NEW YORK, April 20, 2017 /PRNewswire/ —
1Q 2017 highlights
- Consolidated: 84 cents in earnings per share (EPS) and adjusted EPS (non-GAAP) of 95 cents, excluding non-operational items, compared with EPS of $1.06 in 1Q 2016.
- Wireless: Retail postpaid churn of 1.15 percent, with strong customer loyalty demonstrated by retail postpaid phone churn of less than 0.90 percent for the eighth consecutive quarter; intra-quarter improvement in net additions following the launch of Verizon Unlimited.
- Wireline: Fios total revenue growth of 4.7 percent.
Verizon Communications Inc. (NYSE, NASDAQ: VZ) today reported first-quarter 2017 results highlighted by strong wireless profitability and customer loyalty as the company introduced its Verizon Unlimited pricing option, and revenue growth for Fios broadband and Internet of Things (IoT) services.
“Our first-quarter results again demonstrated that customers value a high-quality network experience,” said Chairman and CEO Lowell McAdam. “To build on our loyal customer base and the third-party recognition we have received for network leadership, we extended our wireless and fiber network capabilities, began offering an unlimited pricing option and expanded our opportunities in new markets. We’re executing on strategies to capture future growth and create long-term shareholder value.”
Verizon reported first-quarter 2017 EPS of 84 cents. Adjusted first-quarter 2017 EPS (non-GAAP) of 95 cents included a net of 11 cents per share in early debt redemption costs and a gain on a spectrum license transaction. This compares with first-quarter 2016 earnings of $1.06 per share on both a reported and adjusted basis.
Consolidated results
Total consolidated operating revenues in first-quarter 2017 were $29.8 billion, a 7.3 percent decrease compared with first-quarter 2016. On a comparable basis excluding divestitures and acquisitions in the period (non-GAAP), consolidated revenue declined approximately 4.5 percent.
Net income was $3.6 billion in first-quarter 2017, and EBITDA (non-GAAP, earnings before interest, taxes, depreciation and amortization) totaled $11.2 billion. Consolidated operating income margin was 24.1 percent. Consolidated EBITDA margin (non-GAAP) was 37.7 percent in first-quarter 2017, compared with 37.2 percent in first-quarter 2016.
Cash flow from operations was $1.7 billion during the quarter, including $3.4 billion in discretionary pension contributions. As a result of the contributions, Verizon’s mandatory pension funding through 2020 is expected to be minimal, which will benefit future cash flows and improve the funded status of qualified pension plans.
Capital expenditures totaled $3.1 billion in first-quarter 2017, as Verizon maintained its network leadership.
In Verizon’s media business, AOL delivered solid seasonal performance in first-quarter 2017. Revenue, net of traffic acquisition costs, decreased about 4 percent, driven by a higher percentage of programmatic advertising.
Total telematics revenues were $214 million in first-quarter 2017. Organically, IoT revenues, which include telematics, increased approximately 17 percent year over year.
Verizon also completed its acquisition of XO Communications’ fiber assets in first-quarter 2017.
Wireless results
- The launch of Verizon Unlimited positively changed the trajectory of customer additions in the quarter. A net decline of 307,000 retail postpaid connections in first-quarter 2017 included 289,000 phone losses. Prior to the launch in mid-February, Verizon had a retail postpaid phone net loss of 398,000; after the launch, Verizon added 109,000 retail postpaid phone connections. For the entire quarter, Verizon added a net of 49,000 smartphones to its retail postpaid phone base.
- Verizon’s retail postpaid connections base grew 1.2 percent year over year to 108.5 million, and retail prepaid connections grew 0.5 percent to 5.4 million.
- Retail postpaid churn was 1.15 percent in first-quarter 2017, a year-over-year increase of 19 basis points primarily due to increased churn in tablets. Phone customer loyalty remained high, with retail postpaid phone churn of less than 0.90 percent for the eighth consecutive quarter.
- Total revenues were $20.9 billion in first-quarter 2017, a decline of 5.1 percent compared with first-quarter 2016, due to decreased overage revenue, lower postpaid customers in the quarter and continued promotional activity.
- At the end of first-quarter 2017, approximately 72 percent of postpaid phone customers were on a non-subsidized service pricing plan. The percentage of phone activations on device payment plans remained steady at about 76 percent in first-quarter 2017, compared with about 77 percent in fourth-quarter 2016. Verizon expects this rate to remain consistent in second-quarter 2017. Approximately 48 percent of postpaid phone customers had a device payment plan at the end of first-quarter 2017.
- In first-quarter 2017, overall traffic on LTE increased about 57 percent compared with first-quarter 2016, while Verizon extended its lead in the industry’s third-party network performance studies across the country.
- Segment operating income in first-quarter 2017 was $7.1 billion, and segment operating income margin on total revenues was 33.9 percent. Segment EBITDA (non-GAAP) totaled $9.4 billion in first-quarter 2017, a year-over-year decrease of 7.5 percent. Segment EBITDA margin on total revenues (non-GAAP) was 45.1 percent, compared with 46.2 percent in first-quarter 2016.
- As previously announced, Verizon plans to launch 11 pre-commercial 5G fixed wireless pilots during second-quarter 2017.
Wireline results
- Total wireline revenues declined 0.6 percent, to $7.9 billion, comparing first-quarter 2017 with first-quarter 2016. Consistent with recent trends and on a comparable basis (non-GAAP), this decline was 3.2 percent, excluding revenues from XO Communications in first-quarter 2017.
- Total Fios revenues grew 4.7 percent, to $2.9 billion, comparing first-quarter 2017 with first-quarter 2016. This supported revenue growth of 0.7 percent in consumer markets and 2.3 percent in business markets.
- In first-quarter 2017, Verizon added a net of 35,000 Fios Internet connections and lost a net of 13,000 Fios Video connections. At the end of first-quarter 2017, Verizon had 5.7 million Fios Internet connections and 4.7 million Fios Video connections, year-over-year increases of 3.3 percent and 0.1 percent, respectively.
- During the first quarter, Verizon Enterprise Solutions and Verizon Business Markets entered into new agreements or continued work with a number of clients, including Block Institute, the State of Connecticut, Georgetown University, HRC ManorCare and Xplor.
- Wireline operating income was $293 million in first-quarter 2017, compared with a loss of $67 million in first-quarter 2016. Segment operating income margin was 3.7 percent in first-quarter 2017. Segment EBITDA (non-GAAP) was $1.8 billion in first-quarter 2017, up 18.3 percent from first-quarter 2016. Segment EBITDA margin (non-GAAP) was 22.7 percent in first-quarter 2017, compared with 19.0 percent in first-quarter 2016.
Outlook and forward-looking items
Verizon expects the following:
- Full-year 2017 consolidated revenues, on an organic basis, to be fairly consistent with 2016, with improvement in wireless service revenue and equipment revenue trends; also, full-year 2017 consolidated adjusted EPS trends to be similar to consolidated revenue trends;
- Consolidated capital spending for 2017 in the range of $16.8 billion to $17.5 billion;
- The 2017 effective tax rate to be in the range of 34 percent to 36 percent, excluding impacts from potential tax reform; and
- That it is on track for a return by the 2018-2019 timeframe to the company’s credit-rating profile prior to the acquisition of Vodafone’s indirect 45 percent interest in Verizon Wireless in early 2014.
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, has a diverse workforce of 161,000 and generated nearly $126 billion in 2016 revenues. Verizon operates America’s most reliable wireless network, with 113.9 million retail connections nationwide. The company also provides communications and entertainment services over mobile broadband and the nation’s premier all-fiber network, and delivers integrated business solutions to customers worldwide.
VERIZON’S ONLINE MEDIA CENTER: News releases, 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,” “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. 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.
Important additional information and where to find it
On April 10, 2017, Yahoo! Inc. (“Yahoo”) filed with the Securities and Exchange Commission (the “SEC”) Amendment No. 2 to the preliminary proxy statement regarding the proposed sale of Yahoo’s operating business to Verizon Communications Inc. (“Verizon”) and related transactions. Yahoo will file with the SEC a definitive version of the proxy statement, which will be sent or provided to Yahoo stockholders when available. The information contained in the preliminary proxy statement is not complete and may be changed. BEFORE MAKING ANY VOTING DECISION, YAHOO’S STOCKHOLDERS ARE STRONGLY ADVISED TO READ YAHOO’S PROXY STATEMENT IN ITS ENTIRETY (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO WHEN THEY BECOME AVAILABLE) AND ANY OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTIONS OR INCORPORATED BY REFERENCE THEREIN BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS. Investors and stockholders can obtain a free copy of Yahoo’s proxy statement, any amendments or supplements to the proxy statement, and other documents filed by Yahoo with the SEC in connection with the proposed transactions for no charge at the SEC’s website at www.sec.gov, on the Investor Relations page of Yahoo’s website investor.yahoo.net or by writing to Investor Relations, Yahoo! Inc., 701 First Avenue, Sunnyvale, CA 94089.
Yahoo and its directors and executive officers, as well as Verizon and its directors and executive officers, may be deemed participants in the solicitation of proxies from Yahoo’s investors and stockholders in connection with the proposed transactions. Information concerning the ownership of Yahoo securities by Yahoo’s directors and executive officers is included in their SEC filings on Forms 3, 4 and 5, and additional information is also available in Yahoo’s annual report on Form 10-K for the year ended December 31, 2016, as amended, and Yahoo’s proxy statement for its 2016 annual meeting of stockholders filed with the SEC on May 23, 2016. Information about Verizon’s directors and executive officers is set forth in Verizon’s annual report on Form 10-K for the year ended December 31, 2016 and Verizon’s proxy statement for its 2017 annual meeting of stockholders filed with the SEC on March 20, 2017. Information regarding Yahoo’s directors, executive officers and other persons who may, under the rules of the SEC, be considered participants in the solicitation of proxies in connection with the proposed transactions, including their respective interests by security holdings or otherwise, also will be set forth in the definitive proxy statement relating to the proposed transactions when it is filed with the SEC. These documents may be obtained free of charge from the sources indicated above.
Media contact:
Bob Varettoni
908.559.6388
robert.a.varettoni@verizon.com
|
Verizon Communications Inc. |
||||||||
|
Condensed Consolidated Statements of Income |
||||||||
|
(dollars in millions, except per share amounts) |
||||||||
|
3 Mos. Ended |
3 Mos. Ended |
|||||||
|
Unaudited |
3/31/17 |
3/31/16 |
% Change |
|||||
|
Operating Revenues |
||||||||
|
Service revenues and other |
$ 26,050 |
$ 28,217 |
(7.7) |
|||||
|
Wireless equipment revenues |
3,764 |
3,954 |
(4.8) |
|||||
|
Total Operating Revenues |
29,814 |
32,171 |
(7.3) |
|||||
|
Operating Expenses |
||||||||
|
Cost of services |
6,858 |
7,614 |
(9.9) |
|||||
|
Wireless cost of equipment |
4,808 |
4,998 |
(3.8) |
|||||
|
Selling, general and administrative expense |
6,908 |
7,600 |
(9.1) |
|||||
|
Depreciation and amortization expense |
4,059 |
4,017 |
1.0 |
|||||
|
Total Operating Expenses |
22,633 |
24,229 |
(6.6) |
|||||
|
Operating Income |
7,181 |
7,942 |
(9.6) |
|||||
|
Equity in losses of unconsolidated businesses |
(21) |
(20) |
(5.0) |
|||||
|
Other income and (expense), net |
(846) |
32 |
* |
|||||
|
Interest expense |
(1,132) |
(1,188) |
4.7 |
|||||
|
Income Before Provision for Income Taxes |
5,182 |
6,766 |
(23.4) |
|||||
|
Provision for income taxes |
(1,629) |
(2,336) |
30.3 |
|||||
|
Net Income |
$ 3,553 |
$ 4,430 |
(19.8) |
|||||
|
Net income attributable to noncontrolling interests |
$ 103 |
$ 120 |
(14.2) |
|||||
|
Net income attributable to Verizon |
3,450 |
4,310 |
(20.0) |
|||||
|
Net Income |
$ 3,553 |
$ 4,430 |
(19.8) |
|||||
|
Basic Earnings per Common Share |
||||||||
|
Net income attributable to Verizon |
$ .85 |
$ 1.06 |
(19.8) |
|||||
|
Weighted average number of common shares (in millions) |
4,082 |
4,080 |
||||||
|
Diluted Earnings per Common Share (1) |
||||||||
|
Net income attributable to Verizon |
$ .84 |
$ 1.06 |
(20.8) |
|||||
|
Weighted average number of common |
||||||||
|
shares-assuming dilution (in millions) |
4,087 |
4,085 |
||||||
|
Footnotes: |
||||||||
|
(1) |
Diluted Earnings per Common Share includes the dilutive effect of shares issuable under our stock-based compensation plans, which represents the only potential dilution. |
|||||||
|
* |
Not meaningful |
|||||||
|
Verizon Communications Inc. |
|||||||
|
Condensed Consolidated Balance Sheets |
|||||||
|
(dollars in millions) |
|||||||
|
Unaudited |
3/31/17 |
12/31/16 |
$ Change |
||||
|
Assets |
|||||||
|
Current assets |
|||||||
|
Cash and cash equivalents |
$ 4,307 |
$ 2,880 |
$ 1,427 |
||||
|
Accounts receivable, net |
16,863 |
17,513 |
(650) |
||||
|
Inventories |
1,194 |
1,202 |
(8) |
||||
|
Assets held for sale |
149 |
882 |
(733) |
||||
|
Prepaid expenses and other |
4,645 |
3,918 |
727 |
||||
|
Total current assets |
27,158 |
26,395 |
763 |
||||
|
Plant, property and equipment |
235,550 |
232,215 |
3,335 |
||||
|
Less accumulated depreciation |
150,337 |
147,464 |
2,873 |
||||
|
85,213 |
84,751 |
462 |
|||||
|
Investments in unconsolidated businesses |
1,080 |
1,110 |
(30) |
||||
|
Wireless licenses |
87,754 |
86,673 |
1,081 |
||||
|
Goodwill |
27,630 |
27,205 |
425 |
||||
|
Other intangible assets, net |
8,912 |
8,897 |
15 |
||||
|
Non-current assets held for sale |
762 |
613 |
149 |
||||
|
Other assets |
8,222 |
8,536 |
(314) |
||||
|
Total Assets |
$ 246,731 |
$ 244,180 |
$ 2,551 |
||||
|
Liabilities and Equity |
|||||||
|
Current liabilities |
|||||||
|
Debt maturing within one year |
$ 3,707 |
$ 2,645 |
$ 1,062 |
||||
|
Accounts payable and accrued liabilities |
14,826 |
19,593 |
(4,767) |
||||
|
Other |
8,131 |
8,102 |
29 |
||||
|
Total current liabilities |
26,664 |
30,340 |
(3,676) |
||||
|
Long-term debt |
112,839 |
105,433 |
7,406 |
||||
|
Employee benefit obligations |
22,079 |
26,166 |
(4,087) |
||||
|
Deferred income taxes |
47,847 |
45,964 |
1,883 |
||||
|
Other liabilities |
12,265 |
12,245 |
20 |
||||
|
Equity |
|||||||
|
Common stock |
424 |
424 |
– |
||||
|
Contributed capital |
11,161 |
11,182 |
(21) |
||||
|
Reinvested earnings |
16,153 |
15,059 |
1,094 |
||||
|
Accumulated other comprehensive income |
2,609 |
2,673 |
(64) |
||||
|
Common stock in treasury, at cost |
(7,144) |
(7,263) |
119 |
||||
|
Deferred compensation – employee |
|||||||
|
stock ownership plans and other |
290 |
449 |
(159) |
||||
|
Noncontrolling interests |
1,544 |
1,508 |
36 |
||||
|
Total equity |
25,037 |
24,032 |
1,005 |
||||
|
Total Liabilities and Equity |
$ 246,731 |
$ 244,180 |
$ 2,551 |
||||
|
Verizon – Selected Financial and Operating Statistics |
|||||||
|
Unaudited |
3/31/17 |
12/31/16 |
|||||
|
Total debt (in millions) |
$ 116,546 |
$ 108,078 |
|||||
|
Net debt (in millions) |
$ 112,239 |
$ 105,198 |
|||||
|
Net debt / Adjusted EBITDA(1) |
2.6x |
2.4x |
|||||
|
Common shares outstanding end of period (in millions) |
4,079 |
4,077 |
|||||
|
Total employees (‘000) |
161.0 |
160.9 |
|||||
|
Quarterly cash dividends declared per common share |
$ 0.5775 |
$ 0.5775 |
|||||
|
Footnotes: |
|||||||
|
(1) |
Adjusted EBITDA excludes the effects of non-operational items and impact of divested businesses. |
||||||
|
Certain reclassifications of prior period amounts have been made, where appropriate, to conform to current period presentation. |
|||||||
|
Verizon Communications Inc. |
||||||
|
Condensed Consolidated Statements of Cash Flows |
||||||
|
(dollars in millions) |
||||||
|
3 Mos. Ended |
3 Mos. Ended |
|||||
|
Unaudited |
3/31/17 |
3/31/16 |
$ Change |
|||
|
Cash Flows from Operating Activities |
||||||
|
Net Income |
$ 3,553 |
$ 4,430 |
$ (877) |
|||
|
Adjustments to reconcile net income to net cash provided by |
||||||
|
operating activities: |
||||||
|
Depreciation and amortization expense |
4,059 |
4,017 |
42 |
|||
|
Employee retirement benefits |
(111) |
356 |
(467) |
|||
|
Deferred income taxes |
2,025 |
167 |
1,858 |
|||
|
Provision for uncollectible accounts |
330 |
353 |
(23) |
|||
|
Equity in losses of unconsolidated businesses, net of dividends received |
28 |
29 |
(1) |
|||
|
Changes in current assets and liabilities, net of effects from |
||||||
|
acquisition/disposition of businesses |
(4,694) |
(1,162) |
(3,532) |
|||
|
Discretionary contributions to qualified pension plans |
(3,411) |
– |
(3,411) |
|||
|
Other, net |
(98) |
(693) |
595 |
|||
|
Net cash provided by operating activities |
1,681 |
7,497 |
(5,816) |
|||
|
Cash Flows from Investing Activities |
||||||
|
Capital expenditures (including capitalized software) |
(3,067) |
(3,387) |
320 |
|||
|
Acquisitions of businesses, net of cash acquired |
(1,746) |
(161) |
(1,585) |
|||
|
Acquisitions of wireless licenses |
(196) |
(131) |
(65) |
|||
|
Other, net |
176 |
243 |
(67) |
|||
|
Net cash used in investing activities |
(4,833) |
(3,436) |
(1,397) |
|||
|
Cash Flows from Financing Activities |
||||||
|
Proceeds from long-term borrowings |
13,054 |
– |
13,054 |
|||
|
Proceeds from asset-backed long-term borrowings |
1,283 |
– |
1,283 |
|||
|
Repayments of long-term borrowings and capital lease obligations |
(5,592) |
(376) |
(5,216) |
|||
|
Decrease in short-term obligations, excluding current maturities |
(52) |
(40) |
(12) |
|||
|
Dividends paid |
(2,354) |
(2,302) |
(52) |
|||
|
Other, net |
(1,760) |
33 |
(1,793) |
|||
|
Net cash provided by (used in) financing activities |
4,579 |
(2,685) |
7,264 |
|||
|
Increase in cash and cash equivalents |
1,427 |
1,376 |
51 |
|||
|
Cash and cash equivalents, beginning of period |
2,880 |
4,470 |
(1,590) |
|||
|
Cash and cash equivalents, end of period |
$ 4,307 |
$ 5,846 |
$ (1,539) |
|||
|
Footnotes: |
||||||
|
Certain reclassifications of prior period amounts have been made, where appropriate, to conform to current period presentation. |
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|
Verizon Communications Inc. |
||||||||
|
Wireless – Selected Financial Results |
||||||||
|
(dollars in millions) |
||||||||
|
3 Mos. Ended |
3 Mos. Ended |
|||||||
|
Unaudited |
3/31/17 |
3/31/16 |
% Change |
|||||
|
Operating Revenues |
||||||||
|
Service |
$ 15,778 |
$ 16,809 |
(6.1) |
|||||
|
Equipment |
3,764 |
3,954 |
(4.8) |
|||||
|
Other |
1,336 |
1,241 |
7.7 |
|||||
|
Total Operating Revenues |
20,878 |
22,004 |
(5.1) |
|||||
|
Operating Expenses |
||||||||
|
Cost of services |
1,958 |
1,942 |
0.8 |
|||||
|
Cost of equipment |
4,808 |
4,998 |
(3.8) |
|||||
|
Selling, general and administrative expense |
4,698 |
4,891 |
(3.9) |
|||||
|
Depreciation and amortization expense |
2,338 |
2,293 |
2.0 |
|||||
|
Total Operating Expenses |
13,802 |
14,124 |
(2.3) |
|||||
|
Operating Income |
$ 7,076 |
$ 7,880 |
(10.2) |
|||||
|
Operating Income Margin |
33.9% |
35.8% |
||||||
|
Segment EBITDA |
$ 9,414 |
$ 10,173 |
(7.5) |
|||||
|
Segment EBITDA Margin |
45.1% |
46.2% |
||||||
|
Footnotes: |
||||||||
|
The segment financial results and metrics above are adjusted to exclude the effects of non-operational items, as the Company’s chief operating decision maker excludes these items in assessing business unit performance. |
||||||||
|
Intersegment transactions have not been eliminated. |
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|
Verizon Communications Inc. |
||||||||
|
Wireless – Selected Operating Statistics |
||||||||
|
Unaudited |
3/31/17 |
3/31/16 |
% Change |
|||||
|
Connections (‘000) |
||||||||
|
Retail postpaid |
108,483 |
107,171 |
1.2 |
|||||
|
Retail prepaid |
5,430 |
5,402 |
0.5 |
|||||
|
Total retail |
113,913 |
112,573 |
1.2 |
|||||
|
3 Mos. Ended |
3 Mos. Ended |
|||||||
|
Unaudited |
3/31/17 |
3/31/16 |
% Change |
|||||
|
Net Add Detail (‘000) (1) |
||||||||
|
Retail postpaid |
(307) |
640 |
* |
|||||
|
Retail prepaid |
(17) |
(177) |
90.4 |
|||||
|
Total retail |
(324) |
463 |
* |
|||||
|
Account Statistics |
||||||||
|
Retail Postpaid Accounts (‘000) (2) |
35,270 |
35,720 |
(1.3) |
|||||
|
Retail postpaid connections per account (2) |
3.08 |
3.00 |
2.7 |
|||||
|
Retail postpaid ARPA(3) |
136.98 |
145.34 |
(5.8) |
|||||
|
Retail postpaid I-ARPA(4) |
166.01 |
165.03 |
0.6 |
|||||
|
Churn Detail |
||||||||
|
Retail postpaid |
1.15% |
0.96% |
||||||
|
Retail |
1.39% |
1.23% |
||||||
|
Retail Postpaid Connection Statistics |
||||||||
|
Total Smartphone postpaid % of phones activated |
94.5% |
92.5% |
||||||
|
Total Smartphone postpaid phone base (2) |
88.1% |
84.7% |
||||||
|
Total Internet postpaid base (2) |
18.3% |
17.3% |
||||||
|
4G LTE devices as % of retails postpaid connections |
85.9% |
81.1% |
||||||
|
Other Operating Statistics |
||||||||
|
Capital expenditures (in millions) |
$ 1,831 |
$ 2,190 |
(16.4) |
|||||
|
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. |
|||||||
|
The segment financial results and metrics above are adjusted to exclude the effects of non-operational 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) |
||||||||
|
3 Mos. Ended |
3 Mos. Ended |
|||||||
|
Unaudited |
3/31/17 |
3/31/16 |
% Change |
|||||
|
Operating Revenues |
||||||||
|
Consumer Markets |
$ 3,201 |
$ 3,180 |
0.7 |
|||||
|
Enterprise Solutions |
2,466 |
2,501 |
(1.4) |
|||||
|
Partner Solutions |
1,256 |
1,292 |
(2.8) |
|||||
|
Business Markets |
890 |
870 |
2.3 |
|||||
|
Other |
63 |
80 |
(21.3) |
|||||
|
Total Operating Revenues |
7,876 |
7,923 |
(0.6) |
|||||
|
Operating Expenses |
||||||||
|
Cost of services |
4,480 |
4,644 |
(3.5) |
|||||
|
Selling, general and administrative expense |
1,611 |
1,770 |
(9.0) |
|||||
|
Depreciation and amortization expense |
1,492 |
1,576 |
(5.3) |
|||||
|
Total Operating Expenses |
7,583 |
7,990 |
(5.1) |
|||||
|
Operating Income (Loss) |
$ 293 |
$ (67) |
* |
|||||
|
Operating Income (Loss) Margin |
3.7% |
(0.8)% |
||||||
|
Segment EBITDA |
$ 1,785 |
$ 1,509 |
18.3 |
|||||
|
Segment EBITDA Margin |
22.7% |
19.0% |
||||||
|
Footnotes: |
||||||||
|
The segment financial results and metrics above are adjusted to exclude the effects of non-operational 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 |
3/31/17 |
3/31/16 |
% Change |
|||||
|
Connections (‘000) |
||||||||
|
Fios Video Subscribers |
4,681 |
4,678 |
0.1 |
|||||
|
Fios Internet Subscribers |
5,688 |
5,508 |
3.3 |
|||||
|
Fios Digital voice residence connections |
3,887 |
3,917 |
(0.8) |
|||||
|
Fios Digital connections |
14,256 |
14,103 |
1.1 |
|||||
|
HSI |
1,323 |
1,589 |
(16.7) |
|||||
|
Total Broadband connections |
7,011 |
7,097 |
(1.2) |
|||||
|
Primary residence switched access connections |
3,095 |
3,643 |
(15.0) |
|||||
|
Primary residence connections |
6,982 |
7,560 |
(7.6) |
|||||
|
Total retail residence voice connections |
7,200 |
7,824 |
(8.0) |
|||||
|
Total voice connections |
13,634 |
14,781 |
(7.8) |
|||||
|
3 Mos. Ended |
3 Mos. Ended |
|||||||
|
Unaudited |
3/31/17 |
3/31/16 |
% Change |
|||||
|
Net Add Detail (‘000) |
||||||||
|
Fios Video Subscribers |
(13) |
43 |
* |
|||||
|
Fios Internet Subscribers |
35 |
90 |
(61.1) |
|||||
|
Fios Digital voice residence connections |
(8) |
45 |
* |
|||||
|
Fios Digital connections |
14 |
178 |
(92.1) |
|||||
|
HSI |
(62) |
(78) |
20.5 |
|||||
|
Total Broadband connections |
(27) |
12 |
* |
|||||
|
Primary residence switched access connections |
(135) |
(156) |
13.5 |
|||||
|
Primary residence connections |
(143) |
(111) |
(28.8) |
|||||
|
Total retail residence voice connections |
(155) |
(125) |
(24.0) |
|||||
|
Total voice connections |
(305) |
(254) |
(20.1) |
|||||
|
Revenue Statistics |
||||||||
|
Fios revenues (in millions) |
$ 2,891 |
$ 2,761 |
4.7 |
|||||
|
Other Operating Statistics |
||||||||
|
Capital expenditures (in millions) |
$ 960 |
$ 1,006 |
(4.6) |
|||||
|
Wireline employees (‘000) |
60.8 |
59.5 |
||||||
|
Fios Video Open for Sale (‘000) |
13,829 |
13,366 |
||||||
|
Fios Video penetration |
33.8% |
35.0% |
||||||
|
Fios Internet Open for Sale (‘000) |
14,120 |
13,661 |
||||||
|
Fios Internet penetration |
40.3% |
40.3% |
||||||
|
Footnotes: |
||||||||
|
The segment financial results and metrics above are adjusted to exclude the effects of non-operational items and impact of divested businesses, 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. |
|||||||
|
Non-GAAP Reconciliations – Consolidated Verizon |
|||||||
|
Consolidated Operating Revenues Excluding Divested Businesses and Acquisitions |
|||||||
|
(dollars in millions) |
|||||||
|
3 Mos. Ended |
3 Mos. Ended |
||||||
|
Unaudited |
3/31/17 |
3/31/16 |
|||||
|
Consolidated Operating Revenues |
$ 29,814 |
$ 32,171 |
|||||
|
Less operating revenues from Divested Businesses |
– |
1,280 |
|||||
|
Less operating revenues from Acquisitions |
318 |
– |
|||||
|
Consolidated Operating Revenues Excluding Divested Businesses and Acquisitions |
$ 29,496 |
$ 30,891 |
|||||
|
Year over Year Change |
(4.5)% |
||||||
|
Operating Revenues from Media Business net of Traffic Acquisition Costs |
|||||||
|
(dollars in millions) |
|||||||
|
3 Mos. Ended |
3 Mos. Ended |
||||||
|
Unaudited |
3/31/17 |
3/31/16 |
|||||
|
Operating Revenues from Media Business |
$ 737 |
$ 726 |
|||||
|
Less TAC |
280 |
249 |
|||||
|
Operating Revenues from Media Business net of TAC |
$ 457 |
$ 477 |
|||||
|
Year over Year Change |
(4.2)% |
||||||
|
IoT Revenues Excluding Acquisitions |
(dollars in millions) |
||||||
|
3 Mos. Ended |
3 Mos. Ended |
||||||
|
Unaudited |
3/31/17 |
3/31/16 |
|||||
|
IoT Revenues |
$ 343 |
$ 195 |
|||||
|
Less IoT revenues from Acquisitions |
114 |
– |
|||||
|
IoT Revenues Excluding Acquisitions |
$ 229 |
$ 195 |
|||||
|
Year over Year Change |
17.4% |
||||||
|
Consolidated EBITDA, Consolidated EBITDA Margin and Consolidated Adjusted EBITDA |
|||||||
|
(dollars in millions) |
|||||||
|
3 Mos. |
3 Mos. |
3 Mos. |
3 Mos. |
3 Mos. |
|||
|
Ended |
Ended |
Ended |
Ended |
Ended |
|||
|
Unaudited |
3/31/17 |
12/31/16 |
9/30/16 |
6/30/16 |
3/31/16 |
||
|
Consolidated Net Income |
$ 3,553 |
$ 4,600 |
$ 3,747 |
$ 831 |
$ 4,430 |
||
|
Add/(subtract): |
|||||||
|
Provision for income taxes |
1,629 |
2,349 |
1,829 |
864 |
2,336 |
||
|
Interest expense |
1,132 |
1,137 |
1,038 |
1,013 |
1,188 |
||
|
Other (income) and expense, net |
846 |
(98) |
(97) |
1,826 |
(32) |
||
|
Equity in losses of unconsolidated businesses |
21 |
35 |
23 |
20 |
20 |
||
|
Operating Income |
7,181 |
8,023 |
6,540 |
4,554 |
7,942 |
||
|
Add Depreciation and amortization expense |
4,059 |
3,987 |
3,942 |
3,982 |
4,017 |
||
|
Consolidated EBITDA |
$ 11,240 |
$ 12,010 |
$ 10,482 |
$ 8,536 |
$ 11,959 |
||
|
Add/subtract non-operational items (before tax): |
|||||||
|
Severance, pension, and benefit charges/(credits) |
– |
(1,589) |
797 |
3,550 |
165 |
||
|
Gain on spectrum license transactions |
(126) |
– |
– |
– |
(142) |
||
|
Gain on sale of Divested Businesses |
– |
– |
– |
(1,007) |
– |
||
|
Divested Businesses |
– |
– |
– |
– |
(661) |
||
|
(126) |
(1,589) |
797 |
2,543 |
(638) |
|||
|
Consolidated Adjusted EBITDA |
$ 11,114 |
$ 10,421 |
$ 11,279 |
$ 11,079 |
$ 11,321 |
||
|
Consolidated Operating Revenues |
$ 29,814 |
$ 32,171 |
|||||
|
Consolidated Operating Income Margin |
24.1% |
||||||
|
Consolidated EBITDA Margin |
37.7% |
37.2% |
|||||
|
Verizon Communications Inc. |
||||||||
|
Non-GAAP Reconciliations – Consolidated Verizon |
||||||||
|
Net Debt and Net Debt to Consolidated Adjusted EBITDA Ratio |
||||||||
|
(dollars in millions) |
||||||||
|
Unaudited |
3/31/17 |
12/31/16 |
||||||
|
Verizon Net Debt |
||||||||
|
Debt maturing within one year |
$ 3,707 |
$ 2,645 |
||||||
|
Long-term debt |
112,839 |
105,433 |
||||||
|
Total Debt |
116,546 |
108,078 |
||||||
|
Less Cash and cash equivalents |
4,307 |
2,880 |
||||||
|
Net Debt |
$ 112,239 |
$ 105,198 |
||||||
|
Net Debt to Consolidated Adjusted EBITDA Ratio |
2.6x |
2.4x |
||||||
|
Adjusted Earnings per Common Share (Adjusted EPS) |
||||||||
|
3 Mos. Ended |
3 Mos. Ended |
|||||||
|
Unaudited |
3/31/17 |
3/31/16 |
||||||
|
. |
Pre-tax |
Tax |
After-Tax |
Pre-tax |
Tax |
After-Tax |
||
|
EPS |
$ 0.84 |
$ 1.06 |
||||||
|
Severance, pension, and benefit charges |
$ – |
$ – |
$ – |
– |
$ 165 |
$ (63) |
$ 102 |
0.02 |
|
Early debt redemption costs |
848 |
(336) |
512 |
0.13 |
– |
– |
– |
– |
|
Gain on spectrum license transactions |
(126) |
49 |
(77) |
(0.02) |
(142) |
54 |
(88) |
(0.02) |
|
$ 722 |
$ (287) |
$ 435 |
0.11 |
$ 23 |
$ (9) |
$ 14 |
– |
|
|
Adjusted EPS |
$ 0.95 |
$ 1.06 |
||||||
|
Verizon Communications Inc. |
|||||
|
Non-GAAP Reconciliations – Segments |
|||||
|
Segment EBITDA and Segment EBITDA Margin |
|||||
|
Wireless |
(dollars in millions) |
||||
|
3 Mos. Ended |
3 Mos. Ended |
||||
|
Unaudited |
3/31/17 |
3/31/16 |
|||
|
Operating Income |
$ 7,076 |
$ 7,880 |
|||
|
Add Depreciation and amortization expense |
2,338 |
2,293 |
|||
|
Segment EBITDA |
$ 9,414 |
$ 10,173 |
|||
|
Year over Year Change |
(7.5)% |
||||
|
Total operating revenues |
$ 20,878 |
$ 22,004 |
|||
|
Operating Income Margin |
33.9% |
35.8% |
|||
|
Segment EBITDA Margin |
45.1% |
46.2% |
|||
|
Wireline |
(dollars in millions) |
||||
|
3 Mos. Ended |
3 Mos. Ended |
||||
|
Unaudited |
3/31/17 |
3/31/16 |
|||
|
Operating Income (Loss) |
$ 293 |
$ (67) |
|||
|
Add Depreciation and amortization expense |
1,492 |
1,576 |
|||
|
Segment EBITDA |
$ 1,785 |
$ 1,509 |
|||
|
Year over Year Change |
18.3% |
||||
|
Total operating revenues |
$ 7,876 |
$ 7,923 |
|||
|
Operating Income (Loss) Margin |
3.7% |
(0.8)% |
|||
|
Segment EBITDA Margin |
22.7% |
19.0% |
|||
|
Wireline Operating Revenues Excluding Acquisition |
(dollars in millions) |
||||
|
3 Mos. Ended |
3 Mos. Ended |
||||
|
Unaudited |
3/31/17 |
3/31/16 |
|||
|
Wireline Operating Revenues |
$ 7,876 |
$ 7,923 |
|||
|
Less Wireline operating revenues from Acquisition |
207 |
– |
|||
|
Wireline Operating Revenues Excluding Acquisition |
$ 7,669 |
$ 7,923 |
|||
|
Year over Year Change |
(3.2)% |
||||
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