Verizon(US:VZ)2025-02-12 15:19Financial Performance - The Enterprise and Public Sector revenues for 2024 were $14.2 billion, accounting for approximately 48% of the Business segment's total revenues[30]. - Business Markets and Other revenues reached $13.1 billion in 2024, representing about 44% of the Business segment's total revenues[33]. - Wholesale revenues were $2.2 billion in 2024, making up approximately 8% of the Business segment's total revenues[35]. - Net cash provided by operating activities was $36.9 billion in 2024, a decrease of $563 million compared to 2023[270]. - Free cash flow for 2024 was $19.8 billion, an increase from $18.7 billion in 2023, attributed to a decrease in capital expenditures[307]. - The anticipated cash requirements for the 2025 capital program are between $17.5 billion and $18.5 billion, focusing on advanced networks and broadband expansion[267]. - The company paid $11.2 billion in dividends during 2024, marking the eighteenth consecutive year of dividend increases[287]. - Total debt decreased to $144.0 billion at December 31, 2024, from $150.7 billion at December 31, 2023, with an effective interest rate of 5.1%[282]. - Long-term debt commitments total $142.2 billion, with $21.7 billion expected to be due within the next twelve months[268]. - Capital expenditures for 2024 were $17.1 billion, down from $18.8 billion in 2023, primarily due to the completion of the C-Band deployment program[275]. Market Position and Competition - As of December 31, 2024, the company had 95 million postpaid connections and 20 million prepaid connections, representing approximately 83% and 17% of its Consumer wireless retail connections, respectively[22]. - The company faces intense competition from major players like AT&T and T-Mobile, as well as regional providers and resellers, impacting market share and pricing strategies[55]. - Verizon's competitive landscape includes increasing pressure from low Earth orbit satellite companies and alternative internet access providers[56]. Network and Technology Development - The company operates a national network covering over 146 million wireless retail connections as of December 31, 2024[47]. - The company provides FWA broadband through its 5G and 4G LTE networks, with nearly 4.6 million FWA broadband connections as of December 31, 2024[23]. - The company is evolving its networks to improve reliability, speed, capacity, coverage, and security, with a focus on 5G technology[45]. - The company anticipates continued demand for spectrum driven by growth in customer connections and increased usage of wireless broadband services[49]. - The company continues to pursue opportunities to trade spectrum licenses to meet capacity and expansion needs in the future[50]. Regulatory Environment - Verizon's broadband services are subject to various state and federal regulations, with recent court rulings limiting the risk of burdensome FCC broadband regulation[67]. - Verizon's regulatory environment includes compliance with privacy and data protection laws, which are becoming increasingly stringent globally[71]. - The company holds FCC spectrum licenses that allow it to provide a wide range of mobile and fixed communications services, with licenses typically having a term of 10 years[65]. Workforce and Diversity - Verizon's workforce consists of approximately 99,600 employees, with 88% based in the U.S., and 36.2% of U.S. senior leadership being women[74]. - Verizon's commitment to diversity is reflected in its workforce demographics, with 52.5% White, 18.4% Black, and 14.0% Hispanic employees in the U.S.[75]. Strategic Acquisitions - The company entered into an agreement to acquire Frontier Communications Parent, Inc., which is expected to enhance its fiber broadband footprint and provide opportunities for future Fios growth[47]. - Verizon completed the acquisition of TracFone for approximately $3.5 billion in cash, $3.0 billion in common stock, and up to $650 million in future contingent consideration[351]. - Verizon entered into a merger agreement to acquire Frontier Communications for $38.50 per share in cash, subject to regulatory approvals[353]. - Frontier shareholders approved the merger transaction in November 2024[353]. - If the merger agreement is terminated, Frontier may owe Verizon a termination fee of $320 million under certain circumstances[353]. - Verizon may be required to pay Frontier a termination fee of $590 million under specified conditions if the merger agreement is terminated[353]. - The contingent consideration for TracFone is based on achieving certain revenue and operational targets over a two-year earn-out period[351]. - The estimated fair value of the contingent consideration for TracFone was approximately $560 million at the acquisition date[351]. - The merger with Frontier will result in Frontier becoming a wholly owned subsidiary of Verizon[353]. Financial Health and Cash Management - As of December 31, 2024, the company's cash and cash equivalents balance is $4.2 billion[265]. - Cash and cash equivalents increased by $2.1 billion to $4.2 billion as of December 31, 2024, compared to the previous year[304]. - Other net cash flow from operating activities in 2024 included $2.0 billion from a transaction with Vertical Bridge REIT, LLC[273]. - The company drew down $1.0 billion from credit facilities during 2023, with no drawings in 2024[298]. - Restricted cash decreased by $991 million to $441 million as of December 31, 2024, primarily due to changes in cash collection timing[305]. - Verizon made discretionary contributions of $365 million to qualified pension plans in 2024, up from $200 million in 2023[308]. Impairment and Fair Value Considerations - In Q4 2023, a noncash goodwill impairment charge of approximately $5.8 billion was recorded for the Business reporting unit due to lower projected cash flows[329]. - A projected sustained decline in revenues and earnings could significantly impact the fair value of the reporting unit and result in future impairment charges[331]. - The weighted-average expected loss rate for accounts receivable increased by 0.75% at December 31, 2024, compared to the previous year[343]. - Changes in macroeconomic factors, such as interest rates and inflation, have affected the fair value of the Business reporting unit[329]. - As of October 31, 2024, the fair value of the Business reporting unit exceeded its carrying amount by approximately 8%, but remains susceptible to future impairment risk[330]. Environmental and Sustainability Initiatives - The company has 28 renewable energy purchase agreements totaling approximately 3.7 gigawatts of anticipated renewable energy capacity[315].