| (Mark one) | |||||||
| ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) | ||||||
OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||
| For the fiscal year ended December 31, | 2017 | ||||||
| OR | |||||||
| ¨ | |||||||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) | |||||||
OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||
For the transition period from to | |||||||
| Delaware | 23-2259884 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
| 10036 | |
| (Address of principal executive offices) | (Zip Code) | |
Title of each class | Name of each exchange on which registered | |
| Common Stock, $.10 par value | New York Stock Exchange The NASDAQ Global Select Market | |
None
Large accelerated filer | Emerging growth company__ | |||||
| Non-accelerated filer __ | (Do not check if a smaller reporting company) | Smaller reporting | ||||
$182,142,289,318.
Wireless’ communications products and services include wireless voice and data services and equipment sales, which are provided to consumer, business and government customers across the United Wireline’s voice, data and video communications products and enhanced services include broadband video and data services, corporate networking solutions, basis and customers that utilize Internet of Things (IoT) services via our network. customers. credit check. devices, manufactured by various suppliers. portfolio is being used for 4G LTE. multi-use platform built on deep fiber penetration, providing increased virtualization and opportunities for edge computing services. U.S. licenses. Tower has exclusive rights to lease and operate towers over an average term of approximately 28 years. As the leases expire, American Tower has fixed-price purchase options to acquire these towers based on their anticipated fair market values at the end of the lease terms. As part of this transaction, we also sold 162 towers for $0.1 billion. We have subleased capacity on the towers from American Tower for a minimum of 10 years at current market rates, with options to renew. We and other wireless service providers, as well as equipment manufacturers, offer device payment options that distinguish service pricing from equipment pricing and blur the traditional boundary between prepaid and postpaid plans. These payment options include device payment plans, which provide customers with the ability to pay for their device over a period of time, and device leasing arrangements. Historically, wireless service providers offered customers wireless plans whereby, in exchange for the customer entering into a fixed-term service agreement, the wireless service provider significantly, and in some cases fully, subsidized the customer’s device purchase. Wireless providers recovered those subsidies through higher service fees as compared to those paid by customers on device payment plans. We and many other wireless providers have limited or discontinued this form of device subsidy. As of December 31, 2017 we had approximately 80% of our postpaid phone base on unsubsidized service pricing plans, compared with approximately 67% at December 31, 2016. As of January 2017, we no longer offer consumers new fixed-term service plans for phones. However we continue to service existing plans and provide these plans to business customers. Verizon Communications Inc. and Subsidiaries, which is incorporated by reference into this report. devices. With the Fios Mobile App, programming can be streamed to a customer’s tablet or other mobile device; and Solutions section above. With the advancement of our Intelligent Edge Network; we are evolving our network architecture around a multi-use common fiber platform that will support both our wireless and wireline technologies and will, we believe, drive even greater levels of cost efficiency. We expect that the new architecture will improve our 4G LTE coverage, speed the deployment of 5G technology, deliver high-speed Fios broadband to homes and businesses, and create new enterprise opportunities in the business market. In the Item No.PagePART IItem 1.No. BusinessPage 3PART I Item 1A.Risk Factors 18Item 1. Item 1A. Item 1B. Item 1B. Item 2. Item 3. Item 2.Properties Item 4. Item 3.Legal ProceedingsPART II 21 Item 4.Mine Safety Disclosures21PART IIItem 5. Item 6. Item 6.Selected Financial Data22Item 7. 22Item 7A. 22Item 8. 22Item 9. Item 9A. Item 9B. Item 9A.Controls and Procedures 23PART III Item 9B.Other Information 23PART IIIItem 10. Item 11. Item 11.Executive Compensation24Item 12. 24Item 13. 24Item 14. 24PART IV PART IV Item 15. 25 Signatures30Certifications CertificationsGeneralItem 1. Business General 160,900155,400 employees.segmentsunits and organize by products and services.services, and customer groups, respectively.Wireless States.Wireline data center and cloud services, security and managed network services and local and long distance voice services. We provide these products and services to consumers in the United States,U.S., as well as to carriers, businesses and government customers both in the United StatesU.S. and around the world.20162017 Verizon Annual Report to Shareowners under the headings “Management’s"Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview and - Segment Results of Operations”Operations" and in Note 12 to the consolidated financial statements of Verizon Communications Inc. and Subsidiaries,subsidiaries, which are incorporated by reference into this report.Wireless servicesproducts and productsservices across one of the most extensive wireless networks in the United States (U.S.).U.S. Verizon Wireless is the largest wireless service provider in the United StatesU.S. as measured by retail connections and revenue. At December 31, 2016,2017, Verizon Wireless had 114.2116.3 million retail connections and 20162017 revenues of approximately $89.2$87.5 billion, representing approximately 71%69% of Verizon’s aggregate revenues.“Verizon Wireless”"Verizon Wireless" in April 2000 with both Vodafone Group Plc (Vodafone) and Bell Atlantic as partners, following Vodafone’s contribution of its U.S. wireless assets into Cellco. On September 2, 2013, Verizon entered into a stock purchase agreement with Vodafone and Vodafone 4 Limited, pursuant to which Verizon agreed to acquireWe acquired all of Vodafone’s indirect 45% interest in Verizon Wireless for aggregate consideration of approximately $130 billion (the Wireless Transaction). We completed the Wireless Transaction on February 21,in 2014, and, as a result, we acquired 100%which resulted in full ownership of Verizon Wireless. The consideration paid was primarily comprised of cash and Verizon common stock.and third-generation (3G) Evolution - Data Optimized(EV-DO) networksnetwork of any U.S. wireless service provider. Our 4G LTE network is available to over 98% of the U.S. population in more than 500 markets covering approximately 314319 million people, including those in areas served by our LTE in Rural America partners. Under this program, we are working with wireless carriers in rural areas to collaboratively build and operate a 4G LTE network using each carrier’s network assets and our core 4G LTE equipment and 700 MHz C Block and Advanced Wireless Services (AWS) spectrum.We are adding capacity and density to Approximately 98.5% of our total data traffic in 2017 was carried on our 4G LTE network. We are committed to developing and deployingare workingthe ecosystems for fixed and mobile 5G wireless services. We continue to work with key partners to ensure the aggressive pace ofon innovation, standards development and appropriate requirements for this next generation of wireless technology. Based onDuring 2017, we deployed the outcome of our ongoingpre-commercial trials, we intend to be the first company to deploy alargest 5G fixed wireless broadbandtrial network in the United States. We expectU.S. with active customers. In November 2017, we announced that we will commercially launch 5G wireless residential broadband services in three to launch a fixed commercial wireless service supported by this networkfive U.S. markets in 2018.brand. In addition,brand, customers canthat obtain wireless products and services that operate on our network from resellers that purchase network access from us on a wholesale basis. retail connection represents an individual line of service for a wireless device for which a customer is billed one month in advance a monthly access charge in return for a monthly network service allowance,access to and usage beyond the allowance is billed in arrears.of network service. Approximately 95% of our total retail connections were postpaid retail connections as of December 31, 2016.2017. Our prepaid service enables individuals to obtain wireless services without credit verification by paying for all services in advance.On February 12, 2017, we announced an introductory plan, our new Verizon Unlimited plan, available to our consumerOur unlimited and small business customers, which offers among other things, unlimited domestic voice, data and texting. Both our shared data plans and the Verizon Unlimited plan include our HD (High Definition)High Definition (HD) Voice and Video Calling on compatible devices, and certain plans also include Mobile Hotspot services on compatible devices. Our HD Voice is a suite of services, enabled by Voice over LTE (VoLTE), which deliversdeliver calls over our 4G LTE network, and our Video Calling service combines an HD Voice call with real-time video. Our Mobile Hotspot service enables a customer to activate a personalWi-Fi hotspot via their smartphone that can provide Internet access to multipleWi-Fi enabled devices. Our unlimited plans provide customers the ability to stream DVD or HD quality videos, based on the service plan. We also offer various voice and shared data plans for small and large businesses.Our simplified shared data plan, the new Verizon Plan, offers customers various sizes of data packages that can be shared among up to 10 devices on a consumer account or 25 devices on a business account. The plan features Carryover Data, which allows customers to carry over unused data to the next month, and Safety Mode, which enables customers to avoid data overage fees by allowing them to continue using data at a reduced data speed after using their data allowance. Certain plans, with higher account access amounts also include calling to and voice, text and data roaming in Mexico and Canada. Customers who wish to participate in this new plan can do so by purchasing a device from Verizon either under our device payment program or at full retail, or by using their own compatible device. have historically paid higher access fees for their wireless service in exchange for the ability to purchase their wireless devices at subsidized prices. We have largely discontinued this formAs of device subsidy. UnderJanuary 2017, we no longer offer consumers new fixed-term service plans for phones; however, we continue to offer subsidized plans to our business customers, and we also continue to service existing fixed-term plans as consumers move to unsubsidized pricing driven by the activation of devices purchased under the Verizon device payment program. Under this program, our eligible wireless customers can purchase wireless devices under a device payment plan agreement. Customers that activate service on such devices purchased under the device payment program or on a compatible device that they already own pay lower accessservice fees (unsubsidized service pricing) as compared to those under our fixed-term service plans. Generally, customers entering into device payment plan agreements on or after June 1, 2015 are required to repay all amounts due under their device payment plan agreement before being eligible to upgrade their device. However, certain devices are subject to promotions that allow customers to upgrade to a new device after paying down a specified percentage of the balance on their device payment plan and trading in their device in good working condition.Customers can manage theirWhile each of our prepaid services onplans has traditionally covered a single line of service for one device, in 2017, we expanded our prepaid offerings by giving families the device using their My Verizon Mobile applicationability to combine individual prepaid plans and choose the data allotment for each member of the family. As with all of our prepaid plans, the family plan does not require an annual contract or logging in to the My Verizon website.3GEV-DOthird generation (3G) modules or that are used in conjunction with separate devices that enable access to this service, such as USB modems, JetpacksTMJetpacks™ and other dedicated devices that provide a mobileWi-Fi connection.consisting ofthrough applications providingthat provide music, video, gaming, news and other content. Our business-focused offerings, which are designed to increase productivity, include solutions that enable customers to access the Internet, their corporate intranets ande-mail across our diverse portfolio of wireless devices. Our location-based services provide our customers with directions to their destination and enable our business customers to locate, monitor and communicate with their mobile field workers. Our global datainternational travel services allow our customers to access voice, text and data services and the Internet on allmany of our "World" 3G or 4G smartphones, and many tablets andor basic phones from hundreds ofover 200 international destinations that we sell. A majority of the wireless devices used by our customers can run applications and services offered by Google (a subsidiary of Alphabet Inc.) via Google Play or Apple Inc. (Apple) via iTunes.Our customers can also make and receive calls on their home phone handsets using our wireless network through our Home Phone Connect service or Verizon 4G LTE Broadband Router with Voice service. destinations. offer LTE Internet (Installed), a high-speed Internet service that provides customers with Internet connections in their homes using our 4G LTE network.We provide network access and, in some cases, enhanced value-added servicesneeded to support wireless connections for the Internet of Things (IoT). Our IoT services offerend-to-end solutions fordeliver various IoT vertical markets, such as:Fleet managementproducts and telematics – We providein-vehicle solutions that enable vehicle navigation, GPS tracking, engine diagnostic monitoring and maintenance alerts;Energy – We offer solutions targeted to providing the energy sector with greater visibility into energy usage and the ability to remotely monitor devices used to track energy usage;Agricultural technology – We provide solutions that give farmers critical data they need to improve yields and save costs; andSmart Communities – Our solutions enable localities to collect data from IoT and connected machine technologies with the goal of improving public safety, managing traffic, reducing pollution, identifying revenue generation opportunities, making efficient use of limited resources and attracting businesses, residents and workers.We alsoservices. In addition, we work with various companies that purchase network access from us to connect their Open Development certified devices, bundled together with their own solutions, which they sell toend-users.devices.and 3GEV-DOhigh-speed data services.services and some are also enabled to utilize 3G as well. These devices run on various operating platforms, primarily Apple iOSsystems. We offer both 3G enabled and Google Android. The4G enabled basic phones we offer are 3GEV-DO-enabled andthat also have HTML-browsing capability.capabilities.from multiple manufacturers, all of whichthat can access the Internet via our 4G LTE network or aWi-Fi connection. The tablets run primarily on the Apple iOS and Google Android operating systems. In addition, we offer dedicated devices, which we refer to as JetpacksTM, that provide a mobileWi-Fi 4G LTE and/or 3GEV-DO connection and are capable of connecting multipleWi-Fi enabled devices to the Internet at one time. Our customers can also access the Internet wirelessly at broadband speeds on their computers via data cards, USB modems or through the use of certain laptop computers and netbooks enabled to access our wireless network.We purchase a substantial majority of our wirelessaccessoriesother notifications when they are away from Apple, Samsung, Motorola Mobility, Google, LG Electronics and HTC.A key component of all wireless devices istheir compatible phones. These smart watches can share the chipset, which containssame mobile number as the “intelligence” of the device. The LTE chipsets used in our 4GLTE-enabled devices are manufactured by various companies, each using its own 4G LTE chipset technology. To support Code Division Multiple Access (CDMA)-1XRTT andEV-DO technologies (with and without 4G LTE), most of our wireless device suppliers currently rely on Qualcomm Incorporatedcustomer’s phone, allowing for the manufacture and supply of chipsets. In addition, there are a number of other components common to wireless devices provided by various electronic component manufacturers that we do not deal with directly.seamless communications on-the-go.and 3GEV-DO networksnetwork of any service provider in the United States,U.S., with licensed and operational coverage in all of the 100 most populous U.S. metropolitanMetropolitan areas. As of December 31, 2016,2017, our 4G LTE network covered approximately 314319 million people in the United States,U.S., including those in areas served by our LTE in Rural America partners. We currently have 2122 LTE in Rural America partners that provide 4G LTE coverage to an area covering approximately three million people.Theisas a key factor for our continued success and we strive to provide our customers with the highest network reliability for their wireless services. We believe that steady and consistent network and platform investments provide the foundation for innovative products and services that will fuel profitable growth. The depth and breadth of our network provides our fundamental strength and is the basis for our competitive advantage.plan to continue to upgradehave been densifying our 4G LTE network primarily to increase its capacity and density, by utilizing small cell technology,in-building solutions and distributed antennae systems in additionantenna systems. Network densification not only enables us to deploying existing AWS spectrum.add capacity to address increasing mobile video consumption and the growing demand for IoT products and services, but also positions us for the future deployment of 5G technology. We are also exploring strategic opportunitiesutilizing existing network capabilities to increasehandle increased traffic without interrupting the quality of the customer experience. We have and will continue to deploy advanced technologies such as higher orders of modulation, 4x4 multiple input multiple output, licensed assistance access, and increased cell site density primarily through small cell deployment. Just over 50% of our network capacityavailable low- and efficiency through selective acquisitions ofmid-band spectrum licenses.United StatesU.S. where wireless service is available. We also offer a variety of international wireless voice and data services to our customers through roaming arrangements with wireless service providers outside of the United States.U.S. Certain of our roaming agreements can be terminated at willat-will by either party upon several months’ notice; however, we do not believe that the termination of any of theseat-will agreements would have a material adverse effect on our business.platforms areplatform is 4G LTE, and 3G CDMA. 4G LTEwhich provides higher data throughput performance for data services at a lower cost compared to that offered by 3G technologies.In 2014, we commercially launched our mobile VoLTE service.is now being used, in addition to CDMA3G Code Division Multiple Access (CDMA) technology, to provide voice calling services to our customers. technology. We are densifying our 4G LTE network to add capacity andpre-position us for 5G technology. We launched the Verizon 5G Technology Forum with key industry partners to develop 5G requirements and standards and conduct testing to accelerate the introduction of 5G technologies. We believeexpect that 5G technology will provide higher throughput than the current 4G LTE technology, lower latency and the abilityenable our network to handle more network traffic as the number of Internet-connected devices grows. Based on the outcome of our ongoingpre-commercial trials, weWe intend to be the first company to deploy a 5G fixed wireless broadband network in the United States. We expectU.S. Based on the outcome of our pre-commercial trials in 2017, we announced in November 2017 that we will commercially launch 5G wireless residential broadband services in three to launchfive U.S. markets in 2018.fixed commercial wireless service supported by this network in 2018.have licensesare licensed by the Federal Communications Commission (FCC) to provide these wireless services on portions of the 800 MHz band, also known as cellular spectrum, the 1800-1900 MHz band, also known as Personal Communication Services (PCS) spectrum, portions of the 700 MHz upper C band and AWS 1 and 3 spectrum in the 1700 and 2100 MHz bands, in areas that, collectively, cover nearly all of the population of the United States.Federal Communications Commission (FCC)FCC completed an auction of 65 MHz of spectrum in theAWS-3 band. We participated in that auction and were the high bidder on 181 spectrum licenses, for which we paid cash of approximately $10.4 billion. The FCC granted us these spectrum licenses in April 2015.ever faster rates of speed. Additional spectrum may also allow us to offer new products enabled by advances in technology, including emerging 5G and IoT services. We can meet our future spectrum needs by acquiring licenses or leasing spectrum from other licensees, or by acquiring new spectrum licenses from the FCC, if and when future FCC spectrum auctions occur. In March 2016,addition to spectrum, we believe that future demand will also be met as we increase the FCC commenced a voluntary incentive auctiondensity of television broadcast spectrum in the 600 MHz frequency range. The auction has finished the reverseour networks and forward clock phases. Any results will be disclosed by the FCC after the completion of the assignment phase and after the FCC announces the close of the auction by public notice.Since we and competing wireless service providers have experienced spectrum shortages in certain markets and may have spectrum surpluses in others, fromdeploy advanced technologies.certain of our capacity and expansion needs in the future. In othercertain cases, we have entered into intra-marketintra market spectrum swaps designed to increase the amount of contiguous spectrum within frequency bands in a specific market. Contiguous spectrum improves network performance and efficiency. These swaps, as well as any spectrum purchases, are subjectrequire us to obtainingobtain governmental approvals for the transfer of spectrum licenses in each instance.20162017 Verizon Annual Report to Shareowners in Note 2 to the consolidated financial statements of Verizon Communications Inc. and Subsidiaries, which is incorporated by reference into this report.Nokia and Ericsson are currently our primary network vendors for our LTE network deployments for macro sites as well as small cells. Our primary CDMA cell site equipment infrastructure vendors are Nokia, which provides more than half of our CDMA cell site equipment, and Ericsson, which provides nearly all of our remaining cell site equipment. We also rely on Nokia and Ericsson for our switching equipment. such as Crown Castle International Corp. and American Tower Corporation (American Tower), as lessors or managers of a portion of our existing tower sites.business unitsbusinesses through the Wireless Business Group, a sales and marketing organization that encompasses all of Verizon Wireless’ solutions for medium and large business, and Verizon Wireline's Enterprise Solutions group, which serves all of our government customers. Our marketing plan includes a coordinated program of television, print, radio, outdoor signage, Internet andpoint-of-sale media promotions designed to present our corporate message consistently across all of our markets. We use a combination of direct, indirect and alternative distribution channels in order to increase customer growth while reducingcontrolling customer acquisition costs.These stores are part of a broader initiative that includes the redesign of our retail stores nationwide into “Smart Stores,” which showcase the same mobile lifestyle zones on a smaller scale. In addition, our direct channel includes ourbusiness-to-business sales operations and systems organization and is focused on supporting the wireless communications needs of consumers and local, regional and national business customers. In addition, we have a telemarketing sales force dedicated to handling incoming calls from customers, and we offer fully-automated,end-to-endweb-based sales of wireless devices, accessories and service plans.United States,U.S., as well as through the Internet. The majority of these agents sell both our postpaid and prepaid products and services and do so under exclusive selling arrangements with us. We also have relationships with high-profile national retailers, such as Best Buy,Wal-Mart and Target, towhich sell our postpaid and prepaid wireless products and services. Stores such as Dollar Generalservices, and with various drugstore chains, which sell our prepaid products and services.isremains intense as a result of continuing increasessaturation in the wireless market, penetration levels,increased network investment by our competitors, the development and deployment of new technologies, the introduction of new products and services, new market entrants, the availability of additional spectrum, both licensed and unlicensed, and regulatory changes. Competition may also increase as smaller, stand-alone wireless service providers merge or transfer licenses to larger, better capitalized wireless service providers.•Network reliability, capacity and coverage. We believe that a wireless network that consistently provides high-quality and reliable service is a key differentiator in the U.S. market and driver of customer satisfaction. Lower prices, improved service quality and new wireless service offerings, which in many cases include video content, have led to increased customer usage of wireless services, which, in turn, puts pressure on network capacity. In order to compete effectively, wireless service providers must keep pace with network capacity needs and offer highly reliable national coverage through their networks. We believe that our investments in our 4G LTE network to increase network capacity will enable us to meet consumer demand.•Pricing.Service and equipment pricing play an important role in the wireless competitive landscape. As the demand for wireless services continues to grow, we and other wireless service providers are offering service plans at competitive prices that include unlimited voice minutes and text messages and a specific amount of data access in varying megabyte or gigabyte sizes or, in some cases, on an unlimited basis subject to certain restrictions. These allowances will vary from time to time as part of promotional offers or in response to market circumstances. We and many other wireless service providers also allow customers on certain plans to carry over unused data allowances to the next billing period, or to stay online at a reduced data speed after using all of a data allowance for a billing period. In addition, some wireless service providers have bundled wireless service offerings with other products while others offer promotional pricing and incentives targeted specifically to customers of Verizon Wireless.•Customer service.We believe that high-quality customer service is a key factor in retaining customers and attracting new customers, including those of other wireless providers. Our customer service, retention and satisfaction programs are based on providing customers with convenient andeasy-to-use products and services and focusing on their needs in order to promote long-term relationships and minimize churn. Our competitors also recognize the importance of customer service and are also focused on improving in this area.As part of our efforts to transform and simplify the customer experience, we launched a new My Verizon app, which allows customers to manage their price plan, data usage, account and billing from their device. As part of our efforts to promote long-term relationships with our customers, we offer Verizon Smart Rewards, which is a program that offers a wide variety of rewards to customers in exchange for points they earn in connection with their account-related interactions with Verizon Wireless. The program offers customers discounts and savings on merchandise from well-known brands, as well as discounts and other offers at local shopping and dining venues.•Product and service development.As wireless technologies develop and wireless broadband networks proliferate, continued customer and revenue growth will be increasingly dependent on the development of new and enhanced data products and services. We continue to pursue the development and rapid deployment of new and innovative wireless products and services both independently and in collaboration with application and content providers. We also collaborate with various device manufacturers in the development of distinctive smartphones and other wireless devices that can access the growing array of data applications and content available over the Internet. We continue to focus on increasing the penetration of smartphones, tablets and other connected devices throughout our customer base.•Sales and distribution.The key to achieving sales success in the wireless industry is the reach and quality of sales channels and distribution points. We believe that attaining the optimal combination of varying distribution channels is important to achieving industry-leading profitability, as measured by operating income. We endeavor to increase sales through our company-operated stores, outside sales teams and telemarketing,web-based sales and fulfillment capabilities, our extensive indirect distribution network of retail outlets and prepaid replenishment locations, and through manufacturers of laptops and netbooks with embedded 4G LTE and 3G modules that can access the Internet on our network at broadband speeds. In addition, we sell network access to both traditional resellers, which resell network services to theirend-users, and to various companies to enable wireless communications for their IoT devices or services.•Capital resources.In order to expand the capacity and coverage of their networks and introduce new products and services, wireless service providers require significant capital resources. We generate significant cash flow from operations, as do some of our competitors.industry, includingindustry. These include the factors described above, as well as new technologies, new business models, changes in customer preferences, regulatory changes, demographic trends, economic conditions and pricing strategies that bundle the services of wireless and cable competitors.Wireline United States,U.S., as well as to carriers, businesses and government customers both in the United StatesU.S. and around the world. In 2016,2017, Wireline revenues were $31.3$30.7 billion, representing approximately 25%24% of Verizon’s aggregate revenues.On February 5, 2015,entered into a definitive agreement with Frontier Communications Corporation (Frontier) pursuant to which Verizon sold itscompleted the sale (Access Line Sale) of our local exchange business and related landline activities in California, Florida and Texas, including Fios Internet and video customers, switched and special access lines and high-speed Internet service and long distance voice accounts in these three states to Frontier Communications Corporation (Frontier) for approximately $10.5 billion (approximately $7.3 billion net of income taxes), subject to certain adjustments and including the assumption of $0.6 billion of indebtedness from Verizon by Frontier. The transaction, which included the acquisition by Frontier of the equity interests of Verizon’s incumbent local exchange carriers (ILECs) in California, Florida and Texas, did not involve any assets or liabilities of Verizon Wireless. The transaction closed on April 1, 2016.On 20, 2016, we entered into a purchase agreement to acquire XO Holdings’ wireline business (XO), which ownsowned and operatesoperated one of the largest fiber-based IPInternet Protocol (IP) and Ethernet networks for approximately $1.8 billion, subject to adjustment. We completedin the acquisition on February 1, 2017. Separately,U.S. Concurrently, we entered into ana separate agreement to leaseutilize certain wireless spectrum from a wholly-owned subsidiary of XO Holdings, NextLink, that holds its wireless spectrum. Verizon hasspectrum, which included an option, exercisable undersubject to certain circumstances,conditions, to buy thatthe subsidiary.We are reinventing In February 2017, we completed our network architecture around a common fiber platform that will support both our wireless and wireline technologies. We expect that this new “One Fiber” architecture will improve our 4G LTE coverage, speed the deploymentacquisition of 5G, deliver high-speed Fios broadband to homes and businesses and create new opportunitiesXO for total cash consideration of approximately $1.5 billion, of which $0.1 billion was paid in the small and medium business market. 2015.2016,2017, we announcedexercised our One Fiber strategyoption to buy NextLink for approximately $0.5 billion, subject to certain adjustments. The transaction closed in January 2018. The spectrum acquired as part of the city of Boston. We launched One Fibertransaction will be used for consumer and business services to customers in Boston late in 2016.On December 6, 2016,our 5G technology deployment.with Equinix,to purchase certain fiber-optic network assets in the Chicago market from WideOpenWest, Inc. (WOW!), a leading provider of communications services. The transaction closed in December 2017. In addition, the parties entered into a separate agreement pursuant to which VerizonWOW! will sell 24 customer-facing data center sites incomplete the United States and Latin Americabuild-out of the network assets we acquired by the second half of 2018. The total cash consideration for approximately $3.6 billion, subject to certain adjustments. The sale does not affect Verizon’s data center services delivered from 27 sites in Europe, Asia-Pacific and Canada, or its managed hosting and cloud offerings. The transaction is subject to customary regulatory approvals and closing conditions, andthe transactions is expected to close duringbe approximately $0.3 billion, of which $0.2 billion is related to the first halftransaction that closed in December 2017.2017.customerscustomer groups targeted by these offerings – mass markets, global enterprise- Consumer Markets, Enterprise Solutions, Partner Solutions and global wholesale.MassBusiness Markets.Massoperationsprovides residential fixed connectivity solutions including Internet, TV, and voice services. We provide broadband Internetthese services over our 100% fiber-optic network under the brand "Fios" and video services (including high-speed Internet, Fios Internet and Fios video services), and local exchange (basic service andend-user access) and long distance (including regional toll) voice servicesover a traditional copper-based network to residential and small business subscribers.customers who are not served by Fios. In 2016, Mass2017, Consumer Markets revenues were $14.4$12.8 billion, representing approximately 46%42% of Wireline’s aggregate revenues.services.services. We offer our Fios Internetcustomers fast and high-speed Internet services with varying throughput speeds. We believe that as consumersreliable 100% fiber-optic internet connectivity. As customers connect more devices in their home and stream more high definition video, they will require increased broadband speeds. Withthe need for a fast and reliable internet connection is growing. In 2017, we introduced our Fios Quantum broadband service and certain other data services, our customers can achieve symmetrical upload and downloadGigabit Connection in the marketplace, offering speeds of up to 500940 Mbps on download and we recently launched our Instant Internet service, which allows customers in certain markets to achieve symmetrical upload and download speeds of 750880 Mbps and higher.on upload. As more data storage and, in some cases, processing is moved to the cloud,additional cloud-based applications are introduced, we believe that customers will place an increasing value on upstream bandwidth performance that matches what they already receive for downloads.download. In other areas of our footprint where Fios service is not available, we offer high speed Internet (HSI) using Digital Subscriber Line (DSL) technology.2016,2017, Fios video services were available to approximately 14 million homes across 9 states, as well as the District of Columbia. We have several offerings available to our Fios TV customers, including:including•Fios Quantum TV,which provides customers the ability to record up to 12 shows at once and control live TV from any room in their home;•Fios Custom TV,which provides customers local versions of the Fox, CBS, NBCU, and ABC broadcast stations and other similar local content and offers customers the option of purchasing an Essentials plan that includes a base set of lifestyle, entertainment, pop culture and content for children and national news networks, or a Sports and More plan that includes national and regional sports networks as well asnon-sports national networks. Customers can add more sets of categorized channels to their Custom TV package for an additional monthly fee; and•Fios on Demand,which gives Fios customers the ability to watch content virtually anytime and anywhere, on any compatible device. Customers who subscribe to Fios Internet and video service also have the ability to upload their photos, music and videos to their personal Fios on Demand Library, which gives them access to this content via various data-capable devices. With the Fios Mobile App, programming, such as ESPN, TNT, Nickelodeon, HBO and TBS, can be streamed to a customer’s tablet or other mobile device.We continue to partner with major corporations to offer further interoperability with various products such as video game consoles, smart televisions and tablets. This technology further expands our initiative to provide customers with the ability to watch content virtually anytime and anywhere, on any compatible device. Customers who subscribe to Fios Internet and video services also have the ability to upload their photos, music and videos to their personal Fios on Demand Library, which gives them access to this content via various data-capable device.◦ ◦ ◦ ◦ ◦ ◦ and long distance and toll-free calling andalong with voice messaging services, as well as Voice over Internet protocol (VoIP)conferencing and contact center solutions. Core data includes private line and data access networks. Core services which usealso include the Internet or private broadband networksprovision of customer premises equipment, and installation, maintenance and site services. We continue to transmittransition customers out of copper-based legacy voice communications.Global EnterpriseGlobal Enterprise offers strategic services and other core communicationsdata services to medium and large business customers, including multinational corporations, as well as state and federal government customers. Global Enterprise markets these services through Verizon Enterprise Solutions. In 2016, Global Enterprise revenues were $11.6 billion, representing approximately 37% of Wireline’s aggregate revenues.Verizon Enterprise Solutions offers an array of advanced information and communication technologyfiber services, including Global Internet Protocol (IP) network, cloudIP and IT solutions, and business communications, IoT, data, security and mobility services.•Network products and solutions– These products and solutions primarily include our Private IP, Public Internet, Ethernet and optical networking services. Our Private IP service enables customers around the world to communicate over a virtual private network using a variety of access methods, including Ethernet and Verizon Wireless 4G LTE. Our Public Internet services provide Internet connectivity through a variety of low and high-speed options. Our Ethernet portfolio includes access services that allow customers to connect network environments around the world and enable applications and technologies to work seamlessly and with little disruption, as well as local and long distance layer 2 services that include Metro local area network (LAN), long distance switched and dedicated architectures. Optical networking services include technologies that help customers handle bandwidth demands and control their costs.•IT solutions and cloud services – Our IT solutions and cloud services are built to help our enterprise customers drive innovation and business growth. We offer IT infrastructure services that include colocation and managed hosting in data centers around the globe. Our cloud services include computing, storage, backup, recovery and application platforms our customers rely on to run their business operations.•Business communications services– Business communications services primarily include IP communications services, which simplify network management and drive operational efficiencies by enabling the convergence of voice and data traffic on the same access connection; dedicated Internet access, which provides enterprise customers with high-bandwidth dedicated access to Verizon’s global network; unified communications and collaboration capabilities, which enable customers to communicate in real-time through VoIP and IP conferencing, and emergency communication services, which allow customers to respond effectively to emergencies while maintaining business continuity.•Security services– We offer a suite of data security services to help companies secure their networks, data, applications and infrastructure from security threats while building customer trust and confidence.•Core services– Core services include core voice and data services, which consist of a comprehensive portfolio of global solutions utilizing traditional telecommunications technology, such as conferencing and contact center solutions, and private line and data access networks. Core services also include providing customer premise equipment, and installation, maintenance and site services. We are continuing to transition customers out of copper-based legacy voice and data services to fiber services, including IP and Ethernet.Global WholesaleGlobal Wholesalewireless and otherwireless carriers that use our facilities to provide services to their customers. In 2016, Global Wholesale2017, Partner Solutions revenues were $5.0$4.9 billion, representing approximately 16% of Wireline’s aggregate revenues. A portion of Global WholesalePartner Solutions revenues are generated by a few large telecommunications companies, most of which compete directly with us.Global Wholesaleit jointly marketsare offered to comply with Verizon’s other business units through Verizon Enterprise Solutions:•Data services.Wetelecommunications regulations. In addition, we offer a robust portfolio of data services with varying speeds and options to enhance our wholesale customers’ networks and provide connections to theirend-users and subscribers. Our data services include high-speed digital data offerings, such as Ethernet and Wavelength services, as well as core data circuits, such as DS1s and DS3s. In addition, we receive revenue from data services that is generated from carriers that buy dedicated local exchange capacity to support their private networks.Data services also include certain value-added businesssuch as colocation, resale and unbundled network elements in compliance with applicable regulations.which leverage manyIP Networking, advanced voice solutions, security, and managed information technology (IT) services to U.S.-based small and medium businesses, state and local governments, and educational institutions. In 2017, Business Markets revenues were $3.6 billion, representing approximately 12% of Wireline’s aggregate revenues.same offerings availabletraditional voice and networking products and Fios services noted in the GlobalConsumer Markets section above, Business Markets also offers traditional circuit-based network products and services, advanced networking solutions, advanced communications services, and security services, as noted in the Enterprise portfolio, including:•Managed services, which offer wholesale customers security, remote access, web applications and the opportunity to outsource the management of their networks to Verizon;•Mobility offerings, which enablewholesale customers to enhance their portfolio to triple-play or quad-play capability by leveraging wireless devices and services offered through Verizon Wireless that can be packaged and resold under their own carrier brand; and•Security services, which provide wholesale customers integrated solutions to help their enterpriseend-users secure their networks and data.•Voice services.We provide switched access services that allow carriers to complete theirend-user calls that originate or terminate within our territory. In addition, we provide originating and terminating voice services throughout the United States and globally utilizing our time-division multiplexing (TDM) and VoIP networks.•Local services.We offer an array of local dial tone and broadband services to competitive local exchange carriers, some of which are offered to comply with telecommunications regulations. In addition, we offer services such as colocation, resale and unbundled network elements in compliance with applicable regulations.United StatesU.S. and around the world to provide services and solutions to its customers.•Fios.Ourfiber-to-the-home network through which we provide our Fios residential broadband service has passed over 16.9 million premises in the United States as of December 31, 2016. Residential broadband service has seen significant growth in bandwidth demand over the past several years, and we believe that demand will continue to grow. The continued emergence of new video services, new data applications and the proliferation of IP devices in the home will continue to drive new network requirements for increased data speeds and throughput. We believe that the Passive Optical Network (PON) technology underpinning Fios makes us well positioned to meet these demands in a cost effective and efficient manner. Our PON technology provides the flexibility to adapt our network to deliver increased data speeds and new services without major overhauls or replacements to the fiber-optic infrastructure.•Global IP. Verizon owns and operates one of the largest global fiber networks in the world, providing connectivity to business customers in more than 150 countries. Our global IP network includes long haul, metro and submarine assets that span over 800,000 route miles and enable and support far reaching international operations.“everything-as-a-service” "everything-as-a-service" model in which business customers seek cloud-based, converged enterprise solutions delivered securely via managed and professional services. With the continued deployment of packet optical transport strategy, Verizon is creating a single, high-capacity global network platform that combines optical transport with advanced packet switching technology. The result is a global IP network that can offer powerful solutions to these service demands.markets.market. We compete with these providers for large contracts to provide integrated services to global enterprises. Many of these companies have strong market presence, brand recognition and existing customer relationships, all of which contribute to intensifying competition that may affect our future revenue growth.•Bandwidth (speed) and network reliability:Consumers and small business customers are seeking to leverage high-speed connections for entertainment, communications and productivity. As online and online-enabled activities increase, so will bandwidth requirements, both downstream and upstream. To succeed, we and other network-based providers must ensure that our networks can meet these increasing bandwidth requirements.In addition, network reliability and security are increasingly important competitive factors in the global enterprise market. We continue to invest in our network to be able to meet growing bandwidth demand and provide the most reliable and secure network.•Pricing:Cable operators, telecommunications companies and integrated service providers use pricing to capture market share from incumbents. Pricing is also a significant factor asFor example, VoIP and portal-based calling is free or nearly free to customers and is often supported by advertising revenues.•Customer service: Customers expect industry-leading service from their service providers. As technologies and services evolve, the ability to excel in this area is important for customer acquisition and retention. In Mass Markets, we compete in this area through our service representatives and online support. In Global Enterprise, we provide our customers with ready access to their system and performance information, and we conduct proactive testing of our network to identify issues before they affect customers. In the Global Wholesale business, we believe service improvement can be achieved through continued system automation initiatives.•Product differentiation:As a result of pricing pressures, providers need to differentiate their products and services. Customers are shifting their focus from access to applications and are seeking ways to leverage their broadband and video connections. Converged features, such as integrated wireless and wireline functionality, are becoming similarly important, driven by both customer demand and technological advancement.•Innovation:The delivery of new and innovative products and services has been accelerating. To compete effectively, providers need to continuously review, improve and refine their product portfolio and develop and rapidly deploy new products and services tailored to the needs of the customer.MassPartner Solutions business, we believe service improvement can be achieved through continued system automation initiatives.offerdeliver digital products and services. We continue to market competitive bundled offerings that include high-speedFios Internet, access, digital televisionTV, and voice services. In addition, in 2017 we introduced market offers targeted to our Verizon Wireless customers. Several major cable operators also offer bundles with wireless services through strategic relationships. In addition, customers have more choices for obtaining video content from various online services and that content can be accessed on a TV, computer, tablet or mobile phone.global enterpriseEnterprise Solutions market, the customer’s need to reduce technical complexity coupledcompetition remains intense, primarily as a result of increased industry focus on technology convergence. We compete in this area with the growth opportunity created by technology convergence is driving the expansion of the competitive landscape. Major competitors include system integrators, carriers and hardware and software providers. SomeIn addition, some of the biggest companies in IT services are making strategic acquisitions, divestingnon-strategic assets or forging new alliances to be better positioned for a rebound in technology spending. Many new alliances and acquisitions have focused on emerging fields, such as cloud computing, software delivery, communication applications and other computing tasks via the network, rather than onin-house machines. Carriers have also utilized acquisitions to make significant inroads into enterprise outsourcing markets that have long been dominated by the major IT outsourcers.Global WholesaleWe also competecompetitive local exchange carriers (CLECs). Our telephone operations generally have been required to sella consumer-like "look and feel" are becoming key differentiators for both our SMB and SLED customers. SMB customers are seeking full life-cycle offers that radically simplify the process of starting, running and growing their businesses, while SLED customers want similar services to CLECs at significant discounts from the prices our telephone operations charge their retail customers.that are high quality and secure that enable material improvement in citizen outreach, public safety and city infrastructure performance, all of which help attract inward investment and community prosperity.New Product DevelopmentMedia and Strategic InitiativesTelematicsTo execute this strategy, we have created an organization devoted to the development of new products and the cultivation of new businesses. This organizationVerizon is focused on leveraging all of our assets to create innovative products and services that can provide our customers with integrated solutions that address their needs. Several strategic initiatives have been undertaken by this organizationVerizon in the areas of digital media, interactive entertainment and IoT and telematics(including telematics) products and services.As a market leader in offering differentiated solutions to our connected customers across their devices at home, at work and on the go, Verizon will continue to focus on strategic partnerships as an important pillar of our future strategy. Strategic partnerships are aimed at complementing and augmenting our strengths, expanding our addressable market, accelerating our pace of innovation, enabling faster delivery of solutions such as media and IoT to the marketplace and, where possible, lowering our market and execution risk. Strong partnerships are expected to further our efforts to offer comprehensive solutions for our customers. We look to formulate strategic partnerships and alliances with a global orientation, which we believe will benefit us in terms of technology sourcing, content acquisition, consumer insights and application ecosystems.We believe these investments will assist us in bringing innovative next generation products and services to market and uncovering new sources of revenue, increasing revenue from existing projects and leveraging our strengths across the company.Digital and Interactive Entertainment During 2015,acquired Millennial Media, anconnects advertisers with target audiences through a streamlined advertising technology business.In July 2016, we entered intostack that utilizes a stock purchase agreement (the Purchase Agreement) with Yahoo! Inc. (Yahoo). Pursuant to the Purchase Agreement, upon the termscombination of data, content and subject to the conditions thereof, we agreed to acquire the stock of one or more subsidiaries of Yahoo holding all of Yahoo’stechnology. Verizon has combined Yahoo's operating business with our existing Media business, which included AOL's operations and the content delivery platform of Verizon Digital Media Services (VDMS), to create a new organization named Oath, whichapproximately $4.83 billion in cash, subject to certain adjustments (the Transaction). On February 20, 2017, we entered into an amendment to the Purchase Agreement, pursuant to which, among other things, the Transaction purchase price will be reduced by $350 million to approximately $4.48 billion in cash, subject to certain adjustments. The Transaction is expected to provide us with a valuable portfolio of online properties and mobile applications, including market leading content in sports, finance, news and email services, which have attracted over one billion monthly active consumer views. The Transaction is expected to also expand our analytics and ad tech capabilities and enhance our competitive position and value proposition to advertisers.future. Additional discussion of the Transactiontransaction is included in the 20162017 Verizon Annual Report to Shareowners in Note 2 to the consolidated financial statements of Verizon Communications Inc. and Subsidiaries, which is incorporated by reference into this report.
In 2015, we launched go90, a mobile-first social entertainment platform that provides the opportunity forad-supported mobile video streaming as well as subscription-based services. Digital content available on the go90 platform includes live events, popular web and television content and original content. In 2016, we introduced StreamPass, which offers streaming of live sports through go90 free of data charges to Verizon Wireless customers on certain data plans. We also introduced FreeBee Data, a sponsored data service that enables content providers to provide our customers with access to some or all of the provider’s mobile content or to sponsor specific consumer actions on aper-click basis, free of data charges to the customer.
We have made investments in converging technologies and services involving content delivery networks (CDNs), video streaming and related consumer hardware to leverage new content models. Our wireless network enables us to move towards a unified video strategy that positions us to take advantage of this growth opportunity. We began using Multimedia Broadcast Multicast Service technology to develop our LTE Multicast service, which we use to deliver live events in go90. This service has the potential to enhance our network efficiency and provide our customers with access to live streaming video content with virtually no buffering, regardless of the number of devices using the service. We also believe it is important to have rights to deliver content over a wireless network that do not require an authentication back to a subscription agreement. For example, our NFL agreement allows our customers to access certain games live on our 4G LTE network without authenticating back to any subscription.
We continue to invest in Verizon Digital Media Services,VDMS, which offers a scalable platform for delivering content, including live broadcasts, video on demand, games, software and websites, to our customers on their devices at any time. As the digital platform reshapes the delivery of media and entertainment content, there is an increasing need for a stable, high-quality video delivery platform. We are focused on providing a simpleend-to-end global platform for the delivery of media to customers,consumers, which we believe will be superior to that offered by the existing and highly fragmented media delivery ecosystem. This platform is targeted at media and entertainment companies and other businesses focused on delivering their digital products and services through the Internet. We also expect, through thisthe VDMS platform, to further integrate oursupport video initiatives and offerings, such as Fios and wireless, offerings.
Since its market customer support. investors as soon as reasonably practicable after such reports are electronically filed with the Securities and Exchange Commission (SEC). We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.with regulations and build new business models. Although IoT growth is expanding broadly, and adoption is particularly strong in the telematics and transportation industries as well asin addition to the fields of smart communities, healthcare, utilities and energy management. We are building our growthIoT capabilities in the IoT market by developingleveraging business models that monetize usage on our network at the connectivity, platform and solution layers. For example, weWe have developed IoT solutions that address key market needs for electric and other utilities, farms and other purveyors of food and agriculture, drug companies and others with complex supply chains. In addition, our IoT customers can turn the data that our solutions provide into actionable opportunities to develop new services and create revenue growth.strategy to simplify IoT technology and accelerate its adoption also includes ThingSpace, anservices offer end-to-end solutions for various IoT platform. ThingSpace is designed to help developers create, test, manage and marketIoT-based solutions aimed at major vertical markets, such asas:health caresector with greater visibility into energy usage and the ability to remotely monitor devices used to track energy usage; andcities. ThingSpace comesmachine technologies with a portal that includes immediate access to dedicated application programming interfacesthe goal of improving public safety, managing traffic, reducing pollution, identifying revenue generation opportunities, making efficient use of limited resources and partner development kits. In October 2016, we acquired Sensity Systems, Inc., a leading provider of IoT solutions for smart communities, in order to add a leading comprehensive suite of smart city solutions.attracting businesses, residents and workers.provide connectivityare automating, and helping our customers to optimize, the way people, vehicles and things move through the world. Our telematics business offers a full array of solutions to both businesses and consumers that combine location-based software, services and applicationsdata intelligence. We enable our customers to manufacturers such asMercedes-Benztrack, safeguard and helpoptimize their most prized assets: people, vehicles, equipment and data. Through organic and inorganic growth, Verizon has built one of the largest telematics businesses manage large vehicle fleets more efficiently. worldwide based on its advanced mobile telematics platforms.suite of real-time vehicle communications services and applications connects automobiles with content services and call centers. Our platform enables factory and aftermarket-installed automotive safety and security features as well as location-based services and vehicle diagnostics. We provide usage-based data services to new vehicles in the United States, China and Europe. Our Verizon Telematics solution provides commercial fleet managers throughout North America with real-time access to data that yields operational efficiencies, increased vehicle reliability and improved driver safety. We also provide this service to over 23,000 vehicles operatedconsumer offering is anchored by Verizon.In 2015, we introduced hum,our Hum product. Hum is an aftermarket vehicle technology and subscription service. This subscription-based service that provides consumers with diagnostic technology in their vehicles, access to live assistance and roadside assistance with GPS accuracy when needed. Our humHum service also offers the ability to connect with a certified mechanic to diagnose potential problems and offer solutions.company.business. With these combined businesses, Verizon Telematics is a top commercial telematics provider globally. We expect these acquisitions to advance our fleet telematicsserve both the enterprise and SMB market segments with advanced solutions expand ourand scale in distribution, relationshipsresearch and position our telematics business as a leading provider of fleetdevelopment, and mobile workforce management solutions globally.Patents, Trademarks and Licenses Acquisitions and Divestitures 20162017 Verizon Annual Report to Shareowners under the heading “Management’s"Management’s Discussion and Analysis of Financial Condition and Results of Operations - Acquisitions and Divestitures”,Divestitures" and in Note 2 to the consolidated financial statements of Verizon Communications Inc. and subsidiaries, which is incorporated by reference into this report.Regulatory and Competitive Trends “open access” "open access" FCC regulations, which generally require licensees of particular spectrum to allow customers to use devices and applications of their choice, subject to certain technical limitations. The FCC has also imposed certain specific mandates on wireless carriers, including construction and geographic coverage requirements, technical operating standards, provision of enhanced 911 services, roaming obligations and requirements for wireless tower and antenna facilities.that broadband Internet access services as “information services”"information services" subject to a “light touch”"light touch" regulatory approach rather than to the traditional, utilities-style regulations. In 2015, the FCC reversed course and declared that broadband Internet access services are “telecommunications services”"telecommunications services" subject to common carriage regulation under Title II of the Communications Act. This decision created uncertainty concerningIn December 2017, the levelFCC adopted an order reversing the 2015 Title II Order to return to "light touch" regulation of regulation that will apply to broadband services. It created a risk that such regulation would limit the ways that broadband Internet access service providers structure their business arrangements and manage their networks and could spur additional restrictions, including rate regulation, that could adversely affect broadband investment and innovation. The FCC’s decision was affirmed by the United States Court of Appeals, but may be subject to further challenge in the courts. In addition, Congress and the FCC are likely to continue to debate the proper scope of such regulations.services. Regardless of regulation, Verizon remains committed to the open Internet, which provides consumers with competitive choices and unblocked access to lawful websites and content when, where, and how they want, and our commitment to our customers can be found on our website at http://responsibility.verizon.com/broadband-commitment.“common carrier”"common carrier" services. Common carrier services are subject to heightened regulatory oversight with respect to rates, terms and conditions and other aspects of the services. The FCC has not decided the regulatory classification of VoIP but has said VoIP service providers must comply with certain rules, such as 911 capabilities and law enforcement assistance requirements.voice,wireline, wireless, broadband and the development and roll out of new products, such as those in the media and IoT space. At the federal level, much of our voice business is subject to the FCC’sFCC's privacy requirements. Oversight of broadband Internet access privacy and data security, requirements. In November 2016, the FCC released new privacy and data security rules that will apply to all telecommunications services, including our fixed and mobile voice and broadband services. Other parts of our business are subject to the privacy and data security oversight of other federal regulators, includingwhich had shifted from the Federal Trade Commission.Commission (FTC) to the FCC following the FCC's adoption of its 2015 Title II Order, will return to the FTC as a result of the FCC's repeal of the 2015 Title II Order in December 2017. Generally, attention to privacy and data security requirements is increasing at both the state and federal level. In addition, a new data protection regulation will go into effect in Europe in May 2018 that includes significant penalties fornon-compliance.recent cyber attacks that have occurred or could occur in the future, however, the FCC or other regulators may attempt to increase regulation of the cybersecurity practices of providers.“business"business data services”services" and other services and network facilities. Verizon is both a seller and a buyer of these services, and both makes and receives interconnection payments. In April 2017, the FCC issued an order, which is currently under appeal, that revised the regulatory structure for business data services, eliminating tariffing obligations and ex ante price regulations in markets the FCC determined to be competitive. The FCC has focused in recent years on whether changes in the rates, terms and conditions for both the exchange of traffic and for business data services may be appropriate.“terms"terms and conditions”conditions" of wireless service. For example, some states attempt to regulate wireless customer billing matters and impose reporting requirements. Several states also have laws or regulations that address safety issues (e.g., use of wireless handsets while driving) and taxation matters. In addition, wireless tower and antenna facilities are often subject to state and local zoning and land use regulation, and securing approvals for new or modified facilities is often a lengthy and expensive process.“incumbent"incumbent local exchange carrier”carrier" in nine states and the District of Columbia. These incumbent operations are subject to various levels of pricing flexibility and other state oversight and requirements. Verizon also has other wireline operations that are more lightly regulated.Environmental Matters Executive Officers “Directors,"Directors, Executive Officers and Corporate Governance”Governance" of this Annual Report on Form10-K for information about our executive officers.Employees 2016,2017, Verizon and its subsidiaries had approximately 160,900155,400 employees. Unions represent approximately 23% of our employees.Information on Our Internet Website and Form SD, quarterly reports on Form10-Q, current reports on Form8-K, and all amendments to those reports at http://www.verizon.com/about/investors.Cautionary Statement Concerning Forward-Looking Statements “anticipates,” “believes,” “estimates,” “hopes”"anticipates," "believes," "estimates," "expects," "hopes" or similar expressions. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.Securities and Exchange Commission (SEC),SEC, could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements:
planning may not be sufficient for all eventualities. These events could also damage the infrastructure of the suppliers that provide us with the equipment and services that we need to operate our business and provide products to our customers. A natural disaster or other event causing significant physical damage could cause us to experience substantial losses resulting in significant recovery time and expenditures to resume operations. In addition, these occurrences could result in lost revenues from business interruption as well as damage to our reputation.
In addition, our term loan agreements require Verizon to maintain a certain leverage ratio unless Verizon’s credit ratings are at or above a certain level, which could limit Verizon’s ability to obtain additional financing in the future.
operations. Network equipment Land, buildings and building equipment Furniture and other Our properties as a percentage of total properties are as follows: Wireline Wireless Other PART II Cash Dividend Declared 2016 Fourth Quarter Third Quarter Second Quarter First Quarter 2015 Fourth Quarter Third Quarter Second Quarter First Quarter 2017. PART III Lowell C. McAdam Matthew D. Ellis Roger Gurnani Marc C. Reed Executive Vice President and Chief Administrative Officer Diego Scotti Craig L. Silliman Anthony T. Skiadas John G. Stratton Marni M. Walden Executive Vice President and President of Product Innovation and New Businesses 2009. Consolidated Statements of Income Consolidated Statements of Comprehensive Income Consolidated Balance Sheets Consolidated Statements of Cash Flows Consolidated Statements of Changes in Equity Notes to Consolidated Financial Statements Description Performance Stock Unit Agreement 2015-2017 Award Cycle (filed as Exhibit 10a to Form10-Q for the period ended March 31, 2015 and incorporated herein by reference).** Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith. Allowance for Uncollectible Accounts Receivable: Year 2016 (e) Year 2015 (e) Year 2014 Valuation Allowance for Deferred Tax Assets: Year 2016 Year 2015 Year 2014 Allowance for Uncollectible Accounts Receivable primarily includes amounts previously written off which were credited directly to this account when recovered. Amounts written off as uncollectible or transferred to other accounts or utilized. Reductions to valuation allowances related to deferred tax assets.160,900155,400 employees and approximately 201,000197,000 retirees as of December 31, 20162017 eligible to participate in Verizon’s benefit plans, the costs of pension benefits and active and retiree healthcare benefits have a significant impact on our profitability. Our costs of maintaining these plans, and the future funding requirements for these plans, are affected by several factors, including the legislative and regulatory uncertainty regarding the potential repeal and replacement or modification of the Patient Protection and Affordable Care Act, increases in healthcare costs, decreases in investment returns on funds held by our pension and other benefit plan trusts and changes in the discount rate and mortality assumptions used to calculate pension and other postretirement expenses. If we are unable to limit future increases in the costs of our benefit plans, those costs could reduce our profitability and increase our funding commitments.2016,2017, approximately 23% of our workforce was represented by labor unions. While we have labor contracts in place with these unions, with subsequent negotiations we could incur additional costs and/or experience work stoppages, which could adversely affect our business operations. In addition, while less than 1% of the workforce of our wireless and other businesses outside of wireline areis represented by unions, we cannot predict what level of success unions may have in further organizing these workforcesthis workforce or the potentially negative impact it would have on our costs.consumer class actionwrongful death lawsuits relating to alleged health effects of wireless phones or radio frequency transmitters, and class action lawsuits that challenge marketing practices and disclosures relating to alleged adverse health effects of handheld wireless phones.transmitters. We may incur significant expenses in defending these lawsuits. In addition, we may be required to pay significant awards or settlements. property and equipment was approximately $246 billion at December 31, 2017 and $232 billion at December 31, 2016, and $220 billion at December 31, 2015, including the effect of retirements, but before deducting accumulated depreciation. Our gross investment in property, plant property and equipment consisted of the following:At December 31, 2016 2015 78.5% 78.8% 12.0% 11.9% 9.5% 9.3% 100.0% 100.0% At December 31, 2016 2015 51.7% 53.2% 46.8% 45.4% 1.5% 1.4% 100.0% 100.0% At December 31, 2017 2016 Network equipment 78.3 % 78.5 % Land, buildings and building equipment 12.1 % 12.0 % Furniture and other 9.6 % 9.5 % 100.0 % 100.0 % Our properties as a percentage of total properties are as follows: At December 31, 2017 2016 Wireline 50.7 % 51.7 % Wireless 47.1 % 46.8 % Other 2.2 % 1.5 % 100.0 % 100.0 % United StatesU.S. comprised of administrative and sales offices, customer care centers, retail sales locations, garage work centers, switching centers, cell sites and data centers. Furniture and other consists of telephone equipment, furniture, data processing equipment, office equipment, motor vehicles, plant under construction and leasehold improvements.Verizon California Inc. and othercertain Verizon companies of potential violations of California state hazardous waste statutes primarily arising from the disposal of electronic components, batteries and aerosol cans at certain California facilities. We are cooperating with this investigation and continue to review our operations relating to the management of hazardous waste. While penalties relating to the alleged violations could exceed $100,000, we do not expect that any penalties ultimately incurred will be material. On April 1, 2016, we completed the sale to Frontier of our landline business operated by Verizon California Inc. and certain other Verizon landline companies. As a result of this transaction, Frontier now owns and operates Verizon California Inc. and has assumed the liabilities of Verizon California Inc. that may arise as a result of these alleged violations.PART IIItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 2016,2017, there were 690,741659,979 shareowners of record. Market Price High Low $ 53.90 $ 46.01 $ .5775 56.95 51.02 .5775 55.92 49.05 .5650 54.37 43.79 .5650 $ 47.23 $ 42.20 $ .5650 48.26 38.06 .5650 50.86 46.60 .5500 49.99 45.37 .5500 Market Price High Low 2017 Fourth Quarter $ 53.69 $ 43.97 $ .5900 Third Quarter 50.32 42.80 .5900 Second Quarter 49.55 44.36 .5775 First Quarter 54.83 47.80 .5775 2016 Fourth Quarter $ 53.90 $ 46.01 $ .5775 Third Quarter 56.95 51.02 .5775 Second Quarter 55.92 49.05 .5650 First Quarter 54.37 43.79 .5650 In2014,3, 2017, the Verizon Board of Directors authorized a three-yearnew share buyback program to repurchase up to 100 million shares of the Company’scompany's common stock. The new program will terminate when the aggregate number of shares purchased reaches 100 million, or at the close of business on February 28, 2020, whichever is sooner. Under the program, shares may be repurchased in privately negotiated transactions and on the open market, including through plans complying with Rule10b5-1(c) under the Exchange Act. The timing and number of shares purchased under the program, if any, will depend on market conditions and the Company’s capital allocation priorities.fourth quarter ofyears ended December 31, 2017 and 2016, Verizon did not repurchase any shares of VerizonVerizon’s common stock.stock under our authorized share buyback programs. At December 31, 2016,2017, the maximum number of shares that could be purchased by or on behalf of Verizon under our share buyback program was 97.2100 million.“Stock"Stock Performance Graph”Graph" in the 20162017 Verizon Annual Report to Shareowners, which is incorporated herein by reference.20162017 Verizon Annual Report to Shareowners under the heading “Selected"Selected Financial Data”Data", which is incorporated herein by reference.20162017 Verizon Annual Report to Shareowners under the heading “Management’s"Management’s Discussion and Analysis of Financial Condition and Results of Operations”Operations", which is incorporated herein by reference.20162017 Verizon Annual Report to Shareowners under the heading “Management’s"Management’s Discussion and Analysis of Financial Condition and Results of Operations - Market Risk”Risk", which is incorporated herein by reference.20162017 Verizon Annual Report to Shareowners, which is incorporated herein by reference.2016.20162017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.20162017 Verizon Annual Report to Shareowners and are incorporated herein by reference.PART IIIItem 10. Directors, Executive Officers and Corporate Governance Name Age Office Held Since 62 Chairman and Chief Executive Officer 2011 45 Executive Vice President and Chief Financial Officer 2016 56 Executive Vice President and Chief Information and Technology Architect 2015 58 2012 44 Executive Vice President and Chief Marketing Officer 2014 49 Executive Vice President of Public Policy and General Counsel 2015 48 Senior Vice President and Controller 2013 55 Executive Vice President and President of Operations 2015 49 2015 Name Age Office Held Since Lowell C. McAdam 63 Chairman and Chief Executive Officer 2011 Timothy M. Armstrong 47 Executive Vice President and President and CEO - Oath 2018 Matthew D. Ellis 46 Executive Vice President and Chief Financial Officer 2016 Rima Qureshi 53 2017 Marc C. Reed 59 Executive Vice President and Chief Administrative Officer 2012 Craig L. Silliman 50 Executive Vice President of Public Policy and General Counsel 2015 Anthony T. Skiadas 49 Senior Vice President and Controller 2013 John G. Stratton 56 Executive Vice President and President - Global Operations 2015 Hans E. Vestberg 52 2017 Mr.Timothy Armstrong, who has been with the Company since 2015, Matthew Ellis, who has been with the Company since 2013, and Mr. Scotti,Rima Qureshi, who has been with the Company since 2014.2017, and Hans Vestberg, who has been with the Company since 2017. Officers are not elected for a fixed term of office and may be removed from office at any time at the discretion of the Board of Directors.of the Company from February 2015 until the appointment to his current role in November 2016 and as Senior Vice President and Treasurer of the Company from the time he joined the Company in 2013 until February 2015. Prior to joining Verizon, Mr. Ellis served in leadership positions at Tyson Foods, Inc. for 15 years, most recently as Vice President and Treasurer responsible for financing, cash management, insurance and credit.Diego ScottiMarketingStrategy Officer for Verizon. Ms. Qureshi joined the Company in November 2017. Prior to joining Verizon, Ms. Qureshi served as President and Chief Executive Officer of Ericsson North America from 2016 to 2017 and as Senior Vice President and Chief Strategy Officer and head of mergers and acquisitions from 2014 to 2016. Ms. Qureshi also served as Vice President of Ericsson’s CDMA Mobile Systems Group, Senior Vice President of Strategic Projects, Chairman of Ericsson’s Northern Europe, Russia and Central Asia Group and Chairman of Ericsson’s Modem division before becoming Chief Strategy Officer.ScottiVestberg joined the companyCompany in October 2014.April 2017. Prior to joining Verizon, Mr. ScottiVestberg served as President and Chief Executive Officer of Ericsson from 2010 to 2016. Mr. Vestberg also served as Chief MarketingFinancial Officer of J. CrewEricsson from 20112007 to 2014 and as Executive Director of Marketing at Conde Nast Publications, where he oversaw 20 print and digital media brands, from 2008 to 2011. Mr. Scotti also previously served as the head of global advertising and brand management at American Express.“Governance"Governance — Where to find more information on governance at Verizon and — Business conduct and ethics,” “Item" "Item 1: Election of Directors — Director nominations,” “BoardNominees for election," "Board and Committees — Board committees”committees — Audit Committee " and “Stock"Stock Ownership — Section 16(a) Beneficial Ownership Reporting Compliance”Compliance" in our definitive Proxy Statement to be filed with the Securities and Exchange Commission and delivered to shareholders in connection with our 20172018 Annual Meeting of Shareholders, which are incorporated herein by reference.“Executive"Director Compensation" and "Executive Compensation — Compensation Discussion and Analysis, — Compensation Committee Report and — Compensation Tables”Tables" in our definitive Proxy Statement to be filed with the Securities and Exchange Commission and delivered to shareholders in connection with our 20172018 Annual Meeting of Shareholders, which is incorporated by reference. There were no relationships to be disclosed under paragraph (e)(4) of Item 407 of RegulationS-K.Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters executive officers and for information with respect to securities authorized for issuance under Verizon’s equity compensation plan,Executive Officers, see the sectionssection entitled “Stock Ownership — Security"Security Ownership of Certain Beneficial Owners and Management”Management" in our definitive Proxy Statement to be filed with the SEC and “Item 5: Approvaldelivered to shareholders inVerizon’sShareholders, which is incorporated herein by reference. In addition, the following table provides other equity compensation plan information:” respectively, (2009 LTIP) and, after May 4, 2017, the Company only issued awards under the 2017 Verizon Communications. Inc. Long-Term Incentive Plan (2017 LTIP). Each of these plans provides for awards of stock options, restricted stock, restricted stock units, performance stock units and other equity-based hypothetical stock units to employees of Verizon and its subsidiaries. No new awards are permitted to be issued under any equity compensation plan other than the 2017 LTIP. In accordance with SEC rules, the table does not include outstanding awards that are payable solely in cash by the terms of the award, and such awards do not reduce the number of shares remaining for issuance under the 2017 LTIP.Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted-average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) Equity compensation plans approved by security holders 12,612,515 $ — 90,595,679 Equity compensation plans not approved by security holders 163,484 — — Total 12,775,999 $ — 90,595,679 This amount includes: 12,608,707 shares of common stock subject to outstanding restricted stock units and performance stock units, and 3,808 shares subject to outstanding deferred stock units, in each case including dividend equivalents accrued on such awards through December 31, 2017. This does not include performance stock units, deferred stock units and deferred share equivalents payable solely in cash. Verizon’s outstanding restricted stock units, performance stock units and deferred stock units do not have exercise prices associated with the settlement of these awards. This number reflects shares subject to deferred stock units credited to the Verizon Income Deferral Plan, which were awarded in 2002 under the Verizon Communications Broad-Based Incentive Plan. No new awards are permitted to be issued under this plan. Item 13. Certain Relationships and Related Transactions, and Director Independence 20172018 Annual Meeting of Shareholders, which isare incorporated herein by reference.Item 13. Certain Relationships14. Principal Accounting Fees and Related Transactions, and Director IndependenceServicescertain relationshipsprincipal accounting fees and related transactions and Director independence,services, see the sectionssection entitled “Governance"Audit Matters — Related person transactions” and “Item 1: ElectionItem 2: Ratification of Directors — Independence”Appointment of Independent Registered Public Accounting Firm" in our definitive Proxy Statement to be filed with the Securities and Exchange Commission and delivered to shareholders in connection with our 20172018 Annual Meeting of Shareholders, which are incorporated by reference.For information with respect to principal accounting fees and services, see the section entitled “Audit Matters — Item 2: Ratification of Appointment of Independent Registered Public Accounting Firm” in our definitive Proxy Statement to be filed with the Securities and Exchange Commission and delivered to shareholders in connection with our 2017 Annual Meeting of Shareholders, which are incorporated by reference.PART IV Page (1) (1 ) Report of Management on Internal Control Over Financial Reporting * (2) (2 ) Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting * (3) (3 ) Report of Independent Registered Public Accounting Firm on Financial Statements * Financial Statements covered by Report of Independent Registered Public Accounting Firm: * �� * * * * * * Incorporated herein by reference to the appropriate portions of the registrant’s Annual Report to Shareowners for the fiscal year ended December 31, 2016.2017. (See Part II.) (4) (4 ) Financial Statement Schedule II – Valuation and Qualifying Accounts 29 (5) (5 ) 3a Restated Certificate of Incorporation of Verizon Communications Inc. (Verizon) (filed as Exhibit 3a to Form10-Q for the period ended June 30, 2014 and incorporated herein by reference). 3b Bylaws of Verizon, as amended and restated, effective as of November 3, 2016 (filed as Exhibit 3b to Form8-K filed on November 4, 2016 and incorporated herein by reference). 4a Indenture between Verizon, both individually and as successor in interest to Verizon Global Funding Corp., and U.S. Bank National Association, as successor trustee to Wachovia Bank, National Association, formerly known as First Union National Bank, as Trustee, dated as of December 1, 2000 (incorporated by reference to Verizon Global Funding Corp.’s Registration Statement on FormS-4, RegistrationNo. 333-64792, Exhibit 4.1). 4b First Supplemental Indenture between Verizon, both individually and as successor in interest to Verizon Global Funding Corp., and U.S. Bank National Association, as successor trustee to Wachovia Bank, National Association, formerly known as First Union National Bank, as Trustee, dated as of May 15, 2001 (incorporated by reference to Verizon Global Funding Corp.’s Registration Statement on FormS-3, RegistrationNo. 333-67412, Exhibit 4.2). 4c Second Supplemental Indenture between Verizon, both individually and as successor in interest to Verizon Global Funding Corp., and U.S. Bank National Association, as successor trustee to Wachovia Bank, National Association, formerly known as First Union National Bank, as Trustee, dated as of September 29, 2004 (incorporated by reference to Form8-K filed on February 9, 2006, Exhibit 4.1). 4d Third Supplemental Indenture between Verizon, both individually and as successor in interest to Verizon Global Funding Corp., and U.S. Bank National Association, as successor trustee to Wachovia Bank, National Association, formerly known as First Union National Bank, as Trustee, dated as of February 1, 2006 (incorporated by reference to Form8-K filed on February 9, 2006, Exhibit 4.2). 4e Fourth Supplemental Indenture between Verizon, both individually and as successor in interest to Verizon Global Funding Corp., and U.S. Bank National Association, as successor trustee to Wachovia Bank, National Association, formerly known as First Union National Bank, as Trustee, dated as of April 4, 2016 (incorporated by reference to Verizon Communications Inc.’s Registration Statement on FormS-4, RegistrationNo. 333-212307, Exhibit 4.5). Except for Exhibits 4a – 4e above, no other instrument which defines the rights of holders of long-term debt of Verizon and its consolidated subsidiaries is filed herewith pursuant to RegulationS-K, Item 601(b)(4)(iii)(A). Pursuant to this regulation, Verizon hereby agrees to furnish a copy of any such instrument to the SEC upon request. 10a NYNEX Directors’ Charitable Award Program (filed as Exhibit 10i to Form10-K for the year ended December 31, 2000 and incorporated herein by reference).** 10b 2009 Verizon Long-Term Incentive Plan, As Amended and Restated (incorporated by reference to Appendix D of the Registrant’s Proxy Statement included in Schedule 14A filed on March 18, 2013).** 10b(i) Form of 2011 Special Performance Stock Unit Agreement (filed as Exhibit 10 to Form10-Q for the period ended September 30, 2011 and incorporated by reference).** 10b(ii) Performance Stock Unit Agreement 2014-2016 Award Cycle (filed as Exhibit 10a to Form10-Q for the period ended March 31, 2014 and incorporated herein by reference).**10b(iii)Restricted Stock Unit Agreement 2014-2016 Award Cycle (filed as Exhibit 10b to Form10-Q for the period ended March 31, 2014 and incorporated herein by reference).**10b(iv) 10b(v) Restricted Stock Unit Agreement 2015-2017 Award Cycle (filed as Exhibit 10b to Form10-Q for the period ended March 31, 2015 and incorporated herein by reference).** 10b(vi) Performance Stock Unit Agreement 2016-2018 Award Cycle (filed as Exhibit 10a to Form10-Q for the period ended March 31, 2016 and incorporated herein by reference).** 10b(vii) Restricted Stock Unit Agreement 2016-2018 Award Cycle (filed as Exhibit 10b to Form10-Q for the period ended March 31, 2016 and incorporated herein by reference).** Form of 2017 Performance Stock Unit Agreement pursuant to the 2009 Verizon Communications Inc. Long-Term Incentive Plan. (filed as Exhibit 10a to Form 10-Q for the period ended March 31, 2017 and incorporated herein by reference).** Form of 2017 Restricted Stock Unit Agreement pursuant to the 2009 Verizon Communications Inc. Long-Term Incentive Plan (filed as Exhibit 10b to Form 10-Q for the period ended March 31, 2017 and incorporated herein by reference).** 2017 Special Performance Stock Unit Agreement pursuant to the 2009 Verizon Communications Inc. Long-Term Incentive Plan for J. Stratton (filed as Exhibit 10c to Form 10-Q for the period ended March 31, 2017 and incorporated herein by reference).** 2017 Verizon Communications Inc. Long-Term Incentive Plan (incorporated by reference to Appendix B of the Registrant’s Proxy Statement included in Schedule 14A filed on March 20, 2017).** Form of 2017 Performance Stock Unit Agreement pursuant to the 2017 Verizon Communications Inc. Long-Term Incentive Plan. (filed as Exhibit 10a to Form 10-Q for the period ended June 30, 2017 and incorporated herein by reference).** 10c Form of 2017 Restricted Stock Unit Agreement pursuant to the 2017 Verizon Communications Inc. Long-Term Incentive Plan (filed as Exhibit 10b to Form 10-Q for the period ended June 30, 2017 and incorporated herein by reference).** 2017 Special Restricted Stock Unit Agreement pursuant to the 2017 Verizon Communications Inc. Long-Term Incentive Plan (filed as Exhibit 10c to Form 10-Q for the period ended June 30, 2017 and incorporated herein by reference).** Form of 2017 Restricted Stock Unit Agreement (cash-settled) pursuant to the 2017 Verizon Communications Inc. Long-Term Incentive Plan, filed herewith. Verizon Short-Term Incentive Plan, As Amended and Restated (incorporated by reference to Appendix C of the Registrant’s Proxy Statement included in Schedule 14A filed on March 23, 2009).** 10d Verizon Executive Deferral Plan, filed herewith.** Verizon Income Deferral Plan (filed as Exhibit 10f to Form10-Q for the period ended June 30, 2002 and incorporated herein by reference).** 10d(i) Description of Amendment to Plan (filed as Exhibit 10o(i) to Form10-K for the year ended December 31, 2004 and incorporated herein by reference).** 10e Verizon Excess Pension Plan (filed as Exhibit 10p to Form10-K for the year ended December 31, 2004 and incorporated herein by reference).** 10e(i) Description of Amendment to Plan (filed as Exhibit 10p(i) to Form10-K for the year ended December 31, 2004 and incorporated herein by reference).** 10f GTE’s Executive Salary Deferral Plan, as amended (filed as Exhibit 10.10 to GTE’s Form10-K for the year ended December 31, 1998, FileNo. 1-2755 and incorporated herein by reference).** 10g Bell Atlantic Senior Management Long-Term Disability and Survivor Protection Plan, as amended (filed as Exhibit 10h to Form SE filed on March 27, 1986 and Exhibit 10b(ii) to Form10-K for the year ended December 31, 1997 and incorporated herein by reference).** 10h fGTE Executive Retiree Life Insurance Plan (filed as Exhibit 10q to Form10-K for the year ended December 31, 2010 and incorporated herein by reference).** 10i Verizon Executive Life Insurance Plan, As Amended and Restated September 2009 (filed as Exhibit 10s to Form10-K for the year ended December 31, 2010 and incorporated herein by reference).** 10j Verizon Executive Deferral Plan (filed as Exhibit 10e to Form10-Q for the period ended June 30, 2009 and incorporated herein by reference).**10k Form of Aircraft Time Sharing Agreement, (filed as Exhibit 10v to Form10-K for the year ended December 31, 2010 and incorporated herein by reference).filed herewith.**10l NYNEX Deferred Compensation Plan forNon-Employee Directors (filed as Exhibit 10gg to NYNEX’s Registration StatementNo. 2-87850, FileNo. 1-8608 and incorporated herein by reference).**10mAmendment to NYNEX Deferred Compensation Plan forNon-Employee Directors (filed as Exhibit 10iii 5a to NYNEX’s Quarterly Report on Form10-Q for the period ended June 30, 1996, FileNo. 1-8608 and incorporated herein by reference).**10n Verizon Senior Manager Severance Plan (filed as Exhibit 10d to Form10-Q for the period ended March 31, 2010 and incorporated herein by reference).** 10o Securities Purchase Agreement, dated as of February 5, 2015, by and between Frontier Communications Corporation and Verizon Communications Inc. (filed as Exhibit 10q to Form10-K for the year ended December 31, 2014 and incorporated herein by reference).12 Computation of Ratio of Earnings to Fixed Charges filed herewith. 13 Portions of Verizon’s Annual Report to Shareowners for the fiscal year ended December 31, 20162017, filed herewith. Only the information incorporated by reference into this Form10-K is included in the exhibit.21 List of principal subsidiaries of Verizon, filed herewith. 23 Consent of Ernst & Young LLP, filed herewith. 31.1 Powers of Attorney, filed herewith. Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. 32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith. 101.INS 101.INS XBRL Instance Document. 101.SCH 101.SCH XBRL Taxonomy Extension Schema Document. 101.PRE 101.PRE XBRL Taxonomy Presentation Linkbase Document. 101.CAL 101.CAL XBRL Taxonomy Calculation Linkbase Document. 101.LAB 101.LAB XBRL Taxonomy Label Linkbase Document. 101.DEF 101.DEF XBRL Taxonomy Extension Definition Linkbase Document. ** ** Indicates management contract or compensatory plan or arrangement. 2015 and 2014 (dollars in millions) Additions Description Balance at
Beginning of
Period Charged to
Expenses Charged to
Other Accounts
Note (a)(b) Deductions
Note (c)(d) Balance at
End of Period $ 1,037 $ 1,420 $ 204 $ 1,515 $ 1,146 739 1,610 200 1,512 1,037 645 1,095 141 1,142 739 $ 3,414 $ 146 $ 47 $ 1,134 $ 2,473 1,841 237 1,701 365 3,414 1,685 505 5 354 1,841 (dollars in millions) Additions Description Balance at
Beginning of
Period Charged to
Expenses Charged to Other Accounts Note (a) Deductions
Note (b) Balance at End of Period (c) Allowance for Uncollectible Accounts Receivable: Year 2017 $ 1,146 $ 1,167 $ 205 $ 1,319 $ 1,199 Year 2016 1,037 1,420 150 1,461 1,146 Year 2015 739 1,610 146 1,458 1,037 Additions Description Balance at
Beginning of
Period Charged to
Expenses Charged to Other Accounts Note (d) Deductions
Note (e) Balance at End of Period Valuation Allowance for Deferred Tax Assets: Year 2017 $ 2,473 $ 765 $ 273 $ 218 $ 3,293 Year 2016 3,414 146 47 1,134 2,473 Year 2015 1,841 237 1,701 365 3,414 (a) (b) (c) Allowance for Uncollectible Accounts Receivable includes approximately $260 million, $301 million and $155 million at December 31, 2017, 2016, and 2015, respectively, related to long-term device payment plan receivables. (d) Valuation Allowance for Deferred Tax Assets includes an increase to the valuation allowance as a result of the acquisition of AOL in 2015 and amounts charged to equity and reclassifications from other balance sheet accounts. (c)Amounts written off as uncollectible or transferred to other accounts or utilized.(d)(e)(e)Allowance for Uncollectible Accounts Receivable includes approximately $301 million and $155 million at December 31, 2016 and 2015, respectively, related to long-term device payment plan receivables.
| VERIZON COMMUNICATIONS INC. | ||||||||
| By: | /s/ Anthony T. Skiadas | Date: February 23, 2018 | ||||||
Anthony T. Skiadas
Senior Vice President and Controller | ||||||||
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| /s/ Lowell C. McAdam | Chairman and Chief Executive Officer | February 23, 2018 | ||||
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/s/ Matthew D. Ellis
| Executive Vice President and Chief Financial Officer | February 23, 2018 | ||||
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| /s/ Anthony T. Skiadas | Senior Vice President and Controller | February 23, 2018 | ||||
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