Company sees strong customer loyalty and increased net wireless customer additions with seamless transition to new customer-focused operating structure

As previously disclosed, beginning second quarter 2019, Verizon will report financial and operational results under its new reporting structure, Verizon 2.0. Under this structure, there are two reportable segments that the company operates and manages as strategic business units: Consumer and Business. Verizon previously reported results for its Wireless and Wireline segments. For comparison purposes, results for both the current and previous operating structures are presented below.

2Q 2019 highlights

Consolidated:

• 95 cents in earnings per share (EPS), compared with $1.00 in 2Q 2018; adjusted EPS (non-GAAP), excluding a special item, of $1.23, compared with $1.20 in 2Q 2018.

Consumer:

• Total revenue of $22.0 billion.
• 126,000 retail postpaid net additions, including 73,000 phone net additions and 209,000 postpaid smartphone net additions.
• Total retail postpaid churn of 0.97 percent, and retail postpaid phone churn of 0.72 percent.
• 28,000 Fios Internet net additions.

Business:

• Total revenue of $7.8 billion.
• 325,000 retail postpaid net additions, including 172,000 phone net additions.
• Retail postpaid churn of 1.21 percent, and retail postpaid phone churn of 0.97 percent.

Wireless (non-GAAP):

• Total revenue growth of 1.0 percent year over year to $22.7 billion, driven by a 3.1 percent increase in service revenue.
• 451,000 retail postpaid net additions, including 420,000 postpaid smartphone net additions, and 245,000 phone net additions, an increase from the 199,000 phone net additions in second-quarter 2018.
• Retail postpaid churn of 1.02 percent, and industry-leading retail postpaid phone churn of 0.76 percent.

Wireline (non-GAAP):

• Total revenue of $7.1 billion.
• 34,000 Fios Internet net additions; Fios total revenue growth of 1.9 percent year over year.

NEW YORK, Aug. 01, 2019 (GLOBE NEWSWIRE) -- Verizon Communications Inc. (NYSE, Nasdaq: VZ) today reported strong second-quarter 2019 results highlighted by an increase in net wireless customer additions, continued customer loyalty and industry-leading wireless products and services.

"Verizon finished strong in the first half of 2019 by delivering solid financial results while transforming the business under the new operating structure and advancing our leadership in 5G," said Chairman and CEO Hans Vestberg. "Verizon made history this quarter by becoming the first carrier in the world to launch 5G mobility. We are focused on optimizing our next-generation networks and enhancing the customer experience while we head into the second half of the year with great momentum."

For second-quarter 2019, Verizon reported EPS of 95 cents, compared with $1.00 in second-quarter 2018. On an adjusted basis (non-GAAP), second-quarter 2019 EPS, excluding a special item, was $1.23, compared with adjusted EPS of $1.20 in second-quarter 2018. Verizon’s second-quarter 2019 EPS included 28 cents in early debt redemption costs.

In second-quarter 2019, Verizon's results included the effects of a reduction in benefits from the adoption of a revenue recognition standard, primarily due to the deferral of commission expense, and the adoption of a lease accounting standard. The combined net impact was a 4 cent year-over-year headwind, which is included in the year-over-year increase in adjusted EPS.

Consolidated results

Total consolidated operating revenues in second-quarter 2019 were $32.1 billion, down 0.4 percent from second-quarter 2018. Wireless service revenue growth was offset by lower wireless equipment revenue and wireline service revenue.

Cash flow from operations totaled $15.8 billion in second-quarter 2019, a decline of approximately $600 million year over year. Operational improvements in Verizon's businesses were offset by higher cash taxes and cash payments related to the Voluntary Separation Program.

First half 2019 capital expenditures totaled $8.0 billion. Verizon's capital expenditures continue to support the launch and build-out of its 5G Ultra Wideband network, the growth in data and video traffic on the company's 4G LTE network, the deployment of significant fiber in markets nationwide and the upgrade to Verizon's Intelligent Edge Network architecture.

In 2018, Verizon announced a goal to achieve $10 billion in cumulative cash savings by 2021. This initiative has yielded $4.1 billion of cumulative cash savings since this program began. At the end of second-quarter 2019, Verizon completed the third and final phase of its Voluntary Separation Program and has realized approximately $480 million of expense savings year-to-date. The company expects additional incremental savings in third-quarter 2019, and is on track to achieve its cumulative cash savings goal.

Net income was $4.1 billion in second-quarter 2019. EBITDA (non-GAAP, earnings before interest, taxes, depreciation and amortization) totaled approximately $10.8 billion. Consolidated operating income margin was 24.5 percent in second-quarter 2019, compared with 20.5 percent in second-quarter 2018. Consolidated EBITDA margin (non-GAAP) was 33.5 percent in second-quarter 2019, compared with 34.5 percent in second-quarter 2018. Adjusted EBITDA margin (non-GAAP) in second-quarter 2019 was 37.7 percent. Consolidated adjusted EBITDA (non-GAAP) in second-quarter 2019 was $12.1 billion, an increase of approximately $200 million year over year.

Consumer results

• Total Verizon Consumer revenues were $22.0 billion, flat year over year, reflecting continued strong growth in wireless service revenue and Fios service offerings, offset by declines in wireless equipment and legacy wireline services.

• Verizon Consumer Group reported 126,000 wireless retail postpaid net additions in second-quarter 2019, consisting of 73,000 phone net additions and tablet net losses of 134,000, offset by 187,000 other connected device net additions, primarily wearables. Postpaid smartphone net additions were 209,000, up 17 percent year over year, driven by a 5 percent year over year increase in phone gross additions.

• Consumer wireless service revenues increased 2.5 percent in second-quarter 2019, driven by customer step-ups to higher-priced plans and an increase in connections per account.

• Total retail postpaid churn was 0.97 percent in second-quarter 2019, and retail postpaid phone churn was 0.72 percent.

• In second-quarter 2019, Verizon Consumer Group reported 28,000 Fios Internet net additions and 52,000 Fios Video net losses, reflecting the ongoing shift from traditional linear video to over-the-top offerings. Fios revenues increased by 1.2 percent, primarily due to the demand for broadband offerings.

• Segment operating income was $7.3 billion, an increase of 3.9 percent year over year, and segment operating income margin was 33.4 percent. Segment EBITDA (non-GAAP) totaled $10.2 billion in second-quarter 2019, an increase of 1.6 percent year over year. Segment EBITDA margin (non-GAAP) was 46.5 percent, including approximately 100 basis points in headwinds from the deferral of commission expense and the lease accounting standard.

Business results

• Total Verizon Business revenues were $7.8 billion, down 1.1 percent year over year, as growth in wireless services and high quality fiber products was offset by declines in legacy products.

• Verizon Business Group reported 325,000 wireless retail postpaid net additions in second-quarter 2019, consisting of 172,000 phone net additions, 90,000 tablet net additions and 63,000 other connected device additions.

• Total retail postpaid churn was 1.21 percent in second-quarter 2019, and retail postpaid phone churn was 0.97 percent.

• Segment operating income was $1.1 billion, a decrease of 2.7 percent year over year, and segment operating income margin was 13.8 percent. Segment EBITDA (non-GAAP) totaled $2.1 billion in second-quarter 2019, a decrease of 2.0 percent year over year. Segment EBITDA margin (non-GAAP) was 27.3 percent, down 20 basis points year over year due to declines in legacy wireline product revenues.

Media results

• Total Verizon Media revenues in second-quarter 2019 were $1.8 billion, down 2.9 percent year over year. This is an improvement from first-quarter 2019, when total Verizon Media revenues were down 7.2 percent year over year. Gains in native and mobile advertising continue to be offset by declines in desktop advertising.

Outlook and guidance

As outlined in Verizon's first-quarter 2019 earnings release, the company expects the following:

• Low single-digit percentage growth in adjusted 2019 EPS, excluding the impact of the lease accounting standard.

• Low single-digit percentage growth in full-year consolidated revenues on a GAAP reported basis.

• Cash taxes to be $2 billion to $3 billion higher than in 2018 due to benefits that were realized in 2018 that are not expected to repeat in 2019.

• Capital spending for 2019 to be in the range of $17 billion to $18 billion, including the expanded commercial launch of 5G.

The company now expects the adjusted effective income tax rate (non-GAAP) for full-year 2019 to be at the lower end of its previously disclosed range of 24 percent to 26 percent.

NOTE: See the accompanying schedules and www.verizon.com/about/investors for reconciliations to generally accepted accounting principles (GAAP) for non-GAAP financial measures cited in this document.

Verizon Communications Inc. (NYSE, Nasdaq: VZ), headquartered in New York City, generated revenues of $130.9 billion in 2018. The company operates America’s most reliable wireless network and the nation’s premier all-fiber network, and delivers integrated solutions to businesses worldwide. With brands like Yahoo, TechCrunch and HuffPost, the company’s media group helps consumers stay informed and entertained, communicate and transact, while creating new ways for advertisers and partners to connect. Verizon’s corporate responsibility prioritizes the environmental, social and governance issues most relevant to its business and impact to society.

VERIZON’S ONLINE MEDIA CENTER: News releases, stories, media contacts and other resources are available at www.verizon.com/about/news/. News releases are also available through an RSS feed. To subscribe, visit www.verizon.com/about/rss-feeds/.

Forward-looking statementsIn 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: adverse conditions in the U.S. and international economies; the effects of competition in the markets in which we operate; material changes in technology or technology substitution; disruption of our key suppliers’ provisioning of products or services; changes in the regulatory environment in which we operate, including any increase in restrictions on our ability to operate our networks; breaches of network or information technology security, natural disasters, terrorist attacks or acts of war or significant litigation and any resulting financial impact not covered by insurance; 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; material adverse changes in labor matters, including labor negotiations, and any resulting financial and/or operational impact; significant increases in benefit plan costs or lower investment returns on plan assets; changes in tax laws or treaties, or in their interpretation; 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; the inability to implement our business strategies; and the inability to realize the expected benefits of strategic transactions.

Media contacts:

Kim Ancin

908.559.3227

[email protected]

Eric Wilkens

908.559.3063

[email protected]

Verizon Communications Inc.
Condensed Consolidated Statements of Income
		(dollars in millions, except per share amounts)
		3 Mos. Ended				3 Mos. Ended							6 Mos. Ended				6 Mos. Ended
Unaudited		6/30/19				6/30/18				% Change			6/30/19				6/30/18				% Change
Operating Revenues
Global Enterprise		$	2,673			$	2,808			(4.8	)		$	5,364			$	5,634			(4.8	)
Small and Medium Business			2,785				2,642			5.4				5,493				5,176			6.1
Public Sector and Other			1,492				1,437			3.8				2,963				2,867			3.3
Wholesale			818				964			(15.1	)			1,667				1,957			(14.8	)
Total Operating Revenues			7,768				7,851			(1.1	)			15,487				15,634			(0.9	)
Operating Expenses
Cost of services			2,581				2,660			(3.0	)			5,172				5,370			(3.7	)
Cost of wireless equipment			1,109				1,101			0.7				2,166				2,137			1.4
Selling, general and administrative expense			1,961				1,930			1.6				3,942				3,794			3.9
Depreciation and amortization expense			1,046				1,059			(1.2	)			2,088				2,118			(1.4	)
Total Operating Expenses			6,697				6,750			(0.8	)			13,368				13,419			(0.4	)
Operating Income		$	1,071			$	1,101			(2.7	)		$	2,119			$	2,215			(4.3	)
Operating Income Margin			13.8	%			14.0	%						13.7	%			14.2	%
Segment EBITDA		$	2,117			$	2,160			(2.0	)		$	4,207			$	4,333			(2.9	)
Segment EBITDA Margin			27.3	%			27.5	%						27.2	%			27.7	%
Footnotes:
The segment financial results and metrics above are adjusted to exclude the effects of special items, as the Company’s chief operating decision maker excludes these items in assessing segment performance.
Certain intersegment transactions with corporate entities have not been eliminated.
* Not meaningful

Verizon Communications Inc.
Condensed Consolidated Balance Sheets
		(dollars in millions)
Unaudited		6/30/19				12/31/18				$ Change
Assets
Current assets
Cash and cash equivalents		$	1,949			$	2,745			$	(796	)
Accounts receivable, net			24,926				25,102				(176	)
Inventories			1,167				1,336				(169	)
Prepaid expenses and other			5,266				5,453				(187	)
Total current assets			33,308				34,636				(1,328	)
Property, plant and equipment			257,395				252,835				4,560
Less accumulated depreciation			169,577				163,549				6,028
Property, plant and equipment, net			87,818				89,286				(1,468	)
Investments in unconsolidated businesses			650				671				(21	)
Wireless licenses			94,333				94,130				203
Goodwill			24,632				24,614				18
Other intangible assets, net			9,474				9,775				(301	)
Operating lease right-of-use assets			22,467				0				22,467
Other assets			10,426				11,717				(1,291	)
Total assets		$	283,108			$	264,829			$	18,279
Liabilities and Equity
Current liabilities
Debt maturing within one year		$	8,773			$	7,190			$	1,583
Accounts payable and accrued liabilities			17,633				22,501				(4,868	)
Current operating lease liabilities			3,154				0				3,154
Other current liabilities			8,654				8,239				415
Total current liabilities			38,214				37,930				284
Long-term debt			104,598				105,873				(1,275	)
Employee benefit obligations			18,040				18,599				(559	)
Deferred income taxes			34,225				33,795				430
Non-current operating lease liabilities			18,254				0				18,254
Other liabilities			11,830				13,922				(2,092	)
Total long-term liabilities			186,947				172,189				14,758
Equity
Common stock			429				429				0
Additional paid in capital			13,419				13,437				(18	)
Retained earnings			47,945				43,542				4,403
Accumulated other comprehensive income			1,447				2,370				(923	)
Common stock in treasury, at cost			(6,823	)			(6,986	)			163
Deferred compensation – employee stock ownership plans and other			165				353				(188	)
Noncontrolling interests			1,365				1,565				(200	)
Total equity			57,947				54,710				3,237
Total liabilities and equity		$	283,108			$	264,829			$	18,279
Verizon -Selected Financial and Operating Statistics
		(dollars in millions, except per share amounts)
Unaudited		6/30/19				12/31/18
Total debt		$	113,371			$	113,063
Net debt		$	111,422			$	110,318
Net unsecured debt		$	100,170			$	100,242
Net debt / Consolidated Adjusted EBITDA(1)		2.3x				2.3x
Net unsecured debt / Consolidated Adjusted EBITDA(1)		2.1x				2.1x
Common shares outstanding end of period (in millions)			4,136				4,132
Total employees (‘000)			135.9				144.5
Quarterly cash dividends declared per common share		$	0.6025			$	0.6025
Footnotes:
(1) Consolidated adjusted EBITDA excludes the effects of non-operational items and special items.

Verizon Communications Inc.
Condensed Consolidated Statements of Cash Flows
		(dollars in millions)
		6 Mos. Ended				6 Mos. Ended
Unaudited		6/30/19				6/30/18				$ Change
Cash Flows from Operating Activities
Net Income		$	9,234			$	8,912			$	322
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense			8,463				8,674				(211	)
Employee retirement benefits			(294	)			(300	)			6
Deferred income taxes			588				1,354				(766	)
Provision for uncollectible accounts			738				462				276
Equity in losses of unconsolidated businesses, net of dividends received			50				268				(218	)
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses			(4,593	)			(1,538	)			(3,055	)
Discretionary employee benefits contributions			(300	)			(1,679	)			1,379
Other, net			1,950				280				1,670
Net cash provided by operating activities			15,836				16,433				(597	)
Cash Flows from Investing Activities
Capital expenditures (including capitalized software)			(7,967	)			(7,838	)			(129	)
Acquisitions of businesses, net of cash acquired			(28	)			(38	)			10
Acquisitions of wireless licenses			(199	)			(1,155	)			956
Other, net			(395	)			303				(698	)
Net cash used in investing activities			(8,589	)			(8,728	)			139
Cash Flows from Financing Activities
Proceeds from long-term borrowings			6,237				4,584				1,653
Proceeds from asset-backed long-term borrowings			3,982				1,716				2,266
Repayments of long-term borrowings and finance lease obligations			(9,630	)			(6,568	)			(3,062	)
Repayments of asset-backed long-term borrowings			(2,817	)			(2,000	)			(817	)
Dividends paid			(4,981	)			(4,845	)			(136	)
Other, net			(834	)			(752	)			(82	)
Net cash used in financing activities			(8,043	)			(7,865	)			(178	)
Decrease in cash, cash equivalents and restricted cash			(796	)			(160	)			(636	)
Cash, cash equivalents and restricted cash, beginning of period			3,916				2,888				1,028
Cash, cash equivalents and restricted cash, end of period		$	3,120			$	2,728			$	392

Verizon Communications Inc.
Consumer - Selected Financial Results
		(dollars in millions)
		3 Mos. Ended				3 Mos. Ended							6 Mos. Ended				6 Mos. Ended
Unaudited		6/30/19				6/30/18				% Change			6/30/19				6/30/18				% Change
Operating Revenues
Service		$	16,350			$	16,049			1.9			$	32,609			$	31,873			2.3
Wireless equipment			3,903				4,251			(8.2	)			8,069				8,521			(5.3	)
Other			1,742				1,703			2.3				3,465				3,236			7.1
Total Operating Revenues			21,995				22,003			-				44,143				43,630			1.2
Operating Expenses
Cost of services			3,847				3,842			0.1				7,726				7,615			1.5
Cost of wireless equipment			3,909				4,296			(9.0	)			8,051				8,569			(6.0	)
Selling, general and administrative expense			4,022				3,808			5.6				8,005				7,479			7.0
Depreciation and amortization expense			2,881				2,997			(3.9	)			5,775				5,972			(3.3	)
Total Operating Expenses		$	14,659			$	14,943			(1.9	)		$	29,557			$	29,635			(0.3	)
Operating Income		$	7,336			$	7,060			3.9			$	14,586			$	13,995			4.2
Operating Income Margin			33.4	%			32.1	%						33.0	%			32.1	%
Segment EBITDA		$	10,217			$	10,057			1.6			$	20,361			$	19,967			2.0
Segment EBITDA Margin			46.5	%			45.7	%						46.1	%			45.8	%
Footnotes:
The segment financial results and metrics above are adjusted to exclude the effects of special items, as the Company’s chief operating decision maker excludes these items in assessing segment performance.
Certain intersegment transactions with corporate entities have not been eliminated.

Verizon Communications Inc.
Consumer - Selected Operating Statistics
Unaudited													6/30/19				6/30/18				% Change
Connections (‘000):
Wireless retail postpaid connections														89,630				88,984			0.7
Wireless retail prepaid connections														4,266				4,832			(11.7	)
Total wireless retail connections														93,896				93,816			0.1
Fios video connections														4,270				4,487			(4.8	)
Fios Internet connections														5,837				5,663			3.1
Fios digital voice residence connections														3,725				3,863			(3.6	)
Fios digital connections														13,832				14,013			(1.3	)
Broadband connections														6,474				6,447			0.4
Voice connections														6,058				6,631			(8.6	)
		3 Mos. Ended				3 Mos. Ended							6 Mos. Ended				6 Mos. Ended
Unaudited		6/30/19				6/30/18				% Change			6/30/19				6/30/18				% Change
Gross Additions (‘000):
Wireless retail postpaid			2,725				2,617			4.1				5,439				5,251			3.6
Net Additions Detail (‘000) (1):
Wireless retail postpaid			126				147			(14.3	)			(75	)			92			*
Wireless retail prepaid			(213	)			(236	)		9.7				(389	)			(571	)		31.9
Total wireless retail			(87	)			(89	)		2.2				(464	)			(479	)		3.1
Wireless retail postpaid phones			73				17			*				(90	)			(136	)		33.8
Fios video			(52	)			(38	)		(36.8	)			(107	)			(61	)		(75.4	)
Fios Internet			28				36			(22.2	)			76				98			(22.4	)
Fios digital voice residence			(32	)			(28	)		(14.3	)			(77	)			(42	)		(83.3	)
Fios digital			(56	)			(30	)		(86.7	)			(108	)			(5	)		*
Broadband			(2	)			(7	)		71.4				14				6			*
Voice			(126	)			(155	)		18.7				(274	)			(297	)		7.7
Churn Rate:
Wireless retail postpaid			0.97	%			0.93	%						1.03	%			0.97	%
Wireless retail postpaid phones			0.72	%			0.71	%						0.76	%			0.74	%
Wireless retail			1.23	%			1.19	%						1.28	%			1.25	%
Revenue Statistics (in millions):
Wireless service revenue		$	13,456			$	13,122			2.5			$	26,813			$	26,003			3.1
Fios revenues		$	2,772			$	2,738			1.2			$	5,536			$	5,472			1.2
Other Wireless Statistics:
Wireless retail postpaid ARPA (2)		$	118.15			$	115.53			2.3			$	117.80			$	114.49			2.9
Wireless retail postpaid upgrade rate			4.3	%			5.1	%
Wireless retail postpaid accounts (‘000) (3)														33,924				34,045			(0.4	)
Wireless retail postpaid connections per account (3)														2.64				2.61			1.1
Total wireless Internet postpaid base (3)														16.2	%			15.9	%
Footnotes:
(1) Connection net additions exclude acquisitions and adjustments.
(2) Wireless retail postpaid ARPA - average service revenue per account from retail postpaid accounts.
(3) Statistics presented as of end of period.
The segment financial results and metrics above are adjusted to exclude the effects of special items, as the Company’s chief operating decision maker excludes these items in assessing segment performance.
Certain intersegment transactions with corporate entities have not been eliminated.
* Not meaningful

Verizon Communications Inc.
Business - Selected Financial Results
																	(dollars in millions)
		3 Mos. Ended				3 Mos. Ended							6 Mos. Ended				6 Mos. Ended
Unaudited		6/30/19				6/30/18				% Change			6/30/19				6/30/18				% Change
Operating Revenues
Global Enterprise		$	2,673			$	2,808			(4.8	)		$	5,364			$	5,634			(4.8	)
Small and Medium Business			2,785				2,642			5.4				5,493				5,176			6.1
Public Sector and Other			1,492				1,437			3.8				2,963				2,867			3.3
Wholesale			818				964			(15.1	)			1,667				1,957			(14.8	)
Total Operating Revenues			7,768				7,851			(1.1	)			15,487				15,634			(0.9	)
Operating Expenses
Cost of services			2,581				2,660			(3.0	)			5,172				5,370			(3.7	)
Cost of wireless equipment			1,109				1,101			0.7				2,166				2,137			1.4
Selling, general and administrative expense			1,961				1,930			1.6				3,942				3,794			3.9
Depreciation and amortization expense			1,046				1,059			(1.2	)			2,088				2,118			(1.4	)
Total Operating Expenses			6,697				6,750			(0.8	)			13,368				13,419			(0.4	)
Operating Income		$	1,071			$	1,101			(2.7	)		$	2,119			$	2,215			(4.3	)
Operating Income Margin			13.8	%			14.0	%						13.7	%			14.2	%
Segment EBITDA		$	2,117			$	2,160			(2.0	)		$	4,207			$	4,333			(2.9	)
Segment EBITDA Margin			27.3	%			27.5	%						27.2	%			27.7	%
Footnotes:
The segment financial results and metrics above are adjusted to exclude the effects of special items, as the Company’s chief operating decision maker excludes these items in assessing segment performance.
Certain intersegment transactions with corporate entities have not been eliminated.

Verizon Communications Inc.
Business - Selected Operating Statistics
Unaudited													6/30/19				6/30/18				% Change
Connections (‘000):
Wireless retail postpaid connections														24,221				22,638			7.0
Fios video connections														76				73			4.1
Fios Internet connections														316				296			6.8
Fios digital connections														392				369			6.2
Broadband connections														494				509			(2.9	)
Voice connections														5,163				5,639			(8.4	)
		3 Mos. Ended				3 Mos. Ended							6 Mos. Ended				6 Mos. Ended
Unaudited		6/30/19				6/30/18				% Change			6/30/19				6/30/18				% Change
Gross Additions ('000):
Wireless retail postpaid			1,199				1,162			3.2				2,342				2,242			4.5
Net Add Detail (‘000) (1):
Wireless retail postpaid			325				384			(15.4	)			587				699			(16.0	)
Wireless retail postpaid phones			172				182			(5.5	)			291				311			(6.4	)
Fios video			-				1			*				2				2			-
Fios Internet			6				7			(14.3	)			10				11			(9.1	)
Fios digital			6				8			(25.0	)			12				13			(7.7	)
Broadband			(3	)			(3	)		-				(7	)			(9	)		22.2
Voice			(105	)			(130	)		19.2				(237	)			(254	)		6.7
Churn Rate:
Wireless retail postpaid			1.21	%			1.16	%						1.23	%			1.16	%
Wireless retail postpaid phones			0.97	%			0.96	%						0.99	%			0.96	%
Revenue Statistics (in millions):
Wireless service revenue		$	2,775			$	2,615			6.1			$	5,469			$	5,116			6.9
Fios revenues		$	239			$	218			9.6			$	482			$	435			10.8
Other Operating Statistics:
Wireless retail postpaid upgrade rate			4.2	%			4.6	%
Total wireless Internet postpaid base (2)														33.5	%			33.1	%
Footnotes:
(1) Connection net additions exclude acquisitions and adjustments.
(2) Statistics presented as of end of period.
The segment financial results and metrics above are adjusted to exclude the effects of special items, as the Company’s chief operating decision maker excludes these items in assessing segment performance.
Certain intersegment transactions with corporate entities have not been eliminated.
* Not meaningful

Verizon Communications Inc.
Supplemental Information - Wireless Historical Financial Results
The following supplemental schedule contains historical wireless segment results and is provided to help investors understand trends in our new segment results.
(dollars in millions)
Unaudited		3 Mos. Ended6/30/19				3 Mos. Ended6/30/18				%Change			6 Mos. Ended6/30/19				6 Mos. Ended6/30/18				%Change
Operating Revenues
Service		$	16,244			$	15,754			3.1			$	32,316			$	31,156			3.7
Equipment			4,720				5,044			(6.4	)			9,651				10,084			(4.3	)
Other			1,718				1,651			4.1				3,415				3,109			9.8
Total Operating Revenues			22,682				22,449			1.0				45,382				44,349			2.3
Operating Expenses
Cost of services			2,422				2,335			3.7				4,878				4,550			7.2
Cost of equipment			5,019				5,397			(7.0	)			10,217				10,706			(4.6	)
Selling, general and administrative expense			4,318				3,984			8.4				8,599				7,883			9.1
Depreciation and amortization expense			2,282				2,459			(7.2	)			4,581				4,887			(6.3	)
Total Operating Expenses			14,041				14,175			(0.9	)			28,275				28,026			0.9
Operating Income		$	8,641			$	8,274			4.4			$	17,107			$	16,323			4.8
Operating Income Margin			38.1	%			36.9	%						37.7	%			36.8	%
Segment EBITDA		$	10,923			$	10,733			1.8			$	21,688			$	21,210			2.3
Segment EBITDA Margin			48.2	%			47.8	%						47.8	%			47.8	%
Footnotes:
The segment financial results and metrics above are adjusted to exclude the effects of special items.
Certain intersegment transactions with corporate entities have not been eliminated.

Verizon Communications Inc.
Supplemental Information - Wireless Historical Operating Statistics
The following supplemental schedule contains historical wireless segment results and is provided to help investors understand trends in our new segment results.
Unaudited													6/30/19				6/30/18				% Change
Connections (‘000)
Retail postpaid														113,851				111,622			2.0
Retail prepaid														4,266				4,832			(11.7	)
Total retail														118,117				116,454			1.4
Unaudited		3 Mos. Ended6/30/19				3 Mos. Ended6/30/18				%Change			6 Mos. Ended6/30/19				6 Mos. Ended6/30/18				%Change
Net Add Detail (‘000) (1)
Retail postpaid			451				531			(15.1	)			512				791			(35.3	)
Retail prepaid			(213	)			(236	)		9.7				(389	)			(571	)		31.9
Total retail			238				295			(19.3	)			123				220			(44.1	)
Account Statistics
Retail postpaid accounts (‘000) (2)														35,346				35,309			0.1
Retail postpaid connections per account (2)														3.22				3.16			1.9
Retail postpaid ARPA (3) (4)		$	137.80			$	134.56			2.4			$	137.24			$	133.13			3.1
Churn Detail
Retail postpaid			1.02	%			0.97	%						1.07	%			1.01	%
Retail			1.22	%			1.18	%						1.27	%			1.23	%
Retail Postpaid Connection Statistics (2)
Total smartphone postpaid phone base														93.1	%			91.2	%
Total Internet postpaid base														19.8	%			19.4	%
Footnotes:
(1) Connection net additions exclude acquisitions and adjustments.
(2) Statistics presented as of end of period.
(3) Wireless retail postpaid ARPA - average service revenue per account from retail postpaid accounts.
The segment financial results and metrics above are adjusted to exclude the effects of special items.
Certain intersegment transactions with corporate entities have not been eliminated.
* Not meaningful

Verizon Communications Inc.
Supplemental Information - Wireline Historical Financial Results
The following supplemental schedule contains historical wireline segment results and is provided to help investors understand trends in our new segment results.
(dollars in millions)
Unaudited		3 Mos. Ended6/30/19				3 Mos. Ended6/30/18				%Change			6 Mos. Ended6/30/19				6 Mos. Ended6/30/18				%Change
Operating Revenues
Consumer Markets		$	3,120			$	3,132			(0.4	)		$	6,273			$	6,282			(0.1	)
Enterprise Solutions			2,084				2,211			(5.7	)			4,224				4,451			(5.1	)
Partner Solutions			1,043				1,200			(13.1	)			2,118				2,428			(12.8	)
Business Markets			820				850			(3.5	)			1,648				1,721			(4.2	)
Other			59				66			(10.6	)			127				134			(5.2	)
Total Operating Revenues			7,126				7,459			(4.5	)			14,390				15,016			(4.2	)
Operating Expenses
Cost of services			4,197				4,377			(4.1	)			8,383				8,852			(5.3	)
Selling, general and administrative expense			1,553				1,577			(1.5	)			3,159				3,056			3.4
Depreciation and amortization expense			1,566				1,524			2.8				3,126				3,058			2.2
Total Operating Expenses			7,316				7,478			(2.2	)			14,668				14,966			(2.0	)
Operating Income (Loss)		$	(190	)		$	(19	)		*			$	(278	)		$	50			*
Operating Income (Loss) Margin			(2.7	)%			(0.3	)%						(1.9	)%			0.3	%
Segment EBITDA		$	1,376			$	1,505			(8.6	)		$	2,848			$	3,108			(8.4	)
Segment EBITDA Margin			19.3	%			20.2	%						19.8	%			20.7	%
Footnotes:
The segment financial results and metrics above are adjusted to exclude the effects of special items.
Certain intersegment transactions with corporate entities have not been eliminated.
* Not meaningful

Verizon Communications Inc.
Supplemental Information - Wireline Historical Operating Statistics
The following supplemental schedule contains historical wireline segment results and is provided to help investors understand trends in our new segment results.
Unaudited													6/30/2019				6/30/2018				%Change
Connections (‘000)
Fios video connections														4,346				4,560			(4.7	)
Fios Internet connections														6,153				5,959			3.3
Fios digital voice residence connections														3,725				3,863			(3.6	)
Fios digital connections														14,224				14,382			(1.1	)
Broadband connections														6,968				6,956			0.2
Voice connections														11,221				12,270			(8.5	)
Unaudited		3 Mos. Ended6/30/19				3 Mos. Ended6/30/18				%Change			6 Mos. Ended6/30/19				6 Mos. Ended6/30/18				%Change
Net Add Detail (‘000)
Fios video connections			(52	)			(37	)		(40.5	)			(105	)			(59	)		(78.0	)
Fios Internet connections			34				43			(20.9	)			86				109			(21.1	)
Fios digital voice residence connections			(32	)			(28	)		(14.3	)			(77	)			(42	)		(83.3	)
Fios digital connections			(50	)			(22	)		*				(96	)			8			*
Broadband connections			(5	)			(10	)		50.0				7				(3	)		*
Voice connections			(232	)			(285	)		18.6				(511	)			(551	)		7.3
Revenue Statistics
Fios revenues (in millions)		$	3,011			$	2,956			1.9			$	6,018			$	5,907			1.9
Footnotes:
The segment financial results and metrics above are adjusted to exclude the effects of special items.
Certain intersegment transactions with corporate entities have not been eliminated.
* Not meaningful

Verizon Communications Inc.
Non-GAAP Reconciliations - Consolidated Verizon
Consolidated EBITDA, Consolidated EBITDA Margin, Consolidated Adjusted EBITDA and Consolidated Adjusted EBITDA Margin
																		(dollars in millions)
Unaudited		3 Mos. Ended6/30/2019				3 Mos. Ended3/31/2019				3 Mos. Ended12/31/2018				3 Mos. Ended9/30/2018				3 Mos. Ended6/30/2018				3 Mos. Ended3/31/2018
Consolidated Net Income		$	4,074			$	5,160			$	2,065			$	5,062			$	4,246			$	4,666
Add/(subtract):
Provision (benefit) for income taxes			1,236				1,628				(698	)			1,613				1,281				1,388
Interest expense			1,215				1,210				1,199				1,211				1,222				1,201
Depreciation and amortization expense			4,232				4,231				4,352				4,377				4,350				4,324
Consolidated EBITDA		$	10,757			$	12,229			$	6,918			$	12,263			$	11,099			$	11,579
Add/subtract:
Other (income) expense, net*		$	1,312			$	(295	)		$	(1,865	)		$	(214	)		$	(360	)		$	75
Equity in losses (earnings) of unconsolidated businesses†			13				6				(64	)			3				228				19
Oath goodwill impairment			-				-				4,591				-				-				-
Severance charges			-				-				1,818				-				339				-
Product realignment charges‡			-				-				-				-				450				-
Acquisition and integration related charges‡			-				-				187				130				109				105
			1,325				(289	)			4,667				(81	)			766				199
Consolidated Adjusted EBITDA		$	12,082			$	11,940			$	11,585			$	12,182			$	11,865			$	11,778
Consolidated Operating Revenues - Quarter to Date		$	32,071															$	32,203
Operating Income		$	7,850															$	6,617
Operating Income Margin - Quarter to Date			24.5	%															20.5	%
Consolidated EBITDA Margin - Quarter to Date			33.5	%															34.5	%
Consolidated Adjusted EBITDA Margin - Quarter to Date			37.7	%															36.8	%
Consolidated Adjusted EBITDA - Year Over Year Change		$	217
Consolidated Adjusted EBITDA - Year Over Year Change %			1.8	%
* Includes Pension and benefits mark-to-market adjustments and Early debt redemption costs, where applicable.
† Includes Product realignment charges, where applicable.
‡ Excludes depreciation and amortization expense, where applicable.

Verizon Communications Inc.
Non-GAAP Reconciliations - Consolidated Verizon
Net Debt and Net Debt to Consolidated Adjusted EBITDA Ratio
			(dollars in millions)
Unaudited																	6/30/19				12/31/18
Debt maturing within one year																	$	8,773			$	7,190
Long-term debt																		104,598				105,873
Total Debt																		113,371				113,063
Less Cash and cash equivalents																		1,949				2,745
Net Debt																	$	111,422			$	110,318
Net Debt to Consolidated Adjusted EBITDA Ratio																	2.3x				2.3x
Net Unsecured Debt and Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio
			(dollars in millions)
Unaudited																	6/30/19				12/31/18
Total Debt																	$	113,371			$	113,063
Less Secured debt																		11,252				10,076
Unsecured debt																		102,119				102,987
Less Cash and cash equivalents																		1,949				2,745
Net Unsecured Debt																	$	100,170			$	100,242
Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio																	2.1x				2.1x
Adjusted Earnings per Common Share (Adjusted EPS)(1)
Unaudited								3 Mos. Ended6/30/19													3 Mos. Ended6/30/18
	Pre-tax		Tax			After-Tax					Pre-tax		Tax				After-Tax
EPS								$	0.95												$	1.00
Severance charges	$	-	$	-		$	-		-		$	339	$	(89	)		$	250				0.06
Acquisition and integration-related charges		-		-			-		-			120		(28	)			92				0.02
Early debt redemption costs		1,544		(404	)		1,140		0.28			-		-				-				-
Product realignment charges		-		-			-		-			658		(149	)			509				0.12
	$	1,544	$	(404	)	$	1,140		0.28		$	1,117	$	(266	)		$	851				0.20
Adjusted EPS								$	1.23												$	1.20
(1) Adjusted EPS may not add due to rounding.

Verizon Communications Inc.
Non-GAAP Reconciliations - Segments
Segment EBITDA and Segment EBITDA Margin
Consumer		(dollars in millions)
Unaudited		3 Mos. Ended6/30/19				3 Mos. Ended6/30/18
Operating Income		$	7,336			$	7,060
Add Depreciation and amortization expense			2,881				2,997
Segment EBITDA		$	10,217			$	10,057
Year over year change			1.6	%
Total operating revenues		$	21,995			$	22,003
Operating Income Margin			33.4	%			32.1	%
Segment EBITDA Margin			46.5	%			45.7	%
Business		(dollars in millions)
Unaudited		3 Mos. Ended6/30/19				3 Mos. Ended6/30/18
Operating Income		$	1,071			$	1,101
Add Depreciation and amortization expense			1,046				1,059
Segment EBITDA		$	2,117			$	2,160
Total operating revenues		$	7,768			$	7,851
Operating Income Margin			13.8	%			14.0	%
Segment EBITDA Margin			27.3	%			27.5	%
Segment EBITDA Margin - Year Over Year Change		(20) bps

Verizon Communications Inc.
Supplemental Information - VZ 2.0 to Historical Financial Results Reconciliation(1)
The following tables present a reconciliation of financial results for our current reportable segments, Consumer and Business, to our historical reportable segments, Wireless and Wireline.
	3 Mos. Ended 6/30/19
														(dollars in millions)
	VZ 2.0													Historical
	Consumer			Business			TotalReportableSegments		Adjustments(2)			AdjustedTotalReportableSegments		Wireless									Wireline													HistoricalTotalReportableSegments
Unaudited														Service		Equipment		Other		TotalWireless			ConsumerMarkets		EnterpriseSolutions		PartnerSolutions		BusinessMarkets		Other		TotalWireline
External Operating Revenues
Total Operating Revenues	$	21,995		$	7,768		$	29,763	$	45		$	29,808	$	16,244	$	4,720	$	1,718	$	22,682		$	3,120	$	2,084	$	1,043	$	820	$	59	$	7,126		$	29,808
Operating Expenses
Cost of services		3,847			2,581			6,428		191			6,619								2,422													4,197			6,619
Cost of wireless equipment		3,909			1,109			5,018		1			5,019								5,019													-			5,019
Selling, general and administrative expense		4,022			1,961			5,983		(112	)		5,871								4,318													1,553			5,871
Depreciation and amortization expense		2,881			1,046			3,927		(79	)		3,848								2,282													1,566			3,848
Total Operating Expenses		14,659			6,697			21,356		1			21,357								14,041													7,316			21,357
Operating Income	$	7,336		$	1,071		$	8,407	$	44		$	8,451							$	8,641												$	(190	)	$	8,451
Add Depreciation and amortization expense		2,881			1,046			3,927		(79	)		3,848								2,282													1,566			3,848
Segment EBITDA	$	10,217		$	2,117		$	12,334	$	(35	)	$	12,299							$	10,923												$	1,376		$	12,299
Operating Income Margin		33.4	%		13.8	%															38.1	%												(2.7	)%
Segment EBITDA Margin		46.5	%		27.3	%															48.2	%												19.3	%
Footnotes:
(1) Information presented for VZ 2.0 and historical financial results includes intersegment transactions.
(2) Adjustment represents intersegment revenues that have been eliminated under the new structure net of the impact of VZ Connect and other early-stage development businesses previously included in Corporate.
	3 Mos. Ended 6/30/18
														(dollars in millions)
	VZ 2.0													Historical
	Consumer			Business			TotalReportableSegments		Adjustments(2)			AdjustedTotalReportableSegments		Wireless									Wireline													HistoricalTotalReportableSegments
Unaudited														Service		Equipment		Other		TotalWireless			ConsumerMarkets		EnterpriseSolutions		PartnerSolutions		BusinessMarkets		Other		TotalWireline
External Operating Revenues
Total Operating Revenues	$	22,003		$	7,851		$	29,854	$	54		$	29,908	$	15,754	$	5,044	$	1,651	$	22,449		$	3,132	$	2,211	$	1,200	$	850	$	66	$	7,459		$	29,908
Operating Expenses
Cost of services		3,842			2,660			6,502		210			6,712								2,335													4,377			6,712
Cost of wireless equipment		4,296			1,101			5,397		—			5,397								5,397													—			5,397
Selling, general and administrative expense		3,808			1,930			5,738		(177	)		5,561								3,984													1,577			5,561
Depreciation and amortization expense		2,997			1,059			4,056		(73	)		3,983								2,459													1,524			3,983
Total Operating Expenses		14,943			6,750			21,693		(40	)		21,653								14,175													7,478			21,653
Operating Income	$	7,060		$	1,101		$	8,161	$	94		$	8,255							$	8,274												$	(19	)	$	8,255
Add Depreciation and amortization expense		2,997			1,059			4,056		(73	)		3,983								2,459													1,524			3,983
Segment EBITDA	$	10,057		$	2,160		$	12,217	$	21		$	12,238							$	10,733												$	1,505		$	12,238
Operating Income Margin		32.1	%		14.0	%															36.9	%												(0.3	)%
Segment EBITDA Margin		45.7	%		27.5	%															47.8	%												20.2	%
Footnotes:
(1) Information presented for VZ 2.0 and historical financial results includes intersegment transactions.
(2) Adjustment represents intersegment revenues that have been eliminated under the new structure net of the impact of VZ Connect and other early-stage development businesses previously included in Corporate.
	6 Mos. Ended 6/30/19
														(dollars in millions)
	VZ 2.0													Historical
	Consumer			Business			TotalReportableSegments		Adjustments(2)			AdjustedTotalReportableSegments		Wireless									Wireline													HistoricalTotalReportableSegments
Unaudited														Service		Equipment		Other		TotalWireless			ConsumerMarkets		EnterpriseSolutions		PartnerSolutions		BusinessMarkets		Other		TotalWireline
External Operating Revenues
Total Operating Revenues	$	44,143		$	15,487		$	59,630	$	142		$	59,772	$	32,316	$	9,651	$	3,415	$	45,382		$	6,273	$	4,224	$	2,118	$	1,648	$	127	$	14,390		$	59,772
Operating Expenses
Cost of services		7,726			5,172			12,898		363			13,261								4,878													8,383			13,261
Cost of wireless equipment		8,051			2,166			10,217		—			10,217								10,217													—			10,217
Selling, general and administrative expense		8,005			3,942			11,947		(189	)		11,758								8,599													3,159			11,758
Depreciation and amortization expense		5,775			2,088			7,863		(156	)		7,707								4,581													3,126			7,707
Total Operating Expenses		29,557			13,368			42,925		18			42,943								28,275													14,668			42,943
Operating Income	$	14,586		$	2,119		$	16,705	$	124		$	16,829							$	17,107												$	(278	)	$	16,829
Add Depreciation and amortization expense		5,775			2,088			7,863		(156	)		7,707								4,581													3,126			7,707
Segment EBITDA	$	20,361		$	4,207		$	24,568	$	(32	)	$	24,536							$	21,688												$	2,848		$	24,536
Operating Income Margin		33.0	%		13.7	%															37.7	%												(1.9	)%
Segment EBITDA Margin		46.1	%		27.2	%															47.8	%												19.8	%
Footnotes:
(1) Information presented for VZ 2.0 and historical financial results includes intersegment transactions.
(2) Adjustment represents intersegment revenues that have been eliminated under the new structure net of the impact of VZ Connect and other early-stage development businesses previously included in Corporate.
	6 Mos. Ended 6/30/18
														(dollars in millions)
	VZ 2.0													Historical
	Consumer			Business			TotalReportableSegments		Adjustments(2)			AdjustedTotalReportableSegments		Wireless									Wireline													HistoricalTotalReportableSegments
Unaudited														Service		Equipment		Other		TotalWireless			ConsumerMarkets		EnterpriseSolutions		PartnerSolutions		BusinessMarkets		Other		TotalWireline
External Operating Revenues
Total Operating Revenues	$	43,630		$	15,634		$	59,264	$	101		$	59,365	$	31,156	$	10,084	$	3,109	$	44,349		$	6,282	$	4,451	$	2,428	$	1,721	$	134	$	15,016		$	59,365
Operating Expenses
Cost of services		7,615			5,370			12,985		417			13,402								4,550													8,852			13,402
Cost of wireless equipment		8,569			2,137			10,706		—			10,706								10,706													—			10,706
Selling, general and administrative expense		7,479			3,794			11,273		(334	)		10,939								7,883													3,056			10,939
Depreciation and amortization expense		5,972			2,118			8,090		(145	)		7,945								4,887													3,058			7,945
Total Operating Expenses		29,635			13,419			43,054		(62	)		42,992								28,026													14,966			42,992
Operating Income	$	13,995		$	2,215		$	16,210	$	163		$	16,373							$	16,323												$	50		$	16,373
Add Depreciation and amortization expense		5,972			2,118			8,090		(145	)		7,945								4,887													3,058			7,945
Segment EBITDA	$	19,967		$	4,333		$	24,300	$	18		$	24,318							$	21,210												$	3,108		$	24,318
Operating Income Margin		32.1	%		14.2	%															36.8	%												0.3	%
Segment EBITDA Margin		45.8	%		27.7	%															47.8	%												20.7	%
Footnotes:
(1) Information presented for VZ 2.0 and historical financial results includes intersegment transactions.
(2) Adjustment represents intersegment revenues that have been eliminated under the new structure net of the impact of VZ Connect and other early-stage development businesses previously included in Corporate.

Source: Verizon Communications