Form 8-K VERIZON COMMUNICATIONS For: Aug 01
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________________________________________
FORM 8-K
______________________________________________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: August 1, 2019
(Date of earliest event reported)
______________________________________________________________________________
Verizon Communications Inc.
(Exact name of registrant as specified in its charter)
_______________________________________________________________________________
Delaware | 1-8606 | 23-2259884 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
1095 Avenue of the Americas New York, New York | 10036 | |
(Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code: (212) 395-1000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbol(s) | Name of Exchange on Which Registered | ||
Common Stock, par value $0.10 | VZ | New York Stock Exchange | ||
Common Stock, par value $0.10 | VZ | The NASDAQ Global Select Market | ||
2.375% Notes due 2022 | VZ22A | New York Stock Exchange | ||
0.500% Notes due 2022 | VZ22B | New York Stock Exchange | ||
1.625% Notes due 2024 | VZ24B | New York Stock Exchange | ||
4.073% Notes due 2024 | VZ24C | New York Stock Exchange | ||
0.875% Notes due 2025 | VZ25 | New York Stock Exchange | ||
3.25% Notes due 2026 | VZ26 | New York Stock Exchange | ||
1.375% Notes due 2026 | VZ26B | New York Stock Exchange | ||
0.875% Notes due 2027 | VZ27E | New York Stock Exchange | ||
1.375% Notes due 2028 | VZ28 | New York Stock Exchange | ||
1.875% Notes due 2029 | VZ29B | New York Stock Exchange | ||
1.250% Notes due 2030 | VZ30 | New York Stock Exchange | ||
2.625% Notes due 2031 | VZ31 | New York Stock Exchange | ||
2.500% Notes due 2031 | VZ31A | New York Stock Exchange | ||
4.75% Notes due 2034 | VZ34 | New York Stock Exchange | ||
3.125% Notes due 2035 | VZ35 | New York Stock Exchange | ||
3.375% Notes due 2036 | VZ36A | New York Stock Exchange | ||
2.875% Notes due 2038 | VZ38B | New York Stock Exchange | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
[ ] Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period or complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 2.02. Results of Operations and Financial Condition
Attached as an exhibit hereto are a press release and financial tables dated August 1, 2019 issued by Verizon Communications Inc. (Verizon).
Non-GAAP Measures
Verizon’s press release and financial tables include financial information prepared in conformity with generally accepted accounting principles in the United States (GAAP) as well as non-GAAP financial information. It is management's intent to provide non-GAAP financial information to enhance the understanding of Verizon's GAAP financial information and it should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Each non-GAAP financial measure is presented along with the corresponding GAAP measure so as not to imply that more emphasis should be placed on the non-GAAP measure. We believe that non-GAAP measures provide relevant and useful information, which is used by management, investors and other users of our financial information in assessing both consolidated and segment performance. The non-GAAP financial information presented may be determined or calculated differently by other companies and may not be directly comparable to that of other companies.
EBITDA and EBITDA Margin Related Non-GAAP Measures
Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA), Consolidated EBITDA Margin, Segment EBITDA and Segment EBITDA Margin are non-GAAP financial measures that we believe are useful to management, investors and other users of our financial information in evaluating operating profitability on a more variable cost basis as they exclude depreciation and amortization expense related primarily to capital expenditures and acquisitions that occurred in prior periods, as well as in evaluating operating performance in relation to Verizon’s competitors.
Consolidated EBITDA is calculated by adding back interest, taxes and depreciation and amortization expense to net income. Consolidated EBITDA Margin is calculated by dividing Consolidated EBITDA by consolidated operating revenues.
Segment EBITDA is calculated by adding back depreciation and amortization expense to segment operating income. Segment EBITDA Margin is calculated by dividing Segment EBITDA by segment total operating revenues.
Consolidated Adjusted EBITDA and Consolidated Adjusted EBITDA Margin Related Non-GAAP Measures
Consolidated Adjusted EBITDA and Consolidated Adjusted EBITDA Margin are non-GAAP financial measures that we believe provide relevant and useful information to management, investors and other users of our financial information in evaluating the effectiveness of our operations and underlying business trends in a manner that is consistent with management’s evaluation of business performance. We believe that Consolidated Adjusted EBITDA and Consolidated Adjusted EBITDA Margin are used by investors to compare a company’s operating performance to its competitors by minimizing impacts caused by differences in capital structure, taxes and depreciation policies. Further, the exclusion of non-operational items and special items enables comparability to prior period performance and trend analysis.
Consolidated Adjusted EBITDA is calculated by excluding from Consolidated EBITDA the effect of the following non-operational items: equity in losses and earnings of unconsolidated businesses and other income and expense, net, and the following special items: Oath goodwill impairment, severance charges, product realignment charges and acquisition and integration related charges. Oath goodwill impairment relates to impairment charges recognized in the fourth quarter of 2018 as a result of the Company's annual goodwill impairment testing of its media business, Verizon Media, which operated in 2018 under the "Oath" brand. Severance charges recorded during 2018 are primarily related to the voluntary separation program and other headcount reduction initiatives. Product realignment charges primarily relate to the discontinuation of the go90 platform and associated content. Acquisition and integration related charges represent transaction expenses related to business acquisitions and incremental expenses directly incurred to integrate the acquired businesses into our operations.
Consolidated Adjusted EBITDA Margin is calculated by dividing Consolidated Adjusted EBITDA by Consolidated Operating Revenues.
Net Debt and Net Debt to Consolidated Adjusted EBITDA Ratio
Net Debt and Net Debt to Consolidated Adjusted EBITDA Ratio are non-GAAP financial measures that we believe are useful to management, investors and other users of our financial information in evaluating Verizon’s ability to service its debt.
Net Debt is calculated by subtracting cash and cash equivalents from the sum of debt maturing within one year and long-term debt. Net Debt to Consolidated Adjusted EBITDA Ratio is calculated by dividing Net Debt by Consolidated Adjusted EBITDA. For
purposes of Net Debt to Consolidated Adjusted EBITDA Ratio, Consolidated Adjusted EBITDA is calculated for the last twelve months.
Net Unsecured Debt and Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio
Net Unsecured Debt and Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio are non-GAAP financial measures that we believe are useful to management, investors and other users of our financial information in evaluating Verizon’s ability to service its unsecured debt from continuing operations.
Net Unsecured Debt is calculated by subtracting secured debt and cash and cash equivalents from the sum of debt maturing within one year and long-term debt. Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio is calculated by dividing Net Unsecured Debt by Consolidated Adjusted EBITDA. For purposes of Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio, Consolidated Adjusted EBITDA is calculated for the last twelve months.
Adjusted Effective Income Tax Rate Attributable to Verizon Forecast (Adjusted ETR Forecast)
Adjusted ETR Forecast is a non-GAAP financial measure that we believe is useful to management, investors and other users of our financial information in assessing our effective income tax rate without the effect of special items which could vary from period to period. Adjusted ETR Forecast is calculated by dividing the Provision for income taxes by Net Income attributable to Verizon before tax after adjusting for the impact of Special Items.
We provided an Adjusted ETR forecast for our 2019 fiscal year. We have not provided a reconciliation of this non-GAAP forecast because we cannot, without unreasonable effort, predict the special items that could arise during 2019.
Supplemental Information - Wireless and Wireline
The Wireless and Wireline segment results included in the schedules accompanying this Report are non-GAAP financial measures that we believe provide relevant and useful information to investors and other users of our financial information in reconciling the results of our new segments, Verizon Consumer Group and Verizon Business Group, effective as of April 1, 2019, to the historical presentation of our segment results prior to our strategic reorganization. This supplemental operating information is also provided to help investors and users understand trends in our new segment results.
The Wireless and Wireline segment results are calculated by adjusting total reportable segments operating revenues and operating expenses for intersegment revenues that have been eliminated under the new structure, and the impact of VZ Connect and other early-stage development businesses previously included in Corporate. Total reportable segments operating revenues and operating expenses are calculated by aggregating the total operating revenues and operating expenses of Verizon Consumer Group and Verizon Business Group. This supplemental operating information should be considered in addition to, but not as a substitute for, our segment financial information.
See the accompanying schedules for reconciliations of non-GAAP financial measures to GAAP.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits. | ||
Exhibit Number | Description | |
99 | Press release and financial tables, dated August 1, 2019, issued by Verizon Communications Inc. | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Verizon Communications Inc. | ||||||
(Registrant) | ||||||
Date: | August 1, 2019 | /s/ Anthony T. Skiadas | ||||
Anthony T. Skiadas | ||||||
Senior Vice President and Controller | ||||||
EXHIBIT INDEX
Exhibit Number | Description | |
Press release and financial tables, dated August 1, 2019, issued by Verizon Communications Inc. | ||
Exhibit 99
News Release
FOR IMMEDIATE RELEASE | Media contacts: |
August 1, 2019 | Kim Ancin |
908.559.3227 | |
Eric Wilkens | |
908.559.3063 | |
Verizon reports strong 2Q and first-half 2019 results
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. |
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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 - 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
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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 |
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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. |
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• | 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 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: 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.
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Verizon Communications Inc.
Condensed Consolidated Statements of Income
(dollars in millions, except per share amounts) | ||||||||||||||||||||
Unaudited | 3 Mos. Ended 6/30/19 | 3 Mos. Ended 6/30/18 | % Change | 6 Mos. Ended 6/30/19 | 6 Mos. Ended 6/30/18 | % Change | ||||||||||||||
Operating Revenues | ||||||||||||||||||||
Service revenues and other | $ | 27,351 | $ | 27,159 | 0.7 | $ | 54,548 | $ | 53,891 | 1.2 | ||||||||||
Wireless equipment revenues | 4,720 | 5,044 | (6.4) | 9,651 | 10,084 | (4.3) | ||||||||||||||
Total Operating Revenues | 32,071 | 32,203 | (0.4) | 64,199 | 63,975 | 0.4 | ||||||||||||||
Operating Expenses | ||||||||||||||||||||
Cost of services | 7,702 | 8,234 | (6.5) | 15,494 | 16,180 | (4.2) | ||||||||||||||
Cost of wireless equipment | 5,019 | 5,397 | (7.0) | 10,217 | 10,706 | (4.6) | ||||||||||||||
Selling, general and administrative expense | 7,268 | 7,605 | (4.4) | 14,466 | 14,449 | 0.1 | ||||||||||||||
Depreciation and amortization expense | 4,232 | 4,350 | (2.7) | 8,463 | 8,674 | (2.4) | ||||||||||||||
Total Operating Expenses | 24,221 | 25,586 | (5.3) | 48,640 | 50,009 | (2.7) | ||||||||||||||
Operating Income | 7,850 | 6,617 | 18.6 | 15,559 | 13,966 | 11.4 | ||||||||||||||
Equity in losses of unconsolidated businesses | (13 | ) | (228 | ) | (94.3) | (19 | ) | (247 | ) | (92.3) | ||||||||||
Other income (expense), net | (1,312 | ) | 360 | * | (1,017 | ) | 285 | * | ||||||||||||
Interest expense | (1,215 | ) | (1,222 | ) | (0.6) | (2,425 | ) | (2,423 | ) | 0.1 | ||||||||||
Income Before Provision For Income Taxes | 5,310 | 5,527 | (3.9) | 12,098 | 11,581 | 4.5 | ||||||||||||||
Provision for income taxes | (1,236 | ) | (1,281 | ) | (3.5) | (2,864 | ) | (2,669 | ) | 7.3 | ||||||||||
Net Income | $ | 4,074 | $ | 4,246 | (4.1) | $ | 9,234 | $ | 8,912 | 3.6 | ||||||||||
Net income attributable to noncontrolling interests | $ | 130 | $ | 126 | 3.2 | $ | 258 | $ | 247 | 4.5 | ||||||||||
Net income attributable to Verizon | 3,944 | 4,120 | (4.3) | 8,976 | 8,665 | 3.6 | ||||||||||||||
Net Income | $ | 4,074 | $ | 4,246 | (4.1) | $ | 9,234 | $ | 8,912 | 3.6 | ||||||||||
Basic Earnings Per Common Share | ||||||||||||||||||||
Net income attributable to Verizon | $ | 0.95 | $ | 1.00 | (5.0) | $ | 2.17 | $ | 2.10 | 3.3 | ||||||||||
Weighted-average shares outstanding (in millions) | 4,138 | 4,135 | 4,138 | 4,120 | ||||||||||||||||
Diluted Earnings Per Common Share (1) | ||||||||||||||||||||
Net income attributable to Verizon | $ | 0.95 | $ | 1.00 | (5.0) | $ | 2.17 | $ | 2.10 | 3.3 | ||||||||||
Weighted-average shares outstanding (in millions) | 4,139 | 4,139 | 4,140 | 4,123 | ||||||||||||||||
Footnotes:
(1) | Diluted Earnings per Common Share includes the dilutive effect of shares issuable under our stock-based compensation plans, which represents the only potential dilution. |
* | 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 | — | 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 | — | 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 | — | 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 | — | |||||||||
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 Communications Inc.
Consolidated - 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) | ||||||||||||
Unaudited | 6 Mos. Ended 6/30/19 | 6 Mos. Ended 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 | ) | ||||||||
Net gain on sale of divested businesses | — | — | — | |||||||||
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) | ||||||||||||||||||||
Unaudited | 3 Mos. Ended 6/30/19 | 3 Mos. Ended 6/30/18 | % Change | 6 Mos. Ended 6/30/19 | 6 Mos. Ended 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 | ) | ||||||||||||||||||
Unaudited | 3 Mos. Ended 6/30/19 | 3 Mos. Ended 6/30/18 | % Change | 6 Mos. Ended 6/30/19 | 6 Mos. Ended 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 | ||||||||||||
Verizon Communications Inc.
Unaudited | 3 Mos. Ended 6/30/19 | 3 Mos. Ended 6/30/18 | % Change | 6 Mos. Ended 6/30/19 | 6 Mos. Ended 6/30/18 | % Change | ||||||||||||||||
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) | ||||||||||||||||||||
Unaudited | 3 Mos. Ended 6/30/19 | 3 Mos. Ended 6/30/18 | % Change | 6 Mos. Ended 6/30/19 | 6 Mos. Ended 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 | 06/30/19 | 06/30/18 | % 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) | |||||||||||||||||
Unaudited | 3 Mos. Ended 6/30/19 | 3 Mos. Ended 6/30/18 | % Change | 6 Mos. Ended 6/30/19 | 6 Mos. Ended 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. Ended 6/30/19 | 3 Mos. Ended 6/30/18 | % Change | 6 Mos. Ended 6/30/19 | 6 Mos. Ended 6/30/18 | % 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. Ended 6/30/19 | 3 Mos. Ended 6/30/18 | % Change | 6 Mos. Ended 6/30/19 | 6 Mos. Ended 6/30/18 | % 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) | $ | 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. Ended 6/30/19 | 3 Mos. Ended 6/30/18 | % Change | 6 Mos. Ended 6/30/19 | 6 Mos. Ended 6/30/18 | % 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 | 06/30/19 | 06/30/18 | % 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. Ended 6/30/19 | 3 Mos. Ended 6/30/18 | % Change | 6 Mos. Ended 6/30/19 | 6 Mos. Ended 6/30/18 | % 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. Ended 6/30/19 | 3 Mos. Ended 3/31/19 | 3 Mos. Ended 12/31/18 | 3 Mos. Ended 9/30/18 | 3 Mos. Ended 6/30/18 | 3 Mos. Ended 3/31/18 | ||||||||||||||||||
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. |
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 | ||||||
Verizon Communications Inc.
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)
(dollars in millions, except per share amounts) | ||||||||||||||||||||||||
Unaudited | 3 Mos. Ended 6/30/19 | 3 Mos. Ended 6/30/18 | ||||||||||||||||||||||
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. Ended 6/30/19 | 3 Mos. Ended 6/30/18 | ||||||
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. Ended 6/30/19 | 3 Mos. Ended 6/30/18 | ||||||
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 | Total Reportable Segments | Adjustments(2) | Adjusted Total Reportable Segments | Wireless | Wireline | Historical Total Reportable Segments | |||||||||||||||||||||||||||||||||||||||||
Unaudited | Service | Equipment | Other | Total Wireless | Consumer Markets | Enterprise Solutions | Partner Solutions | Business Markets | Other | Total Wireline | ||||||||||||||||||||||||||||||||||||||
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 (Loss) | $ | 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 (Loss) 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.
Verizon Communications Inc.
Supplemental Information - VZ 2.0 to Historical Financial Results Reconciliation(1)
3 Mos. Ended 6/30/18 | ||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||
VZ 2.0 | Historical | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer | Business | Total Reportable Segments | Adjustments(2) | Adjusted Total Reportable Segments | Wireless | Wireline | Historical Total Reportable Segments | |||||||||||||||||||||||||||||||||||||||||
Unaudited | Service | Equipment | Other | Total Wireless | Consumer Markets | Enterprise Solutions | Partner Solutions | Business Markets | Other | Total Wireline | ||||||||||||||||||||||||||||||||||||||
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 (Loss) | $ | 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 (Loss) 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.
Verizon Communications Inc.
Supplemental Information - VZ 2.0 to Historical Financial Results Reconciliation(1)
6 Mos. Ended 6/30/2019 | ||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||
VZ 2.0 | Historical | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer | Business | Total Reportable Segments | Adjustments(2) | Adjusted Total Reportable Segments | Wireless | Wireline | Historical Total Reportable Segments | |||||||||||||||||||||||||||||||||||||||||
Unaudited | Service | Equipment | Other | Total Wireless | Consumer Markets | Enterprise Solutions | Partner Solutions | Business Markets | Other | Total Wireline | ||||||||||||||||||||||||||||||||||||||
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 (Loss) | $ | 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 (Loss) 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.
Verizon Communications Inc.
Supplemental Information - VZ 2.0 to Historical Financial Results Reconciliation(1)
6 Mos. Ended 6/30/2018 | ||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||
VZ 2.0 | Historical | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer | Business | Total Reportable Segments | Adjustments(2) | Adjusted Total Reportable Segments | Wireless | Wireline | Historical Total Reportable Segments | |||||||||||||||||||||||||||||||||||||||||
Unaudited | Service | Equipment | Other | Total Wireless | Consumer Markets | Enterprise Solutions | Partner Solutions | Business Markets | Other | Total Wireline | ||||||||||||||||||||||||||||||||||||||
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 (Loss) | $ | 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 (Loss) 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.