What changed in this filing

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Item 1A. Risk Factors

2025-02-12 compared with 2024-02-09 · 76 added, 48 removed, 123 unchanged (50% of the section changed)

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Economic and Strategic Risks

We face significant competition that may reduce our profits.

We face significant competition that may negatively affect our operating results.

We face significant competition in our industries.

The rapid development of new technologies, services and products has eliminated many of the traditional distinctions among wireless, cable, internet and local and long distance communication services and brought new competitors to our markets, including other telecommunications companies, cable companies, wireless service providers, satellite providers, technology companies and application and device providers.

The rapid development of new technologies, services and products has eliminated many of the traditional distinctions among wireless, cable, internet and other communication services and brought new competitors to our markets, including other telecommunications companies, cable companies, wireless service providers, satellite providers, technology companies and application and device providers.

While these changes have enabled us to offer new types of products and services, they have also allowed other providers to broaden the scope of their own competitive offerings.

If we are unable to compete effectively, we could experience lower than expected revenues and earnings.

Wireless service providers are significantly altering the financial relationships with their customers through commercial offers that vary service and device pricing, promotions, incentives and levels of service provided – in some cases specifically targeting our customers and putting pressure on pricing and margins.

If we are unable to successfully differentiate our services and products from our competitors, it could adversely affect our competitive position and market share.

Our competitors commonly offer aggressive pricing, promotions, premium content options and other incentives – in some cases specifically targeting our customers and putting pressure on our pricing and margins.

In addition, we expect the wireless industry’s customer growth rate to moderate over time in comparison to historical growth rates, leading to increased competition for customers.

Our ability to compete effectively will depend on, among other things, our network reliability, speed, capacity and coverage, the pricing of our products and services, the quality of our customer service, our development of new and enhanced products and services, the reach and quality of our sales and distribution channels, our ability to market our products and services effectively and our capital resources.

It will also depend on how successfully we anticipate and respond to various factors affecting our industries, including regulatory changes, new technologies and business models, such as the increasing use of artificial intelligence and machine learning technologies, changes in consumer preferences and demand for existing services, demographic trends and evolving economic conditions, including inflation.

Our ability to compete effectively will depend on, among other things, our network reliability, speed, capacity and coverage, the pricing of our products and services, our and our competitors' promotional strategies, the quality of our customer service, our development of new and enhanced products and services, the reach and quality of our sales and distribution channels, our ability to market our products and services effectively and our capital resources.

It will also depend on how successfully we anticipate and respond to various factors affecting our industries, including regulatory changes, new technologies and business models, such as the increasing use of AI and machine learning technologies, changes in consumer preferences and demand for existing services, demographic trends and evolving geopolitical and economic conditions, including inflation.

If we are not able to respond successfully to these competitive challenges, our results of operations and financial condition could be adversely impacted.

In addition, a sustained decline in a reporting unit's revenues and earnings has resulted in the past, and may again result in the future, in a significant negative impact on its fair value requiring us to record an impairment charge, which could have an adverse impact on our results of operations.

If we are not able to take advantage of developments in technology and address changing consumer demand on a timely basis, or if the deployment of our 5G network is delayed or hindered for any reason, we may experience a decline in the demand for our services, be unable to implement our business strategy and experience reduced profits.

If we are not able to take advantage of developments in technology and address changing consumer demand on a timely basis, or if the ongoing deployment of our 5G network is delayed or hindered for any reason, we may experience a decline in the demand for our services, be unable to implement our business strategy and experience reduced profits.

Our industries are rapidly changing as new technologies are developed that offer consumers an array of choices for their communications needs and allow new entrants into the markets we serve.

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We may not be able to accurately predict technological trends or the success of new services in the market.

If our new services fail to gain acceptance in the marketplace, or if costs associated with the implementation and introduction of these services materially increase, our ability to retain and attract customers could be adversely affected.

If our new services fail to gain acceptance in the marketplace, or if costs associated

with the implementation and introduction of these services materially increase, our ability to retain and attract customers could be adversely affected.

The deployment of our 5G network is subject to a variety of risks, including those related to equipment availability, unexpected costs, and regulatory matters that could cause deployment delays or network performance issues.

In addition, certain use cases for 5G technologies and related ecosystems are still in early development stages and their ultimate adoption or success is uncertain.

In addition, certain advanced use cases for 5G technologies and related ecosystems are still in the early phases of adoption and their ultimate adoption or success is uncertain.

These issues could result in significant costs, put us at a competitive disadvantage, or reduce the anticipated benefits of the enhancements to our networks.

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In addition, there could be legal or regulatory restraints on our ability to phase out current services.

Finally, we are using AI in our network deployment and maintenance as well as our customer and employee support services.

There are technological, regulatory, ethical and other risks involved in deploying and using AI, particularly generative AI models.

There can be no assurance that the usage of AI will meaningfully enhance our products or services or be beneficial to our business, including our efficiency or profitability.

Our investments in AI and related technologies may not result in the benefits we anticipate or enable us to obtain or maintain a competitive advantage.

Adverse conditions in the U.S.

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In difficult economic conditions, consumers may seek to reduce discretionary spending by forgoing purchases of our products, electing to use fewer higher margin services, dropping down in price plans or obtaining lower-cost products and services offered by other companies.

Similarly, under these conditions, the business customers that we serve may delay purchasing decisions, delay full implementation of service offerings or reduce their use of services.

Similarly, under these conditions, business customers may delay purchasing decisions, or full implementation of our service offerings, reduce their use of our services or choose lower-cost offerings from our competitors.

In addition, adverse economic conditions may lead to an increased number of our consumer and business customers that are unable to pay for services.

Unfavorable economic conditions could also amplify other risk factors discussed in this section, including, but not limited to, our competitive position and margins.

Over the last two years, as a result of the inflationary environment in the U.S., we experienced increases in our direct costs, including electricity and other energy-related costs for our network operations, and transportation and labor costs, as well as increased interest expenses related to rising interest rates.

Unfavorable economic conditions could also amplify other risks discussed in this report, including, but not limited to, those related to our competitive position and margins.

Furthermore, our initiatives designed to reduce costs and improve operating efficiencies may be ineffective or insufficient.

Over the last several years, as a result of the inflationary environment in the U.S., we experienced increases in our direct costs, including electricity and other energy-related costs for our network operations, and transportation and labor costs, as well as increased interest expense related to changing interest rates.

In 2022, these factors, along with impacts of the intense competition in our industries, resulted in lower earnings per share and caused us to lower our growth expectations and related financial guidance for that year.

We expect the inflationary environment and related pressures to continue into 2024.

In that case and if other unfavorable economic conditions continue or worsen, they could have a material adverse effect on our results of operations and financial condition.

Similarly, unfavorable economic conditions in the future could have a material adverse effect on our results of operations and financial condition.

Operational Risks

Cyber attacks impacting our networks or systems could have an adverse effect on our business.

Cyber attacks, including through the use of ransomware and other forms of malware, distributed denial of services attacks, credential harvesting, social engineering and other means for obtaining unauthorized access to or disrupting the operation of our networks and systems and those of our suppliers, vendors and other service providers, could have an adverse effect on our business.

Cyber attacks may cause equipment failures, loss of information, including sensitive personal information of customers or employees or valuable technical and marketing information, as well as disruptions to our or our customers’ operations.

Cyber attacks against companies, including Verizon, have increased in frequency, scope and potential harm in recent years.

They may occur alone or in conjunction with physical attacks, especially where disruption of service is an objective of the attacker.

The development and maintenance of systems to prevent such attacks is costly and requires ongoing monitoring and updating to address their increasing prevalence and sophistication.

While, to date, we have not been subject to cyber attacks that, individually or in the aggregate, have been material to Verizon's operations or financial condition, the preventive actions we take to reduce the risks associated with cyber attacks, including protection of our systems and networks, may be insufficient to repel or mitigate the effects of a cyber attack in the future.

The inability to operate or use our networks and systems or those of our suppliers, vendors and other service providers as a result of cyber attacks, even for a limited period of time, may result in significant expenses to Verizon and/or a loss of market share to our competitors.

The costs associated with a cyber attack on Verizon could include expensive incentives offered to existing customers and business partners to retain their business, increased expenditures on cybersecurity measures and the use of alternate resources, lost revenues from business interruption and litigation.

Further, certain of Verizon’s businesses, such as those offering security solutions and infrastructure and cloud services to business customers, could be negatively affected if

our ability to protect our own networks and systems is called into question as a result of a cyber attack.

Our presence in the IoT industry, which includes offerings of telematics products and services, could also increase our exposure to potential costs and expenses and reputational harm in the event of cyber attacks impacting these products or services.

In addition, a compromise of security or a theft or other compromise of valuable information, such as financial data and sensitive or private personal information, could result in lawsuits and government claims, investigations or proceedings.

Cyberattacks impacting our networks or systems could have an adverse effect on our business.

Cyberattacks, including through the use of ransomware and other forms of malware, distributed denial of services attacks, credential harvesting, social engineering and other means for obtaining unauthorized access to or disrupting the operation of our networks and systems and those of our suppliers, vendors and other service providers, could have an adverse effect on our business.

Cyberattacks against companies, including Verizon, have increased in frequency, scope and potential harm in recent years.

Cyberattacks may be perpetrated by a variety of groups or persons, including nation-state and state-sponsored actors, malicious actors, employees, contractors, or other unrelated third parties.

Nation-state and state-sponsored actors can sustain malicious activities for extended periods and deploy significant resources to plan and carry out attacks.

For example, in September 2024, we became aware that we were one of several telecommunications companies that were the subject of a cyberattack by a highly sophisticated nation-state actor known as Salt Typhoon.

In that case, the threat actor was able to access portions of our network as part of what we determined to be a narrowly focused effort to obtain information about a limited number of individuals primarily involved in government or political activity.

While we were able to contain the Salt Typhoon attack, we may be unable to contain or mitigate the impacts of a significant cyberattack in the future.

Cyberattacks may cause equipment failures, loss of information, including sensitive personal information of customers or employees or valuable technical, financial and marketing information.

Such attacks may also result in disruptions to our customers’ operations or our own business operations, including our ability to operate our networks and systems, activate customers or take payments.

Cyberattacks may occur alone or in conjunction with physical attacks, especially where disruption of service is an objective of the attacker.

Further, the use of AI and machine learning by threat actors may increase the frequency and severity of cyberattacks against us or other companies.

The inability to operate or use our networks and systems or those of our suppliers, vendors and other service providers as a result of cyberattacks, even for a limited period of time, may result in significant expenses to Verizon, a loss of current or future customers and/or a loss of market share to our competitors.

The costs associated with a cyberattack on Verizon could include expensive incentives offered to existing customers and business partners

to retain their business, increased expenditures on cybersecurity measures and the use of alternate resources, lost revenues from business interruption and the costs of investigations and litigation, including potential damages.

Further, certain of Verizon’s businesses, such as those offering security solutions and infrastructure and cloud services to business customers, could be negatively affected if our ability to protect our own networks and systems is called into question as a result of a cyberattack.

Any of these occurrences could damage our reputation, adversely impact customer and investor confidence and result in a material adverse effect on Verizon’s results of operation or financial condition.

The development and maintenance of systems to prevent and detect cyberattacks is costly and requires ongoing monitoring and updating to address the increasing prevalence and sophistication of cyberattacks.

In addition, due to the sophistication of threat actors, an attack may persist for an extended period of time before it is detected, and it may be difficult and time consuming to ascertain the extent of an attack once detected.

While none of the cyberattacks to which we have been subject to date have been material to Verizon's operations or financial condition, there can be no guarantee that we will not experience a material cyberattack in the future.

The actions we take to reduce the risks associated with cyberattacks, including protecting our systems and networks, may be insufficient to repel or mitigate the effects of a cyberattack in the future.

Natural disasters, extreme weather conditions, acts of war, terrorist or other hostile acts could cause damage to our infrastructure and result in significant disruptions to our operations.

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environmental incidents or impacts;

allegations related to the safety of our products, services and equipment;

governance issues;

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and other issues, incidents, or statements that, whether based on actual or perceived circumstances, result in adverse publicity.

In addition, changes to the content standards of social media platforms could impact our marketing and advertising initiatives on such platforms and increase risks related to our brand.

Damage to our reputation and brands could undermine our customers’ confidence in us and reduce demand for our products and services, which could result in decreased revenue and adversely affect our business and financial results.

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Public health crises could materially adversely affect our business, financial condition and results of operations.

We are subject to risks related to public health crises, such as the COVID-19 pandemic, which had an adverse effect on our operating results in 2020.

Our business is based on our ability to provide products and services to customers throughout the United States and around the world and the ability of those customers to use and pay for those products and services for their businesses and in their daily lives.

As a result, our business, financial condition and results of operations could be materially adversely affected by a public health crisis that significantly impacts the way customers use and are able to pay for our products and services, the way our employees are able to provide services to our customers, and the ways that our partners and suppliers are able to provide products and services to us.

For example, public and private sector policies and initiatives to reduce the transmission of COVID-19 and initiatives Verizon took in response to the health crisis to promote the health and safety of our employees and provide critical infrastructure and connectivity to our customers, along with the related global slowdown in economic activity, resulted in decreased revenues, increased costs and lower earnings per share during 2020.

We are subject to risks related to public health crises, which have in the past, and may in the future, have an adverse effect on our business, financial condition and operating results.

For example, in 2020, the COVID-19 pandemic and resulting policies, initiatives and impacts, along with the related global slowdown in economic activity, resulted in our decreased revenues, increased costs and lower earnings per share.

Negative effects of a public health crisis may include, but are not limited to, closure of our retail stores, impacts on customers' use of our networks, products and services and their ability to pay for them, employees' health and safety concerns, limitation of customer-focused field operations, and vendor and supply chain disruptions.

In addition, such a crisis could significantly increase the probability or consequences of the risks our business faces in ordinary circumstances, such as risks associated with our supplier and vendor relationships, risks of an economic slowdown, regulatory risks, and the costs and availability of financing.

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These regulations could have a significant impact on our businesses.

• Regulation of broadband internet access services – In 2023, the FCC proposed to return to regulation of broadband services under Title II of the Communications Act.

The proposal would revive and expand the FCC's 2015 approach (that was reversed in 2017) to regulating broadband internet access services as telecommunications services subject to utilities-style common carriage regulation.

Several states have also adopted or are considering adopting laws or executive orders that would impose net neutrality and other requirements on some of our broadband services.

• Regulation of broadband internet access services – Verizon offers many different broadband services.

In early January 2025, based on litigation filed by the broadband industry, a federal appeals court overturned the FCC's April 2024 final decision to regulate broadband services via utility-style common carriage regulation under Title II of the Communications Act.

Absent further action in the courts, this decision will remain in effect and limit the risk of burdensome FCC broadband regulation.

In addition to federal activity, several states have adopted or are considering adopting laws or executive orders that would impose net neutrality and other requirements on some of our broadband services, including a law in New York that requires discounted broadband pricing for low income customers.

Some states may also impose pricing or other rules related to broadband built with the assistance of federal or state funding.

The FCC also adopted broad rules related to "digital discrimination" that could further increase regulatory oversight of broadband services;

industry groups have appealed those rules in court.

• "Open access" – We hold certain wireless licenses that require us to comply with so-called "open access" FCC regulations, which generally require licensees of particular spectrum to allow customers to use devices and applications of their choice.

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Tax laws and regulations are complex, dynamic, and subject to change and varying interpretations, especially when evaluated against new technologies and telecommunications services.

In addition, tax legislation has been introduced or is being considered in various jurisdictions that could significantly impact our tax rate, tax liabilities, and carrying value of deferred tax assets or deferred tax liabilities.

In addition, tax legislation has been introduced or is being considered in various jurisdictions that could significantly impact our tax rate, tax liabilities, and the carrying value of deferred tax assets or deferred tax liabilities.

Any of these changes could materially impact our financial performance and our tax provision, net income and cash flows.

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We are subject to a substantial amount of litigation and claims in arbitration, including, but not limited to, shareholder lawsuits, patent and copyright infringement lawsuits, wage and hour class actions, contract and commercial claims, personal injury claims, property claims, environmental claims, and lawsuits relating to our advertising, sales, billing and collection practices.

In addition, our wireless business also faces personal injury and wrongful death lawsuits relating to alleged health effects of wireless phones or radio frequency transmitters.

We may incur significant expenses in defending these lawsuits.

In addition, we may be required to pay significant awards or settlements.

In addition, we may be required to pay significant awards of damages or settlements.

We also could be subject to court-ordered injunctions and other remedies that could negatively impact our business operations.

Our wireless business is also subject to lawsuits relating to alleged adverse health effects of wireless phones and radio frequency transmitters.

Any of these allegations or changes in government agencies’ assessment of the risks associated with using wireless devices could result in significant legal and regulatory liability and other remedies, and could have a material adverse effect on our business, financial condition and operating results.

Allegations related to lead sheathed copper cables in our copper network infrastructure could expose us to regulatory scrutiny, litigation, penalties, removal and compliance costs, operational impact or reputational damage.

There have been media reports alleging that certain lead sheathed copper cables that are part of our copper-based network infrastructure may present health or environmental risks in areas where those facilities are deployed.

These allegations could result in government investigations, legislative or regulatory actions, litigation, penalties and other liability, remediation and compliance costs or negative operational impacts.

In addition, we are currently subject to regulatory inquiries and lawsuits related to these allegations, and additional legal proceedings and other contingencies may arise in the future.

These allegations have resulted in government investigations, regulatory inquiries and litigation, and could further result in legislative or regulatory actions, penalties and other liability, remediation and compliance costs or negative operational impacts.

Additional legal proceedings and other contingencies may arise in the future.

Our insurance policies may not cover or may not be sufficient to fully cover the costs of these claims.

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Financial Risks

Verizon has significant debt, which could increase further if Verizon incurs additional debt in the future and does not retire existing debt.

Verizon has significant debt, which could increase further if we incur additional debt in the future and do not retire existing debt.

As of December 31, 2024, Verizon had approximately $117.9 billion of outstanding unsecured indebtedness, $12.0 billion of unused borrowing capacity under our existing revolving credit facility and $26.1 billion of outstanding secured indebtedness.

Verizon’s debt level and related debt service obligations could have negative consequences, including:

• requiring Verizon to dedicate significant cash flow from operations to the payment of principal, interest and other amounts payable on our debt, which would reduce the funds we have available for other purposes, such as working capital, capital expenditures, dividend payments and acquisitions;

• making it more difficult or expensive for Verizon to obtain any necessary future financing for working capital, capital expenditures, debt service requirements, debt refinancing, acquisitions or other purposes and limiting its ability to repurchase common stock;

• reducing Verizon’s flexibility in planning for or reacting to changes in our industries and market conditions;

• making Verizon more vulnerable in the event of a downturn in our business;

• exposing Verizon to increased interest rate risk to the extent that (i) our debt obligations are subject to variable interest rates or (ii) we need to refinance existing debt that bears interest at a rate lower than current market rates.

Adverse changes in the financial markets and other factors could increase our borrowing costs and the availability of financing.

Our debt level and related debt service obligations could have negative consequences, including:

• requiring us to dedicate significant cash flow from operations to the payment of principal, interest and other amounts payable on our debt, which would reduce the funds we have available for other purposes, such as working capital, capital expenditures, dividend payments and acquisitions;

• making it more difficult or expensive for us to obtain any necessary future financing for working capital, capital expenditures, debt service requirements, debt refinancing, acquisitions or other purposes and limiting our ability to repurchase common stock;

• reducing our flexibility in planning for or reacting to changes in our industries and market conditions;

• making us more vulnerable in the event of a downturn in our business;

• exposing us to increased interest rate risk to the extent that (i) our debt obligations are subject to variable interest rates or (ii) we need to refinance existing debt that bears interest at a rate lower than current market rates.

Our initiatives aimed at reducing our indebtedness and achieving any target leverage ratio may be unsuccessful due to macroeconomic, business and other factors.

Adverse changes in the financial markets and other factors could increase our borrowing costs and reduce the availability of financing.

We require a significant amount of capital to operate and grow our business.

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With approximately 99,600 employees and approximately 179,700 retirees as of December 31, 2024 eligible to participate in Verizon’s benefit plans, the costs of pension benefits and active and retiree healthcare benefits have a significant impact on our profitability.

Our costs of maintaining these plans, and the future funding requirements for these plans, are affected by several factors, including increases in healthcare costs, decreases in investment returns on funds held by our pension and other benefit plan trusts and changes in the discount rate and mortality assumptions used to calculate pension and other postretirement expenses.

If we are unable to limit future increases in the costs of our benefit plans, those costs could reduce our profitability and increase our funding commitments.

We are subject to risks associated with mergers, acquisitions, divestitures and other strategic transactions.

From time to time, we pursue mergers, acquisitions, joint ventures, assets transfers and other strategic transactions that we believe may expand our business or are consistent with our strategy.

We may also occasionally divest assets and businesses.

Any such transaction entails certain risks and could present financial, managerial and operational challenges.

If we are unable to consummate planned strategic transactions and successfully integrate acquired businesses into our existing operations, or if we are not able to achieve cost savings, synergies and other anticipated benefits of any such transaction, our business could be negatively affected.

Divestitures may result in asset impairment and disposition charges, and loss of income from divested assets and businesses, or require continued financial involvement in the divested business for a period following the transaction, including through indemnification arrangements.

In addition, strategic transactions may involve significant expenses, require additional financing or expose us to liabilities not discovered in the due diligence process or as a result of transaction-related litigation.

These and other risks related to our mergers, acquisitions, divestitures and other strategic transactions, including our pending acquisition of Frontier, may have an adverse effect on our business, financial condition, and operating results.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors