Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Verizon Communications Inc. (NYSE:VZ)

Analysis of Income Taxes

Advanced level

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 2,826  518  2,187  3,630  7,451 
Foreign 159  221  267  200  148 
State and local 1,081  974  741  677  842 
Current 4,066  1,713  3,195  4,507  8,441 
Federal 1,432  1,150  175  (14,360) (933)
Foreign (13) 30  (66) (2)
State and local 120  95  184  (37) (128)
Deferred 1,553  1,232  389  (14,463) (1,063)
Income tax provision (benefit) 5,619  2,945  3,584  (9,956) 7,378 

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 21.00% 21.00% 21.00% 35.00% 35.00%
State and local income tax rate, net of federal tax benefits 3.90% 3.70% 3.70% 1.60% 2.20%
Preferred stock disposition 0.00% -9.90% 0.00% 0.00% 0.00%
Affordable housing credit -0.20% -0.40% -0.60% -0.60% -0.70%
Employee benefits including ESOP dividend -0.20% -0.30% -0.30% -0.50% -0.50%
Internal restructure -0.10% 0.00% -9.10% -0.60% -0.70%
Noncontrolling interests -0.50% -0.50% -0.50% -0.60% -0.60%
Non-deductible goodwill 0.00% 0.10% 4.70% 1.00% 2.20%
Other, net -0.50% -0.70% -0.60% -2.00% -1.70%
Effective income tax rate, before impact of tax reform re-measurement 23.40% 13.00% 18.30% 33.30% 35.20%
Impact of tax reform re-measurement 0.00% 0.00% 0.00% -81.60% 0.00%
Effective income tax rate 23.40% 13.00% 18.30% -48.30% 35.20%

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 5,218  5,048  5,403  6,174  10,453 
Tax loss and credit carry forwards 2,848  3,012  3,576  4,176  3,318 
Other, assets 6,096  5,595  1,650  1,938  2,632 
Gross deferred tax assets 14,162  13,655  10,629  12,288  16,403 
Valuation allowances (2,183) (2,260) (2,741) (3,293) (2,473)
Deferred tax assets 11,979  11,395  7,888  8,995  13,930 
Spectrum and other intangible amortization (22,726) (22,388) (21,976) (21,148) (31,404)
Depreciation (18,009) (16,884) (15,662) (14,767) (22,848)
Other, liabilities (6,867) (6,742) (3,976) (4,281) (5,642)
Deferred tax liabilities (47,602) (46,014) (41,614) (40,196) (59,894)
Net deferred tax asset (liability) (35,623) (34,619) (33,726) (31,201) (45,964)

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 88  84  69  31  — 
Deferred tax liabilities 35,711  34,703  33,795  31,232  45,964 

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) 316,481  291,727  264,829  257,143  244,180 
Less: Noncurrent deferred tax assets, net 88  84  69  31  — 
Total assets (adjusted) 316,393  291,643  264,760  257,112  244,180 
Adjustment to Total Liabilities
Total liabilities (as reported) 247,209  228,892  210,119  212,456  220,148 
Less: Noncurrent deferred tax liabilities, net 35,711  34,703  33,795  31,232  45,964 
Total liabilities (adjusted) 211,498  194,189  176,324  181,224  174,184 
Adjustment to Equity Attributable To Verizon
Equity attributable to Verizon (as reported) 67,842  61,395  53,145  43,096  22,524 
Less: Net deferred tax assets (liabilities) (35,623) (34,619) (33,726) (31,201) (45,964)
Equity attributable to Verizon (adjusted) 103,465  96,014  86,871  74,297  68,488 
Adjustment to Net Income Attributable To Verizon
Net income attributable to Verizon (as reported) 17,801  19,265  15,528  30,101  13,127 
Add: Deferred income tax expense (benefit) 1,553  1,232  389  (14,463) (1,063)
Net income attributable to Verizon (adjusted) 19,354  20,497  15,917  15,638  12,064 

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 13.88% 14.61% 11.87% 23.88% 10.42%
Adjusted net profit margin 15.09% 15.54% 12.16% 12.41% 9.58%
Total Asset Turnover
Reported total asset turnover 0.41 0.45 0.49 0.49 0.52
Adjusted total asset turnover 0.41 0.45 0.49 0.49 0.52
Financial Leverage
Reported financial leverage 4.66 4.75 4.98 5.97 10.84
Adjusted financial leverage 3.06 3.04 3.05 3.46 3.57
Return on Equity (ROE)
Reported ROE 26.24% 31.38% 29.22% 69.85% 58.28%
Adjusted ROE 18.71% 21.35% 18.32% 21.05% 17.61%
Return on Assets (ROA)
Reported ROA 5.62% 6.60% 5.86% 11.71% 5.38%
Adjusted ROA 6.12% 7.03% 6.01% 6.08% 4.94%

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 17,801  19,265  15,528  30,101  13,127 
Operating revenues 128,292  131,868  130,863  126,034  125,980 
Profitability Ratio
Net profit margin1 13.88% 14.61% 11.87% 23.88% 10.42%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Verizon 19,354  20,497  15,917  15,638  12,064 
Operating revenues 128,292  131,868  130,863  126,034  125,980 
Profitability Ratio
Adjusted net profit margin2 15.09% 15.54% 12.16% 12.41% 9.58%

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 × 17,801 ÷ 128,292 = 13.88%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to Verizon ÷ Operating revenues
= 100 × 19,354 ÷ 128,292 = 15.09%

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 128,292  131,868  130,863  126,034  125,980 
Total assets 316,481  291,727  264,829  257,143  244,180 
Activity Ratio
Total asset turnover1 0.41 0.45 0.49 0.49 0.52
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Operating revenues 128,292  131,868  130,863  126,034  125,980 
Adjusted total assets 316,393  291,643  264,760  257,112  244,180 
Activity Ratio
Adjusted total asset turnover2 0.41 0.45 0.49 0.49 0.52

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
= 128,292 ÷ 316,481 = 0.41

2 Adjusted total asset turnover = Operating revenues ÷ Adjusted total assets
= 128,292 ÷ 316,393 = 0.41

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 316,481  291,727  264,829  257,143  244,180 
Equity attributable to Verizon 67,842  61,395  53,145  43,096  22,524 
Solvency Ratio
Financial leverage1 4.66 4.75 4.98 5.97 10.84
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 316,393  291,643  264,760  257,112  244,180 
Adjusted equity attributable to Verizon 103,465  96,014  86,871  74,297  68,488 
Solvency Ratio
Adjusted financial leverage2 3.06 3.04 3.05 3.46 3.57

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
= 316,481 ÷ 67,842 = 4.66

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted equity attributable to Verizon
= 316,393 ÷ 103,465 = 3.06

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 17,801  19,265  15,528  30,101  13,127 
Equity attributable to Verizon 67,842  61,395  53,145  43,096  22,524 
Profitability Ratio
ROE1 26.24% 31.38% 29.22% 69.85% 58.28%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Verizon 19,354  20,497  15,917  15,638  12,064 
Adjusted equity attributable to Verizon 103,465  96,014  86,871  74,297  68,488 
Profitability Ratio
Adjusted ROE2 18.71% 21.35% 18.32% 21.05% 17.61%

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 × 17,801 ÷ 67,842 = 26.24%

2 Adjusted ROE = 100 × Adjusted net income attributable to Verizon ÷ Adjusted equity attributable to Verizon
= 100 × 19,354 ÷ 103,465 = 18.71%

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 17,801  19,265  15,528  30,101  13,127 
Total assets 316,481  291,727  264,829  257,143  244,180 
Profitability Ratio
ROA1 5.62% 6.60% 5.86% 11.71% 5.38%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Verizon 19,354  20,497  15,917  15,638  12,064 
Adjusted total assets 316,393  291,643  264,760  257,112  244,180 
Profitability Ratio
Adjusted ROA2 6.12% 7.03% 6.01% 6.08% 4.94%

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 × 17,801 ÷ 316,481 = 5.62%

2 Adjusted ROA = 100 × Adjusted net income attributable to Verizon ÷ Adjusted total assets
= 100 × 19,354 ÷ 316,393 = 6.12%

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.