Stock Analysis on Net
Stock Analysis on Net

Verizon Communications Inc. (NYSE:VZ)

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Analysis of Income Taxes

Microsoft Excel LibreOffice Calc

Income Tax Expense (Benefit)

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

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Federal
Foreign
State and local
Current
Federal
Foreign
State and local
Deferred
Income tax provision (benefit)

Based on: 10-K (filing date: 2021-02-25), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-21).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Verizon Communications Inc.’s current decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Verizon Communications Inc.’s deferred increased from 2018 to 2019 and from 2019 to 2020.
Income tax provision (benefit) Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Verizon Communications Inc.’s income tax provision (benefit) decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.

Effective Income Tax Rate (EITR)

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

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Statutory federal income tax rate
State and local income tax rate, net of federal tax benefits
Preferred stock disposition
Affordable housing credit
Employee benefits including ESOP dividend
Internal restructure
Noncontrolling interests
Non-deductible goodwill
Other, net
Effective income tax rate, before impact of tax reform re-measurement
Impact of tax reform re-measurement
Effective income tax rate

Based on: 10-K (filing date: 2021-02-25), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-21).

Item Description The company
Effective income tax rate, before impact of tax reform re-measurement Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Verizon Communications Inc.’s effective income tax rate, before impact of tax reform re-measurement decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.

Components of Deferred Tax Assets and Liabilities

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

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Employee benefits
Tax loss and credit carry forwards
Other, assets
Gross deferred tax assets
Valuation allowances
Deferred tax assets
Spectrum and other intangible amortization
Depreciation
Other, liabilities
Deferred tax liabilities
Net deferred tax asset (liability)

Based on: 10-K (filing date: 2021-02-25), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-21).

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.’s gross deferred tax assets increased from 2018 to 2019 and from 2019 to 2020.
Deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Verizon Communications Inc.’s deferred tax assets increased from 2018 to 2019 and from 2019 to 2020.
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.’s net deferred tax asset (liability) decreased from 2018 to 2019 and from 2019 to 2020.

Deferred Tax Assets and Liabilities, Classification

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

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Deferred tax assets
Deferred tax liabilities

Based on: 10-K (filing date: 2021-02-25), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-21).

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.’s deferred tax assets increased from 2018 to 2019 and from 2019 to 2020.
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.’s deferred tax liabilities increased from 2018 to 2019 and from 2019 to 2020.

Adjustments to Financial Statements: Removal of Deferred Taxes

Verizon Communications Inc., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Adjustment to Total Assets
Total assets (as reported)
Less: Noncurrent deferred tax assets, net
Total assets (adjusted)
Adjustment to Total Liabilities
Total liabilities (as reported)
Less: Noncurrent deferred tax liabilities, net
Total liabilities (adjusted)
Adjustment to Equity Attributable To Verizon
Equity attributable to Verizon (as reported)
Less: Net deferred tax assets (liabilities)
Equity attributable to Verizon (adjusted)
Adjustment to Net Income Attributable To Verizon
Net income attributable to Verizon (as reported)
Add: Deferred income tax expense (benefit)
Net income attributable to Verizon (adjusted)

Based on: 10-K (filing date: 2021-02-25), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-21).


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


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Verizon Communications Inc., adjusted financial ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net Profit Margin
Reported net profit margin
Adjusted net profit margin
Total Asset Turnover
Reported total asset turnover
Adjusted total asset turnover
Financial Leverage
Reported financial leverage
Adjusted financial leverage
Return on Equity (ROE)
Reported ROE
Adjusted ROE
Return on Assets (ROA)
Reported ROA
Adjusted ROA

Based on: 10-K (filing date: 2021-02-25), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-21).

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.’s adjusted net profit margin ratio improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Verizon Communications Inc.’s adjusted total asset turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020.
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.’s adjusted financial leverage ratio decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Verizon Communications Inc.’s adjusted ROE improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020 not reaching 2018 level.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Verizon Communications Inc.’s adjusted ROA improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020 not reaching 2018 level.

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


Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Verizon
Operating revenues
Profitability Ratio
Net profit margin1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Verizon
Operating revenues
Profitability Ratio
Adjusted net profit margin2

Based on: 10-K (filing date: 2021-02-25), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-21).

2020 Calculations

1 Net profit margin = 100 × Net income attributable to Verizon ÷ Operating revenues
= 100 × ÷ =

2 Adjusted net profit margin = 100 × Adjusted net income attributable to Verizon ÷ Operating revenues
= 100 × ÷ =

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.’s adjusted net profit margin ratio improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Operating revenues
Total assets
Activity Ratio
Total asset turnover1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Operating revenues
Adjusted total assets
Activity Ratio
Adjusted total asset turnover2

Based on: 10-K (filing date: 2021-02-25), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-21).

2020 Calculations

1 Total asset turnover = Operating revenues ÷ Total assets
= ÷ =

2 Adjusted total asset turnover = Operating revenues ÷ Adjusted total assets
= ÷ =

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Verizon Communications Inc.’s adjusted total asset turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Total assets
Equity attributable to Verizon
Solvency Ratio
Financial leverage1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets
Adjusted equity attributable to Verizon
Solvency Ratio
Adjusted financial leverage2

Based on: 10-K (filing date: 2021-02-25), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-21).

2020 Calculations

1 Financial leverage = Total assets ÷ Equity attributable to Verizon
= ÷ =

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted equity attributable to Verizon
= ÷ =

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.’s adjusted financial leverage ratio decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Verizon
Equity attributable to Verizon
Profitability Ratio
ROE1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Verizon
Adjusted equity attributable to Verizon
Profitability Ratio
Adjusted ROE2

Based on: 10-K (filing date: 2021-02-25), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-21).

2020 Calculations

1 ROE = 100 × Net income attributable to Verizon ÷ Equity attributable to Verizon
= 100 × ÷ =

2 Adjusted ROE = 100 × Adjusted net income attributable to Verizon ÷ Adjusted equity attributable to Verizon
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Verizon Communications Inc.’s adjusted ROE improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020 not reaching 2018 level.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Verizon
Total assets
Profitability Ratio
ROA1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Verizon
Adjusted total assets
Profitability Ratio
Adjusted ROA2

Based on: 10-K (filing date: 2021-02-25), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-21).

2020 Calculations

1 ROA = 100 × Net income attributable to Verizon ÷ Total assets
= 100 × ÷ =

2 Adjusted ROA = 100 × Adjusted net income attributable to Verizon ÷ Adjusted total assets
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Verizon Communications Inc.’s adjusted ROA improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020 not reaching 2018 level.