Verizon Communications Inc. (VZ)
Sector: Telecommunications (Industry: Telecom Services)
Investment Theme:
Investing in a stable, high dividend
telecommunication company which has available and reliable resources
to grow customer base in wireless sub-industry.
Overview: Telecommunications sector is witnessing an increasing
trend in wireless business. Among the industry’s major players, Verizon
has been the most consistent player to invest steadily in a single wireless
standard, and has approached the market with a consistent brand message
over the last ten years. Verizon Wireless continues to expand its industry
leadership, steadily growing market share despite pricing at a premium to
its major rivals. The unit also has struck a savvy deal with SpectrumCo,
LLC and Cox TMI Wireless to acquire Advanced Wireless Services
spectrum licenses. It also entered an agreement with ComCast
Corporation, Time Warner Cable, Bright House Networks and Cox
Communications Inc to sell one another’s products and services and, over
time, the cable companies will have the option to sell Verizon Wireless
service on a wholesale basis. If approved by regulators, those agreements
will add wireless spectrum and additional marketing muscle, further
enhancing Verizon’s competitive position.
Recommendation: BUY
Total Annual Return Est.:
3 yr FV
5 yr FV
22.9%
14.9%
Financial Snapshot:
Price
DCF Value
Buy Target
Sell Target
P/E
Forward P/E
Div Yield
Market Cap
52 Wk Range
EPS Growth
PEG
Credit
Current Ratio
$44.73
$75.22
$63.93
$94.02
29.5x
28.9x
4.52%
$127.8 Billion
$46.4 - $35.2
3.1%
1.39
A0.96x
Revenue is expected to grow between 3% and 4% annually over the next
five years, driven by increases in wireless data services from greater
smartphone adoption. Verizon Wireless is believed to have consistently
captured more than its share of industry-wide growth among higher-value
postpaid customers due to its strength of networks, brand, and device lineup, and customer loyalty, a major driver
of profitability.
Verizon’s current price of $44.73 results in a P/E ratio of approximately 29.5x based on current-year EPS estimates
of approximately $1.52, with expected EPS to rise to $1.55 in fiscal year 2013. The discounted cash flow valuation
assumes a 3% annual revenue growth rate and a WACC of 5.32% - using beta of 0.75, resulting in an intrinsic
value of $75.22. If beta of 0.59from S&P stock report is used, WACC will be 4.65%, resulting in an intrinsic value
of $103.1.
2012 Q3 Results: Verizon had a very successful third quarter. Compared with the period of nine months
ended 9/30/2011, revenue of the same period this year grew 4.1%, operating income and net income increased
16.7% and 19.9%, respectively. As a result, basic earnings per common share rose 14.7%, compared with Q3 last
year. At the end of the third quarter, the company had 95.9 million retail connections, a 5.7 percent increase year
over year, including 90.4 million retail postpaid connections.
Huong Doan
November 22nd, 2012
1
Verizon Communications Inc. (VZ)
Sector: Telecommunications (Industry: Telecom Services)
Investment Thesis: Among stocks of telecommunications companies, Verizon’s stock is an attractive
investment because: 1) the company’s ability to grow its customer base at an impressive pace, taking share from
rivals, 2) its capability to extend its industry-leading wireless spectrum position and gain a powerful set of partners,
and 3) its financial strength and relative high dividend yield. In an industry where subscriber gains have tapered off
because cell phones are almost ubiquitous, Verizon continues to add millions of new subscribers each year, and its
customers are the most loyal in the business. With more than 95 million retail customers and coverage of more than
95% of the U.S. population, Verizon Wireless is the clear leader in the industry. A handful of recent developments
promise to further extend Verizon Wireless' competitive strengths. A deal to purchase spectrum that currently sits
unused from a consortium of cable companies, adding capacity for its LTE network. A joint marketing and product
development agreement with the same cable companies would add additional points of distribution and could
produce innovative integrated wireless and cable services. Verizon Wireless has agreed to sell some spectrum at
auction and swap other licenses with T-Mobile, likely in an effort to gain regulatory approval for the cable
agreements.
Pros:
• Verizon has a large and loyal customer base, approximately over 95 million customers, a major driver of
profitability.
• The agreed acquisition of next generation wireless spectrum is promising to increase network’s availability and
capacity.
• The 4 cable companies and Verizon under the joint venture became agents to sell one another’s products and
services. Over time, the cable companies will have the option to sell Verizon Wireless service on a wholesale basic.
Cable companies and Verizon have formed a technology innovation joint venture for the development of
technology and intellectual property to better integrate wireline and wireless products and services.
• Verizon has the best strategy for the long-term future of its fixed-line business. Its next-generation network,
which enables unparalleled data speeds and upgradability, reaches 16.5 million customers.
• The company ranked number one for customer satisfaction from a major consumer publication in 2011
• Its 4G LTE is at the top of PCWorld’s ‘100 best products of 2011’
• The company has robust financial – strong, stable and steady in its performance, cost efficiency, and investment
efficiency.
• Steady dividend payout – the average dividends/sales ratio is 5% in the last five years.
Industry Trends: Telecommunication consists of wireless and wireline sub-industries. The wireless has
experienced growing competition, lower prices, increased service availability, technological innovation, and a
widening variety of product offerings. With wireless becoming increasingly convenient and affordable, call
volumes remain on the rise. The availability of 3G and 4G wireless data products, as well as integrated electronic
devices for music, pictures, video, and internet access, are generating consumer excitement. In the wireline subindustry, broadband has become the focus for telecom carriers. Telecom carriers will continue to lose customer
accounts due to competition from cable providers. The cable companies, with their large marketing budgets,
established customer loyalty, and secure broadband networks, will offer a discounted bundle of telephony service.
Business Summary: Verizon Communications Inc, is a diversified telecom company which has a wireline
presence in 28 states and Washington, D.C.; a wireless presence in 50 states and D.C.; operations in 19 countries.
Verizon Wireless is the firm’s 55%-owned partnership with Vodafone. In 2011, Verizon’s revenue breakdown was
37% of wireline, including telecom and business, and 63% of domestic. As of June 2012, Verizon Wireless had a
0.8% monthly post-paid churn rate, and its retail post-paid monthly service revenue per user was $56, up 3.7% from
a year earlier. The company provided wireline service to 23.3 million voice connections (down 7% from a year
earlier). During 2011, Verizon incurred capital spending of $16.2 billion, with nearly $9 billion for wireless
operations. In the first half of 2012, overall spending was $7.4 billion, with $3.9 billion for wireless.
Huong Doan
November 22nd, 2012
2
Verizon Communications Inc. (VZ)
Sector: Telecommunications (Industry: Telecom Services)
Management Review: Ivan Seidenberg led Verizon from 1995 to 2011. Under his leadership, the company
invested in fiber, wireless broadband, and global internet networks, making Verizon a national company with a
growing global presence. Lowell McAdam, formerly president and COO, replaced Ivan Seidenberg as CEO during
2011. He headed Verizon Wireless from 2006 through October 2010. During the last few years, the board has taken
steps to address the measures used to determine bonuses, with earnings per share determine 50% of the award.
Equity compensation is largely in the form of performance stock units, which vest based on the performance of
Verizon shares. Equity compensation is based on a three-year performance cycle and is paid in a mix of cash and
shares. New CEO Lowell McAdam was given a one-time $10 million equity award upon taking the top spot. This
award vests over five years, is payable in Verizon shares, and must be held for at least two years after vesting.
Financial Trend Analysis: Revenue has increased over the trailing five years although the growth rate has
fluctuated over the same period. Revenue has been up from 2006 to 2009, down 1.2% in 2010, and up again in
2011 and 2012. Gross margin has hinged around 59% of sales. Selling, general and administrative expense has
accounted for an increasing portion in income statement. It has risen from 28.3% of sales in 2006 to 32.13% of
sales in 2011. As a result, operating margin has decreased from 15.2% of sales in 2006 to 11.6% of sales in 2011.
Returns on equity and total capital are following similar trends. Assets turnover is approximately 48% in average
over the last five years. Debt/Equity ratio and Debt/Capital ratio have decreased over years. Current ratio is up and
down, fluctuating from 0.8 to 1 for the last 5 year period. Interest coverage has ranged from 4.6 times to 9.3 times
over the same period due to the volatile annual interest expense and decreasing operating profit.
Financial Health: Since it began offering the iPhone in early 2011, wireless service revenue has been
stabilized, increasing about 5% annually, on average, through 2016 expectedly. However, Verizon is still losing
fixed-line residential customers and the pace of Internet access and television customer growth has slowed sharply
recently. The firm has raised prices to help boost margins and improve the return on its network investment.
Enterprise revenue growth has been slow down because of economic weakness. It is expected a pickup in the
economy over the next year or so should give enterprise revenue a boost. As businesses use networks to move more
data around and drive basic business functions, demand for connectivity among offices and workers should
continue to grow nicely. Verizon has an advantage in meeting this demand because of its local networks throughout
the Northeast, the reach of its global long-distance network, and its ability to consistently invest in network
technology.
Verizon’s strong free cash flow supports continued dividend payments to its shareholders, even as the company
plans to pay a dividend to Vodafone for its partial ownership of Verizon Wireless. In September 2011, the company
declared a 2.4% dividend increase. Verizon has used asset sales, spin-offs, and cash flow to sharply reduce debt in
recent years. The company's consolidated debt load currently sits at a comfortable level.
Competitive Analysis: In wireless segment, only AT&T T can now match Verizon Wireless' scale, Verizon
Wireless has several advantages relative to its primary rival. AT&T has attracted a sizable group of customers
because of its prior exclusive agreement to sell Apple's iPhone. Since Verizon began offering the iPhone in early
2011, the gap between Verizon and AT&T has widened.
Verizon's wireline segment competes for broadband and telephony customers against cable companies Cablevision
and Comcast. At the end of June 2012, it was offering its advanced fiber-based broadband services (FiOS) to 14
million homes and businesses, many of which also had access to FiOS video. FiOS contributed 65% of consumer
wireline revenues. As of June 2012, Verizon had a 36.6% penetration rate (5.1 million customers) with its FiOS
broadband service and a 32.6% penetration rate for the video service (4.5 million); deployment of FiOS to new
markets has slowed from a year earlier, but penetration has continued to edge higher, helped by multi-dwelling
units.
Huong Doan
November 22nd, 2012
3
Verizon Communications Inc. (VZ)
Sector: Telecommunications (Industry: Telecom Services)
Projections and Valuation Summary: The valuation is based on the low end of current estimates of
3% annual revenue growth in a range of 3%-4%. Gross margin is kept in line with historical data, sitting at 59% of
sales. As selling, general and administrative expense has increased over the last few years, I estimated that SG&A
expense will account for 32.5% of sales. Depreciation expense is calculated by timing projected sales and the
average historical percentage of depreciation over sales in 5-year period. The same rule is applied for interest
expense. As Verizon is spending a tremendous amount of money to upgrade and maintain network quality, I
projected it will spend roughly an amount of 17% of sales on capital expenditure yearly to keep out high
competition. Given that the wireless segment is generating tons of cash, Verizon can likely afford enormous capital
expenditure.
Adjusting the revenue growth from 3% to 4% results in a fair value of $79.37. However, the valuation is highly
dependent on WACC; a change in beta from 0.75 to 0.59 (S&P stock report) lowers WACC from 5.32% to 4.65%,
resulting in an increase in intrinsic value from $75.22 to $103.1.
Risk Factors:
• Verizon is confronting to drastic competition in both wireless and wireline segments in a highly penetrated
market. Wireless business has to change offered service plans frequently to appeal customers. Verizon Wireless
recently has taken the lead in shifting to rate plans that more closely match pricing to customer network usage, but
customers, regulators, and the competitive environment may not allow this transition to happen smoothly. Wireline
segment is locked in a battle with the cable companies to capture Internet access, phone, and television customers.
• Verizon Wireless' ownership structure presents some uncertainty. Verizon is potentially exposed to illiquidity and
operational risks if the relationship with Vodafone doesn’t work out. In addition, over the long term, the firm plans
to offer wireless technology in areas that FiOS won't reach. This move will shift revenue to Verizon Wireless,
where Verizon only receives a portion of the benefit, and could pressure margins in the fixed-line business.
• The agreement to acquire additional wireless spectrum and the potential formation of the joint venture with other
cable companies are subject to approval by FCC and review by DOJ. Verizon Wireless will need all that spectrum,
if not more, and likely will need to spend heavily to upgrade its networks as it offers customers more devices that
encourage heavy data usage.
• Verizon is facing a declining demand in the wireline enterprise segment due to slow growth of the US economy
and weakness in European enterprise.
Huong Doan
November 22nd, 2012
4
Verizon Communications Inc. (VZ)
Sector: Telecommunications (Industry: Telecom Services)
DCF Valuation Model:
Current
2012
2013
114,401 117,833
38,203
30,783
21,772
13,108
8,273
4,981
13,499
8,127
16,431
17,675
(1,285)
1,312
16,359
20,032
14,855
4,459
Free Cash Flows ($)
Revenue
EBITDA
Operating profit
Tax
NOPAT
Depreciation
Change in NWC
Capex
Unlevered free cash flows
Terminal value
Terminal value
Discounting model
Present value of cash flows
Sum of PV of forecast period cash flows
PV of terminal value
PV of enterprise value
Projection Period
2014
2015
2016
121,368 125,009 128,760
31,707
32,658
33,638
13,502
13,907
14,324
5,131
5,285
5,443
8,371
8,622
8,881
18,205
18,751
19,314
(7,554)
(2,328)
9,883
20,633
21,252
21,889
13,497
8,450
(3,578)
2017
CAGR
132,622
3%
34,647
-2%
14,754
-7%
5,606
9,147
-7%
19,893
4%
(1,490)
22,546
7%
7,985
-12%
290,626
4,234
12,169
7,234
(2,908)
Implied EV/EBITDA multiple
6,163
26,891
224,315
251,207
3.3x
Less net debt
Equity value
(36,160)
215,047
Implied Equity/EBITDA multiple
Fully diluted shares outstanding
Implied share value
5.6x
2,859
75.22
Current (Discount)/Prem from Fair Value
Buy Price = FV less 15%
Sell Price = FV + 15%
-41%
63.93
94.02
Comparative Valuation Analysis:
Targe t
Ti ck e r
Di vi de n dYi e l d
VZ-N
C omparabl e s
T-US
S -N
C MC S A-O
TW C -N
DTE-XE
Avg
4.52%
4.67%
0.00%
1.82%
2.36%
7.31%
Mark e t C ap
127,883
218,126
14,702
95,317
30,073
53,441
En te rpri se Val u e
215,047
280,808
29,204
144,606
54,390
109,907
29.50
50.41
NEG
20.60
18.11
69.61
37.65
PEG
1.39
2.05
NEG
1.02
0.90
NEG
1.34
Pri ce /C ash Fl ow
3.92
6.54
3.66
4.01
5.65
2.34
4.35
Pri ce /Book Val u e
3.41
2.00
1.06
1.79
3.44
1.13
2.14
EV/EBITDA
3.35
9.82
5.81
6.57
7.38
5.09
6.33
EV/EBIT
5.87
27.11
NEG
12.71
12.91
16.10
14.94
Total De bt/EV
0.25
0.23
0.73
0.26
0.51
0.53
0.42
Total De bt/Equ i ty
0.41
0.62
2.30
0.78
3.74
1.37
1.54
9.47%
3.48%
(11.09%)
8.02%
8.52%
1.00%
3.23%
RO A
4.69%
2.55%
(6.03%)
4.11%
5.80%
2.01%
2.19%
RO E
11.70%
4.08%
(34.06%)
10.10%
22.63%
1.72%
2.69%
P/E
Ne t Margi n
Huong Doan
November 22nd, 2012
3.45%
5
Verizon Communications Inc. (VZ)
Sector: Telecommunications (Industry: Telecom Services)
WACC Calculation:
Total Return Calculation:
WACC Calculation
Marginal tax rate
Risk free rate
Market risk premium
Beta
Cos t of e quity
38.00%
1.62%
5.90%
0.75
6.05%
Cost of debt pre-tax
Afte r tax cos t of de bt
5.73%
3.55%
Share price
Market capitalization
Total debt
Total capital
% equity capital
% debt capital
Total Re turn Calculation
Current Price
$ 44.73
Fair Value
$ 75.22
Div 1
$ 2.06
Div 2
$ 2.11
Div 3
$ 2.17
Div 4
$ 2.23
Div 5
$ 2.29
Ttl Ann Ret 3 yr to FV 22.93%
Ttl Ann Ret 5 yr to FV 14.94%
44.73
127,883
52,802
180,685
70.78%
29.22%
We ighte d ave rage cos t of capital
5.32%
Valuation Assumptions:
Assumption Summary
Current price
$44.73
2012 Est. EPS
1.52
2013 Est. EPS
1.55
Revenue growth
3%
Tax rate
38%
WACC
5.32%
Terminal growth rate
3%
Income Statement Projection:
Year
2013
2014
2015
2016
2017
117,833
121,368
125,009
128,760
132,622
48,754
50,217
51,723
53,275
54,873
69,079
71,152
73,286
75,485
77,749
Consolidated Income S tatement
Sales
COGS
Gross profit
Gross M argin
SG&A
59%
59%
59%
59%
59%
38,296
39,445
40,628
41,847
43,102
EBITDA
30,783
31,707
32,658
33,638
34,647
Depreciation
17,675
18,205
18,751
19,314
19,893
13,108
13,502
13,907
14,324
14,754
Operating profit (EBIT)
Operating M argin
11%
11%
11%
11%
11%
Taxes
4,981
5,131
5,285
5,443
5,606
Interest Expense
2,586
2,586
2,586
2,586
2,586
5,541
5,785
6,036
6,294
6,561
Net income
Net M argin
5%
5%
5%
5%
5%
S hareholder information
Average no. of shares outstanding
2,860
2,870
2,880
2,890
2,900
Dividends
5,892
6,068
6,250
6,438
6,631
Earnings per share
1.55
1.57
1.63
1.70
1.76
Dividends per share
2.06
2.11
2.17
2.23
2.29
Huong Doan
November 22nd, 2012
6
Verizon Communications Inc. (VZ)
Sector: Telecommunications (Industry: Telecom Services)
Historical Financial Data:
Annual Incom e Statem ent
12/31/2011
USD
12/31/2010
USD
12/31/2009
USD
restated
12/31/2008
USD
12/31/2007
USD
Incom e Statem ent
Net Sales or Revenues
110,875.0
106,565.0
107,808.0
97,354.0
93,469.0
Operating Expenses - Total
92,041.0
87,592.0
88,980.0
79,243.0
77,891.0
Cost of Goods Sold
45,875.0
42,008.0
44,579.0
38,902.0
37,547.0
Selling, General & Admin Expenses
29,670.0
29,281.0
27,867.0
25,776.0
25,967.0
Depreciation, Depletion & Amortization
16,496.0
16,303.0
16,534.0
14,565.0
14,377.0
14,991.0
-
14,564.0
13,182.0
13,036.0
1,505.0
-
1,970.0
1,383.0
1,341.0
-
-
-
-
-
0.0
0.0
0.0
0.0
0.0
18,834.0
18,973.0
18,828.0
18,111.0
15,578.0
0.0
0.0
0.0
0.0
0.0
Extraordinary Charge - Pretax
5,954.0
4,328.0
2,850.0
1,227.0
0.0
Non-Operating Interest Income
68.0
92.0
75.0
362.0
168.0
Depreciation
Amortization of Intangibles
Amortization of Deferred Charges
Other Operating Expenses
Operating Income
Extraordinary Credit - Pretax
Interest Expense On Debt
3,269.0
3,487.0
4,029.0
2,566.0
2,258.0
Pretax Equity In Earnings
0.0
0.0
0.0
0.0
0.0
Reserves- Increase(Decrease)
0.0
-
-
0.0
0.0
(82.0)
(38.0)
16.0
(80.0)
43.0
Other Income/Expense - Net
Interest Capitalized
442.0
964.0
927.0
747.0
429.0
Pretax Income
10,039.0
12,176.0
12,967.0
15,347.0
13,960.0
Income Taxes
285.0
2,467.0
1,919.0
3,331.0
3,982.0
483.0
(747.0)
(247.0)
908.0
3,113.0
25.0
(19.0)
73.0
240.0
461.0
(179.0)
3,261.0
2,134.0
2,280.0
349.0
(38.0)
(24.0)
(35.0)
(91.0)
66.0
6.0
4.0
6.0
6.0
7.0
7,794.0
7,668.0
6,707.0
6,155.0
5,053.0
Current Domestic Income Tax
Current Foreign Income Tax
Deferred Domestic Income Tax
Deferred Foreign Income Tax
Income Tax Credits
Minority Interest
Equity In Earnings
444.0
508.0
553.0
567.0
585.0
After Tax Other Income/Expense
0.0
0.0
0.0
-
-
Discontinued Operations
0.0
-
-
-
-
2,404.0
2,549.0
4,894.0
6,428.0
5,510.0
Net Income Before Extra Items/Preferred Div
Extr Items & Gain(Loss) Sale of Assets
0.0
0.0
0.0
0.0
11.0
Net Income Before Preferred Dividends
2,404.0
2,549.0
4,894.0
6,428.0
5,521.0
Preferred Dividend Require
0.0
0.0
0.0
0.0
0.0
2,404.0
2,549.0
4,894.0
6,428.0
5,510.0
EPS Incl Extraordinary Items
0.9
0.9
1.7
2.3
1.9
EPS - Continuing Operations
0.9
0.9
1.7
2.3
1.9
Dividend Per Share
2.0
1.9
1.9
1.8
1.7
2,839,000,000.0
2,833,000,000.0
2,841,000,000.0
2,850,000,000.0
2,915,697,440.0
Net Incom e to Com m on Shareholders
Common Shares Used to Calc Diluted EPS
Huong Doan
November 22nd, 2012
7
Verizon Communications Inc. (VZ)
Sector: Telecommunications (Industry: Telecom Services)
Annual Cash Flow Statem ent
12/31/2011
USD
12/31/2010
USD
12/31/2009
USD
restated
12/31/2008
USD
12/31/2007
USD
Operations
Net Income / Starting Line
2,404.0
2,549.0
-
6,428.0
5,510.0
16,496.0
16,405.0
16,534.0
14,565.0
14,377.0
14,991.0
14,593.0
-
13,182.0
13,036.0
1,505.0
1,812.0
1,970.0
1,383.0
1,341.0
(223.0)
3,233.0
1,384.0
2,183.0
408.0
Deferred Income Taxes
(223.0)
3,233.0
1,384.0
2,183.0
408.0
Investment Tax Credits
-
-
0.0
0.0
0.0
Other Cash Flow
13,382.0
12,904.0
11,366.0
3,252.0
4,325.0
Funds From Operations
32,059.0
35,091.0
34,076.0
26,428.0
24,620.0
0.0
0.0
0.0
0.0
0.0
(2,279.0)
(1,728.0)
(2,511.0)
192.0
1,119.0
(966.0)
(859.0)
(1,393.0)
(1,085.0)
(1,931.0)
208.0
299.0
235.0
(188.0)
(255.0)
(1,607.0)
1,075.0
(1,251.0)
(1,701.0)
(567.0)
Inc(Dec) In Income Taxes Payable
0.0
0.0
0.0
-
-
Inc(Dec) In Other Accruals
0.0
0.0
0.0
-
-
86.0
(2,243.0)
(1,088.0)
3,166.0
3,872.0
29,780.0
33,363.0
31,565.0
26,620.0
25,739.0
(16,244.0)
(16,458.0)
(17,047.0)
(17,238.0)
(17,538.0)
(2,018.0)
(1,438.0)
(0.0)
-
-
Net Assets From Acquisitions
(0.0)
(0.0)
(5,958.0)
(15,904.0)
(763.0)
Increase In Investments
(0.0)
(3.0)
(0.0)
(0.0)
(0.0)
Decrease In Investments
35.0
0.0
84.0
1,677.0
169.0
-
2,594.0
0.0
0.0
0.0
(977.0)
(251.0)
410.0
114.0
(2,024.0)
Depreciation, Depletion & Amortization
Depreciation & Depletion
Amortization of Intangible Assets
Deferred Income Taxes & Investment Tax Credit
Extraordinary Items
Funds From/For Other Operating Activities
Dec(Inc) In Receivables
Dec(Inc) In Inventories
Inc(Dec) In Accounts Payable
Dec(Inc) In Other Assets/Liabilities
Net Cash Flow - Operating Activities
Investing
Capital Expenditures (Addition to Fixed Assets)
Additions To Other Assets
Disposal of Fixed Assets
Other Use/(Source) - Investing
Other Uses - Investing
(0.0)
(0.0)
(410.0)
(114.0)
(0.0)
Other Sources - Investing
977.0
251.0
0.0
-
2,024.0
Net Cash Flow - Investing
(17,250.0)
(15,054.0)
(23,331.0)
(31,579.0)
(16,108.0)
241.0
0.0
0.0
16.0
1,274.0
0.0
0.0
0.0
0.0
0.0
241.0
0.0
0.0
16.0
1,274.0
(2,843.0)
Financing
Net Proceeds From Sale/Issue of Com & Pref
Proceeds From Stock Options
Other Proceeds From Sale/Issuance of Stock
Com/Pfd Purchased
Long Term Borrow ings
Reduction In Long Term Debt
Inc(Dec) In Short Term Borrow ings
Cash Dividends Paid - Total
Common Dividends (Cash)
Preferred Dividends (Cash)
Other Source (Use) - Financing
Other Sources - Financing
(0.0)
(0.0)
(0.0)
(1,368.0)
11,060.0
0.0
12,040.0
21,598.0
3,402.0
(11,805.0)
(8,136.0)
(19,260.0)
(4,146.0)
(5,503.0)
1,928.0
(1,097.0)
(1,652.0)
2,389.0
(3,252.0)
(5,555.0)
(5,412.0)
(5,271.0)
(4,994.0)
(4,773.0)
5,555.0
5,412.0
5,271.0
4,994.0
4,773.0
0.0
0.0
0.0
0.0
0.0
(1,705.0)
995.0
(1,864.0)
93.0
(2.0)
0.0
3,083.0
0.0
93.0
-
Other Uses - Financing
(1,705.0)
(2,088.0)
(1,864.0)
(0.0)
(2.0)
Net Cash Flow - Financing
(5,836.0)
(13,650.0)
(16,007.0)
13,588.0
(11,697.0)
-
-
-
-
-
6,694.0
4,659.0
(7,773.0)
8,629.0
(2,066.0)
Effect of Exchange Rate On Cash
Inc(Dec) In Cash & Short Term Investm ents
Huong Doan
November 22nd, 2012
8
Verizon Communications Inc. (VZ)
Sector: Telecommunications (Industry: Telecom Services)
Annual Balance Sheet
12/31/2011
USD
12/31/2010
USD
12/31/2009
USD
restated
12/31/2008
USD
12/31/2007
USD
13,954.0
7,213.0
2,499.0
10,291.0
3,397.0
13,362.0
6,668.0
2,009.0
9,782.0
1,153.0
592.0
545.0
490.0
509.0
2,244.0
Receivables (Net)
11,822.0
11,840.0
12,573.0
11,749.0
11,772.0
Inventories - Total
Assets
Cash & ST Investments
Cash
Short Term Investments
940.0
1,131.0
1,426.0
2,092.0
1,729.0
Raw Materials
-
-
-
-
-
Work In Process
-
-
-
-
-
Finished Goods
-
-
-
-
-
Progress Payments & Other
-
-
-
-
-
-
-
-
-
-
4,223.0
2,164.0
5,247.0
1,943.0
1,800.0
Prepaid Expenses
Other Current Assets
Current Assets - Total
30,939.0
22,348.0
21,745.0
26,075.0
18,698.0
Long Term Receivables
1,864.0
2,456.0
-
2,752.0
2,829.0
Investment In Unconsolidated Subsidiaries
3,448.0
3,497.0
3,118.0
8,174.0
3,372.0
0.0
0.0
0.0
679.0
692.0
88,434.0
87,711.0
91,985.0
86,546.0
85,294.0
215,626.0
211,655.0
229,743.0
215,605.0
213,994.0
862.0
865.0
925.0
815.0
839.0
21,969.0
21,064.0
21,492.0
20,440.0
19,734.0
Other Investments
Property Plant & Equipment - Net
Property Plant & Equipment - Gross
Land
Buildings
Construction Work In Progress
Machinery & Equipment
3,417.0
4,375.0
-
1,279.0
1,988.0
106,960.0
169,765.0
184,547.0
175,459.0
173,325.0
-
Rental/Lease Property
-
-
-
-
Transportation Equipment
-
2,148.0
4,808.0
-
-
82,056.0
13,117.0
13,777.0
17,314.0
17,779.0
PP&E - Other
PP&E Under Capitalized Leases
362.0
321.0
-
298.0
329.0
(Less) Accumulated Depreciation
127,192.0
123,944.0
137,758.0
129,059.0
128,700.0
Accum Depr-Land
-
-
-
-
-
Accum Depr-Buildings
-
-
-
-
-
Accum Depr-Machinery & Equip.
-
-
-
-
-
Accum Depr-Rental/Lease Property
-
-
-
-
-
Accum Depr-Transport Equip.
-
-
-
-
-
Accum Depr-PP&E Other
-
-
-
-
-
Accum Depr-PP&E Under Cap Leases
-
-
-
-
-
105,776.0
103,993.0
110,059.0
78,126.0
76,074.0
Other Assets
Deferred Charges
Tangible Other Assets
Intangible Other Assets
Total Assets
Huong Doan
November 22nd, 2012
-
-
-
-
-
3,291.0
3,179.0
8,756.0
4,918.0
15,045.0
102,485.0
100,814.0
101,303.0
73,208.0
61,029.0
230,461.0
220,005.0
226,907.0
202,352.0
186,959.0
9
Verizon Communications Inc. (VZ)
Sector: Telecommunications (Industry: Telecom Services)
Liabilities
Accounts Payable
4,194.0
3,936.0
4,337.0
3,856.0
4,491.0
ST Debt & Current Portion of LT Debt
4,849.0
7,542.0
7,205.0
4,993.0
2,954.0
Accrued Payroll
4,857.0
5,686.0
5,084.0
4,871.0
4,828.0
Income Taxes Payable
1,078.0
1,157.0
1,444.0
2,136.0
2,270.0
Dividends Payable
5,940.0
1,402.0
1,372.0
1,584.0
1,266.0
Other Current Liabilities
9,843.0
10,874.0
9,694.0
8,466.0
8,932.0
Current Liabilities - Total
30,761.0
30,597.0
29,136.0
25,906.0
24,741.0
Long Term Debt
50,303.0
45,252.0
55,051.0
46,959.0
28,203.0
LT Debt Excl Capital Leases
50,017.0
45,252.0
55,051.0
46,632.0
27,937.0
Non-Convertible Debt
50,017.0
45,252.0
55,051.0
46,632.0
27,937.0
0.0
0.0
0.0
0.0
0.0
286.0
0.0
-
327.0
266.0
32,957.0
28,164.0
32,622.0
32,512.0
29,960.0
-
-
-
-
-
25,060.0
22,818.0
19,190.0
11,769.0
14,784.0
25,060.0
22,818.0
19,190.0
11,769.0
14,784.0
-
-
-
-
-
-
-
-
-
-
5,472.0
6,262.0
6,765.0
6,301.0
6,402.0
144,553.0
133,093.0
142,764.0
123,447.0
104,090.0
Convertible Debt
Capitalized Lease Obligations
Provision for Risks & Charges
Deferred Income
Deferred Taxes
Deferred Taxes - Credit
Deferred Taxes - Debit
Deferred Tax Liability In Untaxed Reserves
Other Liabilities
Total Liabilities
Shareholders' Equity
Non-Equity Reserves
0.0
0.0
0.0
0.0
0.0
Minority Interest
49,938.0
48,343.0
42,761.0
37,199.0
32,288.0
Preferred Stock
0.0
0.0
0.0
0.0
0.0
Preferred Stock - Non Redeemable
0.0
0.0
0.0
0.0
0.0
Preferred Stock - Redeemable
0.0
0.0
0.0
0.0
0.0
35,970.0
38,569.0
41,382.0
41,706.0
50,581.0
Common Equity
Common Stock
297.0
297.0
297.0
297.0
297.0
Capital Surplus
37,919.0
37,922.0
40,108.0
40,291.0
40,316.0
Revaluation Reserves
Other Appropriated Reserves
Unappropriated (Free) Reserves
-
-
-
0.0
0.0
625.0
201.0
(1,283.0)
(14,192.0)
(5,644.0)
0.0
0.0
0.0
0.0
0.0
1,179.0
4,368.0
7,260.0
19,250.0
17,884.0
Equity In Untaxed Reserves
-
-
-
-
-
ESOP Guarantees
-
-
-
0.0
0.0
880.0
969.0
-
936.0
50.0
72.0
79.0
-
(37.0)
1,167.0
Retained Earnings
Unrealized Foreign Exchange Gain(Loss)
Unrealized Gain(Loss) on Marketable Securities
(Less) Treasury Stock
Total Shareholders Equity
Total Liabilities & Shareholders Equity
Common Shares Outstanding
5,002.0
5,267.0
5,000.0
4,839.0
3,489.0
35,970.0
38,569.0
41,382.0
41,706.0
50,581.0
230,461.0
220,005.0
226,907.0
202,352.0
186,959.0
2,834.0
2,828.1
2,967.6
2,840.5
2,890.4
Notes:
Huong Doan
November 22nd, 2012
1
0