Attached files
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| 8-K - FORM 8-K - VERIZON COMMUNICATIONS INC | a2018q38-k.htm |
Exhibit 99
News Release
FOR IMMEDIATE RELEASE | Media contacts: |
October 23, 2018 | Bob Varettoni |
908.559.6388 | |
robert.a.varettoni@verizon.com | |
Eric Wilkens | |
908.559.3063 | |
eric.wilkens@verizon.com | |
As 5G era begins, Verizon continues strong momentum in 3Q
3Q 2018 highlights
Consolidated:
• | $1.19 in earnings per share (EPS), compared with 89 cents in 3Q 2017; adjusted EPS (non-GAAP), excluding special items, of $1.22, compared with 98 cents in 3Q 2017. |
• | Year-to-date operating cash flow of $26.2 billion, an increase of $9.8 billion year over year and total debt reduction of $4.2 billion. |
Wireless:
• | 515,000 retail postpaid net additions, including 510,000 postpaid smartphone net adds. |
• | Strong customer loyalty, with retail postpaid phone churn at 0.80 percent. |
• | Total revenue growth of 6.1 percent year over year, excluding the impact of the revenue recognition standard adopted on Jan. 1, 2018. |
• | Service revenue growth of 2.6 percent year over year, excluding the impact of the revenue recognition standard. |
Wireline:
• | 54,000 Fios Internet net adds. |
• | Total Fios revenue of $3.0 billion, an increase of 1.5 percent year over year. |
NEW YORK - Verizon Communications Inc. (NYSE, Nasdaq: VZ) today posted third-quarter results highlighted by continued growth at Verizon Wireless, strong cash flow and network innovations that led to the world’s first 5G commercial product offering.
Page 1
“Verizon has posted a third quarter of strong operational and financial performance,” said CEO Hans Vestberg. “With the beginning of the 5G era in this fourth quarter, we expect that trend to continue. We are investing in networks, creating platforms to add value for customers and maintaining a focused, disciplined strategy. Verizon is best positioned to take full advantage of the opportunities offered by the new game-changing generation of technology.”
For third-quarter 2018, Verizon reported EPS of $1.19, compared with 89 cents in third-quarter 2017. The company’s reported earnings included a net impact of 3 cents per share from special items. Charges for early debt redemption and integration-related expenses (primarily pertaining to Oath) were partially offset by a pension and benefit re-measurement credit.
On an adjusted basis (non-GAAP), third-quarter 2018 EPS was $1.22, compared with 98 cents in third-quarter 2017. Verizon’s third-quarter 2018 EPS included approximately 21 cents due to the net effects of tax reform and accounting changes for revenue recognition.
Consolidated results
Total consolidated operating revenues in third-quarter 2018 were $32.6 billion, up 2.8 percent from third-quarter 2017. Excluding the impact of the revenue recognition standard, consolidated operating revenues were up approximately 2.6 percent year over year.
Year-to-date cash flow from operations totaled $26.2 billion through third-quarter 2018, up $9.8 billion year over year. In September 2018, Verizon’s Board of Directors declared a quarterly dividend increase for the 12th consecutive year, and the company’s cash dividend payments totaled $7.3 billion through third-quarter 2018.
Year-to-date capital expenditures were $12.0 billion through third-quarter 2018, including capital to support the increasing demand on Verizon’s industry-leading 4G network, the commercial launch of 5G Home, significant fiber deployment in markets nationwide and the pre-positioning for additional 5G services.
Strong operational cash flow and the benefits from tax reform have enabled Verizon to decrease total debt by $4.2 billion year to date. The company has also made discretionary contributions of $1.7 billion to employee benefit programs during this time.
Page 2
Verizon is on track to deliver against a goal to achieve $10 billion in cumulative cash savings by 2021. This initiative includes zero-based budgeting, which has yielded approximately $1.3 billion of cumulative cash savings on a year-to-date basis, and the recently announced Voluntary Separation Program.
In Verizon’s media business, Oath revenues were $1.8 billion in third-quarter 2018, 6.9 percent below the same quarter last year. The company expects Oath revenues to be relatively flat in the near term and does not expect to meet the previous target of $10 billion in Oath revenues by 2020. In the telematics business, total Verizon Connect revenues, excluding the impact of the revenue recognition standard, were $241 million in third-quarter 2018. IoT (Internet of Things) revenues, including Verizon Connect, increased approximately 12 percent year over year, excluding the impact of the revenue recognition standard.
Net income was $5.1 billion in third-quarter 2018. EBITDA (non-GAAP, earnings before interest, taxes, depreciation and amortization) totaled $12.3 billion. For third-quarter 2018, consolidated operating income margin was 23.5 percent. Consolidated EBITDA margin (non-GAAP) was 37.6 percent in third-quarter 2018, compared with 34.5 percent in third-quarter 2017. Adjusted EBITDA margin (non-GAAP) in third-quarter 2018 was 37.4 percent. Excluding the impact of the revenue recognition standard, adjusted EBITDA margin (non-GAAP) was 36.3 percent.
Wireless results
• | Total revenues were $23.0 billion, an increase of 6.5 percent year over year. Excluding the impact of the revenue recognition standard, total revenues were $22.9 billion in third-quarter 2018, an increase of 6.1 percent compared with third-quarter 2017. |
• | Service revenues for the quarter on a reported basis grew 0.8 percent year over year. Excluding the impact of the revenue recognition standard, service revenues grew 2.6 percent year over year, driven by customer step-ups to higher access plans and increases in the average connections per account. |
• | In third-quarter 2018, approximately 83 percent of Verizon’s postpaid phone base were on unsubsidized plans, compared with 78 percent in the same period last year. |
• | Verizon reported 515,000 retail postpaid net additions in third-quarter 2018, consisting of net phone additions of 295,000, postpaid smartphone net additions of 510,000, tablet losses of 80,000 and 300,000 other connected devices additions, primarily wearables. |
• | Total retail postpaid churn was 1.04 percent in third-quarter 2018, compared with 0.97 percent year over year. Retail postpaid phone churn was 0.80 percent in third-quarter 2018. The company expects retail postpaid phone churn to increase seasonally during fourth-quarter 2018. |
Page 3
• | Segment operating income in third-quarter 2018 was $8.5 billion, and segment operating income margin on total revenues was 37.0 percent. |
• | Segment EBITDA (non-GAAP) totaled $11.0 billion, an increase of 10.0 percent year over year, driven by a combination of service revenue growth and efficiencies gained within the business. Excluding the impact of the revenue recognition standard, segment EBITDA totaled $10.6 billion in third-quarter 2018. Segment EBITDA margin on total revenues (non-GAAP) was 47.7 percent, compared with 46.2 percent in third-quarter 2017. Excluding the impact of the revenue recognition standard, segment EBITDA margin was 46.4 percent. |
Wireline results
• | Total wireline revenues were $7.4 billion. Excluding the impact of the revenue recognition standard, total wireline revenues decreased 3.7 percent year over year in third-quarter 2018. |
• | Total Fios revenues were $3.0 billion. Excluding the impact of the revenue recognition standard, total Fios revenues increased 1.6 percent year over year in third-quarter 2018. |
• | In third-quarter 2018, Verizon added a net of 54,000 Fios Internet connections, indicative of continued strong customer demand for high quality internet connectivity. Verizon lost 63,000 Fios Video connections in third-quarter 2018, impacted by ongoing shifts away from linear video offerings. |
• | Wireline operating loss was $50 million in third-quarter 2018, and segment operating loss margin was 0.7 percent. Segment EBITDA (non-GAAP) was $1.5 billion in third-quarter 2018. Excluding the impact of the revenue recognition standard, segment EBITDA was $1.5 billion. Segment EBITDA margin (non-GAAP) was 20.4 percent in third-quarter 2018, compared with 21.1 percent in third-quarter 2017. Excluding the impact of the revenue recognition standard, segment EBITDA margin was 19.9 percent. |
Outlook and guidance
Verizon expects the following:
• | Full-year consolidated revenue growth at low-to-mid single-digit percentage rates on a GAAP reported basis. |
• | The impact of revenue recognition on EPS for full-year 2018 to be between 27 and 31 cents. The accretive benefit to full-year 2018 consolidated operating income is expected to moderate in 2019 and become insignificant in 2020, as the timing impacts to revenues and commission costs converge. |
• | Low single-digit percentage growth in adjusted EPS in 2018, before the net impact of tax reform and the revenue recognition standard. |
• | Capital spending for 2018 to be in the range of $16.6 billion to $17.0 billion. |
• | The effective tax rate for full-year 2018 to be at the low end of the range of 24 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.
Page 4
Verizon Communications Inc. (NYSE, Nasdaq: VZ), headquartered in New York City, generated $126 billion in 2017 revenues. The company operates America’s most reliable wireless network and the nation’s premier all-fiber network, and delivers integrated solutions to businesses worldwide. Its Oath subsidiary reaches people around the world with a dynamic house of media and technology brands.
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Forward-looking statements
In this communication we have made forward-looking statements. These statements are based on our estimates and assumptions and are subject to risks and uncertainties. Forward-looking statements include the information concerning our possible or assumed future results of operations. Forward-looking statements also include those preceded or followed by the words “anticipates,” “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.
Page 5
Verizon Communications Inc.
Condensed Consolidated Statements of Income
(dollars in millions, except per share amounts)
Unaudited | 3 Mos. Ended 9/30/18 | 3 Mos. Ended 9/30/17 | % Change | 9 Mos. Ended 9/30/18 | 9 Mos. Ended 9/30/17 | % Change | ||||||||||||||||
Operating Revenues | ||||||||||||||||||||||
Service revenues and other | $ | 27,254 | $ | 27,365 | (0.4 | ) | $ | 81,145 | $ | 79,665 | 1.9 | |||||||||||
Wireless equipment revenues | 5,353 | 4,352 | 23.0 | 15,437 | 12,414 | 24.4 | ||||||||||||||||
Total Operating Revenues | 32,607 | 31,717 | 2.8 | 96,582 | 92,079 | 4.9 | ||||||||||||||||
Operating Expenses | ||||||||||||||||||||||
Cost of services | 7,842 | 8,009 | (2.1 | ) | 24,022 | 22,697 | 5.8 | |||||||||||||||
Wireless cost of equipment | 5,489 | 4,965 | 10.6 | 16,195 | 14,808 | 9.4 | ||||||||||||||||
Selling, general and administrative expense | 7,224 | 7,483 | (3.5 | ) | 21,673 | 20,112 | 7.8 | |||||||||||||||
Depreciation and amortization expense | 4,377 | 4,272 | 2.5 | 13,051 | 12,498 | 4.4 | ||||||||||||||||
Total Operating Expenses | 24,932 | 24,729 | 0.8 | 74,941 | 70,115 | 6.9 | ||||||||||||||||
Operating Income | 7,675 | 6,988 | 9.8 | 21,641 | 21,964 | (1.5 | ) | |||||||||||||||
Equity in losses of unconsolidated businesses | (3 | ) | (22 | ) | (86.4 | ) | (250 | ) | (71 | ) | * | |||||||||||
Other income (expense), net | 214 | (291 | ) | * | 499 | (719 | ) | * | ||||||||||||||
Interest expense | (1,211 | ) | (1,164 | ) | 4.0 | (3,634 | ) | (3,514 | ) | 3.4 | ||||||||||||
Income Before Provision For Income Taxes | 6,675 | 5,511 | 21.1 | 18,256 | 17,660 | 3.4 | ||||||||||||||||
Provision for income taxes | (1,613 | ) | (1,775 | ) | (9.1 | ) | (4,282 | ) | (5,893 | ) | (27.3 | ) | ||||||||||
Net Income | $ | 5,062 | $ | 3,736 | 35.5 | $ | 13,974 | $ | 11,767 | 18.8 | ||||||||||||
Net income attributable to noncontrolling interests | $ | 138 | $ | 116 | 19.0 | $ | 385 | $ | 335 | 14.9 | ||||||||||||
Net income attributable to Verizon | 4,924 | 3,620 | 36.0 | 13,589 | 11,432 | 18.9 | ||||||||||||||||
Net Income | $ | 5,062 | $ | 3,736 | 35.5 | $ | 13,974 | $ | 11,767 | 18.8 | ||||||||||||
Basic Earnings Per Common Share | ||||||||||||||||||||||
Net income attributable to Verizon | $ | 1.19 | $ | 0.89 | 33.7 | $ | 3.29 | $ | 2.80 | 17.5 | ||||||||||||
Weighted average number of common shares (in millions) | 4,136 | 4,084 | 4,125 | 4,083 | ||||||||||||||||||
Diluted Earnings Per Common Share (1) | ||||||||||||||||||||||
Net income attributable to Verizon | $ | 1.19 | $ | 0.89 | 33.7 | $ | 3.29 | $ | 2.80 | 17.5 | ||||||||||||
Weighted average number of common shares-assuming dilution (in millions) | 4,140 | 4,089 | 4,129 | 4,088 | ||||||||||||||||||
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 | 9/30/18 | 12/31/17 | $ Change | |||||||||
Assets | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | $ | 2,538 | $ | 2,079 | $ | 459 | ||||||
Accounts receivable, net | 24,012 | 23,493 | 519 | |||||||||
Inventories | 1,270 | 1,034 | 236 | |||||||||
Prepaid expenses and other | 5,334 | 3,307 | 2,027 | |||||||||
Total current assets | 33,154 | 29,913 | 3,241 | |||||||||
Property, plant and equipment | 252,030 | 246,498 | 5,532 | |||||||||
Less accumulated depreciation | 164,566 | 157,930 | 6,636 | |||||||||
Property, plant and equipment, net | 87,464 | 88,568 | (1,104 | ) | ||||||||
Investments in unconsolidated businesses | 732 | 1,039 | (307 | ) | ||||||||
Wireless licenses | 94,006 | 88,417 | 5,589 | |||||||||
Goodwill | 29,200 | 29,172 | 28 | |||||||||
Other intangible assets, net | 9,731 | 10,247 | (516 | ) | ||||||||
Other assets | 11,275 | 9,787 | 1,488 | |||||||||
Total assets | $ | 265,562 | $ | 257,143 | $ | 8,419 | ||||||
Liabilities and Equity | ||||||||||||
Current liabilities | ||||||||||||
Debt maturing within one year | $ | 6,502 | $ | 3,453 | $ | 3,049 | ||||||
Accounts payable and accrued liabilities | 19,342 | 21,232 | (1,890 | ) | ||||||||
Other current liabilities | 8,323 | 8,352 | (29 | ) | ||||||||
Total current liabilities | 34,167 | 33,037 | 1,130 | |||||||||
Long-term debt | 106,440 | 113,642 | (7,202 | ) | ||||||||
Employee benefit obligations | 19,660 | 22,112 | (2,452 | ) | ||||||||
Deferred income taxes | 35,712 | 31,232 | 4,480 | |||||||||
Other liabilities | 13,496 | 12,433 | 1,063 | |||||||||
Total long-term liabilities | 175,308 | 179,419 | (4,111 | ) | ||||||||
Equity | ||||||||||||
Common stock | 429 | 424 | 5 | |||||||||
Additional paid in capital | 13,436 | 11,101 | 2,335 | |||||||||
Retained earnings | 44,091 | 35,635 | 8,456 | |||||||||
Accumulated other comprehensive income | 3,201 | 2,659 | 542 | |||||||||
Common stock in treasury, at cost | (6,987 | ) | (7,139 | ) | 152 | |||||||
Deferred compensation – employee stock ownership plans and other | 325 | 416 | (91 | ) | ||||||||
Noncontrolling interests | 1,592 | 1,591 | 1 | |||||||||
Total equity | 56,087 | 44,687 | 11,400 | |||||||||
Total liabilities and equity | $ | 265,562 | $ | 257,143 | $ | 8,419 | ||||||
Verizon - Selected Financial and Operating Statistics
Unaudited | 9/30/18 | 12/31/17 | ||||||
Total debt (in millions) | $ | 112,942 | $ | 117,095 | ||||
Net debt (in millions) | $ | 110,404 | $ | 115,016 | ||||
Net debt / Consolidated Adjusted EBITDA(1) | 2.4x | 2.6x | ||||||
Common shares outstanding end of period (in millions) | 4,132 | 4,079 | ||||||
Total employees (‘000) | 152.3 | 155.4 | ||||||
Quarterly cash dividends declared per common share | $ | 0.6025 | $ | 0.5900 | ||||
Footnotes:
(1) | Consolidated adjusted EBITDA excludes the effects of non-operational items, special items and operating results of divested businesses. |
Verizon Communications Inc.
Condensed Consolidated Statements of Cash Flows
(dollars in millions)
Unaudited | 9 Mos. Ended 9/30/18 | 9 Mos. Ended 9/30/17 | $ Change | |||||||||
Cash Flows from Operating Activities | ||||||||||||
Net Income | $ | 13,974 | $ | 11,767 | $ | 2,207 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization expense | 13,051 | 12,498 | 553 | |||||||||
Employee retirement benefits | (886 | ) | (334 | ) | (552 | ) | ||||||
Deferred income taxes | 2,023 | 2,577 | (554 | ) | ||||||||
Provision for uncollectible accounts | 699 | 842 | (143 | ) | ||||||||
Equity in losses of unconsolidated businesses, net of dividends received | 291 | 100 | 191 | |||||||||
Net gain on sale of divested businesses | — | (1,774 | ) | 1,774 | ||||||||
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses | (1,944 | ) | (6,257 | ) | 4,313 | |||||||
Discretionary employee benefits contributions | (1,679 | ) | (3,411 | ) | 1,732 | |||||||
Other, net | 715 | 467 | 248 | |||||||||
Net cash provided by operating activities | 26,244 | 16,475 | 9,769 | |||||||||
Cash Flows from Investing Activities | ||||||||||||
Capital expenditures (including capitalized software) | (12,026 | ) | (11,282 | ) | (744 | ) | ||||||
Acquisitions of businesses, net of cash acquired | (39 | ) | (6,247 | ) | 6,208 | |||||||
Acquisitions of wireless licenses | (1,307 | ) | (469 | ) | (838 | ) | ||||||
Proceeds from dispositions of businesses | — | 3,614 | (3,614 | ) | ||||||||
Other, net | 236 | 1,397 | (1,161 | ) | ||||||||
Net cash used in investing activities | (13,136 | ) | (12,987 | ) | (149 | ) | ||||||
Cash Flows from Financing Activities | ||||||||||||
Proceeds from long-term borrowings | 5,932 | 21,915 | (15,983 | ) | ||||||||
Proceeds from asset-backed long-term borrowings | 3,216 | 2,878 | 338 | |||||||||
Repayments of long-term borrowings and capital lease obligations | (9,776 | ) | (16,457 | ) | 6,681 | |||||||
Repayments of asset-backed long-term borrowings | (2,915 | ) | — | (2,915 | ) | |||||||
Dividends paid | (7,283 | ) | (7,067 | ) | (216 | ) | ||||||
Other, net | (1,595 | ) | (2,866 | ) | 1,271 | |||||||
Net cash used in financing activities | (12,421 | ) | (1,597 | ) | (10,824 | ) | ||||||
Increase in cash, cash equivalents and restricted cash | 687 | 1,891 | (1,204 | ) | ||||||||
Cash, cash equivalents and restricted cash, beginning of period | 2,888 | 3,177 | (289 | ) | ||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 3,575 | $ | 5,068 | $ | (1,493 | ) | |||||
Footnotes:
Certain amounts have been reclassified to conform to the current period presentation.
Verizon Communications Inc.
Wireless – Selected Financial Results
(dollars in millions)
Unaudited | 3 Mos. Ended 9/30/18 | 3 Mos. Ended 9/30/17 | % Change | 9 Mos. Ended 9/30/18 | 9 Mos. Ended 9/30/17 | % Change | ||||||||||||||||
Operating Revenues | ||||||||||||||||||||||
Service | $ | 15,966 | $ | 15,841 | 0.8 | $ | 47,122 | $ | 47,241 | (0.3 | ) | |||||||||||
Equipment | 5,353 | 4,352 | 23.0 | 15,437 | 12,414 | 24.4 | ||||||||||||||||
Other | 1,654 | 1,387 | 19.3 | 4,763 | 4,085 | 16.6 | ||||||||||||||||
Total Operating Revenues | 22,973 | 21,580 | 6.5 | 67,322 | 63,740 | 5.6 | ||||||||||||||||
Operating Expenses | ||||||||||||||||||||||
Cost of services | 2,350 | 2,270 | 3.5 | 6,900 | 6,676 | 3.4 | ||||||||||||||||
Cost of equipment | 5,489 | 4,965 | 10.6 | 16,195 | 14,808 | 9.4 | ||||||||||||||||
Selling, general and administrative expense | 4,169 | 4,376 | (4.7 | ) | 12,052 | 13,116 | (8.1 | ) | ||||||||||||||
Depreciation and amortization expense | 2,454 | 2,366 | 3.7 | 7,341 | 7,051 | 4.1 | ||||||||||||||||
Total Operating Expenses | 14,462 | 13,977 | 3.5 | 42,488 | 41,651 | 2.0 | ||||||||||||||||
Operating Income | $ | 8,511 | $ | 7,603 | 11.9 | $ | 24,834 | $ | 22,089 | 12.4 | ||||||||||||
Operating Income Margin | 37.0 | % | 35.2 | % | 36.9 | % | 34.7 | % | ||||||||||||||
Segment EBITDA | $ | 10,965 | $ | 9,969 | 10.0 | $ | 32,175 | $ | 29,140 | 10.4 | ||||||||||||
Segment EBITDA Margin | 47.7 | % | 46.2 | % | 47.8 | % | 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 business unit performance.
Intersegment transactions have not been eliminated.
Verizon Communications Inc.
Wireless – Selected Operating Statistics
Unaudited | 9/30/18 | 9/30/17 | % Change | |||||||||||||||||||
Connections (‘000) | ||||||||||||||||||||||
Retail postpaid | 112,135 | 109,686 | 2.2 | |||||||||||||||||||
Retail prepaid | 4,736 | 5,588 | (15.2 | ) | ||||||||||||||||||
Total retail | 116,871 | 115,274 | 1.4 | |||||||||||||||||||
Unaudited | 3 Mos. Ended 9/30/18 | 3 Mos. Ended 9/30/17 | % Change | 9 Mos. Ended 9/30/18 | 9 Mos. Ended 9/30/17 | % Change | ||||||||||||||||
Net Add Detail (‘000) (1) | ||||||||||||||||||||||
Retail postpaid | 515 | 603 | (14.6 | ) | 1,306 | 910 | 43.5 | |||||||||||||||
Retail prepaid | (96 | ) | 139 | * | (667 | ) | 141 | * | ||||||||||||||
Total retail | 419 | 742 | (43.5 | ) | 639 | 1,051 | (39.2 | ) | ||||||||||||||
Account Statistics | ||||||||||||||||||||||
Retail postpaid accounts (‘000) (2) | 35,309 | 35,364 | (0.2 | ) | ||||||||||||||||||
Retail postpaid connections per account (2) | 3.18 | 3.10 | 2.6 | |||||||||||||||||||
Retail postpaid ARPA (3) (5) | $ | 136.58 | $ | 136.31 | 0.2 | $ | 134.28 | $ | 136.06 | (1.3 | ) | |||||||||||
Retail postpaid I-ARPA (4) (5) | $ | 170.92 | $ | 166.98 | 2.4 | $ | 167.98 | $ | 165.98 | 1.2 | ||||||||||||
Churn Detail | ||||||||||||||||||||||
Retail postpaid | 1.04 | % | 0.97 | % | 1.02 | % | 1.02 | % | ||||||||||||||
Retail | 1.22 | % | 1.19 | % | 1.23 | % | 1.25 | % | ||||||||||||||
Retail Postpaid Connection Statistics (2) | ||||||||||||||||||||||
Total smartphone postpaid phone base | 91.7 | % | 89.4 | % | ||||||||||||||||||
Total Internet postpaid base | 19.4 | % | 18.6 | % | ||||||||||||||||||
Other Operating Statistics | ||||||||||||||||||||||
Capital expenditures (in millions) | $ | 2,127 | $ | 2,652 | (19.8 | ) | $ | 6,144 | $ | 6,927 | (11.3 | ) | ||||||||||
Footnotes:
(1) | Connection net additions exclude acquisitions and adjustments. |
(2) | Statistics presented as of end of period. |
(3) | Retail postpaid ARPA - average service revenue per account from retail postpaid accounts. |
(4) | Retail postpaid I-ARPA - average service revenue per account from retail postpaid account plus recurring device installment billings. |
(5) | ARPA and I-ARPA for periods beginning after January 1, 2018 reflect the adoption of Accounting Standard Update 2014-09, “Revenue from Contracts with Customers (Topic 606)”. ARPA and I-ARPA for periods ending prior to January 1, 2018 were calculated based on the guidance per ASC Topic 605, "Revenue Recognition". Accordingly, amounts are not calculated on a comparative basis. |
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 business unit performance.
Intersegment transactions have not been eliminated.
* | Not meaningful |
Verizon Communications Inc.
Wireline – Selected Financial Results
(dollars in millions)
Unaudited | 3 Mos. Ended 9/30/18 | 3 Mos. Ended 9/30/17 | % Change | 9 Mos. Ended 9/30/18 | 9 Mos. Ended 9/30/17 | % Change | ||||||||||||||||
Operating Revenues | ||||||||||||||||||||||
Consumer Markets | $ | 3,138 | $ | 3,204 | (2.1 | ) | $ | 9,420 | $ | 9,589 | (1.8 | ) | ||||||||||
Enterprise Solutions | 2,172 | 2,262 | (4.0 | ) | 6,623 | 6,882 | (3.8 | ) | ||||||||||||||
Partner Solutions | 1,166 | 1,244 | (6.3 | ) | 3,594 | 3,708 | (3.1 | ) | ||||||||||||||
Business Markets | 840 | 903 | (7.0 | ) | 2,561 | 2,700 | (5.1 | ) | ||||||||||||||
Other | 55 | 49 | 12.2 | 189 | 184 | 2.7 | ||||||||||||||||
Total Operating Revenues | 7,371 | 7,662 | (3.8 | ) | 22,387 | 23,063 | (2.9 | ) | ||||||||||||||
Operating Expenses | ||||||||||||||||||||||
Cost of services | 4,371 | 4,496 | (2.8 | ) | 13,223 | 13,457 | (1.7 | ) | ||||||||||||||
Selling, general and administrative expense | 1,498 | 1,552 | (3.5 | ) | 4,554 | 4,716 | (3.4 | ) | ||||||||||||||
Depreciation and amortization expense | 1,552 | 1,549 | 0.2 | 4,610 | 4,572 | 0.8 | ||||||||||||||||
Total Operating Expenses | 7,421 | 7,597 | (2.3 | ) | 22,387 | 22,745 | (1.6 | ) | ||||||||||||||
Operating Income (Loss) | $ | (50 | ) | $ | 65 | * | $ | — | $ | 318 | * | |||||||||||
Operating Income (Loss) Margin | (0.7 | )% | 0.8 | % | — | % | 1.4 | % | ||||||||||||||
Segment EBITDA | $ | 1,502 | $ | 1,614 | (6.9 | ) | $ | 4,610 | $ | 4,890 | (5.7 | ) | ||||||||||
Segment EBITDA Margin | 20.4 | % | 21.1 | % | 20.6 | % | 21.2 | % | ||||||||||||||
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 business unit performance.
Intersegment transactions have not been eliminated.
* | Not meaningful |
Verizon Communications Inc.
Wireline – Selected Operating Statistics
Unaudited | 09/30/18 | 09/30/17 | % Change | |||||||||||||||||||
Connections (‘000) | ||||||||||||||||||||||
Fios video connections | 4,497 | 4,648 | (3.2 | ) | ||||||||||||||||||
Fios Internet connections | 6,013 | 5,803 | 3.6 | |||||||||||||||||||
Fios digital voice residence connections | 3,833 | 3,920 | (2.2 | ) | ||||||||||||||||||
Fios digital connections | 14,343 | 14,371 | (0.2 | ) | ||||||||||||||||||
High-speed Internet (HSI) connections | 945 | 1,175 | (19.6 | ) | ||||||||||||||||||
Total broadband connections | 6,958 | 6,978 | (0.3 | ) | ||||||||||||||||||
Total voice connections | 12,009 | 13,100 | (8.3 | ) | ||||||||||||||||||
Unaudited | 3 Mos. Ended 9/30/18 | 3 Mos. Ended 9/30/17 | % Change | 9 Mos. Ended 9/30/18 | 9 Mos. Ended 9/30/17 | % Change | ||||||||||||||||
Net Add Detail (‘000) | ||||||||||||||||||||||
Fios video connections | (63 | ) | (18 | ) | * | (122 | ) | (46 | ) | * | ||||||||||||
Fios Internet connections | 54 | 66 | (18.2 | ) | 163 | 150 | 8.7 | |||||||||||||||
Fios digital voice residence connections | (30 | ) | 11 | * | (72 | ) | 25 | * | ||||||||||||||
Fios digital connections | (39 | ) | 59 | * | (31 | ) | 129 | * | ||||||||||||||
High-speed Internet (HSI) connections | (52 | ) | (76 | ) | 31.6 | (164 | ) | (210 | ) | 21.9 | ||||||||||||
Total broadband connections | 2 | (10 | ) | * | (1 | ) | (60 | ) | 98.3 | |||||||||||||
Total voice connections | (261 | ) | (252 | ) | (3.6 | ) | (812 | ) | (839 | ) | 3.2 | |||||||||||
Revenue Statistics | ||||||||||||||||||||||
Fios revenues (in millions) | $ | 2,986 | $ | 2,942 | 1.5 | $ | 8,893 | $ | 8,732 | 1.8 | ||||||||||||
Other Operating Statistics | ||||||||||||||||||||||
Capital expenditures (in millions) | $ | 1,551 | $ | 1,208 | 28.4 | $ | 4,400 | $ | 3,358 | 31.0 | ||||||||||||
Wireline employees (‘000) | 57.0 | 58.2 | ||||||||||||||||||||
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 business unit performance.
Intersegment transactions have not been eliminated.
* | Not meaningful |
Verizon Communications Inc.
Supplemental Information - Impact of Topic 606
We adopted Accounting Standard Update 2014-09, “Revenue from Contracts with Customers (Topic 606)” on January 1, 2018, using the modified retrospective application. This method does not impact the prior periods, which continue to reflect the accounting treatment prior to the adoption of Topic 606. As a result, for items that were affected by our adoption of Topic 606, financial results of periods prior to January 1, 2018 are not comparable to the current period financial results. To provide comparability to our results, we provide the following supplemental schedule which contains certain financial information on a pre adoption of Topic 606 basis.
Consolidated
(dollars in millions)
3 Mos. Ended 9/30/18 | 3 Mos. Ended 9/30/17 | Year Over Year | |||||||||||||||||||||
Unaudited | As reported | Balances without adoption of Topic 606 | Adjustments | As reported | $ Change | % Change | |||||||||||||||||
Operating Revenues | |||||||||||||||||||||||
Service revenues and other | $ | 27,254 | $ | 27,582 | $ | (328 | ) | $ | 27,365 | $ | 217 | 0.8 | |||||||||||
Wireless equipment revenues | 5,353 | 4,950 | 403 | 4,352 | 598 | 13.7 | |||||||||||||||||
Total Operating Revenues | 32,607 | 32,532 | 75 | 31,717 | 815 | 2.6 | |||||||||||||||||
Operating Expenses | |||||||||||||||||||||||
Cost of services | 7,842 | 7,853 | (11 | ) | 8,009 | (156 | ) | (1.9 | ) | ||||||||||||||
Wireless cost of equipment | 5,489 | 5,449 | 40 | 4,965 | 484 | 9.7 | |||||||||||||||||
Selling, general and administrative expense | 7,224 | 7,545 | (321 | ) | 7,483 | 62 | 0.8 | ||||||||||||||||
Depreciation and amortization expense | 4,377 | 4,377 | — | 4,272 | 105 | 2.5 | |||||||||||||||||
Total Operating Expenses | 24,932 | 25,224 | (292 | ) | 24,729 | 495 | 2.0 | ||||||||||||||||
Operating Income | $ | 7,675 | $ | 7,308 | $ | 367 | $ | 6,988 | $ | 320 | 4.6 | ||||||||||||
(dollars in millions)
9 Mos. Ended 9/30/18 | 9 Mos. Ended 9/30/17 | Year Over Year | |||||||||||||||||||||
Unaudited | As reported | Balances without adoption of Topic 606 | Adjustments | As reported | $ Change | % Change | |||||||||||||||||
Operating Revenues | |||||||||||||||||||||||
Service revenues and other | $ | 81,145 | $ | 82,184 | $ | (1,039 | ) | $ | 79,665 | $ | 2,519 | 3.2 | |||||||||||
Wireless equipment revenues | 15,437 | 14,134 | 1,303 | 12,414 | 1,720 | 13.9 | |||||||||||||||||
Total Operating Revenues | 96,582 | 96,318 | 264 | 92,079 | 4,239 | 4.6 | |||||||||||||||||
Operating Expenses | |||||||||||||||||||||||
Cost of services | 24,022 | 24,060 | (38 | ) | 22,697 | 1,363 | 6.0 | ||||||||||||||||
Wireless cost of equipment | 16,195 | 16,087 | 108 | 14,808 | 1,279 | 8.6 | |||||||||||||||||
Selling, general and administrative expense | 21,673 | 22,727 | (1,054 | ) | 20,112 | 2,615 | 13.0 | ||||||||||||||||
Depreciation and amortization expense | 13,051 | 13,051 | — | 12,498 | 553 | 4.4 | |||||||||||||||||
Total Operating Expenses | 74,941 | 75,925 | (984 | ) | 70,115 | 5,810 | 8.3 | ||||||||||||||||
Operating Income | $ | 21,641 | $ | 20,393 | $ | 1,248 | $ | 21,964 | $ | (1,571 | ) | (7.2 | ) | ||||||||||
Verizon Communications Inc.
Supplemental Information - Impact of Topic 606
Wireless(1)(2)
(dollars in millions)
3 Mos. Ended 9/30/18 | 3 Mos. Ended 9/30/17 | Year Over Year | |||||||||||||||||||||
Unaudited | As reported | Balances without adoption of Topic 606 | Adjustments | As reported | $ Change | % Change | |||||||||||||||||
Operating Revenues | |||||||||||||||||||||||
Service | $ | 15,966 | $ | 16,246 | $ | (280 | ) | $ | 15,841 | $ | 405 | 2.6 | |||||||||||
Equipment | 5,353 | 4,950 | 403 | 4,352 | 598 | 13.7 | |||||||||||||||||
Other | 1,654 | 1,699 | (45 | ) | 1,387 | 312 | 22.5 | ||||||||||||||||
Total Operating Revenues | 22,973 | 22,895 | 78 | 21,580 | 1,315 | 6.1 | |||||||||||||||||
Operating Expenses | |||||||||||||||||||||||
Cost of services | 2,350 | 2,350 | — | 2,270 | 80 | 3.5 | |||||||||||||||||
Cost of equipment | 5,489 | 5,449 | 40 | 4,965 | 484 | 9.7 | |||||||||||||||||
Selling, general and administrative expense | 4,169 | 4,463 | (294 | ) | 4,376 | 87 | 2.0 | ||||||||||||||||
Depreciation and amortization expense | 2,454 | 2,454 | — | 2,366 | 88 | 3.7 | |||||||||||||||||
Total Operating Expenses | 14,462 | 14,716 | (254 | ) | 13,977 | 739 | 5.3 | ||||||||||||||||
Operating Income | $ | 8,511 | $ | 8,179 | $ | 332 | $ | 7,603 | $ | 576 | 7.6 | ||||||||||||
(dollars in millions)
9 Mos. Ended 9/30/18 | 9 Mos. Ended 9/30/17 | Year Over Year | |||||||||||||||||||||
Unaudited | As reported | Balances without adoption of Topic 606 | Adjustments | As reported | $ Change | % Change | |||||||||||||||||
Operating Revenues | |||||||||||||||||||||||
Service | $ | 47,122 | $ | 48,039 | $ | (917 | ) | $ | 47,241 | $ | 798 | 1.7 | |||||||||||
Equipment | 15,437 | 14,134 | 1,303 | 12,414 | 1,720 | 13.9 | |||||||||||||||||
Other | 4,763 | 4,878 | (115 | ) | 4,085 | 793 | 19.4 | ||||||||||||||||
Total Operating Revenues | 67,322 | 67,051 | 271 | 63,740 | 3,311 | 5.2 | |||||||||||||||||
Operating Expenses | |||||||||||||||||||||||
Cost of services | 6,900 | 6,900 | — | 6,676 | 224 | 3.4 | |||||||||||||||||
Cost of equipment | 16,195 | 16,087 | 108 | 14,808 | 1,279 | 8.6 | |||||||||||||||||
Selling, general and administrative expense | 12,052 | 13,021 | (969 | ) | 13,116 | (95 | ) | (0.7 | ) | ||||||||||||||
Depreciation and amortization expense | 7,341 | 7,341 | — | 7,051 | 290 | 4.1 | |||||||||||||||||
Total Operating Expenses | 42,488 | 43,349 | (861 | ) | 41,651 | 1,698 | 4.1 | ||||||||||||||||
Operating Income | $ | 24,834 | $ | 23,702 | $ | 1,132 | $ | 22,089 | $ | 1,613 | 7.3 | ||||||||||||
Footnotes:
(1) The financial results above are adjusted to exclude the effects of special items, as the Company’s chief operating decision maker excludes these items in assessing business unit performance.
(2) Intersegment transactions have not been eliminated.
Verizon Communications Inc.
Supplemental Information - Impact of Topic 606
Wireline(1)(2)
(dollars in millions)
3 Mos. Ended 9/30/18 | 3 Mos. Ended 9/30/17 | Year Over Year | |||||||||||||||||||||
Unaudited | As reported | Balances without adoption of Topic 606 | Adjustments | As reported | $ Change | % Change | |||||||||||||||||
Operating Revenues | |||||||||||||||||||||||
Consumer Markets | $ | 3,138 | $ | 3,146 | $ | (8 | ) | $ | 3,204 | $ | (58 | ) | (1.8 | ) | |||||||||
Enterprise Solutions | 2,172 | 2,172 | — | 2,262 | (90 | ) | (4.0 | ) | |||||||||||||||
Partner Solutions | 1,166 | 1,166 | — | 1,244 | (78 | ) | (6.3 | ) | |||||||||||||||
Business Markets | 840 | 840 | — | 903 | (63 | ) | (7.0 | ) | |||||||||||||||
Other | 55 | 52 | 3 | 49 | 3 | 6.1 | |||||||||||||||||
Total Operating Revenues | 7,371 | 7,376 | (5 | ) | 7,662 | (286 | ) | (3.7 | ) | ||||||||||||||
Operating Expenses | |||||||||||||||||||||||
Cost of services | 4,371 | 4,380 | (9 | ) | 4,496 | (116 | ) | (2.6 | ) | ||||||||||||||
Selling, general and administrative expense | 1,498 | 1,526 | (28 | ) | 1,552 | (26 | ) | (1.7 | ) | ||||||||||||||
Depreciation and amortization expense | 1,552 | 1,552 | — | 1,549 | 3 | 0.2 | |||||||||||||||||
Total Operating Expenses | 7,421 | 7,458 | (37 | ) | 7,597 | (139 | ) | (1.8 | ) | ||||||||||||||
Operating Income (Loss) | $ | (50 | ) | $ | (82 | ) | $ | 32 | $ | 65 | $ | (147 | ) | * | |||||||||
(dollars in millions)
9 Mos. Ended 9/30/18 | 9 Mos. Ended 9/30/17 | Year Over Year | |||||||||||||||||||||
Unaudited | As reported | Balances without adoption of Topic 606 | Adjustments | As reported | $ Change | % Change | |||||||||||||||||
Operating Revenues | |||||||||||||||||||||||
Consumer Markets | $ | 9,420 | $ | 9,432 | $ | (12 | ) | $ | 9,589 | $ | (157 | ) | (1.6 | ) | |||||||||
Enterprise Solutions | 6,623 | 6,623 | — | 6,882 | (259 | ) | (3.8 | ) | |||||||||||||||
Partner Solutions | 3,594 | 3,594 | — | 3,708 | (114 | ) | (3.1 | ) | |||||||||||||||
Business Markets | 2,561 | 2,560 | 1 | 2,700 | (140 | ) | (5.2 | ) | |||||||||||||||
Other | 189 | 160 | 29 | 184 | (24 | ) | (13.0 | ) | |||||||||||||||
Total Operating Revenues | 22,387 | 22,369 | 18 | 23,063 | (694 | ) | (3.0 | ) | |||||||||||||||
Operating Expenses | |||||||||||||||||||||||
Cost of services | 13,223 | 13,255 | (32 | ) | 13,457 | (202 | ) | (1.5 | ) | ||||||||||||||
Selling, general and administrative expense | 4,554 | 4,642 | (88 | ) | 4,716 | (74 | ) | (1.6 | ) | ||||||||||||||
Depreciation and amortization expense | 4,610 | 4,610 | — | 4,572 | 38 | 0.8 | |||||||||||||||||
Total Operating Expenses | 22,387 | 22,507 | (120 | ) | 22,745 | (238 | ) | (1.0 | ) | ||||||||||||||
Operating Income (Loss) | $ | — | $ | (138 | ) | $ | 138 | $ | 318 | $ | (456 | ) | * | ||||||||||
Footnotes:
(1) The financial results above are adjusted to exclude the effects of special items, as the Company’s chief operating decision maker excludes these items in assessing business unit performance.
(2) Intersegment transactions have not been eliminated.
* | Not meaningful |
Verizon Communications Inc.
Supplemental Information - Impact of Topic 606
Fios Revenues
(dollars in millions)
3 Mos. Ended 9/30/18 | 3 Mos. Ended 9/30/17 | Year Over Year | |||||||||||||||||||||
Unaudited | As reported | Balances without adoption of Topic 606 | Adjustments | As reported | $ Change | % Change | |||||||||||||||||
Fios Revenues | $ | 2,986 | $ | 2,989 | $ | (3 | ) | $ | 2,942 | $ | 47 | 1.6 | |||||||||||
Verizon Communications Inc.
Non-GAAP Reconciliations - Consolidated Verizon
Consolidated EBITDA, Consolidated EBITDA Margin, Consolidated Adjusted EBITDA, Consolidated Adjusted EBITDA Margin and Consolidated Adjusted EBITDA Excluding Operating Results from Divested Businesses
(dollars in millions)
Unaudited | 3 Mos. Ended 9/30/18 | 3 Mos. Ended 6/30/18 | 3 Mos. Ended 3/31/18 | 3 Mos. Ended 12/31/17 | 3 Mos. Ended 9/30/17 | 3 Mos. Ended 6/30/17 | 3 Mos. Ended 3/31/17 | |||||||||||||||||||||
Consolidated Net Income | $ | 5,062 | $ | 4,246 | $ | 4,666 | $ | 18,783 | $ | 3,736 | $ | 4,478 | $ | 3,553 | ||||||||||||||
Add/(subtract): | ||||||||||||||||||||||||||||
Provision (benefit) for income taxes | 1,613 | 1,281 | 1,388 | (15,849 | ) | 1,775 | 2,489 | 1,629 | ||||||||||||||||||||
Interest expense | 1,211 | 1,222 | 1,201 | 1,219 | 1,164 | 1,218 | 1,132 | |||||||||||||||||||||
Depreciation and amortization expense | 4,377 | 4,350 | 4,324 | 4,456 | 4,272 | 4,167 | 4,059 | |||||||||||||||||||||
Consolidated EBITDA* | $ | 12,263 | $ | 11,099 | $ | 11,579 | $ | 8,609 | $ | 10,947 | $ | 12,352 | $ | 10,373 | ||||||||||||||
Add/subtract: | ||||||||||||||||||||||||||||
Other (income) expense, net† | $ | (214 | ) | $ | (360 | ) | $ | 75 | $ | 1,302 | $ | 291 | $ | (199 | ) | $ | 627 | |||||||||||
Equity in losses of unconsolidated businesses‡ | 3 | 228 | 19 | 6 | 22 | 28 | 21 | |||||||||||||||||||||
Severance charges | — | 339 | — | 302 | — | 195 | — | |||||||||||||||||||||
Product realignment charges§ | — | 450 | — | 463 | — | — | — | |||||||||||||||||||||
Gain on spectrum license transactions | — | — | — | (144 | ) | — | — | (126 | ) | |||||||||||||||||||
Net gain on sale of divested businesses | — | — | — | — | — | (1,774 | ) | — | ||||||||||||||||||||
Acquisition and integration related charges§ | 130 | 109 | 105 | 154 | 166 | 559 | — | |||||||||||||||||||||
(81 | ) | 766 | 199 | 2,083 | 479 | (1,191 | ) | 522 | ||||||||||||||||||||
Consolidated Adjusted EBITDA | 12,182 | 11,865 | 11,778 | 10,692 | 11,426 | 11,161 | 10,895 | |||||||||||||||||||||
Operating results from divested businesses§ | — | — | — | — | (17 | ) | (50 | ) | (104 | ) | ||||||||||||||||||
Consolidated Adjusted EBITDA Excluding Operating Results from Divested Businesses | $ | 12,182 | $ | 11,865 | $ | 11,778 | $ | 10,692 | $ | 11,409 | $ | 11,111 | $ | 10,791 | ||||||||||||||
Consolidated Operating Revenues - Quarter to Date | $ | 32,607 | $ | 31,717 | ||||||||||||||||||||||||
Operating Income Margin - Quarter to Date | 23.5 | % | 22.0 | % | ||||||||||||||||||||||||
Consolidated EBITDA Margin - Quarter to Date | 37.6 | % | 34.5 | % | ||||||||||||||||||||||||
Consolidated Adjusted EBITDA Margin - Quarter to Date | 37.4 | % | 36.0 | % | ||||||||||||||||||||||||
* | Prior period figures have been amended to conform to the current period's calculation of Consolidated EBITDA. |
† | 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. |
Verizon Communications Inc.
Non-GAAP Reconciliations - Consolidated Verizon
Net Debt and Net Debt to Consolidated Adjusted EBITDA Ratio
(dollars in millions)
Unaudited | 9/30/18 | 12/31/17 | ||||||
Net Debt | ||||||||
Debt maturing within one year | $ | 6,502 | $ | 3,453 | ||||
Long-term debt | 106,440 | 113,642 | ||||||
Total Debt | 112,942 | 117,095 | ||||||
Less Cash and cash equivalents | 2,538 | 2,079 | ||||||
Net Debt | $ | 110,404 | $ | 115,016 | ||||
Net Debt to Consolidated Adjusted EBITDA Ratio | 2.4x | 2.6x | ||||||
Adjusted Earnings per Common Share (Adjusted EPS)(1)
(dollars in millions, except per share amounts)
Unaudited | 3 Mos. Ended 9/30/18 | 3 Mos. Ended 9/30/17 | ||||||||||||||||||||||
Pre-tax | Tax | After-Tax | Pre-tax | Tax | After-Tax | |||||||||||||||||||
EPS | $ | 1.19 | $ | 0.89 | ||||||||||||||||||||
Severance, pension and benefits charges (credits) | $ | (454 | ) | $ | 119 | $ | (335 | ) | (0.08 | ) | $ | — | $ | — | $ | — | — | |||||||
Early debt redemption costs | 476 | (124 | ) | 352 | 0.09 | 454 | (180 | ) | 274 | 0.07 | ||||||||||||||
Acquisition and integration related charges | 137 | (34 | ) | 103 | 0.02 | 166 | (66 | ) | 100 | 0.02 | ||||||||||||||
$ | 159 | $ | (39 | ) | $ | 120 | 0.03 | $ | 620 | $ | (246 | ) | $ | 374 | 0.09 | |||||||||
Adjusted EPS | $ | 1.22 | $ | 0.98 | ||||||||||||||||||||
(1) | Adjusted EPS may not add due to rounding. |
Verizon Communications Inc.
Non-GAAP Reconciliations - Segments
Segment EBITDA and Segment EBITDA Margin
Wireless
(dollars in millions) | ||||||||
Unaudited | 3 Mos. Ended 9/30/18 | 3 Mos. Ended 9/30/17 | ||||||
Operating Income | $ | 8,511 | $ | 7,603 | ||||
Add Depreciation and amortization expense | 2,454 | 2,366 | ||||||
Segment EBITDA | $ | 10,965 | $ | 9,969 | ||||
Total operating revenues | $ | 22,973 | $ | 21,580 | ||||
Operating Income Margin | 37.0 | % | 35.2 | % | ||||
Segment EBITDA Margin | 47.7 | % | 46.2 | % | ||||
Wireline
(dollars in millions) | ||||||||
Unaudited | 3 Mos. Ended 9/30/18 | 3 Mos. Ended 9/30/17 | ||||||
Operating Income (Loss) | $ | (50 | ) | $ | 65 | |||
Add Depreciation and amortization expense | 1,552 | 1,549 | ||||||
Segment EBITDA | $ | 1,502 | $ | 1,614 | ||||
Total operating revenues | $ | 7,371 | $ | 7,662 | ||||
Operating Income (Loss) Margin | (0.7 | )% | 0.8 | % | ||||
Segment EBITDA Margin | 20.4 | % | 21.1 | % | ||||
Verizon Communications Inc.
EBITDA Excluding Impact of Topic 606(1)
Consolidated
(dollars in millions) | ||||
Unaudited | 3 Mos. Ended 9/30/18 | |||
Consolidated Net Income | $ | 5,062 | ||
Add: | ||||
Provision for income taxes | 1,613 | |||
Interest expense | 1,211 | |||
Depreciation and amortization expense | 4,377 | |||
Consolidated EBITDA | $ | 12,263 | ||
Add/subtract: | ||||
Other income, net† | $ | (214 | ) | |
Equity in losses of unconsolidated businesses‡ | 3 | |||
Acquisition and integration related charges§ | 130 | |||
(81 | ) | |||
Consolidated Adjusted EBITDA | 12,182 | |||
Less Impact of Topic 606 | 367 | |||
Consolidated Adjusted EBITDA Excluding Impact of Topic 606 | $ | 11,815 | ||
Total operating revenues | $ | 32,532 | ||
Consolidated Adjusted EBITDA Margin Excluding Impact of Topic 606 | 36.3 | % | ||
† | 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. |
Wireless
(dollars in millions) | ||||||||
Unaudited | 3 Mos. Ended 9/30/18 | 3 Mos. Ended 9/30/17 | ||||||
Operating Income | $ | 8,179 | $ | 7,603 | ||||
Add Depreciation and amortization expense | 2,454 | 2,366 | ||||||
Segment EBITDA | $ | 10,633 | $ | 9,969 | ||||
Total operating revenues | $ | 22,895 | $ | 21,580 | ||||
Segment EBITDA Margin | 46.4 | % | 46.2 | % | ||||
(1) Amounts for the three months ended September 30, 2018 exclude the impact of Accounting Standard Update 2014-09, “Revenue from Contracts with Customers (Topic 606)”, which we adopted on January 1, 2018.
Verizon Communications Inc.
EBITDA Excluding Impact of Topic 606(1)
Wireline
(dollars in millions) | ||||
Unaudited | 3 Mos. Ended 9/30/18 | |||
Operating Loss | $ | (82 | ) | |
Add Depreciation and amortization expense | 1,552 | |||
Segment EBITDA | $ | 1,470 | ||
Total operating revenues | $ | 7,376 | ||
Segment EBITDA Margin | 19.9 | % | ||
(1) Amounts for the three months ended September 30, 2018 exclude the impact of Accounting Standard Update 2014-09, “Revenue from Contracts with Customers (Topic 606)”, which we adopted on January 1, 2018.