ANNUAL REPORT 2019 Financial and operational highlights as of December 31, 2019 Verizon strategically 2019 highlights reorganized the business effective th April 1, 2019. $4.81 $10.0 13 Under its new reporting adjusted billion in consecutive year structure, Verizon 2.0, earnings per cash dividend of annual dividend there are two reportable share (non-GAAP) payments increases segments that the company operates and manages as strategic business units: $35.7 $131.9 $91.1 Consumer and Business. billion in billion in billion in Verizon previously operated cash flow from consolidated consumer and managed the business operations revenue revenues under its historical Wireless and Wireline segments. For comparison purposes, $31.4 $94.2 $28.6 highlights for both the billion in billion in historical billion in historical current and previous business wireless revenues wireline revenues operating structures are revenues (non-GAAP) (non-GAAP) represented here. Dividends declared per share 2019 $2.435 2019 2018 $2.385 $2.435 Up 2.1% year over year 2017 $2.335 See our investor website ( www.verizon.com/about/investorss) for reconciliations to U.S. generally accepted accounting principles (GAAP) for the non-GAAP financial measures included in this annual report. Forward-looking statements In this communication we have made forward-looking statements. These statements are based on our estimates and assumptions and are subject to risks and uncertainties. Forward-looking statements include the information concerning our possible or assumed future results of operations. Forward-looking statements also include those preceded or followed by the words “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. 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. The following important factors, along with those discussed in our filings with the Securities and Exchange Commission (the “SEC”), could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements: cyber attacks impacting our networks or systems and any resulting financial or reputational impact; natural disasters, terrorist attacks or acts of war or significant litigation and any resulting financial or reputational impact; disruption of our key suppliers’ or vendors' provisioning of products or services; material adverse changes in labor matters and any resulting financial or operational impact; the effects of competition in the markets in which we operate; failure to take advantage of developments in technology and address changes in consumer demand; performance issues or delays in the deployment of our 5G network resulting in significant costs or a reduction in the anticipated benefits of the enhancement to our networks; the inability to implement our business strategy; adverse conditions in the U.S. and international economies; changes in the regulatory environment in which we operate, including any increase in restrictions on our ability to operate our networks; our high level of indebtedness; an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations or adverse conditions in the credit markets affecting the cost, including interest rates, and/or availability of further financing; significant increases in benefit plan costs or lower investment returns on plan assets; changes in tax laws or treaties, or in their interpretation; and changes in accounting assumptions that regulatory agencies, including the SEC, may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings. 2 verizon.com/2019AnnualReport Dear Shareholder, As we began 2019, Verizon had just launched the world's first commercial 5G network, and with it, a technology that would define Hans Vestberg the future of our company – and Chairman and Chief Executive Officer our industry – for years to come. Establishing the promise of what 5G can deliver for our This was the impetus for our Verizon 2.0 strategy, the customers, for our company, for our investors, and for society implementation of which was a critical priority for 2019. as a whole, was a key objective for Verizon in 2019, but so was continued strong performance in our core business. Three imperatives guided us in the execution of this strategy: We demonstrated that “5G Built Right” – the kind of network First, to preserve the immense advantages that this that only Verizon is in a position to deliver – will generate not company has inherited from its proud past. only a Fourth Industrial Revolution, but a new era of sustainable These include a highly skilled workforce; a deeply trusted brand; innovation and inclusive growth. and a network infrastructure that is second to none. This conviction guided our strategy for 2019 and shaped everything we accomplished over the course of a very Second, to strengthen these core assets in exciting year. order to retain market leadership at a time of increased competition. We’ve long believed that 5G would be so much more than Our skilled workforce would need new training; new tools; and merely a “next generation” of wireless. In some ways, it’s more new organizational structures that maximize openness and like an entirely new technology. innovation. Our brand would need new resonance in a market defined by ever-increasing consumer choice. Our network In order to ensure that the market fully appreciates both the infrastructure would need an accelerating progress toward 5G. transformative potential of 5G and Verizon’s unique capacity for delivering on that potential, our company has reshaped itself to Third, and most important, to transform our address the needs, expectations, and requirements of current operations wherever needed in order to not only and potential customers. keep pace with change, but to drive the change. Verizon Communications Inc. and Subsidiaries 2019 Annual Report 3 The first major manifestation of Verizon 2.0 was the Only 5G built on this type of foundation will be able to fully reorganization of our entire company into three groups – support virtual reality, augmented reality, the Internet of Things, Verizon Consumer, Verizon Business, and Verizon Media – which advanced robotics, 3D printing, wearable tech, and the other are defined by our customer-facing operations. This structure next-generation technologies that our customers will be reflects our conviction that 5G and its related technologies looking for. require us to reimagine how we serve customers’ needs – both now and in the future. Our progress toward a fully operational and transformational 5G network reached some important milestones in 2019. On Each of these groups is led by an outstanding senior executive: April 3, Verizon became the first company in the world to give Ronan Dunne, EVP and Group CEO - Verizon Consumer, Tami customers a 5G-enabled smartphone linked to a 5G network, Erwin, EVP and Group CEO - Verizon Business, and Guru and the number of cities receiving Verizon 5G reached 31 by Gowrappan, EVP and Group CEO - Verizon Media. year end. With the Verizon 2.0 organizational structure in place, we We have also seen growth in the number of businesses interested focused on the technology that had necessitated the revamp in in using 5G as companies large and small are beginning to deploy the first place – 5G. this technology to generate results. Among them is Corning, which is turning to 5G to enhance efficiency at one of the world’s In my start-of-year keynote at the Consumer Electronics Show largest fiber optic cable manufacturing facilities. in Las Vegas, I introduced the themes that would guide our thinking and our actions on 5G over the rest of 2019, including We’re just getting started. This year our 5G Labs made our devotion to the concept of “5G Built Right.” breakthroughs in edge-of-network cloud technologies that will make mobile devices much more powerful. In order to enable the full promise of 5G, a network needs to be built to deliver what we refer to as “currencies” – specific Our expansion in 5G is also helping us to address our capabilities of fifth-generation technology. responsibilities in a world where consumers and investors are increasingly calling upon corporations to uphold such values These include such qualities as a peak data rate at least 10 as environmental sustainability, economic inclusivity, times (or more) greater than 4G, mobile data volumes 1,000 and workforce diversity. times higher than anything seen before, and latency (or signal lag) only about one-tenth that of 4G. We regard these values as wholly consistent with – even essential to – the advancement of our business objectives. Only a network built on millimeter wave spectrum, like Verizon’s, In fact, we see our business as a catalyst for the human will be able to fully take advantage of all of 5G’s currencies. connections and technological progress that the world needs to tackle the challenges of our time. Thanks to our investment of capital and effort over the last several years, Verizon is positioned to bring together all of the components Our company’s purpose statement that we introduced