Verizon(VZ) - 2024 Q3 - Quarterly Report

Financial Performance - Verizon's operating revenues for the three months ended September 30, 2024, were $33.33 billion, a slight decrease of 0.02$33.34 billion in the same period of 2023[174]. - The Consumer segment's operating revenues for the three months ended September 30, 2024, totaled $25.36 billion, representing an increase of 0.4$25.26 billion in 2023[163]. - The Business segment's operating revenues for the three months ended September 30, 2024, were $7.35 billion, reflecting a decrease of 2.3$7.53 billion in 2023[164]. - Total operating revenues for the three months ended September 30, 2024, increased by $103 million, or 0.4$25,360 million compared to $25,257 million in the same period of 2023[211]. - Wireless service revenue for the three months ended September 30, 2024, increased by$414 million, or 2.6%, to $16,377 million compared to$15,963 million in the same period of 2023[211]. - Wireless equipment revenue decreased by $424 million, or 8.6$4,478 million for the three months ended September 30, 2024, compared to $4,902 million in the same period of 2023[211]. - Consolidated Net Income for the three months ended September 30, 2023, was$3,411 million, a decrease from $4,884 million in the same period of 2024, representing a decline of approximately 30.2$10,432 million, down from $12,056 million in the same period of 2024, reflecting a decrease of about 13.5$12,491 million, slightly up from $12,238 million in the same period of 2024, indicating an increase of approximately 2.1$27.40 billion, an increase of 6.0% from $25.86 billion in 2023[175]. - Selling, general and administrative expenses increased by$1.7 billion during the three months ended September 30, 2024, primarily due to severance charges related to a voluntary separation program[181]. - Cost of services decreased by $247 million in access costs and$176 million in personnel costs during the nine months ended September 30, 2024 compared to the same period in 2023[178]. - Cost of wireless equipment decreased by $594 million and$2.1 billion for the three and nine months ended September 30, 2024, respectively, due to lower volume of wireless devices sold[179]. - Total operating expenses for the three months ended September 30, 2024, increased by $46 million, or 0.3$17,756 million compared to $17,710 million in the same period of 2023[216]. - Cost of services increased by$148 million, or 3.3%, to $4,567 million for the three months ended September 30, 2024, compared to$4,419 million in the same period of 2023[216]. Capital Expenditures and Investments - Capital expenditures for the nine months ended September 30, 2024, amounted to $12.0 billion, with expectations for total capital expenditures in 2024 to be between$17.0 billion and $17.5 billion[167]. - Verizon entered into a prepaid lease agreement with Vertical Bridge for over 6,000 wireless towers, with an upfront payment of approximately$2.8 billion[171]. - The company announced a license purchase agreement to acquire spectrum licenses from United States Cellular Corporation for a total consideration of $1.0 billion, pending regulatory approvals[172]. - The company made payments of$269 million for obligations related to wireless licenses during the nine months ended September 30, 2024[253]. Debt and Cash Flow - Total debt as of September 30, 2024, was $150.6 billion, with unsecured debt at$126.4 billion and secured debt at $24.3 billion[256]. - Cash provided by operating activities for the nine months ended September 30, 2024, was$26,480 million, a decrease of $2,318 million from$28,798 million in the same period of 2023[249]. - Net cash used in financing activities for the nine months ended September 30, 2024, was $11.5 billion, slightly down from$11.6 billion in the same period of 2023[255]. - Cash dividends paid during the nine months ended September 30, 2024, amounted to $8.4 billion, compared to$8.2 billion in 2023[261]. - Free cash flow for the nine months ended September 30, 2024, was $14.461 billion, a decrease from$14.634 billion in the same period of 2023[265]. - Cash and cash equivalents increased to $5.0 billion as of September 30, 2024, up by$2.9 billion from December 31, 2023[263]. Mergers and Acquisitions - Verizon completed the acquisition of TracFone Wireless for approximately $3.5 billion in cash and stock, with an additional contingent consideration of up to$650 million based on performance measures[278]. - Verizon entered into a merger agreement to acquire Frontier Communications for $38.50 per share in cash, subject to shareholder and regulatory approvals[280]. - If the merger agreement is terminated, Frontier may owe Verizon a termination fee of$320 million, while Verizon may owe Frontier $590 million under certain circumstances[280]. - In the nine months ended September 30, 2024 and September 30, 2023, Verizon made contingent consideration payments of$52 million and $182 million, respectively[279]. Regulatory and Compliance - The FCC's decision to regulate broadband services as common carrier services is currently under appeal, affecting future regulatory trends[281]. - Verizon's disclosure controls and procedures were deemed effective as of September 30, 2024, following an evaluation by the CEO and CFO[284]. - The company is implementing a new global ERP system to enhance financial information flow and reporting, expected to be completed in phases over several years[285]. - There were no changes in the company's internal control over financial reporting during the third quarter of 2024 that materially affected its effectiveness[286]. - Verizon is involved in various litigation and regulatory proceedings but does not believe any are material as of the report date[287]. Employee and Severance Charges - A severance charge of$1.7 billion ($1.3 billion after-tax) was recorded during the three and nine months ended September 30, 2024, due to a voluntary separation program affecting approximately 4,800 employees[170]. - The company reported severance charges of$1,733 million for the three months ended September 30, 2023, with no charges reported in the same period of 2024[196]. - The company recorded pre-tax severance charges of $1.7 billion during the three and nine months ended September 30, 2024, related to voluntary separation programs[243].