vz-20230425

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 25, 2023

(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

New York Stock Exchange

Common Stock, par value $0.10

The Nasdaq Global Select Market

1.625% Notes due 2024

VZ 24B

New York Stock Exchange

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

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

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 25, 2023, issued by Verizon Communications Inc. (Verizon). Attached as Exhibit 99.2 hereto is commentary, dated April 25, 2023, discussing Verizon's financial and operating results for the first quarter of 2023.

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 Forecast

Consolidated Adjusted EBITDA and Consolidated Adjusted EBITDA 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 in a manner that is consistent with management’s evaluation of business performance. We believe that Consolidated Adjusted EBITDA and Consolidated Adjusted EBITDA 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: severance charges and net gain from disposition of business. Severance charges recorded during 2022 and 2021 relate to involuntary and voluntary separations, respectively, under our existing plans. Net gain from disposition of business relates to the sale of Verizon Media in 2021.

We have not provided a reconciliation for our Consolidated Adjusted EBITDA Forecast because we cannot, without unreasonable effort, predict the special items that could arise during 2023.

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 early debt redemption costs.

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 2023.

Adjusted Effective Income Tax Rate Attributable to Verizon Forecast (Adjusted ETR Forecast)

Adjusted ETR Forecast is a non-GAAP financial measure that we believe is useful to management, investors and other users of our financial information in assessing our effective income tax rate without the effect of special items which could vary from period to period. Adjusted ETR Forecast is calculated by dividing the provision for income taxes by net income attributable to Verizon before tax after adjusting for the impact of special items.

We have not provided a reconciliation for our Adjusted ETR Forecast because we cannot, without unreasonable effort, predict the special items that could arise during 2023.

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 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

Consolidated operating expenses excluding depreciation and amortization 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 in a manner that is consistent with management's evaluation of operating performance. We believe that consolidated operating expenses excluding depreciation and amortization is used by investors to compare a company’s operating expenses to its competitors by eliminating impacts caused by differences in depreciation and amortization policies.

Consolidated operating expenses excluding depreciation and amortization is calculated by excluding from consolidated operating expenses the effect of depreciation and amortization expense.

See the accompanying schedules for reconciliations of non-GAAP financial measures to GAAP.

Item 9.01. Financial Statements and Exhibits


(d) Exhibits.

Exhibit Number						Description

99.1						Press release and financial tables, dated April 25, 2023, issued by Verizon Communications Inc.
99.2						Commentary discussing financial and operating results of Verizon Communications Inc. for the first quarter of 2023.


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 25, 2023

/s/ Anthony T. Skiadas

Anthony T. Skiadas

Senior Vice President and Controller

Exhibit 99.1

News Release


FOR IMMEDIATE RELEASE			Media contacts:
April 25, 2023			Kim Ancin
			908-559-3227
			[email protected]

			Eric Wilkens
			201-572-9317
			[email protected]

Verizon begins 2023 with rapid network expansion and

the most broadband additions in over a decade

Company's total wireless postpaid phone gross additions

increased 5.3 percent year over year

Cash flow from operations increased $1.5 billion year over year,

and free cash flow1 increased $1.3 billion year over year

1Q 2023 highlights

Consolidated:

•$1.17 in EPS, compared with $1.09 in first-quarter 2022; adjusted EPS1, excluding a special item, of $1.20, compared with $1.35 in first-quarter 2022.

•Total operating revenue of $32.9 billion, a decrease of 1.9 percent from first-quarter 2022.

•Net income of $5.0 billion, an increase of 6.5 percent from first-quarter 2022, and adjusted EBITDA1 of $11.9 billion, down 1.1 percent year over year.

Total Broadband:

•Total broadband net additions of 437,000 was the largest result in more than a decade, reflecting a strong demand for fixed wireless and Fios products. This result included 393,000 fixed wireless net additions, an increase from 379,000 fixed wireless net additions in fourth-quarter 2022.

•67,000 Fios Internet net additions, an increase from 60,000 Fios Internet net additions in first-quarter 2022.

Total Wireless:

•Total wireless service revenue3 of $18.9 billion, a 3.0 percent increase year over year.

•Postpaid phone net losses of 127,000, and retail postpaid net additions of 633,000. Total wireless postpaid phone gross additions increased 5.3 percent year over year, primarily driven by an 11.5 percent year over year growth in Consumer phone gross additions.

•Total retail postpaid churn of 1.15 percent, and retail postpaid phone churn of 0.90 percent.

NEW YORK - Verizon Communications Inc. (NYSE, Nasdaq: VZ) reported first-quarter results today highlighted by increased cash flow and the largest number of total broadband net additions in more than a decade.

"Our operational and financial results reflect the steps that we have taken to improve our performance. Compared to this time last year, we have added more postpaid phone gross additions to our network and have increased our cash flow from operations and free cash flow1," said Verizon Chairman and CEO Hans Vestberg. “Last month, we announced that our 5G Ultra Wideband now reaches more than 200 million people as we continue to undergo the most aggressive network deployment in our company's history. With our mobile and broadband capabilities, and our focus on network strength, we are giving more customers in more places a superior network experience."

For first-quarter 2023, Verizon reported EPS of $1.17, compared with $1.09 in first-quarter 2022. On an adjusted basis1, excluding a special item, EPS was $1.20 in first-quarter 2023, compared with adjusted EPS1 of $1.35 in first-quarter 2022.

First-quarter 2023 earnings included a pre-tax loss of approximately $208 million from a special item representing the impacts of amortization of intangible assets related to TracFone and other acquisitions.

Consolidated results

•Total consolidated operating revenue in first-quarter 2023 of $32.9 billion, a decrease of 1.9 percent from first-quarter 2022. This decrease was primarily due to lower equipment revenue and continued declines in Business wireline services.

•Total wireless service revenue3 in first-quarter 2023 increased 3.0 percent year over year. As discussed during the company's fourth-quarter 2022 earnings call, results for first-quarter 2023 included a benefit of approximately 185 basis points associated with a larger allocation of administrative and telco recovery fees from other revenue into wireless service revenue. This benefit was partially offset by the impact associated with the shutdown of the company's 3G network, completed at the end of fourth-quarter 2022. The shutdown resulted in the removal of approximately 1.1 million retail connections and the corresponding loss of revenue for first-quarter 2023.

•Net income of $5.0 billion, an increase of 6.5 percent compared to first-quarter 2022, and adjusted EBITDA1 of $11.9 billion, a decrease of 1.1 percent year over year.

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•Cash flow from operations totaled $8.3 billion in first-quarter 2023, an increase from $6.8 billion in first-quarter 2022. This increase was primarily due to working capital improvements driven by lower inventory levels, fewer phone upgrades and a modest improvement in customer payment patterns, despite current macroeconomic uncertainties.

•First-quarter 2023 capital expenditures were $6.0 billion, and included most of the remaining $1.75 billion under the company's C-Band related spending program.

•The company ended first-quarter 2023 with free cash flow1 of $2.3 billion, an increase from $1.0 billion in first-quarter 2022.

•Verizon's unsecured debt as of the end of first-quarter 2023 increased by $1.4 billion sequentially to $132.0 billion. The company's net unsecured debt1 balance increased sequentially by $1.8 billion to $129.8 billion. At the end of first-quarter 2023, Verizon's ratio of unsecured debt to net income (LTM) was approximately 6.0 times, and its net unsecured debt to adjusted EBITDA ratio1 was approximately 2.7 times.

Verizon Consumer results

•Total Verizon Consumer revenue was $24.9 billion, a decrease of 1.7 percent year over year. This decrease was due to declines in wireless equipment revenue partially offset by gains in service and other revenue.

•Wireless service revenue increased 2.5 percent year over year. This increase was driven by a larger allocation of administrative and telco recovery fees from other revenue into wireless service revenue, to partly recover network operating costs, and pricing actions implemented in the second half of 2022. These gains were partially offset by the amortization of wireless equipment sales promotions as well as volume driven declines in prepaid revenue.

•Consumer wireless retail postpaid churn was 1.05 percent in first-quarter 2023, and wireless retail postpaid phone churn was 0.84 percent.

•In first-quarter 2023, Consumer reported 263,000 wireless retail postpaid phone net losses. Consumer postpaid phone gross additions increased 11.5 percent year over year, continuing the momentum from the second half of 2022.

•Consumer reported 351,000 wireless retail prepaid net losses in first-quarter 2023. The company is taking steps to generate long term value, including strengthening its brands, evolving its go-to-market strategy and migrating off-network subscribers onto the Verizon network. In the short term, these actions are having a negative impact on prepaid net additions. The reported result was also due to elevated disconnects in the SafeLink brand.

•Consumer reported 256,000 fixed wireless net additions and 63,000 Fios Internet net additions in first-quarter 2023. Consumer Fios revenue was $2.9 billion in first-quarter 2023, a decrease of 0.8 percent year over year.

•In first-quarter 2023, Consumer operating income was $7.1 billion, a decrease of 3.0 percent year over year, and segment operating income margin was 28.6 percent, a decrease from 28.9 percent in first-quarter 2022. Segment EBITDA1 in first-quarter 2023 was $10.3 billion, a decrease of 1.6 percent year over year. This decline was due to higher bad debt, as involuntary churn rates and collections return to pre-pandemic levels, and elevated marketing expenses, among other factors. Segment EBITDA margin1 was 41.5 percent, an increase from 41.4 percent in first-quarter 2022.

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Verizon Business results

•Total Verizon Business revenue was $7.5 billion in first-quarter 2023, a decrease of 2.8 percent year over year. This decrease was due to lower wireline and wireless equipment revenue that offset the growth in wireless service revenue.

•Business wireless service revenue was $3.3 billion, an increase of 5.3 percent year over year. This growth was driven predominantly by the continued momentum in adding more customers onto the platform, and pricing actions implemented in the second half of 2022 and early 2023.

•Business reported 312,000 wireless retail postpaid net additions in first-quarter 2023, including 136,000 postpaid phone net additions.

•Business wireless retail postpaid churn was 1.50 percent in first-quarter 2023, and wireless retail postpaid phone churn was 1.16 percent.

•Business reported 137,000 fixed wireless net additions in first-quarter 2023.

•In first-quarter 2023, Verizon Business operating income was $551 million, a decrease of 18.1 percent year over year, and segment operating income margin was 7.4 percent, a decrease from 8.7 percent in first-quarter 2022. Segment EBITDA1 was $1.6 billion in first-quarter 2023, a decrease of 5.1 percent year over year, which reflected continued declines in high margin wireline revenues. Segment EBITDA margin1 was 22.0 percent in first-quarter 2023, a decrease from 22.5 percent in first-quarter 2022.

Outlook and guidance

For 2023, Verizon continues to expect the following:

•Total wireless service revenue growth2 3 of 2.5 percent to 4.5 percent.

•Adjusted EBITDA1 of $47.0 billion to $48.5 billion.

•Adjusted EPS1 of $4.55 to $4.85.

•Adjusted effective income tax rate1 in the range of 22.5 percent to 24.0 percent.

•Capital spending in the range of $18.25 billion to $19.25 billion.

1Non-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).

2Includes a benefit of approximately 190 basis points from the reallocation from Other revenue to Wireless service revenue. This results from a larger allocation of administrative and telco recovery charges which partly recover network operating costs.

3Total wireless service revenue represents the sum of Consumer and Business segments.

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 $136.8 billion in 2022. 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,” “forecasts,” “hopes,” “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: the effects of competition in the markets in which we operate, including any 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 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; 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; disruption of our key suppliers’ or vendors' provisioning of products or services, including as a result of geopolitical factors, public health crises or the potential impacts of global climate change; material adverse changes in labor matters and any resulting financial or operational impact; 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.

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Verizon Communications Inc.

Condensed Consolidated Statements of Income


(dollars in millions, except per share amounts)
Unaudited	3 Mos. Ended 3/31/23		3 Mos. Ended 3/31/22		% Change

Operating Revenues
Service revenues and other	$	27,152	$	27,218	(0.2)
Wireless equipment revenues	5,760		6,336		(9.1)
Total Operating Revenues	32,912		33,554		(1.9)

Operating Expenses
Cost of services	7,078		7,227		(2.1)
Cost of wireless equipment	6,426		7,123		(9.8)
Selling, general and administrative expense	7,506		7,172		4.7
Depreciation and amortization expense	4,318		4,236		1.9

Total Operating Expenses	25,328		25,758		(1.7)

Operating Income	7,584		7,796		(2.7)
Equity in earnings (losses) of unconsolidated businesses	9		(3)		*
Other income (expense), net	114		(924)		*
Interest expense	(1,207)		(786)		53.6
Income Before Provision For Income Taxes	6,500		6,083		6.9
Provision for income taxes	(1,482)		(1,372)		8.0
Net Income	$	5,018	$	4,711	6.5

Net income attributable to noncontrolling interests	$	109	$	131	(16.8)
Net income attributable to Verizon	4,909		4,580		7.2
Net Income	$	5,018	$	4,711	6.5

Basic Earnings Per Common Share
Net income attributable to Verizon	$	1.17	$	1.09	7.3
Weighted-average shares outstanding (in millions)	4,207		4,201

Diluted Earnings Per Common Share (1)
Net income attributable to Verizon	$	1.17	$	1.09	7.3
Weighted-average shares outstanding (in millions)	4,211		4,202

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	3/31/23		12/31/22		$ Change

Assets
Current assets
Cash and cash equivalents	$	2,234	$	2,605	$	(371)
Accounts receivable	23,748		25,332		(1,584)
Less Allowance for credit losses	892		826		66

Accounts receivable, net	22,856		24,506		(1,650)
Inventories	2,381		2,388		(7)

Prepaid expenses and other	8,251		8,358		(107)
Total current assets	35,722		37,857		(2,135)

Property, plant and equipment	310,519		307,689		2,830
Less Accumulated depreciation	203,532		200,255		3,277
Property, plant and equipment, net	106,987		107,434		(447)
Investments in unconsolidated businesses	1,052		1,071		(19)
Wireless licenses	150,485		149,796		689

Goodwill	28,674		28,671		3
Other intangible assets, net	11,246		11,461		(215)
Operating lease right-of-use assets	25,947		26,130		(183)
Other assets	17,603		17,260		343
Total assets	$	377,716	$	379,680	$	(1,964)

Liabilities and Equity
Current liabilities
Debt maturing within one year	$	12,081	$	9,963	$	2,118
Accounts payable and accrued liabilities	19,273		23,977		(4,704)

Current operating lease liabilities	4,177		4,134		43
Other current liabilities	12,237		12,097		140
Total current liabilities	47,768		50,171		(2,403)

Long-term debt	140,772		140,676		96
Employee benefit obligations	12,750		12,974		(224)
Deferred income taxes	43,667		43,441		226
Non-current operating lease liabilities	21,303		21,558		(255)
Other liabilities	17,237		18,397		(1,160)
Total long-term liabilities	235,729		237,046		(1,317)

Equity
Common stock	429		429		—
Additional paid in capital	13,523		13,420		103
Retained earnings	84,543		82,380		2,163
Accumulated other comprehensive loss	(2,177)		(1,865)		(312)
Common stock in treasury, at cost	(3,832)		(4,013)		181
Deferred compensation – employee stock ownership plans and other	397		793		(396)
Noncontrolling interests	1,336		1,319		17
Total equity	94,219		92,463		1,756
Total liabilities and equity	$	377,716	$	379,680	$	(1,964)

Verizon Communications Inc.

Consolidated - Selected Financial and Operating Statistics


(dollars in millions, except per share amounts)
Unaudited	3/31/23			12/31/22

Total debt	$	152,853		$	150,639

Unsecured debt	$	132,018		$	130,631
Net unsecured debt(1)	$	129,784		$	128,026

Unsecured debt / Consolidated Net Income (LTM)	6.0		x	6.0		x
Net unsecured debt / Consolidated Adjusted EBITDA(1)(2)	2.7x			2.7		x
Common shares outstanding end of period (in millions)	4,204			4,200
Total employees (‘000)	115.5			117.1
Quarterly cash dividends declared per common share	$	0.6525		$	0.6525

Footnotes:

(1)Non-GAAP financial measure.

(2)Consolidated Adjusted EBITDA excludes the effects of non-operational items and special items.

Verizon Communications Inc.

Condensed Consolidated Statements of Cash Flows


(dollars in millions)
Unaudited	3 Mos. Ended 3/31/23		3 Mos. Ended 3/31/22		$ Change

Cash Flows from Operating Activities
Net Income	$	5,018	$	4,711	$	307
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	4,318		4,236		82
Employee retirement benefits	54		(210)		264
Deferred income taxes	331		627		(296)
Provision for expected credit losses	530		328		202
Equity in losses of unconsolidated businesses, net of dividends received	10		7		3


Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses	(774)		(3,492)		2,718

Other, net	(1,198)		614		(1,812)
Net cash provided by operating activities	8,289		6,821		1,468

Cash Flows from Investing Activities
Capital expenditures (including capitalized software)	(5,958)		(5,821)		(137)

Acquisitions of wireless licenses	(598)		(1,838)		1,240
Collateral repayments (payments) related to derivative contracts, net	367		(277)		644

Other, net	79		(59)		138
Net cash used in investing activities	(6,110)		(7,995)		1,885

Cash Flows from Financing Activities
Proceeds from long-term borrowings	504		3,604		(3,100)
Proceeds from asset-backed long-term borrowings	1,754		3,545		(1,791)
Net proceeds from short-term commercial paper	342		3,791		(3,449)
Repayments of long-term borrowings and finance lease obligations	(1,325)		(6,556)		5,231
Repayments of asset-backed long-term borrowings	(931)		(1,650)		719
Dividends paid	(2,744)		(2,654)		(90)
Other, net	17		165		(148)
Net cash provided by (used in) financing activities	(2,383)		245		(2,628)

Decrease in cash, cash equivalents and restricted cash	(204)		(929)		725
Cash, cash equivalents and restricted cash, beginning of period	4,111		4,161		(50)
Cash, cash equivalents and restricted cash, end of period	$	3,907	$	3,232	$	675

Footnotes:

Certain amounts have been reclassified to conform to the current period presentation.

Verizon Communications Inc.

Consumer - Selected Financial Results


(dollars in millions)
Unaudited	3 Mos. Ended 3/31/23			3 Mos. Ended 3/31/22			% Change

Operating Revenues
Service	$	18,456		$	18,126		1.8
Wireless equipment	4,878			5,374			(9.2)
Other	1,523			1,792			(15.0)
Total Operating Revenues	24,857			25,292			(1.7)

Operating Expenses
Cost of services	4,432			4,446			(0.3)
Cost of wireless equipment	5,191			5,813			(10.7)
Selling, general and administrative expense	4,921			4,552			8.1
Depreciation and amortization expense	3,214			3,162			1.6
Total Operating Expenses	17,758			17,973			(1.2)

Operating Income	$	7,099		$	7,319		(3.0)
Operating Income Margin	28.6		%	28.9		%

Segment EBITDA(1)	$	10,313		$	10,481		(1.6)
Segment EBITDA Margin(1)	41.5		%	41.4		%

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	3/31/23			3/31/22			% Change

Connections (‘000):
Wireless retail postpaid	92,192			91,414			0.9
Wireless retail prepaid	22,331			23,772			(6.1)
Total wireless retail	114,523			115,186			(0.6)

Wireless retail postpaid phones	74,611			75,422			(1.1)

Fios video	3,160			3,495			(9.6)
Fios internet	6,803			6,596			3.1



Fixed wireless access (FWA) broadband	1,140			216			*
Wireline broadband	7,062			6,925			2.0
Total broadband	8,202			7,141			14.9

Unaudited	3 Mos. Ended 3/31/23			3 Mos. Ended 3/31/22			% Change

Gross Additions (‘000):
Wireless retail postpaid	3,210			2,481			29.4

Net Additions Detail (‘000):
Wireless retail postpaid	321			(126)			*
Wireless retail prepaid	(351)			(80)			*
Total wireless retail	(30)			(206)			85.4

Wireless retail postpaid phones	(263)			(292)			9.9

Fios video	(74)			(78)			5.1
Fios internet	63			55			14.5



FWA broadband	256			112			*
Wireline broadband	46			37			24.3

Total broadband	302			149			*

Churn Rate:
Wireless retail postpaid	1.05		%	0.95		%
Wireless retail postpaid phones	0.84		%	0.77		%
Wireless retail prepaid	4.31		%	3.69		%
Wireless retail	1.69		%	1.51		%

Revenue Statistics (in millions):
Wireless service revenue	$	15,599		$	15,217		2.5
Fios revenues	$	2,889		$	2,911		(0.8)

Verizon Communications Inc.

Consumer - Selected Operating Statistics (continued)


Unaudited	3 Mos. Ended 3/31/23			3 Mos. Ended 3/31/22			% Change

Other Wireless Statistics:
Wireless retail postpaid ARPA (1)	$	130.06		$	123.96		4.9
Wireless retail postpaid upgrade rate	4.0		%	4.8		%
Wireless retail postpaid accounts (‘000) (2)	33,034			33,514			(1.4)
Wireless retail postpaid connections per account (2)	2.79			2.73			2.2
Wireless retail prepaid ARPU (3)	$	30.71		$	30.89		(0.6)

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 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 3/31/23			3 Mos. Ended 3/31/22			% Change

Operating Revenues

Enterprise and Public Sector	$	3,787		$	3,978		(4.8)

Business Markets and SaaS	3,104			3,076			0.9
Wholesale	603			655			(7.9)
Total Operating Revenues	7,494			7,709			(2.8)

Operating Expenses
Cost of services	2,582			2,606			(0.9)
Cost of wireless equipment	1,234			1,310			(5.8)
Selling, general and administrative expense	2,033			2,059			(1.3)
Depreciation and amortization expense	1,094			1,061			3.1
Total Operating Expenses	6,943			7,036			(1.3)

Operating Income	$	551		$	673		(18.1)
Operating Income Margin	7.4		%	8.7		%

Segment EBITDA(1)	$	1,645		$	1,734		(5.1)
Segment EBITDA Margin(1)	22.0		%	22.5		%

Footnotes:

(1) Non-GAAP financial measure.

Our Business segment’s wireless and wireline products and services are organized by the primary customer groups targeted by these offerings. During the first quarter of 2023, Verizon reorganized the customer groups within its Business segment. Previously, this segment was comprised of four customer groups: Small and Medium Business, Global Enterprise, Public Sector and Other, and Wholesale. Following the reorganization, there are now three customer groups: Enterprise and Public Sector, Business Markets and SaaS, and Wholesale. Enterprise and Public Sector combines the customers previously included in Global Enterprise and Public Sector and Other (excluding BlueJeans and Connect customers) as well as the commercial wireline customers previously included in Small and Medium Business. Business Markets and SaaS combines the customers previously included in Small and Medium Business (excluding commercial wireline customers), the BlueJeans customers previously included in Global Enterprise and Public Sector and Other, and the Connect customers previously included in Public Sector and Other. The Wholesale customer group remained unchanged. Prior period operating revenue results within the Business segment have been recast for these reorganized customer groups. There was no change to the composition of our reportable segments and total segment results, nor the determination of segment profit.

Certain intersegment transactions with corporate entities have not been eliminated.

Verizon Communications Inc.

Business - Selected Operating Statistics



Unaudited	3/31/23			3/31/22			% Change

Connections (‘000):
Wireless retail postpaid	28,820			27,809			3.6
Wireless retail postpaid phones	17,703			17,353			2.0

Fios video	65			71			(8.5)
Fios internet	377			361			4.4


FWA broadband	726			217			*
Wireline broadband	466			475			(1.9)


Total broadband	1,192			692			72.3

Unaudited	3 Mos. Ended 3/31/23			3 Mos. Ended 3/31/22			% Change

Gross Additions (‘000):
Wireless retail postpaid	1,607			1,502			7.0

Net Additions Detail (‘000):
Wireless retail postpaid	312			395			(21.0)
Wireless retail postpaid phones	136			256			(46.9)

Fios video	(2)			—			*
Fios internet	4			5			(20.0)


FWA broadband	137			82			67.1
Wireline broadband	(2)			(2)			—

Total broadband	135			80			68.8

Churn Rate:
Wireless retail postpaid	1.50		%	1.34		%
Wireless retail postpaid phones	1.16		%	1.06		%

Revenue Statistics (in millions):
Wireless service revenue	$	3,290		$	3,125		5.3
Fios revenues	$	307		$	295		4.1

Other Operating Statistics:

Wireless retail postpaid upgrade rate	2.8		%	3.4		%

Footnotes:

Certain intersegment transactions with corporate entities have not been eliminated.

*Not meaningful

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.



Unaudited	3/31/23	3/31/22	% Change

Connections (‘000)
Retail postpaid				121,012			119,223			1.5
Retail prepaid				22,331			23,772			(6.1)
Total retail				143,343			142,995			0.2

Retail postpaid phones				92,314			92,775			(0.5)

Unaudited				3 Mos. Ended 3/31/23			3 Mos. Ended 3/31/22			% Change

Net Additions Detail (‘000)
Retail postpaid phones				(127)			(36)			*
Retail postpaid				633			269			*
Retail prepaid				(351)			(80)			*
Total retail				282			189			49.2

Account Statistics
Retail postpaid accounts (‘000) (1)				34,877			35,224			(1.0)
Retail postpaid connections per account (1)				3.47			3.38			2.7
Retail postpaid ARPA (2)				$	152.27		$	144.87		5.1
Retail prepaid ARPU (3)				$	30.71		$	30.89		(0.6)

Churn Detail
Retail postpaid phone				0.90		%	0.83		%
Retail postpaid				1.15		%	1.04		%
Retail prepaid				4.31		%	3.69		%
Retail				1.65		%	1.48		%

Retail Postpaid Connection Statistics


Upgrade rate				3.7		%	4.5		%

Revenue Statistics (in millions) (4)
Wireless service				$	18,889		$	18,342		3.0
Wireless equipment				5,760			6,336			(9.1)
Wireless other				1,515			1,818			(16.7)
Total Wireless				$	26,164		$	26,496		(1.3)

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.

*Not meaningful

Verizon Communications Inc.

Non-GAAP Reconciliations - Consolidated Verizon

Consolidated EBITDA and Consolidated Adjusted EBITDA


(dollars in millions)
Unaudited	3 Mos. Ended 3/31/23			3 Mos. Ended 12/31/22		3 Mos. Ended 9/30/22		3 Mos. Ended 6/30/22		3 Mos. Ended 3/31/22

Consolidated Net Income	$	5,018		$	6,698	$	5,024	$	5,315	$	4,711
Add:
Provision for income taxes	1,482			2,113		1,496		1,542		1,372
Interest expense	1,207			1,105		937		785		786
Depreciation and amortization expense (1)	4,318			4,218		4,324		4,321		4,236
Consolidated EBITDA	$	12,025		$	14,134	$	11,781	$	11,963	$	11,105

Add/(subtract):
Other (income) expense, net (2)	$	(114)		$	(2,687)	$	439	$	(49)	$	924
Equity in losses (earnings) of unconsolidated businesses	(9)			(4)		(2)		(41)		3

Severance charges	—			304		—		—		—





	(123)			(2,387)		437		(90)		927

Consolidated Adjusted EBITDA	$	11,902		$	11,747	$	12,218	$	11,873	$	12,032
Consolidated Adjusted EBITDA - Year over year change %	(1.1)		%

Footnotes:

(1) Includes Amortization of acquisition-related intangible assets.

(2) Includes Pension and benefits remeasurement adjustments and Early debt redemption costs, where applicable.

Consolidated EBITDA and Consolidated Adjusted EBITDA (LTM)


Unaudited	12 Mos. Ended 3/31/23		12 Mos. Ended 12/31/22

Consolidated Net Income	$	22,055	$	21,748
Add:
Provision for income taxes	6,633		6,523
Interest expense	4,034		3,613
Depreciation and amortization expense (1)	17,181		17,099
Consolidated EBITDA	$	49,903	$	48,983

Add/(subtract):
Other (income) expense, net (2)	$	(2,411)	$	(1,373)
Equity in losses (earnings) of unconsolidated businesses	(56)		(44)

Severance charges	304		304





	(2,163)		(1,113)

Consolidated Adjusted EBITDA	$	47,740	$	47,870

Footnotes:

(1) Includes Amortization of acquisition-related intangible assets.

(2) Includes Pension and benefits remeasurement adjustments and Early debt redemption costs, where applicable.

Verizon Communications Inc.

Net Unsecured Debt and Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio


(dollars in millions)
Unaudited	3/31/23			12/31/22

Debt maturing within one year	$	12,081		$	9,963
Long-term debt	140,772			140,676
Total Debt	152,853			150,639
Less Secured debt	20,835			20,008
Unsecured Debt	132,018			130,631
Less Cash and cash equivalents	2,234			2,605
Net Unsecured Debt	$	129,784		$	128,026



Consolidated Net Income (LTM)	$	22,055		$	21,748
Unsecured Debt to Consolidated Net Income Ratio	6.0		x	6.0		x
Consolidated Adjusted EBITDA (LTM)	$	47,740		$	47,870
Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio	2.7x			2.7		x


Net Unsecured Debt - Quarter over quarter change	$	1,758

Adjusted Earnings per Common Share (Adjusted EPS)


(dollars in millions, except per share amounts)
Unaudited	3 Mos. Ended 3/31/23								3 Mos. Ended 3/31/22
	Pre-tax		Tax		After-Tax				Pre-tax		Tax		After-Tax
EPS							$	1.17							$	1.09
Amortization of acquisition-related intangible assets	$	208	$	(53)	$	155	0.04		$	238	$	(60)	$	178	0.04

Early debt redemption costs	—		—		—		—		1,241		(316)		925		0.22











	$	208	$	(53)	$	155	$	0.04	$	1,479	$	(376)	$	1,103	$	0.26
Adjusted EPS							$	1.20							$	1.35

Footnotes:

Adjusted EPS may not add due to rounding.



Free Cash Flow
(dollars in millions)
Unaudited	3 Mos. Ended 3/31/23		3 Mos. Ended 3/31/22

Net Cash Provided by Operating Activities	$	8,289	$	6,821
Capital expenditures (including capitalized software)	(5,958)		(5,821)
Free Cash Flow	$	2,331	$	1,000
Year over year change	$	1,331

Verizon Communications Inc.

Non-GAAP Reconciliations - Segments

Segment EBITDA and Segment EBITDA Margin

Consumer


(dollars in millions)
Unaudited	3 Mos. Ended 3/31/23			3 Mos. Ended 3/31/22

Operating Income	$	7,099		$	7,319
Add Depreciation and amortization expense	3,214			3,162
Segment EBITDA	$	10,313		$	10,481
Year over year change %	(1.6)		%

Total operating revenues	$	24,857		$	25,292
Operating Income Margin	28.6		%	28.9		%
Segment EBITDA Margin	41.5		%	41.4		%

Business


(dollars in millions)
Unaudited	3 Mos. Ended 3/31/23			3 Mos. Ended 3/31/22

Operating Income	$	551		$	673
Add Depreciation and amortization expense	1,094			1,061
Segment EBITDA	$	1,645		$	1,734
Year over year change %	(5.1)		%

Total operating revenues	$	7,494		$	7,709
Operating Income Margin	7.4		%	8.7		%
Segment EBITDA Margin	22.0		%	22.5		%

Exhibit 99.2

This supplemental information regarding the financial and operating results of Verizon Communications Inc. (Verizon) for the first quarter ended March 31, 2023 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.

Verizon had a total of 633 thousand wireless retail postpaid net additions for the first quarter 2023. This success was driven by wearables adoption, Fixed Wireless Access momentum and continued strong performance in Business phone net additions.

Postpaid phone gross additions for the first quarter 2023 were 2.4 million, up 5.3% year over year primarily driven by an 11.5% increase in gross additions within the Consumer segment. Postpaid phone churn was 0.90%, up 7 basis points year over year. Postpaid phone net losses were 127 thousand, compared to net losses of 36 thousand for the first quarter 2022.

Verizon Consumer Group delivered 321 thousand total wireless postpaid net additions, as positive postpaid non-phone device additions were partially offset by 263 thousand postpaid phone net losses for the first quarter. Postpaid phone gross additions were up 11.5% year over year continuing the momentum

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from the second half of last year. Our efforts around the segmentation of our customer base and more targeted go-to-market approach and offerings to different customer groups have been key drivers behind the improved gross additions performance. Postpaid phone churn was 0.84%, up 7 basis points compared to the same period last year. We are now seeing a return of involuntary churn rates to pre-pandemic levels. As for voluntary churn, performance was mixed across the quarter with elevated churn rates at the start of the year as normal holiday season activity extended into the early parts of the first quarter. As the quarter progressed, we saw improvements in churn, and exited the quarter with voluntary churn rates in line with the prior year period.

In the Consumer segment, wireless postpaid average revenue per account (ARPA) was $130.06 for the first quarter, up 4.9% year over year. ARPA primarily increased as a result of a larger allocation of our administrative and telco recovery fees from other revenue into service revenue, and the pricing actions implemented in the second half of 2022. The costs associated with promotions and the amortization impact on service revenue continued during the first quarter, serving as a pressure on ARPA.

Prepaid offerings remain an important part of our value market strategy. We are taking steps to generate long term value, including working actively to strengthen our brands, evolving our go-to-market strategy and migrating off-network subscribers onto our network. In the short term, these actions are having a negative impact on our prepaid net additions. We had prepaid net losses of 351 thousand for the first quarter 2023, down by more than 270 thousand compared to the prior year period. This decline was also driven by elevated disconnects in our SafeLink brand which provides service to customers on government-subsidized programs.

As a result of the elevated SafeLink churn, overall prepaid churn for the first quarter was 4.31%, up 62 basis points year over year.

We expect the pressures on prepaid net additions, including elevated SafeLink disconnects, to increase in the second quarter and abate later in the year.

Verizon Business Group again delivered strong results. We saw solid demand across each of our customer groups and had 136 thousand postpaid phone net additions for the first quarter compared to 256 thousand for the same

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period last year. The year over year decline was primarily due to certain commercial transactions that contributed to our net additions a year ago. We also saw an increase in churn driven by pressures around restructurings within the technology sector, and customers right sizing their accounts in an effort to be more cautious around spending.

On a consolidated basis, total broadband net additions were 437 thousand in the first quarter, a new quarterly record in more than a decade. As expected, we saw continued sequential growth in fixed wireless with 393 thousand net additions, up from 379 thousand in the fourth quarter 2022. Customer satisfaction remains high, as evidenced by our net promoter scores as well as encouraging churn trends among our longer-standing customers.

Fios internet net additions for the first quarter were 67 thousand, up from 60 thousand in the first quarter of last year. We see strong demand for our high- quality broadband products, which is reflected in a year over year increase in Fios gross additions, even in an environment with lower households moving activity compared to the prior year. Fios retention rates continue to be strong, with a record low churn rate over more than five years.

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Consolidated total operating revenue was $32.9 billion for the first quarter, down 1.9% year over year. Revenue decline was driven by both service and other revenue, which was down 0.2% and equipment revenue, which was down 9.1% year over year.

Total wireless service revenue2 was $18.9 billion, up 3.0% year over year. As we discussed at our fourth quarter earnings call, our results for the first quarter included a benefit of approximately 185 basis points associated with a larger allocation of our administrative and telco recovery fees from other revenue into wireless service revenue. This benefit was partially offset by the impact associated with the shutdown of our 3G network, completed at the end of the fourth quarter. The shutdown resulted in the removal of approximately 1.1 million retail connections and the corresponding loss of revenue for the first quarter.

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Consolidated net income was $5.0 billion for the first quarter 2023, up 6.5% compared to the prior year period.

Consolidated Adjusted EBITDA1 was $11.9 billion for the first quarter 2023, down 1.1% year over year as wireless service revenue growth was offset by higher bad debt expense, and increased marketing promotional expense, among other factors, compared to the same period last year.

During the first quarter, consolidated operating expenses were down 1.7% and consolidated operating expenses, excluding depreciation and amortization1, were down 2.4% year over year, primarily due to lower cost of equipment from fewer upgrades, which helped to offset an increase in bad debt of approximately $200 million. Bad debt expense reflects the return of collections to pre-pandemic levels.

Net interest expense slightly increased in the first quarter compared to the fourth quarter 2022 due to higher interest rates on our outstanding debt balance.

Earnings per share (EPS) for the first quarter 2023 was $1.17.

Reported first quarter earnings include a pre-tax loss from special items of approximately $208 million, related to the impacts of amortization of intangible assets related to TracFone Wireless, Inc. and other acquisitions.

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Excluding the effects of this special item, Adjusted EPS1 for the first quarter 2023 was $1.20, a decrease of 11.1% year over year.

Total Consumer revenue for the first quarter was $24.9 billion, down 1.7% year over year due to declines in wireless equipment revenue partially offset by gains in service and other revenue. Consumer service and other revenue for the first quarter was $20.0 billion, up 0.3%, compared to the similar period in 2022.

Consumer wireless service revenue for the first quarter 2023 was $15.6 billion, a 2.5% increase compared to the first quarter 2022. The increase was driven by a larger allocation of our administrative and telco recovery fees from other revenue into wireless service revenue, to partly recover network operating costs, as well as pricing actions implemented in the second half of 2022. These gains were partially offset by the amortization of wireless equipment sales promotions as well as volume driven declines in prepaid revenue.

Consumer Fios revenue for the first quarter 2023 was $2.9 billion, slightly down year over year as the positive effects of Fios internet customer growth were offset primarily by the decline in video and voice connections, consistent with trends we see across the industry.

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Consumer operating income for the first quarter was $7.1 billion, down 3.0% year over year, resulting in operating income margin of 28.6%.

Segment EBITDA1 for the first quarter was $10.3 billion, down 1.6% compared to the similar period in 2022. This decline can be attributed to higher bad debt, as involuntary churn rates and collections return to pre-pandemic levels, and elevated marketing expenses, among other factors. Consumer Segment EBITDA margin1 for the first quarter was 41.5%.

Note: Our Business segment’s wireless and wireline products and services are organized by the primary customer groups targeted by these offerings. During the first quarter of 2023, Verizon reorganized the customer groups within its Business segment. Previously, this segment was comprised of four customer groups: Small and Medium Business, Global Enterprise, Public Sector and Other, and Wholesale. Following the reorganization, there are now three customer groups: Enterprise and Public Sector, Business Markets and SaaS, and Wholesale. Enterprise and Public Sector combines the customers previously included in Global Enterprise and Public Sector and Other (excluding BlueJeans and Connect customers) as well as the commercial wireline customers previously included in Small and Medium Business. Business Markets and SaaS combines the customers previously included in Small and Medium Business (excluding commercial wireline customers), the BlueJeans customers previously included in Global Enterprise and Public Sector and Other, and the Connect customers previously included in Public Sector and Other. The Wholesale customer group remained unchanged. Prior period operating revenue results within the Business segment have been recast for these reorganized customer groups. There was no change to the composition of our reportable segments and total segment results, nor the determination of segment profit.

Total Business revenue for the first quarter was $7.5 billion, down 2.8% year over year. The decline was due to lower wireline and wireless equipment revenue that offset the increase in wireless service revenue.

Business wireless service revenue for the first quarter was $3.3 billion, up 5.3% year over year. This growth was driven predominantly by the continued momentum in adding more customers onto the platform, as well as pricing

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actions implemented in the second half of 2022 and early 2023. As expected, Business wireline trends remain consistent with the prevailing macro pressures in this market.

Business operating income for the first quarter 2023 was $551 million, down 18.1% year over year, resulting in operating income margin of 7.4%.

Segment EBITDA1 for the first quarter was $1.6 billion, down 5.1% year over year, reflecting continued declines to high margin wireline revenues. Business Segment EBITDA margin1 for the first quarter was 22.0%.

Cash flow from operating activities for the first quarter totaled $8.3 billion compared to $6.8 billion in the prior year period. This increase was primarily due to working capital improvements driven by lower inventory levels coupled with lower upgrades and a modest improvement in customer payment patterns, despite the current macroeconomic uncertainties.

Capital spending for the first quarter was $6.0 billion, up $137 million compared to the same period in 2022, and included most of the remaining $1.75 billion of the C-Band related spending in our guidance. With the conclusion of our C-Band spending program, we expect a step down in the pacing of overall Capex throughout the remainder of the year and continue to

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expect 2023 capital spending to be within our guidance of $18.25 billion to $19.25 billion.

The net result of cash flow from operations and capital spending is free cash flow1 of $2.3 billion for the first quarter 2023.

Our financing strategy of keeping short term maturities to a minimum was helpful in minimizing our debt financing activities in the higher interest rate environment in 2022. We continue to have low near term unsecured debt maturities, with only $600 million due this year in the second quarter 2023.

Total unsecured debt for the quarter was $132.0 billion, an increase of $1.4 billion compared to the end of 2022, and $5.3 billion lower year over year. Net unsecured debt1 was $129.8 billion, a $1.8 billion increase from the prior quarter and a $5.8 billion decrease compared to the first quarter 2022. At the end of the first quarter 2023, our unsecured debt to net income (LTM) ratio was 6.0x, a 0.3x improvement compared to the first quarter 2022 and flat from the prior quarter. Our net unsecured debt to Adjusted EBITDA ratio1 was 2.7x as of the end of the first quarter 2023, a 0.1x improvement compared to the first quarter 2022 and flat from the prior quarter.

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.

Forward-looking statements

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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 any inability to successfully respond to competitive factors such as prices, promotional incentives and evolving consumer preferences; 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, including inflation 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; 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; disruption of our key suppliers’ or vendors' provisioning of products or services, including as a result of geopolitical factors, public health crises or the potential impacts of global climate change; material adverse changes in labor matters and any resulting financial or operational impact; 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.

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Verizon Communications Inc.

Non-GAAP Reconciliations - Consolidated Verizon

Consolidated EBITDA and Consolidated Adjusted EBITDA


(dollars in millions)
Unaudited	3 Mos. Ended 3/31/23			3 Mos. Ended 12/31/22		3 Mos. Ended 9/30/22		3 Mos. Ended 6/30/22		3 Mos. Ended 3/31/22		3 Mos. Ended 12/31/21		3 Mos. Ended 9/30/21		3 Mos. Ended 6/30/21

Consolidated Net Income	$	5,018		$	6,698	$	5,024	$	5,315	$	4,711	$	4,737	$	6,554	$	5,949
Add:
Provision for income taxes	1,482			2,113		1,496		1,542		1,372		1,407		1,820		1,875
Interest expense	1,207			1,105		937		785		786		739		801		844
Depreciation and amortization expense (1)	4,318			4,218		4,324		4,321		4,236		4,051		3,961		4,020
Consolidated EBITDA	$	12,025		$	14,134	$	11,781	$	11,963	$	11,105	$	10,934	$	13,136	$	12,688

Add/(subtract):
Other (income) expense, net (2)	$	(114)		$	(2,687)	$	439	$	(49)	$	924	$	860	$	(269)	$	(502)
Equity in losses (earnings) of unconsolidated businesses	(9)			(4)		(2)		(41)		3		(135)		(1)		(1)

Severance charges	—			304		—		—		—		106		103		—




Net gain from disposition of business	—			—		—		—		—		—		(706)		—
	(123)			(2,387)		437		(90)		927		831		(873)		(503)

Consolidated Adjusted EBITDA	$	11,902		$	11,747	$	12,218	$	11,873	$	12,032	$	11,765	$	12,263	$	12,185








Consolidated Adjusted EBITDA - Year over year change %	(1.1)		%

Footnotes:

(1) Includes Amortization of acquisition-related intangible assets.

(2) Includes Pension and benefits remeasurement adjustments and Early debt redemption costs, where applicable.

Consolidated EBITDA and Consolidated Adjusted EBITDA (LTM)


Unaudited	12 Mos. Ended 3/31/23		12 Mos. Ended 12/31/22		12 Mos. Ended 3/31/22

Consolidated Net Income	$	22,055	$	21,748	$	21,951
Add:
Provision for income taxes	6,633		6,523		6,474
Interest expense	4,034		3,613		3,170
Depreciation and amortization expense (1)	17,181		17,099		16,268
Consolidated EBITDA	$	49,903	$	48,983	$	47,863

Add/(subtract):
Other (income) expense, net (2)	$	(2,411)	$	(1,373)	$	1,013
Equity in losses (earnings) of unconsolidated businesses	(56)		(44)		(134)

Severance charges	304		304		209




Net gain from disposition of business	—		—		(706)
	(2,163)		(1,113)		382

Consolidated Adjusted EBITDA	$	47,740	$	47,870	$	48,245

Footnotes:

(1) Includes Amortization of acquisition-related intangible assets.

(2) Includes Pension and benefits remeasurement adjustments and Early debt redemption costs, where applicable.

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Verizon Communications Inc.

Net Unsecured Debt and Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio


(dollars in millions)
Unaudited	3/31/23			12/31/22			3/31/22

Debt maturing within one year	$	12,081		$	9,963		$	13,421
Long-term debt	140,772			140,676			139,961
Total Debt	152,853			150,639			153,382
Less Secured debt	20,835			20,008			16,102
Unsecured Debt	132,018			130,631			137,280
Less Cash and cash equivalents	2,234			2,605			1,661
Net Unsecured Debt	$	129,784		$	128,026		$	135,619
Consolidated Net Income (LTM)	$	22,055		21,748			$	21,951
Unsecured Debt to Consolidated Net Income Ratio	6.0		x	6.0		x	6.3		x
Consolidated Adjusted EBITDA (LTM)	$	47,740		47,870			$	48,245
Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio	2.7		x	2.7		x	2.8		x
Net Unsecured Debt - Quarter over quarter change	$	1,758
Net Unsecured Debt - Year over year change	$	(5,835)


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

Adjusted Earnings per Common Share (Adjusted EPS)


(dollars in millions, except per share amounts)
Unaudited	3 Mos. Ended 3/31/23									3 Mos. Ended 3/31/22
	Pre-tax		Tax		After-Tax					Pre-tax		Tax		After-Tax
EPS							$	1.17								$	1.09
Amortization of acquisition-related intangible assets	$	208	$	(53)	$	155	0.04			$	238	$	(60)	$	178	0.04

Early debt redemption costs	—		—		—		—			1,241		(316)		925		0.22











	$	208	$	(53)	$	155	$	0.04		$	1,479	$	(376)	$	1,103	$	0.26
Adjusted EPS							$	1.20								$	1.35
Year over year change %							(11.1)		%

Footnotes:

Adjusted EPS may not add due to rounding.



Free Cash Flow
(dollars in millions)
Unaudited	3 Mos. Ended 3/31/23		3 Mos. Ended 3/31/22

Net Cash Provided by Operating Activities	$	8,289	$	6,821
Capital expenditures (including capitalized software)	(5,958)		(5,821)
Free Cash Flow	$	2,331	$	1,000



Consolidated Operating Expenses Excluding Depreciation and Amortization
(dollars in millions)
Unaudited	3 Mos. Ended 3/31/23			3 Mos. Ended 3/31/22

Consolidated Operating Expenses	$	25,328		$	25,758
Depreciation and amortization expense (1)	4,318			4,236
Consolidated Operating Expenses Excluding Depreciation and Amortization	$	21,010		$	21,522
Year over year change %	(2.4)		%

Footnotes:

(1) Includes Amortization of acquisition-related intangible assets.

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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 3/31/23			3 Mos. Ended 3/31/22

Operating Income	$	7,099		$	7,319
Add Depreciation and amortization expense	3,214			3,162
Segment EBITDA	$	10,313		$	10,481
Year over year change %	(1.6)		%

Total operating revenues	$	24,857		$	25,292
Operating Income Margin	28.6		%	28.9		%
Segment EBITDA Margin	41.5		%	41.4		%

Business


(dollars in millions)
Unaudited	3 Mos. Ended 3/31/23			3 Mos. Ended 3/31/22

Operating Income	$	551		$	673
Add Depreciation and amortization expense	1,094			1,061
Segment EBITDA	$	1,645		$	1,734
Year over year change %	(5.1)		%

Total operating revenues	$	7,494		$	7,709
Operating Income Margin	7.4		%	8.7		%
Segment EBITDA Margin	22.0		%	22.5		%

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