What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-02-17 compared with 2025-02-12 · 261 added, 277 removed, 645 unchanged (45% of the section changed)

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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.

To compete effectively in today’s dynamic marketplace, we are focused on the capabilities of our high-performing networks to drive growth based on delivering what customers want and need in the digital world.

We are consistently deploying new network architecture and technologies to secure our leadership in both 5G and 4G wireless networks.

Our network quality is the hallmark of our brand and the foundation for the connectivity, platforms and solutions upon which we build our competitive advantage.

In 2024, we focused on enhancing and driving the monetization of our networks, platforms and solutions, retaining and growing our high-quality customer base and further improving our financial and operating performance.

Our strategy requires significant capital investments primarily to acquire wireless spectrum, put the spectrum into service, provide additional capacity for growth in our networks, invest in the fiber that supports our businesses, evolve and maintain our networks and develop and maintain significant advanced information technology systems and data system capabilities.

We believe that our C-Band spectrum, together with our industry leading millimeter wave spectrum holdings and our 4G LTE network and fiber infrastructure, will drive innovative products and services and fuel our growth.

To compete effectively in today’s dynamic marketplace, we are focused on delivering what customers want and need in the digital world by offering innovative products and services, delivering excellent customer experience, and leveraging the capabilities of our high-performing networks.

Highlights of Our 2025 Financial Results

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under the Verizon family of brands and through wholesale and other arrangements.

As of the date this report is being filed, our wireline services are provided in 31 U.S.

states and Washington D.C.

over our 100% fiber-optic network through our fiber product portfolio, as well as over a traditional copper-based network.

We also provide 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.

Customers can obtain our wireless services on a postpaid or prepaid basis.

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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 IoT services and products.

Our Business segment provides wireless and wireline communications services and products, including mobility communication services, FWA and wireline broadband, IoT connectivity solutions, advanced communication services, corporate networking solutions, local and long distance voice services, and security and managed network services.

We provide these products and services to businesses, public sector customers and wireless and wireline carriers across the U.S.

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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 are included in the chief operating decision maker's assessment of segment performance.

Gains and losses from these transactions that are not individually significant are included in

segment results and therefore are included in the chief operating decision maker's assessment of segment performance.

See "Consolidated Results of Operations" for additional information regarding Corporate and other results.

Capital Expenditures and Investments

We continue to invest in our wireless networks, high-speed fiber and other advanced technologies to position ourselves at the center of growth trends for the future.

Our strategy requires significant capital investments primarily to acquire wireless spectrum, put the spectrum into service, provide additional capacity for growth in our networks, invest in fiber, evolve and maintain our networks and develop and maintain significant advanced information technology systems and data system capabilities.

During the year ended December 31, 2025, these investments included $17.0 billion for capital expenditures.

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Global Networks and Technology

We consider the reliability, speed, capacity, coverage and security of our wireless network to be key factors in our continued success.

We are evolving and transforming our networks to ensure our customers receive access to the best network possible.

Over the past several years, we have been leading the development of 5G wireless technology industry standards and the ecosystems for fixed and mobile 5G wireless services.

Our evolution to 5G with its new architecture allows us to simplify operations by eliminating legacy network elements.

While we continue to improve our 5G wireless service coverage, we are also adding capacity and density to our networks.

Network densification enables us to increase coverage, improve quality of service and add capacity to accommodate an increasing number of users.

In addition to enhancing our wireless service, our wireless mobility investments provide the foundation for our growing FWA broadband business.

We are also continuing to expand our fiber-based networks, as customers increasingly value the ability to obtain wireless and wireline broadband services from the same provider.

In September 2024, we entered into an agreement to acquire Frontier as part of our fiber expansion strategy, and we expect to increase the capital expenditures we devote to our fiber networks in 2025.

We design, build and operate networks to provide connectivity and related services meeting the needs of our diverse customers:

consumers, businesses, government organizations, first responders, and educational institutions.

We have a portfolio of spectrum holdings, including C-Band and millimeter wave spectrum, and are constantly transforming our networks by leveraging innovation and new technologies to deliver improved network performance and efficiency.

Our networks leverage advanced technologies, including 5G wireless, fiber-based transport, cloud infrastructures, AI and automation, private networks and IP routing solutions.

We are using the benefits of cloud computing and storage to virtualize aspects of our network infrastructure.

We are densifying our networks by utilizing macro and small cell technology, in-building solutions and distributed antenna systems to increase coverage, improve quality of service and add capacity to accommodate an increasing number of users.

Recent Developments

On January 20, 2026, we completed the acquisition of Frontier, a U.S.

provider of broadband internet and other communication services.

This transaction expanded our fiber broadband footprint to 31 U.S.

states and Washington D.C., and provides opportunities for future growth.

On January 30, 2026, we completed the acquisition of Starry, a fixed wireless broadband provider serving multi-dwelling units in five markets across the U.S.

This transaction is expected to provide additional FWA capabilities and enhance our ability to deliver high-speed internet to multi-dwelling units and urban communities.

Consolidated Results of Operations

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In "Segment Results of Operations," we review the performance of our two reportable segments in more detail.

A detailed discussion of our 2022 results and year-over-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023.

During the first quarter of 2025, Verizon reclassified recurring device protection and insurance related plan revenues from Other revenue into Wireless service revenue.

In addition, beginning in the first quarter of 2025, Verizon no longer counts the impacts of the second number offering in calculating certain phone metrics, including wireless retail postpaid phone net additions and wireless retail postpaid phone churn.

We have reclassified certain prior year amounts to conform to the current year presentation.

A discussion of the 2023 results of the Consumer and Business segments affected by these changes and related year-over-year comparisons between 2024 and 2023 have been included in "Segment Results of Operations" below.

A discussion of the 2023 items and year-over-year comparisons between 2024 and 2023 for all other items that are not included in this Annual Report can be found in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024.

Consolidated Operating Revenues

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Depreciation and amortization expense 18,349 17,892 457 2.6

Verizon Business Group goodwill impairment — 5,841 (5,841) nm

Consolidated Operating Expenses $ 108,932 $ 106,102 $ 2,830 2.7

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Operating expenses for our segments are discussed separately below under the heading "Segment Results of Operations."

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Cost of services decreased during 2025 compared to 2024 primarily as a result of:

• a decrease of $259 million in access costs primarily as a result of decreases in prepaid subscribers, changes in usage and net circuit access prices;

• a decrease of $147 million in personnel costs primarily related to the impact of workforce changes;

• an increase of $167 million related to an asset and business rationalization charge taken in 2024 compared to an asset rationalization charge taken in 2023;

• an increase of $152 million in digital content costs primarily associated with an increase in subscriptions through MyPlan offerings, partially offset by a decrease in traditional linear content costs due to a decline in Fios video subscribers.

• a decrease of $222 million in personnel costs due to prior year workforce reductions;

• a decrease of $169 million in access costs primarily related to changes in pricing and circuit usage;

• a decrease of $105 million related to device protection offerings;

• a decrease of $91 million in other direct costs primarily related to legacy wireline products and services;

• an increase of $198 million in regulatory fees primarily related to growth in our Federal Universal Service Fund (FUSF) assessable revenue base in addition to a higher net rate;

• an increase of $145 million in rent and lease expense primarily related to the tower transaction with Vertical Bridge REIT, LLC (Vertical Bridge) along with new leases and lease modifications related to the continued deployment of the C-Band spectrum.

Cost of Wireless Equipment

Cost of wireless equipment decreased during 2024 compared to 2023 primarily as a result of:

• a decrease of $2.1 billion driven by a lower volume of wireless devices sold primarily related to a decrease of 10% in upgrades;

Cost of wireless equipment increased during 2025 compared to 2024 primarily due to:

• an increase of $1.7 billion driven by a higher volume of wireless devices sold primarily related to an increase of 12% in upgrades;

• an increase of $1.2 billion due to a shift to higher priced equipment in the mix of wireless devices sold.

Selling, General and Administrative Expense

Selling, general and administrative expense includes salaries and wages and benefits not directly attributable to a service or product, the provision for credit losses, taxes other than income taxes, advertising and sales commission costs, call center and information technology costs, regulatory fees, professional service fees and rent and utilities for administrative space.

Also included is a portion of the aggregate customer care costs as discussed above in "Cost of Services."

Selling, general and administrative expense increased during 2024 compared to 2023 primarily as a result of:

• an increase of $1.2 billion due to severance charges in 2024 primarily related to our voluntary separation program compared to 2023;

• an increase of $240 million in personnel costs related to an increase in costs associated with the transition to third-party contracted resources along with the impacts of a prior year compensation plan assumption change that did not reoccur and increased sales commission expense;

• an increase of $124 million in the provision for credit losses resulting from an increase in postpaid phone gross additions and additional bad debt reserves;

• an increase of $124 million in advertising costs related to Value Brand marketing campaigns and the refresh of the Verizon brand in 2024 compared to 2023;

• a decrease of $273 million related to an asset and business rationalization charge taken in 2024 compared to an asset rationalization charge taken in 2023;

• a decrease of $161 million related to business transformation costs in 2023 that did not reoccur.

See "Special Items" for additional information on the severance charges, the asset and business rationalization charges and the business transformation costs.

Selling, general and administrative expense decreased during 2025 compared to 2024 primarily as a result of:

• a decrease of $241 million related to lower costs for device insurance programs primarily due to a decrease in claims;

• a decrease of $150 million in advertising costs;

• a decrease of $115 million in personnel costs primarily related to the impact of prior year workforce reductions partially offset by an increase in sales commission expense due to higher volumes;

• an increase of $193 million r elated to an increase in asset and business rationalization charges in 2025 compared to 2024.

See "Special Items" for additional information on the asset and business rationalization charges.

Depreciation and Amortization Expense

Depreciation and amortization expense increased during 2024 compared to 2023, primarily due to the change in the mix of net depreciable and amortizable assets, including the amortization period of certain acquisition-related intangible assets, and the continued deployment of C-Band network assets.

Verizon Business Group Goodwill Impairment

During 2023, we recorded a pre-tax charge of $5.8 billion as a result of the annual goodwill impairment test performed in the fourth quarter.

See "Critical Accounting Estimates" for additional information.

Depreciation and amortization expense increased during 2025 compared to 2024, primarily due to the change in the mix of net depreciable and amortizable assets and the continued deployment of C-Band network assets.

Other Consolidated Results

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368 385 (17) (4.4)

Other, net (26) (37) 11 (29.7)

Other Income (Expense), Net $ 995 $ (313) $ 1,308 nm

Other, net 237 (26) 263 nm

Other Income (Expense), Net $ 107 $ 995 $ (888) (89.2)

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Other income (expense), net reflects certain items not directly related to our core operations, including interest income, debt extinguishment gains and losses, components of net periodic pension and postretirement benefit income and cost and certain foreign exchange gains and losses.

Other income (expense), net increased during 2024 compared to 2023 primarily due to a net pension and postretirement benefits remeasurement gain of $657 million recorded during 2024, compared with a loss of $992 million recorded during 2023.

The increase was partially offset by a decrease of $396 million due to lower plan assets on which to earn expected returns in our pension and postretirement plans compared to 2023.

Other income (expense), net reflects certain items not directly related to our core operations, including interest income, debt extinguishment gains, components of net periodic pension and postretirement benefit income and cost and certain foreign exchange gains and losses.

Other income (expense), net decreased during 2025 compared to 2024 primarily due to a net pension and postretirement benefits remeasurement loss of $453 million recorded during 2025, compared with a gain of $657 million recorded during 2024.

The decrease was partially offset by an increase resulting from fair market value adjustments on certain investments.

See Note 11 to the consolidated financial statements for more information on the other components of net periodic benefit income (cost).

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(2) The effective interest rate is the rate of actual interest incurred on debt.

It is calculated by dividing the total interest costs on debt balances by the average debt outstanding.

It is calculated by dividing the annualized total interest costs on debt balances by the average debt outstanding.

(3) We believe that this measure is useful to management, investors and other users of our financial information in evaluating our debt financing cost and trends in our debt leverage management.

Total interest expense increased during 2024 compared to 2023 primarily as a result of a decrease in capitalized interest due to additional C-Band spectrum licenses being placed into service and an increase in interest costs due to a higher average interest rate partially offset by lower average debt balances.

Total interest expense increased during 2025 compared to 2024 primarily as a result of a decrease in capitalized interest due to additional C-Band spectrum licenses being placed into service, partially offset by a decrease in interest costs due to lower average debt balances and a lower interest rate.

Provision for Income Taxes

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The effective income tax rate is calculated by dividing the provision for income taxes by income before the provision for income taxes.

The decrease in the effective income tax rate was primarily due to the Verizon Business Group goodwill impairment charge of $5.8 billion in 2023 that substantially decreased income before income taxes and was not deductible.

The increase in the provision for income taxes was primarily due to the increase in 2024 in income before income taxes.

The increase in the effective income tax rate and provision for income taxes was primarily due to higher tax benefits resulting from the favorable resolution of various income tax matters and a reduction in deferred income taxes due to changes in state apportionment during the prior period.

A reconciliation of the statutory federal income tax rate to the effective income tax rate for each period is included in Note 12 to the consolidated financial statements.

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Consolidated EBITDA $ 47,715 $ 47,520

Other (income) expense, net (2)

Other income, net (3)

$ (107) $ (995)

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Asset and business rationalization

Acquisition and integration related charges

Legacy legal matter

Verizon Business Group goodwill impairment — 5,841

Legal settlement — 100

Business transformation costs — 176

Non-strategic business shutdown — 158

Consolidated Adjusted EBITDA $ 49,997 $ 48,791

(1) Includes Amortization of acquisition-related intangible assets, which were $817 million and $865 million during the years ended December 31, 2024 and 2023, respectively.

The results for the year ended December 31, 2023 also include a portion of the charges associated with the Non-strategic business shutdown.

(1) The result for the year ended December 31, 2025 includes a portion of the Acquisition and integration related charges.

See "Special Items" for additional information.

(2) Includes Pension and benefits mark-to-market credits of $532 million during the year ended December 31, 2024 and charges of $992 million during the year ended December 31, 2023.

(2) Includes Amortization of acquisition-related intangible assets, which were $760 million and $817 million during the years ended December 31, 2025 and 2024, respectively.

(3) Includes Pension and benefits mark-to-market charges of $441 million during the year ended December 31, 2025 and credits of $532 million during the year ended December 31, 2024.

See "Special Items" for additional information.

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To aid in the understanding of segment performance as it relates to segment operating income, management uses the following operating statistics to evaluate the overall effectiveness of our segments.

We believe these operating statistics are useful to investors and other users of our financial information because they provide additional insight into drivers of our segments’ operating results, key trends and performance relative to our peers.

We believe these operating statistics are useful to investors and other users of our financial information because they provide additional insight into drivers of our segments’

operating results, key trends and performance relative to our peers.

These operating statistics may be determined or calculated differently by other companies and may not be directly comparable to those statistics of other companies.

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FWA broadband connections, net additions are the total number of additional FWA broadband connections, less the number of FWA broadband disconnects in the period.

FWA broadband connections, net additions in each period presented are calculated by subtracting the FWA broadband disconnects, net of certain adjustments, from the FWA broadband new connections in the period.

FWA broadband connections, net additions in each period presented are calculated

by subtracting the FWA broadband disconnects, net of certain adjustments, from the FWA broadband new connections in the period.

Wireline broadband connections, net additions are the total number of additional wireline broadband connections, less the number of wireline broadband disconnects in the period.

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We also provide FWA broadband through our 5G or 4G LTE networks as an alternative to traditional landline internet access.

As of the date this report is being filed, our wireline services are provided in 31 U.S.

states and Washington D.C.

over our 100% fiber-optic network through our fiber product portfolio, as well as over a traditional copper-based network.

Operating Revenues and Selected Operating Statistics

(dollars in millions, except ARPA)

Years Ended December 31, 2024 2023 Increase/(Decrease)

Increase/(Decrease)

Years Ended December 31, 2025 2024 2023 2025 vs 2024

$ 80,912 $ 79,458 $ 77,336 $ 1,454 1.8 % $ 2,122 2.7 %

Wireless equipment 21,779 19,598 20,645 2,181 11.1 (1,047) (5.1)

Other 6,426 6,107 319 5.2

4,116 3,848 3,645 268 7.0 203 5.6

Total Operating Revenues $ 106,807 $ 102,904 $ 101,626 $ 3,903 3.8 $ 1,278 1.3

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Connections (‘000):

Wireless retail

115,903 115,256 114,972 647 0.6 284 0.2

Wireless retail postpaid 95,678 95,118 93,850 560 0.6 1,268 1.4

Wireless retail prepaid 20,138 21,122 (984) (4.7)

Total wireless retail 115,256 114,972 284 0.2

Wireless retail core prepaid (3)

19,169 18,843 18,851 326 1.7 % (8) 0.0

Fios internet 7,328 7,135 6,976 193 2.7 159 2.3

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Net Additions in Period (‘000):

Wireless retail postpaid 1,345 2,044 (699) (34.2)

Wireless retail prepaid (975) (1,151) 176 15.3

Total wireless retail 685 370 893 315 85.1 (523) (58.6)

Wireless retail postpaid phones 341 (132) 473 nm

Wireless retail postpaid 581 1,345 2,044 (764) (56.8) (699) (34.2)

Wireless retail postpaid phone

137 82 (132) 55 67.1 214 nm

Wireless retail core prepaid (3)

343 2 (1,078) 341 nm 1,080 nm

FWA broadband

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Wireless retail postpaid 1.15 % 1.06 % 1.03 %

Wireless retail postpaid phones 0.84 % 0.83 %

Wireless retail postpaid phone

0.92 % 0.83 % 0.83 %

Account Statistics:

Wireless retail postpaid ARPA (1)

$ 147.31 $ 144.00 $ 137.80 $ 3.31 2.3 $ 6.20 4.5

Wireless retail postpaid accounts (‘000) (2)

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2.95 2.90 2.84 0.05 1.7 0.06 2.1

(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) As of end of period.

Where applicable, the operating results reflect certain adjustments, including those related to the 3G network shutdowns, migration activity among different types of devices and plans, customer profile changes, and adjustments in connection with mergers, acquisitions and divestitures.

(3) Represents total prepaid results excluding our SafeLink brand.

Where applicable, the operating results reflect certain adjustments, including those related to the reclassification of connections associated with Verizon’s second number offering, migration activity among different types of devices and plans, customer profile changes, and adjustments in connection with mergers, acquisitions and divestitures.

Where applicable, historical results have been recast to conform to the current period presentation.

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Consumer's total operating revenues increased during 2025 compared to 2024 as a result of increases in Service, Wireless equipment and Other revenues.

Consumer's total operating revenues increased during 2024 compared to 2023 as a result of increases in Service and Other revenues, partially offset by a decrease in Wireless equipment revenue.

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Service revenue increased during 2025 compared to 2024 primarily driven by an increase in Wireless service revenue.

Wireless service revenue increased during 2025 compared to 2024 primarily due to:

• an increase of $775 million in postpaid revenue primarily related to higher adoption of perks and premium MyPlan offerings, pricing actions, and a 26% increase in our FWA subscriber base, partially offset by the amortization of wireless equipment sales promotions;

• an increase of $673 million related to growth in non-retail service revenue.

Service revenue increased during 2024 compared to 2023 primarily driven by an increase in Wireless service revenue.

Wireless service revenue increased during 2024 compared to 2023 primarily as a result of:

• an increase of $1.5 billion in access revenues related to our postpaid plans primarily due to pricing actions, an increase in subscriptions through MyPlan offerings and a 45% increase in our FWA subscriber base.

These increases were partially offset by the amortization of wireless equipment sales promotions;

• an increase of $1.5 billion in postpaid revenues primarily related to pricing actions, an increase in subscriptions through MyPlan offerings and a 45% increase in our FWA subscriber base, partially offset by the amortization of wireless equipment sales promotions;

• an increase of $638 million related to growth in non-retail service revenue;

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Wireless Equipment Revenue

Wireless equipment revenue increased during 2025 compared to 2024 primarily due to:

• an increase of $1.3 billion driven by a higher volume of wireless devices sold primarily related to an increase of 16% in upgrades, partially offset by the impact of related promotions;

• an increase of $916 million related to a shift to higher priced equipment in the mix of wireless devices sold.

Wireless equipment revenue decreased during 2024 compared to 2023 primarily as a result of:

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Other Revenue

Other revenue includes fees that partially recover the direct and indirect costs of complying with regulatory and industry obligations and programs, revenues associated with certain products included in our device protection offerings, leasing and interest recognized when equipment is sold to the customer by an authorized agent under a device payment plan agreement.

Other revenue increased during 2024 compared to 2023 primarily due to:

• an increase of $193 million driven by regulatory surcharges primarily related to a higher net Federal Universal Service Fund rate, along with an increase in other regulatory surcharges;

• an increase of $116 million related to device protection offerings primarily due to changes in the products offered and pricing actions.

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.

Other revenue increased during 2025 compared to 2024 primarily due to an increase of $189 million driven by regulatory surcharges primarily related to growth in our FUSF assessable revenue base in addition to a higher net rate.

Other revenue increased during 2024 compared to 2023 primarily due to an increase of $193 million driven by regulatory surcharges primarily related to a higher net FUSF rate, along with an increase in other regulatory surcharges.

Operating Expenses

(dollars in millions)

Years Ended December 31, 2024 2023 Increase/(Decrease)

Years Ended December 31, 2025 2024 Increase

Cost of services $ 18,433 $ 18,072 $ 361 2.0 %

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Cost of services increased during 2025 compared to 2024 primarily as a result of:

• an increase of $270 million in rent and lease expense primarily driven by new leases and lease modifications related to the continued deployment of the C-Band spectrum and Consumer's proportionate usage of shared leased assets;

• an increase of $195 million in personnel costs mainly driven by certain other post-employment benefit credits in 2023 that did not reoccur in 2024;

• an increase of $172 million in regulatory fees primarily related to growth in our FUSF assessable revenue base in addition to a higher net rate;

• an increase of $172 million in rent and lease expense primarily related to the tower transaction with Vertical Bridge along with new leases and lease modifications related to the continued deployment of the C-Band spectrum and Consumer's proportionate usage of shared leased assets;

• an increase of $129 million in digital content costs primarily associated with an increase in subscriptions through MyPlan offerings, partially offset by a decrease in traditional linear content costs due to a decline in Fios video subscribers;

• a decrease of $169 million in access costs primarily as a result of decreases in prepaid subscribers, changes in usage and net circuit access prices.

• a decrease of $95 million related to device protection offerings.

Cost of Wireless Equipment

Cost of wireless equipment decreased during 2024 compared to 2023 primarily as a result of:

• a decrease of $1.7 billion driven by a lower volume of wireless devices sold primarily related to a decrease of 10% in upgrades;

• an increase of $1.2 billion due to a shift to higher priced equipment in the mix of wireless devices sold.

Cost of wireless equipment increased during 2025 compared to 2024 primarily due to:

• an increase of $1.7 billion driven by a higher volume of wireless devices sold primarily related to an increase of 16% in upgrades;

• an increase of $988 million due to a shift to higher priced equipment in the mix of wireless devices sold.

Selling, General and Administrative Expense

Selling, general and administrative expense increased during 2024 compared to 2023 primarily due to:

• an increase of $176 million in the provision for credit losses resulting from an increase in postpaid phone gross additions and additional bad debt reserves;

• an increase of $105 million in advertising costs related to Value Brand marketing campaigns in 2024 compared to 2023.

Selling, general and administrative expense increased during 2025 compared to 2024 primarily as a result of:

• an increase of $94 million in personnel costs mainly driven by an increase in commission expense due to higher volumes;

• an increase of $75 million in building and facility costs primarily due to higher utility rates;

• a decrease of $68 million in advertising costs.

Depreciation and Amortization Expense

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Verizon Business Group

We provide these products and services to businesses, public sector customers and wireless and wireline carriers across the U.S.

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(dollars in millions)

Years Ended December 31, 2024 2023 Increase/(Decrease)

Increase/(Decrease)

Years Ended December 31, 2025 2024 2023 2025 vs 2024

Enterprise and Public Sector $ 13,534 $ 14,218 $ 15,076 $ (684) (4.8) % $ (858) (5.7) %

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Wireless retail postpaid 280 1,010 1,242 (730) (72.3) (232) (18.7)

Wireless retail postpaid phones 546 562 (16) (2.8)

Wireless retail postpaid phone

225 501 562 (276) (55.1) (61) (10.9)

FWA broadband

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Wireline broadband

(1) (8) 7 87.5

(7) (1) (8) (6) nm 7 87.5

Total broadband 466 621 539 (155) (25.0) 82 15.2

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Wireless retail postpaid phones 1.23 % 1.10 % 1.13 %

(1) Service and other revenues included in our Business segment were approximately $25.9 billion and $26.4 billion for the years ended December 31, 2024 and 2023, respectively.

Wireless equipment revenues included in our Business segment were approximately $3.6 billion and $3.7 billion for the years ended December 31, 2024 and 2023, respectively.

(1) Service and other revenues included in our Business segment were approximately $25.4 billion, $25.9 billion and $26.4 billion for the years ended December 31, 2025, 2024 and 2023, respectively.

Wireless equipment revenues included in our Business segment were approximately $3.7 billion, $3.6 billion and $3.7 billion for the years ended December 31, 2025, 2024 and 2023, respectively.

(2) 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.

(3) As of end of period

Business's total operating revenues decreased during 2024 compared to 2023 as a result of decreases in Enterprise and Public Sector and Wholesale revenues, partially offset by an increase in Business Markets and Other revenue.

Where applicable, historical results have been recast to conform to the current period presentation.

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Business's total operating revenues decreased during both 2025 compared to 2024 and 2024 compared to 2023 as a result of decreases in Enterprise and Public Sector and Wholesale revenues, partially offset by an increase in Business Markets and Other revenue.

Enterprise and Public Sector

Enterprise and Public Sector offers wireless products and services as well as wireline connectivity such as broadband and managed services to our large business and public sector customers.

Large businesses are identified based on their size and volume of business with Verizon.

Enterprise and Public Sector offers wireless products and services as well as wireline connectivity such as broadband and managed solutions to our large business and public sector customers.

Public sector customers include U.S.

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Our offerings to this customer group include plans with features and pricing designed to address their specific needs.

Enterprise and Public Sector revenues decreased during 2024 compared to 2023 primarily due to a decrease of $702 million in wireline revenue primarily driven by declines in networking, traditional data and voice communication services along with related professional services.

These declines were due to secular market pressure and technology shifts, coupled with lower customer premise equipment sales volumes.

Enterprise and Public Sector revenues decreased during 2025 compared to 2024 primarily due to:

• a decrease of $532 million in wireline revenue primarily driven by declines in networking, traditional data and voice communication services along with related professional services, due to secular market pressure and technology shifts, coupled with lower customer premise equipment sales volumes;

• a decrease of $193 million in Wireless service revenue primarily driven by pressure in Public Sector in part from government efficiency efforts.

Business Markets and Other

that ordinarily do not meet the requirements to be categorized as Enterprise and Public Sector, as described above.

Business Markets and Other offers wireless services (including FWA broadband), wireless equipment, advanced communication services, tailored voice and networking products, fiber broadband services, video services, advanced voice solutions and security services to businesses that ordinarily do not meet the requirements to be categorized as Enterprise and Public Sector, as described above.

Business Markets and Other also includes solutions that support mobile resource management.

Business Markets and Other revenue increased during 2025 compared to 2024 primarily due to an increase of $392 million in Wireless service revenue driven by pricing actions and an increase in our FWA subscriber base, partially offset by the amortization of wireless equipment sales promotions.

Business Markets and Other revenue increased during 2024 compared to 2023 primarily as a result of:

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Wholesale offers wireline communications services including data, voice, local dial tone and broadband services primarily to local, long distance, and wireless carriers that use our facilities to provide services to their customers.

Wholesale revenues decreased during 2025 compared to 2024 primarily due to a decrease of $260 million related to declines in traditional data and voice communication services and network connectivity as a result of technology substitution.

Wholesale revenues decreased during 2024 compared to 2023 primarily due to a decrease of $117 million related to declines in traditional voice communication and network connectivity as a result of technology substitution, as well as a decrease in core data.

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Cost of services decreased during 2025 compared to 2024 primarily due to:

• a decrease of $99 million in rent and lease expense primarily driven by a change in Business's proportionate usage of shared leased assets;

• a decrease of $87 million in access costs primarily related to changes in usage and net circuit access prices;

• a decrease of $182 million in personnel costs related to the impact of prior year workforce reductions;

• a decrease of $172 million in access costs primarily related to changes in pricing and circuit usage;

• a decrease of $86 million in other direct costs primarily related to legacy wireline products and services;

• a decrease of $73 million in customer premise equipment costs due to lower volumes sold.

• a decrease of $63 million in personnel costs related to the impact of workforce changes, partially offset by certain other post-employment benefit credits in 2023 that did not reoccur in 2024.

Cost of Wireless Equipment

Cost of wireless equipment decreased during 2024 compared to 2023 primarily as a result of:

• a decrease of $385 million driven by a lower volume of wireless devices sold;

• an increase of $267 million due to a shift to higher priced equipment in the mix of wireless devices sold.

Cost of wireless equipment increased during 2025 compared to 2024 primarily due to:

• an increase of $120 million driven by a higher volume of wireless devices sold;

• an increase of $86 million related to a shift to higher priced equipment in the mix of wireless devices sold.

Selling, General and Administrative Expense

Selling, general and administrative expense increased during 2024 compared to 2023 primarily as a result of:

• an increase of $221 million in personnel costs primarily related to an increase in costs associated with the transition to third-party contracted resources along with the impacts of a prior year compensation plan assumption change that did not reoccur;

• a decrease of $63 million in the provision for credit losses resulting from a reduction in bad debt reserves.

Selling, general and administrative expense decreased during 2025 compared to 2024 primarily due to:

• a decrease of $283 million in personnel costs related to the impact of prior year workforce reductions primarily due to the voluntary separation program that was announced in June of 2024 and completed in March of 2025;

• a decrease of $44 million in advertising costs.

Depreciation and Amortization Expense

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(dollars in millions)

Years Ended December 31, 2024 2023 Decrease

Years Ended December 31, 2025 2024 Increase/(Decrease)

Segment Operating Income $ 2,532 $ 2,058 $ 474 23.0 %

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Selling, general and administrative expense 378 185

Legacy legal matter

Selling, general and administrative expense 106 —

Verizon Business Group goodwill impairment

Legal settlement

Selling, general and administrative expense — 100

Business transformation costs

Cost of services — 15

Acquisition and integration related charges

Selling, general and administrative expense 91 —

Non-strategic business shutdown

Depreciation and amortization expense — 21

Cost of services — 45

Interest expense 19 —

Legacy legal matter

Selling, general and administrative expense — 106

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Within Other (income) expense, net 441 (532)

Within Interest expense 19 —

Total $ 3,609 $ 2,498

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Severance, Pension and Benefits Charges (Credits)

During 2025, we recorded pre-tax severance charges of $1.7 billion principally as a result of separations in connection with our workforce reduction initiatives.

The severance charges were recorded in Selling, general and administrative expense in our consolidated statements of income.

During 2025, in accordance with our accounting policy to recognize actuarial gains and losses in the period in which they occur, we recorded a net pre-tax pension and benefits charge of $441 million in our pension and postretirement benefit plans.

The net charge was recorded in Other income (expense), net in our consolidated statement of income and was primarily driven by:

• a charge of $345 million ($76 million for pension plans and $269 million for postretirement benefit plans) due to a decrease in our discount rate assumption used to determine the current year liabilities of our plans from a weighted-average of 5.8% for our pension plans and 5.6% post retirement plans at December 31, 2024 to a weighted-average of 5.7% for our pension plans and 5.4% for our postretirement plans at December 31, 2025;

• a net charge of $96 million due to changes in other actuarial assumption adjustments, which includes the difference between our estimated and our actual return on plan assets.

During 2024, we recorded pre-tax severance charges of $1.7 billion related to separations under our voluntary separation program for select U.S.-based management employees as well as other headcount reduction initiatives.

The severance charges were recorded in Selling, general and administrative expense in our consolidated statement of income.

The severance charges were recorded in Selling, general and administrative expense in our consolidated statements of income.

During 2024, in accordance with our accounting policy to recognize actuarial gains and losses in the period in which they occur, we recorded a net pre-tax pension and benefits credit of $532 million in our pension and postretirement benefit plans.

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• a net charge of $48 million primarily due to other actuarial assumption adjustments.

During 2023, we recorded net pre-tax severance charges of $533 million, primarily related to involuntary separations under our existing plans, in Selling, general and administrative expense in our consolidated statement of income.

During 2023, in accordance with our accounting policy to recognize actuarial gains and losses in the period in which they occur, we recorded net pre-tax pension and benefits charges of $992 million in our pension and postretirement benefit plans.

The charges were recorded in Other income (expense), net in our consolidated statement of income and were primarily driven by:

• a charge of $534 million due to an increase in our healthcare cost trend rate assumption used to determine the current year liabilities of our postretirement benefit plans from a weighted-average of 6.6% at December 31, 2022 to a weighted-average of 7.3% at December 31, 2023;

• a charge of $503 million ($288 million for pension plans and $215 million for postretirement benefit plans) due to a decrease in our discount rate assumption used to determine the current year liabilities of our plans from a weighted-average of 5.2% at December 31, 2022 to a weighted-average of 5.0% at December 31, 2023;

• a net credit of $45 million primarily due to other actuarial assumption adjustments, which includes the difference between our estimated and our actual return on plan assets.

Due to the presentation of the other components of net periodic benefit cost, we recognize a portion of the pension and benefits charges (credits) in Other income (expense), net in our consolidated statements of income.

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Asset and Business Rationalization

During 2024, we recorded a pre-tax asset and business rationalization charge of $374 million predominately related to the decision to cease use of certain real estate assets and exit non-strategic portions of certain businesses as part of our continued transformation initiatives.

During 2023, we recorded pre-tax asset rationalization charges of $480 million.

Asset rationalization charges of $155 million recorded during the second quarter of 2023 related to certain real estate and non-strategic assets that we made a decision to cease use of as part of our transformation initiatives.

Asset rationalization charges of $325 million recorded during the fourth quarter of 2023 primarily related to Business network assets that we made a decision to cease use of as part of our continued transformation initiatives.

During 2025 and 2024, we recorded pre-tax asset and business rationalization charges of $583 million and $374 million, respectively, predominately related to the decision to cease use of certain real estate assets and exit non-strategic portions of certain businesses as part of our transformation initiatives.

Acquisition and Integration Related Charges

During 2025, we recorded charges of $110 million related to transaction and integration expenses associated with the acquisition of Frontier completed in January 2026.

Legacy Legal Matter

During 2024, we recorded a pre-tax charge of $106 million associated with a litigation matter related to a legacy contract for the production of telephone directories in Costa Rica by a subsidiary of the Company.

Verizon Business Group Goodwill Impairment

During 2023, we recorded a pre-tax charge of $5.8 billion as a result of the annual goodwill impairment test performed in the fourth quarter.

See "Critical Accounting Estimates" for additional information.

Legal Settlement

During 2023, we recorded a pre-tax charge of $100 million related to the settlement of a litigation matter regarding certain administrative fees.

Business Transformation Costs

During 2023, we recorded pre-tax charges of $176 million primarily related to costs incurred in connection with strategic partnership initiatives in our managed network support services for certain Business customers.

Non-Strategic Business Shutdown

During 2023, we recorded pre-tax charges of $179 million related to the shutdown of our BlueJeans business offering.

Operating Environment and Trends

The telecommunications industry is highly competitive, and we expect competition to remain intense as traditional and non-traditional participants seek increased market share.

We believe that our high-quality networks and customer base in addition to our attractive offerings and value proposition differentiate us from our competitors and give us the ability to plan and manage through changing market conditions.

We believe that our attractive offerings and value proposition as well as our high-quality networks and customer base support our competitive position and give us the ability to plan and manage through changing market conditions.

We remain focused on executing on the fundamentals of the business:

enhancing our networks, offering innovative services and products, growing and maintaining a high-quality customer base, and delivering strong financial and operating results.

We also continue to focus on cost efficiencies in order to have flexibility to adjust to changes in the competitive and economic environments and increase shareholder value.

We are undertaking various business transformation initiatives and continue to focus on cost efficiencies in order to have flexibility to adjust to changes in the competitive and economic environments, streamline our operations, enhance customer experience and increase shareholder value.

wireless market has achieved a high penetration of smartphones, which reduces the opportunity for new phone connection growth for the industry.

We expect the wireless industry's customer growth rate to moderate over time in comparison to historical growth rates, furthering competition for customers.

We expect the wireless industry's customer growth rate to continue to moderate over time in comparison to historical growth rates, furthering competition for customers.

Future revenue growth in the industry is expected to be driven by expanding existing customer relationships, increasing the number of ways customers can connect with wireless networks and services and increasing the penetration of FWA and connected devices including wearables, tablets and IoT devices.

Although certain advanced use cases for 5G technologies and related ecosystems are in the early phases of adoption, we believe that they will provide an opportunity for growth in the coming years.

We expect future service revenue growth opportunities to arise from increased access revenue as customer demand for mobile and FWA 5G connectivity continues to expand and customers shift to higher access plans.

Additionally, we expect service revenue to benefit from targeted pricing actions and increased connections per account.

Future service revenue growth opportunities will be dependent on expanding the penetration of our services, increasing the number of ways that our customers can connect with our networks and services and the development of new 5G use cases and ecosystems.

Pricing plays an increasingly important role in the wireless competitive landscape.

As the demand for wireless services continues to grow, wireless service providers are offering a range of service plans and bundled services at competitive prices.

In addition, aggressive device promotions have become more common in recent years in an effort to encourage customers to switch carriers, as well as retain existing customers.

We compete in this area by offering our customers services and devices, with a variety of content options and other perks, that we believe provide significant value for the price.

We and other wireless service providers, as well as equipment manufacturers, offer device payment options, which provide customers with the ability to pay for their device over a period of time, and some providers offer device leasing arrangements.

Future service revenue growth opportunities will be dependent on increasing the number of wireless customers, expanding the penetration of our services, increasing the number of ways that our customers can connect with our networks and services and the development of new 5G use cases and ecosystems.

Pricing plays an important role in the wireless competitive landscape.

Wireless service providers are offering a range of service plans and bundled services at competitive prices.

In addition, aggressive device promotions and price lock guarantees have become more common in recent years in an effort to encourage customers to switch carriers, as well as retain existing customers.

For further details on competitive environment and trends, refer to "Business — Competition and Related Trends" in Part I, Item 1 and "Risk Factors — Economic and Strategic Risks — We face significant competition that may negatively affect our operating results" in Part I, Item 1A of this Annual Report on Form 10-K.

Connection Trends

In our Consumer segment, we are focused on attracting new customers and maintaining our high-quality retail postpaid customer base by capitalizing on demand for reliable high-speed connectivity and customizable, personalized offerings and solutions.

We believe the combination of our wireless network quality and service and product offerings represents an attractive value proposition and provides a compelling customer experience, supporting increased penetration of data services.

While our Consumer segment experienced diminished wireless connection growth in recent years, we expect that future connection growth opportunities will be driven by the comparative value we provide to our customers, as well as our FWA broadband service.

In our prepaid business, while we expect to continue to operate in a highly competitive environment, we are making improvements to achieve long-term growth.

We expect to continue to grow our Fios internet connections as we seek to expand availability of Fios, increase our penetration rates within our Fios service areas, and experience continued strong demand for higher speed internet connections.

Our pending acquisition of Frontier is expected to enhance our fiber broadband footprint and provide opportunities for future growth.

At the same time, we expect continued growth of FWA connections to complement strong Fios results as demand for broadband services continues to grow.

In Fios video, the business continues to face ongoing pressure as observed throughout the linear television market.

In our Consumer segment, we are focused on attracting new customers and maintaining our high-quality retail postpaid customer base by meeting demand for reliable high-speed connectivity and thoughtfully designed offerings and solutions.

We believe the combination of our innovative service and product offerings, enhanced customer support and network quality represents an attractive value proposition and provides a compelling customer experience, supporting increased penetration of data services.

While our Consumer segment has experienced lower wireless connection growth in recent years, we expect that future connection growth opportunities will be driven by the comparative value we provide to our customers, as well as our FWA broadband service.

In addition, in recent years, we made meaningful improvements in our prepaid business and operations.

While we expect to continue to operate in a highly competitive environment, we are focused on achieving long-term growth in our postpaid and prepaid business.

We expect to continue to grow our fiber internet connections as we seek to expand availability of fiber, increase our penetration rates, and experience continued strong demand for higher speed internet connections.

On January 20, 2026, we completed the acquisition of Frontier, a U.S.

provider of broadband internet and other communication services.

This transaction expanded our fiber broadband footprint to 31 U.S.

states and Washington D.C., and provides opportunities for future growth.

At the same time, we expect continued growth of FWA connections to complement strong fiber results as demand for broadband services continues to grow.

Our strong broadband footprint and offerings also provide us with convergence growth opportunities and related benefits for both our broadband and mobility businesses.

In video, the business continues to face ongoing pressure as observed throughout the linear television market.

We have experienced continuing access line and DSL losses as customers have switched to alternative technologies such as wireless, VoIP, and cable for voice and data services, and we expect this trend to continue.

In our Business segment, we offer wireless products and services to business and public sector customers across the U.S.

In our Business segment, we offer wireless and wireline products and services to businesses and public sector customers across the U.S and around the world.

We continue to grow our connections while operating in a highly competitive environment.

We expect that this connection growth, combined with our industry-leading network assets, will provide additional opportunities to sell solutions, such as those around security, private networking and other network connectivity services, advanced communications and professional services.

In addition, in both our Consumer and our Business segments, we expect to support connection growth in part by adding capacity and further expanding our wireless coverage, and by continuing the build-out and densification of our 5G network.

We expect that this connection growth, combined with our value proposition and network assets, will provide additional opportunities to grow our business.

Service Revenue Trends

In our Consumer segment, we expect continued growth in our wireless service revenue, driven by targeted pricing actions, migrations to higher priced plans, increased offering of perks, and increases in FWA connections and revenue, offset in part by higher promotion amortization impacts in 2025.

Our efforts to maintain and grow our customer base and make improvements to our prepaid business, if successful, are also expected to benefit our wireless service revenue.

We expect Fios revenue to benefit from growth in our Fios customer base and an ongoing demand for higher speed internet connections, which offsets the impact of the shift from bundled wireline services to standalone internet service.

In our Business segment, we expect wireless service revenue to expand, driven by growth from an increase in wireless volumes and strong FWA revenue.

We expect that Fios, through increased penetration, will also contribute to revenue growth and that legacy traditional wireline services will continue to face secular pressures.

We are focused on achieving profitable growth as we continue to deliver strong revenues and undertake initiatives to reduce costs and improve efficiencies, including through AI-driven technologies.

We expect that our ability to generate cash flows will benefit from our expected service revenue growth, despite the moderate expected increase in our 2025 capital program compared to 2024.

In our Consumer segment, we expect our mobility and broadband revenue, to be driven by our plans to maintain and grow our customer base, migrations to higher priced plans, increased offering of perks, and increases in FWA connections and revenue, offset in part by higher promotion amortization impacts.

Our wireless service revenue is expected to benefit from our growing prepaid business.

We expect broadband revenue to benefit from our expanded fiber footprint and customer base following the closing of the Frontier acquisition, continued growth in our fiber and FWA connections, and an ongoing demand for higher speed internet access.

We anticipate 2026 will be a transitional year for revenue as we work towards achieving sustainable volume based growth.

In our Business segment, we expect mobility and broadband revenue to expand, driven by growth from an increase in wireless volumes, strong FWA revenue and increased penetration of fiber.

We expect that legacy traditional wireline services will continue to face secular pressures.

In 2026, we expect to focus on our strategic growth areas - mobility and broadband, and plan to continue to rationalize our product portfolio, implement operational efficiencies and leverage the latest technological and digital capabilities.

We are focused on achieving profitable growth as we continue to deliver strong revenues and undertake transformation initiatives to reduce costs and improve efficiencies, including through AI-driven technologies.

We expect that our ability to generate cash flows will benefit from our expected mobility and broadband service revenue growth and optimization of our cost structure.

We are focused on a more efficient use of capital with the goal to achieve our capital investment priorities at lower cost.

See "Liquidity and Capital Resources" for additional information on our capital program.

In the course of business, we make promotional equipment offers to attract and retain customers.

In 2024, the growth of our wireless service revenue was unfavorably impacted by the amortization of wireless equipment sales and promotions.

We expect these pressures to continue and increase in 2025.

In addition, in 2023 and 2024, we had fewer phone upgrades compared to prior years.

To the extent upgrade volumes increase in 2025, the expenses associated with those device sales are expected to contribute to higher costs.

In 2024 and 2025, the growth of our wireless service revenue was unfavorably impacted by the amortization of wireless equipment sales and promotions.

We expect these pressures to continue in 2026.

Liquidity and Capital Resources

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Our cash and cash equivalents are held both domestically and internationally, and are invested to maintain principal and provide liquidity.

See "Change In Cash, Cash Equivalents and Restricted Cash" for additional information regarding the changes in our cash balances.

See "Quantitative and Qualitative Disclosures About Market Risk" for additional information regarding our foreign currency risk management strategies.

We expect that our capital spending requirements will continue to be financed primarily through internally generated funds.

Debt or equity financing may be needed to fund additional investments or development activities, including, for example, to complete our acquisition of Frontier, or to maintain an appropriate capital structure to ensure our financial flexibility.

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.

Our external financing arrangements include credit facilities and other bank lines of credit, an active commercial paper program, vendor financing arrangements, issuances of registered debt or equity securities, U.S.

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Capital Expenditures

Our 2025 capital program includes capital to fund advanced networks and services, including expanding and adding capacity and density to our core networks, the ongoing deployment of C-Band spectrum, and advancing our network architecture.

It will also support our broadband expansion plans including the launch of our fixed wireless access solution for multi-dwelling units.

Our 2026 capital program includes capital to fund advanced networks and services, including expanding and adding capacity and density to our core networks, completing the deployment of C-Band spectrum, and advancing our network architecture, while reducing the cost to deliver services to our customers, and pursuing other opportunities to drive operating efficiencies.

It will also support our broadband investment plans and the expansion of our fiber broadband footprint.

We anticipate cash requirements for our 2026 capital program to be between $16.0 billion and $16.5 billion.

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The following represent our anticipated material cash requirements from known contractual and other obligations as of December 31, 2025:

• Pursuant to the Agreement and Plan of Merger, dated as of September 4, 2024, Verizon agreed to acquire Frontier for a per share merger consideration of $38.50.

On January 20, 2026, Verizon completed the acquisition and paid approximately $9.4 billion in cash, net of cash acquired, and assumed approximately $12.9 billion of Frontier's debt, resulting in a total aggregate consideration of approximately $22.3 billion.

See Note 3 to the consolidated financial statements for additional information.

• Long-term debt, including current maturities, commitments of $155.8 billion, of which $17.3 billion (including $1.4 billion of unsecured debt) are expected to be due within the next twelve months.

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(5,613) (17,100)

Increase (decrease) in cash, cash equivalents and restricted cash $ 1,138 $ (614)

Increase in cash, cash equivalents and restricted cash $ 14,864 $ 1,138

Cash Flows Provided By Operating Activities

Our primary source of funds continues to be cash generated from operations.

Net cash provided by operating activities decreased $563 million during 2024 compared to 2023 primarily due to changes in working capital, partially offset by an increase in earnings and an increase in Other, net cash flow from operating activities.

Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses

The change in working capital was primarily driven by higher cash income taxes paid in the current period as well as higher interest expense and severance payments primarily related to separations under our voluntary separation program.

Other, net cash flow from operating activities during 2024 includes $2.0 billion of proceeds related to the transaction with Vertical Bridge REIT, LLC (Vertical Bridge).

These proceeds were partially offset by discretionary contributions made in March 2024 in the aggregate amount of $365 million to our qualified pension plans.

We expect that there will be no required pension funding through the end of 2025, subject to changes in market conditions.

Net cash provided by operating activities increased $225 million during 2025 compared to 2024.

The increase is primarily attributable to a reduction in cash tax payments as a result of the One Big Beautiful Bill legislation, partially offset by a decrease in earnings and a decrease in Other, net cash flow from operating activities.

Other, net cash flow from operating activities during 2024 included $2.0 billion of proceeds related to the transaction with Vertical Bridge.

As a result of the prior year discretionary contributions to our qualified pension plans of $365 million and the additional non-cash contributions made in 2025 in the aggregate principal amount of $1.3 billion, we expect that there will be no required pension funding through the end of 2030, subject to changes in market conditions.

Cash Flows Used In Investing Activities

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Capital expenditures, including capitalized software, were $17.0 billion and $17.1 billion for 2025 and 2024, respectively.

Capital expenditures decreased approximately $1.7 billion during 2024, compared to 2023, primarily due to the completion of our accelerated $10 billion C-Band deployment program in 2023.

Capital expenditures decreased $79 million during 2025, compared to 2024, primarily due to efficiencies in our fiber and wireless network infrastructure investments.

Acquisitions of Wireless Licenses

During 2024 and 2023, we made payments of $269 million and $4.3 billion, respectively, for obligations related to clearing costs and accelerated clearing incentives associated with Auction 107 .

During 2024 and 2023, we recorded capitalized interest related to wireless licenses of $616 million and $1.4 billion, respectively.

Collateral Receipts (Payments) Related to Derivative Contracts, Net

During 2024, we made collateral payments of $712 million related to derivative contracts, net of receipts.

During 2023, we received return of collateral posted of $880 million related to derivative contracts, net of payments.

See Note 9 to the consolidated financial statements for additional information.

During 2025 and 2024, we recorded capitalized interest related to wireless licenses of $428 million and $616 million, respectively.

During 2024, we made payments of $269 million for obligations related to clearing costs and accelerated clearing incentives associated with Auction 107 for C-Band wireless spectrum .

Cash Flows Used In Financing Activities

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During 2025 and 2024, net cash used in financing activities was $5.6 billion and $17.1 billion, respectively.

During 2024, our net cash used in financing activities of $17.1 billion was primarily driven by $20.3 billion used for repayments and repurchases of long-term borrowings (secured and unsecured) as well as finance lease obligations, $11.2 billion used for dividend payments, and $1.1 billion used for other financing activities.

These cash flows used in financing activities were partially offset by $15.6 billion provided by proceeds from long-term borrowings, which included $12.4 billion of proceeds from our asset-backed debt transactions.

During 2025, our net cash used in financing activities of $5.6 billion was primarily driven by $27.6 billion provided by proceeds from long-term borrowings, which included $9.3 billion of proceeds from our asset-backed debt transactions partially offset by $19.8 billion used for repayments and repurchases of long-term borrowings (secured and unsecured) as well as finance lease obligations, $11.5 billion used for dividend payments, and $1.9 billion used for other financing activities.

Proceeds from and Repayments and Repurchases of Long-Term Borrowings

At December 31, 2024, our total debt decreased to $144.0 billion compared to $150.7 billion at December 31, 2023.

At December 31, 2025, our total debt increased to $158.2 billion compared to $144.0 billion at December 31, 2024.

Our effective interest rate was 5.0% and 5.1% during the years ended December 31, 2025 and 2024, respectively.

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Verizon may acquire debt securities issued by Verizon and its affiliates through open market purchases, redemptions, privately negotiated transactions, tender offers, exchange offers, or otherwise, upon such terms and at such prices as Verizon may from time to time determine, for cash or other consideration.

Other, net cash flow from financing activities during 2024 includes $830 million in proceeds related to financing obligations for the cell towers transaction with Vertical Bridge.

These proceeds were partially offset by $431 million in payments related to vendor financing arrangements, $425 million in equity distribution payments made for controlled entities, $313 million in payments made under the sublease arrangement for our cell towers, $280 million in cash consideration payments to acquire additional interest in certain controlled entities and $243 million in payments for settlement of cross currency swaps.

See Note 6 to the consolidated financial statements for additional information on the Vertical Bridge transaction.

Other, net cash flow from financing activities during 2025 includes $650 million in payments related to vendor financing arrangements, $485 million in payments made under the sublease arrangement for our cell towers, $496 million in equity distribution payments made for controlled entities and $185 million in payments related to tax withholding of employee share based arrangements.

See Note 14 to the consolidated financial statements for additional information on noncontrolling interests.

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During the third quarter of 2025, our Board of Directors increased our quarterly dividend payment by 1.8% to $0.6900 from $0.6775 per share in the preceding quarter.

This is the eighteenth consecutive year that Company’s Board of Directors has approved a quarterly dividend increase.

This is the nineteenth consecutive year that Company’s Board of Directors has approved a quarterly dividend increase.

As in prior periods, dividend payments were a significant use of capital resources.

During 2025, we paid $11.5 billion in dividends.

During 2023, our net cash used in financing activities of $14.7 billion was primarily driven by $11.0 billion used for dividend payments, $10.6 billion used for repayments and repurchases of long-term borrowings (secured and unsecured) as well as finance lease obligations and $1.5 billion used for other financing activities.

These cash flows used in financing activities were

partially offset by $8.6 billion provided by proceeds from long-term borrowings, which included $6.6 billion of proceeds from our asset-backed debt transactions.

During 2024, our net cash used in financing activities of $17.1 billion was primarily driven by $20.3 billion used for repayments and repurchases of long-term borrowings (secured and unsecured) as well as finance lease obligations, $11.2 billion used for dividend payments and $1.1 billion used for other financing activities.

Proceeds from and Repayments and Repurchases of Long-Term Borrowings

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See "Quantitative and Qualitative Disclosures About Market Risk" for additional information.

Other, net cash flow from financing activities during 2023 includes $302 million in payments made under the sublease arrangement for our cell towers, $257 million in payments for contingent consideration related to the acquisition of TracFone Wireless, Inc.

(TracFone) and $252 million in payments related to vendor financing arrangements.

See Note 3 to the consolidated financial statements for additional information on the TracFone contingent considerations.

Other, net cash flow from financing activities during 2024 includes $830 million in proceeds related to financing obligations for the cell towers transaction with Vertical Bridge.

under the sublease arrangement for our cell towers, $280 million in cash consideration payments to acquire additional interest in certain controlled entities and $243 million in payments for settlement of cross currency swaps.

See Note 6 to the consolidated financial statements for additional information on the Vertical Bridge transaction.

See Note 14 to the consolidated financial statements for additional information on noncontrolling interests.

During the third quarter of 2024, our Board of Directors increased our quarterly dividend payment by 1.9% to $0.6775 per share.

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Asset-Backed Debt

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.

Cash collections on the receivables and on the underlying receivables related to the participation interest collateralizing our asset-backed notes issued to third-party investors and loans received from banks and their conduit facilities 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 consolidated balance sheets.

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As of December 31, 2025, there have been no drawings against the revolving credit facility since its inception.

(2) During 2025, we drew down $270 million .

During 2024, there were no drawings from these facilities.

During 2023, we drew down $1.0 billion from these facilities.

Borrowings under certain of these facilities are amortized semi-annually in equal installments up to the applicable maturity dates.

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Any amounts borrowed under these facilities and subsequently repaid cannot be reborrowed.

In March 2024, we amended our $9.5 billion revolving credit facility to increase the capacity to $12.0 billion and extended its maturity to 2028.

Common stock has been used from time to time to satisfy some of the funding requirements of employee and shareholder plans.

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In February 2020, the Board of Directors of the Company authorized a share buyback program to repurchase up to 100 million shares of our common stock.

The program will terminate when the aggregate number of shares purchased reaches 100 million, or a new share repurchase plan superseding the current plan is authorized, whichever is sooner.

The program permits Verizon to repurchase shares over time, with the amount and timing of repurchases depending on market conditions and corporate needs.

There were no repurchases of common stock during 2024 and 2023 under our authorized share buyback program.

There were no repurchases of common stock during 2025 and 2024 under our share buyback program.

The share buyback program authorized by the Board in February 2020 terminated upon the authorization of the new share repurchase program discussed below.

On January 30, 2026, the Board of Directors of the Company authorized a share repurchase program for up to $25 billion of our common stock.

The program will terminate when the aggregate consideration paid to purchase shares of our common stock reaches $25 billion, exclusive of any fees, commissions or other expenses, or a new share repurchase plan superseding the current plan is authorized, whichever is sooner.

Under the program, shares may be repurchased in privately negotiated transactions, on the open market, or otherwise, including through plans complying with Rule 10b5-1 or Rule 10b-18 under the Exchange Act.

The timing and number of shares purchased under the program, if any, will depend on prevailing stock prices, general economic and market conditions, and other considerations.

The share repurchase program does not obligate us to acquire any particular amount of common stock, and the program may be suspended or discontinued at any time at our discretion.

Credit Ratings

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Our Cash and cash equivalents at December 31, 2025 totaled $19.0 billion, a $14.9 billion increase compared to December 31, 2024, primarily as a result of the factors discussed above.

Restricted cash at December 31, 2024 totaled $441 million, a $991 million decrease compared to restricted cash at December 31, 2023, primarily related to cash collections on certain receivables and on the underlying receivables related to the participation interest that are required at certain specified times to be placed into segregated accounts.

The decrease of $991 million in restricted cash was primarily due to a change in the timing on when cash collections on certain receivables collateralizing our asset-backed debt securities are required to be placed into segregated accounts.

Our cash balance at December 31, 2025 included net cash proceeds from notes issued in 2025 to fund the acquisition of Frontier, which closed in January 2026.

Restricted cash at December 31, 2025 and 2024 totaled $451 million and $441 million, respectively, primarily related to cash collections on certain receivables and on the underlying receivables related to the participation interest that are required at certain specified times to be placed into segregated accounts.

Free Cash Flow

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Free cash flow $ 20,126 $ 19,822

The increase in free cash flow during 2024 is a reflection of the decrease in capital expenditures, partially offset by the decrease in operating cash flows, both of which are discussed above.

The increase in free cash flow during 2025 is a reflection of the increase in operating cash flows, as well as the decrease in capital expenditures, both of which are discussed above.

Employee Benefit Plans Funded Status and Contributions

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These plans primarily relate to our domestic business units.

During 2025, we made discretionary non-cash contributions in the aggregate principal amount of $1.3 billion to our qualified pension plans.

During 2024, we made discretionary contributions in the aggregate amount of $365 million to our qualified pension plans.

During 2023, we made a discretionary contribution of $200 million to one of our qualified pension plans.

During 2025 and 2024, we made contributions of $54 million and $56 million to our nonqualified pension plans, respectively.

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Critical Accounting Estimates

A summary of the critical accounting estimates used in preparing our financial statements are as follows:

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However, we may elect to bypass the qualitative assessment in any period and proceed directly to performing the quantitative impairment test.

It is our policy to perform quantitative impairment assessment at least every three years.

It is our policy to perform a quantitative impairment assessment at least every three years.

During the fourth quarter of 2024, we performed a quantitative impairment assessment in accordance with our policy.

The quantitative impairment assessment we performed during the fourth quarter of 2024 indicated that the fair value of our wireless licenses is substantially in excess of their carrying value and, therefore, did not result in an impairment.

Our quantitative impairment assessment consisted of comparing the estimated fair value of our aggregate wireless licenses to the aggregated carrying amount as of the test date.

Under our quantitative assessment, we estimated the fair value of our wireless licenses using the Greenfield approach.

The Greenfield approach is an income based valuation approach that values the wireless licenses by calculating the cash flow generating potential of a hypothetical start-up company that goes into business with no assets except the wireless licenses to be valued.

assets except the wireless licenses to be valued.

A discounted cash flow analysis is used to estimate what a marketplace participant would be willing to pay to purchase the aggregated wireless licenses as of the valuation date.

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During the fourth quarter of 2025, we performed a qualitative impairment assessment as our annual impairment test to determine whether it is more likely than not that the fair value of our wireless licenses was less than the carrying amount.

As part of our qualitative assessment we considered several factors including the enterprise value of our combined wireless business, macroeconomic conditions (including changes in interest rates and discount rates), industry and market considerations (including industry revenue and EBITDA margin results, projections and recent merger and acquisition activity), the recent and projected financial performance of our combined wireless business as a whole, as well as other factors including the result of our last quantitative assessment performed in 2021.

Our annual impairment test in 2023 indicated that it is more likely than not that the fair value of our wireless licenses remained above their carrying value and, therefore, did not result in an impairment.

During the fourth quarter of 2024, we performed a quantitative impairment assessment in accordance with our policy.

In the event of a 10% decline in the fair value of our wireless licenses, the fair value would have still exceeded their carrying value.

We do not believe reasonable changes in significant estimates would change the outcome to this quantitative assessment.

For instance, if either the terminal value growth rate declined by 50 basis points (bps) or if the WACC increased by 50 bps, the fair value of wireless licenses would still exceed their carrying value.

As part of our qualitative assessment we considered several factors including the enterprise value of our combined wireless business, macroeconomic conditions (including changes in interest rates and discount rates), industry and market considerations (including industry revenue and subscriber growth, as well as recent merger and acquisition activity), the recent and projected financial performance of our combined wireless business as a whole, as well as other factors including the result of our last quantitative assessment performed in 2024.

Our qualitative assessment in 2025 indicated that it is more likely than not that the fair value of our wireless licenses remained above their carrying value and, therefore, did not result in an impairment.

At both December 31, 2025 and 2024, the balance of our goodwill was approximately $22.8 billion, of which $21.2 billion was in our Consumer reporting unit and $1.7 billion was in our Business reporting unit.

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It is our policy to perform quantitative impairment assessments at least every three years.

Under the qualitative assessment, we consider several factors, including the enterprise value of the reporting unit from the last quantitative test and the excess of fair value over carrying value from this test, macroeconomic conditions (including changes in interest rates and discount rates), industry and market considerations (including industry revenue and EBITDA margin results, projections and recent merger and acquisition activity), the recent and projected financial performance of the reporting unit, as well as other factors.

Under the qualitative assessment, we consider several factors, including the enterprise value of the reporting unit from the last quantitative test and the excess of fair value over carrying value from this test, macroeconomic conditions (including changes in interest rates and discount rates), industry and market considerations (including industry revenue and EBITDA margin, projections and recent merger and acquisition activity), the recent and projected financial performance of the reporting unit, as well as other factors.

Under the quantitative assessment, the fair value of the reporting unit is calculated using an average of the market approach and a discounted cash flow method, as a form of the income approach.

The market approach includes the use of comparative multiples to complement discounted cash flow results.

The discounted cash flow method is based on the present value of two

components-projected cash flows and a terminal value.

The discounted cash flow method is based on the present value of two components-projected cash flows and a terminal value.

The terminal value represents the expected normalized future cash flows of the reporting unit beyond the cash flows from the discrete projection period.

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The market multiples approach reflects significant judgment involved in the selection of comparable public company multiples and benchmarks.

The selection of companies and multiples is influenced by differences in growth and profitability, and volatility in market prices of peer companies.

The selection of companies and multiples is influenced by differences in growth, profitability, and volatility in market prices of peer companies.

These valuation inputs are inherently judgmental, and an adverse change in one or a combination of these inputs could result in a goodwill impairment.

During the fourth quarter of 2023, we performed a qualitative impairment assessment for our Consumer reporting unit.

Our qualitative assessment indicated that it was more likely than not that the fair value of our Consumer reporting unit exceeded its carrying value and, therefore, did not result in an impairment.

During the fourth quarter of 2024, we performed a quantitative impairment assessment for our Consumer reporting unit in accordance with our policy.

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Our assessment indicated that the fair value of our Consumer reporting unit substantially exceeded its carrying value and, therefore, did not result in an impairment.

In the event of a 10% decline in the fair value of our Consumer reporting unit, the fair value of the Consumer reporting unit would have still exceeded its book value.

We do not believe reasonable changes in significant assumptions would change the outcome to this quantitative assessment.

For instance, if either the terminal value growth rate declined by 50 bps or if the discount rate increased by 50 bps, the fair value of our Consumer reporting unit would still exceed its carrying value.

During the fourth quarter of 2023, we performed a quantitative impairment assessment for our Business reporting unit given the low excess of fair value over carrying value identified in our 2022 annual impairment assessment and increased competitive and market pressures experienced throughout 2023.

These pressures resulted in lower projected cash flows primarily driven by secular declines in wireline services and products across our Business customer groups.

In connection with Verizon’s annual budget process in the fourth quarter of 2023, leadership completed a comprehensive five-year strategic planning review of our Business reporting unit resulting in declines in financial projections driven by market dynamics as compared to the prior year five-year strategic planning cycle.

The revised projections were used as a key input into the Business reporting unit’s annual goodwill impairment test performed in the fourth quarter of 2023.

In addition, changes in the macroeconomic environment, including interest rate and inflationary pressures also impacted the fair value of the reporting unit.

We applied a combination of a market approach and a discounted cash flow method reflecting current assumptions and inputs, including our revised projections, discount rate and expected growth rates, which resulted in the determination that the fair value of our Business reporting unit was less than its carrying amount.

As a result, in the fourth quarter of 2023, we recorded a noncash goodwill impairment charge of approximately $5.8 billion ($5.8 billion after-tax) in our consolidated statement of income.

The goodwill balance of the Business reporting unit was approximately $7.5 billion prior to the occurrence of this impairment charge.

During the fourth quarter of 2024, we performed a quantitative impairment assessment for our Business reporting unit given the impairment of the Business reporting unit's goodwill in the prior year.

In addition, the Business reporting unit has continued to experience competitive and market pressures throughout 2024, that may persist over the near term.

We applied a combination of a market approach and a discounted cash flow method reflecting current assumptions and inputs, including our revised projections, discount rate and expected growth rates, which indicated that the fair value of our Business reporting unit exceeded its carrying value and, therefore, did not result in an impairment.

During the fourth quarter of 2025, we performed a qualitative impairment assessment for our Consumer reporting unit.

Our qualitative assessment indicated that it was more likely than not that the fair value of our Consumer reporting unit exceeded its carrying value and, therefore, did not result in an impairment.

During the fourth quarters of both 2024 and 2025, we performed quantitative impairment assessments for our Business reporting unit.

We performed a quantitative impairment assessment in 2024 as a result of the goodwill impairment recorded in 2023 and the competitive and market pressures experienced throughout 2024.

We elected to perform a quantitative impairment

assessment in 2025 given that the 2024 impairment assessment resulted in a fair value that was marginally in excess of the carrying value, as well as the sustained competitive pressures and market conditions that continued throughout 2025.

In both years, we applied a combination of a market approach and a discounted cash flow method reflecting current assumptions and inputs, including our revised projections, discount rates and expected growth rates.

These analyses both indicated that the fair value of our Business reporting unit exceeded its carrying value and, therefore, did not result in an impairment in either 2024 or 2025.

At the goodwill impairment measurement date of October 31, 2025, our Business reporting unit had a fair value that exceeded its carrying amount by approximately 9% and remains susceptible to future impairment risk.

We do not anticipate reasonable changes in significant assumptions to change the outcome of the quantitative impairment assessment.

For instance, if either the terminal value growth rate declined by 50 bps, or if the discount rate increased by 50 bps, or if the EBITDA margin decreased by 100 basis points, the fair value of our Business reporting unit would still exceed its carrying value.

For instance, if either the terminal value growth rate declined by 50 basis points, or if the discount rate increased by 50 basis points, or if the EBITDA margin decreased by 100 basis points, the fair value of our Business reporting unit would still exceed its carrying value.

However, management believes there is a continued risk that our Business reporting unit may be required to recognize an impairment charge in the future.

As of December 31, 2024, $1.7 billion of goodwill was allocated to our Business reporting unit.

See Note 4 to the consolidated financial statements for additional information.

A projected sustained decline in the reporting unit's revenues and earnings could have a significant negative impact on its fair value and could result in future impairment charges.

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(1) decreases in sales volumes or long-term growth rate as a result of competitive pressures or other factors;

or (2) the reporting unit's inability to achieve or delays in achieving its goals or strategic initiatives.

or (2) the reporting unit's inability to achieve or delays in achieving its goals or strategic initiatives including, but not limited to, cost savings efforts.

Adverse changes to macroeconomic factors, such as increases in long-term interest rates, would also negatively impact the fair value of the reporting unit.

See Note 4 to the consolidated financial statements for additional information.

Pension and Other Postretirement Benefit Plans

We maintain benefit plans for most of our employees, including, for certain employees, pension and other postretirement benefit plans.

Benefit plan assumptions, including the discount rate used, the long-term rate of return on plan assets, the determination of the substantive plan and health care trend rates are periodically updated and impact the amount of benefit plan income,

expense, assets and obligations.

Changes to one or more of these assumptions could significantly impact our accounting for pension and other postretirement benefits.

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We depreciate property, plant and equipment on a straight-line basis over the estimated useful life of the assets.

The estimated useful life is subject to change due to a variety of factors such as change in asset capacity or

performance, technical obsolescence, market expectations and competitive impacts.

The estimated useful life is subject to change due to a variety of factors such as change in asset capacity or performance, technical obsolescence, market expectations and competitive impacts.

In connection with our ongoing review of the estimated useful lives of property, plant and equipment during 2025, we determined that the estimated useful life of our property, plant and equipment would remain unchanged.

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We consider multiple factors in determining the allowance as discussed above.

If there is a deterioration of our customers’ financial condition or if future actual default rates on receivables in general differ from those currently anticipated, we may have to adjust our allowance for credit losses, which would affect earnings in the period the adjustments are made.

If there is a deterioration of our customers’ financial condition or if expected default rates differ from actual default rates on receivables, we may have to adjust our allowance for credit losses, which would affect earnings in the period the adjustments are made.

See Note 8 to the consolidated financial statements for additional information.

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We believe these spectrum license transactions have allowed us to continue to enhance the reliability of our wireless network while also resulting in a more efficient use of spectrum.

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 2024, 2023 and 2022, we made payments of $269 million, $4.3 billion and $1.6 billion, respectively, 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.

In March 2022, Verizon signed agreements with satellite operators in which operators agreed to clear C-Band spectrum in certain markets and frequencies ahead of the previously expected timeframe.

During 2022, Verizon incurred costs associated with these agreements of approximately $340 million, of which $310 million was paid as of December 31, 2022 and the remainder was paid in 2023.

This early clearance accelerated Verizon's access to more spectrum in a number of key markets to support its 5G network initiatives.

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.

In February 2021, the FCC concluded Auction 107 for C-Band wireless spectrum.

In accordance with the rules applicable to the auction, Verizon was 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 were approximately $7.5 billion.

During 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 were 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 (currently known as Array Digital Infrastructure, Inc.) and certain of its subsidiaries (collectively, 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 sale of UScellular's wireless operations and select spectrum assets to T-Mobile US, Inc., which concluded in August 2025, and the termination of certain post-closing arrangements with respect to that sale.

See Note 3 to the consolidated financial statements for additional information regarding our spectrum license transactions.

TracFone Wireless, Inc.

On November 23, 2021 (the Acquisition Date), we completed the acquisition of TracFone.

Verizon acquired all of TracFone's outstanding stock in exchange for approximately $3.5 billion in cash, net of cash acquired and working capital and other adjustments, 57,596,544 shares of common stock of the Company valued at approximately $3.0 billion, and up to an additional $650 million in future cash contingent consideration related to the achievement of certain performance measures and other commercial arrangements.

The fair value of the common stock was determined on the basis of its closing market price on the Acquisition Date.

The estimated fair value of the contingent consideration as of the Acquisition Date was approximately $560 million and represented a Level 3 measurement.

The contingent consideration payable was based on the achievement of certain revenue and operational targets, measured over a two year earn out period.

Contingent consideration payments were completed in January of 2024.

During 2024 and 2023, Verizon made payments of $52 million and $257 million, respectively, related to the contingent consideration, which are reflected in Cash flows from financing activities in our consolidated statements of cash flows.

See Note 3 and Note 9 to the consolidated financial statements for additional information.

Frontier Communications Parent, Inc.

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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 the 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.

The transaction closed on January 20, 2026.

Pursuant to the Merger Agreement, the Company's subsidiary merged with and into Frontier, with Frontier surviving such merger as a wholly owned subsidiary of the Company.

At the effective time of the merger, each share of Frontier common stock issued and outstanding immediately prior to such time (subject to certain limited exceptions) was cancelled and converted into the right to receive an amount in cash equal to $38.50 per share, without interest.

At closing, Verizon paid approximately $9.4 billion in cash, net of cash acquired, and assumed approximately $12.9 billion of Frontier's debt, resulting in a total aggregate consideration of approximately $22.3 billion.

The financial results of Frontier will be included in the Company's consolidated results beginning on January 20, 2026, the date of the closing of the acquisition.

In January 2026, we repaid approximately $5.7 billion of the debt assumed as part of the Frontier acquisition.

See Note 3 to the consolidated financial statements for additional information.

On January 30, 2026, Verizon completed the acquisition of Starry, a fixed wireless broadband provider serving multi-dwelling units in five markets across the U.S.

The aggregate cash consideration paid by Verizon at the closing of the transaction was insignificant.

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 7. Management’s Discussion and Analysis