Verizon Communications Inc 8-K, filed Mar 3, 2022
Verizon Communications Inc (VZ)
8-K
2022-03-03
For: 2022-03-03
View Original
Added on
April 11, 2026
About this 8-K
Verizon Communications Inc filed this 8-K on March 3, 2022.
Items reported
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
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: March 3, 2022
(Date of earliest event reported)
______________________________________________________________________________
(Exact name of registrant as specified in its charter)
_______________________________________________________________________________
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
Registrant’s telephone number, including area code: (212 ) 395-1000
(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:
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||||||||
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).
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 7.01. Regulation FD Disclosure.
Attached as Exhibit 99.1 and incorporated by reference herein are slides from an investor presentation given by Verizon Communications Inc. ("Verizon") on March 3, 2022 . Also attached as Exhibit 99.2 and incorporated by reference herein is a press release dated March 3, 2022 , issued by Verizon, and a reconciliation of a non-GAAP financial measure.
The information provided pursuant to this Item 7.01 is “furnished” and shall not be deemed to be “filed” with the Securities and Exchange Commission or incorporated by reference in any filing under the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in any such filings.
Non-GAAP Measures
Verizon’s slides 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.
Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio Forecast
Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio Forecast is a non-GAAP financial measure that we believe is 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. Consolidated Adjusted EBITDA is calculated by adding back interest, taxes and depreciation and amortization expense to net income and excluding the effect of non-operational items and special items that could arise. Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio Forecast is calculated by dividing Net Unsecured Debt by Consolidated Adjusted EBITDA. For purposes of Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio Forecast, Consolidated Adjusted EBITDA is calculated for the last twelve months of the forecasted period.
We have not provided a reconciliation for our Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio Forecast because we cannot, without unreasonable effort, predict the impacts to the special items that could arise during future periods.
Free Cash Flow Forecast
Free cash flow forecast 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. The free cash flow forecast has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures. For example, free cash flow forecast does not incorporate payments made on finance lease obligations or cash payments for acquisitions of businesses or wireless licenses. Therefore, we believe it is important to view the free cash flow forecast as a complement to our entire consolidated statements of cash flows.
Free cash flow forecast is calculated by subtracting capital expenditures (including capitalized software) from net cash provided by operating activities.
See the accompanying Exhibit 99.2 for the reconciliation of the non-GAAP financial measure to GAAP.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number | Description | |||||||
| 99.1 | Slides from an investor presentation given on March 3, 2022. | |||||||
| 99.2 | Press release, dated March 3, 2022, issued by Verizon Communications Inc., and reconciliation of non-GAAP financial measure. | |||||||
| 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: | March 3, 2022 | /s/ Anthony T. Skiadas | ||||||||||||||||||
| Anthony T. Skiadas | ||||||||||||||||||||
| Senior Vice President and Controller | ||||||||||||||||||||
EXHIBIT INDEX
| Exhibit Number | Description | |||||||
Slides from an investor presentation given on | ||||||||
| Press release, dated March 3, 2022, issued by Verizon Communications Inc., and reconciliation of non-GAAP financial measure. | ||||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL). | |||||||
© 2022 Verizon 1
“Safe Harbor” Statement NOTE: In this presentation 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,” “forecasts,” “plans” or similar expressions. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The following important factors, along with those discussed in our filings with the Securities and Exchange Commission (the “SEC”), could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements: cyber attacks impacting our networks or systems and any resulting financial or reputational impact; damage to our infrastructure or disruption of our operations from natural disasters, extreme weather conditions or terrorist attacks and any resulting financial or reputational impact; the impact of public health crises, including the COVID-19 pandemic, on our operations, our employees and the ways in which our customers use our networks and other products and services; disruption of our key suppliers’ or vendors' provisioning of products or services, including as a result of geopolitical factors, the COVID-19 pandemic or the potential impacts of global climate change; material adverse changes in labor matters and any resulting financial or operational impact; the effects of competition in the markets in which we operate; failure to take advantage of developments in technology and address changes in consumer demand; performance issues or delays in the deployment of our 5G network resulting in significant costs or a reduction in the anticipated benefits of the enhancement to our networks; the inability to implement our business strategy; adverse conditions in the U.S. and international economies; changes in the regulatory environment in which we operate, including any increase in restrictions on our ability to operate our networks or businesses; 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 treaties, or in their interpretation; and changes in accounting assumptions that regulatory agencies, including the SEC, may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings. This presentation includes the following measures, each of which is a non-GAAP financial measure: adjusted earnings per share, free cash flow forecast, net unsecured debt/adjusted EBITDA ratio, and net unsecured debt/adjusted EBITDA ratio forecast. As required by SEC rules, we have provided a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures in materials on our website at www.verizon.com/about/investors. 2
Network-as-a-Service 3 Network-as-a-Service Strategy Mobility Broadband Cloud 21st Century Infrastructure Personalized Distributed Virtualized Network Metaverse IoT Our Network is the Foundation for the 5G Economy
2019 Key Verizon Milestones 2020 2021 2022 mmWave Acquisition Verizon Intelligent Edge Network First to 5G Mix & Match Launch Verizon 2.0 Model First Industry Green Bond Nationwide 5G Public MEC Launch with AWS Private MEC Launch with AWS + Microsoft CBRS Acquisition Citizen Verizon C-Band Acquisition TracFone Acquisition VMG Divestiture 10-Year NFL 5G Deal EDISON Alliance C-Band Deployment Mix & Match 4.0 Verizon Ultra Internet for Home & Business 4
Delivering Financial Performance and Growth 5 Wireless Service Revenue $B Dividends $B Adjusted EPS $ per Share
5 Vectors of Growth 6 5 Vectors of Growth Drive Verizon’s Performance
Revenue Growth 4% annual service and other revenue growth in 2024 & beyond Strong Margins NaaS to drive long-term consolidated Adjusted EBITDA growth at or above revenue growth Capital Intensity Reduction below pre-C-Band levels Leverage Achieve target long-term leverage ratio of 1.75-2.0x by 2025 Return of Capital Dividends and Buybacks ESG Invest $3B in Digital Inclusion by 2025 & carbon neutral operations by 2035 Financial Outlook Overview 7
Fundamentals Network Leadership Customer-Driven Models Trusted Brand Financial Discipline Network-as-a-Service Disrupt Broadband Market New Business Models Leadership in Mobility Network-as-a-Service Framework 9
iEN OneFiber Investments Enabling Our Strategy C-Band mmWave 10 Network Spectrum Acquisition Strategic Investments are the Key Enablers that Accelerate our Strategy
Building an Ecosystem Around Us 11 Connectivity OEMs Cloud & Integrators Global Partners
First-of-its-kind Strategic Partnership 12 Verizon’s Network will Enable the Metaverse ● The Metaverse represents a new use case of Verizon’s multi-purpose network ● Partnership to determine: ○ Verizon’s network requirements to support XR cloud rendering and low latency streaming ○ Measure impact of edge computing with Verizon’s MEC infrastructure on key performance metrics for metaverse optimized experiences
Verizon Prepaid Measures of Success + Drive new customer growth + Increase revenue via step-ups, premium offerings and subscription services + Capture share + Fiber + Fixed Wireless Access (FWA) + Build on the first mover advantage + Edge computing and next-gen enterprise solutions + #1 Share + Return on invested capital + Wholesale, MVNOs, and other strategic partnerships + ARPA + Subscribers & Accounts + Premium Unlimited Penetration + Households and Businesses Covered + Total Subscribers + Total Revenue + Prepaid ARPU + Prepaid Subscribers + Prepaid Revenue Measures of Success Measures of Success Measures of Success Network-as-a-Service Overview 13 Measures of Success + Wireless Service Revenue
Addressable Market 14 $120B Serviceable Addressable Market Expansion over Next 5 Years 2021 $460B $120B Growth$340B 2026E
● Consistent strategy driving execution ● Portfolio of assets designed to compete ● Vibrant ecosystem, redefining our market ● Multiple new paths to growth More Pathways to Growth 15
16
Global Networks & Technologies Enable NaaS Build the world’s best networks Deploy the world’s best systems Drive best efficiency Develop the world’s best culture 17 4 Pillars Serve as Foundation for NaaS Strategy and Underpin the 5G Economy
Core Fiber RAN TechnologyM u lt i- P u rp o se N et w o rk What Makes Us Different 18
Reduction in Transport Network ElementsCore 1 Verizon Intelligent Edge Network Vision Supports NaaS 93% Reduction in Edge Routers 90% 19 iEN Driving over $1B in Cumulative Benefits
Best-in-class latency Virtualization is Transforming Networks Owned Webscale Platform World leader for VRAN deployment Virtualization Layer Compute Network Storage RAN Core 20 Verizon is a World Leader in VRAN
Fiber is Fundamental to NaaS 45% Expect 50% YE 2022 Sites on Verizon Fiber YE 2021 16.5M Expect Incremental 550K in 2022 Fios Open for Sale YE 2021 21 Owned Fiber Assets Improves Performance and Reliability
Fiber Owner’s Economics 10x Expected Backhaul Increase ~$300M Owner’s Economics Benefits Access cost savings in 2021 22 Fiber Owner’s Economics Drives Cost Efficiency
Transforming the Network 4.5M Circuits Off Copper 60M kWhs Saved 36 Wire Centers Converted to Fiber 11% Copper Trouble Reduction YoY due to network transformation 23 Copper to Fiber Transformation Drives Additional Cost Savings
Industry Leading RAN Design mmWave High density + Urban + Enterprises + Industrial Mid-Band Suburban + In-building + Complements mmWave Low-Band Wide Coverage Rural + Delivers IoT over distances Satellite Global Coverage +Enterprise grade connectivity + Automobile + IoT + Backhaul & Broadband + 5G Integration 24 Coverage and Range
mmWave Usage Growth Avg. daily usage (TB) mmWave Usage is Growing Fast mmWave Usage in Deployed Footprint Percentage usage on mmWave 25 mmWave is Vital to 5G Plan to Support and Scale Usage in Dense Areas
Ultra Speed C-Band Performance Massive Capacity Peak DL speeds on C-Band C-Band Spectrum (MHz) >900 Mbps 60 Today Peak DL speeds with aggregation C-Band Spectrum (MHz) >1 Gbps 161 2023+ Unique devices connected to C-Band network 12M 26 C-Band off to a Fast Start with Better than Expected Performance
Efficient Use of One Network for Mobility and FWA 12PM – 6PM Peak Mobility Usage 7PM – 9PM Peak FWA Usage While customers are binge watching videoWhile customers are at work 27 Mobility & FWA Peak Usage is Complementary
Capacity Enablers ● More spectrum ● Complementary usage patterns ● Bits per Hertz efficiency Spectral Efficiency Forecast with C-Band 28 5G Spectrum is 80% more Efficient than LTE
C-Band Coverage Exceeding Expectations 100M+ POPs 175M POPs 29 EOY 2021 2021 Investor Day Guide 2022 Investor Day Guide 100M POPs 250M+ POPs 175M POPs EOY 2022 EOY 2023 250M+ POPs C-Band Deployment is Accelerating Faster than Original Build Plan EOY 2024
Customer Network Leadership in MEC & Multi-Cloud Services 30 Cloud Provider 1 Cloud Provider 2 Customer Cloud MEC iEN: Multi-Cloud Leverage Intelligent Edge Network to Connect Customers to Multiple Cloud Environments
© 2022 Verizon Evolved Packet Core 5G Services Evolution 31 C ap ab ili ti es Te ch n o lo g ie s LTE, 5G Broadband, Fixed Wireless, Voice over LTE Consumer & Private Network Slices Non-Standalone Standalone Ultra Reliable Cloud Native 5G Packet Core 5G Core Evolution will Enable Network Slicing Use Cases as the Ecosystem Evolves
© 2022 Verizon Multi-gig up to 10 Gbps symmetrical using NG-PON2 Advanced Fios Network Speed Efficiency Multi-Purpose Reliability 32 Upgraded Technology Enhances Fios Customer Speeds
© 2022 Verizon ● Cloud integration and digitization ● Market-leading platform ● Coverage ● Low latency ● Real-time Internet of Things 33 Unique Network Capabilities Make Verizon an Ideal IoT Partner
© 2022 Verizon ● Network leadership in core, fiber, RAN and technology ● Reliable, differentiated and scalable platform ● Top engineering talent More Pathways to Growth 34
Verizon confidential and proprietary. Unauthorized disclosure, reproduction or other use prohibited. 35
© 2022 Verizon 36 Path to Accelerated Growth Network-as-a-Service Be our customers’ choice for their digital transformation journey Build on our strong leadership position Expand into new growth categories
© 2022 Verizon 37 Market Leader in Mobility and Fiber Broadband 44% 49% Wireless Share #1 in Wireless across Enterprise, Public Sector & SMB B2B Fios Share #1 broadband provider in Fios footprint
© 2022 Verizon 18% 38 5G Mobility 80% Expected 5G Mobility Drivers ● Continued growth in premium plan step-ups ● Suite of above network products ○ Security ○ One Talk ○ Unified Communications 5G Phone Adoption Outlook 4Q21 Delivered Highest Wireless Win Share in More than 2 Years; C-Band Accelerates Industry-Leading Market Share Growth YE2021 YE2025
© 2022 Verizon 39 Nationwide Broadband 14M Expected FWA business locations covered by 2025 ~100K 1M+ Fixed Wireless Access (FWA) Subscribers FWA as Primary Broadband Access for Every Customer Segment and New Use Cases YE2021 YE2025
© 2022 Verizon 40 Verizon Addressable Opportunity by 2025 $30B Private Networks + Edge Compute + Enterprise Solutions • Rapid ecosystem development • First and only player with all 3 major cloud platforms • Seamlessly integrate Public and Private MEC into hybrid, multi-cloud solutions
© 2022 Verizon 41 5G Enables Increased Sensor Capacity & Accelerated Adoption Continued double-digit IoT connections growth expected
© 2022 Verizon 42 Enterprise Private Networking Solutions Increased Productivity Revenue Opportunity Cost Savings Network Customization Operations Monetization Gateway to Enable 5G Private Edge Computing
© 2022 Verizon 43 Private Networking Use Cases Automotive In-building coverage with Hybrid MEC Financial Services Industrial Operations Logistics Education/ Universities Sporting Events & Entertainment Superior Network Positions Verizon to Drive the Market to Accelerated Adoption of Private Networks
© 2022 Verizon 44 Business Transformation New Customers & Revenue Acceleration Enhanced Customer Experiences & Digital Strong Cost Control & Business Simplification Initiatives 1 2 3 Targeting 25% EBITDA Margin
● Building the 21st Century infrastructure: ○ Mobility, Broadband & Cloud ● Accelerating Growth with Many Ways to Win ● Delivering Transformational Customer Outcomes More Pathways to Growth 45
46
1 Diversified brand portfolio 2 Home broadband coverage 3 Connecting everyone, everything, everywhere Even Stronger Consumer Group than 12 Months Ago Verizon Prepaid 47 100M POPs mobility C-Band coverage 30M FWA HHs coverage
© 2022 Verizon 48 Go to Market Strength Value Prop Differentiation Product Innovation Customer Experience Lifetime Value Management Omni-Channel Capabilities Network-as-a-Service Wholesale Brand Equity
© 2022 Verizon 49 Winning with Mix & Match 4.0 and C-Band Expanded 5G Ultra Wideband coverage Unlimited premium data with no speed caps The most hotspot capacity offered by any carrier 6 entertainment subscriptions Mix and Match Offers Flexibility and Efficiency that brings more Value to Customers
© 2022 Verizon 50 Personalized Customer Base Management ARPA & Step-up Strategy Exclusive Partnerships Personalized Upgrade Offers Maximize Yield Drive Lifetime Value Create Loyalty
© 2022 Verizon 51 Exceeding 2021 Investor Day Targets 5G Postpaid Phone Penetration Postpaid Plan Mix ARPA Forecast Exceeded Expectations 34% EOP 2021 33% Premium UNL EOP 2021 3.3% ARPA growth to $122.30 FY 2021 2021 Outlook
© 2022 Verizon 52 Raising our Outlook 2022 Outlook 5G Postpaid Phone Penetration Postpaid Plan Mix ARPA Forecast
© 2022 Verizon 53 YE 2025 Nationwide Broadband Targets 50M 18M Expected HHs covered FWA Expected Fios Open For Sale Opportunity to be THE Nationwide Broadband Provider in the U.S.
© 2022 Verizon 54 Winning with Mobile & 5G Home No contracts, data caps or extra fees, equipment included 50% off pricing for Mobile & Home customers Self set-up enhancements Base & Acquisition management to support stress free switching Increase 5G Open for Sale (OFS) Disrupting the Industry with Unparalleled Experience
© 2022 Verizon 55 Home Broadband Subscribers 6.5M 11M YE 2021 2025 E Total Broadband Subscribers = Fios + Fixed Wireless Access
© 2022 Verizon 56 Scaling Value Drives Churn Benefits 16bps 34bps Active Content Subscription Premium Unlimited + Broadband Incremental Improvement in Consumer Phone Churn
© 2022 Verizon 57 Unlocking Substantial Value Go to Market Agility & Lean Structure Amplify Mission with New Products, Services and Innovation Value Market Premium Market
© 2022 Verizon 58 Verizon Value Market Outlook Prepaid Wireless Service Revenue
© 2022 Verizon 59 Network Monetization Strong Revenue Stream Healthy Margins Open for Business Network-as-a-Service Strategy Creates an Additional Pathway to Revenue Growth
© 2022 Verizon 60 Operational Excellence Model Financial Imperatives Go to market Portfolio Omni Operations Consumer Better Customer Experience Lower Costs to Serve Strong Margins
● Multiple paths to grow ● Leading all customer segments ● Disrupting home broadband nationwide ● Agility and nimbleness ● Customer-centric model More Pathways to Growth 61
62
● Acquired C-Band and achieved 100M POPs Target ● Completed TracFone acquisition ● Divested non-core assets ● Achieved financial targets 2021 Goals Delivered 63
© 2022 Verizon 64 Platform for Accelerating Performance Revenue Growth Operating Leverage Capital Efficiency Free Cash Flow Conversion Capital Allocation Model
© 2022 Verizon 65 5 Vectors Drive Accelerating Revenue Expected Annual Service & Other Revenue Growth 2022 ~3%* YoY 2023 3%+ YoY 2024+ 4% YoY *Organic (excludes Verizon Media Group and TracFone) Proof Point: FWA Scaling Quickly. Positioned to Deliver 150K+ FWA Adds in 1Q22
© 2022 Verizon 66 Revenue Growth Drivers Expected Service & Other Revenue Growth ($B) Consumer Business 2.2%* 4%Growth rates Vector Contributions to 2022-2025 Growth * Excludes impact from Verizon Media
© 2022 Verizon 67 5G Mobility Growth Drivers 5G Mobility Growth Outlook* * Vector includes postpaid net adds, ARPA/ARPU, and device protection Expected Key Drivers Consumer • 2.0%+ ARPA CAGR thru 2025 (excl. FWA) • ~2/3 from Premium mix and ~1/3 from products • Growth from subscribers and accounts • Customers with 5G phones are 2.5X more likely to take premium unlimited Business • Growth from market leadership expansion • 5G adoption grows to 80% by year end 2025 • SMB premium mix of ~70% by year end 2025
© 2022 Verizon 68 Nationwide Broadband Growth Drivers Expected Key DriversBroadband Revenue Outlook* *Note: Includes both Consumer & Business FWA + Fios Revenue FWA • 50M Households Covered by YE 2025 • 14M Businesses covered by YE 2025 • 4M–5M Subscribers by YE 2025 Fios • >18M Open For Sale by YE 2025 • ~8M Internet Subscribers by YE 2025 • Consumer Internet-only mix grows from 40% to 50%+ by YE 2025 Format complete. Ready for Proof Graph data needed -IR to manage OG LINK HERE
© 2022 Verizon 69 MEC & B2B Solutions Growth Drivers MEC & B2B Solution Revenue Outlook* Expected Key Drivers • IoT revenue grows from $1.5B+ in 2021 driven by double-digit connections CAGR thru 2025 • ~$1B of growth from Public MEC by YE 2025 • Scaling private networks, delivering private MEC and solutions revenue * Vector includes IoT, MEC, Private Wireless Networks, BlueJeans and other services
© 2022 Verizon 70 Value Market Growth Drivers Expected Key DriversPrepaid Revenue Growth Outlook * Tracfone contribution only includes incremental revenue post acquisition • Growing subscriber base over long term • Shift to unlimited plans and growth in value added services driving ARPU • Migrating 6M+ off-net subs helps drive ~$1B in synergies
© 2022 Verizon 71 Operating Leverage Plan Operating Scale from Multiple Revenue Sources Network Owner’s Economics Adjusted EBITDA Growth at or Above Revenue Growth $300M 2021 Fiber Access Cost Savings and Annualized Savings Approaching $1B by 2025
© 2022 Verizon 72 Improving Capital Efficiency over Time Capex Outlook ($B) • C-Band accelerated $10B spend concludes in 2023 • $3B run-rate savings from key programs by 2024 ○ Less reliance on 4G LTE capacity over time ○ Completion of One Fiber core build in 2023 ○ iEN efficiencies result in virtualization benefits Expected Key Drivers * At the mid-point of 2022 guidance Positioned for $20B-$22B FCF in 2023 and Expected to Expand thereafter
© 2022 Verizon 73 Target Leverage Ratio Leverage Ratio (Net Unsecured Debt/Adjusted EBITDA) Revenue Growth plus Capital Intensity Reduction Support Deleveraging
© 2022 Verizon 74 Capital Allocation Model Investment in the Business • Capital Expenditures • Spectrum • Mergers & Acquisitions Commitment to Dividend • 15 consecutive years of increases Strong Balance Sheet • Target net unsecured debt to adjusted EBITDA range of 1.75x – 2.0x Share Repurchases • Efficient return of excess cash flow to shareholders 1 2 3 4
● Clear path to 4% annual service and other revenue growth in 2024+ ● Adjusted EBITDA growth at or above revenue growth ● Efficiencies drive lower capital intensity and overall spend ● Target leverage ratio remains at 1.75x – 2.0x with share repurchases considered at 2.25x More Pathways to Growth 75
© 2022 Verizon
Exhibit 99.2
News Release
| FOR IMMEDIATE RELEASE | Media contacts: | ||||
| March 3, 2022 | Kim Ancin | ||||
| Kimberly.ancin@verizon.com | |||||
908-801-0500 | |||||
Verizon 5G Ultra Wideband expected to cover
175 million people by the end of 2022
Company outlines multiple paths to growth to drive four percent service and other revenue growth in 2024 and beyond
Announces ultra innovations with new content and entertainment hub, strikes strategic partnership with Meta, launches new private networking solution for business customers
What you need to know:
•Verizon expects to generate service and other revenue growth of at least 4 percent in 2024 and beyond and to lower capital intensity to below 12% in 2024; and will now consider share buybacks when the company reaches a 2.25x leverage ratio
•More than 175 million people expected to be covered with 5G Ultra Wideband by year-end 2022
•Announces new offering +play, a direct-to-consumer platform featuring Netflix and other content partners
•Expands Private Networking Solutions as gateway to Private Mobile Edge Compute
•Plans to increase broadband penetration with subscriber growth in Fixed Wireless
•First-of-its-kind strategic partnership with Meta, a step to understanding the foundational requirements for metaverse applications
NEW YORK, N.Y. -- Verizon Communications Inc. (NYSE, Nasdaq: VZ) today announced an acceleration in availability of its market-leading 5G Ultra Wideband network to an expected 175 million people by year-end 2022. This new fast tracked timeline is made possible by the incredible pace of deployment achieved by Verizon’s network engineering team.
At the company’s Investor Day 2022, the leadership team outlined its vision and strategy, powered by its leading 5G network and the source for the company’s growth over the next several years. As the world continues to transition to a more hybrid work environment and is increasingly mobile, the new currency will be ultra-fast, ultra-reliable connectivity, creating new markets and ushering in the 5G economy. The company’s Network-as-a-Service strategy was built to drive the 5G economy through an ever-expanding volume of services and technologies that are enabled by 5G Ultra Wideband’s capacity to connect to a massive number of devices at high speed.
The company outlined multiple paths to growth: 5G Mobility, Nationwide Broadband, Mobile Edge Compute (MEC) and business solutions, the Value Market and Network Monetization, stating expectations that it will drive 4 percent service and other revenue growth for the company in 2024 and beyond.
“Through our deliberate strategy of investment and divestment we have already significantly increased the size of our addressable market which, over the next 5 years, should grow an additional $120B. We chose a strategy where we not only participate in a much larger market but also a market where we are in the leading position in our paths to growth,” said Hans Vestberg, Verizon Chairman and CEO. “Verizon's transformative technology and Network-as-a-Service platform is what enables the 5G Economy and makes us the partner of choice for key customers and applications providers. Our high-capacity, low-latency network delivers a superior, unmatched experience that will enable all of our stakeholders to live, work and play in new and amazing ways for years to come.”
Vestberg went on to say, “Verizon’s networks power a future-proof strategy, built on strong trends in Mobility, Broadband and Cloud. We imagined a world of hyper-connectivity and
massive capacity, knowing it would inspire innovation and new use cases. We see immense momentum today and what has us most excited is that we know that our network will support use cases that have not yet even been imagined.”
Optimizing the Metaverse with Verizon’s 5G Network
Over the next decade, the metaverse will enable immersive, interconnected and interoperable digital spaces to help people connect in ways not yet possible. These metaverse experiences will be delivered across all screens, at home, at work, and on the go and customers will want to have those experiences on the industry’s leading 5G network. That is why Verizon unveiled a first-of-its-kind strategic partnership with Meta that aims to couple Verizon’s 5G Ultra Wideband network and edge compute capabilities with Meta’s technologies to understand the foundational requirements for metaverse applications. The collaboration will explore how Verizon’s mobile edge compute infrastructure can deliver intensive XR cloud rendering and low latency streaming, which are core capabilities needed for metaverse applications.
•The metaverse is the next evolution in online social technology, enabling immersive, interconnected and interoperable digital spaces over the next decade that represent the evolution of the internet from how it exists today. Innovations that enable the next generation of fixed and mobile connectivity are critical pieces to make the metaverse a reality.
•Verizon and Meta are also exploring a range of metaverse opportunities from the future of hybrid work/collaboration to metaverse-related consumer experiences.
Introducing +play, a new ultra innovation content hub exclusive to Verizon customers, coming later this year
Verizon announced +play (plus play), exclusive to Verizon customers. This unique, direct-to-consumer platform allows users to discover, purchase and manage some of their favorite subscriptions across entertainment, audio, gaming, fitness, lifestyle and more – ALL in one place. +play builds on the content Verizon already offers through leading providers including Disney+, Hulu, ESPN+, discovery+ and AMC+, all of whom are featured in the new service, and introduces new partners, including Netflix, Peloton, Live Nation’s Veeps, WW International, Inc., A+E Networks, The Athletic, Calm, Duolingo, and TelevisaUnivision’s Vix+, among many others.
•Limited trials of +play will begin at the end of this month with an expected commercial launch later this year. Verizon expects the product to generate significant new revenues from subscription purchases, increase customer loyalty and improve its market-leading retention rates.
Expands private networking solutions as gateway to ultra-private
mobile edge compute
With traditional wireless technology solutions, organizations are often left with coverage gaps, fractured security and inconsistent service quality that leads to costly downtime and lower productivity. To solve this problem for its customers, Verizon Business announced a new, cost competitive, turn-key private networking solution with Celona, that will accelerate the use of private 5G to support a new generation of business initiatives. Together, Verizon and Celona will offer one solution with a common relationship, contract, support center and implementation team.
•The solution will benefit small, mid-market and enterprise businesses that are looking to quickly deploy a private network that is built on cloud-first architecture, utilizing plug-and-play ingredients, self-organizing wireless and AI for app intelligence.
•The offer will also help businesses expedite bringing private 5G applications to market, streamlining costs and mitigating operational challenges.
•This solution simplifies the customer experience and gives customers the ability to effectively scale their connectivity, and will also lower the cost barrier for developers, opening new pathways for them to test innovative and transformative applications.
Verizon’s On Site LTE and 5G solution provides customers a private and secure on-premises cellular wireless network on which to run critical business applications and operations.
Verizon customers can now use a Celona LAN to deploy the private core on-premise, or on any private or public cloud.
Ultra C-Band acceleration drives additional subscriber growth in nationwide broadband
The expansion of Verizon’s C-Band coverage provides additional growth opportunities in nationwide broadband with over 150,000 net additions expected for fixed wireless access alone in the first quarter of 2022.
As the company continues to expand its 5G network over the next few years, it plans to:
•Significantly expands its fixed wireless coverage of households and businesses, disrupting an existing market and capturing share; becoming its second largest contributor to revenue growth.
•Cover 50 million households and 14 million businesses, and have 4 to 5 million total fixed wireless subscribers by year end 2025.
Accelerating Revenue and Cash Flow Growth
With the benefit of the accelerated C-Band deployment, new products, services and partnerships described above, Verizon expects to generate service and other revenue growth of approximately three percent in 2022, excluding the net impact of the sale of Verizon Media and the company's ownership of TracFone; at least three percent in 2023; and four percent in 2024 and beyond. Coupled with anticipated reduced capital intensity to below 12 percent in 2024 following the conclusion of the initial C-Band build, the company expects faster growth in free cash flow and a resulting step down in leverage.
CFO Matt Ellis stated that Verizon will consider share buybacks when the company reaches a 2.25x net unsecured debt/adjusted EBITDA leverage ratio, slightly above its long-term target range of 1.75x-2.0x.
“Our capital allocation priorities are unchanged: Investment in the business, commitment to the dividend, a strong balance sheet and share repurchases, in that order,” Ellis said. “Our diverse growth opportunities, combined with our unmatched assets and proven track record of
execution, position us well for the future. Our expected strong cash flow provides additional optionality, and we look forward to continuing to deliver for all of our stakeholders.”
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Verizon Communications Inc. (NYSE, Nasdaq: VZ) was formed on June 30, 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 $133.6 billion in 2021. 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, security and control.
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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,” “believes,” “estimates,” “expects,” “hopes,” “forecasts,” “plans” or similar expressions. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The following important factors, along with those discussed in our filings with the Securities and Exchange Commission (the “SEC”), could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements: cyber attacks impacting our networks or systems and any resulting financial or reputational impact; damage to our infrastructure or disruption of our operations from natural disasters, extreme weather conditions or terrorist attacks and any resulting financial or reputational impact; the impact of public health crises, including the COVID-19 pandemic, on our operations, our employees and the ways in which our customers use our networks and other products and services; disruption of our key suppliers’ or vendors' provisioning of products or services, including as a result of geopolitical factors, the COVID-19 pandemic or the potential impacts of global climate change; material adverse changes in labor matters and any resulting financial or operational impact; the effects of competition in the markets in which we operate; failure to take advantage of developments in technology and address changes in consumer demand; performance issues or delays in the deployment of our 5G network resulting in significant costs or a reduction in the anticipated benefits of the enhancement to our networks; the inability to implement our business strategy; adverse conditions in the U.S. and international economies; changes in the regulatory environment in which we operate, including any increase in restrictions on our ability to operate our networks or businesses; 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 treaties, or in their interpretation; and changes in accounting assumptions that regulatory agencies, including the SEC, may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings.
Non-GAAP Reconciliation
| Free Cash Flow Forecast | |||||||||||||||||
| (dollars in billions) | |||||||||||||||||
| Unaudited | 12 Mos. Ended 12/31/23 | ||||||||||||||||
| Net Cash Provided by Operating Activities Forecast | $ 39.5 to $ 41.5 | ||||||||||||||||
| Capital expenditures (including capitalized software) forecast | (19.5) | ||||||||||||||||
| Free Cash Flow Forecast | $ 20 to $ 22 | ||||||||||||||||