Overview

Verizon Communications Inc. (Verizon, or the Company) is a holding company that,
acting through its subsidiaries, is one of the world's leading providers of
communications, information and entertainment products and services to
consumers, businesses and government entities. With a presence around the world,
we offer data, video and voice services and solutions on our networks that are
designed to meet customers' demand for mobility, reliable network connectivity,
security and control. We have a highly diverse workforce of approximately
133,200 employees as of September 30, 2020.

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 new digital world. During 2020, we are
focused on leveraging our network leadership; retaining and growing our
high-quality customer base while balancing profitability; enhancing ecosystems
in growth businesses; and driving monetization of our networks and solutions. We
are creating business value by earning customers', employees' and shareholders'
trust, limiting our environmental impact and continuing our customer base growth
while creating social benefit through our products and services. 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 steady and
consistent investments in our networks and platforms will drive innovative
products and services and fuel our growth.

We are consistently deploying new network architecture and technologies to
secure our leadership in both fourth-generation (4G) and fifth-generation (5G)
wireless networks. We expect that our next-generation multi-use platform, which
we call the Intelligent Edge Network, will simplify operations by eliminating
legacy network elements, speed the deployment of 5G wireless technology and
create new opportunities in the business market in a cost efficient manner. Our
network leadership is the hallmark of our brand and the foundation for the
connectivity, platforms and solutions upon which we build our competitive
advantage.

Highlights of Our Financial Results for the Three Months Ended September 30,
2020 and 2019
(dollars in millions)

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Highlights of Our Financial Results for the Nine Months Ended September 30, 2020
and 2019
(dollars in millions)

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Impacts of the Recent Novel Coronavirus (COVID-19)
This disclosure discusses the actions Verizon has taken in response to the
COVID-19 crisis and the impacts that the situation has had on our business, as
well as related known or expected trends. The disclosure in the remainder of
this Management's Discussion & Analysis of Financial Condition and Results of
Operations is qualified by the disclosure in this section on the impacts of
COVID-19 and, to the extent that the disclosure in the remainder of Management's
Discussion & Analysis refers to a financial or performance metric that has been
affected by a trend or activity, that reference is in addition to any impact
discussed in this section on the impacts of COVID-19.

COVID-19 was identified in China in late 2019 and has since spread throughout
the world, including throughout the United States (U.S.). Public and private
sector policies and initiatives to reduce the transmission of COVID-19 have
varied significantly across the U.S., but during the nine months ended September
30, 2020 a significant percentage of the U.S. population was subject to
meaningful restrictions on activities, which included limitations on the
operation of businesses including retail operations, requirements that
individuals remain in or close to their homes, school closures, limitations on
large gatherings, travel restrictions and other policies to promote or enforce
physical distancing. Similar restrictions have been implemented in many other
countries in which we operate. Some of these restrictions eased to varying
degrees during the second and third quarters of 2020. As described below, these
restrictions and our responses to them have significantly impacted how our
customers use our products and services, how they interact with us, and how our
employees work and provide services to our customers. In addition, governments
have imposed a wide variety of consumer protection measures that limit how
certain businesses, including telecommunications companies, can operate their
businesses and interact with their customers. The crisis and governmental
responses to the crisis have also resulted in a slowdown of global economic
activity, which has significantly impacted our customers. As a result, prior
trends in our business may not be applicable to our operations during the
pendency of the crisis.

The impact of COVID-19 for the remainder of the year and beyond will depend
significantly on the duration and potential cyclicality of the health crisis and
the related public policy actions, additional initiatives we may undertake in
response to employee, market or regulatory needs or demands, the length and
severity of the global economic slowdown, and whether and how our customers
change their behaviors over the longer term.

Operations

In response to the crisis beginning in the first quarter 2020, we began executing our business continuity plans and evolving our operations to


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continue to protect the safety of our employees and customers and to continue to
provide critical infrastructure and connectivity to our customers as they
changed their ways of working and living. Some of the initiatives we took
include:
•Moving over 115,000 of our 133,200 employees to remote work arrangements.
•Temporarily closing nearly 70% of our company-owned retail store locations and
moving to appointment-only access to our remaining store locations.
•Limiting our customer-focused field operations based on the criticality of the
services being provided or repaired.
•Enhancing our safety protocols for employees working outside their homes.
•Providing temporary additional compensation to employees in front line roles
that cannot be done from home.
•Adjusting other compensation and benefits programs to address circumstances
created by the crisis.
•Taking the Federal Communication Commission's (FCC's) "Keep Americans
Connected" pledge, through which we pledged to waive late fees for, and not
terminate service to, any of our consumer or small business customers who
informed us that they had been impacted financially by the COVID-19 crisis
through May 13, which we extended to June 30, 2020.
•Providing additional data allocations to permit wireless consumer and small
business customers to remain connected during the first several months of the
pandemic.
•Waiving activation and upgrade fees through digital distribution channels.
•Working with business customers to address payment needs during the crisis.
•Maintaining effective governance and internal controls in a remote work
environment.

As some of the restrictions on physical movement and limitations on business and
other activities described above eased to varying degrees during the second and
third quarters of 2020, we began the process of resuming certain of our
operations, with the health and safety of our employees and customers as our
utmost priority, and modifying some of our temporary policies. These initiatives
include:
•Transitioning to facility access at limited capacity where feasible for those
with remote work arrangements.
•Optimizing our sales channels to drive more activity through online and
telesales to serve customers.
•Reopening temporarily closed company-owned retail store locations, with nearly
100% of all company-owned retail store locations open as of September 30, 2020,
and introducing social distancing measures for employee and customer safety,
such as touch-less retail, appointment scheduling and curbside pickup options.
•Starting July 1, customers who had notified us that they had been financially
impacted by the crisis and had an unpaid balance were automatically enrolled in
our "Stay Connected" repayment program, which allows customers to pay off their
service balance over six months and extends any unpaid device payment plan
agreements by the number of months unpaid.
•Resuming certain customer-focused field operations.
•Discontinuing certain of our temporary compensation and benefits arrangements.

We expect that we will continue to revise our approach to these initiatives as
the crisis evolves in the fourth quarter 2020 and beyond in order to meet the
needs of our employees, customers and the Company in order to continue to
provide our innovative products and services.

Liquidity and Capital Resources
Verizon finished the third quarter 2020 in a strong financial position. As of
September 30, 2020, our balance sheet included:
Cash and cash equivalents     $   9.0   billion
Unsecured debt                $ 105.5   billion



As of September 30, 2020, our Cash and cash equivalents balance was $9.0 billion
compared to $2.6 billion as of December 31, 2019 and $3.0 billion as of
September 30, 2019. We made the decision to maintain a higher cash balance in
order to further protect the Company against the uncertainties of the COVID-19
crisis. As of September 30, 2020, we have no unsecured notes maturing during the
remainder of 2020 and we have less than $1.0 billion of unsecured notes maturing
in 2021. As of September 30, 2020, we had not drawn down on our $9.5 billion
revolving credit facility and the unused borrowing capacity was approximately
$9.4 billion. The revolving credit facility does not require us to comply with
financial covenants or maintain specified credit ratings, and it permits us to
borrow even if our business has incurred a material adverse change. During the
three months ended September 30, 2020, we drew $1.0 billion from export credit
facilities and issued $2.1 billion aggregate principal amount of unsecured
notes, including $1.0 billion principal amount of green bonds. We repaid the
remaining balance of the commercial paper issued in April 2020 and had no
outstanding commercial paper as of September 30, 2020. In October 2020, we
completed exchange offers with respect to 17 series of unsecured notes issued by
Verizon, allowing us to exchange the notes accepted in the exchange offers for
new unsecured Verizon notes having a later maturity date and, for certain of the
accepted series of notes, cash. We also amended our revolving credit facility to
extend the maturity date to 2024.

The COVID-19 crisis, together with other dynamics in the marketplace, has caused
borrowing costs to fluctuate significantly and, in certain cases, restricted the
ability of borrowers to access the capital markets and other sources of
financing. In order to provide financial flexibility and finance certain
investments and projects, we may continue to utilize external financing
arrangements that have been or may be affected by these market conditions.
However, we believe that our cash on hand, the cash we expect to generate from
our operations, and cash from other sources of financing available to us are,
and will continue to be, sufficient to meet our ongoing operating, capital
expenditure and investing requirements.

We expect to continue to have sufficient cash to fund our operations, although
we could experience significant fluctuations in our cash flows from period to
period during the crisis. The net cash generated from our operations provides
our primary source of cash flows. While we have historically experienced
consistently low levels of payment delinquencies among our consumer and business
accounts, beginning late
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in the first quarter 2020, we started to see increases in delinquencies across
our retail customer base and our small and medium business accounts. This change
in delinquency rate moderated during the second quarter and significantly
improved during the third quarter. Accordingly, our provision for credit losses
increased in the first quarter 2020, but remained flat in the second quarter and
decreased in the third quarter. If these levels of delinquencies begin to grow
again, they could have a material adverse impact on our cash flows. We could
also experience fluctuations in our cash flows resulting from the ongoing
impacts of the crisis on macroeconomic conditions in the U.S. and our customers
working to become current on their bills in the fourth quarter 2020 and beyond.

In addition, we issue asset-backed debt secured by our device payment plan
agreement receivables and the collections on such receivables. These
transactions require us to comply with various tests, including delinquency and
loss-related tests, which, if not met, would cause the asset-backed debt to
amortize earlier and faster than otherwise expected. The holders of our
asset-backed debt do not have any recourse to Verizon with respect to the
payment of principal and interest on the debt. However, if an early amortization
of our asset-backed debt occurs, including as a result of increased customer
delinquencies or losses relating to COVID-19, all collections on the securitized
device payment plan agreement receivables would be used to pay principal and
interest on the asset-backed debt, and our financing cash flow requirements
would increase for the twelve months immediately following an early amortization
event.

Impacts on Financial Results
Our revenues and expenses in 2020 were impacted by COVID-19 as a result of the
actions we took to care for our employees and to keep our customers connected
and as a result of our customers' changing activities as well as the
restrictions on activities and the global economic slowdown, as described below.
We estimate that the net impact of COVID-19 on our third quarter results was a
reduction of approximately $0.05 in earnings per share, primarily as a result of
decreases in wireless service revenue, decreases in advertising and search
revenue at Verizon Media Group (Verizon Media), and the operational actions we
took, as described above.

Revenues


The nine months ended September 30, 2020 included lower overage revenues and
lower fees from activations and upgrades and fewer fees, as well as lower
roaming revenues as our customers meaningfully reduced travel during the year.
As a result of our decision to keep our customers connected during the crisis,
we experienced fewer step ups in data plans in the first half of 2020. We saw
the rate of step ups increase during the three months ended September 30, 2020.
During the first half of 2020, we also saw a reduction in advertising and search
revenue in Verizon Media, as customers scaled back their advertising campaigns.
This reduction has moderated during the three months ended September 30, 2020.

We have seen considerably less churn in the consumer wireless base and lower equipment volumes and upgrade rates since the beginning of the crisis. As a result of changing customer behaviors, we experienced significantly lower equipment revenue during the nine months ended September 30, 2020.

Expenses


While certain expenses, such as equipment cost, were lower during the nine
months ended September 30, 2020 as a result of the revenue impacts discussed
above, these decreases were partially offset by an increase in commission
expense and, during the first quarter 2020, an increase in the allowance for
credit losses. The increase in commission expense was a result of an expansion
of our compensation programs for both employees and agents early in the crisis.
This COVID-19 relief program did not qualify for deferral treatment as defined
by Accounting Standards Update (ASU) 2014-09, "Revenue from Contracts with
Customers;" however the costs were not materially different on a cash basis.

As a result of waiving late fees and keeping customers connected during the
crisis pursuant to our pledge, and pursuant to various state orders and laws, we
saw increases in delinquencies across our retail customer base and certain of
our business accounts. This change in the delinquency rate has since moderated,
as discussed above; however, if the levels of delinquencies for our consumer and
small and medium business customers begin to grow again, additional provisions
to our allowance for credit losses may be required, which could be significant.
We continue to monitor customer behavior and our expected loss assumptions and
estimates.

Other


Equity and debt markets have experienced significant volatility during 2020
partially as a result of the crisis, and federal governmental actions to
stimulate the economy have significantly impacted interest rates. These
circumstances could affect the funding level of our pension plans and our
calculated liabilities under our pension and other postemployment benefit plans.
Other impacts from the crisis on our financial results in the fourth quarter and
beyond could result from a further slowdown in the global economy, additional
regulatory or legislative initiatives that impact our relationships with our
customers, and other initiatives we undertake to respond to the needs of our
employees and our customers.

We expect these impacts on our revenues and expenses to continue during the fourth quarter 2020 and beyond, though the extent of these impacts will depend on the factors described above.



Business Overview
We have two reportable segments that we operate and manage as strategic business
units - Verizon Consumer Group (Consumer) and Verizon Business Group (Business).

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Revenue by Segment for the Three Months Ended September 30, 2020 and 2019

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Note: Excludes eliminations.

Revenue by Segment for the Nine Months Ended September 30, 2020 and 2019

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Note: Excludes eliminations.

Verizon Consumer Group
Our Consumer segment provides consumer-focused wireless and wireline
communications services and products. Our wireless services are provided across
one of the most extensive wireless networks in the U.S. under the Verizon brand
and through wholesale and other arrangements. 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 by our Verizon Fios product portfolio
and over a traditional copper-based network to customers who are not served by
Fios. Our Consumer segment's wireless and wireline products and services are
available to our retail customers, as well as resellers that purchase wireless
network access from us on a wholesale basis.

Customers can obtain our wireless services on a postpaid or prepaid basis. Our
postpaid service is generally billed one month in advance for a monthly access
charge in return for access to and usage of network services. Our prepaid
service is offered only to Consumer customers and enables individuals to obtain
wireless services without credit verification by paying for all services in
advance. The Consumer segment also offers several categories of wireless
equipment to customers, including a variety of smartphones and other handsets,
wireless-enabled internet devices, such as tablets and jetpacks, and other
wireless-enabled connected devices, such as smart watches and other wearables.

In addition to the wireless services and equipment discussed above, Consumer
sells residential fixed connectivity solutions, including internet, video and
voice services, and wireless network access to resellers on a wholesale basis.
The Consumer segment's operating revenues for the three and nine months ended
September 30, 2020 totaled $21.7 billion and $64.6 billion, respectively,
representing a decrease of 4.3% and 3.3%, respectively, compared to the similar
periods in 2019. See "Segment Results of Operations" for additional information
regarding our Consumer segment's operating performance and selected operating
statistics.

Verizon Business Group
Our Business segment provides wireless and wireline communications services and
products, including data, video and conferencing services, corporate networking
solutions, security and managed network services, local and long distance voice
services and network access to deliver various Internet of Things (IoT) services
and products, including solutions that support fleet tracking management,
compliance management, field service management, asset tracking and other types
of mobile resource management. We provide these products and services to
businesses, government customers and wireless and wireline carriers across the
U.S. and select products and services to customers around the
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world. The Business segment's operating revenues for the three and nine months
ended September 30, 2020 totaled $7.7 billion and $22.9 billion, respectively,
representing a decrease of 1.7% and 2.0%, respectively, compared to the similar
periods in 2019. See "Segment Results of Operations" for additional information
regarding our Business segment's operating performance and selected operating
statistics.

Corporate and Other
Corporate and other includes the results of our media business, Verizon Media,
and other businesses, investments in unconsolidated businesses, insurance
captives, unallocated corporate expenses, certain pension and other employee
benefit related costs and interest and financing expenses. Corporate and other
also includes the historical results of divested businesses and other
adjustments and gains and losses that are not allocated in assessing segment
performance due to their nature. Although such transactions are excluded from
the business segment results, they are included in reported consolidated
earnings. Gains and losses from transactions that are not individually
significant are included in segment results as these items are included in the
chief operating decision maker's assessment of segment performance.

Verizon Media includes diverse media and technology brands that serve both
consumers and businesses. Verizon Media provides consumers with owned and
operated and third-party search properties as well as mail, news, finance,
sports and entertainment offerings, and provides other businesses and partners
access to consumers through digital advertising, content delivery and video
streaming platforms. Verizon Media's total operating revenues were $1.7 billion
and $4.7 billion, respectively, for the three and nine months ended
September 30, 2020, which represents a decrease of 7.4% and 12.1%, respectively,
compared to the similar periods in 2019.

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. During the nine months ended September 30, 2020, these investments
included $14.2 billion for capital expenditures. See "Cash Flows Used in
Investing Activities" for additional information. Capital expenditures for 2020
are currently expected to be at the upper end of the $17.5 billion to $18.5
billion range, including the continued investment in our 5G network. We believe
that our investments aimed at expanding our portfolio of products and services
will provide our customers with an efficient, reliable infrastructure for
competing in the information economy.

Global Network and Technology
We are focusing our capital spending on adding capacity and density to our 4G
Long-Term Evolution (LTE) network, while also building our next generation 5G
network. We are densifying our network by utilizing small cell technology,
in-building solutions and distributed antenna systems. Network densification
enables us to add capacity to address increasing mobile video consumption and
the growing demand for IoT products and services on our 4G LTE and 5G networks.
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. We expect that 5G technology will provide higher throughput
and lower latency than the current 4G LTE technology and enable our networks to
handle more traffic as the number of internet-connected devices grows. As of
October 2020, we have launched our 5G Ultra Wideband Network in 55 U.S. markets,
as well as numerous 5G-compatible smartphones and other devices. We have also
announced the launch of 5G nationwide service, available to 200 million people
in over 1,800 markets. Using an advanced technology called Dynamic Spectrum
Sharing, we are utilizing our current low and mid-band spectrum resources to
maximize our 5G and 4G LTE customers' experiences on the Verizon network. In
addition, as of October 2020, Verizon has commercially launched 5G Home in eight
U.S. markets.

To compensate for the shrinking market for traditional copper-based products, we
continue to build fiber-based networks supporting data, video and advanced
business services - areas where demand for reliable high-speed connections is
growing. We are evolving the architecture of our networks to a next-generation
multi-use platform, providing improved efficiency and virtualization, increased
automation and opportunities for edge computing services that will support both
our fiber-based and radio access network technologies. We call this the
Intelligent Edge Network. We expect that this new architecture will simplify
operations by eliminating legacy network elements, speed the deployment of 5G
wireless technology and create new opportunities in the business market in a
cost efficient manner.

Operating Environment and Trends
The information related to trends affecting our business in "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included in our Annual Report on Form 10-K for the year ended December 31, 2019
is updated by the disclosure included above under "Impacts of the Recent Novel
Coronavirus (COVID-19)" and the following information.

We adopted ASU 2016-13, ASU 2018-19, ASU 2019-04, ASU 2019-05, Financial
Instruments - Credit Losses (Topic 326) on January 1, 2020, using the modified
retrospective application. This method does not impact the prior periods, which
continue to reflect the accounting treatment prior to the adoption of Topic 326.
As a result, for items that were affected by our adoption of Topic 326,
financial results of periods prior to January 1, 2020 are not comparable to the
current period financial results. See Notes 1 and 6 to the condensed
consolidated financial statements for additional information.

Recent Developments
In August 2020, the FCC completed Auction 105 for Priority Access Licenses in
the 3.5 Gigahertz (GHz) Citizens Broadband Radio Service band. Verizon won 557
licenses, valued at approximately $1.9 billion, in the auction.

In September 2020, Verizon filed an application to participate in FCC Auction
107, which relates to mid-band wireless spectrum known as C-Band. The auction is
expected to commence on December 8, 2020.
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Consolidated Results of Operations




In this section, we discuss our overall results of operations and highlight
special items that are not included in our segment results. Our revenues and
expenses in the first nine months of 2020 were impacted by the COVID-19 pandemic
as a result of the actions we took to care for our employees and keep our
customers connected and as a result of our customers' changing activities,
restrictions on activities and the global economic slowdown. See "Overview" for
more information. In "Segment Results of Operations," we review the performance
of our two reportable segments in more detail.

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