flows for operating leases
|
$
|
(1,058
|
)
|
Operating cash flows for finance leases
|
(9
|
)
|
|
Cash Flows from Financing Activities
|
|
||
Financing cash flows for finance leases
|
(86
|
)
|
|
Supplemental lease cash flow disclosures
|
|
||
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities
|
668
|
|
|
Right-of-use assets obtained in exchange for new finance lease liabilities
|
115
|
|
|
At March 31,
|
|
|
(dollars in millions)
|
2019
|
|
|
Assets
|
|
||
Property, plant and equipment, net
|
$
|
742
|
|
|
|
||
Liabilities
|
|
||
Debt maturing within one year
|
$
|
323
|
|
Long-term debt
|
611
|
|
|
Total Finance lease liabilities
|
$
|
934
|
|
|
At March 31,
|
|
|
2019
|
|
Weighted-average remaining lease term (years)
|
|
|
Operating Leases
|
9
|
|
Finance Leases
|
4
|
|
Weighted-average discount rate
|
|
|
Operating Leases
|
4.2
|
%
|
Finance Leases
|
3.6
|
%
|
(dollars in millions)
|
Operating Leases
|
|
|
Finance Leases
|
|
||
Remainder of 2019
|
$
|
3,051
|
|
|
$
|
279
|
|
2020
|
3,805
|
|
|
270
|
|
||
2021
|
3,462
|
|
|
173
|
|
||
2022
|
3,045
|
|
|
122
|
|
||
2023
|
2,689
|
|
|
75
|
|
||
Thereafter
|
10,792
|
|
|
105
|
|
||
Total lease payments
|
26,844
|
|
|
1,024
|
|
||
Less interest
|
(4,876
|
)
|
|
(90
|
)
|
||
Present value of lease liabilities
|
21,968
|
|
|
934
|
|
||
Less current obligation
|
(2,997
|
)
|
|
(323
|
)
|
||
Long-term obligation at March 31, 2019
|
$
|
18,971
|
|
|
$
|
611
|
|
Note 6. Debt
|
(dollars in millions)
|
Principal Amount Exchanged
|
|
Principal Amount Issued
|
|
||
Verizon 1.750% - 5.150% notes and floating rate notes, due 2021 - 2025
|
$
|
3,892
|
|
$
|
—
|
|
GTE LLC 8.750% debentures, due 2021
|
21
|
|
—
|
|
||
Verizon 4.016% notes due 2029 (1)
|
—
|
|
4,000
|
|
||
Total
|
$
|
3,913
|
|
$
|
4,000
|
|
(dollars in millions)
|
Principal Redeemed / Repaid
|
|
Amount Paid as % of Principal (1)
|
|
|
Verizon 5.900% notes due 2054
|
$
|
500
|
|
100.000
|
%
|
Verizon 1.375% notes due 2019
|
206
|
|
100.000
|
%
|
|
Verizon 1.750% notes due 2021
|
621
|
|
100.000
|
%
|
|
Verizon 3.000% notes due 2021
|
930
|
|
101.061
|
%
|
|
Verizon 3.500% notes due 2021
|
315
|
|
102.180
|
%
|
|
Open market repurchases of various Verizon notes
|
163
|
|
Various
|
|
|
Total
|
$
|
2,735
|
|
|
(dollars in millions)
|
Principal Amount Issued
|
|
Net Proceeds (1)
|
|
||
Verizon 3.875% notes due 2029 (2)
|
$
|
1,000
|
|
$
|
994
|
|
Verizon 5.000% notes due 2051
|
510
|
|
506
|
|
||
Total
|
$
|
1,510
|
|
$
|
1,500
|
|
(dollars in millions)
|
Interest Rates %
|
|
|
Expected Weighted-average Life to Maturity
|
Principal Amount Issued
|
|
|
A-1a Senior class notes
|
2.930
|
|
|
2.50
|
$
|
900
|
|
A-1b Senior floating rate class notes
|
LIBOR + 0.330
|
|
(1)
|
2.50
|
100
|
|
|
B Junior class notes
|
3.020
|
|
|
3.22
|
69
|
|
|
C Junior class notes
|
3.220
|
|
|
3.40
|
53
|
|
|
Total ABS notes
|
|
|
|
$
|
1,122
|
|
|
At March 31,
|
|
|
At December 31,
|
|
||
(dollars in millions)
|
2019
|
|
|
2018
|
|
||
Assets
|
|
|
|
||||
Account receivable, net
|
$
|
9,535
|
|
|
$
|
8,861
|
|
Prepaid expenses and other
|
1,045
|
|
|
989
|
|
||
Other assets
|
3,263
|
|
|
2,725
|
|
||
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Accounts payable and accrued liabilities
|
10
|
|
|
7
|
|
||
Short-term portion of long-term debt
|
5,494
|
|
|
5,352
|
|
||
Long-term debt
|
4,892
|
|
|
4,724
|
|
Note 7. Wireless Device Payment Plans
|
|
At March 31,
|
|
|
At December 31,
|
|
||
(dollars in millions)
|
2019
|
|
|
2018
|
|
||
Device payment plan agreement receivables, gross
|
$
|
18,865
|
|
|
$
|
19,313
|
|
Unamortized imputed interest
|
(493
|
)
|
|
(546
|
)
|
||
Device payment plan agreement receivables, net of unamortized imputed interest
|
18,372
|
|
|
18,767
|
|
||
Allowance for credit losses
|
(526
|
)
|
|
(597
|
)
|
||
Device payment plan agreement receivables, net
|
$
|
17,846
|
|
|
$
|
18,170
|
|
|
|
|
|
||||
Classified in our condensed consolidated balance sheets:
|
|
|
|
||||
Accounts receivable, net
|
$
|
12,607
|
|
|
$
|
12,624
|
|
Other assets
|
5,239
|
|
|
5,546
|
|
||
Device payment plan agreement receivables, net
|
$
|
17,846
|
|
|
$
|
18,170
|
|
|
At March 31,
|
|
|
At December 31,
|
|
||
(dollars in millions)
|
2019
|
|
|
2018
|
|
||
Unbilled
|
$
|
17,586
|
|
|
$
|
18,043
|
|
Billed:
|
|
|
|
||||
Current
|
990
|
|
|
986
|
|
||
Past due
|
289
|
|
|
284
|
|
||
Device payment plan agreement receivables, gross
|
$
|
18,865
|
|
|
$
|
19,313
|
|
(dollars in millions)
|
2019
|
|
|
2018
|
|
||
Balance at January 1,
|
$
|
597
|
|
|
$
|
848
|
|
Bad debt expense
|
155
|
|
|
104
|
|
||
Write-offs
|
(226
|
)
|
|
(149
|
)
|
||
Balance at March 31,
|
$
|
526
|
|
|
$
|
803
|
|
Note 8. Fair Value Measurements
|
(dollars in millions)
|
Level 1(1)
|
|
|
Level 2(2)
|
|
|
Level 3(3)
|
|
|
Total
|
|
||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Other assets:
|
|
|
|
|
|
|
|
||||||||
Fixed income securities
|
$
|
—
|
|
|
$
|
430
|
|
|
$
|
—
|
|
|
$
|
430
|
|
Interest rate swaps
|
—
|
|
|
100
|
|
|
—
|
|
|
100
|
|
||||
Cross currency swaps
|
—
|
|
|
215
|
|
|
—
|
|
|
215
|
|
||||
Interest rate caps
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||
Total
|
$
|
—
|
|
|
$
|
751
|
|
|
$
|
—
|
|
|
$
|
751
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Other liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
—
|
|
|
$
|
361
|
|
|
$
|
—
|
|
|
$
|
361
|
|
Cross currency swaps
|
—
|
|
|
519
|
|
|
—
|
|
|
519
|
|
||||
Forward starting interest rate swaps
|
—
|
|
|
242
|
|
|
—
|
|
|
242
|
|
||||
Interest rate caps
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Foreign exchange forwards
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||
Total
|
$
|
—
|
|
|
$
|
1,134
|
|
|
$
|
—
|
|
|
$
|
1,134
|
|
(dollars in millions)
|
Level 1(1)
|
|
|
Level 2(2)
|
|
|
Level 3(3)
|
|
|
Total
|
|
||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Other assets:
|
|
|
|
|
|
|
|
||||||||
Fixed income securities
|
$
|
—
|
|
|
$
|
405
|
|
|
$
|
—
|
|
|
$
|
405
|
|
Interest rate swaps
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Cross currency swaps
|
—
|
|
|
220
|
|
|
—
|
|
|
220
|
|
||||
Interest rate caps
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
||||
Total
|
$
|
—
|
|
|
$
|
642
|
|
|
$
|
—
|
|
|
$
|
642
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Other liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
—
|
|
|
$
|
813
|
|
|
$
|
—
|
|
|
$
|
813
|
|
Cross currency swaps
|
—
|
|
|
536
|
|
|
—
|
|
|
536
|
|
||||
Forward starting interest rate swaps
|
—
|
|
|
60
|
|
|
—
|
|
|
60
|
|
||||
Interest rate caps
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||
Total
|
$
|
—
|
|
|
$
|
1,413
|
|
|
$
|
—
|
|
|
$
|
1,413
|
|
(1)
|
Quoted prices in active markets for identical assets or liabilities
|
(2)
|
Observable inputs other than quoted prices in active markets for identical assets and liabilities
|
(3)
|
Unobservable pricing inputs in the market
|
|
At March 31,
|
|
|
At December 31,
|
|
||||||||||
|
2019
|
|
|
2018
|
|
||||||||||
(dollars in millions)
|
Carrying
Amount
|
|
|
Fair Value
|
|
|
Carrying
Amount
|
|
|
Fair
Value
|
|
||||
Short- and long-term debt, excluding finance leases
|
$
|
112,725
|
|
|
$
|
125,307
|
|
|
$
|
112,159
|
|
|
$
|
118,535
|
|
|
At March 31,
|
|
|
At December 31,
|
|
||
(dollars in millions)
|
2019
|
|
|
2018
|
|
||
Interest rate swaps
|
$
|
19,076
|
|
|
$
|
19,813
|
|
Cross currency swaps
|
16,638
|
|
|
16,638
|
|
||
Forward starting interest rate swaps
|
3,000
|
|
|
4,000
|
|
||
Interest rate caps
|
1,624
|
|
|
2,218
|
|
||
Foreign exchange forwards
|
1,000
|
|
|
600
|
|
|
At March 31,
|
|
|
At December 31,
|
|
||
(dollars in millions)
|
2019
|
|
|
2018
|
|
||
Carrying amount of hedged liabilities
|
$
|
18,752
|
|
|
$
|
18,903
|
|
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged liabilities
|
(205
|
)
|
|
(785
|
)
|
Note 9. Employee Benefits
|
|
(dollars in millions)
|
|
|||||||||||||
|
Pension
|
|
Health Care and Life
|
|
|||||||||||
Three Months Ended March 31,
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
Service cost - Cost of services
|
$
|
50
|
|
|
$
|
58
|
|
|
$
|
20
|
|
|
$
|
26
|
|
Service cost - Selling, general and administrative expense
|
11
|
|
|
14
|
|
|
4
|
|
|
6
|
|
||||
Service cost
|
$
|
61
|
|
|
$
|
72
|
|
|
$
|
24
|
|
|
$
|
32
|
|
|
|
|
|
|
|
|
|
||||||||
Amortization of prior service cost (credit)
|
$
|
15
|
|
|
$
|
10
|
|
|
$
|
(243
|
)
|
|
$
|
(244
|
)
|
Expected return on plan assets
|
(282
|
)
|
|
(329
|
)
|
|
(9
|
)
|
|
(11
|
)
|
||||
Interest cost
|
178
|
|
|
166
|
|
|
157
|
|
|
153
|
|
||||
Remeasurement gain, net
|
(96
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other components
|
$
|
(185
|
)
|
|
$
|
(153
|
)
|
|
$
|
(95
|
)
|
|
$
|
(102
|
)
|
|
|
|
|
|
|
|
|
||||||||
Total
|
$
|
(124
|
)
|
|
$
|
(81
|
)
|
|
$
|
(71
|
)
|
|
$
|
(70
|
)
|
Note 10. Equity and Accumulated Other Comprehensive Income
|
(dollars in millions, except per share amounts, and shares in thousands)
|
||||||||||||||
Three months ended March 31,
|
2019
|
|
|
|
|
2018
|
|
|
|
|
||||
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
||
Common Stock
|
|
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
4,291,434
|
|
|
$
|
429
|
|
|
4,242,374
|
|
|
$
|
424
|
|
|
Common shares issued
|
—
|
|
|
—
|
|
|
49,048
|
|
|
5
|
|
|
||
Balance at end of period
|
4,291,434
|
|
|
429
|
|
|
4,291,422
|
|
|
429
|
|
|
||
|
|
|
|
|
|
|
|
|
||||||
Additional Paid In Capital
|
|
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
|
|
13,437
|
|
|
|
|
11,101
|
|
|
||||
Other
|
|
|
(19
|
)
|
|
|
|
2,336
|
|
|
||||
Balance at end of period
|
|
|
13,418
|
|
|
|
|
13,437
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||
Retained Earnings
|
|
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
|
|
43,542
|
|
|
|
|
35,635
|
|
|
||||
Opening balance sheet adjustment
|
|
|
410
|
|
(1)
|
|
|
2,232
|
|
(2)
|
||||
Adjusted opening balance
|
|
|
43,952
|
|
|
|
|
37,867
|
|
|
||||
Net income attributable to Verizon
|
|
|
5,032
|
|
|
|
|
4,545
|
|
|
||||
Dividends declared ($0.6025, $0.5900 per share)
|
|
|
(2,491
|
)
|
|
|
|
(2,438
|
)
|
|
||||
Balance at end of period
|
|
|
46,493
|
|
|
|
|
39,974
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||
Accumulated Other Comprehensive Income
|
|
|
|
|
|
|
|
|
||||||
Balance at beginning of period attributable to Verizon
|
|
|
2,370
|
|
|
|
|
2,659
|
|
|
||||
Opening balance sheet adjustment
|
|
|
—
|
|
|
|
|
630
|
|
(2)
|
||||
Adjusted opening balance
|
|
|
2,370
|
|
|
|
|
3,289
|
|
|
||||
Foreign currency translation adjustments
|
|
|
24
|
|
|
|
|
93
|
|
|
||||
Unrealized gain (loss) on cash flow hedges
|
|
|
(13
|
)
|
|
|
|
501
|
|
|
||||
Unrealized gain (loss) on marketable securities
|
|
|
4
|
|
|
|
|
(5
|
)
|
|
||||
Defined benefit pension and postretirement plans
|
|
|
(169
|
)
|
|
|
|
(173
|
)
|
|
||||
Other comprehensive income (loss)
|
|
|
(154
|
)
|
|
|
|
416
|
|
|
||||
Balance at end of period attributable to Verizon
|
|
|
2,216
|
|
|
|
|
3,705
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||
Treasury Stock
|
|
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
(159,400
|
)
|
|
(6,986
|
)
|
|
(162,898
|
)
|
|
(7,139
|
)
|
|
||
Employee plans
|
3,668
|
|
|
161
|
|
|
3,368
|
|
|
147
|
|
|
||
Shareholder plans
|
5
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
||
Balance at end of period
|
(155,727
|
)
|
|
(6,825
|
)
|
|
(159,526
|
)
|
|
(6,992
|
)
|
|
||
|
|
|
|
|
|
|
|
|
||||||
Deferred Compensation-ESOPs and Other
|
|
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
|
|
353
|
|
|
|
|
416
|
|
|
||||
Restricted stock equity grant
|
|
|
35
|
|
|
|
|
33
|
|
|
||||
Amortization
|
|
|
(263
|
)
|
|
|
|
(221
|
)
|
|
||||
Balance at end of period
|
|
|
125
|
|
|
|
|
228
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||
Noncontrolling Interests
|
|
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
|
|
1,565
|
|
|
|
|
1,591
|
|
|
||||
Opening balance sheet adjustment
|
|
|
1
|
|
(1)
|
|
|
44
|
|
(2)
|
||||
Adjusted opening balance
|
|
|
1,566
|
|
|
|
|
1,635
|
|
|
||||
Net income attributable to noncontrolling interests
|
|
|
128
|
|
|
|
|
121
|
|
|
||||
Total comprehensive income
|
|
|
128
|
|
|
|
|
121
|
|
|
||||
Distributions and other
|
|
|
(90
|
)
|
|
|
|
(192
|
)
|
|
||||
Balance at end of period
|
|
|
1,604
|
|
|
|
|
1,564
|
|
|
||||
Total Equity
|
|
|
$
|
57,460
|
|
|
|
|
$
|
52,345
|
|
|
|
|
|
|
|
|
|
|
(dollars in millions)
|
Foreign
currency
translation
adjustments
|
|
|
Unrealized
gain (loss) on cash
flow hedges
|
|
|
Unrealized
gain (loss) on
marketable
securities
|
|
|
Defined
benefit
pension and
postretirement
plans
|
|
|
Total
|
|
|||||
Balance at January 1, 2019
|
$
|
(600
|
)
|
|
$
|
(80
|
)
|
|
$
|
20
|
|
|
$
|
3,030
|
|
|
$
|
2,370
|
|
Other comprehensive income (loss)
|
24
|
|
|
(141
|
)
|
|
4
|
|
|
—
|
|
|
(113
|
)
|
|||||
Amounts reclassified to net income
|
—
|
|
|
128
|
|
|
—
|
|
|
(169
|
)
|
|
(41
|
)
|
|||||
Net other comprehensive income (loss)
|
24
|
|
|
(13
|
)
|
|
4
|
|
|
(169
|
)
|
|
(154
|
)
|
|||||
Balance at March 31, 2019
|
$
|
(576
|
)
|
|
$
|
(93
|
)
|
|
$
|
24
|
|
|
$
|
2,861
|
|
|
$
|
2,216
|
|
Note 11. Segment Information
|
Segment
|
Description
|
Wireless
|
Wireless’ communications products and services include wireless voice and data services and equipment sales, which are provided to consumer, business and government customers across the U.S.
|
Wireline
|
Wireline’s communications products and enhanced services include video and data services, corporate networking solutions, security and managed network services and local and long distance voice services. We provide these products and services to consumers in the U.S., as well as to carriers, businesses and government customers both in the U.S. and around the world.
|
|
Three Months Ended
|
|
|||||
|
March 31,
|
|
|||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
||
External Operating Revenues
|
|
|
|
||||
Wireless
|
|
|
|
||||
Service
|
$
|
16,057
|
|
|
$
|
15,371
|
|
Equipment
|
4,931
|
|
|
5,040
|
|
||
Other
|
1,633
|
|
|
1,396
|
|
||
Total Wireless
|
22,621
|
|
|
21,807
|
|
||
|
|
|
|
||||
Wireline
|
|
|
|
||||
Consumer Markets
|
3,103
|
|
|
3,149
|
|
||
Enterprise Solutions
|
2,140
|
|
|
2,240
|
|
||
Partner Solutions
|
833
|
|
|
979
|
|
||
Business Markets
|
828
|
|
|
871
|
|
||
Other
|
66
|
|
|
67
|
|
||
Total Wireline
|
6,970
|
|
|
7,306
|
|
||
Total reportable segments
|
$
|
29,591
|
|
|
$
|
29,113
|
|
|
|
|
|
||||
Intersegment Revenues
|
|
|
|
||||
Wireless
|
$
|
79
|
|
|
$
|
93
|
|
Wireline
|
294
|
|
|
251
|
|
||
Total reportable segments
|
$
|
373
|
|
|
$
|
344
|
|
|
|
|
|
||||
Total Operating Revenues
|
|
|
|
||||
Wireless
|
$
|
22,700
|
|
|
$
|
21,900
|
|
Wireline
|
7,264
|
|
|
7,557
|
|
||
Total reportable segments
|
$
|
29,964
|
|
|
$
|
29,457
|
|
|
|
|
|
||||
Operating Income (Loss)
|
|
|
|
||||
Wireless
|
$
|
8,466
|
|
|
$
|
8,049
|
|
Wireline
|
(88
|
)
|
|
69
|
|
||
Total reportable segments
|
$
|
8,378
|
|
|
$
|
8,118
|
|
|
At March 31,
|
|
|
At December 31,
|
|
||
(dollars in millions)
|
2019
|
|
|
2018
|
|
||
Assets
|
|
|
|
||||
Wireless
|
$
|
237,889
|
|
|
$
|
213,290
|
|
Wireline
|
98,057
|
|
|
94,799
|
|
||
Total reportable segments
|
335,946
|
|
|
308,089
|
|
||
Corporate and other
|
246,512
|
|
|
244,695
|
|
||
Eliminations
|
(298,511
|
)
|
|
(287,955
|
)
|
||
Total consolidated - reported
|
$
|
283,947
|
|
|
$
|
264,829
|
|
|
Three Months Ended
|
|
|||||
|
March 31,
|
|
|||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
||
Total reportable segment operating revenues
|
$
|
29,964
|
|
|
$
|
29,457
|
|
Corporate and other
|
2,591
|
|
|
2,711
|
|
||
Eliminations
|
(427
|
)
|
|
(396
|
)
|
||
Total consolidated operating revenues
|
$
|
32,128
|
|
|
$
|
31,772
|
|
|
Three Months Ended
|
|
|||||
|
March 31,
|
|
|||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
||
Total reportable segment operating income
|
$
|
8,378
|
|
|
$
|
8,118
|
|
Corporate and other
|
(466
|
)
|
|
(454
|
)
|
||
Other components of net periodic benefit charges (Note 9)
|
(203
|
)
|
|
(208
|
)
|
||
Acquisition and integration related charges
|
—
|
|
|
(107
|
)
|
||
Total consolidated operating income
|
7,709
|
|
|
7,349
|
|
||
|
|
|
|
||||
Equity in losses of unconsolidated businesses
|
(6
|
)
|
|
(19
|
)
|
||
Other income (expense), net
|
295
|
|
|
(75
|
)
|
||
Interest expense
|
(1,210
|
)
|
|
(1,201
|
)
|
||
Income Before Provision For Income Taxes
|
$
|
6,788
|
|
|
$
|
6,054
|
|
Note 12. Commitments and Contingencies
|
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Overview
|
Consolidated Results of Operations
|
|
Three Months Ended
|
|
|
|
|
|
||||||||
|
March 31,
|
|
|
Increase/
|
||||||||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
|
(Decrease)
|
|||||||
Wireless
|
$
|
22,700
|
|
|
$
|
21,900
|
|
|
$
|
800
|
|
|
3.7
|
%
|
Wireline
|
7,264
|
|
|
7,557
|
|
|
(293
|
)
|
|
(3.9
|
)
|
|||
Corporate and other
|
2,591
|
|
|
2,711
|
|
|
(120
|
)
|
|
(4.4
|
)
|
|||
Eliminations
|
(427
|
)
|
|
(396
|
)
|
|
(31
|
)
|
|
7.8
|
|
|||
Consolidated Revenues
|
$
|
32,128
|
|
|
$
|
31,772
|
|
|
$
|
356
|
|
|
1.1
|
|
|
Three Months Ended
|
|
|
|
|
|
||||||||
|
March 31,
|
|
|
Increase/
|
||||||||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
|
(Decrease)
|
|||||||
Cost of services
|
$
|
7,792
|
|
|
$
|
7,946
|
|
|
$
|
(154
|
)
|
|
(1.9
|
)%
|
Wireless cost of equipment
|
5,198
|
|
|
5,309
|
|
|
(111
|
)
|
|
(2.1
|
)
|
|||
Selling, general and administrative expense
|
7,198
|
|
|
6,844
|
|
|
354
|
|
|
5.2
|
|
|||
Depreciation and amortization expense
|
4,231
|
|
|
4,324
|
|
|
(93
|
)
|
|
(2.2
|
)
|
|||
Consolidated Operating Expenses
|
$
|
24,419
|
|
|
$
|
24,423
|
|
|
$
|
(4
|
)
|
|
—
|
|
|
Three Months Ended
|
|
|
|
|
|
||||||||
|
March 31,
|
|
|
Increase/
|
||||||||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
|
(Decrease)
|
|||||||
Interest income
|
$
|
29
|
|
|
$
|
16
|
|
|
$
|
13
|
|
|
81.3
|
%
|
Other components of net periodic benefit cost
|
280
|
|
|
255
|
|
|
25
|
|
|
9.8
|
|
|||
Other, net
|
(14
|
)
|
|
(346
|
)
|
|
332
|
|
|
(96.0
|
)
|
|||
Total
|
$
|
295
|
|
|
$
|
(75
|
)
|
|
$
|
370
|
|
|
nm
|
|
|
Three Months Ended
|
|
|
|
|
|
||||||||
|
March 31,
|
|
|
Increase/
|
||||||||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
|
(Decrease)
|
|||||||
Total interest costs on debt balances
|
$
|
1,368
|
|
|
$
|
1,377
|
|
|
$
|
(9
|
)
|
|
(0.7
|
)%
|
Less capitalized interest costs
|
158
|
|
|
176
|
|
|
(18
|
)
|
|
(10.2
|
)
|
|||
Total
|
$
|
1,210
|
|
|
$
|
1,201
|
|
|
$
|
9
|
|
|
0.7
|
|
|
|
|
|
|
|
|
|
|||||||
Average debt outstanding
|
$
|
113,476
|
|
|
$
|
117,973
|
|
|
|
|
|
|||
Effective interest rate
|
4.8
|
%
|
|
4.7
|
%
|
|
|
|
|
|
Three Months Ended
|
|
|
|
||||||||||
|
March 31,
|
|
|
Increase/
|
||||||||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
|
(Decrease)
|
|||||||
Provision for income taxes
|
$
|
1,628
|
|
|
$
|
1,388
|
|
|
$
|
240
|
|
|
17.3
|
%
|
Effective income tax rate
|
24.0
|
%
|
|
22.9
|
%
|
|
|
|
|
|
Three Months Ended
|
|
|||||
|
March 31,
|
|
|||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
||
Consolidated Net Income
|
$
|
5,160
|
|
|
$
|
4,666
|
|
Add:
|
|
|
|
||||
Provision for income taxes
|
1,628
|
|
|
1,388
|
|
||
Interest expense
|
1,210
|
|
|
1,201
|
|
||
Depreciation and amortization expense
|
4,231
|
|
|
4,324
|
|
||
Consolidated EBITDA*
|
$
|
12,229
|
|
|
$
|
11,579
|
|
|
|
|
|
||||
Add (Less):
|
|
|
|
||||
Other (income) expense, net†
|
$
|
(295
|
)
|
|
$
|
75
|
|
Equity in losses of unconsolidated businesses
|
6
|
|
|
19
|
|
||
Acquisition and integration related charges‡
|
—
|
|
|
105
|
|
||
Consolidated Adjusted EBITDA
|
$
|
11,940
|
|
|
$
|
11,778
|
|
Segment Results of Operations
|
|
Three Months Ended
|
|
|
|
||||||||||
|
March 31,
|
|
|
Increase/
|
||||||||||
(dollars in millions, except ARPA and I-ARPA)
|
2019
|
|
|
2018
|
|
|
(Decrease)
|
|||||||
Service
|
$
|
16,072
|
|
|
$
|
15,402
|
|
|
$
|
670
|
|
|
4.4
|
%
|
Equipment
|
4,931
|
|
|
5,040
|
|
|
(109
|
)
|
|
(2.2
|
)
|
|||
Other
|
1,697
|
|
|
1,458
|
|
|
239
|
|
|
16.4
|
|
|||
Total Operating Revenues
|
$
|
22,700
|
|
|
$
|
21,900
|
|
|
$
|
800
|
|
|
3.7
|
|
|
|
|
|
|
|
|
|
|||||||
Connections (‘000): (1)
|
|
|
|
|
|
|
|
|||||||
Retail
|
117,886
|
|
|
116,182
|
|
|
1,704
|
|
|
1.5
|
|
|||
Retail postpaid
|
113,407
|
|
|
111,114
|
|
|
2,293
|
|
|
2.1
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Net additions in period (‘000): (2)
|
|
|
|
|
|
|
|
|||||||
Retail connections
|
(115
|
)
|
|
(75
|
)
|
|
(40
|
)
|
|
(53.3
|
)
|
|||
Retail postpaid connections
|
61
|
|
|
260
|
|
|
(199
|
)
|
|
(76.5
|
)
|
|||
|
|
|
|
|
|
|
|
|||||||
Churn Rate:
|
|
|
|
|
|
|
|
|||||||
Retail connections
|
1.31
|
%
|
|
1.28
|
%
|
|
|
|
|
|||||
Retail postpaid connections
|
1.12
|
%
|
|
1.04
|
%
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||||
Account Statistics:
|
|
|
|
|
|
|
|
|||||||
Retail postpaid ARPA
|
$
|
136.68
|
|
|
$
|
131.71
|
|
|
$
|
4.97
|
|
|
3.8
|
|
Retail postpaid I-ARPA
|
$
|
172.09
|
|
|
$
|
164.72
|
|
|
$
|
7.37
|
|
|
4.5
|
|
|
|
|
|
|
|
|
|
|||||||
Retail postpaid accounts (‘000) (1)
|
35,338
|
|
|
35,333
|
|
|
5
|
|
|
—
|
|
|||
Retail postpaid connections per account (1)
|
3.21
|
|
|
3.14
|
|
|
0.07
|
|
|
2.2
|
|
(1)
|
As of end of period
|
(2)
|
Excluding acquisitions and adjustments
|
|
Three Months Ended
|
|
|
|
||||||||||
|
March 31,
|
|
|
Increase/
|
||||||||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
|
(Decrease)
|
|||||||
Cost of services
|
$
|
2,456
|
|
|
$
|
2,215
|
|
|
$
|
241
|
|
|
10.9
|
%
|
Cost of equipment
|
5,198
|
|
|
5,309
|
|
|
(111
|
)
|
|
(2.1
|
)
|
|||
Selling, general and administrative expense
|
4,281
|
|
|
3,899
|
|
|
382
|
|
|
9.8
|
|
|||
Depreciation and amortization expense
|
2,299
|
|
|
2,428
|
|
|
(129
|
)
|
|
(5.3
|
)
|
|||
Total Operating Expenses
|
$
|
14,234
|
|
|
$
|
13,851
|
|
|
$
|
383
|
|
|
2.8
|
|
|
Three Months Ended
|
|
|
|
||||||||||
|
March 31,
|
|
|
Increase/
|
||||||||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
|
(Decrease)
|
|||||||
Segment Operating Income
|
$
|
8,466
|
|
|
$
|
8,049
|
|
|
$
|
417
|
|
|
5.2
|
%
|
Add Depreciation and amortization expense
|
2,299
|
|
|
2,428
|
|
|
(129
|
)
|
|
(5.3
|
)
|
|||
Segment EBITDA
|
$
|
10,765
|
|
|
$
|
10,477
|
|
|
$
|
288
|
|
|
2.7
|
|
|
|
|
|
|
|
|
|
|||||||
Segment operating income margin
|
37.3
|
%
|
|
36.8
|
%
|
|
|
|
|
|||||
Segment EBITDA margin
|
47.4
|
%
|
|
47.8
|
%
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
||||||||
|
March 31,
|
|
|
Increase/
|
||||||||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
|
(Decrease)
|
|||||||
Consumer Markets
|
$
|
3,153
|
|
|
$
|
3,150
|
|
|
$
|
3
|
|
|
0.1
|
%
|
Enterprise Solutions
|
2,140
|
|
|
2,240
|
|
|
(100
|
)
|
|
(4.5
|
)
|
|||
Partner Solutions
|
1,075
|
|
|
1,228
|
|
|
(153
|
)
|
|
(12.5
|
)
|
|||
Business Markets
|
828
|
|
|
871
|
|
|
(43
|
)
|
|
(4.9
|
)
|
|||
Other
|
68
|
|
|
68
|
|
|
—
|
|
|
—
|
|
|||
Total Operating Revenues
|
$
|
7,264
|
|
|
$
|
7,557
|
|
|
$
|
(293
|
)
|
|
(3.9
|
)
|
|
|
|
|
|
|
|
|
|||||||
Connections (‘000):(1)
|
|
|
|
|
|
|
|
|||||||
Total voice connections
|
11,453
|
|
|
12,555
|
|
|
(1,102
|
)
|
|
(8.8
|
)
|
|||
|
|
|
|
|
|
|
|
|||||||
Total Broadband connections
|
6,973
|
|
|
6,966
|
|
|
7
|
|
|
0.1
|
|
|||
Fios Internet connections
|
6,119
|
|
|
5,916
|
|
|
203
|
|
|
3.4
|
|
|||
Fios Video connections
|
4,398
|
|
|
4,597
|
|
|
(199
|
)
|
|
(4.3
|
)
|
(1)
|
As of end of period
|
|
Three Months Ended
|
|
|
|
||||||||||
|
March 31,
|
|
|
Increase/
|
||||||||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
|
(Decrease)
|
|||||||
Cost of services
|
$
|
4,186
|
|
|
$
|
4,475
|
|
|
$
|
(289
|
)
|
|
(6.5
|
)%
|
Selling, general and administrative expense
|
1,606
|
|
|
1,479
|
|
|
127
|
|
|
8.6
|
|
|||
Depreciation and amortization expense
|
1,560
|
|
|
1,534
|
|
|
26
|
|
|
1.7
|
|
|||
Total Operating Expenses
|
$
|
7,352
|
|
|
$
|
7,488
|
|
|
$
|
(136
|
)
|
|
(1.8
|
)
|
|
Three Months Ended
|
|
|
|
||||||||||
|
March 31,
|
|
|
Increase/
|
||||||||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
|
(Decrease)
|
|||||||
Segment Operating Income (Loss)
|
$
|
(88
|
)
|
|
$
|
69
|
|
|
$
|
(157
|
)
|
|
nm
|
|
Add Depreciation and amortization expense
|
1,560
|
|
|
1,534
|
|
|
26
|
|
|
1.7
|
%
|
|||
Segment EBITDA
|
$
|
1,472
|
|
|
$
|
1,603
|
|
|
$
|
(131
|
)
|
|
(8.2
|
)
|
|
|
|
|
|
|
|
|
|||||||
Segment operating income (loss) margin
|
(1.2
|
)%
|
|
0.9
|
%
|
|
|
|
|
|||||
Segment EBITDA margin
|
20.3
|
%
|
|
21.2
|
%
|
|
|
|
|
Special Items
|
|
Three Months Ended
|
|
|||||
|
March 31,
|
|
|||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
||
Severance, pension and benefits credits
|
|
|
|
||||
Other income (expense), net
|
$
|
(96
|
)
|
|
$
|
—
|
|
Acquisition and integration related charges
|
|
|
|
||||
Selling, general and administrative expense
|
—
|
|
|
105
|
|
||
Depreciation and amortization expense
|
—
|
|
|
2
|
|
||
Early debt redemption costs
|
|
|
|
||||
Other income (expense), net
|
—
|
|
|
249
|
|
||
Total
|
$
|
(96
|
)
|
|
$
|
356
|
|
|
Three Months Ended
|
|
|||||
|
March 31,
|
|
|||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
||
Within Total Operating Expenses
|
$
|
—
|
|
|
$
|
107
|
|
Within Other income (expense), net
|
(96
|
)
|
|
249
|
|
||
Total
|
$
|
(96
|
)
|
|
$
|
356
|
|
Consolidated Financial Condition
|
|
Three Months Ended
|
|
|
|
|||||||
|
March 31,
|
|
|
|
|||||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
|
Change
|
|
|||
Cash Flows Provided By (Used In)
|
|
|
|
|
|
||||||
Operating activities
|
$
|
7,081
|
|
|
$
|
6,648
|
|
|
$
|
433
|
|
Investing activities
|
(4,803
|
)
|
|
(5,285
|
)
|
|
482
|
|
|||
Financing activities
|
(2,657
|
)
|
|
(1,316
|
)
|
|
(1,341
|
)
|
|||
Increase (decrease) in cash, cash equivalents and restricted cash
|
$
|
(379
|
)
|
|
$
|
47
|
|
|
$
|
(426
|
)
|
|
Three Months Ended
|
|
|||||
|
March 31,
|
|
|||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
||
Wireless
|
$
|
2,044
|
|
|
$
|
2,367
|
|
Wireline
|
1,733
|
|
|
1,673
|
|
||
Other
|
491
|
|
|
512
|
|
||
Capital expenditures
|
$
|
4,268
|
|
|
$
|
4,552
|
|
Total as a percentage of revenue
|
13.3
|
%
|
|
14.3
|
%
|
|
Three Months Ended
|
|
|
|
|||||||
|
March 31,
|
|
|
|
|||||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
|
Change
|
|
|||
Net cash provided by operating activities
|
$
|
7,081
|
|
|
$
|
6,648
|
|
|
$
|
433
|
|
Less Capital expenditures (including capitalized software)
|
4,268
|
|
|
4,552
|
|
|
(284
|
)
|
|||
Free cash flow
|
$
|
2,813
|
|
|
$
|
2,096
|
|
|
$
|
717
|
|
Market Risk
|
Acquisitions and Divestitures
|
Other Factors That May Affect Future Results
|
Cautionary Statement Concerning Forward-Looking Statements
|
•
|
adverse conditions in the U.S. and international economies;
|
•
|
the effects of competition in the markets in which we operate;
|
•
|
material changes in technology or technology substitution;
|
•
|
disruption of our key suppliers’ provisioning of products or services;
|
•
|
changes in the regulatory environment in which we operate, including any increase in restrictions on our ability to operate our networks;
|
•
|
breaches of network or information technology security, natural disasters, terrorist attacks or acts of war or significant litigation and any resulting financial impact not covered by insurance;
|
•
|
our high level of indebtedness;
|
•
|
an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations or adverse conditions in the credit markets affecting the cost, including interest rates, and/or availability of further financing;
|
•
|
material adverse changes in labor matters, including labor negotiations, and any resulting financial and/or operational impact;
|
•
|
significant increases in benefit plan costs or lower investment returns on plan assets;
|
•
|
changes in tax laws or treaties, or in their interpretation;
|
•
|
changes in accounting assumptions that regulatory agencies, including the SEC, may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings;
|
•
|
the inability to implement our business strategies; and
|
•
|
the inability to realize the expected benefits of strategic transactions.
|
Item 3. Quantitative and Qualitative Disclosures About Market Risk
|
Item 4. Controls and Procedures
|
Part II – Other Information
|
Item 1. Legal Proceedings
|
Item 1A. Risk Factors
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 6. Exhibits
|
Exhibit
Number
|
|
Description
|
|
|
|
10a
|
|
Verizon Communications Inc. Short-Term Incentive Plan.
|
|
|
|
10b
|
|
Form of 2019 Performance Stock Unit Agreement pursuant to the 2017 Verizon Communications Inc. Long-Term
Incentive Plan. |
|
|
|
10c
|
|
Form of 2019 Restricted Stock Unit Agreement pursuant to the 2017 Verizon Communications Inc. Long-Term
Incentive Plan. |
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document.
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101.CAL
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XBRL Taxonomy Calculation Linkbase Document.
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101.LAB
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XBRL Taxonomy Label Linkbase Document.
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document.
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Signature
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VERIZON COMMUNICATIONS INC.
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Date: April 26, 2019
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By
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/s/ Anthony T. Skiadas
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Anthony T. Skiadas
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Senior Vice President and Controller
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(Principal Accounting Officer)
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Exhibit
Number
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Description
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Verizon Communications Inc. Short-Term Incentive Plan.
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Form of 2019 Performance Stock Unit Agreement pursuant to the 2017 Verizon Communications Inc. Long-Term
Incentive Plan. |
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Form of 2019 Restricted Stock Unit Agreement pursuant to the 2017 Verizon Communications Inc. Long-Term
Incentive Plan. |
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Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101.INS
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XBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
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101.SCH
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XBRL Taxonomy Extension Schema Document.
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101.PRE
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XBRL Taxonomy Presentation Linkbase Document.
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101.CAL
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XBRL Taxonomy Calculation Linkbase Document.
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101.LAB
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XBRL Taxonomy Label Linkbase Document.
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document.
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2.1
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“Award” means an award described in Article 5 hereof.
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2.2
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“Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act, as amended from time to time, or any successor rule.
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2.3
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“Board” or “Board of Directors” means the Board of Directors of the Company.
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2.4
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“Change in Control” means a change in control of the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act, whether or not the Company is then subject to such reporting requirement; provided that, without limitation, such a Change in Control shall be deemed to have occurred if:
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(a)
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Any Person becomes a Beneficial Owner of shares of one or more classes of stock of the Company representing twenty percent (20%) or more of the total voting power of the Company’s then outstanding voting stock; or
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(b)
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The Company and any Person consummate a merger, consolidation, reorganization, or other business combination; or
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(c)
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The Board adopts resolutions authorizing the liquidation or dissolution, or sale to any Person of all or substantially all of the assets, of the Company.
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(i)
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The Company’s voting stock outstanding immediately before the consummation of the transaction will represent no less than forty-five percent (45%) of the combined voting power entitled to vote for the election of directors of the surviving parent corporation immediately following the consummation of the transaction; and
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(ii)
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Members of the Incumbent Board will constitute at least one-half of the board of directors of the surviving parent corporation; and
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(iii)
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The Chief Executive Officer or co-Chief Executive Officer of the Company will be the chief executive officer or co-chief executive officer of the surviving parent corporation; and
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(iv)
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The headquarters of the surviving parent corporation will be located in New York, New York.
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2.5
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“Code” means the Internal Revenue Code of 1986, as amended from time to time.
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2.6
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“Committee” means the Human Resources Committee of the Board or any other committee appointed by the Board to administer the Plan and Awards to Participants hereunder, as specified in Article 3 hereof.
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2.7
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“Company” means Verizon Communications Inc., a Delaware corporation, and any successor thereto as provided in Article 12 hereof.
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2.8
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“Director” means any individual who is a member of the Board.
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2.9
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“Effective Date” shall have the meaning ascribed to such term in Section 1.1 hereof.
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2.10
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“Employee” means any employee of the Company or of a Subsidiary. Directors who are employed by the Company or by a Subsidiary shall be considered Employees under the Plan.
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2.11
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“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor statute.
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2.12
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“Insider” means an individual who is, on the relevant date, subject to the reporting requirements of Section 16(a) of the Exchange Act.
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2.13
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“Participant” means an Employee at the senior management level who has been selected to receive an Award or who holds an outstanding Award.
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2.14
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“Plan” means the Verizon Communications Inc. Short-Term Incentive Plan, as set forth herein and as it may be amended from time to time.
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2.15
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“Plan Year” means the calendar year.
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2.16
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“Subsidiary” means (a) a corporation, partnership, joint venture, or other entity in which the Company has an ownership interest of at least fifty percent (50%), and (b) a corporation, partnership, joint venture, or other entity in which the Company holds an ownership interest of less than fifty percent (50%) but which, in the discretion of the Committee, is treated as a Subsidiary for purposes of the Plan.
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(a)
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You acknowledge that the geographic boundaries, scope of prohibited activities, and time duration of the restrictions set forth in paragraphs 1 and 2 above are reasonable in nature and are no broader than are necessary to maintain the confidential information,
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(b)
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You shall indicate your agreement to the obligations and restrictions set forth in this Exhibit B in accordance with the instructions provided in the Agreement, and your acceptance of the Agreement shall include your acceptance of such obligations and restrictions. As stated in paragraph 21 of the Agreement, you and Verizon hereby expressly agree that the use of electronic media to indicate confirmation, consent, signature, acceptance, agreement and delivery shall be legally valid and have the same legal force and effect as if you and Verizon executed this Exhibit B in paper form.
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(c)
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You acknowledge that you have been advised in writing to, and have had the opportunity to, consult with counsel of your choice concerning the terms and conditions of this Exhibit B and that you have been provided with at least ten (10) business days to review and consider this Exhibit B prior to accepting it.
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(a)
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General. Except as otherwise provided in paragraph 26 below, all disputes arising under or related to the Plan or this Agreement and all claims in which a Participant seeks damages or other relief that relate in any way to RSUs or other benefits of the Plan are subject to the dispute resolution procedure described below in this paragraph 25.
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(b)
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Internal Dispute Resolution Procedure. All Units Award Disputes, and all Units Damages Dispute alleging breach of contract, tort, or public policy claims with respect to the Plan or this Agreement (collectively, “Plan Disputes”), shall be referred in the first instance to the Verizon Employee Benefits Committee (“EB Committee”) for resolution internally within Verizon. Except where otherwise prohibited by law, all Plan Disputes must be filed in writing with the EB Committee no later than one year from the date that the dispute accrues. Consistent with paragraph 25(c)(i) of this Agreement, all decisions relating to the enforceability of the limitations period contained herein shall be made by the arbitrator. To the fullest extent permitted by law, the EB Committee shall have full power, discretion, and authority to interpret the Plan and this Agreement and to decide all Plan Disputes brought under this Plan and Agreement. Determinations made by the EB Committee shall be final, conclusive and binding, subject only to review by arbitration pursuant to paragraph (c) below under the arbitrary and capricious standard of review. A Participant’s failure to refer a Plan Dispute to the EB Committee for resolution will in no way impair the Company’s right to compel arbitration or the enforceability of the waiver in paragraph 25(c)(ii).
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(c)
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Arbitration. All appeals from determinations by the EB Committee as described in paragraph (b) above, and any Units Damages Dispute, shall be fully and finally settled by arbitration administered by the American Arbitration Association (“AAA”) on an individual basis (and not on a collective or class action basis) before a single arbitrator pursuant to the AAA’s Commercial Arbitration Rules in effect at the time any such arbitration is initiated. Any such arbitration must be initiated in writing pursuant to the aforesaid rules of the AAA no later than one year from the date that the claim accrues, except where a longer limitations period is required by applicable law. However, a Participant’s failure to initiate arbitration within one year will in no way impair the Company’s right, exercised at its discretion, to compel arbitration or the enforceability of the waiver in paragraph 25(c)(ii). Decisions about the applicability of the limitations period contained herein shall be made by the arbitrator. A copy of the AAA’s Commercial Arbitration Rules may be obtained from Human Resources. The Participant agrees that the arbitration shall be held at the office of the AAA nearest the place of the Participant’s most recent employment by the Company or a Related Company, unless the parties agree in writing to a different location. All claims by the Company or a Related Company against the Participant, except for breaches of any of the Participant’s obligations and restrictions set forth in Exhibits A and B to this Agreement, may also be raised in such arbitration proceedings.
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1.
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I have reviewed this quarterly report on Form 10-Q of Verizon Communications Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: April 26, 2019
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/s/ Hans E. Vestberg
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Hans E. Vestberg
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Chairman and Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Verizon Communications Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: April 26, 2019
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/s/ Matthew D. Ellis
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Matthew D. Ellis
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Executive Vice President and Chief Financial Officer
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(1)
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the report of the Company on Form 10-Q for the quarterly period ending March 31, 2019 (the Report) fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934 (the Exchange Act); and
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods referred to in the Report.
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Date: April 26, 2019
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/s/ Hans E. Vestberg
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Hans E. Vestberg
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Chairman and Chief Executive Officer
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(1)
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the report of the Company on Form 10-Q for the quarterly period ending March 31, 2019 (the Report) fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934 (the Exchange Act); and
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods referred to in the Report.
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Date: April 26, 2019
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/s/ Matthew D. Ellis
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Matthew D. Ellis
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Executive Vice President and Chief Financial Officer
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