• Verizon reports strong 2Q and first-half 2019 results

    ソース: Nasdaq GlobeNewswire / 01 8 2019 06:55:09   America/New_York

    Company sees strong customer loyalty and increased net wireless customer additions with seamless transition to new customer-focused operating structure

    As previously disclosed, beginning second quarter 2019, Verizon will report financial and operational results under its new reporting structure, Verizon 2.0. Under this structure, there are two reportable segments that the company operates and manages as strategic business units: Consumer and Business. Verizon previously reported results for its Wireless and Wireline segments. For comparison purposes, results for both the current and previous operating structures are presented below.

    2Q 2019 highlights

    Consolidated:

    • 95 cents in earnings per share (EPS), compared with $1.00 in 2Q 2018; adjusted EPS (non-GAAP), excluding a special item, of $1.23, compared with $1.20 in 2Q 2018.

    Consumer:

    • Total revenue of $22.0 billion.
    • 126,000 retail postpaid net additions, including 73,000 phone net additions and 209,000 postpaid smartphone net additions.
    • Total retail postpaid churn of 0.97 percent, and retail postpaid phone churn of 0.72 percent.
    • 28,000 Fios Internet net additions.

    Business:

    • Total revenue of $7.8 billion.
    • 325,000 retail postpaid net additions, including 172,000 phone net additions.
    • Retail postpaid churn of 1.21 percent, and retail postpaid phone churn of 0.97 percent.

    Wireless (non-GAAP):

    • Total revenue growth of 1.0 percent year over year to $22.7 billion, driven by a 3.1 percent increase in service revenue.
    • 451,000 retail postpaid net additions, including 420,000 postpaid smartphone net additions, and 245,000 phone net additions, an increase from the 199,000 phone net additions in second-quarter 2018.
    • Retail postpaid churn of 1.02 percent, and industry-leading retail postpaid phone churn of 0.76 percent.

    Wireline (non-GAAP):

    • Total revenue of $7.1 billion.
    • 34,000 Fios Internet net additions; Fios total revenue growth of 1.9 percent year over year.

    NEW YORK, Aug. 01, 2019 (GLOBE NEWSWIRE) -- Verizon Communications Inc. (NYSE, Nasdaq: VZ) today reported strong second-quarter 2019 results highlighted by an increase in net wireless customer additions, continued customer loyalty and industry-leading wireless products and services.

    "Verizon finished strong in the first half of 2019 by delivering solid financial results while transforming the business under the new operating structure and advancing our leadership in 5G," said Chairman and CEO Hans Vestberg. "Verizon made history this quarter by becoming the first carrier in the world to launch 5G mobility. We are focused on optimizing our next-generation networks and enhancing the customer experience while we head into the second half of the year with great momentum."

    For second-quarter 2019, Verizon reported EPS of 95 cents, compared with $1.00 in second-quarter 2018. On an adjusted basis (non-GAAP), second-quarter 2019 EPS, excluding a special item, was $1.23, compared with adjusted EPS of $1.20 in second-quarter 2018. Verizon’s second-quarter 2019 EPS included 28 cents in early debt redemption costs.

    In second-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 year-over-year headwind, which is included in the year-over-year increase in adjusted EPS.

    Consolidated results

    Total consolidated operating revenues in second-quarter 2019 were $32.1 billion, down 0.4 percent from second-quarter 2018. Wireless service revenue growth was offset by lower wireless equipment revenue and wireline service revenue.

    Cash flow from operations totaled $15.8 billion in second-quarter 2019, a decline of approximately $600 million year over year. Operational improvements in Verizon's businesses were offset by higher cash taxes and cash payments related to the Voluntary Separation Program.

    First half 2019 capital expenditures totaled $8.0 billion. Verizon's capital expenditures continue to support the launch and build-out of its 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.

    In 2018, Verizon announced a goal to achieve $10 billion in cumulative cash savings by 2021. This initiative has yielded $4.1 billion of cumulative cash savings since this program began. At the end of second-quarter 2019, Verizon completed the third and final phase of its Voluntary Separation Program and has realized approximately $480 million of expense savings year-to-date. The company expects additional incremental savings in third-quarter 2019, and is on track to achieve its cumulative cash savings goal.

    Net income was $4.1 billion in second-quarter 2019. EBITDA (non-GAAP, earnings before interest, taxes, depreciation and amortization) totaled approximately $10.8 billion. Consolidated operating income margin was 24.5 percent in second-quarter 2019, compared with 20.5 percent in second-quarter 2018. Consolidated EBITDA margin (non-GAAP) was 33.5 percent in second-quarter 2019, compared with 34.5 percent in second-quarter 2018. Adjusted EBITDA margin (non-GAAP) in second-quarter 2019 was 37.7 percent. Consolidated adjusted EBITDA (non-GAAP) in second-quarter 2019 was $12.1 billion, an increase of approximately $200 million year over year.

    Consumer results

    • Total Verizon Consumer revenues were $22.0 billion, flat year over year, reflecting 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 126,000 wireless retail postpaid net additions in second-quarter 2019, consisting of 73,000 phone net additions and tablet net losses of 134,000, offset by 187,000 other connected device net additions, primarily wearables. Postpaid smartphone net additions were 209,000, up 17 percent year over year, driven by a 5 percent year over year increase in phone gross additions.
    • Consumer wireless service revenues increased 2.5 percent in second-quarter 2019, driven by customer step-ups to higher-priced plans and an increase in connections per account.
    • Total retail postpaid churn was 0.97 percent in second-quarter 2019, and retail postpaid phone churn was 0.72 percent.
    • In second-quarter 2019, Verizon Consumer Group reported 28,000 Fios Internet net additions and 52,000 Fios Video net losses, reflecting the ongoing shift from traditional linear video to over-the-top offerings. Fios revenues increased by 1.2 percent, primarily due to the demand for broadband offerings.
    • Segment operating income was $7.3 billion, an increase of 3.9 percent year over year, and segment operating income margin was 33.4 percent. Segment EBITDA (non-GAAP) totaled $10.2 billion in second-quarter 2019, an increase of 1.6 percent year over year. Segment EBITDA margin (non-GAAP) was 46.5 percent, including approximately 100 basis points in headwinds from the deferral of commission expense and the lease accounting standard.

    Business results

    • Total Verizon Business revenues were $7.8 billion, down 1.1 percent year over year, as growth in wireless services and high quality fiber products was offset by declines in legacy products.
    • Verizon Business Group reported 325,000 wireless retail postpaid net additions in second-quarter 2019, consisting of 172,000 phone net additions, 90,000 tablet net additions and 63,000 other connected device additions.
    • Total retail postpaid churn was 1.21 percent in second-quarter 2019, and retail postpaid phone churn was 0.97 percent.
    • Segment operating income was $1.1 billion, a decrease of 2.7 percent year over year, and segment operating income margin was 13.8 percent. Segment EBITDA (non-GAAP) totaled $2.1 billion in second-quarter 2019, a decrease of 2.0 percent year over year. Segment EBITDA margin (non-GAAP) was 27.3 percent, down 20 basis points year over year due to declines in legacy wireline product revenues.

    Media results

    • Total Verizon Media revenues in second-quarter 2019 were $1.8 billion, down 2.9 percent year over year. This is an improvement from first-quarter 2019, when total Verizon Media revenues were down 7.2 percent year over year. Gains in native and mobile advertising continue to be offset by declines in desktop advertising.

    Outlook and guidance

    As outlined in Verizon's first-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.   

    The company now expects the 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 reliable 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 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.


    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    6 Mos. Ended 6 Mos. Ended   
    Unaudited 6/30/19 6/30/18 % Change 6/30/19 6/30/18 % Change
                 
    Operating Revenues            
    Global Enterprise $  2,673  $  2,808  (4.8) $  5,364  $  5,634  (4.8)
    Small and Medium Business    2,785     2,642  5.4     5,493     5,176  6.1 
    Public Sector and Other    1,492     1,437  3.8     2,963     2,867  3.3 
    Wholesale    818     964  (15.1)    1,667     1,957  (14.8)
    Total Operating Revenues    7,768     7,851  (1.1)    15,487     15,634  (0.9)
                 
    Operating Expenses            
    Cost of services    2,581     2,660  (3.0)    5,172     5,370  (3.7)
    Cost of wireless equipment    1,109     1,101  0.7     2,166     2,137  1.4 
    Selling, general and administrative expense    1,961     1,930  1.6     3,942     3,794  3.9 
    Depreciation and amortization expense    1,046     1,059  (1.2)    2,088     2,118  (1.4)
    Total Operating Expenses    6,697     6,750  (0.8)    13,368     13,419  (0.4)
                 
    Operating Income $  1,071  $  1,101  (2.7) $  2,119  $  2,215  (4.3)
    Operating Income Margin  13.8%  14.0%    13.7%  14.2%  
                 
    Segment EBITDA $  2,117  $  2,160  (2.0) $  4,207  $  4,333  (2.9)
    Segment EBITDA Margin  27.3%  27.5%    27.2%  27.7%  
                 
                 
    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.
                 
    * Not meaningful
                 



       
    Verizon Communications Inc.  
    Condensed Consolidated Balance Sheets  
           
      (dollars in millions)
    Unaudited6/30/19 12/31/18 $ Change
           
    Assets      
    Current assets      
    Cash and cash equivalents $  1,949  $  2,745  $  (796)
    Accounts receivable, net  24,926   25,102   (176)
    Inventories  1,167   1,336   (169)
    Prepaid expenses and other  5,266   5,453   (187)
    Total current assets  33,308   34,636   (1,328)
           
    Property, plant and equipment  257,395   252,835   4,560 
    Less accumulated depreciation  169,577   163,549   6,028 
    Property, plant and equipment, net  87,818   89,286   (1,468)
    Investments in unconsolidated businesses  650   671   (21)
    Wireless licenses  94,333   94,130   203 
    Goodwill  24,632   24,614   18 
    Other intangible assets, net  9,474   9,775   (301)
    Operating lease right-of-use assets  22,467   0   22,467 
    Other assets  10,426   11,717   (1,291)
    Total assets $  283,108  $  264,829  $  18,279 
           
    Liabilities and Equity      
    Current liabilities      
    Debt maturing within one year $  8,773  $  7,190  $  1,583 
    Accounts payable and accrued liabilities  17,633   22,501   (4,868)
    Current operating lease liabilities  3,154   0   3,154 
    Other current liabilities  8,654   8,239   415 
    Total current liabilities  38,214   37,930   284 
           
    Long-term debt  104,598   105,873   (1,275)
    Employee benefit obligations  18,040   18,599   (559)
    Deferred income taxes  34,225   33,795   430 
    Non-current operating lease liabilities  18,254   0   18,254 
    Other liabilities  11,830   13,922   (2,092)
    Total long-term liabilities  186,947   172,189   14,758 
           
    Equity      
    Common stock  429   429   0 
    Additional paid in capital  13,419   13,437   (18)
    Retained earnings  47,945   43,542   4,403 
    Accumulated other comprehensive income  1,447   2,370   (923)
    Common stock in treasury, at cost  (6,823)  (6,986)  163 
    Deferred compensation – employee stock ownership plans and other  165   353   (188)
    Noncontrolling interests  1,365   1,565   (200)
    Total equity  57,947   54,710   3,237 
    Total liabilities and equity $  283,108  $  264,829  $  18,279 
           
           
    Verizon -Selected Financial and Operating Statistics
      (dollars in millions, except per share amounts)  
           
    Unaudited6/30/19 12/31/18  
           
    Total debt $  113,371  $  113,063   
    Net debt $  111,422  $  110,318   
    Net unsecured debt $  100,170  $  100,242   
    Net debt / Consolidated Adjusted EBITDA(1) 2.3x 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)   135.9    144.5   
    Quarterly cash dividends declared per common share $  0.6025  $  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)
      6 Mos. Ended 6 Mos. Ended  
    Unaudited6/30/19 6/30/18 $ Change
           
    Cash Flows from Operating Activities      
    Net Income $  9,234  $  8,912  $  322 
    Adjustments to reconcile net income to net cash provided by operating activities:      
    Depreciation and amortization expense    8,463     8,674     (211)
    Employee retirement benefits    (294)    (300)    6 
    Deferred income taxes    588     1,354     (766)
    Provision for uncollectible accounts    738     462     276 
    Equity in losses of unconsolidated businesses, net of dividends received    50     268     (218)
    Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses    (4,593)    (1,538)    (3,055)
    Discretionary employee benefits contributions    (300)    (1,679)    1,379 
    Other, net    1,950     280     1,670 
    Net cash provided by operating activities    15,836     16,433     (597)
           
    Cash Flows from Investing Activities      
    Capital expenditures (including capitalized software)    (7,967)    (7,838)    (129)
    Acquisitions of businesses, net of cash acquired    (28)    (38)    10 
    Acquisitions of wireless licenses    (199)    (1,155)    956 
    Other, net    (395)    303     (698)
    Net cash used in investing activities    (8,589)    (8,728)    139 
           
    Cash Flows from Financing Activities      
    Proceeds from long-term borrowings    6,237     4,584     1,653 
    Proceeds from asset-backed long-term borrowings    3,982     1,716     2,266 
    Repayments of long-term borrowings and finance lease obligations    (9,630)    (6,568)    (3,062)
    Repayments of asset-backed long-term borrowings    (2,817)    (2,000)    (817)
    Dividends paid    (4,981)    (4,845)    (136)
    Other, net    (834)    (752)    (82)
    Net cash used in financing activities    (8,043)    (7,865)    (178)
           
    Decrease in cash, cash equivalents and restricted cash    (796)    (160)    (636)
    Cash, cash equivalents and restricted cash, beginning of period    3,916     2,888     1,028 
    Cash, cash equivalents and restricted cash, end of period $  3,120  $  2,728  $  392 
           



                
    Verizon Communications Inc.
    Consumer - Selected Financial Results
                 
       (dollars in millions)
                 
      3 Mos. Ended 3 Mos. Ended   6 Mos. Ended 6 Mos. Ended  
    Unaudited6/30/19 6/30/18 % Change 6/30/19 6/30/18 % Change
                 
    Operating Revenues            
    Service $  16,350  $  16,049    1.9  $  32,609  $  31,873    2.3 
    Wireless equipment  3,903   4,251    (8.2)  8,069   8,521    (5.3)
    Other  1,742   1,703    2.3   3,465   3,236    7.1 
    Total Operating Revenues  21,995   22,003    -    44,143   43,630    1.2 
                 
    Operating Expenses            
    Cost of services  3,847   3,842    0.1   7,726   7,615    1.5 
    Cost of wireless equipment  3,909   4,296    (9.0)  8,051   8,569    (6.0)
    Selling, general and administrative expense  4,022   3,808    5.6   8,005   7,479    7.0 
    Depreciation and amortization expense  2,881   2,997    (3.9)  5,775   5,972    (3.3)
    Total Operating Expenses $  14,659  $  14,943    (1.9) $  29,557  $  29,635    (0.3)
                 
    Operating Income $  7,336  $  7,060    3.9  $  14,586  $  13,995    4.2 
    Operating Income Margin  33.4%  32.1%    33.0%  32.1%  
                 
    Segment EBITDA $  10,217  $  10,057    1.6  $  20,361  $  19,967    2.0 
    Segment EBITDA Margin  46.5%  45.7%    46.1%  45.8%  
                 
                 
    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      6/30/19 6/30/18 % Change
                 
    Connections (‘000):            
    Wireless retail postpaid connections          89,630     88,984  0.7 
    Wireless retail prepaid connections          4,266     4,832  (11.7)
    Total wireless retail connections          93,896     93,816  0.1 
                 
    Fios video connections          4,270     4,487  (4.8)
    Fios Internet connections          5,837     5,663  3.1 
    Fios digital voice residence connections          3,725     3,863  (3.6)
    Fios digital connections          13,832     14,013  (1.3)
    Broadband connections          6,474     6,447  0.4 
    Voice connections          6,058     6,631  (8.6)
                 
                 
      3 Mos. Ended 3 Mos. Ended   6 Mos. Ended 6 Mos. Ended  
    Unaudited6/30/19 6/30/18 % Change 6/30/19 6/30/18 % Change
                 
    Gross Additions (‘000):            
    Wireless retail postpaid    2,725     2,617  4.1     5,439     5,251  3.6 
                 
    Net Additions Detail (‘000) (1):            
    Wireless retail postpaid    126     147  (14.3)    (75)    92  *
    Wireless retail prepaid    (213)    (236) 9.7     (389)    (571) 31.9 
    Total wireless retail    (87)    (89) 2.2     (464)    (479) 3.1 
                 
    Wireless retail postpaid phones    73     17  *    (90)    (136) 33.8 
                 
    Fios video    (52)    (38) (36.8)    (107)    (61) (75.4)
    Fios Internet    28     36  (22.2)    76     98  (22.4)
    Fios digital voice residence    (32)    (28) (14.3)    (77)    (42) (83.3)
    Fios digital    (56)    (30) (86.7)    (108)    (5) *
    Broadband    (2)    (7) 71.4     14     6  *
    Voice    (126)    (155) 18.7     (274)    (297) 7.7 
                 
    Churn Rate:            
    Wireless retail postpaid  0.97%  0.93%    1.03%  0.97%  
    Wireless retail postpaid phones  0.72%  0.71%    0.76%  0.74%  
    Wireless retail  1.23%  1.19%    1.28%  1.25%  
                 
    Revenue Statistics (in millions):            
    Wireless service revenue $  13,456  $  13,122  2.5  $  26,813  $  26,003  3.1 
    Fios revenues $  2,772  $  2,738  1.2  $  5,536  $  5,472  1.2 
                 
    Other Wireless Statistics:            
    Wireless retail postpaid ARPA (2) $  118.15  $  115.53  2.3  $  117.80  $  114.49  2.9 
    Wireless retail postpaid upgrade rate  4.3%  5.1%        
    Wireless retail postpaid accounts (‘000) (3)          33,924     34,045  (0.4)
    Wireless retail postpaid connections per account (3)        2.64   2.61  1.1 
                 
    Total wireless Internet postpaid base (3)        16.2%  15.9%  
                 
                 
    Footnotes:           
    (1)  Connection net additions exclude acquisitions and 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   6 Mos. Ended 6 Mos. Ended  
    Unaudited6/30/19 6/30/18 % Change 6/30/19 6/30/18 % Change
                 
    Operating Revenues            
    Global Enterprise $  2,673  $  2,808  (4.8) $  5,364  $  5,634  (4.8)
    Small and Medium Business    2,785     2,642  5.4     5,493     5,176  6.1 
    Public Sector and Other    1,492     1,437  3.8     2,963     2,867  3.3 
    Wholesale    818     964  (15.1)    1,667     1,957  (14.8)
    Total Operating Revenues    7,768     7,851  (1.1)    15,487     15,634  (0.9)
                 
    Operating Expenses            
    Cost of services    2,581     2,660  (3.0)    5,172     5,370  (3.7)
    Cost of wireless equipment    1,109     1,101  0.7     2,166     2,137  1.4 
    Selling, general and administrative expense    1,961     1,930  1.6     3,942     3,794  3.9 
    Depreciation and amortization expense    1,046     1,059  (1.2)    2,088     2,118  (1.4)
    Total Operating Expenses    6,697     6,750  (0.8)    13,368     13,419  (0.4)
                 
    Operating Income $  1,071  $  1,101  (2.7) $  2,119  $  2,215  (4.3)
    Operating Income Margin  13.8%  14.0%    13.7%  14.2%  
                 
    Segment EBITDA $  2,117  $  2,160  (2.0) $  4,207  $  4,333  (2.9)
    Segment EBITDA Margin  27.3%  27.5%    27.2%  27.7%  
                 
                 
    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.
    Business - Selected Operating Statistics
                 
    Unaudited      6/30/19 6/30/18 % Change
                 
    Connections (‘000):            
    Wireless retail postpaid connections          24,221     22,638  7.0 
                 
    Fios video connections          76     73  4.1 
    Fios Internet connections          316     296  6.8 
    Fios digital connections          392     369  6.2 
    Broadband connections          494     509  (2.9)
    Voice connections          5,163     5,639  (8.4)
                 
                 
      3 Mos. Ended 3 Mos. Ended   6 Mos. Ended 6 Mos. Ended  
    Unaudited 6/30/19 6/30/18 % Change 6/30/19 6/30/18 % Change
                 
    Gross Additions ('000):            
    Wireless retail postpaid    1,199     1,162  3.2    2,342     2,242   4.5 
                 
    Net Add Detail (‘000) (1):            
    Wireless retail postpaid    325     384  (15.4)    587     699  (16.0)
    Wireless retail postpaid phones    172     182  (5.5)    291     311  (6.4)
                 
    Fios video    -     1  *    2     2    - 
    Fios Internet    6     7  (14.3)    10     11  (9.1)
    Fios digital     6     8  (25.0)    12     13  (7.7)
    Broadband    (3)    (3)   -     (7)    (9) 22.2 
    Voice    (105)    (130) 19.2     (237)    (254) 6.7 
                 
    Churn Rate:            
    Wireless retail postpaid  1.21%  1.16%    1.23%  1.16%  
    Wireless retail postpaid phones  0.97%  0.96%    0.99%  0.96%  
                 
    Revenue Statistics (in millions):            
    Wireless service revenue $  2,775  $  2,615  6.1  $  5,469  $  5,116  6.9 
    Fios revenues $  239  $  218  9.6  $  482  $  435  10.8 
                 
    Other Operating Statistics:            
    Wireless retail postpaid upgrade rate  4.2%  4.6%        
    Total wireless Internet postpaid base (2)        33.5%  33.1%  
                 
                 
    Footnotes: 
    (1)  Connection net additions exclude acquisitions and 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. 
                 
    * Not meaningful 
                 



       
    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
    6/30/19
     3 Mos. Ended
    6/30/18
     %
    Change
     6 Mos. Ended
    6/30/19
     6 Mos. Ended
    6/30/18
     %
    Change
                 
    Operating Revenues            
    Service $  16,244  $  15,754    3.1  $  32,316  $  31,156    3.7 
    Equipment    4,720     5,044    (6.4)    9,651     10,084    (4.3)
    Other    1,718     1,651    4.1     3,415     3,109    9.8 
    Total Operating Revenues    22,682     22,449    1.0     45,382     44,349    2.3 
                 
    Operating Expenses            
    Cost of services    2,422     2,335    3.7     4,878     4,550    7.2 
    Cost of equipment    5,019     5,397    (7.0)    10,217     10,706    (4.6)
    Selling, general and administrative expense    4,318     3,984    8.4     8,599     7,883    9.1 
    Depreciation and amortization expense    2,282     2,459    (7.2)    4,581     4,887    (6.3)
    Total Operating Expenses    14,041     14,175    (0.9)    28,275     28,026    0.9 
                 
    Operating Income $  8,641  $  8,274    4.4  $  17,107  $  16,323    4.8 
    Operating Income Margin  38.1%  36.9%    37.7%  36.8%  
                 
    Segment EBITDA $  10,923  $  10,733    1.8  $  21,688  $  21,210    2.3 
    Segment EBITDA Margin  48.2%  47.8%    47.8%  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 6/30/19 6/30/18 % Change
                 
    Connections (‘000)            
    Retail postpaid          113,851     111,622    2.0 
    Retail prepaid          4,266     4,832    (11.7)
    Total retail          118,117     116,454    1.4 
                 
                 
    Unaudited 3 Mos. Ended
    6/30/19
     3 Mos. Ended
    6/30/18
     %
    Change
     6 Mos. Ended
    6/30/19
     6 Mos. Ended
    6/30/18
     %
    Change
                 
    Net Add Detail (‘000) (1)            
    Retail postpaid    451     531    (15.1)    512     791    (35.3)
    Retail prepaid    (213)    (236)   9.7     (389)    (571)   31.9 
    Total retail    238     295    (19.3)    123     220    (44.1)
                 
    Account Statistics            
    Retail postpaid accounts (‘000) (2)          35,346     35,309    0.1 
    Retail postpaid connections per account (2)          3.22     3.16    1.9 
    Retail postpaid ARPA (3) (4) $  137.80  $  134.56    2.4  $  137.24  $  133.13    3.1 
                 
    Churn Detail            
    Retail postpaid  1.02%  0.97%    1.07%  1.01%  
    Retail  1.22%  1.18%    1.27%  1.23%  
                 
    Retail Postpaid Connection Statistics (2)            
    Total smartphone postpaid phone base        93.1%  91.2%  
    Total Internet postpaid base        19.8%  19.4%  
                 
                 
    Footnotes:            
    (1)  Connection net additions exclude acquisitions and 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. 
                 
    * Not meaningful 
                 

     

     
    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
    6/30/19
     3 Mos. Ended
    6/30/18
     %
    Change
     6 Mos. Ended
    6/30/19
     6 Mos. Ended
    6/30/18
     %
    Change
                 
    Operating Revenues            
    Consumer Markets $  3,120  $  3,132    (0.4) $  6,273  $  6,282    (0.1)
    Enterprise Solutions    2,084     2,211    (5.7)    4,224     4,451    (5.1)
    Partner Solutions    1,043     1,200    (13.1)    2,118     2,428    (12.8)
    Business Markets    820     850    (3.5)    1,648     1,721    (4.2)
    Other    59     66    (10.6)    127     134    (5.2)
    Total Operating Revenues    7,126     7,459    (4.5)    14,390     15,016    (4.2)
                 
    Operating Expenses            
    Cost of services    4,197     4,377    (4.1)    8,383     8,852    (5.3)
    Selling, general and administrative expense    1,553     1,577    (1.5)    3,159     3,056    3.4 
    Depreciation and amortization expense    1,566     1,524    2.8     3,126     3,058    2.2 
    Total Operating Expenses    7,316     7,478    (2.2)    14,668     14,966    (2.0)
                 
    Operating Income (Loss) $  (190) $  (19)  *  $  (278) $  50   * 
    Operating Income (Loss) Margin  (2.7)%  (0.3)%    (1.9)%  0.3%  
                 
    Segment EBITDA $  1,376  $  1,505    (8.6) $  2,848  $  3,108    (8.4)
    Segment EBITDA Margin  19.3%  20.2%    19.8%  20.7%  
                 
                 
    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       6/30/2019 6/30/2018 %
    Change
                 
    Connections (‘000)            
    Fios video connections          4,346     4,560    (4.7)
    Fios Internet connections          6,153     5,959    3.3 
    Fios digital voice residence connections          3,725     3,863    (3.6)
    Fios digital connections          14,224     14,382    (1.1)
    Broadband connections          6,968     6,956    0.2 
    Voice connections          11,221     12,270    (8.5)
                 
                 
    Unaudited 3 Mos. Ended
    6/30/19
     3 Mos. Ended
    6/30/18
     %
    Change
     6 Mos. Ended
    6/30/19
     6 Mos. Ended
    6/30/18
     %
    Change
                 
    Net Add Detail (‘000)            
    Fios video connections    (52)    (37)   (40.5)    (105)    (59)   (78.0)
    Fios Internet connections    34     43    (20.9)    86     109    (21.1)
    Fios digital voice residence connections    (32)    (28)   (14.3)    (77)    (42)   (83.3)
    Fios digital connections    (50)    (22)  *     (96)    8   * 
    Broadband connections    (5)    (10)   50.0     7     (3)  * 
    Voice connections    (232)    (285)   18.6     (511)    (551)   7.3 
                 
    Revenue Statistics            
    Fios revenues (in millions) $  3,011   $  2,956     1.9  $  6,018   $  5,907     1.9 
                 
     
    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
    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 $  4,074  $  5,160  $  2,065  $  5,062  $  4,246  $  4,666 
      Add/(subtract):            
    Provision (benefit) for income taxes    1,236     1,628     (698)    1,613     1,281     1,388 
    Interest expense    1,215     1,210     1,199     1,211     1,222     1,201 
    Depreciation and amortization expense    4,232     4,231     4,352     4,377     4,350     4,324 
    Consolidated EBITDA $  10,757  $  12,229  $  6,918  $  12,263  $  11,099  $  11,579 
                 
      Add/subtract:            
    Other (income) expense, net* $  1,312  $  (295) $  (1,865) $  (214) $  (360) $  75 
    Equity in losses (earnings) of unconsolidated businesses†    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 
         1,325     (289)    4,667     (81)    766     199 
                 
    Consolidated Adjusted EBITDA $  12,082  $  11,940  $  11,585  $  12,182  $  11,865  $  11,778 
    Consolidated Operating Revenues - Quarter to Date $  32,071        $  32,203   
    Operating Income $  7,850        $  6,617   
    Operating Income Margin - Quarter to Date  24.5%        20.5%  
    Consolidated EBITDA Margin - Quarter to Date  33.5%        34.5%  
    Consolidated Adjusted EBITDA Margin - Quarter to Date  37.7%        36.8%  
    Consolidated Adjusted EBITDA - Year Over Year Change $  217           
    Consolidated Adjusted EBITDA  - Year Over Year Change %  1.8%          
                 
                 
    *  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       6/30/19 12/31/18
               
    Debt maturing within one year       $  8,773  $  7,190 
    Long-term debt          104,598     105,873 
    Total Debt          113,371     113,063 
    Less Cash and cash equivalents          1,949     2,745 
    Net Debt       $  111,422  $  110,318 
    Net Debt to Consolidated Adjusted EBITDA Ratio       2.3x 2.3x
               
               
    Net Unsecured Debt and Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio       
      (dollars in millions)
    Unaudited       6/30/19 12/31/18
               
    Total Debt       $  113,371  $  113,063 
    Less Secured debt          11,252     10,076 
    Unsecured debt          102,119     102,987 
    Less Cash and cash equivalents          1,949     2,745 
    Net Unsecured Debt       $  100,170  $  100,242 
    Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio      2.1x 2.1x
               
               
    Adjusted Earnings per Common Share (Adjusted EPS)(1)        
               
    Unaudited 3 Mos. Ended
    6/30/19
      3 Mos. Ended
    6/30/18
     Pre-taxTaxAfter-Tax Pre-taxTax After-Tax  
    EPS   $  0.95      $  1.00 
    Severance charges$  -$  - $  -   - $  339$  (89) $  250     0.06 
    Acquisition and integration-related charges   -   -    -   -    120   (28)    92     0.02 
    Early debt redemption costs   1,544   (404)   1,140   0.28    -   -     -     - 
    Product realignment charges   -   -    -   -    658   (149)    509     0.12 
     $  1,544$  (404)$  1,140   0.28 $  1,117$  (266) $  851     0.20 
    Adjusted EPS   $  1.23      $  1.20 
               
               
    (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
    6/30/19
     3 Mos. Ended
    6/30/18
         
    Operating Income $  7,336  $  7,060 
    Add Depreciation and amortization expense    2,881     2,997 
    Segment EBITDA $  10,217  $  10,057 
    Year over year change  1.6%  
         
    Total operating revenues $  21,995  $  22,003 
    Operating Income Margin  33.4%  32.1%
    Segment EBITDA Margin  46.5%  45.7%
         
         
    Business (dollars in millions)
         
    Unaudited 3 Mos. Ended
    6/30/19
     3 Mos. Ended
    6/30/18
         
    Operating Income $  1,071  $  1,101 
    Add Depreciation and amortization expense    1,046     1,059 
    Segment EBITDA $  2,117  $  2,160 
         
    Total operating revenues $  7,768  $  7,851 
    Operating Income Margin  13.8%  14.0%
    Segment EBITDA Margin  27.3%  27.5%
    Segment EBITDA Margin - Year Over Year Change (20) bps  
         

     

    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 6/30/19 
      (dollars in millions)
     VZ 2.0Historical
     ConsumerBusinessTotal
    Reportable
    Segments
    Adjustments
    (2)
    Adjusted
    Total
    Reportable
    Segments
    WirelessWirelineHistorical
    Total
    Reportable
    Segments
    UnauditedServiceEquipmentOtherTotal
    Wireless
    Consumer
    Markets
    Enterprise
    Solutions
    Partner
    Solutions
    Business
    Markets
    OtherTotal
    Wireline
    External Operating Revenues                
      Total Operating Revenues$  21,995 $  7,768 $  29,763$  45 $  29,808$  16,244$  4,720$  1,718$  22,682 $  3,120$  2,084$  1,043$  820$  59$  7,126 $  29,808
                     
    Operating Expenses                
      Cost of services   3,847    2,581    6,428   191    6,619      2,422         4,197    6,619
      Cost of wireless equipment   3,909    1,109    5,018   1    5,019      5,019         -    5,019
      Selling, general and administrative expense   4,022    1,961    5,983   (112)   5,871      4,318         1,553    5,871
      Depreciation and amortization expense   2,881    1,046    3,927   (79)   3,848      2,282         1,566    3,848
    Total Operating Expenses   14,659    6,697    21,356   1    21,357      14,041         7,316    21,357
    Operating Income$  7,336 $  1,071 $  8,407$  44 $  8,451   $  8,641      $  (190)$  8,451
      Add Depreciation and amortization expense   2,881    1,046    3,927   (79)   3,848      2,282         1,566    3,848
    Segment EBITDA$  10,217 $  2,117 $  12,334$  (35)$  12,299   $  10,923      $  1,376 $  12,299
    Operating Income Margin 33.4% 13.8%       38.1%      (2.7)% 
    Segment EBITDA Margin 46.5% 27.3%       48.2%      19.3% 
                     
    Footnotes:  
    (1) Information presented for VZ 2.0 and historical financial results includes intersegment transactions. 
    (2) Adjustment represents intersegment revenues 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 6/30/18 
      (dollars in millions)
     VZ 2.0Historical
     ConsumerBusinessTotal
    Reportable
    Segments
    Adjustments
    (2)
    Adjusted
    Total
    Reportable
    Segments
    WirelessWirelineHistorical
    Total
    Reportable
    Segments
    UnauditedServiceEquipmentOtherTotal
    Wireless
    Consumer
    Markets
    Enterprise
    Solutions
    Partner
    Solutions
    Business
    Markets
    OtherTotal
    Wireline
    External Operating Revenues                
      Total Operating Revenues$  22,003 $  7,851 $  29,854$  54 $  29,908$  15,754$  5,044$  1,651$  22,449 $  3,132$  2,211$  1,200$  850$  66$  7,459 $  29,908
                     
    Operating Expenses                
      Cost of services   3,842    2,660    6,502   210    6,712      2,335         4,377    6,712
      Cost of wireless equipment   4,296    1,101    5,397  —     5,397      5,397        —     5,397
      Selling, general and administrative expense   3,808    1,930    5,738   (177)   5,561      3,984         1,577    5,561
      Depreciation and amortization expense   2,997    1,059    4,056   (73)   3,983      2,459         1,524    3,983
    Total Operating Expenses   14,943    6,750    21,693   (40)   21,653      14,175         7,478    21,653
    Operating Income$  7,060 $  1,101 $  8,161$  94 $  8,255   $  8,274      $  (19)$  8,255
      Add Depreciation and amortization expense   2,997    1,059    4,056   (73)   3,983      2,459         1,524    3,983
    Segment EBITDA$  10,057 $  2,160 $  12,217$  21 $  12,238   $  10,733      $  1,505 $  12,238
    Operating Income Margin 32.1% 14.0%       36.9%      (0.3)% 
    Segment EBITDA Margin 45.7% 27.5%       47.8%      20.2% 
                     
                     
    Footnotes:   
    (1) Information presented for VZ 2.0 and historical financial results includes intersegment transactions. 
    (2) Adjustment represents intersegment revenues 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. 
                     
                     
     6 Mos. Ended 6/30/19 
      (dollars in millions)
     VZ 2.0Historical
     ConsumerBusinessTotal
    Reportable
    Segments
    Adjustments
    (2)
    Adjusted
    Total
    Reportable
    Segments
    WirelessWirelineHistorical
    Total
    Reportable
    Segments
    UnauditedServiceEquipmentOtherTotal
    Wireless
    Consumer
    Markets
    Enterprise
    Solutions
    Partner
    Solutions
    Business
    Markets
    OtherTotal
    Wireline
    External Operating Revenues                
      Total Operating Revenues$  44,143 $  15,487 $  59,630$  142 $  59,772$  32,316$  9,651$  3,415$  45,382 $  6,273$  4,224$  2,118$  1,648$  127$  14,390 $  59,772
                     
    Operating Expenses                
      Cost of services   7,726    5,172    12,898   363    13,261      4,878         8,383    13,261
      Cost of wireless equipment   8,051    2,166    10,217  —     10,217      10,217        —     10,217
      Selling, general and administrative expense   8,005    3,942    11,947   (189)   11,758      8,599         3,159    11,758
      Depreciation and amortization expense   5,775    2,088    7,863   (156)   7,707      4,581         3,126    7,707
    Total Operating Expenses   29,557    13,368    42,925   18    42,943      28,275         14,668    42,943
    Operating Income$  14,586 $  2,119 $  16,705$  124 $  16,829   $  17,107      $  (278)$  16,829
      Add Depreciation and amortization expense   5,775    2,088    7,863   (156)   7,707      4,581         3,126    7,707
    Segment EBITDA$  20,361 $  4,207 $  24,568$  (32)$  24,536   $  21,688      $  2,848 $  24,536
    Operating Income Margin 33.0% 13.7%       37.7%      (1.9)% 
    Segment EBITDA Margin 46.1% 27.2%       47.8%      19.8% 
                     
                     
    Footnotes:                
    (1) Information presented for VZ 2.0 and historical financial results includes intersegment transactions. 
    (2) Adjustment represents intersegment revenues 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. 
                     
                     
     6 Mos. Ended 6/30/18 
      (dollars in millions)
     VZ 2.0Historical
     ConsumerBusinessTotal
    Reportable
    Segments
    Adjustments
    (2)
    Adjusted
    Total
    Reportable
    Segments
    WirelessWirelineHistorical
    Total
    Reportable
    Segments
    UnauditedServiceEquipmentOtherTotal
    Wireless
    Consumer
    Markets
    Enterprise
    Solutions
    Partner
    Solutions
    Business
    Markets
    OtherTotal
    Wireline
    External Operating Revenues                
      Total Operating Revenues$  43,630 $  15,634 $  59,264$  101 $  59,365$  31,156$  10,084$  3,109$  44,349 $  6,282$  4,451$  2,428$  1,721$  134$  15,016 $  59,365
                     
    Operating Expenses                
      Cost of services   7,615    5,370    12,985   417    13,402      4,550         8,852    13,402
      Cost of wireless equipment   8,569    2,137    10,706  —     10,706      10,706        —     10,706
      Selling, general and administrative expense   7,479    3,794    11,273   (334)   10,939      7,883         3,056    10,939
      Depreciation and amortization expense   5,972    2,118    8,090   (145)   7,945      4,887         3,058    7,945
    Total Operating Expenses   29,635    13,419    43,054   (62)   42,992      28,026         14,966    42,992
    Operating Income$