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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: April 22, 2024
(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 | | 10036 |
| New York, | New York | | |
| (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 Each 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 |
| 4.073% Notes due 2024 | | VZ 24C | | New York Stock Exchange |
| 0.875% Notes due 2025 | | VZ 25 | | New York Stock Exchange |
| 3.25% Notes due 2026 | | VZ 26 | | New York Stock Exchange |
| 1.375% Notes due 2026 | | VZ 26B | | New York Stock Exchange |
| 0.875% Notes due 2027 | | VZ 27E | | New York Stock Exchange |
| 1.375% Notes due 2028 | | VZ 28 | | New York Stock Exchange |
| 1.125% Notes due 2028 | | VZ 28A | | New York Stock Exchange |
| 2.350% Fixed Rate Notes due 2028 | | VZ 28C | | New York Stock Exchange |
| 1.875% Notes due 2029 | | VZ 29B | | New York Stock Exchange |
| 0.375% Notes due 2029 | | VZ 29D | | New York Stock Exchange |
| 1.250% Notes due 2030 | | VZ 30 | | New York Stock Exchange |
| 1.875% Notes due 2030 | | VZ 30A | | New York Stock Exchange |
| 4.250% Notes due 2030 | | VZ 30D | | New York Stock Exchange |
| 2.625% Notes due 2031 | | VZ 31 | | New York Stock Exchange |
| 2.500% Notes due 2031 | | VZ 31A | | New York Stock Exchange |
| 3.000% Fixed Rate Notes due 2031 | | VZ 31D | | New York Stock Exchange |
| 0.875% Notes due 2032 | | VZ 32 | | New York Stock Exchange |
| 0.750% Notes due 2032 | | VZ 32A | | New York Stock Exchange |
| 3.500% Notes due 2032 | | VZ 32B | | New York Stock Exchange |
| 1.300% Notes due 2033 | | VZ 33B | | New York Stock Exchange |
| 4.75% Notes due 2034 | | VZ 34 | | New York Stock Exchange |
| 4.750% Notes due 2034 | | VZ 34C | | New York Stock Exchange |
| 3.125% Notes due 2035 | | VZ 35 | | New York Stock Exchange |
| 1.125% Notes due 2035 | | VZ 35A | | New York Stock Exchange |
| 3.375% Notes due 2036 | | VZ 36A | | New York Stock Exchange |
| 3.750% Notes due 2036 | | VZ 36B | | New York Stock Exchange |
| 2.875% Notes due 2038 | | VZ 38B | | New York Stock Exchange |
| 1.875% Notes due 2038 | | VZ 38C | | New York Stock Exchange |
| 1.500% Notes due 2039 | | VZ 39C | | New York Stock Exchange |
| 3.50% Fixed Rate Notes due 2039 | | VZ 39D | | New York Stock Exchange |
| 1.850% Notes due 2040 | | VZ 40 | | New York Stock Exchange |
| 3.850% Fixed Rate Notes due 2041 | | VZ 41C | | 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 for 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 Exhibit 99.1 hereto are a press release and financial tables, dated April 22, 2024, issued by Verizon Communications Inc. (Verizon). Attached as Exhibit 99.2 hereto is commentary, dated April 22, 2024, discussing Verizon's financial and operating results for the first quarter of 2024.
Non-GAAP Measures
Verizon’s press release, financial tables and commentary attached to the report 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 providing these non-GAAP measures in addition to the GAAP measures allows management, investors and other users of our financial information to more fully and accurately assess 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), 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 as they are widely accepted financial measures used in evaluating the profitability of a company and its operating performance in relation to its competitors.
Consolidated EBITDA is calculated by adding back interest, taxes and depreciation and amortization expense to net income.
Segment EBITDA is calculated by adding back segment depreciation and amortization expense to segment operating income. Segment EBITDA Margin is calculated by dividing Segment EBITDA by total segment operating revenues.
Consolidated Adjusted EBITDA and Consolidated Adjusted EBITDA Growth Forecast
Consolidated Adjusted EBITDA and Consolidated Adjusted EBITDA Growth Forecast 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. We believe that Consolidated Adjusted EBITDA and Consolidated Adjusted EBITDA Growth Forecast 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 and amortization 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: legacy legal matter, severance charges, Verizon Business Group ("Verizon Business") goodwill impairment, asset rationalization, legal settlement, business transformation costs and non-strategic business shutdown. Legacy legal matter recorded during 2024 relates to a litigation matter associated with a legacy contract for the production of telephone directories in Costa Rica by a subsidiary of Verizon. Severance charges recorded during 2023 and 2022 primarily relate to involuntary separations under our existing plans. Verizon Business goodwill impairment relates to an impairment charge recognized in the fourth quarter of 2023 as a result of Verizon's annual goodwill impairment test. Asset rationalization recorded during the second quarter of 2023 relates to certain real estate and non-strategic assets that we made a decision to cease use of as part of our transformation initiatives. Asset rationalization recorded during the fourth quarter of 2023 primarily relates to Verizon Business network assets that we made a decision to cease use of as part of our continued transformation initiatives. Legal settlement recorded during 2023 relates to the settlement of a litigation matter regarding certain administrative fees. Business transformation costs recorded during 2023 primarily relate to costs incurred in connection with strategic partnership initiatives in our managed network support services for certain Verizon Business customers. Non-strategic business shutdown relates to the shutdown of our BlueJeans business offering in 2023.
We have not provided a reconciliation for our Consolidated Adjusted EBITDA Growth Forecast because we cannot, without unreasonable effort, predict the special items that could arise during 2024.
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 Earnings per Common Share (Adjusted EPS) and Adjusted EPS Forecast
Adjusted EPS and Adjusted EPS Forecast are non-GAAP financial measures that we believe are useful to management, investors and other users of our financial information in evaluating our operating results and understanding our operating trends without the effect of special items which could vary from period to period. We believe excluding special items provides more comparable assessment of our financial results from period to period.
Adjusted EPS is calculated by excluding from the calculation of reported EPS the effect of the following special items: amortization of acquisition-related intangible assets and legacy legal matter.
We exclude the amortization of acquisition-related intangible assets because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions we consummate. While we have a history of significant acquisition activity, we do not acquire businesses on a predictable cycle, and the amount of an acquisition’s purchase price allocated to intangible assets and related amortization term are unique to each acquisition and can vary significantly from acquisition to acquisition. Exclusion of this amortization expense facilitates more consistent comparisons of operating results over time between our newly acquired and long-held businesses, and with both acquisitive and non-acquisitive peer companies. We believe that it is important for investors to understand that our non-GAAP financial measure adjusts for the intangible asset amortization but does not adjust the revenue that is generated in part from the use of such intangible assets.
We have not provided a reconciliation for our Adjusted EPS Forecast because we cannot, without unreasonable effort, predict the special items that could arise during 2024.
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 effect of special items.
We have not provided a reconciliation for our Adjusted ETR Forecast because we cannot, without unreasonable effort, predict the special items that could arise during 2024.
Free Cash Flow
Free cash flow is a non-GAAP financial measure that reflects an additional way of viewing our liquidity that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our cash flows. We believe it is a more conservative measure of cash flow since capital expenditures are necessary for ongoing operations. Free cash flow has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures. For example, free cash flow does not incorporate payments made or expected to be made on finance lease obligations or cash payments for acquisitions of businesses or wireless licenses. Therefore, we believe it is important to view free cash flow as a complement to our entire consolidated statements of cash flows.
Free cash flow is calculated by subtracting capital expenditures (including capitalized software) from net cash provided by operating activities.
Consolidated Operating Expenses Excluding Depreciation and Amortization and Special Items
Consolidated operating expenses excluding depreciation and amortization and special items is a non-GAAP financial measure that we believe is useful to management, investors and other users of our financial information in evaluating our operating expenses and underlying operating trends. We believe that consolidated operating expenses excluding depreciation and amortization and special items is used by investors to more accurately compare a company’s operating expenses to those of its competitors by eliminating impacts caused by differences in depreciation and amortization policies. In addition, the exclusion of the effects of special items allows for better comparability of our financial results from period to period.
Consolidated operating expenses excluding depreciation and amortization and special items is calculated by excluding from consolidated operating expenses the effects of depreciation and amortization expense and the following special item: legacy legal matter.
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 |
| |
| | Press release and financial tables, dated April 22, 2024, issued by Verizon Communications Inc. |
| | Commentary discussing financial and operating results of Verizon Communications Inc. for the first quarter of 2024. |
| | |
| | |
| 104 | | Cover Page Interactive Data File (formatted as inline XBRL). |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
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: | | April 22, 2024 | | | | /s/ Mary-Lee Stillwell |
| | | | | | Mary-Lee Stillwell |
| | | | | | Senior Vice President and Controller |
Exhibit 99.1
News Release
| | | | | |
FOR IMMEDIATE RELEASE | Media contacts: |
| April 22, 2024 | Katie Magnotta |
| 201-602-9235 |
| [email protected] |
| |
| |
| |
| |
Verizon begins 2024 with strong wireless service revenue growth, solid cash flow and continued momentum in broadband
First quarter performance positions Verizon for
growth and profitability throughout 2024
1Q 2024 Highlights
Consolidated:
•Earnings per share of $1.09, compared with earnings per share of $1.17 in first-quarter 2023; adjusted EPS1, excluding special items, of $1.15, compared with $1.20 in first-quarter 2023.
•Total operating revenue of $33.0 billion, up 0.2 percent from first-quarter 2023.
•Consolidated net income for the first quarter of $4.7 billion, compared to consolidated net income of $5.0 billion in first-quarter 2023, and consolidated adjusted EBITDA1 of $12.1 billion, up from $11.9 billion in first-quarter 2023.
Total Wireless:
•Total wireless service revenue2 of $19.5 billion, a 3.3 percent increase year over year.
•Retail postpaid phone net losses of 68,000, and retail postpaid net additions of 253,000.
•Retail postpaid phone churn of 0.89 percent, and retail postpaid churn of 1.15 percent.
Total Broadband:
•Total broadband net additions of 389,000, including 53,000 Fios Internet net additions.
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•Verizon Business reported 151,000 fixed wireless net additions in first-quarter 2024, their best quarterly result to date.
•11.1 million total broadband subscribers as of the end of first-quarter 2024, including 3.4 million subscribers on fixed wireless. Verizon added more than 3 million broadband subscribers in the last two years.
•Fixed wireless revenue for the first-quarter 2024 was $452 million, up $197 million compared to the prior year period.
NEW YORK - Verizon Communications Inc. (NYSE, Nasdaq: VZ) reported first-quarter 2024 results with strong wireless service revenue, solid cash flow, adjusted EBITDA expansion and fixed wireless subscriber base growth.
“Our strong results show that our team is delivering. Our performance in the first quarter sets us up for a successful 2024,” said Verizon Chairman and CEO Hans Vestberg. “We are on track to meet our financial guidance and to deliver positive Consumer postpaid phone net adds for the year. Our fixed wireless subscriber base is continuing to grow rapidly, and our network remains the best in the industry, by far.”
For first-quarter 2024, Verizon reported earnings per share of $1.09, compared with earnings per share of $1.17 in first-quarter 2023. On an adjusted basis1, excluding special items, EPS was $1.15 in first-quarter 2024, compared with adjusted EPS1 of $1.20 in first-quarter 2023.
First quarter 2024 financial results reflected a pre-tax loss from special items of $327 million. This includes the amortization of intangible assets related to Tracfone and other acquisitions of $221 million, and a $106 million charge associated with a litigation matter related to a legacy contract for the production of telephone directories in Costa Rica by a subsidiary of Verizon.
Consolidated results: Verizon delivers on three key metrics: wireless service revenue, adjusted EBITDA and cash flow
•Total consolidated operating revenue in first-quarter 2024 of $33.0 billion, up 0.2 percent from first-quarter 2023. The increase can be attributed to pricing actions implemented in recent quarters, combined with improved operating results offset by a decrease in wireless equipment revenue due to lower upgrade volumes.
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•Total wireless service revenue2 in first-quarter 2024 was $19.5 billion, up 3.3 percent year over year, driven primarily by pricing actions implemented in recent quarters, higher premium price plan adoption, and growth of our fixed wireless subscriber base.
•Cash flow from operations totaled $7.1 billion in first-quarter 2024, down from $8.3 billion in first-quarter 2023.
•First-quarter 2024 capital expenditures were $4.4 billion, compared to $6.0 billion in first-quarter 2023.
•The company ended first-quarter 2024 with free cash flow1 of $2.7 billion, up from $2.3 billion in first-quarter 2023.
•Consolidated net income for first-quarter 2024 was $4.7 billion, compared to consolidated net income of $5.0 billion in first-quarter 2023, and consolidated adjusted EBITDA1 was $12.1 billion, up from $11.9 billion in first-quarter 2023.
•Verizon's total unsecured debt as of the end of first-quarter 2024 was $128.4 billion, a $0.1 billion decrease compared to fourth-quarter 2023, and $3.6 billion lower year over year. The company's net unsecured debt1 at the end of first-quarter 2024 was $126.0 billion. At the end of first-quarter 2024, Verizon's ratio of unsecured debt to net income (LTM) was 10.9 times and net unsecured debt to consolidated adjusted EBITDA ratio1 was 2.6 times.
Verizon Consumer
•Total Verizon Consumer revenue in first-quarter 2024 was $25.1 billion, an increase of 0.8 percent year over year as gains in service revenue were partially offset by declines in wireless equipment revenue.
•Wireless service revenue in first-quarter 2024 was $16.1 billion, up 3.4 percent year over year, driven by growth in Consumer wireless postpaid average revenue per account (ARPA) from pricing actions and continued FWA adoption.
•Consumer wireless retail postpaid churn was 1.03 percent in first-quarter 2024, and wireless retail postpaid phone churn was 0.83 percent.
•In first-quarter 2024, Consumer reported 158,000 wireless retail postpaid phone net losses, representing an improvement of 105,000 from first-quarter 2023 net losses of 263,000, driven by improvements in both gross adds and churn. This represents Verizon Consumer's best first-quarter performance since 2018.
•Consumer postpaid phone gross additions in first-quarter 2024 increased 5.3 percent year over year, driven by the continued success of myPlan and last year's go to market improvements.
•Consumer reported 216,000 wireless retail prepaid net losses in first-quarter 2024. Wireless retail prepaid net losses excluding SafeLink Wireless, Verizon's brand offering access to government-sponsored connectivity benefits and programs, were 131,000.
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•Consumer reported 203,000 fixed wireless net additions and 49,000 Fios Internet net additions in first-quarter 2024. Consumer Fios revenue was $2.9 billion in first-quarter 2024.
•In first-quarter 2024, Consumer operating income was $7.4 billion, an increase of 3.8 percent year over year, and segment operating income margin was 29.4 percent, an increase from 28.6 percent in first-quarter 2023. Segment EBITDA1 in first-quarter 2024 was $10.7 billion, an increase of 3.6 percent year over year. This improvement can be attributed to wireless service revenue growth and lower upgrade volumes. Segment EBITDA margin1 in first-quarter 2024 was 42.6 percent, an increase from 41.5 percent in first-quarter 2023.
Verizon Business
•Total Verizon Business revenue was $7.4 billion in first-quarter 2024, a decrease of 1.6 percent year over year, as increases in wireless service revenue were more than offset by decreases in wireline revenue and wireless equipment revenue.
•Business wireless service revenue in first-quarter 2024 was $3.4 billion, an increase of 2.7 percent year over year. This was driven by continued strong net additions in the quarter for both mobility and fixed wireless, as well as benefits from pricing actions implemented in recent quarters.
•Business reported 178,000 wireless retail postpaid net additions in first-quarter 2024, including 90,000 postpaid phone net additions.
•Business wireless retail postpaid churn was 1.51 percent in first-quarter 2024, and wireless retail postpaid phone churn was 1.13 percent.
•Business reported 151,000 fixed wireless net additions in first-quarter 2024, representing a 10.2 percent increase from first-quarter 2023. This marked their best quarterly result to date.
•In first-quarter 2024, Verizon Business operating income was $399 million, a decrease of 27.6 percent year over year, and segment operating income margin was 5.4 percent, a decrease from 7.4 percent in first-quarter 2023. Segment EBITDA1 in first-quarter 2024 was $1.5 billion, a decrease of 7.2 percent year over year, driven by wireline revenue declines. Segment EBITDA margin1 in first-quarter 2024 was 20.7 percent, a decrease from 22.0 percent in first-quarter 2023.
Outlook and guidance: Verizon is on track to meet financial guidance
The company does not provide a reconciliation for any of the following adjusted (non-GAAP) forecasts because it cannot, without unreasonable effort, predict the special items that could arise, and the company is unable to address the probable significance of the unavailable information.
For 2024, Verizon continues to expect the following:
•Total wireless service revenue growth2 of 2.0 percent to 3.5 percent.
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•Adjusted EBITDA growth1 of 1.0 percent to 3.0 percent.
•Adjusted EPS1 of $4.50 to $4.70.
•Capital expenditures between $17.0 billion and $17.5 billion.
•Adjusted effective income tax rate1 in the range of 22.5 percent to 24.0 percent.
1 Non-GAAP financial measure. See the accompanying schedules and www.verizon.com/about/investors for reconciliations of non-GAAP financial measures cited in this document to most directly comparable financial measures under generally accepted accounting principles (GAAP).
2 Total wireless service revenue represents the sum of Consumer and Business segments.
Verizon Communications Inc. (NYSE, Nasdaq: VZ) was formed in 2000 and is one of the world’s leading providers of technology and communications services. Headquartered in New York City and with a presence around the world, Verizon generated revenues of $134.0 billion in 2023. The company offers data, video and voice services and solutions on its award-winning networks and platforms, delivering on customers’ demand for mobility, reliable network connectivity, and security.
####
VERIZON’S ONLINE MEDIA CENTER: News releases, stories, media contacts and other resources are available at verizon.com/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,” “assumes,” “believes,” “estimates,” “expects,” “forecasts,” “hopes,” “intends,” “plans,” “targets” 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: the effects of competition in the markets in which we operate, including the inability to successfully respond to competitive factors such as prices, promotional incentives and evolving consumer preferences; failure to take advantage of, or respond to competitors' use of, developments in technology and address changes in consumer demand; performance issues or delays in the deployment of our 5G network resulting in significant costs or a reduction in the anticipated benefits of the enhancement to our networks; the inability to implement our business strategy; adverse conditions in the U.S. and international economies, including inflation and changing interest rates in the markets in which we operate; cyber attacks impacting our networks or systems and any resulting financial or reputational impact; damage to our infrastructure or disruption of our operations from natural disasters, extreme weather conditions, acts of war, terrorist attacks or other hostile acts and any resulting financial or reputational impact; disruption of our key suppliers’ or vendors' provisioning of products or services, including as a result of geopolitical factors or the potential impacts of global climate change; material adverse changes in labor matters and any resulting financial or operational impact; damage to our reputation or brands; the impact of public health crises on our operations, our employees and the ways in which our customers use our networks and other products and services; changes in the regulatory environment in which we operate, including any increase in restrictions on our ability to operate our networks or businesses; allegations regarding the release of hazardous materials or pollutants into the environment from our, or our predecessors’, network assets and any related government investigations, regulatory developments, litigation, penalties and other liability, remediation and compliance costs, operational impacts or reputational damage; our high level of indebtedness; significant litigation and any resulting material expenses incurred in defending against lawsuits or paying awards or settlements; an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations or adverse conditions in the credit markets affecting the cost, including interest rates, and/or availability of further financing; significant increases in benefit plan costs or lower investment returns on plan assets; changes in tax laws or regulations, or in their interpretation, or challenges to our tax positions, resulting in additional tax expense or liabilities; and changes in accounting assumptions that regulatory agencies, including the SEC, may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings.
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Verizon Communications Inc.
Condensed Consolidated Statements of Income
| | | | | | | | | | | | | | | | | | | | | | | | | | |
(dollars in millions, except per share amounts) |
| Unaudited | | 3 Mos. Ended 3/31/24 | | 3 Mos. Ended 3/31/23 | | %
Change | | | | | | |
| | | | | | | | | | | | |
| Operating Revenues | | | | | | | | | | | | |
| Service revenues and other | | $ | 27,620 | | | $ | 27,152 | | | 1.7 | | | | | | |
| Wireless equipment revenues | | 5,361 | | | 5,760 | | | (6.9) | | | | | | |
| Total Operating Revenues | | 32,981 | | | 32,912 | | | 0.2 | | | | | | |
| | | | | | | | | | | | |
| Operating Expenses | | | | | | | | | | | | |
| Cost of services | | 6,967 | | | 7,078 | | | (1.6) | | | | | | |
| Cost of wireless equipment | | 5,905 | | | 6,426 | | | (8.1) | | | | | | |
| Selling, general and administrative expense | | 8,143 | | | 7,506 | | | 8.5 | | | | | | |
| Depreciation and amortization expense | | 4,445 | | | 4,318 | | | 2.9 | | | | | | |
| | | | | | | | | | | | |
| Total Operating Expenses | | 25,460 | | | 25,328 | | | 0.5 | | | | | | |
| | | | | | | | | | | | |
| Operating Income | | 7,521 | | | 7,584 | | | (0.8) | | | | | | |
| Equity in earnings (losses) of unconsolidated businesses | | (9) | | | 9 | | | * | | | | | | |
| Other income, net | | 198 | | | 114 | | | 73.7 | | | | | | |
| Interest expense | | (1,635) | | | (1,207) | | | 35.5 | | | | | | |
| Income Before Provision For Income Taxes | | 6,075 | | | 6,500 | | | (6.5) | | | | | | |
| Provision for income taxes | | (1,353) | | | (1,482) | | | (8.7) | | | | | | |
| Net Income | | $ | 4,722 | | | $ | 5,018 | | | (5.9) | | | | | | |
| | | | | | | | | | | | |
| Net income attributable to noncontrolling interests | | $ | 120 | | | $ | 109 | | | 10.1 | | | | | | |
| Net income attributable to Verizon | | 4,602 | | | 4,909 | | | (6.3) | | | | | | |
| Net Income | | $ | 4,722 | | | $ | 5,018 | | | (5.9) | | | | | | |
| | | | | | | | | | | | |
| Basic Earnings Per Common Share | | | | | | | | | | | | |
| Net income attributable to Verizon | | $ | 1.09 | | | $ | 1.17 | | | (6.8) | | | | | | |
| Weighted-average shares outstanding (in millions) | | 4,215 | | | 4,207 | | | | | | | | | |
| | | | | | | | | | | | |
Diluted Earnings Per Common Share(1) | | | | | | | | | | | | |
| Net income attributable to Verizon | | $ | 1.09 | | | $ | 1.17 | | | (6.8) | | | | | | |
| Weighted-average shares outstanding (in millions) | | 4,219 | | | 4,211 | | | | | | | | | |
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 | | 3/31/24 | | 12/31/23 | | $ Change |
| | | | | | |
| Assets | | | | | | |
| Current assets | | | | | | |
| Cash and cash equivalents | | $ | 2,365 | | | $ | 2,065 | | | $ | 300 | |
| Accounts receivable | | 26,380 | | | 26,102 | | | 278 | |
| Less Allowance for credit losses | | 1,061 | | | 1,017 | | | 44 | |
| | | | | | |
| Accounts receivable, net | | 25,319 | | | 25,085 | | | 234 | |
| Inventories | | 2,076 | | | 2,057 | | | 19 | |
| | | | | | |
| Prepaid expenses and other | | 8,197 | | | 7,607 | | | 590 | |
| Total current assets | | 37,957 | | | 36,814 | | | 1,143 | |
| | | | | | |
| Property, plant and equipment | | 322,266 | | | 320,108 | | | 2,158 | |
| Less Accumulated depreciation | | 214,403 | | | 211,798 | | | 2,605 | |
| Property, plant and equipment, net | | 107,863 | | | 108,310 | | | (447) | |
| Investments in unconsolidated businesses | | 941 | | | 953 | | | (12) | |
| Wireless licenses | | 156,111 | | | 155,667 | | | 444 | |
| | | | | | |
| Goodwill | | 22,842 | | | 22,843 | | | (1) | |
| Other intangible assets, net | | 10,835 | | | 11,057 | | | (222) | |
| Operating lease right-of-use assets | | 24,351 | | | 24,726 | | | (375) | |
| Other assets | | 19,258 | | | 19,885 | | | (627) | |
| Total assets | | $ | 380,158 | | | $ | 380,255 | | | $ | (97) | |
| | | | | | |
| Liabilities and Equity | | | | | | |
| Current liabilities | | | | | | |
| Debt maturing within one year | | $ | 15,594 | | | $ | 12,973 | | | $ | 2,621 | |
| Accounts payable and accrued liabilities | | 20,139 | | | 23,453 | | | (3,314) | |
| | | | | | |
| Current operating lease liabilities | | 4,282 | | | 4,266 | | | 16 | |
| Other current liabilities | | 13,616 | | | 12,531 | | | 1,085 | |
| Total current liabilities | | 53,631 | | | 53,223 | | | 408 | |
| | | | | | |
| Long-term debt | | 136,104 | | | 137,701 | | | (1,597) | |
| Employee benefit obligations | | 12,805 | | | 13,189 | | | (384) | |
| Deferred income taxes | | 45,980 | | | 45,781 | | | 199 | |
| Non-current operating lease liabilities | | 19,654 | | | 20,002 | | | (348) | |
| Other liabilities | | 16,258 | | | 16,560 | | | (302) | |
| Total long-term liabilities | | 230,801 | | | 233,233 | | | (2,432) | |
| | | | | | |
| Equity | | | | | | |
| Common stock | | 429 | | | 429 | | | — | |
| Additional paid in capital | | 13,571 | | | 13,631 | | | (60) | |
| Retained earnings | | 84,714 | | | 82,915 | | | 1,799 | |
| Accumulated other comprehensive loss | | (1,199) | | | (1,380) | | | 181 | |
| Common stock in treasury, at cost | | (3,602) | | | (3,821) | | | 219 | |
| Deferred compensation – employee stock ownership plans and other | | 421 | | | 656 | | | (235) | |
| Noncontrolling interests | | 1,392 | | | 1,369 | | | 23 | |
| Total equity | | 95,726 | | | 93,799 | | | 1,927 | |
| Total liabilities and equity | | $ | 380,158 | | | $ | 380,255 | | | $ | (97) | |
Verizon Communications Inc.
Consolidated - Selected Financial and Operating Statistics
| | | | | | | | | | | | | | | | | | |
| (dollars in millions, except per share amounts) | | | | |
| Unaudited | | 3/31/24 | | 12/31/23 | | | | |
| | | | | | | | |
| Total debt | | $ | 151,698 | | | $ | 150,674 | | | | | |
| | | | | | | | |
| Unsecured debt | | $ | 128,408 | | | $ | 128,491 | | | | | |
Net unsecured debt(1) | | $ | 126,043 | | | $ | 126,426 | | | | | |
| | | | | | | | |
| Unsecured debt / Consolidated Net Income (LTM) | | 10.9 | x | | 10.6 | x | | | | |
Net unsecured debt / Consolidated Adjusted EBITDA(1)(2) | | 2.6 | x | | 2.6 | x | | | | |
| Common shares outstanding end of period (in millions) | | 4,209 | | | 4,204 | | | | | |
Total employees (‘000)(3) | | 104.4 | | | 105.4 | | | | | |
| Quarterly cash dividends declared per common share | | $ | 0.6650 | | | $ | 0.6650 | | | | | |
Footnotes:
(1)Non-GAAP financial measure.
(2)Consolidated Adjusted EBITDA excludes the effects of non-operational items and special items.
(3)Number of employees on a full-time equivalent basis.
Verizon Communications Inc.
Condensed Consolidated Statements of Cash Flows
| | | | | | | | | | | | | | | | | | | | |
| (dollars in millions) |
| Unaudited | | 3 Mos. Ended 3/31/24 | | 3 Mos. Ended 3/31/23 | | $ Change |
| | | | | | |
| Cash Flows from Operating Activities | | | | | | |
| Net Income | | $ | 4,722 | | | $ | 5,018 | | | $ | (296) | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | |
| Depreciation and amortization expense | | 4,445 | | | 4,318 | | | 127 | |
| Employee retirement benefits | | 62 | | | 54 | | | 8 | |
| Deferred income taxes | | 141 | | | 331 | | | (190) | |
| Provision for expected credit losses | | 567 | | | 530 | | | 37 | |
| Equity in losses of unconsolidated businesses, net of dividends received | | 14 | | | 10 | | | 4 | |
| | | | | | |
| | | | | | |
| | | | | | |
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses | | (2,531) | | | (774) | | | (1,757) | |
| | | | | | |
| Other, net | | (336) | | | (1,198) | | | 862 | |
| Net cash provided by operating activities | | 7,084 | | | 8,289 | | | (1,205) | |
| | | | | | |
| Cash Flows from Investing Activities | | | | | | |
| Capital expenditures (including capitalized software) | | (4,376) | | | (5,958) | | | 1,582 | |
| | | | | | |
| Acquisitions of wireless licenses | | (449) | | | (598) | | | 149 | |
| Collateral receipts (payments) related to derivative contracts, net | | (432) | | | 367 | | | (799) | |
| | | | | | |
| Other, net | | 12 | | | 79 | | | (67) | |
| Net cash used in investing activities | | (5,245) | | | (6,110) | | | 865 | |
| | | | | | |
| Cash Flows from Financing Activities | | | | | | |
| Proceeds from long-term borrowings | | 3,110 | | | 504 | | | 2,606 | |
| Proceeds from asset-backed long-term borrowings | | 2,510 | | | 1,754 | | | 756 | |
| Net proceeds from short-term commercial paper | | 2,347 | | | 342 | | | 2,005 | |
| Repayments of long-term borrowings and finance lease obligations | | (4,508) | | | (1,325) | | | (3,183) | |
| Repayments of asset-backed long-term borrowings | | (1,408) | | | (931) | | | (477) | |
| Dividends paid | | (2,796) | | | (2,744) | | | (52) | |
| Other, net | | (683) | | | 17 | | | (700) | |
| Net cash used in financing activities | | (1,428) | | | (2,383) | | | 955 | |
| | | | | | |
| Increase (decrease) in cash, cash equivalents and restricted cash | | 411 | | | (204) | | | 615 | |
| Cash, cash equivalents and restricted cash, beginning of period | | 3,497 | | | 4,111 | | | (614) | |
| Cash, cash equivalents and restricted cash, end of period | | $ | 3,908 | | | $ | 3,907 | | | $ | 1 | |
Verizon Communications Inc.
Consumer - Selected Financial Results
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| (dollars in millions) |
| Unaudited | | 3 Mos. Ended 3/31/24 | | 3 Mos. Ended 3/31/23 | | %
Change | | | | | | |
| | | | | | | | | | | | |
| Operating Revenues | | | | | | | | | | | | |
| Service | | $ | 18,998 | | | $ | 18,456 | | | 2.9 | | | | | | |
| Wireless equipment | | 4,490 | | | 4,878 | | | (8.0) | | | | | | |
| Other | | 1,569 | | | 1,523 | | | 3.0 | | | | | | |
| Total Operating Revenues | | 25,057 | | | 24,857 | | | 0.8 | | | | | | |
| | | | | | | | | | | | |
| Operating Expenses | | | | | | | | | | | | |
| Cost of services | | 4,537 | | | 4,432 | | | 2.4 | | | | | | |
| Cost of wireless equipment | | 4,750 | | | 5,191 | | | (8.5) | | | | | | |
| Selling, general and administrative expense | | 5,089 | | | 4,921 | | | 3.4 | | | | | | |
| Depreciation and amortization expense | | 3,309 | | | 3,214 | | | 3.0 | | | | | | |
| Total Operating Expenses | | 17,685 | | | 17,758 | | | (0.4) | | | | | | |
| | | | | | | | | | | | |
| Operating Income | | $ | 7,372 | | | $ | 7,099 | | | 3.8 | | | | | | |
| Operating Income Margin | | 29.4 | % | | 28.6 | % | | | | | | | | |
| | | | | | | | | | | | |
Segment EBITDA(1) | | $ | 10,681 | | | $ | 10,313 | | | 3.6 | | | | | | |
Segment EBITDA Margin(1) | | 42.6 | % | | 41.5 | % | | | | | | | | |
Footnotes:
(1) Non-GAAP financial measure.
The segment financial results and metrics above exclude the effects of special items (other than the effects of acquisition-related intangible asset amortization), which the Company’s chief operating decision maker does not consider in assessing segment performance.
Certain intersegment transactions with corporate entities have not been eliminated.
Verizon Communications Inc.
Consumer - Selected Operating Statistics
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| Unaudited | | | | | | | | 3/31/24 | | 3/31/23 | | % Change |
| | | | | | | | | | | | |
| Connections (‘000): | | | | | | | | | | | | |
| Wireless retail postpaid | | | | | | | | 93,905 | | | 92,192 | | | 1.9 |
| Wireless retail prepaid | | | | | | | | 20,904 | | | 22,331 | | | (6.4) |
| Total wireless retail | | | | | | | | 114,809 | | | 114,523 | | | 0.2 |
| | | | | | | | | | | | |
Wireless retail prepaid excl. SafeLink | | | | | | | | 18,717 | | | 19,758 | | | (5.3) |
| Wireless retail postpaid phone | | | | | | | | 74,561 | | | 74,611 | | | (0.1) |
| | | | | | | | | | | | |
| Fios video | | | | | | | | 2,883 | | | 3,160 | | | (8.8) |
| Fios internet | | | | | | | | 7,025 | | | 6,803 | | | 3.3 |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Fixed wireless access (FWA) broadband | | | | | | | | 2,070 | | | 1,140 | | | 81.6 |
| Wireline broadband | | | | | | | | 7,227 | | | 7,062 | | | 2.3 |
| Total broadband | | | | | | | | 9,297 | | | 8,202 | | | 13.4 |
| | | | | | | | | | | | |
| Unaudited | | | | | | | | 3 Mos. Ended 3/31/24 | | 3 Mos. Ended 3/31/23 | | %
Change |
| | | | | | | | | | | | |
| Gross Additions (‘000): | | | | | | | | | | | | |
| Wireless retail postpaid | | | | | | | | 2,983 | | | 3,210 | | | (7.1) |
| Wireless retail postpaid phone | | | | | | | | 1,710 | | | 1,624 | | | 5.3 |
| | | | | | | | | | | | |
Net Additions Detail (‘000): | | | | | | | | | | | | |
| Wireless retail postpaid | | | | | | | | 75 | | | 321 | | | (76.6) |
| Wireless retail prepaid | | | | | | | | (216) | | | (351) | | | 38.5 |
| Total wireless retail | | | | | | | | (141) | | | (30) | | | * |
| | | | | | | | | | | | |
Wireless retail prepaid excl. SafeLink | | | | | | | | (131) | | | (277) | | | 52.7 |
| Wireless retail postpaid phone | | | | | | | | (158) | | | (263) | | | 39.9 |
| | | | | | | | | | | | |
| Fios video | | | | | | | | (68) | | | (74) | | | 8.1 |
| Fios internet | | | | | | | | 49 | | | 63 | | | (22.2) |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| FWA broadband | | | | | | | | 203 | | | 256 | | | (20.7) |
| Wireline broadband | | | | | | | | 36 | | | 46 | | | (21.7) |
| | | | | | | | | | | | |
| Total broadband | | | | | | | | 239 | | | 302 | | | (20.9) |
| | | | | | | | | | | | |
| Churn Rate: | | | | | | | | | | | | |
| Wireless retail postpaid | | | | | | | | 1.03 | % | | 1.05 | % | | |
| Wireless retail postpaid phone | | | | | | | | 0.83 | % | | 0.84 | % | | |
| Wireless retail prepaid | | | | | | | | 4.26 | % | | 4.31 | % | | |
Wireless retail prepaid excl. SafeLink | | | | | | | | 3.61 | % | | 3.72 | % | | |
| Wireless retail | | | | | | | | 1.62 | % | | 1.69 | % | | |
| | | | | | | | | | | | |
| Revenue Statistics (in millions): | | | | | | | | | | | | |
| Wireless service revenue | | | | | | | | $ | 16,134 | | | $ | 15,599 | | | 3.4 |
| Fios revenue | | | | | | | | $ | 2,896 | | | $ | 2,889 | | | 0.2 |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Verizon Communications Inc.
Consumer - Selected Operating Statistics (continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Unaudited | | 3 Mos. Ended 3/31/24 | | 3 Mos. Ended 3/31/23 | | %
Change | | | | | | |
| | | | | | | | | | | | |
| Other Wireless Statistics: | | | | | | | | | | | | |
Wireless retail postpaid ARPA(1) | | $ | 135.75 | | | $ | 130.06 | | | 4.4 | | | | | | |
Wireless retail postpaid upgrade rate | | 3.1 | % | | 4.0 | % | | | | | | | | |
Wireless retail postpaid accounts (‘000)(2) | | 32,876 | | | 33,034 | | | (0.5) | | | | | | |
Wireless retail postpaid connections per account(2) | | 2.86 | | | 2.79 | | | 2.5 | | | | | | |
Wireless retail prepaid ARPU(3) | | $ | 31.17 | | | $ | 30.71 | | | 1.5 | | | | | | |
Wireless retail prepaid ARPU(3) excl. SafeLink | | $ | 32.26 | | | $ | 32.15 | | | 0.3 | | | | | | |
| | | | | | | | | | | | |
Footnotes:
(1) Wireless retail postpaid ARPA - average service revenue per account from retail postpaid accounts.
(2) Statistics presented as of end of period.
(3) Wireless retail prepaid ARPU - average service revenue per unit from retail prepaid connections.
Where applicable, the operating results reflect certain adjustments, including those related to the 3G network shutdowns, migration activity among different types of devices and plans, customer profile changes, and adjustments in connection with mergers, acquisitions and divestitures.
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 3/31/24 | | 3 Mos. Ended 3/31/23 | | %
Change | | | | | | |
| | | | | | | | | | | | |
| Operating Revenues | | | | | | | | | | | | |
| | | | | | | | | | | | |
| Enterprise and Public Sector | | $ | 3,587 | | | $ | 3,787 | | | (5.3) | | | | | | |
| | | | | | | | | | | | |
| Business Markets and Other | | 3,195 | | | 3,104 | | | 2.9 | | | | | | |
| Wholesale | | 594 | | | 603 | | | (1.5) | | | | | | |
| Total Operating Revenues | | 7,376 | | | 7,494 | | | (1.6) | | | | | | |
| | | | | | | | | | | | |
| Operating Expenses | | | | | | | | | | | | |
| Cost of services | | 2,432 | | | 2,582 | | | (5.8) | | | | | | |
| Cost of wireless equipment | | 1,155 | | | 1,234 | | | (6.4) | | | | | | |
| Selling, general and administrative expense | | 2,262 | | | 2,033 | | | 11.3 | | | | | | |
| Depreciation and amortization expense | | 1,128 | | | 1,094 | | | 3.1 | | | | | | |
| Total Operating Expenses | | 6,977 | | | 6,943 | | | 0.5 | | | | | | |
| | | | | | | | | | | | |
| Operating Income | | $ | 399 | | | $ | 551 | | | (27.6) | | | | | | |
| Operating Income Margin | | 5.4 | % | | 7.4 | % | | | | | | | | |
| | | | | | | | | | | | |
Segment EBITDA(1) | | $ | 1,527 | | | $ | 1,645 | | | (7.2) | | | | | | |
Segment EBITDA Margin(1) | | 20.7 | % | | 22.0 | % | | | | | | | | |
Footnotes:
(1) Non-GAAP financial measure.
The segment financial results and metrics above exclude the effects of special items (other than the effects of acquisition-related intangible asset amortization), which the Company’s chief operating decision maker does not consider in assessing segment performance.
Certain intersegment transactions with corporate entities have not been eliminated.
Verizon Communications Inc.
Business - Selected Operating Statistics
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| Unaudited | | | | | | | | 3/31/24 | | 3/31/23 | | %
Change |
| | | | | | | | | | | | |
| Connections (‘000): | | | | | | | | | | | | |
| Wireless retail postpaid | | | | | | | | 29,947 | | | 28,820 | | | 3.9 |
| Wireless retail postpaid phone | | | | | | | | 18,306 | | | 17,703 | | | 3.4 |
| | | | | | | | | | | | |
| Fios video | | | | | | | | 59 | | | 65 | | | (9.2) |
| Fios internet | | | | | | | | 389 | | | 377 | | | 3.2 |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| FWA broadband | | | | | | | | 1,358 | | | 726 | | | 87.1 |
| Wireline broadband | | | | | | | | 458 | | | 466 | | | (1.7) |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Total broadband | | | | | | | | 1,816 | | | 1,192 | | | 52.3 |
| | | | | | | | | | | | |
| Unaudited | | | | | | | | 3 Mos. Ended 3/31/24 | | 3 Mos. Ended 3/31/23 | | %
Change |
| | | | | | | | | | | | |
| Gross Additions (‘000): | | | | | | | | | | | | |
| Wireless retail postpaid | | | | | | | | 1,531 | | | 1,607 | | | (4.7) |
| Wireless retail postpaid phone | | | | | | | | 705 | | | 757 | | | (6.9) |
| | | | | | | | | | | | |
| Net Additions Detail (‘000): | | | | | | | | | | | | |
| Wireless retail postpaid | | | | | | | | 178 | | | 312 | | | (42.9) |
| Wireless retail postpaid phone | | | | | | | | 90 | | | 136 | | | (33.8) |
| | | | | | | | | | | | |
| Fios video | | | | | | | | (2) | | | (2) | | | — |
| Fios internet | | | | | | | | 4 | | | 4 | | | — |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| FWA broadband | | | | | | | | 151 | | | 137 | | | 10.2 |
| Wireline broadband | | | | | | | | (1) | | | (2) | | | 50.0 |
| | | | | | | | | | | | |
| Total broadband | | | | | | | | 150 | | | 135 | | | 11.1 |
| | | | | | | | | | | | |
| Churn Rate: | | | | | | | | | | | | |
| Wireless retail postpaid | | | | | | | | 1.51 | % | | 1.50 | % | | |
| Wireless retail postpaid phone | | | | | | | | 1.13 | % | | 1.16 | % | | |
| | | | | | | | | | | | |
| Revenue Statistics (in millions): | | | | | | | | | | | | |
| Wireless service revenue | | | | | | | | $ | 3,379 | | | $ | 3,290 | | | 2.7 |
| Fios revenue | | | | | | | | $ | 311 | | | $ | 307 | | | 1.3 |
| | | | | | | | | | | | |
| Other Operating Statistics: | | | | | | | | | | | | |
| | | | | | | | | | | | |
| Wireless retail postpaid upgrade rate | | | | | | | | 2.5 | % | | 2.8 | % | | |
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Footnotes:
Where applicable, the operating results reflect certain adjustments, including those related to the 3G network shutdowns, migration activity among different types of devices and plans, customer profile changes, and adjustments in connection with mergers, acquisitions and divestitures.
Certain intersegment transactions with corporate entities have not been eliminated.
Verizon Communications Inc.
Supplemental Information - Total Wireless Operating and Financial Statistics
The following supplemental schedule contains certain financial and operating metrics which reflect an aggregation of our Consumer and Business segments’ wireless results.
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|
| Unaudited | | 3/31/24 | | 3/31/23 | | % Change |
| | | | | | | | | | | | |
| Connections (‘000) | | | | | | | | | | | | |
| Retail postpaid | | | | | | | | 123,852 | | | 121,012 | | | 2.3 |
Retail prepaid | | | | | | | | 20,904 | | | 22,331 | | | (6.4) |
| Total retail | | | | | | | | 144,756 | | | 143,343 | | | 1.0 |
| | | | | | | | | | | | |
Retail prepaid excl. SafeLink | | | | | | | | 18,717 | | | 19,758 | | | (5.3) |
| Retail postpaid phone | | | | | | | | 92,867 | | | 92,314 | | | 0.6 |
| | | | | | | | | | | | |
| Unaudited | | | | | | | | 3 Mos. Ended 3/31/24 | | 3 Mos. Ended 3/31/23 | | %
Change |
| | | | | | | | | | | | |
| Net Additions Detail (‘000) | | | | | | | | | | | | |
| Retail postpaid phone | | | | | | | | (68) | | | (127) | | | 46.5 |
| Retail postpaid | | | | | | | | 253 | | | 633 | | | (60.0) |
| Retail prepaid | | | | | | | | (216) | | | (351) | | | 38.5 |
| Total retail | | | | | | | | 37 | | | 282 | | | (86.9) |
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| Retail prepaid excl. SafeLink | | | | | | | | (131) | | | (277) | | | 52.7 |
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| Account Statistics | | | | | | | | | | | | |
Retail postpaid accounts (‘000)(1) | | | | | | | | 34,839 | | | 34,877 | | | (0.1) |
Retail postpaid connections per account(1) | | | | | | | | 3.55 | | | 3.47 | | | 2.3 |
Retail postpaid ARPA(2) | | | | | | | | $ | 158.25 | | | $ | 152.27 | | | 3.9 |
Retail prepaid ARPU(3) | | | | | | | | $ | 31.17 | | | $ | 30.71 | | | 1.5 |
Retail prepaid ARPU(3) excl. SafeLink | | | | | | | | $ | 32.26 | | | $ | 32.15 | | | 0.3 |
| | | | | | | | | | | | |
| Churn Detail | | | | | | | | | | | | |
| Retail postpaid phone | | | | | | | | 0.89 | % | | 0.90 | % | | |
| Retail postpaid | | | | | | | | 1.15 | % | | 1.15 | % | | |
| Retail prepaid | | | | | | | | 4.26 | % | | 4.31 | % | | |
Retail prepaid excl. SafeLink | | | | | | | | 3.61 | % | | 3.72 | % | | |
| Retail | | | | | | | | 1.60 | % | | 1.65 | % | | |
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| Retail Postpaid Connection Statistics | | | | | | | | | | | | |
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| Upgrade rate | | | | | | | | 3.0 | % | | 3.7 | % | | |
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Revenue Statistics (in millions)(4) | | | | | | | | | | | | |
| FWA revenue | | | | | | | | $ | 452 | | | $ | 255 | | | 77.3 |
| Wireless service | | | | | | | | $ | 19,513 | | | $ | 18,889 | | | 3.3 |
| Wireless equipment | | | | | | | | 5,361 | | | 5,760 | | | (6.9) |
| Wireless other | | | | | | | | 1,585 | | | 1,515 | | | 4.6 |
| Total Wireless | | | | | | | | $ | 26,459 | | | $ | 26,164 | | | 1.1 |
Footnotes:
(1) Statistics presented as of end of period.
(2) Wireless retail postpaid ARPA - average service revenue per account from retail postpaid accounts.
(3) Wireless retail prepaid ARPU - average service revenue per unit from retail prepaid connections.
(4) Intersegment transactions between Consumer or Business segment with corporate entities have not been eliminated.
Where applicable, the operating results reflect certain adjustments, including those related to the 3G network shutdowns, migration activity among different types of devices and plans, customer profile changes, and adjustments in connection with mergers, acquisitions and divestitures.
Verizon Communications Inc.
Non-GAAP Reconciliations - Consolidated Verizon | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consolidated EBITDA and Consolidated Adjusted EBITDA | | | | | | | | | | | | | | | | | | |
| (dollars in millions) |
| Unaudited | | | | | | | | | | | | 3 Mos. Ended 3/31/24 | | | | | | 3 Mos. Ended 12/31/23 | | 3 Mos. Ended 9/30/23 | | 3 Mos. Ended 6/30/23 | | 3 Mos. Ended 3/31/23 |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Consolidated Net Income (Loss) | | | | | | | | | | | | $ | 4,722 | | | | | | | $ | (2,573) | | | $ | 4,884 | | | $ | 4,766 | | | $ | 5,018 | |
| Add: | | | | | | | | | | | | | | | | | | | | | | | | |
| Provision for income taxes | | | | | | | | | | | | 1,353 | | | | | | | 756 | | | 1,308 | | | 1,346 | | | 1,482 | |
| Interest expense | | | | | | | | | | | | 1,635 | | | | | | | 1,599 | | | 1,433 | | | 1,285 | | | 1,207 | |
Depreciation and amortization expense(1) | | | | | | | | | | | | 4,445 | | | | | | | 4,516 | | | 4,431 | | | 4,359 | | | 4,318 | |
| Consolidated EBITDA | | | | | | | | | | | | $ | 12,155 | | | | | | | $ | 4,298 | | | $ | 12,056 | | | $ | 11,756 | | | $ | 12,025 | |
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| Add/(subtract): | | | | | | | | | | | | | | | | | | | | | | | | |
Other (income) expense, net(2) | | | | | | | | | | | | $ | (198) | | | | | | | $ | 807 | | | $ | (170) | | | $ | (210) | | | $ | (114) | |
| Equity in losses (earnings) of unconsolidated businesses | | | | | | | | | | | | 9 | | | | | | | 11 | | | 18 | | | 33 | | | (9) | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Severance charges | | | | | | | | | | | | — | | | | | | | 296 | | | — | | | 237 | | | — | |
| Legacy legal matter | | | | | | | | | | | | 106 | | | | | | | — | | | — | | | — | | | — | |
| Verizon Business Group goodwill impairment | | | | | | | | | | | | — | | | | | | | 5,841 | | | — | | | — | | | — | |
| Asset rationalization | | | | | | | | | | | | — | | | | | | | 325 | | | — | | | 155 | | | — | |
| Legal settlement | | | | | | | | | | | | — | | | | | | | 100 | | | — | | | — | | | — | |
| Business transformation costs | | | | | | | | | | | | — | | | | | | | — | | | 176 | | | — | | | — | |
| Non-strategic business shutdown | | | | | | | | | | | | — | | | | | | | — | | | 158 | | | — | | | — | |
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| | | | | | | | | | | | (83) | | | | | | | 7,380 | | | 182 | | | 215 | | | (123) | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Consolidated Adjusted EBITDA | | | | | | | | | | | | $ | 12,072 | | | | | | | $ | 11,678 | | | $ | 12,238 | | | $ | 11,971 | | | $ | 11,902 | |
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| Footnotes: | | | | | | | | | | | | | | | | | | | | | | | | |
(1) Includes Amortization of acquisition-related intangible assets and a portion of the Non-strategic business shutdown, where applicable. | | |
(2) Includes Pension and benefits remeasurement adjustments, where applicable. | | | | | | |
Verizon Communications Inc.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Consolidated EBITDA and Consolidated Adjusted EBITDA (LTM) | | | | | | | | | | | | | | | | | | | | | | |
(dollars in millions) | | | | | | | | | | | | |
| Unaudited | | | | | | | | 12 Mos. Ended 3/31/24 | | 12 Mos. Ended 12/31/23 | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| Consolidated Net Income | | | | | | | | $ | 11,799 | | | $ | 12,095 | | | | | | | | | | | | | |
| Add: | | | | | | | | | | | | | | | | | | | | | | |
| Provision for income taxes | | | | | | | | 4,763 | | | 4,892 | | | | | | | | | | | | | |
| Interest expense | | | | | | | | 5,952 | | | 5,524 | | | | | | | | | | | | | |
Depreciation and amortization expense(1) | | | | | | | | 17,751 | | | 17,624 | | | | | | | | | | | | | |
| Consolidated EBITDA | | | | | | | | $ | 40,265 | | | $ | 40,135 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| Add/(subtract): | | | | | | | | | | | | | | | | | | | | | | |
Other expense, net(2) | | | | | | | | $ | 229 | | | $ | 313 | | | | | | | | | | | | | |
Equity in losses of unconsolidated businesses | | | | | | | | 71 | | | 53 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| Severance charges | | | | | | | | 533 | | | 533 | | | | | | | | | | | | | |
| Legacy legal matter | | | | | | | | 106 | | | — | | | | | | | | | | | | | |
| Verizon Business Group goodwill impairment | | | | | | | | 5,841 | | | 5,841 | | | | | | | | | | | | | |
| Asset rationalization | | | | | | | | 480 | | | 480 | | | | | | | | | | | | | |
| Legal settlement | | | | | | | | 100 | | | 100 | | | | | | | | | | | | | |
| Business transformation costs | | | | | | | | 176 | | | 176 | | | | | | | | | | | | | |
| Non-strategic business shutdown | | | | | | | | 158 | | | 158 | | | | | | | | | | | | | |
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| | | | | | | | 7,694 | | | 7,654 | | | | | | | | | | | | | |
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| Consolidated Adjusted EBITDA | | | | | | | | $ | 47,959 | | | $ | 47,789 | | | | | | | | | | | | | |
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| Footnotes: | | | | | | | | | | | | |
| (1) Includes Amortization of acquisition-related intangible assets and a portion of the Non-strategic business shutdown, where applicable. | | | | | | | | | | | | |
(2) Includes Pension and benefits remeasurement adjustments, where applicable. | | | | | | | | | | | | | | | | |
Verizon Communications Inc.
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net Unsecured Debt and Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio | | | | | | | | |
| (dollars in millions) |
| Unaudited | | 3/31/24 | | | | | | 12/31/23 | | 3/31/23 |
| | | | | | | | | | |
| Debt maturing within one year | | $ | 15,594 | | | | | | | $ | 12,973 | | | $ | 12,081 | |
| Long-term debt | | 136,104 | | | | | | | 137,701 | | | 140,772 | |
| Total Debt | | 151,698 | | | | | | | 150,674 | | | 152,853 | |
| Less Secured debt | | 23,290 | | | | | | | 22,183 | | | 20,835 | |
| Unsecured Debt | | 128,408 | | | | | | | 128,491 | | | 132,018 | |
| Less Cash and cash equivalents | | 2,365 | | | | | | | 2,065 | | | 2,234 | |
Net Unsecured Debt | | $ | 126,043 | | | | | | | $ | 126,426 | | | $ | 129,784 | |
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| Consolidated Net Income (LTM) | | $ | 11,799 | | | | | | | $ | 12,095 | | | |
| Unsecured Debt to Consolidated Net Income Ratio | | 10.9 | x | | | | | | 10.6 | x | | |
| Consolidated Adjusted EBITDA (LTM) | | $ | 47,959 | | | | | | | $ | 47,789 | | | |
| Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio | | 2.6 | x | | | | | | 2.6 | x | | |
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| Adjusted Earnings per Common Share (Adjusted EPS) | | | | | | | | |
(dollars in millions, except per share amounts) |
| Unaudited | | 3 Mos. Ended 3/31/24 | | 3 Mos. Ended 3/31/23 |
| | Pre-tax | Tax | After-Tax | | | Pre-tax | Tax | After-Tax | |
| EPS | | | | | $ | 1.09 | | | | | | $ | 1.17 | |
| Amortization of acquisition-related intangible assets | | $ | 221 | | $ | (56) | | $ | 165 | | 0.04 | | | $ | 208 | | $ | (53) | | $ | 155 | | 0.04 | |
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| Legacy legal matter | | 106 | | (27) | | 79 | | 0.02 | | | — | | — | | — | | — | |
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| | $ | 327 | | $ | (83) | | $ | 244 | | $ | 0.06 | | | $ | 208 | | $ | (53) | | $ | 155 | | $ | 0.04 | |
| Adjusted EPS | | | | | $ | 1.15 | | | | | | $ | 1.20 | |
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Footnote: | | | | | | | | | | |
Adjusted EPS may not add due to rounding. | | | | | | | | | | |
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| Free Cash Flow | | | | | | | |
| (dollars in millions) | |
| Unaudited | | 3 Mos. Ended 3/31/24 | | | | 3 Mos. Ended 3/31/23 | |
| | | | | | | |
| Net Cash Provided by Operating Activities | | $ | 7,084 | | | | | $ | 8,289 | | |
| Capital expenditures (including capitalized software) | | (4,376) | | | | | (5,958) | | |
| Free Cash Flow | | $ | 2,708 | | | | | $ | 2,331 | | |
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Verizon Communications Inc.
Non-GAAP Reconciliations - Segments
| | | | | | | | | | | | | | | | | | |
| Segment EBITDA and Segment EBITDA Margin | | | | | | | | |
| | | | | | | | |
| Consumer | | | | | | | | |
| (dollars in millions) |
| Unaudited | | 3 Mos. Ended 3/31/24 | | 3 Mos. Ended 3/31/23 | | | | |
| | | | | | | | |
| Operating Income | | $ | 7,372 | | | $ | 7,099 | | | | | |
| Add Depreciation and amortization expense | | 3,309 | | | 3,214 | | | | | |
| Segment EBITDA | | $ | 10,681 | | | $ | 10,313 | | | | | |
| Year over year change % | | 3.6 | % | | | | | | |
| | | | | | | | |
| Total operating revenues | | $ | 25,057 | | | $ | 24,857 | | | | | |
| Operating Income Margin | | 29.4 | % | | 28.6 | % | | | | |
| Segment EBITDA Margin | | 42.6 | % | | 41.5 | % | | | | |
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| Business | | | | | | | | |
| (dollars in millions) |
| Unaudited | | 3 Mos. Ended 3/31/24 | | 3 Mos. Ended 3/31/23 | | | | |
| | | | | | | | |
| Operating Income | | $ | 399 | | | $ | 551 | | | | | |
| Add Depreciation and amortization expense | | 1,128 | | | 1,094 | | | | | |
| Segment EBITDA | | $ | 1,527 | | | $ | 1,645 | | | | | |
| Year over year change % | | (7.2) | % | | | | | | |
| | | | | | | | |
| Total operating revenues | | $ | 7,376 | | | $ | 7,494 | | | | | |
| Operating Income Margin | | 5.4 | % | | 7.4 | % | | | | |
| Segment EBITDA Margin | | 20.7 | % | | 22.0 | % | | | | |
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| | | | | | | | |
This supplemental information regarding the financial and operating results of Verizon Communications Inc. (Verizon) for the first quarter ended March 31, 2024 contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Discussion of factors that may affect future results is included at the end of this document and is also contained in Verizon's filings with the US Securities and Exchange Commission.
Consolidated Financial Results
* Non-GAAP financial measure.
** Total Wireless service revenue represents the sum of Consumer and Business segments.
Consolidated total operating revenue for the first quarter was $33.0 billion, up 0.2% year over year.
•Service and other revenue was $27.6 billion, up 1.7% year over year.
◦Total Wireless service revenue2 was $19.5 billion, up 3.3% year over year, driven primarily by pricing actions implemented in recent quarters, higher premium price plan adoption, and growth from our fixed wireless access (FWA) connections.
◦Total Fios revenue was $3.2 billion, up 0.3% year over year.
•Wireless equipment revenue was $5.4 billion, down 6.9% year over year, predominantly due to lower upgrade volumes.
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Consolidated net income for the first quarter was $4.7 billion compared to $5.0 billion for the first quarter 2023, as the benefits from improved operational performance and pricing actions were more than offset by higher selling, general, and administrative (SG&A) expenses and higher interest expense.
Consolidated adjusted EBITDA1 for the first quarter was $12.1 billion, compared to $11.9 billion in the prior year period. This result was driven by Wireless service revenue growth and the benefits of lower upgrade volumes, which were offset by higher SG&A expenses, and ongoing declines in Verizon Business Group wireline revenue.
Consolidated operating expenses for the first quarter were $25.5 billion, up 0.5% year over year. Consolidated operating expenses, excluding depreciation and amortization and special items,1 were $20.9 billion, down 0.5% year over year.
Interest expense for the first quarter was $1.6 billion compared to $1.2 billion for the first quarter 2023 due to lower capitalized interest and higher interest rates on our outstanding debt balance.
Earnings per share (EPS) was $1.09 compared to EPS of $1.17 in the prior year period.
•First quarter 2024 financial results reflected a pre-tax loss from special items of approximately $327 million. This includes the amortization of intangible assets related to Tracfone and other acquisitions of $221 million, and a $106 million charge associated with a litigation matter related to a legacy contract for the production of telephone directories in Costa Rica by a subsidiary of Verizon.
Adjusted EPS1 for the first quarter was $1.15 compared to $1.20 in the prior year period.
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Cash Flow Summary
* Non-GAAP financial measure.
Cash flow from operating activities for the first quarter was $7.1 billion compared to $8.3 billion in the prior year period driven by year over year pressures from higher interest expense primarily related to a reduction in capitalized interest. Additionally, we made a discretionary pension contribution of $365 million prior to the closing of the previously disclosed retiree pension annuitization transaction.
•Capital spending for the first quarter was $4.4 billion compared to $6.0 billion in the prior year period.
Free cash flow1 for the first quarter was $2.7 billion compared to $2.3 billion in the prior year period.
Total unsecured debt as of the end of the first quarter was $128.4 billion, a $0.1 billion decrease compared to the fourth quarter 2023 and $3.6 billion lower year over year. Unsecured debt to net income (LTM) ratio was 10.9x as of the end of the first quarter, an increase of 0.3x compared to the fourth quarter 2023 and a 4.9x increase year over year.
Net unsecured debt1 as of the end of the first quarter was $126.0 billion, a $0.4 billion decrease compared to the fourth quarter 2023 and $3.7 billion lower year over year. Net unsecured debt to adjusted EBITDA ratio1 was 2.6x as of the end of the first quarter, in line with the fourth quarter 2023 and a 0.1x improvement year over year.
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Mobility Highlights
Note: Where applicable, the operating results reflect certain adjustments
Consolidated
Total postpaid net additions for the first quarter were 253 thousand, down from 633 thousand in the prior year period, as slower growth in tablets, wearables, and other connected devices more than offset improved phone net losses and solid performance in FWA.
Total postpaid phone net losses for the first quarter were 68 thousand, an improvement from 127 thousand net losses in the prior year period.
•Postpaid phone gross additions were 2.4 million, up 1.4% year over year.
•Postpaid phone churn was 0.89%, down 1 basis point year over year.
Consumer Group
Postpaid net additions for the first quarter were 75 thousand, down from 321 thousand in the prior year period.
•Postpaid phone net losses were 158 thousand compared to 263 thousand net losses in the prior year period.
◦Postpaid phone gross additions were 1.7 million, up 5.3% year over year.
◦Postpaid phone churn was 0.83%, down 1 basis point year over year.
Prepaid net losses were 216 thousand compared to 351 thousand net losses in the prior year period.
•Excluding SafeLink Wireless (SafeLink), our brand offering access to government-sponsored connectivity benefits and programs, prepaid net losses were 131 thousand compared to 277 thousand net losses in the prior year period.
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◦Prepaid churn was 4.26%, down 5 basis points year over year. Excluding SafeLink, prepaid churn was 3.61%, down 11 basis points year over year.
Business Group
Postpaid phone net additions for the first quarter were 90 thousand, down from 136 thousand in the prior year period.
•Postpaid phone churn was 1.13%, down 3 basis points year over year.
Broadband Highlights
Total broadband net additions for the first quarter were 389 thousand compared to 437 thousand in the prior year period.
•FWA net additions were 354 thousand, down from 393 thousand in the prior year period.
◦Consumer FWA net additions were 203 thousand, down 53 thousand year over year.
◦Business FWA net additions were 151 thousand, up 14 thousand year over year.
•Fios internet net additions were 53 thousand, down from 67 thousand in the prior year period.
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Consumer Financial Results
Total Consumer revenue for the first quarter was $25.1 billion, up 0.8% year over year, as gains in Service revenue were partially offset by declines in Wireless equipment revenue.
•Consumer Service and other revenue was $20.6 billion, up 2.9% year over year.
•Consumer Wireless service revenue was $16.1 billion, up 3.4% year over year, driven by growth in Consumer wireless postpaid average revenue per account (ARPA) from pricing actions and continued FWA adoption.
•Consumer Fios revenue was $2.9 billion, up 0.2% year over year.
•Consumer Wireless equipment revenue was $4.5 billion, down 8.0% year over year, driven primarily by a 20.9% year over year decline in upgrades.
Consumer Wireless postpaid ARPA was $135.75 for the first quarter, up 4.4% year over year, driven by pricing actions implemented in recent quarters, continued adoption of premium Unlimited plans, and an increase in our FWA subscriber base.
Consumer operating income for the first quarter was $7.4 billion, up 3.8% year over year, resulting in operating income margin of 29.4%.
Consumer segment EBITDA1 for the first quarter was $10.7 billion, up 3.6% year over year. This improvement can be attributed to Service revenue growth and lower upgrade volumes. Consumer segment EBITDA margin1 for the first quarter was 42.6%.
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Business Financial Results
Note: Revenue by customer group may not add due to rounding.
Total Business revenue for the first quarter was $7.4 billion, down 1.6% year over year, as increases in Wireless service revenue were more than offset by decreases in Wireline revenue and Wireless equipment revenue.
•Business Wireless service revenue was $3.4 billion, up 2.7% year over year, driven by continued strong net additions in the first quarter 2024 for both mobility and FWA, as well as benefits from pricing actions implemented in recent quarters.
•Business wireline results reflect continued secular declines in the prevailing wireline market, consistent with prior periods.
Business operating income for the first quarter was $399 million, down 27.6% year over year, resulting in operating income margin of 5.4%.
Business segment EBITDA1 for the first quarter was $1.5 billion, down 7.2% year over year, driven by continued declines in Wireline revenues. Business segment EBITDA margin1 for the first quarter was 20.7%.
Notes
1 Non-GAAP financial measure. See the accompanying schedules and www.verizon.com/about/investors for reconciliations of non-GAAP financial measures cited in this document to most directly comparable financial measures under generally accepted accounting principles (GAAP).
2 Total Wireless service revenue represents the sum of Consumer and Business segments.
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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,” “assumes,” “believes,” “estimates,” “expects,” “forecasts,” “hopes,” “intends,” “plans,” “targets” 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: the effects of competition in the markets in which we operate, including the inability to successfully respond to competitive factors such as prices, promotional incentives and evolving consumer preferences; failure to take advantage of, or respond to competitors' use of, developments in technology and address changes in consumer demand; performance issues or delays in the deployment of our 5G network resulting in significant costs or a reduction in the anticipated benefits of the enhancement to our networks; the inability to implement our business strategy; adverse conditions in the U.S. and international economies, including inflation and changing interest rates in the markets in which we operate; cyber attacks impacting our networks or systems and any resulting financial or reputational impact; damage to our infrastructure or disruption of our operations from natural disasters, extreme weather conditions, acts of war, terrorist attacks or other hostile acts and any resulting financial or reputational impact; disruption of our key suppliers’ or vendors' provisioning of products or services, including as a result of geopolitical factors or the potential impacts of global climate change; material adverse changes in labor matters and any resulting financial or operational impact; damage to our reputation or brands; the impact of public health crises on our operations, our employees and the ways in which our customers use our networks and other products and services; changes in the regulatory environment in which we operate, including any increase in restrictions on our ability to operate our networks or businesses; allegations regarding the release of hazardous materials or pollutants into the environment from our, or our predecessors’, network assets and any related government investigations, regulatory developments, litigation, penalties and other liability, remediation and compliance costs, operational impacts or reputational damage; our high level of indebtedness; significant litigation and any resulting material expenses incurred in defending against lawsuits or paying awards or settlements; an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations or adverse conditions in the credit markets affecting the cost, including interest rates, and/or availability of further financing; significant increases in benefit plan costs or lower investment returns on plan assets; changes in tax laws or regulations, or in their interpretation, or challenges to our tax positions, resulting in additional tax expense or liabilities; and changes in accounting assumptions that regulatory agencies, including the SEC, may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings.
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Verizon Communications Inc.
Non-GAAP Reconciliations - Consolidated Verizon
Consolidated EBITDA and Consolidated Adjusted EBITDA
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| (dollars in millions) |
| Unaudited | | | | | | | | 3 Mos. Ended 3/31/24 | | 3 Mos. Ended 12/31/23 | | 3 Mos. Ended 9/30/23 | | 3 Mos. Ended 6/30/23 | | 3 Mos. Ended 3/31/23 | | 3 Mos. Ended 12/31/22 | | 3 Mos. Ended 9/30/22 | | 3 Mos. Ended 6/30/22 |
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| Consolidated Net Income (Loss) | | | | | | | | $ | 4,722 | | | $ | (2,573) | | | $ | 4,884 | | | $ | 4,766 | | | $ | 5,018 | | | $ | 6,698 | | | $ | 5,024 | | | $ | 5,315 | |
| Add: | | | | | | | | | | | | | | | | | | | | | | |
| Provision for income taxes | | | | | | | | 1,353 | | | 756 | | | 1,308 | | | 1,346 | | | 1,482 | | | 2,113 | | | 1,496 | | | 1,542 | |
| Interest expense | | | | | | | | 1,635 | | | 1,599 | | | 1,433 | | | 1,285 | | | 1,207 | | | 1,105 | | | 937 | | | 785 | |
Depreciation and amortization expense(1) | | | | | | | | 4,445 | | | 4,516 | | | 4,431 | | | 4,359 | | | 4,318 | | | 4,218 | | | 4,324 | | | 4,321 | |
| Consolidated EBITDA | | | | | | | | $ | 12,155 | | | $ | 4,298 | | | $ | 12,056 | | | $ | 11,756 | | | $ | 12,025 | | | $ | 14,134 | | | $ | 11,781 | | | $ | 11,963 | |
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| Add/(subtract): | | | | | | | | | | | | | | | | | | | | | | |
Other (income) expense, net(2) | | | | | | | | $ | (198) | | | $ | 807 | | | $ | (170) | | | $ | (210) | | | $ | (114) | | | $ | (2,687) | | | $ | 439 | | | $ | (49) | |
| Equity in losses (earnings) of unconsolidated businesses | | | | | | | | 9 | | | 11 | | | 18 | | | 33 | | | (9) | | | (4) | | | (2) | | | (41) | |
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| Severance charges | | | | | | | | — | | | 296 | | | — | | | 237 | | | — | | | 304 | | | — | | | — | |
| Legacy legal matter | | | | | | | | 106 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Verizon Business Group goodwill impairment | | | | | | | | — | | | 5,841 | | | — | | | — | | | — | | | — | | | — | | | — | |
| Asset rationalization | | | | | | | | — | | | 325 | | | — | | | 155 | | | — | | | — | | | — | | | — | |
| Legal settlement | | | | | | | | — | | | 100 | | | — | | | — | | | — | | | — | | | — | | | — | |
| Business transformation costs | | | | | | | | — | | | — | | | 176 | | | — | | | — | | | — | | | — | | | — | |
| Non-strategic business shutdown | | | | | | | | — | | | — | | | 158 | | | — | | | — | | | — | | | — | | | — | |
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| | | | | | | | (83) | | | 7,380 | | | 182 | | | 215 | | | (123) | | | (2,387) | | | 437 | | | (90) | |
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| Consolidated Adjusted EBITDA | | | | | | | | $ | 12,072 | | | $ | 11,678 | | | $ | 12,238 | | | $ | 11,971 | | | $ | 11,902 | | | $ | 11,747 | | | $ | 12,218 | | | $ | 11,873 | |
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Footnotes:
(1) Includes Amortization of acquisition-related intangible assets and a portion of the Non-strategic business shutdown, where applicable.
(2) Includes Pension and benefits remeasurement adjustments, where applicable.
Verizon Communications Inc.
Consolidated EBITDA and Consolidated Adjusted EBITDA (LTM)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (dollars in millions) | | | | | | |
| Unaudited | | 12 Mos. Ended 3/31/24 | | | | | | | | 12 Mos. Ended 12/31/23 | | | | | | 12 Mos. Ended 3/31/23 | | | | | | |
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| Consolidated Net Income | | $ | 11,799 | | | | | | | | | $ | 12,095 | | | | | | | $ | 22,055 | | | | | | | |
| Add: | | | | | | | | | | | | | | | | | | | | | | |
| Provision for income taxes | | 4,763 | | | | | | | | | 4,892 | | | | | | | 6,633 | | | | | | | |
| Interest expense | | 5,952 | | | | | | | | | 5,524 | | | | | | | 4,034 | | | | | | | |
Depreciation and amortization expense(1) | | 17,751 | | | | | | | | | 17,624 | | | | | | | 17,181 | | | | | | | |
| Consolidated EBITDA | | $ | 40,265 | | | | | | | | | $ | 40,135 | | | | | | | $ | 49,903 | | | | | | | |
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| Add/(subtract): | | | | | | | | | | | | | | | | | | | | | | |
Other (income) expense, net(2) | | $ | 229 | | | | | | | | | $ | 313 | | | | | | | $ | (2,411) | | | | | | | |
| Equity in losses (earnings) of unconsolidated businesses | | 71 | | | | | | | | | 53 | | | | | | | (56) | | | | | | | |
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| Severance charges | | 533 | | | | | | | | | 533 | | | | | | | 304 | | | | | | | |
| Legacy legal matter | | 106 | | | | | | | | | — | | | | | | | — | | | | | | | |
| Verizon Business Group goodwill impairment | | 5,841 | | | | | | | | | 5,841 | | | | | | | — | | | | | | | |
| Asset rationalization | | 480 | | | | | | | | | 480 | | | | | | | — | | | | | | | |
| Legal settlement | | 100 | | | | | | | | | 100 | | | | | | | — | | | | | | | |
| Business transformation costs | | 176 | | | | | | | | | 176 | | | | | | | — | | | | | | | |
| Non-strategic business shutdown | | 158 | | | | | | | | | 158 | | | | | | | — | | | | | | | |
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| | 7,694 | | | | | | | | | 7,654 | | | | | | | (2,163) | | | | | | | |
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| Consolidated Adjusted EBITDA | | $ | 47,959 | | | | | | | | | $ | 47,789 | | | | | | | $ | 47,740 | | | | | | | |
Footnotes:
(1) Includes Amortization of acquisition-related intangible assets and a portion of the Non-strategic business shutdown, where applicable.
(2) Includes Pension and benefits remeasurement adjustments, where applicable.
Verizon Communications Inc.
Net Unsecured Debt and Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (dollars in millions) |
| Unaudited | | 3/31/24 | | 12/31/23 | | 3/31/23 | | | | | | | | |
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| Debt maturing within one year | | $ | 15,594 | | | $ | 12,973 | | | $ | 12,081 | | | | | | | | | |
| Long-term debt | | 136,104 | | | 137,701 | | | 140,772 | | | | | | | | | |
| Total Debt | | 151,698 | | | 150,674 | | | 152,853 | | | | | | | | | |
| Less Secured debt | | 23,290 | | | 22,183 | | | 20,835 | | | | | | | | | |
| Unsecured Debt | | 128,408 | | | 128,491 | | | 132,018 | | | | | | | | | |
| Less Cash and cash equivalents | | 2,365 | | | 2,065 | | | 2,234 | | | | | | | | | |
Net Unsecured Debt | | $ | 126,043 | | | $ | 126,426 | | | $ | 129,784 | | | | | | | | | |
| Consolidated Net Income (LTM) | | $ | 11,799 | | | $ | 12,095 | | | $ | 22,055 | | | | | | | | | |
| Consolidated Adjusted EBITDA (LTM) | | $ | 47,959 | | | $ | 47,789 | | | $ | 47,740 | | | | | | | | | |
| Unsecured Debt to Consolidated Net Income Ratio | | 10.9 | x | | 10.6 | x | | 6.0 | x | | | | | | | | |
| Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio | | 2.6 | x | | 2.6 | x | | 2.7 | x | | | | | | | | |
| Net Unsecured Debt - Quarter over quarter change | | $ | (383) | | | | | | | | | | | | | |
| Net Unsecured Debt - Year over year change | | $ | (3,741) | | | | | | | | | | | | | |
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Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio - Quarter over quarter change | | — | x | | | | | | | | | | | | |
| Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio - Year over year change | | (0.1) | x | | | | | | | | | | | | |
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Adjusted Earnings per Common Share (Adjusted EPS)
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(dollars in millions, except per share amounts) |
| Unaudited | | 3 Mos. Ended 3/31/24 | | 3 Mos. Ended 3/31/23 |
| | Pre-tax | Tax | After-Tax | | | Pre-tax | Tax | After-Tax | |
| EPS | | | | | $ | 1.09 | | | | | | $ | 1.17 | |
| Amortization of acquisition-related intangible assets | | $ | 221 | | $ | (56) | | $ | 165 | | 0.04 | | | $ | 208 | | $ | (53) | | $ | 155 | | 0.04 | |
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| Legacy legal matter | | 106 | | (27) | | 79 | | 0.02 | | | — | | — | | — | | — | |
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| | $ | 327 | | $ | (83) | | $ | 244 | | $ | 0.06 | | | $ | 208 | | $ | (53) | | $ | 155 | | $ | 0.04 | |
| Adjusted EPS | | | | | $ | 1.15 | | | | | | $ | 1.20 | |
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Footnote:
Adjusted EPS may not add due to rounding.
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| Free Cash Flow | | | | | |
| (dollars in millions) | |
| Unaudited | | 3 Mos. Ended 3/31/24 | | 3 Mos. Ended 3/31/23 | |
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| Net Cash Provided by Operating Activities | | $ | 7,084 | | | $ | 8,289 | | |
| Capital expenditures (including capitalized software) | | (4,376) | | | (5,958) | | |
| Free Cash Flow | | $ | 2,708 | | | $ | 2,331 | | |
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| Consolidated Operating Expenses Excluding Depreciation and Amortization and Special Items | | | | | |
| (dollars in millions) |
| Unaudited | | 3 Mos. Ended 3/31/24 | | | 3 Mos. Ended 3/31/23 |
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| Consolidated Operating Expenses | | $ | 25,460 | | | | $ | 25,328 | |
Depreciation and amortization expense(1) | | 4,445 | | | | 4,318 | |
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| Legacy legal matter | | 106 | | | | — | |
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| Consolidated Operating Expenses Excluding Depreciation and Amortization and Special Items | | $ | 20,909 | | | | $ | 21,010 | |
| Year over year change % | | (0.5) | % | | | |
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Footnote:
(1) Includes Amortization of acquisition-related intangible assets.
Verizon Communications Inc.
Non-GAAP Reconciliations - Segments
Segment EBITDA and Segment EBITDA Margin
Consumer
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| (dollars in millions) |
| Unaudited | | 3 Mos. Ended 3/31/24 | | 3 Mos. Ended 3/31/23 | | | | |
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| Operating Income | | $ | 7,372 | | | $ | 7,099 | | | | | |
| Add Depreciation and amortization expense | | 3,309 | | | 3,214 | | | | | |
| Segment EBITDA | | $ | 10,681 | | | $ | 10,313 | | | | | |
| Year over year change % | | 3.6 | % | | | | | | |
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| Total operating revenues | | $ | 25,057 | | | $ | 24,857 | | | | | |
| Operating Income Margin | | 29.4 | % | | 28.6 | % | | | | |
| Segment EBITDA Margin | | 42.6 | % | | 41.5 | % | | | | |
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Business
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| (dollars in millions) |
| Unaudited | | 3 Mos. Ended 3/31/24 | | 3 Mos. Ended 3/31/23 | | | | |
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| Operating Income | | $ | 399 | | | $ | 551 | | | | | |
| Add Depreciation and amortization expense | | 1,128 | | | 1,094 | | | | | |
| Segment EBITDA | | $ | 1,527 | | | $ | 1,645 | | | | | |
| Year over year change % | | (7.2) | % | | | | | | |
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| Total operating revenues | | $ | 7,376 | | | $ | 7,494 | | | | | |
| Operating Income Margin | | 5.4 | % | | 7.4 | % | | | | |
| Segment EBITDA Margin | | 20.7 | % | | 22.0 | % | | | | |
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