Verizon Communications Inc. (NYSE, Nasdaq: VZ) today reported
strong third-quarter 2019 results highlighted by increased cash
flow and the most third-quarter phone gross additions in five
years.
"Verizon continued its momentum in the third quarter by driving
strong wireless volumes in both our Consumer and Business segments,
while delivering solid financial results, highlighted by continued
wireless service revenue growth, increased cash flow, and EPS
growth," said Chairman and CEO Hans Vestberg. "We are focused on
our 5G rollout strategy, looking to deploy next-generation networks
while enhancing our industry-leading 4G LTE network. Going into the
fourth quarter, we are energized by the strong performance of the
business and we are confident in our strategy to drive value for
our customers and growth for our shareholders."
For third-quarter 2019, Verizon reported EPS of $1.25, compared
with $1.19 in third-quarter 2018. The company's reported earnings
include a minimal net impact from special items: a net pre-tax gain
of $261 million from dispositions of assets and businesses that was
offset by a pension re-measurement pre-tax charge of $291 million.
On an adjusted basis (non-GAAP), third-quarter 2019 EPS, excluding
special items, was $1.25, compared with adjusted EPS of $1.22 in
third-quarter 2018.
In third-quarter 2019, Verizon's results included the effects of
a reduction in benefits from the adoption of a revenue recognition
standard, primarily due to the deferral of commission expense, and
the adoption of a lease accounting standard. The combined net
impact was a 4 cent headwind in third-quarter 2019, and 13 cents
year-to-date, which is included in the year-over-year increase in
adjusted EPS.
Consolidated results
Total consolidated operating revenues in
third-quarter 2019 were $32.9 billion, up 0.9 percent from
third-quarter 2018. This growth was primarily driven by higher
wireless service revenue, partially offset by lower wireless
equipment revenue and declines in legacy wireline revenue,
predominantly in the Business segment.
Year-to-date cash flow from operations totaled
$26.7 billion, an increase of $504 million year over year. This
growth was the result of operational improvements in Verizon's
businesses and lower discretionary employee benefit contributions,
offset by higher cash tax payments and cash payments related to the
Voluntary Separation Program. In September 2019, Verizon’s Board of
Directors declared a quarterly dividend increase for the 13th
consecutive year. Through third-quarter 2019, the company’s cash
dividend payments totaled $7.5 billion.
Year-to-date capital expenditures were $12.3
billion through third-quarter 2019. Capital expenditures continue
to support the launch and build-out of Verizon's 5G Ultra Wideband
network, the growth in data and video traffic on the company's 4G
LTE network, the deployment of significant fiber in markets
nationwide and the upgrade to Verizon's Intelligent Edge Network
architecture.
Strong operational cash flow and capital spending
efficiencies have enabled Verizon to decrease total debt by $3.5
billion year to date. The company remains focused on reducing its
unsecured debt portfolio while continuing to actively manage its
near-term maturities, optimize its overall funding footprint, and
lower its cost of capital.
In 2018, Verizon announced a goal to achieve $10
billion in cumulative cash savings by 2021. This initiative has
yielded $4.6 billion of cumulative cash savings since the program
began. In third-quarter 2019, Verizon realized over $400 million of
expense savings from the Voluntary Separation Program, producing
approximately $900 million in expense savings year-to-date.
Net income was $5.3 billion in third-quarter 2019.
EBITDA (non-GAAP, earnings before interest, taxes, depreciation and
amortization) totaled approximately $12.2 billion. Consolidated
operating income margin was 24.9 percent in third-quarter 2019,
compared with 23.5 percent in third-quarter 2018. Consolidated
EBITDA margin (non-GAAP) was 37.0 percent in third-quarter 2019,
compared with 37.6 percent in third-quarter 2018. Adjusted EBITDA
margin (non-GAAP) in third-quarter 2019 was 36.6 percent, and
consolidated adjusted EBITDA (non-GAAP) in third-quarter 2019 was
$12.0 billion.
Consumer results
- Total Verizon Consumer revenues were $22.7 billion, an increase
of 1.4 percent year over year, driven by continued strong growth in
wireless service revenue and Fios service offerings, offset by
declines in wireless equipment and legacy wireline services.
- Verizon Consumer Group reported 193,000 wireless retail
postpaid net additions in third-quarter 2019. This consisted of
239,000 phone net additions, more than double the 112,000 phone net
additions in third-quarter 2018, and tablet net losses of 176,000,
offset by 130,000 other connected device net additions, primarily
wearables. Postpaid smartphone net additions were 372,000, an
increase from 285,000 postpaid smartphone net additions in
third-quarter 2018. This was driven by a 10 percent year over year
increase in phone gross additions.
- Consumer wireless service revenues increased 2.1 percent in
third-quarter 2019, driven by customer step-ups to higher-priced
plans and an increase in connections per account.
- Total retail postpaid churn was 1.05 percent in third-quarter
2019, and retail postpaid phone churn was 0.79 percent.
- In third-quarter 2019, Verizon Consumer Group reported 30,000
Fios Internet net additions and 67,000 Fios Video net losses,
reflecting the ongoing shift from traditional linear video to
over-the-top offerings. Consumer Fios revenues increased by 1.7
percent, primarily due to the demand for broadband offerings.
- Segment operating income was $7.5 billion, an increase of 3.8
percent year over year, and segment operating income margin was
33.0 percent. Segment EBITDA (non-GAAP) totaled $10.3 billion in
third-quarter 2019, an increase of 0.7 percent year over year.
Segment EBITDA margin (non-GAAP) was 45.3 percent, which was down
30 basis points year over year, including approximately 80 basis
points from the deferral of commission expense and the lease
accounting standard.
Business results
- Total Verizon Business revenues were $7.9 billion,
approximately flat year over year, as growth in wireless service
revenue and high quality fiber products was offset by declines in
legacy wireline products.
- Verizon Business Group reported 408,000 wireless retail
postpaid net additions in third-quarter 2019, an increase of 12.1
percent year over year. This consisted of 205,000 phone net
additions, 112,000 tablet net additions and 91,000 other connected
device additions.
- Total retail postpaid churn was 1.22 percent in third-quarter
2019, and retail postpaid phone churn was 0.98 percent.
- Segment operating income was $1.0 billion, a decrease of 15.3
percent year over year, and segment operating income margin was
12.4 percent. Segment EBITDA (non-GAAP) totaled $2.0 billion in
third-quarter 2019, a decrease of 10.7 percent year over year.
Segment EBITDA margin (non-GAAP) was 25.2 percent, down from 28.2
percent in third-quarter 2018, due in part to declines in high
margin wholesale revenue and legacy wireline products. This
includes headwinds of approximately 50 basis points from the
deferral of commission expense and the lease accounting
standard.
Media results
- Total Verizon Media revenues in third-quarter 2019 were $1.8
billion, down 2.0 percent year over year, continuing the
improvement in revenue trends. Gains in native and mobile
advertising continue to be offset by declines in desktop
advertising, though the business is building momentum in key
areas.
Outlook and guidance
As outlined in Verizon's second-quarter 2019 earnings release,
the company expects the following:
- Low single-digit percentage growth in adjusted 2019 EPS,
excluding the impact of the lease accounting standard.
- Low single-digit percentage growth in full-year consolidated
revenues on a GAAP reported basis.
- Cash taxes to be $2 billion to $3 billion higher than in 2018
due to benefits that were realized in 2018 that are not expected to
repeat in 2019.
- Capital spending for 2019 to be in the range of $17 billion to
$18 billion, including the expanded commercial launch of 5G.
- Adjusted effective income tax rate (non-GAAP) for full-year
2019 to be at the lower end of its previously disclosed range of 24
percent to 26 percent.
NOTE: See the accompanying schedules and
www.verizon.com/about/investors for reconciliations to generally
accepted accounting principles (GAAP) for non-GAAP financial
measures cited in this document.
Verizon Communications Inc. (NYSE, Nasdaq: VZ), headquartered in
New York City, generated revenues of $130.9 billion in 2018. The
company operates America’s most awarded wireless network and the
nation’s premier all-fiber network, and delivers integrated
solutions to businesses worldwide. With brands like Yahoo,
TechCrunch and HuffPost, the company’s media group helps consumers
stay informed and entertained, communicate and transact, while
creating new ways for advertisers and partners to connect.
Verizon’s corporate responsibility prioritizes the environmental,
social and governance issues most relevant to its business and
impact to society.
VERIZON’S ONLINE MEDIA CENTER: News releases, stories, media
contacts and other resources are available at
www.verizon.com/about/news/. News releases are also available
through an RSS feed. To subscribe, visit
www.verizon.com/about/rss-feeds/.
Forward-looking statementsIn this communication
we have made forward-looking statements. These statements are based
on our estimates and assumptions and are subject to risks and
uncertainties. Forward-looking statements include the information
concerning our possible or assumed future results of operations.
Forward-looking statements also include those preceded or followed
by the words “anticipates,” “believes,” “estimates,” “expects,”
“hopes” or similar expressions. For those statements, we claim the
protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995.
We undertake no obligation to revise or publicly release the
results of any revision to these forward-looking statements, except
as required by law. Given these risks and uncertainties, readers
are cautioned not to place undue reliance on such forward-looking
statements. The following important factors, along with those
discussed in our filings with the Securities and Exchange
Commission (the “SEC”), could affect future results and could cause
those results to differ materially from those expressed in the
forward-looking statements: adverse conditions in the U.S. and
international economies; the effects of competition in the markets
in which we operate; material changes in technology or technology
substitution; disruption of our key suppliers’ provisioning of
products or services; changes in the regulatory environment in
which we operate, including any increase in restrictions on our
ability to operate our networks; breaches of network or information
technology security, natural disasters, terrorist attacks or acts
of war or significant litigation and any resulting financial impact
not covered by insurance; our high level of indebtedness; an
adverse change in the ratings afforded our debt securities by
nationally accredited ratings organizations or adverse conditions
in the credit markets affecting the cost, including interest rates,
and/or availability of further financing; material adverse changes
in labor matters, including labor negotiations, and any resulting
financial and/or operational impact; significant increases in
benefit plan costs or lower investment returns on plan assets;
changes in tax laws or treaties, or in their interpretation;
changes in accounting assumptions that regulatory agencies,
including the SEC, may require or that result from changes in the
accounting rules or their application, which could result in an
impact on earnings; the inability to implement our business
strategies; and the inability to realize the expected benefits of
strategic transactions.
Media
contacts: |
Kim Ancin |
908.559.3227 |
kimberly.ancin@verizon.com |
|
Eric Wilkens |
908.559.3063 |
eric.wilkens@verizon.com |
Verizon
Communications Inc. |
|
Condensed
Consolidated Statements of Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in millions,
except per share amounts) |
|
|
3 Mos. Ended |
|
3 Mos. Ended |
|
|
|
9 Mos. Ended |
|
9 Mos. Ended |
|
|
|
Unaudited |
9/30/19 |
|
9/30/18 |
|
% Change |
|
9/30/19 |
|
9/30/18 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues and other |
$ |
27,753 |
|
|
$ |
27,254 |
|
|
1.8 |
|
$ |
82,301 |
|
|
$ |
81,145 |
|
|
1.4 |
|
Wireless equipment revenues |
|
5,141 |
|
|
|
5,353 |
|
|
(4.0) |
|
|
14,792 |
|
|
|
15,437 |
|
|
(4.2) |
|
Total Operating Revenues |
|
32,894 |
|
|
|
32,607 |
|
|
0.9 |
|
|
97,093 |
|
|
|
96,582 |
|
|
0.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
7,902 |
|
|
|
7,842 |
|
|
0.8 |
|
|
23,396 |
|
|
|
24,022 |
|
|
(2.6) |
|
Cost of wireless equipment |
|
5,482 |
|
|
|
5,489 |
|
|
(0.1) |
|
|
15,699 |
|
|
|
16,195 |
|
|
(3.1) |
|
Selling, general and administrative expense |
|
7,216 |
|
|
|
7,224 |
|
|
(0.1) |
|
|
21,682 |
|
|
|
21,673 |
|
|
— |
|
Depreciation and amortization expense |
|
4,114 |
|
|
|
4,377 |
|
|
(6.0) |
|
|
12,577 |
|
|
|
13,051 |
|
|
(3.6) |
|
Total Operating Expenses |
|
24,714 |
|
|
|
24,932 |
|
|
(0.9) |
|
|
73,354 |
|
|
|
74,941 |
|
|
(2.1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
8,180 |
|
|
|
7,675 |
|
|
6.6 |
|
|
23,739 |
|
|
|
21,641 |
|
|
9.7 |
|
Equity in
losses of unconsolidated businesses |
|
(1 |
) |
|
|
(3 |
) |
|
(66.7) |
|
|
(20 |
) |
|
|
(250 |
) |
|
(92.0) |
|
Other income
(expense), net |
|
(110 |
) |
|
|
214 |
|
|
* |
|
|
(1,127 |
) |
|
|
499 |
|
|
* |
|
Interest
expense |
|
(1,146 |
) |
|
|
(1,211 |
) |
|
(5.4) |
|
|
(3,571 |
) |
|
|
(3,634 |
) |
|
(1.7) |
|
Income Before Provision For Income Taxes |
|
6,923 |
|
|
|
6,675 |
|
|
3.7 |
|
|
19,021 |
|
|
|
18,256 |
|
|
4.2 |
|
Provision
for income taxes |
|
(1,586 |
) |
|
|
(1,613 |
) |
|
(1.7) |
|
|
(4,450 |
) |
|
|
(4,282 |
) |
|
3.9 |
|
Net
Income |
$ |
5,337 |
|
|
$ |
5,062 |
|
|
5.4 |
|
$ |
14,571 |
|
|
$ |
13,974 |
|
|
4.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interests |
$ |
143 |
|
|
$ |
138 |
|
|
3.6 |
|
$ |
401 |
|
|
$ |
385 |
|
|
4.2 |
|
Net income
attributable to Verizon |
|
5,194 |
|
|
|
4,924 |
|
|
5.5 |
|
|
14,170 |
|
|
|
13,589 |
|
|
4.3 |
|
Net
Income |
$ |
5,337 |
|
|
$ |
5,062 |
|
|
5.4 |
|
$ |
14,571 |
|
|
$ |
13,974 |
|
|
4.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per Common Share |
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Verizon |
$ |
1.26 |
|
|
$ |
1.19 |
|
|
5.9 |
|
$ |
3.42 |
|
|
$ |
3.29 |
|
|
4.0 |
|
Weighted-average shares outstanding (in millions) |
|
4,138 |
|
|
|
4,136 |
|
|
|
|
|
4,138 |
|
|
|
4,125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Common Share
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Verizon |
$ |
1.25 |
|
|
$ |
1.19 |
|
|
5.0 |
|
$ |
3.42 |
|
|
$ |
3.29 |
|
|
4.0 |
|
Weighted-average shares outstanding (in millions) |
|
4,140 |
|
|
|
4,140 |
|
|
|
|
|
4,140 |
|
|
|
4,129 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
9/30/19 |
|
12/31/18 |
|
$ Change |
|
|
|
|
|
|
Assets |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
3,020 |
|
|
$ |
2,745 |
|
|
$ |
275 |
|
Accounts receivable, net |
|
24,713 |
|
|
|
25,102 |
|
|
|
(389 |
) |
Inventories |
|
1,538 |
|
|
|
1,336 |
|
|
|
202 |
|
Prepaid expenses and other |
|
5,624 |
|
|
|
5,453 |
|
|
|
171 |
|
Total current assets |
|
34,895 |
|
|
|
34,636 |
|
|
|
259 |
|
|
|
|
|
|
|
Property, plant and equipment |
|
260,053 |
|
|
|
252,835 |
|
|
|
7,218 |
|
Less accumulated depreciation |
|
171,204 |
|
|
|
163,549 |
|
|
|
7,655 |
|
Property, plant and equipment, net |
|
88,849 |
|
|
|
89,286 |
|
|
|
(437 |
) |
Investments in unconsolidated businesses |
|
628 |
|
|
|
671 |
|
|
|
(43 |
) |
Wireless licenses |
|
94,433 |
|
|
|
94,130 |
|
|
|
303 |
|
Goodwill |
|
24,570 |
|
|
|
24,614 |
|
|
|
(44 |
) |
Other intangible assets, net |
|
9,264 |
|
|
|
9,775 |
|
|
|
(511 |
) |
Operating lease right-of-use assets |
|
22,218 |
|
|
|
— |
|
|
|
22,218 |
|
Other assets |
|
10,018 |
|
|
|
11,717 |
|
|
|
(1,699 |
) |
Total assets |
$ |
284,875 |
|
|
$ |
264,829 |
|
|
$ |
20,046 |
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Debt maturing within one year |
$ |
7,830 |
|
|
$ |
7,190 |
|
|
$ |
640 |
|
Accounts payable and accrued liabilities |
|
19,566 |
|
|
|
22,501 |
|
|
|
(2,935 |
) |
Current operating lease liabilities |
|
2,959 |
|
|
|
— |
|
|
|
2,959 |
|
Other current liabilities |
|
8,854 |
|
|
|
8,239 |
|
|
|
615 |
|
Total current liabilities |
|
39,209 |
|
|
|
37,930 |
|
|
|
1,279 |
|
|
|
|
|
|
|
Long-term debt |
|
101,769 |
|
|
|
105,873 |
|
|
|
(4,104 |
) |
Employee benefit obligations |
|
18,236 |
|
|
|
18,599 |
|
|
|
(363 |
) |
Deferred income taxes |
|
34,592 |
|
|
|
33,795 |
|
|
|
797 |
|
Non-current operating lease liabilities |
|
18,214 |
|
|
|
— |
|
|
|
18,214 |
|
Other liabilities |
|
12,543 |
|
|
|
13,922 |
|
|
|
(1,379 |
) |
Total long-term liabilities |
|
185,354 |
|
|
|
172,189 |
|
|
|
13,165 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Common stock |
|
429 |
|
|
|
429 |
|
|
|
— |
|
Additional paid in capital |
|
13,418 |
|
|
|
13,437 |
|
|
|
(19 |
) |
Retained earnings |
|
50,595 |
|
|
|
43,542 |
|
|
|
7,053 |
|
Accumulated other comprehensive income |
|
1,104 |
|
|
|
2,370 |
|
|
|
(1,266 |
) |
Common stock in treasury, at cost |
|
(6,822 |
) |
|
|
(6,986 |
) |
|
|
164 |
|
Deferred compensation – employee stock ownership plans and
other |
|
197 |
|
|
|
353 |
|
|
|
(156 |
) |
Noncontrolling interests |
|
1,391 |
|
|
|
1,565 |
|
|
|
(174 |
) |
Total equity |
|
60,312 |
|
|
|
54,710 |
|
|
|
5,602 |
|
Total liabilities and equity |
$ |
284,875 |
|
|
$ |
264,829 |
|
|
$ |
20,046 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated -
Selected Financial and Operating Statistics |
(dollars in millions,
except per share amounts) |
|
|
|
|
|
|
|
|
Unaudited |
9/30/19 |
|
12/31/18 |
|
|
|
|
|
|
|
|
Total
debt |
$ |
109,599 |
|
|
$ |
113,063 |
|
|
|
Net
debt |
$ |
106,579 |
|
|
$ |
110,318 |
|
|
|
Net
unsecured debt |
$ |
97,779 |
|
|
$ |
100,242 |
|
|
|
Net debt /
Consolidated Adjusted EBITDA(1) |
2.2x |
|
2.3x |
|
|
Net
unsecured debt / Consolidated Adjusted EBITDA(1) |
2.1x |
|
2.1x |
|
|
Common
shares outstanding end of period (in millions) |
|
4,136 |
|
|
|
4,132 |
|
|
|
Total
employees (‘000) |
|
135.4 |
|
|
|
144.5 |
|
|
|
Quarterly
cash dividends declared per common share |
$ |
0.6150 |
|
|
$ |
0.6025 |
|
|
|
|
|
|
|
|
|
Footnotes: |
|
|
|
|
|
(1) Consolidated adjusted EBITDA excludes the effects of
non-operational items and special items. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Verizon Communications Inc. |
|
|
|
|
|
Condensed Consolidated Statements of Cash
Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in
millions) |
|
9 Mos. Ended |
|
9 Mos. Ended |
|
|
Unaudited |
9/30/19 |
|
9/30/18 |
|
$ Change |
|
|
|
|
|
|
Cash
Flows from Operating Activities |
|
|
|
|
|
Net Income |
$ |
14,571 |
|
|
$ |
13,974 |
|
|
$ |
597 |
|
Adjustments
to reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
Depreciation and amortization expense |
|
12,577 |
|
|
|
13,051 |
|
|
|
(474 |
) |
Employee retirement benefits |
|
(105 |
) |
|
|
(886 |
) |
|
|
781 |
|
Deferred income taxes |
|
1,070 |
|
|
|
2,023 |
|
|
|
(953 |
) |
Provision for uncollectible accounts |
|
1,131 |
|
|
|
699 |
|
|
|
432 |
|
Equity in losses of unconsolidated businesses, net of dividends
received |
|
64 |
|
|
|
291 |
|
|
|
(227 |
) |
Net loss on sale of divested businesses |
|
94 |
|
|
|
— |
|
|
|
94 |
|
Changes in current assets and liabilities, net of effects from
acquisition/disposition of businesses |
|
(3,902 |
) |
|
|
(1,944 |
) |
|
|
(1,958 |
) |
Discretionary employee benefits contributions |
|
(300 |
) |
|
|
(1,679 |
) |
|
|
1,379 |
|
Other,
net |
|
1,548 |
|
|
|
715 |
|
|
|
833 |
|
Net cash
provided by operating activities |
|
26,748 |
|
|
|
26,244 |
|
|
|
504 |
|
|
|
|
|
|
|
Cash
Flows from Investing Activities |
|
|
|
|
|
Capital
expenditures (including capitalized software) |
|
(12,332 |
) |
|
|
(12,026 |
) |
|
|
(306 |
) |
Acquisitions
of businesses, net of cash acquired |
|
(29 |
) |
|
|
(39 |
) |
|
|
10 |
|
Acquisitions
of wireless licenses |
|
(299 |
) |
|
|
(1,307 |
) |
|
|
1,008 |
|
Proceeds
from dispositions of businesses |
|
27 |
|
|
|
— |
|
|
|
27 |
|
Other,
net |
|
476 |
|
|
|
236 |
|
|
|
240 |
|
Net cash
used in investing activities |
|
(12,157 |
) |
|
|
(13,136 |
) |
|
|
979 |
|
|
|
|
|
|
|
Cash
Flows from Financing Activities |
|
|
|
|
|
Proceeds
from long-term borrowings |
|
8,360 |
|
|
|
5,932 |
|
|
|
2,428 |
|
Proceeds
from asset-backed long-term borrowings |
|
3,982 |
|
|
|
3,216 |
|
|
|
766 |
|
Repayments
of long-term borrowings and finance lease obligations |
|
(12,486 |
) |
|
|
(9,776 |
) |
|
|
(2,710 |
) |
Repayments
of asset-backed long-term borrowings |
|
(5,273 |
) |
|
|
(2,915 |
) |
|
|
(2,358 |
) |
Dividends
paid |
|
(7,474 |
) |
|
|
(7,283 |
) |
|
|
(191 |
) |
Other,
net |
|
(1,410 |
) |
|
|
(1,595 |
) |
|
|
185 |
|
Net cash
used in financing activities |
|
(14,301 |
) |
|
|
(12,421 |
) |
|
|
(1,880 |
) |
|
|
|
|
|
|
Increase in cash, cash equivalents and restricted
cash |
|
290 |
|
|
|
687 |
|
|
|
(397 |
) |
Cash, cash equivalents and restricted cash, beginning of
period |
|
3,916 |
|
|
|
2,888 |
|
|
|
1,028 |
|
Cash, cash equivalents and restricted cash, end of
period |
$ |
4,206 |
|
|
$ |
3,575 |
|
|
$ |
631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Verizon Communications Inc. |
|
|
|
|
|
|
|
|
|
|
|
Consumer -
Selected Financial Results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Mos. Ended |
|
3 Mos. Ended |
|
|
|
9 Mos. Ended |
|
9 Mos. Ended |
|
|
Unaudited |
9/30/19 |
|
9/30/18 |
|
% Change |
|
9/30/19 |
|
9/30/18 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues |
|
|
|
|
|
|
|
|
|
|
|
Service |
$ |
16,433 |
|
|
$ |
16,193 |
|
|
1.5 |
|
$ |
49,042 |
|
|
$ |
48,066 |
|
|
2.0 |
Wireless equipment |
|
4,257 |
|
|
|
4,508 |
|
|
(5.6) |
|
|
12,326 |
|
|
|
13,029 |
|
|
(5.4) |
Other |
|
2,016 |
|
|
|
1,698 |
|
|
18.7 |
|
|
5,481 |
|
|
|
4,934 |
|
|
11.1 |
Total Operating Revenues |
|
22,706 |
|
|
|
22,399 |
|
|
1.4 |
|
|
66,849 |
|
|
|
66,029 |
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
4,035 |
|
|
|
3,850 |
|
|
4.8 |
|
|
11,761 |
|
|
|
11,465 |
|
|
2.6 |
Cost of wireless equipment |
|
4,291 |
|
|
|
4,379 |
|
|
(2.0) |
|
|
12,342 |
|
|
|
12,948 |
|
|
(4.7) |
Selling, general and administrative expense |
|
4,085 |
|
|
|
3,947 |
|
|
3.5 |
|
|
12,090 |
|
|
|
11,426 |
|
|
5.8 |
Depreciation and amortization expense |
|
2,806 |
|
|
|
3,010 |
|
|
(6.8) |
|
|
8,581 |
|
|
|
8,982 |
|
|
(4.5) |
Total Operating Expenses |
|
15,217 |
|
|
|
15,186 |
|
|
0.2 |
|
|
44,774 |
|
|
|
44,821 |
|
|
(0.1) |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
$ |
7,489 |
|
|
$ |
7,213 |
|
|
3.8 |
|
$ |
22,075 |
|
|
$ |
21,208 |
|
|
4.1 |
Operating Income Margin |
|
33.0 |
% |
|
|
32.2 |
% |
|
|
|
|
33.0 |
% |
|
|
32.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA |
$ |
10,295 |
|
|
$ |
10,223 |
|
|
0.7 |
|
$ |
30,656 |
|
|
$ |
30,190 |
|
|
1.5 |
Segment EBITDA Margin |
|
45.3 |
% |
|
|
45.6 |
% |
|
|
|
|
45.9 |
% |
|
|
45.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes: |
|
|
|
|
|
|
|
|
|
|
|
The segment financial
results and metrics above are adjusted to exclude the effects of
special items, as the Company’s chief operating decision maker
excludes these items in assessing segment performance. |
|
|
|
|
|
|
|
|
|
|
|
|
Certain intersegment
transactions with corporate entities have not been eliminated. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Verizon Communications Inc. |
|
|
|
|
|
|
|
|
|
|
|
Consumer -
Selected Operating Statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited |
|
|
|
|
|
|
9/30/19 |
|
9/30/18 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
Connections (‘000): |
|
|
|
|
|
|
|
|
|
|
|
Wireless retail postpaid connections |
|
|
|
|
|
|
|
89,739 |
|
|
|
89,062 |
|
|
0.8 |
Wireless retail prepaid connections |
|
|
|
|
|
|
|
4,183 |
|
|
|
4,736 |
|
|
(11.7) |
Total wireless retail connections |
|
|
|
|
|
|
|
93,922 |
|
|
|
93,798 |
|
|
0.1 |
|
|
|
|
|
|
|
|
|
|
|
|
Fios video connections |
|
|
|
|
|
|
|
4,203 |
|
|
|
4,423 |
|
|
(5.0) |
Fios Internet connections |
|
|
|
|
|
|
|
5,867 |
|
|
|
5,711 |
|
|
2.7 |
Fios digital voice residence connections |
|
|
|
|
|
|
|
3,672 |
|
|
|
3,833 |
|
|
(4.2) |
Fios digital connections |
|
|
|
|
|
|
|
13,742 |
|
|
|
13,967 |
|
|
(1.6) |
Broadband connections |
|
|
|
|
|
|
|
6,469 |
|
|
|
6,452 |
|
|
0.3 |
Voice connections |
|
|
|
|
|
|
|
5,904 |
|
|
|
6,480 |
|
|
(8.9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Mos. Ended |
|
3 Mos. Ended |
|
|
|
9 Mos. Ended |
|
9 Mos. Ended |
|
|
Unaudited |
9/30/19 |
|
9/30/18 |
|
% Change |
|
9/30/19 |
|
9/30/18 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
Gross Additions (‘000): |
|
|
|
|
|
|
|
|
|
|
|
Wireless retail postpaid |
|
3,020 |
|
|
|
2,850 |
|
|
6.0 |
|
|
8,459 |
|
|
|
8,101 |
|
|
4.4 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
Additions Detail (‘000): |
|
|
|
|
|
|
|
|
|
|
|
Wireless retail postpaid (1) |
|
193 |
|
|
|
151 |
|
|
27.8 |
|
|
118 |
|
|
|
243 |
|
|
(51.4) |
Wireless retail prepaid (1) |
|
(81 |
) |
|
|
(96 |
) |
|
15.6 |
|
|
(470 |
) |
|
|
(667 |
) |
|
29.5 |
Total wireless retail (1) |
|
112 |
|
|
|
55 |
|
|
* |
|
|
(352 |
) |
|
|
(424 |
) |
|
17.0 |
|
|
|
|
|
|
|
|
|
|
|
|
Wireless retail postpaid phones (1) |
|
239 |
|
|
|
112 |
|
|
* |
|
|
149 |
|
|
|
(24 |
) |
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
Fios video |
|
(67 |
) |
|
|
(64 |
) |
|
(4.7) |
|
|
(174 |
) |
|
|
(125 |
) |
|
(39.2) |
Fios Internet |
|
30 |
|
|
|
48 |
|
|
(37.5) |
|
|
106 |
|
|
|
146 |
|
|
(27.4) |
Fios digital voice residence |
|
(53 |
) |
|
|
(30 |
) |
|
(76.7) |
|
|
(130 |
) |
|
|
(72 |
) |
|
(80.6) |
Fios digital |
|
(90 |
) |
|
|
(46 |
) |
|
(95.7) |
|
|
(198 |
) |
|
|
(51 |
) |
|
* |
Broadband |
|
(5 |
) |
|
|
5 |
|
|
* |
|
|
9 |
|
|
|
11 |
|
|
(18.2) |
Voice |
|
(154 |
) |
|
|
(151 |
) |
|
(2.0) |
|
|
(428 |
) |
|
|
(448 |
) |
|
4.5 |
|
|
|
|
|
|
|
|
|
|
|
|
Churn Rate: |
|
|
|
|
|
|
|
|
|
|
|
Wireless retail postpaid |
|
1.05 |
% |
|
|
1.01 |
% |
|
|
|
|
1.03 |
% |
|
|
0.98 |
% |
|
|
Wireless retail postpaid phones |
|
0.79 |
% |
|
|
0.77 |
% |
|
|
|
|
0.77 |
% |
|
|
0.75 |
% |
|
|
Wireless retail |
|
1.27 |
% |
|
|
1.24 |
% |
|
|
|
|
1.27 |
% |
|
|
1.25 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue Statistics (in millions): |
|
|
|
|
|
|
|
|
|
|
|
Wireless service revenue |
$ |
13,533 |
|
|
$ |
13,257 |
|
|
2.1 |
|
$ |
40,346 |
|
|
$ |
39,260 |
|
|
2.8 |
Fios revenues |
$ |
2,811 |
|
|
$ |
2,764 |
|
|
1.7 |
|
$ |
8,347 |
|
|
$ |
8,236 |
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
|
|
Other Wireless Statistics: |
|
|
|
|
|
|
|
|
|
|
|
Wireless retail postpaid ARPA (2) |
$ |
118.89 |
|
|
$ |
117.06 |
|
|
1.6 |
|
$ |
118.16 |
|
|
$ |
115.34 |
|
|
2.4 |
Wireless retail postpaid upgrade rate |
|
4.9 |
% |
|
|
5.1 |
% |
|
|
|
|
|
|
|
|
Wireless retail postpaid accounts (‘000) (3) |
|
|
|
|
|
|
|
33,898 |
|
|
|
34,005 |
|
|
(0.3) |
Wireless retail postpaid connections per account (3) |
|
|
|
|
|
|
|
2.65 |
|
|
|
2.62 |
|
|
1.1 |
Total wireless Internet postpaid base (3) |
|
|
|
|
|
|
|
16.1 |
% |
|
|
15.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes: |
|
|
|
|
|
|
|
|
|
|
|
(1) Connection net
additions include certain adjustments. |
(2) Wireless retail
postpaid ARPA - average service revenue per account from retail
postpaid accounts. |
(3) Statistics
presented as of end of period. |
|
|
|
|
|
|
|
|
|
|
|
|
The segment financial
results and metrics above are adjusted to exclude the effects of
special items, as the Company’s chief operating decision maker
excludes these items in assessing segment performance. |
|
|
|
|
|
|
|
|
|
|
|
|
Certain intersegment
transactions with corporate entities have not been eliminated. |
|
|
|
|
|
|
|
|
|
|
|
|
* Not
meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Verizon Communications Inc. |
|
|
|
|
|
|
|
|
|
|
|
Business -
Selected Financial Results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Mos. Ended |
|
3 Mos. Ended |
|
|
|
9 Mos. Ended |
|
9 Mos. Ended |
|
|
Unaudited |
9/30/19 |
|
9/30/18 |
|
% Change |
|
9/30/19 |
|
9/30/18 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues |
|
|
|
|
|
|
|
|
|
|
|
Global Enterprise |
$ |
2,714 |
|
|
$ |
2,782 |
|
|
(2.4) |
|
$ |
8,078 |
|
|
$ |
8,416 |
|
|
(4.0) |
Small and Medium Business |
|
2,899 |
|
|
|
2,729 |
|
|
6.2 |
|
|
8,392 |
|
|
|
7,905 |
|
|
6.2 |
Public Sector and Other |
|
1,472 |
|
|
|
1,455 |
|
|
1.2 |
|
|
4,435 |
|
|
|
4,322 |
|
|
2.6 |
Wholesale |
|
800 |
|
|
|
927 |
|
|
(13.7) |
|
|
2,467 |
|
|
|
2,884 |
|
|
(14.5) |
Total Operating Revenues |
|
7,885 |
|
|
|
7,893 |
|
|
(0.1) |
|
|
23,372 |
|
|
|
23,527 |
|
|
(0.7) |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
2,666 |
|
|
|
2,657 |
|
|
0.3 |
|
|
7,838 |
|
|
|
8,027 |
|
|
(2.4) |
Cost of wireless equipment |
|
1,190 |
|
|
|
1,110 |
|
|
7.2 |
|
|
3,356 |
|
|
|
3,247 |
|
|
3.4 |
Selling, general and administrative expense |
|
2,042 |
|
|
|
1,900 |
|
|
7.5 |
|
|
5,984 |
|
|
|
5,694 |
|
|
5.1 |
Depreciation and amortization expense |
|
1,010 |
|
|
|
1,072 |
|
|
(5.8) |
|
|
3,098 |
|
|
|
3,190 |
|
|
(2.9) |
Total Operating Expenses |
|
6,908 |
|
|
|
6,739 |
|
|
2.5 |
|
|
20,276 |
|
|
|
20,158 |
|
|
0.6 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
$ |
977 |
|
|
$ |
1,154 |
|
|
(15.3) |
|
$ |
3,096 |
|
|
$ |
3,369 |
|
|
(8.1) |
Operating Income Margin |
|
12.4 |
% |
|
|
14.6 |
% |
|
|
|
|
13.2 |
% |
|
|
14.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA |
$ |
1,987 |
|
|
$ |
2,226 |
|
|
(10.7) |
|
$ |
6,194 |
|
|
$ |
6,559 |
|
|
(5.6) |
Segment EBITDA Margin |
|
25.2 |
% |
|
|
28.2 |
% |
|
|
|
|
26.5 |
% |
|
|
27.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes: |
|
|
|
|
|
|
|
|
|
|
|
The segment financial
results and metrics above are adjusted to exclude the effects of
special items, as the Company’s chief operating decision maker
excludes these items in assessing segment performance. |
|
|
|
|
|
|
|
|
|
|
|
|
Certain intersegment
transactions with corporate entities have not been eliminated. |
|
|
|
|
|
|
|
|
|
|
|
|
Verizon Communications Inc. |
|
|
|
|
|
|
|
|
|
|
|
Business -
Selected Operating Statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited |
|
|
|
|
|
|
9/30/19 |
|
9/30/18 |
|
%
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Connections (‘000): |
|
|
|
|
|
|
|
|
|
|
|
|
Wireless retail postpaid connections |
|
|
|
|
|
|
|
|
24,732 |
|
|
|
23,073 |
|
|
7.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fios video connections |
|
|
|
|
|
|
|
|
77 |
|
|
|
74 |
|
|
4.1 |
Fios Internet connections |
|
|
|
|
|
|
|
|
322 |
|
|
|
302 |
|
|
6.6 |
Fios digital connections |
|
|
|
|
|
|
|
|
399 |
|
|
|
376 |
|
|
6.1 |
Broadband connections |
|
|
|
|
|
|
|
|
492 |
|
|
|
506 |
|
|
(2.8) |
Voice connections |
|
|
|
|
|
|
|
|
5,058 |
|
|
|
5,529 |
|
|
(8.5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Mos. Ended |
|
3 Mos. Ended |
|
|
|
9 Mos. Ended |
|
9 Mos. Ended |
|
|
Unaudited |
|
9/30/19 |
|
9/30/18 |
|
%
Change |
|
9/30/19 |
|
9/30/18 |
|
%
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Additions ('000): |
|
|
|
|
|
|
|
|
|
|
|
|
Wireless retail postpaid |
|
|
1,302 |
|
|
|
1,163 |
|
|
12.0 |
|
|
3,644 |
|
|
|
3,405 |
|
|
7.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Add Detail (‘000): |
|
|
|
|
|
|
|
|
|
|
|
|
Wireless retail postpaid (1) |
|
|
408 |
|
|
|
364 |
|
|
12.1 |
|
|
995 |
|
|
|
1,063 |
|
|
(6.4) |
Wireless retail postpaid phones (1) |
|
|
205 |
|
|
|
183 |
|
|
12.0 |
|
|
496 |
|
|
|
494 |
|
|
0.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fios video |
|
|
1 |
|
|
|
1 |
|
|
— |
|
|
3 |
|
|
|
3 |
|
|
— |
Fios Internet |
|
|
6 |
|
|
|
6 |
|
|
— |
|
|
16 |
|
|
|
17 |
|
|
(5.9) |
Fios digital |
|
|
7 |
|
|
|
7 |
|
|
— |
|
|
19 |
|
|
|
20 |
|
|
(5.0) |
Broadband |
|
|
(2 |
) |
|
|
(3 |
) |
|
33.3 |
|
|
(9 |
) |
|
|
(12 |
) |
|
25.0 |
Voice |
|
|
(105 |
) |
|
|
(110 |
) |
|
4.5 |
|
|
(341 |
) |
|
|
(364 |
) |
|
6.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Churn Rate: |
|
|
|
|
|
|
|
|
|
|
|
|
Wireless retail postpaid |
|
|
1.22 |
% |
|
|
1.17 |
% |
|
|
|
|
1.22 |
% |
|
|
1.16 |
% |
|
|
Wireless retail postpaid phones |
|
|
0.98 |
% |
|
|
0.95 |
% |
|
|
|
|
0.99 |
% |
|
|
0.95 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue Statistics (in millions): |
|
|
|
|
|
|
|
|
|
|
|
|
Wireless service revenue |
|
$ |
2,850 |
|
|
$ |
2,687 |
|
|
6.1 |
|
$ |
8,319 |
|
|
$ |
7,803 |
|
|
6.6 |
Fios revenues |
|
$ |
243 |
|
|
$ |
222 |
|
|
9.5 |
|
$ |
725 |
|
|
$ |
657 |
|
|
10.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Operating Statistics: |
|
|
|
|
|
|
|
|
|
|
|
|
Wireless retail postpaid upgrade rate |
|
|
4.5 |
% |
|
|
4.8 |
% |
|
|
|
|
|
|
|
|
Total wireless Internet postpaid base (2) |
|
|
|
|
|
|
|
|
33.5 |
% |
|
|
33.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes: |
|
|
|
|
|
|
|
|
|
|
|
(1) Connection net additions include certain adjustments. |
|
|
|
|
|
|
|
|
|
|
(2)
Statistics presented as of end of period. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The segment financial
results and metrics above are adjusted to exclude the effects of
special items, as the Company’s chief operating decision maker
excludes these items in assessing segment performance. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain intersegment transactions with corporate entities have not
been eliminated. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Verizon
Communications Inc. |
|
|
|
|
Supplemental
Information - Wireless Historical Financial Results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following
supplemental schedule contains historical wireless segment results
and is provided to help investors understand trends in our new
segment results. |
|
(dollars in
millions) |
Unaudited |
|
3 Mos. Ended 9/30/19 |
|
3 Mos. Ended 9/30/18 |
|
% Change |
|
9 Mos. Ended 9/30/19 |
|
9 Mos. Ended 9/30/18 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Service |
|
$ |
16,398 |
|
|
$ |
15,966 |
|
|
2.7 |
|
$ |
48,714 |
|
|
$ |
47,122 |
|
|
3.4 |
Equipment |
|
|
5,141 |
|
|
|
5,353 |
|
|
(4.0) |
|
|
14,792 |
|
|
|
15,437 |
|
|
(4.2) |
Other |
|
|
2,030 |
|
|
|
1,654 |
|
|
22.7 |
|
|
5,445 |
|
|
|
4,763 |
|
|
14.3 |
Total Operating Revenues |
|
|
23,569 |
|
|
|
22,973 |
|
|
2.6 |
|
|
68,951 |
|
|
|
67,322 |
|
|
2.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
|
2,583 |
|
|
|
2,350 |
|
|
9.9 |
|
|
7,461 |
|
|
|
6,900 |
|
|
8.1 |
Cost of equipment |
|
|
5,482 |
|
|
|
5,489 |
|
|
(0.1) |
|
|
15,699 |
|
|
|
16,195 |
|
|
(3.1) |
Selling, general and administrative expense |
|
|
4,462 |
|
|
|
4,169 |
|
|
7.0 |
|
|
13,061 |
|
|
|
12,052 |
|
|
8.4 |
Depreciation and amortization expense |
|
|
2,259 |
|
|
|
2,454 |
|
|
(7.9) |
|
|
6,840 |
|
|
|
7,341 |
|
|
(6.8) |
Total Operating Expenses |
|
|
14,786 |
|
|
|
14,462 |
|
|
2.2 |
|
|
43,061 |
|
|
|
42,488 |
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
8,783 |
|
|
$ |
8,511 |
|
|
3.2 |
|
$ |
25,890 |
|
|
$ |
24,834 |
|
|
4.3 |
Operating Income Margin |
|
|
37.3 |
% |
|
|
37.0 |
% |
|
|
|
|
37.5 |
% |
|
|
36.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA |
|
$ |
11,042 |
|
|
$ |
10,965 |
|
|
0.7 |
|
$ |
32,730 |
|
|
$ |
32,175 |
|
|
1.7 |
Segment EBITDA Margin |
|
|
46.8 |
% |
|
|
47.7 |
% |
|
|
|
|
47.5 |
% |
|
|
47.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes: |
|
|
|
|
|
|
|
|
|
|
|
|
The segment financial
results and metrics above are adjusted to exclude the effects of
special items. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain intersegment
transactions with corporate entities have not been eliminated. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Verizon Communications Inc. |
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Information - Wireless Historical Operating
Statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
The following
supplemental schedule contains historical wireless segment results
and is provided to help investors understand trends in our new
segment results. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited |
|
9/30/19 |
|
9/30/18 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Connections (‘000) |
|
|
|
|
|
|
|
|
|
|
|
|
Retail postpaid |
|
|
|
|
|
|
|
|
114,471 |
|
|
|
112,135 |
|
|
2.1 |
Retail prepaid |
|
|
|
|
|
|
|
|
4,183 |
|
|
|
4,736 |
|
|
(11.7) |
Total retail |
|
|
|
|
|
|
|
|
118,654 |
|
|
|
116,871 |
|
|
1.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited |
|
3 Mos. Ended 9/30/19 |
|
3 Mos. Ended 9/30/18 |
|
% Change |
|
9 Mos. Ended 9/30/19 |
|
9 Mos. Ended 9/30/18 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Add Detail (‘000) (1) |
|
|
|
|
|
|
|
|
|
|
|
|
Retail postpaid |
|
|
601 |
|
|
|
515 |
|
|
16.7 |
|
|
1,113 |
|
|
|
1,306 |
|
|
(14.8) |
Retail prepaid |
|
|
(81 |
) |
|
|
(96 |
) |
|
15.6 |
|
|
(470 |
) |
|
|
(667 |
) |
|
29.5 |
Total retail |
|
|
520 |
|
|
|
419 |
|
|
24.1 |
|
|
643 |
|
|
|
639 |
|
|
0.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Account Statistics |
|
|
|
|
|
|
|
|
|
|
|
|
Retail
postpaid accounts (‘000) (2) |
|
|
|
|
|
|
|
|
35,371 |
|
|
|
35,309 |
|
|
0.2 |
Retail
postpaid connections per account (2) |
|
|
|
|
|
|
|
|
3.24 |
|
|
|
3.18 |
|
|
1.9 |
Retail
postpaid ARPA (3) |
|
$ |
139.01 |
|
|
$ |
136.58 |
|
|
1.8 |
|
$ |
137.83 |
|
|
$ |
134.28 |
|
|
2.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Churn Detail |
|
|
|
|
|
|
|
|
|
|
|
|
Retail postpaid |
|
|
1.09 |
% |
|
|
1.04 |
% |
|
|
|
|
1.07 |
% |
|
|
1.02 |
% |
|
|
Retail |
|
|
1.26 |
% |
|
|
1.22 |
% |
|
|
|
|
1.26 |
% |
|
|
1.23 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail Postpaid Connection Statistics
(2) |
|
|
|
|
|
|
|
|
|
|
|
|
Total smartphone postpaid phone base |
|
|
|
|
|
|
|
|
93.5 |
% |
|
|
91.7 |
% |
|
|
Total Internet postpaid base |
|
|
|
|
|
|
|
|
19.8 |
% |
|
|
19.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes: |
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Connection net additions include certain adjustments. |
|
|
|
|
|
|
|
|
|
|
|
|
(2)
Statistics presented as of end of period. |
|
|
|
|
|
|
|
|
|
|
|
|
(3) Wireless retail
postpaid ARPA - average service revenue per account from retail
postpaid accounts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The segment financial
results and metrics above are adjusted to exclude the effects of
special items. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain intersegment transactions with corporate entities have not
been eliminated. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Verizon Communications Inc. |
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Information - Wireline Historical Financial Results |
|
|
|
|
|
|
|
|
|
|
|
|
|
The following
supplemental schedule contains historical wireline segment results
and is provided to help investors understand trends in our new
segment results. |
(dollars in
millions) |
Unaudited |
|
3 Mos. Ended 9/30/19 |
|
3 Mos. Ended 9/30/18 |
|
% Change |
|
9 Mos. Ended 9/30/19 |
|
9 Mos. Ended 9/30/18 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Markets |
|
$ |
3,124 |
|
|
$ |
3,138 |
|
|
(0.4) |
|
$ |
9,397 |
|
|
$ |
9,420 |
|
|
(0.2) |
Enterprise Solutions |
|
|
2,085 |
|
|
|
2,172 |
|
|
(4.0) |
|
|
6,309 |
|
|
|
6,623 |
|
|
(4.7) |
Partner Solutions |
|
|
1,044 |
|
|
|
1,166 |
|
|
(10.5) |
|
|
3,162 |
|
|
|
3,594 |
|
|
(12.0) |
Business Markets |
|
|
795 |
|
|
|
840 |
|
|
(5.4) |
|
|
2,443 |
|
|
|
2,561 |
|
|
(4.6) |
Other |
|
|
46 |
|
|
|
55 |
|
|
(16.4) |
|
|
173 |
|
|
|
189 |
|
|
(8.5) |
Total Operating Revenues |
|
|
7,094 |
|
|
|
7,371 |
|
|
(3.8) |
|
|
21,484 |
|
|
|
22,387 |
|
|
(4.0) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
|
4,318 |
|
|
|
4,371 |
|
|
(1.2) |
|
|
12,701 |
|
|
|
13,223 |
|
|
(3.9) |
Selling, general and administrative expense |
|
|
1,542 |
|
|
|
1,498 |
|
|
2.9 |
|
|
4,701 |
|
|
|
4,554 |
|
|
3.2 |
Depreciation and amortization expense |
|
|
1,480 |
|
|
|
1,552 |
|
|
(4.6) |
|
|
4,606 |
|
|
|
4,610 |
|
|
(0.1) |
Total Operating Expenses |
|
|
7,340 |
|
|
|
7,421 |
|
|
(1.1) |
|
|
22,008 |
|
|
|
22,387 |
|
|
(1.7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Loss |
|
$ |
(246 |
) |
|
$ |
(50 |
) |
|
* |
|
$ |
(524 |
) |
|
$ |
— |
|
|
* |
Operating Loss Margin |
|
|
(3.5 |
)% |
|
|
(0.7 |
)% |
|
|
|
|
(2.4 |
)% |
|
|
0.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA |
|
$ |
1,234 |
|
|
$ |
1,502 |
|
|
(17.8) |
|
$ |
4,082 |
|
|
$ |
4,610 |
|
|
(11.5) |
Segment EBITDA Margin |
|
|
17.4 |
% |
|
|
20.4 |
% |
|
|
|
|
19.0 |
% |
|
|
20.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The segment financial
results and metrics above are adjusted to exclude the effects of
special items. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain intersegment
transactions with corporate entities have not been eliminated. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Not
meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Verizon Communications Inc. |
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Information - Wireline Historical Operating
Statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following
supplemental schedule contains historical wireline segment results
and is provided to help investors understand trends in our new
segment results. |
Unaudited |
|
|
|
|
|
|
|
9/30/19 |
|
9/30/18 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Connections (‘000) |
|
|
|
|
|
|
|
|
|
|
|
|
Fios video connections |
|
|
|
|
|
|
|
|
4,280 |
|
|
|
4,497 |
|
|
(4.8) |
Fios Internet connections |
|
|
|
|
|
|
|
|
6,189 |
|
|
|
6,013 |
|
|
2.9 |
Fios digital voice residence connections |
|
|
|
|
|
|
|
|
3,672 |
|
|
|
3,833 |
|
|
(4.2) |
Fios digital connections |
|
|
|
|
|
|
|
|
14,141 |
|
|
|
14,343 |
|
|
(1.4) |
Broadband connections |
|
|
|
|
|
|
|
|
6,961 |
|
|
|
6,958 |
|
|
— |
Voice connections |
|
|
|
|
|
|
|
|
10,962 |
|
|
|
12,009 |
|
|
(8.7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited |
|
3 Mos. Ended 9/30/19 |
|
3 Mos. Ended 9/30/18 |
|
% Change |
|
9 Mos. Ended 9/30/19 |
|
9 Mos. Ended 9/30/18 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Add Detail (‘000) |
|
|
|
|
|
|
|
|
|
|
|
|
Fios video connections |
|
|
(66 |
) |
|
|
(63 |
) |
|
(4.8) |
|
|
(171 |
) |
|
|
(122 |
) |
|
(40.2) |
Fios Internet connections |
|
|
36 |
|
|
|
54 |
|
|
(33.3) |
|
|
122 |
|
|
|
163 |
|
|
(25.2) |
Fios digital voice residence connections |
|
|
(53 |
) |
|
|
(30 |
) |
|
(76.7) |
|
|
(130 |
) |
|
|
(72 |
) |
|
(80.6) |
Fios digital connections |
|
|
(83 |
) |
|
|
(39 |
) |
|
* |
|
|
(179 |
) |
|
|
(31 |
) |
|
* |
Broadband connections |
|
|
(7 |
) |
|
|
2 |
|
|
* |
|
|
— |
|
|
|
(1 |
) |
|
* |
Voice connections |
|
|
(259 |
) |
|
|
(261 |
) |
|
0.8 |
|
|
(770 |
) |
|
|
(812 |
) |
|
5.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue Statistics |
|
|
|
|
|
|
|
|
|
|
|
|
Fios revenues (in millions) |
|
$ |
3,054 |
|
|
$ |
2,986 |
|
|
2.3 |
|
$ |
9,072 |
|
|
$ |
8,893 |
|
|
2.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes: |
|
|
|
|
|
|
|
|
|
|
|
|
The segment financial
results and metrics above are adjusted to exclude the effects of
special items. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain intersegment
transactions with corporate entities have not been eliminated. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Not
meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Verizon Communications Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Reconciliations - Consolidated Verizon |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
EBITDA, Consolidated EBITDA Margin, Consolidated Adjusted EBITDA
and Consolidated Adjusted EBITDA Margin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in
millions) |
|
Unaudited |
|
3 Mos. Ended
9/30/2019 |
|
3 Mos. Ended
6/30/2019 |
|
3 Mos. Ended
3/31/2019 |
|
3 Mos. Ended
12/31/2018 |
|
3 Mos. Ended
9/30/2018 |
|
3 Mos. Ended
6/30/2018 |
|
3 Mos. Ended 3/31/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Net Income |
|
$ |
5,337 |
|
|
$ |
4,074 |
|
$ |
5,160 |
|
|
$ |
2,065 |
|
|
$ |
5,062 |
|
|
$ |
4,246 |
|
|
$ |
4,666 |
|
Add/(subtract): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for income taxes |
|
|
1,586 |
|
|
|
1,236 |
|
|
1,628 |
|
|
|
(698 |
) |
|
|
1,613 |
|
|
|
1,281 |
|
|
|
1,388 |
|
Interest expense |
|
|
1,146 |
|
|
|
1,215 |
|
|
1,210 |
|
|
|
1,199 |
|
|
|
1,211 |
|
|
|
1,222 |
|
|
|
1,201 |
|
Depreciation and amortization expense |
|
|
4,114 |
|
|
|
4,232 |
|
|
4,231 |
|
|
|
4,352 |
|
|
|
4,377 |
|
|
|
4,350 |
|
|
|
4,324 |
|
Consolidated EBITDA |
|
$ |
12,183 |
|
|
$ |
10,757 |
|
$ |
12,229 |
|
|
$ |
6,918 |
|
|
$ |
12,263 |
|
|
$ |
11,099 |
|
|
$ |
11,579 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add/(subtract): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) expense, net* |
|
$ |
110 |
|
|
$ |
1,312 |
|
$ |
(295 |
) |
|
$ |
(1,865 |
) |
|
$ |
(214 |
) |
|
$ |
(360 |
) |
|
$ |
75 |
|
Equity in losses (earnings) of unconsolidated businesses† |
|
|
1 |
|
|
|
13 |
|
|
6 |
|
|
|
(64 |
) |
|
|
3 |
|
|
|
228 |
|
|
|
19 |
|
Oath goodwill impairment |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
4,591 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Severance charges |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
1,818 |
|
|
|
— |
|
|
|
339 |
|
|
|
— |
|
Product realignment charges‡ |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
450 |
|
|
|
— |
|
Acquisition and integration related charges‡ |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
187 |
|
|
|
130 |
|
|
|
109 |
|
|
|
105 |
|
Net gain from dispositions of assets and businesses |
|
|
(261 |
) |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
(150 |
) |
|
|
1,325 |
|
|
(289 |
) |
|
|
4,667 |
|
|
|
(81 |
) |
|
|
766 |
|
|
|
199 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Adjusted EBITDA |
|
$ |
12,033 |
|
|
$ |
12,082 |
|
$ |
11,940 |
|
|
$ |
11,585 |
|
|
$ |
12,182 |
|
|
$ |
11,865 |
|
|
$ |
11,778 |
|
Consolidated Operating Revenues - Quarter to
Date |
|
$ |
32,894 |
|
|
|
|
|
|
|
|
$ |
32,607 |
|
|
|
|
|
|
Operating Income |
|
$ |
8,180 |
|
|
|
|
|
|
|
|
$ |
7,675 |
|
|
|
|
|
|
Operating Income Margin - Quarter to Date |
|
|
24.9 |
% |
|
|
|
|
|
|
|
|
23.5 |
% |
|
|
|
|
|
Consolidated EBITDA Margin - Quarter to Date |
|
|
37.0 |
% |
|
|
|
|
|
|
|
|
37.6 |
% |
|
|
|
|
|
Consolidated Adjusted EBITDA Margin - Quarter to
Date |
|
|
36.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Includes Pension and
benefits mark-to-market adjustments and Early debt redemption
costs, where applicable. |
|
|
|
† Includes Product
realignment charges, where applicable. |
|
‡ Excludes
depreciation and amortization expense, where applicable. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Verizon
Communications Inc. |
|
Non-GAAP
Reconciliations - Consolidated Verizon |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt and
Net Debt to Consolidated Adjusted EBITDA Ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in
millions) |
|
Unaudited |
|
|
|
|
|
|
|
9/30/19 |
|
12/31/18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
maturing within one year |
|
|
|
|
|
|
|
$ |
7,830 |
|
|
$ |
7,190 |
|
|
Long-term
debt |
|
|
|
|
|
|
|
|
101,769 |
|
|
|
105,873 |
|
|
Total Debt |
|
|
|
|
|
|
|
|
109,599 |
|
|
|
113,063 |
|
|
Less Cash and cash equivalents |
|
|
|
|
|
|
|
|
3,020 |
|
|
|
2,745 |
|
|
Net
Debt |
|
|
|
|
|
|
|
$ |
106,579 |
|
|
$ |
110,318 |
|
|
Net
Debt to Consolidated Adjusted EBITDA Ratio |
|
|
|
|
|
|
|
2.2x |
|
2.3x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Unsecured
Debt and Net Unsecured Debt to Consolidated Adjusted EBITDA
Ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in
millions) |
|
Unaudited |
|
|
|
|
|
|
|
9/30/19 |
|
12/31/18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt |
|
|
|
|
|
|
|
$ |
109,599 |
|
|
$ |
113,063 |
|
|
Less Secured debt |
|
|
|
|
|
|
|
|
8,800 |
|
|
|
10,076 |
|
|
Unsecured debt |
|
|
|
|
|
|
|
|
100,799 |
|
|
|
102,987 |
|
|
Less Cash and cash equivalents |
|
|
|
|
|
|
|
|
3,020 |
|
|
|
2,745 |
|
|
Net
Unsecured Debt |
|
|
|
|
|
|
|
$ |
97,779 |
|
|
$ |
100,242 |
|
|
Net
Unsecured Debt to Consolidated Adjusted EBITDA Ratio |
|
|
|
|
|
|
|
2.1x |
|
2.1x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings per Common Share (Adjusted
EPS)(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in millions,
except per share amounts) |
|
Unaudited |
|
3 Mos. Ended 9/30/19 |
|
|
3 Mos. Ended 9/30/18 |
|
|
Pre-tax |
Tax |
After-Tax |
|
Pre-tax |
Tax |
|
After-Tax |
|
|
|
EPS |
|
|
|
$ |
1.25 |
|
|
|
|
|
|
$ |
1.19 |
|
|
Pension remeasurement charge (credit) |
$ |
291 |
|
$ |
(76 |
) |
$ |
215 |
|
|
0.05 |
|
$ |
(454 |
) |
$ |
119 |
|
|
$ |
(335 |
) |
|
|
(0.08 |
) |
|
Acquisition and integration-related charges |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
137 |
|
|
(34 |
) |
|
|
103 |
|
|
|
0.02 |
|
|
Early debt redemption costs |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
476 |
|
|
(124 |
) |
|
|
352 |
|
|
|
0.09 |
|
|
Net gain from dispositions of assets and businesses |
|
(261 |
) |
|
37 |
|
|
(224 |
) |
|
(0.05 |
) |
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
$ |
30 |
|
$ |
(39 |
) |
$ |
(9 |
) |
$ |
— |
|
$ |
159 |
|
$ |
(39 |
) |
|
$ |
120 |
|
|
$ |
0.03 |
|
|
Adjusted EPS |
|
|
|
$ |
1.25 |
|
|
|
|
|
|
$ |
1.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjusted
EPS may not add due to rounding. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Verizon Communications Inc. |
|
|
|
|
|
Non-GAAP Reconciliations - Segments |
|
|
|
|
|
|
|
|
|
|
Segment EBITDA and Segment EBITDA Margin |
|
|
|
|
|
|
|
Consumer |
|
(dollars in
millions) |
|
|
|
|
|
|
|
Unaudited |
|
3 Mos. Ended
9/30/19 |
|
3 Mos. Ended
9/30/18 |
|
|
|
|
|
|
|
Operating Income |
|
$ |
7,489 |
|
|
$ |
7,213 |
|
|
Add Depreciation and amortization expense |
|
|
2,806 |
|
|
|
3,010 |
|
|
Segment EBITDA |
|
$ |
10,295 |
|
|
$ |
10,223 |
|
|
Year over
year change |
|
|
0.7 |
% |
|
|
|
|
|
|
|
|
|
Total
operating revenues |
|
$ |
22,706 |
|
|
$ |
22,399 |
|
|
Operating Income Margin |
|
|
33.0 |
% |
|
|
32.2 |
% |
|
Segment EBITDA Margin |
|
|
45.3 |
% |
|
|
45.6 |
% |
|
Segment
EBITDA Margin - Year Over Year Change |
|
(30) bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business |
|
(dollars in
millions) |
|
|
|
|
|
|
|
Unaudited |
|
3 Mos. Ended
9/30/19 |
|
3 Mos. Ended
9/30/18 |
|
|
|
|
|
|
|
Operating Income |
|
$ |
977 |
|
|
$ |
1,154 |
|
|
Add Depreciation and amortization expense |
|
|
1,010 |
|
|
|
1,072 |
|
|
Segment EBITDA |
|
$ |
1,987 |
|
|
$ |
2,226 |
|
|
Year over
Year Change |
|
|
(10.7 |
)% |
|
|
|
|
|
|
|
|
|
Total
operating revenues |
|
$ |
7,885 |
|
|
$ |
7,893 |
|
|
Operating Income Margin |
|
|
12.4 |
% |
|
|
14.6 |
% |
|
Segment EBITDA Margin |
|
|
25.2 |
% |
|
|
28.2 |
% |
|
|
|
|
|
|
|
Verizon
Communications Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Information - VZ 2.0 to Historical
Financial Results Reconciliation(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables
present a reconciliation of financial results for our current
reportable segments, Consumer and Business, to our historical
reportable segments, Wireless and Wireline. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Mos. Ended 9/30/19 |
|
|
|
(dollars in millions) |
|
VZ 2.0 |
Historical |
|
Consumer |
Business |
Total Reportable Segments |
Adjustments(2) |
Adjusted Total Reportable Segments |
Wireless |
Wireline |
HistoricalTotalReportableSegments |
Unaudited |
Service |
Equipment |
Other |
Total Wireless |
Consumer Markets |
Enterprise Solutions |
Partner Solutions |
Business Markets |
Other |
Total Wireline |
External Operating Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Revenues |
$ |
22,706 |
|
$ |
7,885 |
|
$ |
30,591 |
$ |
72 |
|
$ |
30,663 |
$ |
16,398 |
$ |
5,141 |
$ |
2,030 |
$ |
23,569 |
|
$ |
3,124 |
$ |
2,085 |
$ |
1,044 |
$ |
795 |
$ |
46 |
$ |
7,094 |
|
$ |
30,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
4,035 |
|
|
2,666 |
|
|
6,701 |
|
200 |
|
|
6,901 |
|
|
|
|
2,583 |
|
|
|
|
|
|
|
4,318 |
|
|
6,901 |
Cost of wireless equipment |
|
4,291 |
|
|
1,190 |
|
|
5,481 |
|
1 |
|
|
5,482 |
|
|
|
|
5,482 |
|
|
|
|
|
|
|
— |
|
|
5,482 |
Selling, general and administrative expense |
|
4,085 |
|
|
2,042 |
|
|
6,127 |
|
(123 |
) |
|
6,004 |
|
|
|
|
4,462 |
|
|
|
|
|
|
|
1,542 |
|
|
6,004 |
Depreciation and amortization expense |
|
2,806 |
|
|
1,010 |
|
|
3,816 |
|
(77 |
) |
|
3,739 |
|
|
|
|
2,259 |
|
|
|
|
|
|
|
1,480 |
|
|
3,739 |
Total Operating Expenses |
|
15,217 |
|
|
6,908 |
|
|
22,125 |
|
1 |
|
|
22,126 |
|
|
|
|
14,786 |
|
|
|
|
|
|
|
7,340 |
|
|
22,126 |
Operating Income (Loss) |
$ |
7,489 |
|
$ |
977 |
|
$ |
8,466 |
$ |
71 |
|
$ |
8,537 |
|
|
|
$ |
8,783 |
|
|
|
|
|
|
$ |
(246 |
) |
$ |
8,537 |
Add Depreciation and amortization expense |
|
2,806 |
|
|
1,010 |
|
|
3,816 |
|
(77 |
) |
|
3,739 |
|
|
|
|
2,259 |
|
|
|
|
|
|
|
1,480 |
|
|
3,739 |
Segment EBITDA |
$ |
10,295 |
|
$ |
1,987 |
|
$ |
12,282 |
$ |
(6 |
) |
$ |
12,276 |
|
|
|
$ |
11,042 |
|
|
|
|
|
|
$ |
1,234 |
|
$ |
12,276 |
Operating Income (Loss) Margin |
|
33.0 |
% |
|
12.4 |
% |
|
|
|
|
|
|
|
37.3 |
% |
|
|
|
|
|
|
(3.5 |
)% |
|
Segment EBITDA Margin |
|
45.3 |
% |
|
25.2 |
% |
|
|
|
|
|
|
|
46.8 |
% |
|
|
|
|
|
|
17.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Information
presented for VZ 2.0 and historical financial results includes
intersegment transactions. |
(2) Adjustment
represents intersegment transactions that have been eliminated
under the new structure net of the impact of VZ Connect and other
early-stage development businesses previously included in
Corporate. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Mos. Ended 9/30/18 |
|
|
|
(dollars in millions) |
|
VZ 2.0 |
Historical |
|
Consumer |
Business |
Total Reportable Segments |
Adjustments(2) |
Adjusted Total Reportable Segments |
Wireless |
Wireline |
Historical Total Reportable Segments |
Unaudited |
Service |
Equipment |
Other |
Total Wireless |
Consumer Markets |
Enterprise Solutions |
Partner Solutions |
Business Markets |
Other |
Total Wireline |
External Operating Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Revenues |
$ |
22,399 |
|
$ |
7,893 |
|
$ |
30,292 |
$ |
52 |
|
$ |
30,344 |
$ |
15,966 |
$ |
5,353 |
$ |
1,654 |
$ |
22,973 |
|
$ |
3,138 |
$ |
2,172 |
$ |
1,166 |
$ |
840 |
$ |
55 |
$ |
7,371 |
|
$ |
30,344 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
3,850 |
|
|
2,657 |
|
|
6,507 |
|
214 |
|
|
6,721 |
|
|
|
|
2,350 |
|
|
|
|
|
|
|
4,371 |
|
|
6,721 |
Cost of wireless equipment |
|
4,379 |
|
|
1,110 |
|
|
5,489 |
|
— |
|
|
5,489 |
|
|
|
|
5,489 |
|
|
|
|
|
|
|
— |
|
|
5,489 |
Selling, general and administrative expense |
|
3,947 |
|
|
1,900 |
|
|
5,847 |
|
(180 |
) |
|
5,667 |
|
|
|
|
4,169 |
|
|
|
|
|
|
|
1,498 |
|
|
5,667 |
Depreciation and amortization expense |
|
3,010 |
|
|
1,072 |
|
|
4,082 |
|
(76 |
) |
|
4,006 |
|
|
|
|
2,454 |
|
|
|
|
|
|
|
1,552 |
|
|
4,006 |
Total Operating Expenses |
|
15,186 |
|
|
6,739 |
|
|
21,925 |
|
(42 |
) |
|
21,883 |
|
|
|
|
14,462 |
|
|
|
|
|
|
|
7,421 |
|
|
21,883 |
Operating Income (Loss) |
$ |
7,213 |
|
$ |
1,154 |
|
$ |
8,367 |
$ |
94 |
|
$ |
8,461 |
|
|
|
$ |
8,511 |
|
|
|
|
|
|
$ |
(50 |
) |
$ |
8,461 |
Add Depreciation and amortization expense |
|
3,010 |
|
|
1,072 |
|
|
4,082 |
|
(76 |
) |
|
4,006 |
|
|
|
|
2,454 |
|
|
|
|
|
|
|
1,552 |
|
|
4,006 |
Segment EBITDA |
$ |
10,223 |
|
$ |
2,226 |
|
$ |
12,449 |
$ |
18 |
|
$ |
12,467 |
|
|
|
$ |
10,965 |
|
|
|
|
|
|
$ |
1,502 |
|
$ |
12,467 |
Operating Income (Loss) Margin |
|
32.2 |
% |
|
14.6 |
% |
|
|
|
|
|
|
|
37.0 |
% |
|
|
|
|
|
|
(0.7 |
)% |
|
Segment EBITDA Margin |
|
45.6 |
% |
|
28.2 |
% |
|
|
|
|
|
|
|
47.7 |
% |
|
|
|
|
|
|
20.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Information
presented for VZ 2.0 and historical financial results includes
intersegment transactions. |
(2) Adjustment
represents intersegment transactions that have been eliminated
under the new structure net of the impact of VZ Connect and other
early-stage development businesses previously included in
Corporate. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9 Mos. Ended 9/30/19 |
|
|
|
(dollars in millions) |
|
VZ 2.0 |
Historical |
|
Consumer |
Business |
Total Reportable Segments |
Adjustments(2) |
Adjusted Total Reportable Segments |
Wireless |
Wireline |
Historical Total Reportable Segments |
Unaudited |
Service |
Equipment |
Other |
Total Wireless |
Consumer Markets |
Enterprise Solutions |
Partner Solutions |
Business Markets |
Other |
Total Wireline |
External Operating Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Revenues |
$ |
66,849 |
|
$ |
23,372 |
|
$ |
90,221 |
$ |
214 |
|
$ |
90,435 |
$ |
48,714 |
$ |
14,792 |
$ |
5,445 |
$ |
68,951 |
|
$ |
9,397 |
$ |
6,309 |
$ |
3,162 |
$ |
2,443 |
$ |
173 |
$ |
21,484 |
|
$ |
90,435 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
11,761 |
|
|
7,838 |
|
|
19,599 |
|
563 |
|
|
20,162 |
|
|
|
|
7,461 |
|
|
|
|
|
|
|
12,701 |
|
|
20,162 |
Cost of wireless equipment |
|
12,342 |
|
|
3,356 |
|
|
15,698 |
|
1 |
|
|
15,699 |
|
|
|
|
15,699 |
|
|
|
|
|
|
|
— |
|
|
15,699 |
Selling, general and administrative expense |
|
12,090 |
|
|
5,984 |
|
|
18,074 |
|
(312 |
) |
|
17,762 |
|
|
|
|
13,061 |
|
|
|
|
|
|
|
4,701 |
|
|
17,762 |
Depreciation and amortization expense |
|
8,581 |
|
|
3,098 |
|
|
11,679 |
|
(233 |
) |
|
11,446 |
|
|
|
|
6,840 |
|
|
|
|
|
|
|
4,606 |
|
|
11,446 |
Total Operating Expenses |
|
44,774 |
|
|
20,276 |
|
|
65,050 |
|
19 |
|
|
65,069 |
|
|
|
|
43,061 |
|
|
|
|
|
|
|
22,008 |
|
|
65,069 |
Operating Income (Loss) |
$ |
22,075 |
|
$ |
3,096 |
|
$ |
25,171 |
$ |
195 |
|
$ |
25,366 |
|
|
|
$ |
25,890 |
|
|
|
|
|
|
$ |
(524 |
) |
$ |
25,366 |
Add Depreciation and amortization expense |
|
8,581 |
|
|
3,098 |
|
|
11,679 |
|
(233 |
) |
|
11,446 |
|
|
|
|
6,840 |
|
|
|
|
|
|
|
4,606 |
|
|
11,446 |
Segment EBITDA |
$ |
30,656 |
|
$ |
6,194 |
|
$ |
36,850 |
$ |
(38 |
) |
$ |
36,812 |
|
|
|
$ |
32,730 |
|
|
|
|
|
|
$ |
4,082 |
|
$ |
36,812 |
Operating Income (Loss) Margin |
|
33.0 |
% |
|
13.2 |
% |
|
|
|
|
|
|
|
37.5 |
% |
|
|
|
|
|
|
(2.4 |
)% |
|
Segment EBITDA Margin |
|
45.9 |
% |
|
26.5 |
% |
|
|
|
|
|
|
|
47.5 |
% |
|
|
|
|
|
|
19.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Information
presented for VZ 2.0 and historical financial results includes
intersegment transactions. |
(2) Adjustment
represents intersegment transactions that have been eliminated
under the new structure net of the impact of VZ Connect and other
early-stage development businesses previously included in
Corporate. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9 Mos. Ended 9/30/18 |
|
|
|
(dollars in millions) |
|
VZ 2.0 |
Historical |
|
Consumer |
Business |
Total Reportable Segments |
Adjustments(2) |
Adjusted Total Reportable Segments |
Wireless |
Wireline |
Historical Total Reportable Segments |
Unaudited |
Service |
Equipment |
Other |
Total Wireless |
Consumer Markets |
Enterprise Solutions |
Partner Solutions |
Business Markets |
Other |
Total Wireline |
External Operating Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Revenues |
$ |
66,029 |
|
$ |
23,527 |
|
$ |
89,556 |
$ |
153 |
|
$ |
89,709 |
$ |
47,122 |
$ |
15,437 |
$ |
4,763 |
$ |
67,322 |
|
$ |
9,420 |
$ |
6,623 |
$ |
3,594 |
$ |
2,561 |
$ |
189 |
$ |
22,387 |
|
$ |
89,709 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
11,465 |
|
|
8,027 |
|
|
19,492 |
|
631 |
|
|
20,123 |
|
|
|
|
6,900 |
|
|
|
|
|
|
|
13,223 |
|
|
20,123 |
Cost of wireless equipment |
|
12,948 |
|
|
3,247 |
|
|
16,195 |
|
— |
|
|
16,195 |
|
|
|
|
16,195 |
|
|
|
|
|
|
|
— |
|
|
16,195 |
Selling, general and administrative expense |
|
11,426 |
|
|
5,694 |
|
|
17,120 |
|
(514 |
) |
|
16,606 |
|
|
|
|
12,052 |
|
|
|
|
|
|
|
4,554 |
|
|
16,606 |
Depreciation and amortization expense |
|
8,982 |
|
|
3,190 |
|
|
12,172 |
|
(221 |
) |
|
11,951 |
|
|
|
|
7,341 |
|
|
|
|
|
|
|
4,610 |
|
|
11,951 |
Total Operating Expenses |
|
44,821 |
|
|
20,158 |
|
|
64,979 |
|
(104 |
) |
|
64,875 |
|
|
|
|
42,488 |
|
|
|
|
|
|
|
22,387 |
|
|
64,875 |
Operating Income |
$ |
21,208 |
|
$ |
3,369 |
|
$ |
24,577 |
$ |
257 |
|
$ |
24,834 |
|
|
|
$ |
24,834 |
|
|
|
|
|
|
$ |
— |
|
$ |
24,834 |
Add Depreciation and amortization expense |
|
8,982 |
|
|
3,190 |
|
|
12,172 |
|
(221 |
) |
|
11,951 |
|
|
|
|
7,341 |
|
|
|
|
|
|
|
4,610 |
|
|
11,951 |
Segment EBITDA |
$ |
30,190 |
|
$ |
6,559 |
|
$ |
36,749 |
$ |
36 |
|
$ |
36,785 |
|
|
|
$ |
32,175 |
|
|
|
|
|
|
$ |
4,610 |
|
$ |
36,785 |
Operating Income Margin |
|
32.1 |
% |
|
14.3 |
% |
|
|
|
|
|
|
|
36.9 |
% |
|
|
|
|
|
|
0.0 |
% |
|
Segment EBITDA Margin |
|
45.7 |
% |
|
27.9 |
% |
|
|
|
|
|
|
|
47.8 |
% |
|
|
|
|
|
|
20.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Information
presented for VZ 2.0 and historical financial results includes
intersegment transactions. |
(2) Adjustment
represents intersegment transactions that have been eliminated
under the new structure net of the impact of VZ Connect and other
early-stage development businesses previously included in
Corporate. |
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