Stock Analysis on Net
Stock Analysis on Net

Verizon Communications Inc. (NYSE:VZ)

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

Verizon Communications Inc., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Federal 2,070 2,411 1,876 2,826 518
Foreign 219 201 248 159 221
State and local 215 938 414 1,081 974
Current 2,504 3,550 2,538 4,066 1,713
Federal 1,799 2,529 3,354 1,432 1,150
Foreign 28 (22) (97) 1 (13)
State and local 561 466 1,007 120 95
Deferred 2,388 2,973 4,264 1,553 1,232
Income tax provision 4,892 6,523 6,802 5,619 2,945

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Verizon Communications Inc. current increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Verizon Communications Inc. deferred decreased from 2021 to 2022 and from 2022 to 2023.
Income tax provision Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Verizon Communications Inc. income tax provision decreased from 2021 to 2022 and from 2022 to 2023.

Effective Income Tax Rate (EITR)

Verizon Communications Inc., effective income tax rate (EITR) reconciliation

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Statutory federal income tax rate 21.00% 21.00% 21.00% 21.00% 21.00%
State and local income tax rate, net of federal tax benefits 3.60% 3.90% 3.80% 3.90% 3.70%
Affiliate stock disposition 0.00% 0.00% 0.00% 0.00% -9.90%
Noncontrolling interest -0.60% -0.40% -0.40% -0.50% -0.50%
Goodwill impairment 7.00% 0.00% 0.00% 0.00% 0.00%
Divestitures 0.00% 0.00% -0.60% 0.10% -0.10%
Tax credits -0.80% -0.50% -0.50% -0.80% -1.30%
Other, net -1.40% -0.90% -0.20% -0.30% 0.10%
Effective income tax rate 28.80% 23.10% 23.10% 23.40% 13.00%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Effective income tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

Components of Deferred Tax Assets and Liabilities

Verizon Communications Inc., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Employee benefits 3,913 3,888 4,388 5,218 5,048
Tax loss, credit, and other carry forwards 1,922 1,940 2,224 2,848 3,012
Lease liabilities 5,480 5,395 — — —
Other, assets 1,708 1,591 7,314 6,096 5,595
Gross deferred tax assets 13,023 12,814 13,926 14,162 13,655
Valuation allowances (1,341) (1,347) (1,574) (2,183) (2,260)
Deferred tax assets 11,682 11,467 12,352 11,979 11,395
Spectrum and other intangible amortization (28,535) (25,851) (24,935) (22,726) (22,388)
Depreciation (20,884) (21,388) (19,893) (18,009) (16,884)
Lease right-of-use assets (5,200) (5,007) — — —
Other, liabilities (2,696) (2,489) (8,041) (6,867) (6,742)
Deferred tax liabilities (57,315) (54,735) (52,869) (47,602) (46,014)
Net deferred tax asset (liability) (45,633) (43,268) (40,517) (35,623) (34,619)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Gross deferred tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Verizon Communications Inc. gross deferred tax assets decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.
Deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Verizon Communications Inc. deferred tax assets decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.
Net deferred tax asset (liability) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Verizon Communications Inc. net deferred tax asset (liability) decreased from 2021 to 2022 and from 2022 to 2023.

Deferred Tax Assets and Liabilities, Classification

Verizon Communications Inc., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Deferred tax assets 148 173 168 88 84
Deferred tax liabilities 45,781 43,441 40,685 35,711 34,703

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Deferred tax assets Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Verizon Communications Inc. deferred tax assets increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Verizon Communications Inc. deferred tax liabilities increased from 2021 to 2022 and from 2022 to 2023.

Adjustments to Financial Statements: Removal of Deferred Taxes

Verizon Communications Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported) 380,255 379,680 366,596 316,481 291,727
Less: Noncurrent deferred tax assets, net 148 173 168 88 84
Total assets (adjusted) 380,107 379,507 366,428 316,393 291,643
Adjustment to Total Liabilities
Total liabilities (as reported) 286,456 287,217 283,396 247,209 228,892
Less: Noncurrent deferred tax liabilities, net 45,781 43,441 40,685 35,711 34,703
Total liabilities (adjusted) 240,675 243,776 242,711 211,498 194,189
Adjustment to Equity Attributable To Verizon
Equity attributable to Verizon (as reported) 92,430 91,144 81,790 67,842 61,395
Less: Net deferred tax assets (liabilities) (45,633) (43,268) (40,517) (35,623) (34,619)
Equity attributable to Verizon (adjusted) 138,063 134,412 122,307 103,465 96,014
Adjustment to Net Income Attributable To Verizon
Net income attributable to Verizon (as reported) 11,614 21,256 22,065 17,801 19,265
Add: Deferred income tax expense (benefit) 2,388 2,973 4,264 1,553 1,232
Net income attributable to Verizon (adjusted) 14,002 24,229 26,329 19,354 20,497

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Verizon Communications Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Verizon Communications Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net Profit Margin
Reported net profit margin 8.67% 15.53% 16.51% 13.88% 14.61%
Adjusted net profit margin 10.45% 17.71% 19.71% 15.09% 15.54%
Total Asset Turnover
Reported total asset turnover 0.35 0.36 0.36 0.41 0.45
Adjusted total asset turnover 0.35 0.36 0.36 0.41 0.45
Financial Leverage
Reported financial leverage 4.11 4.17 4.48 4.66 4.75
Adjusted financial leverage 2.75 2.82 3.00 3.06 3.04
Return on Equity (ROE)
Reported ROE 12.57% 23.32% 26.98% 26.24% 31.38%
Adjusted ROE 10.14% 18.03% 21.53% 18.71% 21.35%
Return on Assets (ROA)
Reported ROA 3.05% 5.60% 6.02% 5.62% 6.60%
Adjusted ROA 3.68% 6.38% 7.19% 6.12% 7.03%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Verizon Communications Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Verizon Communications Inc. adjusted total asset turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Verizon Communications Inc. adjusted financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Verizon Communications Inc. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Verizon Communications Inc. adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.

Verizon Communications Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Verizon 11,614 21,256 22,065 17,801 19,265
Operating revenues 133,974 136,835 133,613 128,292 131,868
Profitability Ratio
Net profit margin1 8.67% 15.53% 16.51% 13.88% 14.61%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Verizon 14,002 24,229 26,329 19,354 20,497
Operating revenues 133,974 136,835 133,613 128,292 131,868
Profitability Ratio
Adjusted net profit margin2 10.45% 17.71% 19.71% 15.09% 15.54%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Net profit margin = 100 × Net income attributable to Verizon ÷ Operating revenues
= 100 × 11,614 ÷ 133,974 = 8.67%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to Verizon ÷ Operating revenues
= 100 × 14,002 ÷ 133,974 = 10.45%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Verizon Communications Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Operating revenues 133,974 136,835 133,613 128,292 131,868
Total assets 380,255 379,680 366,596 316,481 291,727
Activity Ratio
Total asset turnover1 0.35 0.36 0.36 0.41 0.45
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Operating revenues 133,974 136,835 133,613 128,292 131,868
Adjusted total assets 380,107 379,507 366,428 316,393 291,643
Activity Ratio
Adjusted total asset turnover2 0.35 0.36 0.36 0.41 0.45

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Total asset turnover = Operating revenues ÷ Total assets
= 133,974 ÷ 380,255 = 0.35

2 Adjusted total asset turnover = Operating revenues ÷ Adjusted total assets
= 133,974 ÷ 380,107 = 0.35

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Verizon Communications Inc. adjusted total asset turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets 380,255 379,680 366,596 316,481 291,727
Equity attributable to Verizon 92,430 91,144 81,790 67,842 61,395
Solvency Ratio
Financial leverage1 4.11 4.17 4.48 4.66 4.75
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 380,107 379,507 366,428 316,393 291,643
Adjusted equity attributable to Verizon 138,063 134,412 122,307 103,465 96,014
Solvency Ratio
Adjusted financial leverage2 2.75 2.82 3.00 3.06 3.04

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Financial leverage = Total assets ÷ Equity attributable to Verizon
= 380,255 ÷ 92,430 = 4.11

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted equity attributable to Verizon
= 380,107 ÷ 138,063 = 2.75

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Verizon Communications Inc. adjusted financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Verizon 11,614 21,256 22,065 17,801 19,265
Equity attributable to Verizon 92,430 91,144 81,790 67,842 61,395
Profitability Ratio
ROE1 12.57% 23.32% 26.98% 26.24% 31.38%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Verizon 14,002 24,229 26,329 19,354 20,497
Adjusted equity attributable to Verizon 138,063 134,412 122,307 103,465 96,014
Profitability Ratio
Adjusted ROE2 10.14% 18.03% 21.53% 18.71% 21.35%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROE = 100 × Net income attributable to Verizon ÷ Equity attributable to Verizon
= 100 × 11,614 ÷ 92,430 = 12.57%

2 Adjusted ROE = 100 × Adjusted net income attributable to Verizon ÷ Adjusted equity attributable to Verizon
= 100 × 14,002 ÷ 138,063 = 10.14%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Verizon Communications Inc. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Verizon 11,614 21,256 22,065 17,801 19,265
Total assets 380,255 379,680 366,596 316,481 291,727
Profitability Ratio
ROA1 3.05% 5.60% 6.02% 5.62% 6.60%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Verizon 14,002 24,229 26,329 19,354 20,497
Adjusted total assets 380,107 379,507 366,428 316,393 291,643
Profitability Ratio
Adjusted ROA2 3.68% 6.38% 7.19% 6.12% 7.03%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROA = 100 × Net income attributable to Verizon ÷ Total assets
= 100 × 11,614 ÷ 380,255 = 3.05%

2 Adjusted ROA = 100 × Adjusted net income attributable to Verizon ÷ Adjusted total assets
= 100 × 14,002 ÷ 380,107 = 3.68%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Verizon Communications Inc. adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.