Vonderours Verizon

by Colin Berkshire

Verizon is an interesting creature for me to follow. I watch their finances and just find them curious.

On the surface they are a delightfully profitable company generating about $13 Billion a year in net income. (Down about 25% per share over the last several years.)

You would expect such a company to use its cash to vertically integrate and to grow. But their income is relatively flat, their profit margins are up and down but mostly flat.

What I find so very curious is that their total assets are declining by about $10 Billion a year (over the last three years.) Their long-term debt has grown by about $5 Billion a year, annually over the past three years.

The most curious thing is that Verizon put about $5 Billion a year of assets on its books as “Intangibles & Goodwill”. I’ve never thought that intangibles and goodwill are easily accounted for, and how Verizon has $15 Billion more value in this area is hard for me to contemplate, considering how their network is degrading, how their customer base is declining, and how they just had 3 Billion accounts breached through their Yahoo division.

I’m not a finance guy, although I am also not an idiot. But it sure seems like a lot of the magic happening at Verizon involves adding a lot of seasoning to the process of cooking the books. Just my opinion, of course.