VERIZON COMMUNICATIONS INC 10-Q

Item 1. Financial Statements (Unaudited) Condensed Consolidated Statements of Income Verizon Communications Inc. and Subsidiaries Three Months Ended March 31, (dollars in millions, except per share amounts) (unaudited) 2025 2024 Operating Revenues Service revenues and other $ 28,087 $ 27,620 Wireless equipment revenues 5,398 5,361 Total Operating Revenues 33,485 32,981 Operating Expenses Cost of services (exclusive of items shown below) 6,950 6,967 Cost of wireless equipment 6,106 5,905 Selling, general and administrative expense 7,874 8,143 Depreciation and amortization expense 4,577 4,445 Total Operating Expenses 25,507 25,460 Operating Income 7,978 7,521 Equity in earnings (losses) of unconsolidated businesses 6 ( 9 ) Other income, net 121 198 Interest expense ( 1,632 ) ( 1,635 ) Income Before Provision For Income Taxes 6,473 6,075 Provision for income taxes ( 1,490 ) ( 1,353 ) Net Income $ 4,983 $ 4,722 Net income attributable to noncontrolling interests $ 104 $ 120 Net income attributable to Verizon 4,879 4,602 Net Income $ 4,983 $ 4,722 Basic Earnings Per Common Share Net income attributable to Verizon $ 1.16 $ 1.09 Weighted-average shares outstanding (in millions) 4,222 4,215 Diluted Earnings Per Common Share Net income attributable to Verizon $ 1.15 $ 1.09 Weighted-average shares outstanding (in millions) 4,226 4,219 See Notes to Condensed Consolidated Financial Statements 4 Table of Contents Condensed Consolidated Statements of Comprehensive Income Verizon Communications Inc. and Subsidiaries Three Months Ended March 31, (dollars in millions) (unaudited) 2025 2024 Net Income $ 4,983 $ 4,722 Other Comprehensive Income (Loss), Net of Tax (Expense) Benefit Foreign currency translation adjustments, net of tax of $ 9 and $( 5 ) 67 ( 50 ) Unrealized gain on cash flow hedges, net of tax of $( 7 ) and $( 11 ) 21 35 Unrealized gain (loss) on fair value hedges, net of tax of $ 219 and $( 68 ) ( 653 ) 200 Unrealized gain (loss) on marketable securities, net of tax of $ 0 and $ 0 1 ( 2 ) Defined benefit pension and postretirement plans, net of tax of $ 1 and $ 1 ( 2 ) ( 2 ) Other comprehensive income (loss) attributable to Verizon ( 566 ) 181 Total Comprehensive Income $ 4,417 $ 4,903 Comprehensive income attributable to noncontrolling interests $ 104 $ 120 Comprehensive income attributable to Verizon 4,313 4,783 Total Comprehensive Income $ 4,417 $ 4,903 See Notes to Condensed Consolidated Financial Statements 5 Table of Contents Condensed Consolidated Balance Sheets Verizon Communications Inc. and Subsidiaries At March 31, At December 31, (dollars in millions, except per share amounts) (unaudited) 2025 2024 Assets Current assets Cash and cash equivalents $ 2,257 $ 4,194 Accounts receivable 27,033 27,261 Less Allowance for credit losses 1,144 1,152 Accounts receivable, net 25,889 26,109 Inventories 2,197 2,247 Prepaid expenses and other 7,010 7,973 Total current assets 37,353 40,523 Property, plant and equipment 331,888 331,406 Less Accumulated depreciation 223,965 222,884 Property, plant and equipment, net 107,923 108,522 Investments in unconsolidated businesses 820 842 Wireless licenses 156,726 156,613 Goodwill 22,842 22,841 Other intangible assets, net 10,847 11,129 Operating lease right-of-use assets 24,175 24,472 Other assets 19,678 19,769 Total assets $ 380,364 $ 384,711 Liabilities and Equity Current liabilities Debt maturing within one year $ 22,629 $ 22,633 Accounts payable and accrued liabilities 19,413 23,374 Current operating lease liabilities 4,686 4,415 Other current liabilities 14,338 14,349 Total current liabilities 61,066 64,771 Long-term debt 121,020 121,381 Employee benefit obligations 11,793 11,997 Deferred income taxes 46,643 46,732 Non-current operating lease liabilities 19,379 19,928 Other liabilities 18,426 19,327 Total long-term liabilities 217,261 219,365 Commitments and Contingencies (Note 12) Equity Series preferred stock ($ 0.10 par value; 250,000,000 shares authorized; none issued) — — Common stock ($ 0.10 par value; 6,250,000,000 shares authorized in each period; 4,291,433,646 shares issued in each period) 429 429 Additional paid in capital 13,415 13,466 Retained earnings 91,128 89,110 Accumulated other comprehensive loss ( 1,489 ) ( 923 ) Common stock in treasury, at cost ( 75,178,732 and 81,753,488 shares outstanding) ( 3,295 ) ( 3,583 ) Deferred compensation – employee stock ownership plans (ESOPs) and other 534 738 Noncontrolling interests 1,315 1,338 Total equity 102,037 100,575 Total liabilities and equity $ 380,364 $ 384,711 See Notes to Condensed Consolidated Financial Statements 6 Table of Contents Condensed Consolidated Statements of Cash Flows Verizon Communications Inc. and Subsidiaries Three Months Ended March 31, (dollars in millions) (unaudited) 2025 2024 Cash Flows from Operating Activities Net Income $ 4,983 $ 4,722 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense 4,577 4,445 Employee retirement benefits 143 62 Deferred income taxes 132 141 Provision for expected credit losses 587 567 Equity in losses of unconsolidated businesses, inclusive of dividends received 20 14 Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses ( 2,618 ) ( 2,531 ) Other, net ( 42 ) ( 336 ) Net cash provided by operating activities 7,782 7,084 Cash Flows from Investing Activities Capital expenditures (including capitalized software) ( 4,145 ) ( 4,376 ) Acquisitions of wireless licenses ( 122 ) ( 449 ) Other, net 515 ( 420 ) Net cash used in investing activities ( 3,752 ) ( 5,245 ) Cash Flows from Financing Activities Proceeds from long-term borrowings — 3,110 Proceeds from asset-backed long-term borrowings 2,781 2,510 Repayments of long-term borrowings and finance lease obligations ( 2,446 ) ( 4,508 ) Repayments of asset-backed long-term borrowings ( 2,589 ) ( 1,408 ) Dividends paid ( 2,856 ) ( 2,796 ) Other, net ( 783 ) 1,664 Net cash used in financing activities ( 5,893 ) ( 1,428 ) Increase (decrease) in cash, cash equivalents and restricted cash ( 1,863 ) 411 Cash, cash equivalents and restricted cash, beginning of period 4,635 3,497 Cash, cash equivalents and restricted cash, end of period (Note 1) $ 2,772 $ 3,908 See Notes to Condensed Consolidated Financial Statements 7 Table of Contents Notes to Condensed Consolidated Financial Statements (Unaudited) Verizon Communications Inc. and Subsidiaries Note 1. Basis of Presentation Verizon Communications Inc. (the Company) is a holding company that, acting through its subsidiaries (together with the Company, collectively, Verizon), is one of the world's leading providers of communications, technology, information and streaming products and services to consumers, businesses and government entities. With a presence around the world, we offer data, video and voice services and solutions on our networks and platforms that are designed to meet customers’ demand for mobility, reliable network connectivity and security. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) in the United States (U.S.) and based upon Securities and Exchange Commission rules that permit reduced disclosure for interim periods. For a more complete discussion of significant accounting policies and certain other information, you should refer to the financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. These financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of results of operations and financial condition for the interim periods shown. The results for the interim periods are not necessarily indicative of results for the full year. The condensed consolidated financial statements include our controlled subsidiaries, as well as variable interest entities (VIE) where we are deemed to be the primary beneficiary. All significant intercompany accounts and transactions have been eliminated. Certain amounts have been reclassified to conform to the current period's presentation. Earnings Per Common Share There were a total of approximately 4.4 million and 3.7 million outstanding dilutive securities, primarily consisting of performance stock units and restricted stock units, included in the computation of diluted earnings per common share for the three months ended March 31, 2025 and 2024 , respectively. Cash, Cash Equivalents and Restricted Cash We consider all highly liquid investments with an original maturity of 90 days or less when purchased to be cash equivalents. Cash equivalents are stated at cost, which approximates quoted market value and includes amounts held in money market funds. Cash collections on the receivables and on the underlying receivables related to the participation interest collateralizing our asset-backed debt securities are required at certain specified times to be placed into segregated accounts. Deposits to the segregated accounts are considered restricted cash. Cash, cash equivalents and restricted cash are included in the following line items in the condensed consolidated balance sheets: At March 31, At December 31, Increase / (Decrease) (dollars in millions) 2025 2024 Cash and cash equivalents $ 2,257 $ 4,194 $ ( 1,937 ) Restricted cash: Prepaid expenses and other 329 319 10 Other assets 136 122 14 Assets held for sale: Prepaid expenses and other 50 — 50 Cash, cash equivalents and restricted cash $ 2,772 $ 4,635 $ ( 1,863 ) Note 2. Revenues and Contract Costs We earn revenue from contracts with customers, primarily through the provision of telecommunications and other services and through the sale of wireless equipment. Revenue by Category We have two reportable segments that we operate and manage as strategic business units, Consumer and Business. Revenue is disaggregated by products and services within Consumer, and customer groups (Enterprise and Public Sector, Business Markets and Other, and Wholesale) within Business. See Note 10 for additional information on revenue by segment, including Corporate and other. 8 Table of Contents We also earn revenues that are not accounted for under Topic 606 from leasing arrangements (such as those for towers and equipment), captive reinsurance arrangements primarily related to wireless device insurance and the interest recognized when equipment is sold to the customer by an authorized agent under a device payment plan agreement. We have elected the practical expedient within Topic 842, to combine the lease and non-lease components for those customer arrangements under Topic 606 that involve customer premise equipment where we are the lessor. Remaining Performance Obligations When allocating the total contract transaction price to identified performance obligations, a portion of the total transaction price may relate to service performance obligations which were not satisfied or were partially satisfied as of the end of the reporting period. Below we disclose information relating to these unsatisfied performance obligations. We apply the practical expedient available under Topic 606 that provides the option to exclude the expected revenues arising from unsatisfied performance obligations related to contracts that have an original expected duration of one year or less. This situation primarily arises with respect to certain month-to-month service contracts. At March 31, 2025, month-to-month service contracts represented approximately 95 % of both our wireless postpaid contracts and our wireline Consumer and our Business Markets and Other contracts, compared to March 31, 2024, for which month-to-month service contracts represented approximately 95 % of our wireless postpaid contracts and 94 % of our wireline Consumer and our Business Markets and Other contracts . Additionally, certain contracts provide customers the option to purchase additional services. The fees related to these additional services are recognized when the customer exercises the option (typically on a month-to-month basis). Contracts for wireless services, with or without promotional credits that require maintenance of service, are generally either month-to-month and cancellable at any time, or considered to contain terms ranging from greater than one month to up to thirty-six months (typically under a device payment plan associated with a promotion or a fixed-term plan). Additionally, customers may incur charges based on usage or additional optional services purchased in conjunction with entering into a contract that can be cancelled at any time and therefore are not included in the transaction price. The transaction price allocated to service performance obligations, which are not satisfied or are partially satisfied as of the end of the reporting period, are generally related to contracts that are not accounted for as month-to-month contracts. Our Consumer group customers also include traditional wholesale resellers that purchase and resell wireless service under their own brands to their respective customers. Reseller arrangements generally include a stated contract term, which typically extends longer than two years and, in some cases, include a periodic minimum revenue commitment over the contract term for which revenues will be recognized in future periods. Consumer customer contracts for wireline services are generally month-to-month; however, they may have a service term of two years or shorter than twelve months . Certain contracts with Business customers for wireline services extend into future periods, contain fixed monthly fees and usage-based fees, and can include annual commitments in each year of the contract or commitments over the entire specified contract term; however, a significant number of contracts for wireline services with our Business customers have a contract term that is twelve months or less. Additionally, there are certain contracts with Business customers for wireline services that have a contractual minimum fee over the total contract term. We cannot predict the time period when revenue will be recognized related to those contracts; thus, they are excluded from the expected recognition timeframe below. These contracts have varying terms spanning over approximately twenty-eight years ending in September 2053 and have aggregate contract minimum payments totaling $ 1.6 billion. At March 31, 2025, the aggregate amount of the transaction price related to unsatisfied performance obligations was $ 53.3 billion, of which we expect to recognize substantially all of the revenue from origination over the next thirty-six months , with the remainder recognized thereafter. Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations and changes in the timing and scope of contracts, arising from contract modifications. Accounts Receivable and Contract Balances The timing of revenue recognition may differ from the time of billing to our customers. Receivables presented in our condensed consolidated balance sheets represent an unconditional right to consideration. Contract balances represent amounts from an arrangement when either Verizon has performed, by transferring goods or services to the customer in advance of receiving all or partial consideration for such goods and services from the customer, or the customer has made payment to Verizon in advance of obtaining control of the goods and/or services promised to the customer in the contract. 9 Table of Contents The following table presents information about receivables from contracts with customers: At March 31, At December 31, (dollars in millions) 2025 2024 Accounts Receivable (1) $ 9,074 $ 9,225 Device payment plan agreement receivables (2) 19,451 19,766 (1) Balances do not include receivables related to the following: activity associated with certain vendor agreements, leasing arrangements (such as those for towers and equipment), captive reinsurance arrangements primarily related to wireless device insurance and device payment plan agreement receivables presented separately. (2) Included in device payment plan agreement receivables presented in Note 6. Receivables derived from the sale of equipment on a device payment plan through an authorized agent are excluded. Contract assets primarily relate to our rights to consideration for goods or services provided to customers but for which we do not have an unconditional right at the reporting date. Under a fixed-term plan, total contract revenue is allocated between wireless service and equipment revenues. In conjunction with these arrangements, a contract asset is created, which represents the difference between the amount of equipment revenue recognized upon sale and the amount of consideration received from the customer when the performance obligation related to the transfer of control of the equipment is satisfied. The contract asset is reclassified to accounts receivable as wireless services are provided and billed. We have the right to bill the customer as service is provided over time, which results in our right to the payment being unconditional. The contract asset balances are presented in our condensed consolidated balance sheets as Prepaid expenses and other and Other assets. We recognize the allowance for credit losses at inception and reassess quarterly based on management’s expectation of the asset’s collectability. Contract liabilities arise when we bill our customers and receive consideration in advance of providing the goods or services promised in the contract. We typically bill service one month in advance, which is the primary component of the contract liability balance. Contract liabilities are recognized as revenue when services are provided to the customer. The contract liability balances are presented in our condensed consolidated balance sheets as Other current liabilities and Other liabilities. Revenue recognized related to contract liabilities existing at January 1, 2025 and January 1, 2024 were $ 4.6 billion and $ 4.4 billion for the three months ended March 31, 2025 and March 31, 2024, respectively. The balances of contract assets and contract liabilities recorded in our condensed consolidated balance sheets were as follows: At March 31, At December 31, (dollars in millions) 2025 2024 Assets Prepaid expenses and other $ 559 $ 621 Other assets 301 321 Total Contract Assets $ 860 $ 942 Liabilities Other current liabilities $ 7,538 $ 7,492 Other liabilities 2,178 2,186 Total Contract Liabilities $ 9,716 $ 9,678 Contract Costs Topic 606 requires the recognition of an asset for incremental costs to obtain a customer contract, which are then amortized to expense over the respective periods of expected benefit. We recognize an asset for incremental commission expenses paid to internal and external sales personnel and agents in conjunction with obtaining customer contracts. We only defer these costs when we have determined the commissions are incremental costs that would not have been incurred absent the customer contract and are expected to be recoverable. Costs to obtain a contract are amortized and recorded ratably as commission expense over the period representing the transfer of goods or services to which the assets relate. Costs to obtain wireless contracts are amortized over both of our Consumer and Business customers' estimated upgrade cycles, as such costs are typically incurred each time a customer upgrades. Costs to obtain wireline contracts are amortized as expense over the estimated customer relationship period for our Consumer customers. Incremental costs to obtain wireline contracts for our Business customers are insignificant. Costs to obtain contracts are recorded in Selling, general and administrative expense. We also defer costs incurred to fulfill contracts that: (1) relate directly to the contract; (2) are expected to generate resources that will be used to satisfy our performance obligation under the contract; and (3) are expected to be recovered through revenue generated under the contract. Contract fulfillment costs are expensed as we satisfy our performance obligations and recorded in Cost of services. These costs principally relate to direct costs that enhance our wireline business resources, such as costs incurred to install circuits. We determine the amortization periods for our costs incurred to obtain or fulfill a customer contract at a portfolio level due to the similarities within these customer contract portfolios. 10 Table of Contents Other costs, such as general costs or costs related to past performance obligations, are expensed as incurred. Collectively, costs to obtain a contract and costs to fulfill a contract are referred to as deferred contract costs, and amortized over a two -to- seven year period. Deferred contract costs are classified as current or non-current within Prepaid expenses and other and Other assets, respectively. The balances of deferred contract costs included in our condensed consolidated balance sheets were as follows: At March 31, At December 31, (dollars in millions) 2025 2024 Assets Prepaid expenses and other $ 2,934 $ 2,932 Other assets 2,774 2,808 Total $ 5,708 $ 5,740 For the three months ended March 31, 2025 and March 31, 2024, we recognized expense of $ 877 million and $ 829 million, respectively, associated with the amortization of deferred contract costs, primarily within Selling, general and administrative expense in our condensed consolidated statements of income. We assess our deferred contract costs for impairment on a quarterly basis. We recognize an impairment charge to the extent the carrying amount of a deferred cost exceeds the remaining amount of consideration we expect to receive in exchange for the goods and services related to the cost, less the expected costs related directly to providing those goods and services that have not yet been recognized as expenses. There were no impairment charges recognized for the three months ended March 31, 2025 or March 31, 2024. Note 3. Acquisitions and Divestitures Spectrum License Transactions In February 2021, the Federal Communications Commission (FCC) concluded Auction 107 for C-Band wireless spectrum. In accordance with the rules applicable to the auction, Verizon is required to make payments for our allocable share of clearing costs incurred by, and incentive payments due to, the incumbent license holders associated with the auction, which are estimated to be $ 7.5 billion. During the three months ended March 31, 2024, we made payments of $ 269 million for obligations related to clearing costs and accelerated clearing incentives. The carrying value of the wireless spectrum won in Auction 107 consists of all payments required to participate and purchase licenses in the auction, including Verizon's allocable share of clearing costs incurred by, and incentive payments due to, the incumbent license holders associated with the auction that we are obligated to pay in order to acquire the licenses, as well as capitalized interest to the extent qualifying activities have occurred. On October 17, 2024, Verizon entered into a license purchase agreement to acquire select spectrum licenses of United States Cellular Corporation and certain of its subsidiaries (UScellular) for total consideration of $ 1.0 billion, subject to certain potential adjustments. The closing of this transaction is subject to the receipt of regulatory approvals and other closing conditions, including the consummation of UScellular's proposed sale of its wireless operations and select spectrum assets to T-Mobile US, Inc., and the termination of certain post-closing arrangements with respect to that sale. Frontier Communications Parent, Inc. On September 4, 2024, Verizon entered into an Agreement and Plan of Merger (the Merger Agreement) to acquire Frontier Communications Parent, Inc. (Frontier), a U.S. provider of broadband internet and other communication services. The transaction is structured as a merger of the Company's subsidiary with and into Frontier, as a result of which Frontier will become a wholly owned subsidiary of the Company and shares of Frontier common stock outstanding immediately prior to the effective time of merger (subject to certain limited exceptions) will be cancelled and converted into the right to receive a per share merger consideration of $ 38.50 , in cash. In November 2024, Frontier shareholders approved the transaction. Consummation of the transaction is subject to receipt of certain regulatory approvals and other customary closing conditions. Under certain circumstances, if the Merger Agreement is terminated, Frontier may be required to pay Verizon a termination fee of $ 320 million. Under certain other specified circumstances, Verizon may be required to pay Frontier a termination fee of $ 590 million. 11 Table of Contents Note 4. Wireless Licenses, Goodwill, and Other Intangible Assets Wireless Licenses The carrying amounts of our Wireless licenses are as follows: At March 31, At December 31, (dollars in millions) 2025 2024 Wireless licenses $ 156,726 $ 156,613 At March 31, 2025 and 2024, approximately $ 9.4 billion and $ 13.9 billion, respectively, of wireless licenses were under development for commercial service for which we were capitalizing interest costs. We recorded $ 122 million and $ 180 million of capitalized interest on wireless licenses for the three months ended March 31, 2025 and 2024, respectively. During the three months ended March 31, 2025, we renewed various wireless licenses in accordance with FCC regulations. The average renewal period for these licenses was 15 years. Goodwill Changes in the carrying amount of Goodwill are as follows: (dollars in millions) Consumer Business Total Balance at January 1, 2025 (1) $ 21,177 $ 1,664 $ 22,841 Reclassifications, adjustments and other — 1 1 Balance at March 31, 2025 $ 21,177 $ 1,665 $ 22,842 (1) Goodwill is net of accumulated impairment charges of $ 5.8 billion related to our Business reporting unit. Other Intangible Assets The following table displays the composition of Other intangible assets, net as well as the respective amortization periods: At March 31, 2025 At December 31, 2024 (dollars in millions) Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount Customer lists ( 6 to 13 years) $ 4,242 $ ( 2,751 ) $ 1,491 $ 4,242 $ ( 2,629 ) $ 1,613 Non-network internal-use software ( 3 to 7 years) 28,587 ( 20,291 ) 8,296 28,136 ( 19,743 ) 8,393 Other ( 4 to 25 years) 2,666 ( 1,606 ) 1,060 2,664 ( 1,541 ) 1,123 Total $ 35,495 $ ( 24,648 ) $ 10,847 $ 35,042 $ ( 23,913 ) $ 11,129 The amortization expense for Other intangible assets was as follows: Three Months Ended (dollars in millions) March 31, 2025 $ 734 2024 698 The estimated future amortization expense for Other intangible assets for the remainder of the current year and next 5 years is as follows: Years (dollars in millions) Remainder of 2025 $ 2,159 2026 2,644 2027 2,096 2028 1,610 2029 946 2030 690 Note 5. Debt Significant Debt Transactions Debt or equity financing may be needed to fund additional investments or development activities or to maintain an appropriate capital structure to ensure our financial flexibility. 12 Table of Contents The following table shows the significant transactions involving the senior unsecured debt securities of the Company and its subsidiaries that occurred during the three months ended March 31, 2025. Repayments, Redemptions and Repurchases (dollars in millions) Principal Repaid/ Redeemed/ Repurchased Amount Paid (1) Verizon 4.050 % notes due 2025 A$ 450 $ 365 Verizon 3.376 % notes due 2025 $ 793 806 Verizon floating rate notes due 2025 487 490 Open market repurchases of various Verizon notes 410 317 Total $ 1,978 (1) Represents amount paid to repay, redeem or repurchase, including any accrued interest. In addition, for securities denominated in a currency other than the U.S. dollar, amount paid is shown on a U.S. dollar equivalent basis and includes the amount payable per the derivatives entered into in connection with the transaction. See Note 7 for additional information on cross currency swap transactions related to the transaction. In April 2025, we repaid at maturity € 747 million of outstanding aggregate principal amount of 0.875 % notes. We also redeemed all of the $ 985 million outstanding aggregate principal amount of 2.625 % notes due 2026. See Note 7 for additional information on derivative activity related to the transactions. Issuances In April 2025, we issued $ 2.3 billion aggregate principal amount of notes due 2035, with an interest rate of 5.250 % per year. We contributed $ 563 million principal amount of the notes to our pension trust. See Note 8 for additional information. Commercial Paper Program During the three months ended March 31, 2025, we issued $ 4.8 billion in net proceeds and made $ 4.8 billion in principal repayments of commercial paper. These transactions were recorded within Other, net cash flow from financing activities in our condensed consolidated statements of cash flows on a net basis. As of March 31, 2025, we had no commercial paper outstanding. Asset-Backed Debt As of March 31, 2025 , the carrying value of our asset-backed debt was $ 26.3 billion. Our asset-backed debt includes Asset-Backed Notes (ABS Notes) issued to third-party investors (Investors) and loans (ABS Financing Facilities) received from banks and their conduit facilities (collectively, the Banks). Our consolidated asset-backed debt bankruptcy remote legal entities (each, an ABS Entity, or collectively, the ABS Entities) issue the debt or are otherwise party to the transaction documentation in connection with our asset-backed debt transactions. Under the terms of our asset-backed debt, Cellco Partnership (Cellco), a wholly-owned subsidiary of the Company, and certain other Company affiliates (collectively, the Originators) transfer device payment plan agreement receivables and certain other receivables (collectively referred to as certain receivables) or a participation interest in certain other receivables to one of the ABS Entities, which in turn transfers such receivables and participation interest to another ABS Entity that issues the debt. Verizon entities retain the equity interests and residual interests, as applicable, in the ABS Entities, which represent the rights to all funds not needed to make required payments on the asset-backed debt and other related payments and expenses. Our asset-backed debt is secured by the transferred receivables and participation interest, and future collections on such receivables and underlying receivables related to such participation interest. These receivables and participation interest transferred to the ABS Entities and related assets, consisting primarily of restricted cash, will only be available for payment of asset-backed debt and expenses related thereto, payments to the Originators in respect of additional transfers of certain receivables and participation interest, and other obligations arising from our asset-backed debt transactions, and will not be available to pay other obligations or claims of Verizon’s creditors until the associated asset-backed debt and other obligations are satisfied. The Investors or Banks, as applicable, which hold our asset-backed debt have legal recourse to the assets securing the debt, but do not have any recourse to Verizon with respect to the payment of principal and interest on the debt. Under a parent support agreement, the Company has agreed to guarantee certain of the payment obligations of Cellco and the Originators to the ABS Entities. Cash collections on the receivables and on the underlying receivables related to the participation interest collateralizing our asset-backed debt securities are required at certain specified times to be placed into segregated accounts. Deposits to the segregated accounts are considered restricted cash and are included in Prepaid expenses and other and Other assets in our condensed consolidated balance sheets. 13 Table of Contents Proceeds from our asset-backed debt transactions are reflected in Cash flows from financing activities in our condensed consolidated statements of cash flows. The asset-backed debt issued is included in Debt maturing within one year and Long-term debt in our condensed consolidated balance sheets. ABS Notes During the three months ended March 31, 2025 , we completed the following ABS Notes transactions: (dollars in millions) Interest Rates % Expected Weighted-average Life to Maturity (in years) Principal Amount Issued January 2025 Series 2025-1 A Senior class notes 4.710 2.99 $ 535 B Junior class notes 4.940 2.99 41 C Junior class notes 5.090 2.99 25 Series 2025-2 A Senior class notes 4.940 5.00 446 B Junior class notes 5.160 5.00 34 C Junior class notes 5.340 5.00 20 January 2025 total 1,101 March 2025 Series 2025-3 A-1a Senior class notes 4.510 1.97 706 A-1b Senior class notes Compounded SOFR + 0.550 (1) 1.97 185 B Junior class notes 4.770 1.97 68 C Junior class notes 4.900 1.97 41 Series 2025-4 A Senior class notes 4.760 4.97 446 B Junior class notes 5.020 4.97 34 C Junior class notes 5.200 4.97 20 March 2025 total 1,500 Total $ 2,601 (1) Compounded Secured Overnight Financing Rate (SOFR) is calculated using SOFR as published by the Federal Reserve Bank of New York in accordance with the terms of such notes. Under the terms of each series of ABS Notes outstanding as of March 31, 2025, there is a revolving period of up to two years , three years , or five years , as applicable, during which we may transfer additional receivables to the ABS Entity. During the three months ended March 31, 2025 , we made aggregate principal repayments of $ 800 million in connection with an anticipated redemption of ABS Notes and notes that have entered the amortization period. In April 2025, in connection with an anticipated redemption of ABS Notes, we made a principal repayment, in whole, for $ 932 million. ABS Financing Facilities Under the two loan agreements outstanding in connection with the ABS Financing Facility originally entered into in 2021 and most recently renewed in 2023 (2021 ABS Financing Facility), we prepaid an aggregate of $ 250 million in February 2025 and we prepaid an aggregate of $ 1.4 billion in March 2025 . The aggregate outstanding balance under the 2021 ABS Financing Facility was $ 6.4 billion as of March 31, 2025. Under the loan agreement outstanding in connection with the ABS Financing Facility originally entered into in 2022 and most recently renewed in 2024 (2022 ABS Financing Facility), we prepaid an aggregate of $ 163 million in February 2025 and we borrowed an additional $ 189 million in March 2025. T he aggregate outstanding balance under the 2022 ABS Financing Facility was $ 5.0 billion as of March 31, 2025 . In April 2025, we prepaid an aggregate of $ 241 million under the loan agreement outstanding in connection with the 2022 ABS Financing Facility. 14 Table of Contents Variable Interest Entities The ABS Entities meet the definition of a VIE for which we have determined that we are the primary beneficiary as we have both the power to direct the activities of the entity that most significantly impact the entity's performance and the obligation to absorb losses or the right to receive benefits of the entity. Therefore, the assets, liabilities and activities of the ABS Entities are consolidated in our financial results and are included in amounts presented on the face of our condensed consolidated balance sheets. The assets and liabilities related to our asset-backed debt arrangements included in our condensed consolidated balance sheets were as follows: At March 31, At December 31, (dollars in millions) 2025 2024 Assets Accounts receivable, net $ 17,913 $ 18,339 Prepaid expenses and other 331 322 Other assets 10,997 11,647 Liabilities Accounts payable and accrued liabilities 37 37 Debt maturing within one year 15,847 17,312 Long-term debt 10,490 8,827 The Accounts receivable, net amounts above do not include underlying receivables for which a participation interest has been transferred to the ABS Entities. See Note 6 for additional information on certain receivables and participation interest used to secure asset-backed debt. Long-Term Credit Facilities At March 31, 2025 (dollars in millions) Maturities Facility Capacity Unused Capacity Principal Amount Outstanding Verizon revolving credit facility (1) 2028 $ 12,000 $ 11,964 $ — Various export credit facilities (2) 2025 - 2031 10,000 — 5,118 Total $ 22,000 $ 11,964 $ 5,118 (1) The revolving credit facility does not require us to comply with financial covenants or maintain specified credit ratings, and it permits us to borrow even if our business has incurred a material adverse change. The revolving credit facility provides for the issuance of letters of credit. As of March 31, 2025 , there have been no drawings against the revolving credit facility since its inception. (2) During the three months ended March 31, 2025 and 2024 , there were no drawings from these facilities. Borrowings under certain of these facilities are repaid semi-annually in equal installments up to the applicable maturity dates. Maturities reflect maturity dates of principal amounts outstanding. Any amounts borrowed under these facilities and subsequently repaid cannot be reborrowed. Non-Cash Transactions During the three months ended March 31, 2025 and 2024, we financed, primarily through alternative financing arrangements, the purchase of approximately $ 627 million and $ 463 million, respectively, consisting primarily of network equipment. As of March 31, 2025 and December 31, 2024 , $ 2.6 billion and $ 2.5 billion, respectively, relating to these financing arrangements, including those entered into in prior years and liabilities assumed through acquisitions, remained outstanding. These purchases are non-cash financing activities and therefore are not reflected within Capital expenditures in our condensed consolidated statements of cash flows. Net Debt Extinguishment Gains During the three months ended March 31, 2025 and 2024 , we recorded net debt extinguishment gains of $ 90 million and $ 110 million, respectively. T he net gains are recorded in Other income, net in our condensed consolidated statements of income. The total non-cash debt extinguishment gains are reflected within Other, net cash flow from operating activities, and the total cash payments to extinguish the debt are reflected within Other, net cash flow from financing activities in our condensed consolidated statements of cash flows. Guarantees We guarantee the debentures of our operating telephone company subsidiaries. As of March 31, 2025 , $ 614 million aggregate principal amount of these obligations remained outstanding. Each guarantee will remain in place for the life of the obligation 15 Table of Contents unless terminated pursuant to its terms, including the operating telephone company no longer being a wholly-owned subsidiary of the Company. Debt Covenants We and our consolidated subsidiaries are in compliance with all of our restrictive covenants in our debt agreements. Note 6. Device Payment Plan Agreement and Wireless Service Receivables The following table presents information about accounts receivable, net of allowances, recorded in our condensed consolidated balance sheet: At March 31, 2025 (dollars in millions) Device payment plan agreement Wireless service Other receivables (1) Total Accounts receivable $ 15,614 $ 5,935 $ 5,484 $ 27,033 Less Allowance for credit losses 712 245 187 1,144 Accounts receivable, net of allowance $ 14,902 $ 5,690 $ 5,297 $ 25,889 (1) Other receivables primarily include wireline and other receivables, of which the allowances are individually insignificant. Included in Other assets and Accounts receivable, net at March 31, 2025 and December 31, 2024, are net device payment plan agreement receivables, net wireless service receivables and net other receivables of $ 28.8 billion and $ 29.9 billion, respectively, which have been transferred to ABS Entities and continue to be reported in our condensed consolidated balance sheets. Included in Accounts receivable, net at March 31, 2025 and December 31, 2024, are net other receivables of $ 815 million and $ 1.2 billion, respectively, on which a participation interest has been transferred to ABS Entities and continue to be reported in our condensed consolidated balance sheets. See Note 5 for additional information. We believe the carrying value of these receivables approximate their fair value using a Level 3 expected cash flow model. Under the Verizon device payment program, our eligible wireless customers purchase wireless devices under a device payment plan agreement. Customers that activate service on devices purchased under the device payment program pay lower service fees as compared to those under our fixed-term service plans, and their device payment plan charge is included on their wireless monthly bill. While we no longer offer Consumer customers fixed-term subsidized service plans for devices, we continue to offer subsidized plans to our Business customers. We also continue to service existing plans for customers who have not yet purchased and activated devices under the Verizon device payment program. Wireless Device Payment Plan Agreement Receivables The following table displays both the current and non-current portions of device payment plan agreement receivables, net, recognized in our condensed consolidated balance sheets: At March 31, At December 31, (dollars in millions) 2025 2024 Device payment plan agreement receivables, gross $ 30,805 $ 31,308 Unamortized imputed interest ( 976 ) ( 975 ) Device payment plan agreement receivables, at amortized cost 29,829 30,333 Allowance (1) ( 1,348 ) ( 1,315 ) Device payment plan agreement receivables, net $ 28,481 $ 29,018 Classified in our condensed consolidated balance sheets: Accounts receivable, net $ 14,902 $ 15,141 Other assets 13,579 13,877 Device payment plan agreement receivables, net $ 28,481 $ 29,018 (1) Includes allowance for both short-term and long-term device payment plan agreement receivables. For indirect channel wireless contracts with customers, we impute risk adjusted interest on the device payment plan agreement receivables. We record the imputed interest as a reduction to the related accounts receivable. The associated interest income, which is included within Service revenues and other in our condensed consolidated statements of income, is recognized over the financed device payment term. Promotions In connection with certain device payment plan agreements, we may offer a promotion to allow our customers to upgrade to a new device after paying down a certain specified portion of the required device payment plan agreement amount as well as trading in their device in good working order. When a customer enters into a device payment plan agreement with the right to upgrade to a new device, we account for this trade-in right as a guarantee obligation. 16 Table of Contents We may offer certain promotions that allow a customer to trade in their owned device in connection with the purchase of a new device. Under these types of promotions, the customer receives a credit for the value of the trade-in device. At March 31, 2025 and December 31, 2024, the amount of trade-in liability was $ 325 million and $ 396 million, respectively. In addition, we may provide the customer with additional future billing credits that will be applied against the customer’s monthly bill as long as service is maintained. These future billing credits are accounted for as consideration payable to a customer and are included in the determination of total transaction price, resulting in a contract liability. Device payment plan agreement receivables, net, disclosed in the table above, does not reflect the trade-in liability, additional future credits or the guarantee liability. Origination of Device Payment Plan Agreements When originating device payment plan agreements, we use internal and external data sources to create a credit risk score to measure the credit quality of a customer and to determine eligibility for the device payment program. Verizon's experience has been that the payment attributes of longer tenured customers are highly predictive for estimating their reliability to make future payments. Customers with longer tenures tend to exhibit similar risk characteristics to other customers with longer tenures, and receivables due from customers with longer tenures tend to perform better than receivables from customers that have not previously been Verizon customers. As a result of this experience, we make initial lending decisions based upon whether the customers are "established customers" or "short-tenured customers." If a Consumer customer has been a customer for 45 days or more, or if a Business customer has been a customer for 12 months or more, the customer is considered an "established customer." For established customers, the credit decision and ongoing credit monitoring processes rely on a combination of internal and external data sources. If a Consumer customer has been a customer less than 45 days, or a Business customer has been a customer for less than 12 months, the customer is considered a "short-tenured customer." For short-tenured customers, the credit decision and credit monitoring processes rely more heavily on external data sources. Available external credit data from credit reporting agencies along with internal data are used to create custom credit risk scores for Consumer customers. The custom credit risk score is generated automatically from the applicant's credit data using proprietary custom credit models. The credit risk score measures the likelihood that the potential customer will become severely delinquent and be disconnected for non-payment. For a small portion of short-tenured customer applications, a traditional credit report is not available from one of the national credit reporting agencies because the potential customer does not have sufficient credit history. In those instances, alternative credit data is used for the risk assessment. For Business customers, we also verify the existence of the business with external data sources. Based on the custom credit risk score, we assign each customer a credit class, each of which has specified offers of credit. This includes an account level spending limit and a maximum amount of credit allowed per device for Consumer customers or a required down payment percentage for Business customers. Credit Quality Information Subsequent to origination, we assess indicators for the quality of our wireless device payment plan agreement portfolio using two models, one for new customers and one for existing customers. The model for new customers pools all Consumer and Business wireless customers based on less than 210 days as "new customers." The model for existing customers pools all Consumer and Business wireless customers based on 210 days or more as "existing customers." The following table presents device payment plan agreement receivables, at amortized cost, and gross write-offs recorded, as of and for the three months ended March 31, 2025, by credit quality indicator and year of origination: Year of Origination (1) (dollars in millions) 2025 2024 2023 and prior Total Device payment plan agreement receivables, at amortized cost New customers $ 968 $ 2,776 $ 1,459 $ 5,203 Existing customers 3,681 12,636 8,309 24,626 Total $ 4,649 $ 15,412 $ 9,768 $ 29,829 Gross write-offs New customers $ 22 $ 181 $ 61 $ 264 Existing customers — 45 62 107 Total $ 22 $ 226 $ 123 $ 371 (1) Includes accounts that have been suspended at a point in time. The data presented in the table above was last updated on March 31, 2025. 17 Table of Contents We assess indicators for the quality of our wireless service receivables portfolio as one overall pool. The following table presents wireless service receivables, at amortized cost, and gross write-offs recorded, as of and for the three months ended March 31, 2025, by year of origination: Year of Origination (dollars in millions) 2025 2024 and prior Total Wireless service receivables, at amortized cost $ 5,687 $ 248 $ 5,935 Gross write-offs 21 123 144 The data presented in the table above was last updated on March 31, 2025. Allowance for Credit Losses The credit quality indicators are used in determining the estimated amount and the timing of expected credit losses for the device payment plan agreement and wireless service receivables portfolios. For device payment plan agreement receivables, we record bad debt expense based on a default and loss calculation using our proprietary loss model. The expected loss rate is determined based on customer credit scores and other qualitative factors as noted above. The loss rate is assigned individually on a customer by customer basis and the custom credit scores are then aggregated by vintage and used in our proprietary loss model to calculate the weighted-average loss rate used for determining the allowance balance. We monitor the collectability of our wireless service receivables as one overall pool. Wireline service receivables are disaggregated and pooled by the following types of customers and related contracts: consumer, small and medium business, enterprise, public sector and wholesale. For wireless service receivables and wireline consumer and small and medium business receivables, the allowance is calculated based on a 12 month rolling average write-off balance multiplied by the average life-cycle of an account from billing to write-off. The risk of loss is assessed over the contractual life of the receivables and is adjusted based on the historical loss amounts for current and future conditions based on management's qualitative considerations. For enterprise, public sector and wholesale wireline receivables, the allowance for credit losses is based on historical write-off experience and individual customer credit risk, if applicable. Activity in the allowance for credit losses by portfolio segment of receivables was as follows: (dollars in millions) Device Payment Plan Agreement Receivables (1) Wireless Service Plan Receivables Balance at January 1, 2025 $ 1,315 $ 240 Current period provision for expected credit losses 393 136 Write-offs charged against the allowance ( 371 ) ( 144 ) Recoveries collected 11 13 Balance at March 31, 2025 $ 1,348 $ 245 (1) Includes allowance for both short-term and long-term device payment plan agreement receivables. We monitor delinquency and write-off experience based on the quality of our device payment plan agreement and wireless service receivables portfolios. The extent of our collection efforts with respect to a particular customer are based on the results of our proprietary custom internal scoring models that analyze the customer's past performance to predict the likelihood of the customer falling further delinquent. These custom scoring models assess a number of variables, including origination characteristics, customer account history and payment patterns. Since our customers’ behaviors may be impacted by general economic conditions, we analyzed whether changes in macroeconomic conditions impact our credit loss experience and have concluded that our credit loss estimates are generally not materially impacted by reasonable and supportable forecasts of future economic conditions. Based on the score derived from these models, accounts are grouped by risk category to determine the collection strategy to be applied to such accounts. For device payment plan agreement receivables and wireless service receivables, we consider an account to be delinquent and in default status if there are unpaid charges remaining on the account on the day after the bill’s due date. The risk class determines the speed and severity of the collections effort including initiatives taken to facilitate customer payment. The balance and aging of the device payment plan agreement receivables, at amortized cost, were as follows: At March 31, (dollars in millions) 2025 Unbilled $ 28,405 Billed: Current 1,136 Past due 288 Device payment plan agreement receivables, at amortized cost $ 29,829 18 Table of Contents Note 7. Fair Value Measurements and Financial Instruments Recurring Fair Value Measurements The following table presents the balances of assets and liabilities measured at fair value on a recurring basis as of March 31, 2025: (dollars in millions) Level 1 (1) Level 2 (2) Level 3 (3) Total Assets: Prepaid expenses and other: Fixed income securities $ — $ 26 $ — $ 26 Foreign exchange forwards — 3 — 3 Interest rate caps — 1 — 1 Other assets: Fixed income securities — 307 — 307 Cross currency swaps — 528 — 528 Total $ — $ 865 $ — $ 865 Liabilities: Other current liabilities: Interest rate swaps $ — $ 1,932 $ — $ 1,932 Cross currency swaps — 332 — 332 Foreign exchange forwards — 1 — 1 Interest rate caps — 1 — 1 Other liabilities: Interest rate swaps — 2,886 — 2,886 Cross currency swaps — 2,081 — 2,081 Total $ — $ 7,233 $ — $ 7,233 (1) Quoted prices in active markets for identical assets or liabilities. (2) Observable inputs other than quoted prices in active markets for identical assets and liabilities. (3) Unobservable pricing inputs in the market. The following table presents the balances of assets and liabilities measured at fair value on a recurring basis as of December 31, 2024: (dollars in millions) Level 1 (1) Level 2 (2) Level 3 (3) Total Assets: Prepaid expenses and other: Fixed income securities $ — $ 16 $ — $ 16 Interest rate caps — 3 — 3 Other assets: Fixed income securities — 269 — 269 Cross currency swaps — 500 — 500 Total $ — $ 788 $ — $ 788 Liabilities: Other current liabilities: Interest rate swaps $ — $ 1,964 $ — $ 1,964 Cross currency swaps — 345 — 345 Foreign exchange forwards — 5 — 5 Interest rate caps — 3 — 3 Other liabilities: Interest rate swaps — 3,338 — 3,338 Cross currency swaps — 2,344 — 2,344 Total $ — $ 7,999 $ — $ 7,999 (1) Quoted prices in active markets for identical assets or liabilities. (2) Observable inputs other than quoted prices in active markets for identical assets and liabilities. (3) Unobservable pricing inputs in the market. Certain of our equity investments do not have readily determinable fair values and are excluded from the tables above. Such investments are measured at cost, less any impairment, plus or minus changes resulting from observable price changes in 19 Table of Contents orderly transactions for an identical or similar investment of the same issuer and are included in Investments in unconsolidated businesses in our condensed consolidated balance sheets. As of March 31, 2025 and December 31, 2024, the carrying amount of our investments without readily determinable fair values was $ 717 million and $ 724 million, respectively. During the three months ended March 31, 2025, there were insignificant adjustments due to observable price changes and there were no impairment charges. As of March 31, 2025, cumulative adjustments due to observable price changes and impairment charges were $ 180 million and $ 120 million, respectively. Fixed income securities consist primarily of investments in municipal bonds. The valuation of the fixed income securities is based on the quoted prices for similar assets in active markets or identical assets in inactive markets or models that apply inputs from observable market data. The valuation determines that these securities are classified as Level 2. Derivative contracts are valued using models based on readily observable market parameters for all substantial terms of our derivative contracts and thus are classified within Level 2. We use mid-market pricing for fair value measurements of our derivative instruments. Our derivative instruments are recorded on a gross basis. We recognize transfers between levels of the fair value hierarchy as of the end of the reporting period. Fair Value of Short-term and Long-term Debt The fair value of our debt is determined using various methods, including quoted prices for identical debt instruments, which is a Level 1 measurement, as well as quoted prices for similar debt instruments with comparable terms and maturities, which is a Level 2 measurement. The fair value of our short-term and long-term debt, excluding finance leases, was as follows: Fair Value (dollars in millions) Carrying Amount Level 1 Level 2 Level 3 Total At March 31, 2025 $ 141,217 $ 82,646 $ 54,369 $ — $ 137,015 At December 31, 2024 141,665 81,552 55,464 — 137,016 Derivative Instruments We enter into derivative transactions primarily to manage our exposure to fluctuations in foreign currency exchange rates and interest rates. We employ risk management strategies, which may include the use of a variety of derivatives including interest rate swaps, cross currency swaps, forward starting interest rate swaps, treasury rate locks, interest rate caps, swaptions and foreign exchange forwards. We do not hold derivatives for trading purposes. The following table sets forth the notional amounts of our outstanding derivative instruments: At March 31, At December 31, (dollars in millions) 2025 2024 Interest rate swaps $ 24,025 $ 24,025 Cross currency swaps 31,694 32,053 Foreign exchange forwards 730 620 The following tables summarize the activities of our designated derivatives: Three Months Ended March 31, (dollars in millions) 2025 2024 Interest Rate Swaps: Notional value entered into $ — $ — Notional value settled — — Pre-tax gain recognized in Interest expense — 2 Cross Currency Swaps: Notional value entered into — 2,146 Notional value settled 359 3,067 Pre-tax gain (loss) on cross currency swaps recognized in Interest expense 1,078 ( 742 ) Pre-tax gain (loss) on hedged debt recognized in Interest expense ( 1,078 ) 742 Excluded components recognized in Other comprehensive income (loss) ( 848 ) 282 Initial value of the excluded component amortized into Interest expense 23 26 20 Table of Contents Three Months Ended March 31, (dollars in millions) 2025 2024 Other, net Cash Flows from Financing Activities: Cash paid for settlement of cross currency swaps, net $ ( 73 ) $ ( 216 ) The following table displays the amounts recorded in Long-term debt in our condensed consolidated balance sheets related to cumulative basis adjustments for our interest rate swaps designated as fair value hedges. The cumulative amounts exclude cumulative basis adjustments related to foreign exchange risk. At March 31, At December 31, (dollars in millions) 2025 2024 Carrying amount of hedged liabilities $ 19,341 $ 18,863 Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged liabilities ( 4,706 ) ( 5,192 ) Cumulative amount of fair value hedging adjustment remaining for which hedge accounting has been discontinued 267 281 Interest Rate Swaps We enter into interest rate swaps to achieve a targeted mix of fixed and variable rate debt. We principally receive fixed rates and pay variable rates, resulting in a net increase or decrease to Interest expense. These swaps are designated as fair value hedges and hedge against interest rate risk exposure of designated debt issuances. We record the interest rate swaps at fair value in our condensed consolidated balance sheets as assets and liabilities. Changes in the fair value of the interest rate swaps are recorded to Interest expense, which are primarily offset by changes in the fair value of the hedged debt due to changes in interest rates. In April 2025, we settled interest rate swaps with a total notional amount of $ 985 million. Cross Currency Swaps We have entered into cross currency swaps to exchange our British Pound Sterling, Euro, Swiss Franc, Canadian Dollar and Australian Dollar-denominated cash flows into U.S. dollars and to fix our cash payments in U.S. dollars, as well as to mitigate the impact of foreign currency transaction gains or losses. These swaps are designated as fair value hedges. We record the cross currency swaps at fair value in our condensed consolidated balance sheets as assets and liabilities. Changes in the fair value of the cross currency swaps attributable to changes in the spot rate of the hedged item and changes in the recorded value of the hedged debt due to changes in spot rates are recorded in the same income statement line item. We present exchange gains and losses from the conversion of foreign currency denominated debt as a part of Interest expense. During the three months ended March 31, 2025 and March 31, 2024 , these amounts completely offset each other and no net gain or loss was recorded. Changes in the fair value of cross currency swaps attributable to time value and cross currency basis spread are initially recorded to Other comprehensive income (loss). Unrealized gains or losses on excluded components are recorded in Other comprehensive income (loss) and are recognized into Interest expense on a systematic and rational basis through the swap accrual over the life of the hedging instrument. On March 31, 2022, we elected to de-designate our cross currency swaps previously designated as cash flow hedges and re-designated these swaps as fair value hedges. The amount remaining in Accumulated other comprehensive loss related to cash flow hedges on the date of transition will be reclassified to earnings when the hedged item is recognized in earnings or when it becomes probable that the forecasted transactions will not occur. For the fair value hedges, we elected to exclude the change in fair value of the cross currency swaps related to both time value and cross currency basis spread from the assessment of hedge effectiveness (the excluded components). The initial value of the excluded components of $ 1.0 billion as of March 31, 2022 will continue to be amortized into Interest expense over the remaining life of the hedging instruments. During the three months ended March 31, 2025 and March 31, 2024 , the amortization of the initial value of the excluded component completely offset the amortization related to the amount remaining in Other comprehensive income (loss) related to cash flow hedges. See Note 9 for additional information. We estimate that $ 94 million will be amortized into Interest expense within the next 12 months. In April 2025, we settled cross currency swaps with a total notional amount of $ 817 million. Net Investment Hedges We have designated certain foreign currency debt instruments as net investment hedges to mitigate foreign exchange exposure related to non-U.S. dollar net investments in certain foreign subsidiaries against changes in foreign exchange rates. The notional amount of Euro-denominated debt designated as a net investment hedge was € 750 million as of both March 31, 2025 and December 31, 2024. 21 Table of Contents Undesignated Derivatives We also have the following derivative contracts which we use as economic hedges but for which we have elected not to apply hedge accounting. The following table summarizes the activity of our derivatives not designated in hedging relationships: Three Months Ended March 31, (dollars in millions) 2025 2024 Foreign Exchange Forwards: Notional value entered into $ 1,990 $ 3,140 Notional value settled 1,880 3,060 Pre-tax gain (loss) recognized in Other income, net 29 ( 22 ) Treasury Rate Locks: Notional value entered into 250 — Notional value settled 250 — Pre-tax gain recognized in Interest expense 3 — Foreign Exchange Forwards We entered into Euro foreign exchange forwards, and in prior periods, British Pound Sterling foreign exchange forwards to mitigate our foreign exchange rate risk related to non-functional currency denominated monetary assets and liabilities of international subsidiaries. Treasury Rate Locks We enter into treasury rate locks to mitigate our interest rate risk on future transactions. Concentrations of Credit Risk Financial instruments that subject us to concentrations of credit risk consist primarily of temporary cash investments, short-term and long-term investments, trade receivables, including device payment plan agreement receivables, certain notes receivable, including lease receivables, and derivative contracts. Counterparties to our derivative contracts are major financial institutions with whom we have negotiated derivatives agreements (ISDA master agreements) and credit support annex (CSA) agreements which provide rules for collateral exchange. The CSA agreements contain fixed cap amounts or rating based thresholds such that we or our counterparties may be required to hold or post collateral based upon changes in outstanding positions as compared to established thresholds or caps and changes in credit ratings. We do not offset fair value amounts recognized for derivative instruments and fair value amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral arising from derivative instruments recognized at fair value. At March 31, 2025, we did no t hold any collateral. At March 31, 2025, we posted $ 1.6 billion of collateral related to derivative contracts under collateral exchange agreements, which was recorded as Prepaid expenses and other in our condensed consolidated balance sheet. At December 31, 2024, we did no t hold any collateral. At December 31, 2024, we posted $ 2.1 billion of collateral related to derivative contracts under collateral exchange agreements, which was recorded as Prepaid expenses and other in our condensed consolidated balance sheet. While we may be exposed to credit losses due to the nonperformance of our counterparties, we consider the risk remote and do not expect that any such nonperformance would result in a significant effect on our results of operations or financial condition due to our diversified pool of counterparties. Note 8. Employee Benefits We maintain non-contributory defined benefit pension plans for certain employees. In addition, we maintain postretirement health care and life insurance plans for certain retirees and their dependents, which are both contributory and non-contributory, and include a limit on our share of the cost for certain current and future retirees. In accordance with our accounting policy for pension and other postretirement benefits, operating expenses include service costs associated with pension and other postretirement benefits while other credits and/or charges based on actuarial assumptions, including projected discount rates, an estimated return on plan assets, and impact from health care trend rates are reported in Other income, net. These estimates are updated in the fourth quarter or upon a remeasurement event, to reflect actual return on plan assets and updated actuarial assumptions. The adjustment is recognized in the income statement during the fourth quarter and upon a remeasurement event pursuant to our accounting policy for the recognition of actuarial gains and losses. 22 Table of Contents Net Periodic Benefit Cost (Income) The following table summarizes the components of net periodic benefit cost (income) related to our pension and postretirement health care and life insurance plans: (dollars in millions) Pension Health Care and Life Three Months Ended March 31, 2025 2024 2025 2024 Service cost - Cost of services $ 34 $ 41 $ 7 $ 11 Service cost - Selling, general and administrative expense 5 7 2 2 Service cost $ 39 $ 48 $ 9 $ 13 Amortization of prior service cost (credit) $ 28 $ 28 $ ( 32 ) $ ( 32 ) Expected return on plan assets ( 134 ) ( 208 ) ( 7 ) ( 7 ) Interest cost 103 157 136 135 Remeasurement gain, net — ( 73 ) — — Other components $ ( 3 ) $ ( 96 ) $ 97 $ 96 Total $ 36 $ ( 48 ) $ 106 $ 109 The service cost component of net periodic benefit cost (income) is recorded in Cost of services and Selling, general and administrative expense in the condensed consolidated statements of income while the other components, including mark-to-market adjustments, if any, are recorded in Other income, net. Pension Annuitization On February 29, 2024, we entered into two separate commitment agreements, one by and between the Company, State Street Global Advisors Trust Company (State Street), as independent fiduciary of the Verizon Management Pension Plan and Verizon Pension Plan for Associates (the Pension Plans), and The Prudential Insurance Company of America (Prudential), and one by and between the Company, State Street and RGA Reinsurance Company (RGA), under which the Pension Plans purchased nonparticipating single premium group annuity contracts from Prudential and RGA, respectively, to settle approximately $ 5.8 billion of benefit liabilities of the Pension Plans, net of certain adjustments, resulting in a net pre-tax settlement gain of $ 200 million. The purchase of the group annuity contracts closed on March 6, 2024. The group annuity contracts primarily cover a population that includes 56,000 retirees who commenced benefit payments from the Pension Plans prior to January 1, 2023 (Transferred Participants). Prudential and RGA each irrevocably guarantee and assume the sole obligation to make future payments to the Transferred Participants as provided under their respective group annuity contracts, with direct payments beginning July 1, 2024. The aggregate amount of each Transferred Participant's payment under the group annuity contracts will be equal to the amount of each individual’s payment under the Pension Plans. The purchase of the group annuity contracts was funded directly by transferring $ 5.6 billion of assets of the Pension Plans, net of certain adjustments. The Company made additional contributions to the Pension Plans prior to the closing date of the transaction, as discussed below. With these contributions, the funded ratio of each of the Pension Plans did not change as a result of this transaction. Pension plan assets and liabilities are primarily presented within Employee benefit obligations in our condensed consolidated balance sheets. 2024 Voluntary Separation Program In June 2024, we announced a voluntary separation program for select U.S.-based management employees. Under this program approximately 4,800 eligible employees separated from Verizon through the end of March 2025. Severance Payments During the three months ended March 31, 2025, we paid severance benefits of $ 406 million primarily related to the voluntary separation program and an additional $ 95 million related to other severance related contractual obligations associated with the voluntary separation program. At March 31, 2025, we had a remaining severance liability of $ 617 million, a portion of which relates to future contractual payments to separated employees under the voluntary separation program. Employer Contributions During the three months ended March 31, 2025, we made no contributions to our qualified pension plans. During the three months ended March 31, 2024, we made discretionary contributions to the Pension Plans in the aggregate amount of 23 Table of Contents $ 365 million. During the three months ended March 31, 2025 and March 31, 2024, we made insignificant contributions to our nonqualified pension plans. In April 2025, we made a discretionary non-cash contribution to our qualified pensions plans in the principal amount of $ 563 million. See Note 5 for additional information. No required qualified pension plans contributions are expected through December 31, 2025. No significant changes are expected with respect to the nonqualified pension and other postretirement benefit plans contributions in 2025. Remeasurement gain, net During the three months ended March 31, 2024, we recorded a net pre-tax remeasurement gain of $ 73 million in our pension plans due to a net pre-tax settlement gain of $ 200 million resulting from the pension annuitization transaction discussed above, partially offset by a net pre-tax remeasurement loss of $ 127 million triggered by settlements. The net pre-tax remeasurement loss recorded for the three months ended March 31, 2024, was primarily driven by a $ 613 million charge resulting from the difference between our estimated and actual return on assets, partially offset by a credit of $ 486 million due to changes in our discount rate assumption used to determine the current year liabilities of our pension plans. 24 Table of Contents Note 9. Equity and Accumulated Other Comprehensive Loss Equity Changes in the components of Total equity were as follows: Three Months Ended March 31, 2025 2024 (dollars in millions, except per share amounts, and shares in thousands) Shares Amount Shares Amount Common Stock Balance at beginning of period 4,291,434 $ 429 4,291,434 $ 429 Balance at end of period 4,291,434 429 4,291,434 429 Additional Paid In Capital Balance at beginning of period 13,466 13,631 Other ( 51 ) ( 60 ) Balance at end of period 13,415 13,571 Retained Earnings Balance at beginning of period 89,110 82,915 Net income attributable to Verizon 4,879 4,602 Dividends declared ($ 0.6775 , $ 0.6650 per share) ( 2,861 ) ( 2,799 ) Other — ( 4 ) Balance at end of period 91,128 84,714 Accumulated Other Comprehensive Loss Balance at beginning of period attributable to Verizon ( 923 ) ( 1,380 ) Foreign currency translation adjustments 67 ( 50 ) Unrealized gain on cash flow hedges 21 35 Unrealized gain (loss) on fair value hedges ( 653 ) 200 Unrealized gain (loss) on marketable securities 1 ( 2 ) Defined benefit pension and postretirement plans ( 2 ) ( 2 ) Other comprehensive income (loss) ( 566 ) 181 Balance at end of period attributable to Verizon ( 1,489 ) ( 1,199 ) Treasury Stock Balance at beginning of period ( 81,753 ) ( 3,583 ) ( 87,173 ) ( 3,821 ) Employee plans 6,575 288 4,992 219 Shareholder plans — — 2 — Balance at end of period ( 75,178 ) ( 3,295 ) ( 82,179 ) ( 3,602 ) Deferred Compensation-ESOPs and Other Balance at beginning of period 738 656 Restricted stock equity grant 191 102 Amortization ( 395 ) ( 337 ) Balance at end of period 534 421 Noncontrolling Interests Balance at beginning of period 1,338 1,369 Total comprehensive income 104 120 Distributions and other ( 127 ) ( 97 ) Balance at end of period 1,315 1,392 Total Equity $ 102,037 $ 95,726 Common Stock Verizon did not repurchase any shares of the Company's common stock through its previously authorized share buyback program during the three months ended March 31, 2025. At March 31, 2025, the maximum number of shares that could be purchased by or on behalf of Verizon under our share buyback program was 100 million. 25 Table of Contents Common stock has been used from time to time to satisfy some of the funding requirements of employee and shareholder plans, including 6.6 million shares of common stock issued from treasury stock during the three months ended March 31, 2025. Accumulated Other Comprehensive Income (Loss) The changes in the balances of Accumulated other comprehensive loss by component were as follows: (dollars in millions) Foreign currency translation adjustments Unrealized gain (loss) on cash flow hedges Unrealized gain (loss) on fair value hedges Unrealized gain (loss) on marketable securities Defined benefit pension and postretirement plans Total Balance at January 1, 2025 $ ( 733 ) $ ( 981 ) $ 589 $ ( 5 ) $ 207 $ ( 923 ) Excluded components recognized in other comprehensive income — — ( 636 ) — — ( 636 ) Other comprehensive income 67 — — 1 — 68 Amounts reclassified to net income — 21 ( 17 ) — ( 2 ) 2 Net other comprehensive income (loss) 67 21 ( 653 ) 1 ( 2 ) ( 566 ) Balance at March 31, 2025 $ ( 666 ) $ ( 960 ) $ ( 64 ) $ ( 4 ) $ 205 $ ( 1,489 ) The amounts presented above in Net other comprehensive income (loss) are net of taxes. The amounts reclassified to net income related to unrealized gain (loss) on cash flow hedges and unrealized gain (loss) on fair value hedges in the table above are included in Other income, net and Interest expense in our condensed consolidated statements of income. See Note 7 for additional information. The amounts reclassified to net income related to unrealized gain (loss) on marketable securities and defined benefit pension and postretirement plans in the table above are included in Other income, net in our condensed consolidated statements of income. See Note 8 for additional information. Note 10. Segment Information Reportable Segments We have two reportable segments that we operate and manage as strategic business units, Consumer and Business. We measure and evaluate our reportable segments based on segment operating income, consistent with the chief operating decision maker's (CODM) assessment of segment performance. The Company's CODM is the Chief Executive Officer. The CODM uses segment operating income to allocate resources (including employees, financial or capital resources) and to assess performance during the monthly and quarterly financial strategic review process. When assessing segment performance and how to allocate resources, the CODM focuses on evaluating whether revenues generated are sufficient to cover variable and fixed costs with an appropriate return on investment. Key decisions considered by the CODM using segment operating income include prioritization and timing of changes to network technologies, allocation of capital expenditures based on the Company's priorities, geographic expansion of wireline and wireless networks, establishment of key financial and operational targets, pricing decisions, branding matters and people management. Our segments and their principal activities consist of the following: Segment Description Verizon Consumer Group Our Consumer segment provides consumer-focused wireless and wireline communications services and products. Our wireless services are provided across one of the most extensive wireless networks in the U.S. under the Verizon family of brands and through wholesale and other arrangements. We also provide fixed wireless access (FWA) broadband through our 5G or 4G LTE networks as an alternative to traditional landline internet access. Our wireline services are provided in nine states in the Mid-Atlantic and Northeastern U.S., as well as Washington D.C., over our 100% fiber-optic network through our Verizon Fios product portfolio and over a traditional copper-based network to customers who are not served by Fios. Verizon Business Group Our Business segment provides wireless and wireline communications services and products, including FWA broadband, data, video and advanced communication services, corporate networking solutions, security and managed network services, local and long distance voice services and network access to deliver various Internet of Things services and products. We provide these products and services to businesses, public sector customers and wireless and wireline carriers across the U.S. and a subset of these products and services to customers around the world. Our Consumer segment's wireless and wireline products and services are available to our retail customers, as well as resellers that purchase wireless network access from us on a wholesale basis. Our Business segment's wireless and wireline products 26 Table of Contents and services are organized by the primary customer groups for these offerings: Enterprise and Public Sector, Business Markets and Other, and Wholesale. Corporate and other primarily includes device insurance programs, investments in unconsolidated businesses and development stage businesses that support our strategic initiatives, as well as unallocated corporate expenses, certain pension and other employee benefit related costs and interest and financing expenses. Corporate and other also includes the historical results of divested businesses and other adjustments and gains and losses that are not allocated or used in assessing segment performance due to their nature. Although such transactions are excluded from the business segment results, they are included in reported consolidated earnings. Gains and losses from these transactions that are not individually significant are included in segment results and therefore included in the CODM's assessment of segment performance. The following table provides operating financial information for our two reportable segments: Three Months Ended March 31, 2025 2024 (dollars in millions) Consumer Business Total Reportable Segments Consumer Business Total Reportable Segments External Operating Revenues Service (1) $ 19,993 $ — $ 19,993 $ 19,572 $ — $ 19,572 Wireless equipment 4,532 — 4,532 4,490 — 4,490 Other (1)(2) 1,020 — 1,020 943 — 943 Enterprise and Public Sector — 3,457 3,457 — 3,587 3,587 Business Markets and Other — 3,307 3,307 — 3,190 3,190 Wholesale — 515 515 — 590 590 Intersegment revenues 73 7 80 52 9 61 Total Operating Revenues (3) 25,618 7,286 32,904 25,057 7,376 32,433 Operating Expenses (4) Cost of wireless equipment 4,912 1,194 6,106 4,750 1,155 5,905 Centrally managed network and shared service costs (5) 4,521 2,482 7,003 4,430 2,624 7,054 Depreciation and amortization expense 3,543 1,020 4,563 3,309 1,128 4,437 Other segment expenses (6) 5,218 1,926 7,144 5,196 2,070 7,266 Total Operating Expenses 18,194 6,622 24,816 17,685 6,977 24,662 Operating Income $ 7,424 $ 664 $ 8,088 $ 7,372 $ 399 $ 7,771 (1) Reflects the reclassification of recurring device protection and insurance related plan revenues from Other revenue into Wireless service revenue in the first quarter of 2025. (2) Other revenue includes fees that partially recover the direct and indirect costs of complying with regulatory and industry obligations and programs, leasing and interest recognized when equipment is sold to the customer by an authorized agent under a device payment plan agreement. (3) Service and other revenues and Wireless equipment revenues included in our Business segment were approximately $ 6.4 billion and $ 866 million, respectively, for the three months ended March 31, 2025 and were approximately $ 6.5 billion and $ 871 million, respectively, for the three months ended March 31, 2024. (4) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. Intersegment expenses are included within the amounts shown. (5) Centrally managed network and shared service costs include costs for network and leased assets, supply chain and other centralized services that are allocated to our Consumer and Business segments based on proportionate usage of services. (6) Other segment expenses for each reportable segment include certain personnel, digital content, sales-related, overhead, other direct and operating costs. The following table provides Fios revenue for our two reportable segments and includes intersegment activity: Three Months Ended March 31, (dollars in millions) 2025 2024 Consumer $ 2,896 $ 2,896 Business 310 311 Total Fios revenue $ 3,206 $ 3,207 27 Table of Contents The following table provides Wireless service revenue for our two reportable segments and includes intersegment activity: Three Months Ended March 31, (dollars in millions) 2025 2024 Consumer $ 17,199 $ 16,760 Business 3,565 3,467 Total Wireless service revenue $ 20,764 $ 20,227 Wireless service revenue reflects the reclassification of recurring device protection and insurance related plan revenues from Other revenue into Wireless service revenue in the first quarter of 2025. Reconciliation to Consolidated Financial Information The reconciliation of segment operating revenues and operating income to consolidated operating revenues and operating income below includes the effects of special items that the CODM does not consider in assessing segment performance, primarily because of their nature. A reconciliation of the reportable segments' operating revenues to consolidated operating revenues is as follows: Three Months Ended March 31, (dollars in millions) 2025 2024 Total reportable segments operating revenues $ 32,904 $ 32,433 Corporate and other 660 611 Eliminations ( 79 ) ( 63 ) Total consolidated operating revenues $ 33,485 $ 32,981 A reconciliation of the total reportable segments' operating income to consolidated income before provision for income taxes is as follows: Three Months Ended March 31, (dollars in millions) 2025 2024 Total reportable segments operating income $ 8,088 $ 7,771 Corporate and other ( 102 ) ( 136 ) Other components of net periodic benefit charges (Note 8) ( 8 ) ( 8 ) Legacy legal matter — ( 106 ) Total consolidated operating income 7,978 7,521 Equity in earnings (losses) of unconsolidated businesses 6 ( 9 ) Other income, net 121 198 Interest expense ( 1,632 ) ( 1,635 ) Income Before Provision For Income Taxes $ 6,473 $ 6,075 No single customer accounted for more than 10% of our total operating revenues during the three months ended March 31, 2025 or 2024. The CODM does not review disaggregated assets on a segment basis; therefore, such information is not presented. Depreciation and amortization included in the measure of segment profitability is primarily allocated based on proportional usage, and is included within Total reportable segments operating income. Note 11. Additional Financial Information We maintain a voluntary supplier finance program with a financial institution which provides certain suppliers the option, at their sole discretion, to participate in the program and sell their receivables due from Verizon to the financial institution on a non-recourse basis. As of March 31, 2025 and December 31, 2024, $ 619 million and $ 772 million, respectively, remained as confirmed obligations outstanding related to suppliers participating in the supplier finance program. Note 12. Commitments and Contingencies In the ordinary course of business, Verizon is involved in various litigation and regulatory proceedings at the state and federal level. Where it is determined, in consultation with counsel based on litigation and settlement risks, that a loss is probable and estimable in a given matter, Verizon establishes an accrual. In none of the currently pending matters is the amount of accrual material. An estimate of the reasonably possible loss or range of loss in excess of the amounts already accrued cannot be made at this time due to various factors typical in contested proceedings, including: (1) uncertain damage theories and demands; (2) a 28 Table of Contents less than complete factual record; (3) uncertainty concerning legal theories and their resolution by courts or regulators; and (4) the unpredictable nature of the opposing party and its demands. We continuously monitor these proceedings as they develop and adjust any accrual or disclosure as needed. We do not expect that the ultimate resolution of any pending regulatory or legal matter in future periods will have a material effect on our financial condition, but it could have a material effect on our results of operations for a given reporting period. Verizon is currently involved in approximately 25 federal district court actions alleging that Verizon is infringing various patents. Most of these cases are brought by non-practicing entities and effectively seek only monetary damages; a small number are brought by companies that have sold products and could seek injunctive relief as well. These cases have progressed to various stages and a small number may have gone to trial or may go to trial in the coming 12 months if they are not otherwise resolved. In connection with the execution of agreements for the sales of businesses and investments, Verizon ordinarily provides representations and warranties to the purchasers pertaining to a variety of nonfinancial matters, such as ownership of the securities being sold, as well as indemnity from certain financial losses. From time to time, counterparties may make claims under these provisions, and Verizon will seek to defend against those claims and resolve them in the ordinary course of business. As of March 31, 2025, Verizon had 28 renewable energy purchase agreements (REPAs) with third parties. Each of the REPAs is based on the expected operation of a renewable energy-generating facility and has a fixed price term of 12 to 20 years from the commencement of the facility's entry into commercial operation. Nineteen of the facilities have entered into commercial operation, and the remainder are under development. The REPAs generally are expected to be financially settled based on the prevailing market price as energy is generated by the facilities. 29 Table of Contents