|
|
|
|
|
Delaware
|
1-8606
|
23-2259884
|
|
(State or other jurisdiction
of incorporation)
|
(Commission File Number)
|
(I.R.S. Employer Identification No.)
|
|
|
|
|
|
1095 Avenue of the Americas
|
|
10036
|
|
New York
|
New York
|
|
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
Title of Each Class
|
|
Trading Symbol(s)
|
|
Name of Exchange on Which Registered
|
Common Stock, par value $0.10
|
|
VZ
|
|
New York Stock Exchange
|
Common Stock, par value $0.10
|
|
VZ
|
|
The NASDAQ Global Select Market
|
2.375% Notes due 2022
|
|
VZ22A
|
|
New York Stock Exchange
|
0.500% Notes due 2022
|
|
VZ22B
|
|
New York Stock Exchange
|
1.625% Notes due 2024
|
|
VZ24B
|
|
New York Stock Exchange
|
4.073% Notes due 2024
|
|
VZ24C
|
|
New York Stock Exchange
|
0.875% Notes due 2025
|
|
VZ25
|
|
New York Stock Exchange
|
3.25% Notes due 2026
|
|
VZ26
|
|
New York Stock Exchange
|
1.375% Notes due 2026
|
|
VZ26B
|
|
New York Stock Exchange
|
0.875% Notes due 2027
|
|
VZ27E
|
|
New York Stock Exchange
|
1.375% Notes due 2028
|
|
VZ28
|
|
New York Stock Exchange
|
1.875% Notes due 2029
|
|
VZ29B
|
|
New York Stock Exchange
|
1.250% Notes due 2030
|
|
VZ30
|
|
New York Stock Exchange
|
2.625% Notes due 2031
|
|
VZ31
|
|
New York Stock Exchange
|
2.500% Notes due 2031
|
|
VZ31A
|
|
New York Stock Exchange
|
4.75% Notes due 2034
|
|
VZ34
|
|
New York Stock Exchange
|
3.125% Notes due 2035
|
|
VZ35
|
|
New York Stock Exchange
|
3.375% Notes due 2036
|
|
VZ36A
|
|
New York Stock Exchange
|
2.875% Notes due 2038
|
|
VZ38B
|
|
New York Stock Exchange
|
|
|
•
|
Part I. Item 1. Financial Statements (Unaudited)
|
•
|
Part I. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
(d) Exhibits.
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
99
|
|
Revisions to Verizon's Quarterly Report on Form 10-Q the quarter ended March 31, 2019:
Revised Part I. Item 1. Financial Statements (Unaudited)
Revised Part I. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
|
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.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Label Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
104
|
|
Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101).
|
|
|
|
|
|
|
|
Verizon Communications Inc.
|
|
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
||
Date:
|
|
August 8, 2019
|
|
|
|
/s/ Anthony T. Skiadas
|
|
|
|
|
|
|
Anthony T. Skiadas
|
|
|
|
|
|
|
Senior Vice President and Controller
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
|
Revisions to Verizon's Quarterly Report on Form 10-Q the quarter ended March 31, 2019:
Revised Part I. Item 1. Financial Statements (Unaudited) Revised Part I. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations |
|
|
|
|
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.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Label Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
104
|
|
Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101).
|
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
|
|
||
Cost of wireless 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)
|
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)
|
Historical
Wireless
|
|
|
Historical
Wireline
|
|
|
Historical
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
|
Verizon Consumer Group
|
|
Our Consumer segment provides consumer-focused wireless and wireline communications services and products. Our wireless services are provided across one of the most extensive wireless networks in the U.S. under the Verizon Wireless brand and through wholesale and other arrangements. Our wireline services are provided in nine states in the Mid-Atlantic and Northeastern U.S., as well as Washington D.C., over our 100% fiber-optic network under the Fios brand and over a traditional copper-based network to customers who are not served by Fios.
|
|
|
|
Verizon
Business Group |
|
Our Business segment provides wireless and wireline communications services and products, video and data services, corporate networking solutions, security and managed network services, local and long distance voice services and network access to deliver various IoT services and products. We provide these products and services to businesses, government customers and wireless and wireline carriers across the U.S. and select products and services to customers around the world.
|
|
Three Months Ended
|
|
|||||
|
March 31,
|
|
|||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
||
External Operating Revenues
|
|
|
|
||||
Consumer
|
|
|
|
||||
Service
|
$
|
16,261
|
|
|
$
|
15,814
|
|
Wireless equipment
|
4,166
|
|
|
4,270
|
|
||
Other
|
1,671
|
|
|
1,480
|
|
||
Total Consumer
|
22,098
|
|
|
21,564
|
|
||
|
|
|
|
||||
Business
|
|
|
|
||||
Global Enterprise
|
2,690
|
|
|
2,825
|
|
||
Small and Medium Business
|
2,704
|
|
|
2,528
|
|
||
Public Sector and Other
|
1,471
|
|
|
1,429
|
|
||
Wholesale
|
841
|
|
|
986
|
|
||
Total Business
|
7,706
|
|
|
7,768
|
|
||
Total reportable segments
|
$
|
29,804
|
|
|
$
|
29,332
|
|
|
|
|
|
||||
Intersegment Revenues
|
|
|
|
||||
Consumer
|
$
|
50
|
|
|
$
|
63
|
|
Business
|
13
|
|
|
15
|
|
||
Total reportable segments
|
$
|
63
|
|
|
$
|
78
|
|
|
|
|
|
||||
Total Operating Revenues
|
|
|
|
||||
Consumer
|
$
|
22,148
|
|
|
$
|
21,627
|
|
Business(1)
|
7,719
|
|
|
7,783
|
|
||
Total reportable segments
|
$
|
29,867
|
|
|
$
|
29,410
|
|
|
|
|
|
||||
Operating Income
|
|
|
|
||||
Consumer
|
$
|
7,250
|
|
|
$
|
6,935
|
|
Business
|
1,048
|
|
|
1,114
|
|
||
Total reportable segments
|
$
|
8,298
|
|
|
$
|
8,049
|
|
|
Three Months Ended
|
|
|||||
|
March 31,
|
|
|||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
||
Consumer
|
$
|
2,764
|
|
|
$
|
2,734
|
|
Business
|
243
|
|
|
217
|
|
||
Total Fios revenue
|
$
|
3,007
|
|
|
$
|
2,951
|
|
|
Three Months Ended
|
|
|||||
|
March 31,
|
|
|||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
||
Consumer
|
$
|
13,357
|
|
|
$
|
12,881
|
|
Business
|
2,694
|
|
|
2,501
|
|
||
Total Wireless service revenue
|
$
|
16,051
|
|
|
$
|
15,382
|
|
|
Three Months Ended
|
|
|||||
|
March 31,
|
|
|||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
||
Total reportable segment operating revenues
|
$
|
29,867
|
|
|
$
|
29,410
|
|
Corporate and other
|
2,335
|
|
|
2,463
|
|
||
Eliminations
|
(74
|
)
|
|
(101
|
)
|
||
Total consolidated operating revenues
|
$
|
32,128
|
|
|
$
|
31,772
|
|
|
Three Months Ended
|
|
|||||
|
March 31,
|
|
|||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
||
Total reportable segment operating income
|
$
|
8,298
|
|
|
$
|
8,049
|
|
Corporate and other
|
(386
|
)
|
|
(385
|
)
|
||
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)
|
|||||||
Consumer
|
$
|
22,148
|
|
|
$
|
21,627
|
|
|
$
|
521
|
|
|
2.4
|
%
|
Business
|
7,719
|
|
|
7,783
|
|
|
(64
|
)
|
|
(0.8
|
)
|
|||
Corporate and other
|
2,335
|
|
|
2,463
|
|
|
(128
|
)
|
|
(5.2
|
)
|
|||
Eliminations
|
(74
|
)
|
|
(101
|
)
|
|
27
|
|
|
(26.7
|
)
|
|||
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
|
)%
|
Cost of wireless 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)
|
2019
|
|
|
2018
|
|
|
(Decrease)
|
|||||||
Service
|
$
|
16,259
|
|
|
$
|
15,824
|
|
|
$
|
435
|
|
|
2.7
|
%
|
Wireless equipment
|
4,166
|
|
|
4,270
|
|
|
(104
|
)
|
|
(2.4
|
)
|
|||
Other
|
1,723
|
|
|
1,533
|
|
|
190
|
|
|
12.4
|
|
|||
Total Operating Revenues
|
$
|
22,148
|
|
|
$
|
21,627
|
|
|
$
|
521
|
|
|
2.4
|
|
|
|
|
|
|
|
|
|
|||||||
Connections (‘000): (1)
|
|
|
|
|
|
|
|
|||||||
Wireless retail connections
|
94,059
|
|
|
93,992
|
|
|
67
|
|
|
0.1
|
|
|||
Wireless retail postpaid connections
|
89,580
|
|
|
88,924
|
|
|
656
|
|
|
0.7
|
|
|||
Fios Internet connections
|
5,808
|
|
|
5,627
|
|
|
181
|
|
|
3.2
|
|
|||
Fios video connections
|
4,322
|
|
|
4,525
|
|
|
(203
|
)
|
|
(4.5
|
)
|
|||
Broadband connections
|
6,476
|
|
|
6,454
|
|
|
22
|
|
|
0.3
|
|
|||
Voice connections
|
6,184
|
|
|
6,786
|
|
|
(602
|
)
|
|
(8.9
|
)
|
|||
|
|
|
|
|
|
|
|
|||||||
Net Additions in Period (‘000): (2)
|
|
|
|
|
|
|
|
|||||||
Wireless retail
|
(377
|
)
|
|
(390
|
)
|
|
13
|
|
|
3.3
|
|
|||
Wireless retail postpaid
|
(201
|
)
|
|
(55
|
)
|
|
(146
|
)
|
|
nm
|
|
|||
Wireless retail postpaid phones
|
(163
|
)
|
|
(153
|
)
|
|
(10
|
)
|
|
(6.5
|
)
|
|||
|
|
|
|
|
|
|
|
|||||||
Churn Rate:
|
|
|
|
|
|
|
|
|||||||
Wireless retail
|
1.32
|
%
|
|
1.31
|
%
|
|
|
|
|
|||||
Wireless retail postpaid
|
1.08
|
%
|
|
1.01
|
%
|
|
|
|
|
|||||
Wireless retail postpaid phones
|
0.81
|
%
|
|
0.77
|
%
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||||
Account Statistics:
|
|
|
|
|
|
|
|
|||||||
Wireless retail postpaid ARPA
|
$
|
117.45
|
|
|
$
|
113.44
|
|
|
$
|
4.01
|
|
|
3.5
|
|
Wireless retail postpaid accounts (‘000) (1)
|
33,958
|
|
|
34,109
|
|
|
(151
|
)
|
|
(0.4
|
)
|
|||
Wireless retail postpaid connections per account (1)
|
2.64
|
|
|
2.61
|
|
|
0.03
|
|
|
1.1
|
|
(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
|
$
|
3,879
|
|
|
$
|
3,773
|
|
|
$
|
106
|
|
|
2.8
|
%
|
Cost of wireless equipment
|
4,142
|
|
|
4,273
|
|
|
(131
|
)
|
|
(3.1
|
)
|
|||
Selling, general and administrative expense
|
3,983
|
|
|
3,671
|
|
|
312
|
|
|
8.5
|
|
|||
Depreciation and amortization expense
|
2,894
|
|
|
2,975
|
|
|
(81
|
)
|
|
(2.7
|
)
|
|||
Total Operating Expenses
|
$
|
14,898
|
|
|
$
|
14,692
|
|
|
$
|
206
|
|
|
1.4
|
|
|
Three Months Ended
|
|
|
|
||||||||||
|
March 31,
|
|
|
Increase/
|
||||||||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
|
(Decrease)
|
|||||||
Segment Operating Income
|
$
|
7,250
|
|
|
$
|
6,935
|
|
|
$
|
315
|
|
|
4.5
|
%
|
Add Depreciation and amortization expense
|
2,894
|
|
|
2,975
|
|
|
(81
|
)
|
|
(2.7
|
)
|
|||
Segment EBITDA
|
$
|
10,144
|
|
|
$
|
9,910
|
|
|
$
|
234
|
|
|
2.4
|
|
|
|
|
|
|
|
|
|
|||||||
Segment operating income margin
|
32.7
|
%
|
|
32.1
|
%
|
|
|
|
|
|||||
Segment EBITDA margin
|
45.8
|
%
|
|
45.8
|
%
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
||||||||
|
March 31,
|
|
|
Increase/
|
||||||||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
|
(Decrease)
|
|||||||
Global Enterprise
|
$
|
2,691
|
|
|
$
|
2,826
|
|
|
$
|
(135
|
)
|
|
(4.8
|
)%
|
Small and Medium Business
|
2,708
|
|
|
2,534
|
|
|
174
|
|
|
6.9
|
|
|||
Public Sector and Other
|
1,471
|
|
|
1,430
|
|
|
41
|
|
|
2.9
|
|
|||
Wholesale
|
849
|
|
|
993
|
|
|
(144
|
)
|
|
(14.5
|
)
|
|||
Total Operating Revenues (1)
|
$
|
7,719
|
|
|
$
|
7,783
|
|
|
$
|
(64
|
)
|
|
(0.8
|
)
|
|
|
|
|
|
|
|
|
|||||||
Connections (‘000): (2)
|
|
|
|
|
|
|
|
|||||||
Wireless retail postpaid connections
|
23,827
|
|
|
22,190
|
|
|
1,637
|
|
|
7.4
|
|
|||
Fios Internet connections
|
311
|
|
|
289
|
|
|
22
|
|
|
7.6
|
|
|||
Fios video connections
|
76
|
|
|
72
|
|
|
4
|
|
|
5.6
|
|
|||
Broadband connections
|
497
|
|
|
512
|
|
|
(15
|
)
|
|
(2.9
|
)
|
|||
Voice connections
|
5,269
|
|
|
5,769
|
|
|
(500
|
)
|
|
(8.7
|
)
|
|||
|
|
|
|
|
|
|
|
|||||||
Net additions in period (‘000): (3)
|
|
|
|
|
|
|
|
|||||||
Wireless retail postpaid
|
262
|
|
|
315
|
|
|
(53
|
)
|
|
(16.8
|
)
|
|||
Wireless retail postpaid phones
|
119
|
|
|
129
|
|
|
(10
|
)
|
|
(7.8
|
)
|
|||
|
|
|
|
|
|
|
|
|||||||
Churn Rate:
|
|
|
|
|
|
|
|
|||||||
Wireless retail postpaid
|
1.24
|
%
|
|
1.16
|
%
|
|
|
|
|
|||||
Wireless retail postpaid phones
|
1.02
|
%
|
|
0.95
|
%
|
|
|
|
|
(1)
|
Service and other revenues included in our Business segment amounted to approximately $6.9 billion and $7.0 billion for the three months ended March 31, 2019 and 2018, respectively. Wireless equipment revenues included in our Business segment amounted to approximately $765 million and $770 million for the three months ended March 31, 2019 and 2018, respectively.
|
(2)
|
As of end of period
|
(3)
|
Excluding acquisitions and adjustments
|
|
Three Months Ended
|
|
|
|
||||||||||
|
March 31,
|
|
|
Increase/
|
||||||||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
|
(Decrease)
|
|||||||
Cost of services
|
$
|
2,591
|
|
|
$
|
2,710
|
|
|
$
|
(119
|
)
|
|
(4.4
|
)%
|
Cost of wireless equipment
|
1,057
|
|
|
1,036
|
|
|
21
|
|
|
2.0
|
|
|||
Selling, general and administrative expense
|
1,981
|
|
|
1,864
|
|
|
117
|
|
|
6.3
|
|
|||
Depreciation and amortization expense
|
1,042
|
|
|
1,059
|
|
|
(17
|
)
|
|
(1.6
|
)
|
|||
Total Operating Expenses
|
$
|
6,671
|
|
|
$
|
6,669
|
|
|
$
|
2
|
|
|
—
|
|
|
Three Months Ended
|
|
|
|
||||||||||
|
March 31,
|
|
|
Increase/
|
||||||||||
(dollars in millions)
|
2019
|
|
|
2018
|
|
|
(Decrease)
|
|||||||
Segment Operating Income
|
$
|
1,048
|
|
|
$
|
1,114
|
|
|
$
|
(66
|
)
|
|
(5.9
|
)%
|
Add Depreciation and amortization expense
|
1,042
|
|
|
1,059
|
|
|
(17
|
)
|
|
(1.6
|
)%
|
|||
Segment EBITDA
|
$
|
2,090
|
|
|
$
|
2,173
|
|
|
$
|
(83
|
)
|
|
(3.8
|
)
|
|
|
|
|
|
|
|
|
|||||||
Segment operating income margin
|
13.6
|
%
|
|
14.3
|
%
|
|
|
|
|
|||||
Segment EBITDA margin
|
27.1
|
%
|
|
27.9
|
%
|
|
|
|
|
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
|
|
||
Capital expenditures (including capitalized software)
|
$
|
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.
|