4Q 2018 highlights
Consolidated:
- 47 cents in earnings per share (EPS), compared with $4.56 in 4Q 2017; adjusted EPS (non-GAAP), excluding special items, of $1.12, compared with 86 cents in 4Q 2017.
Wireless:
- 1.2 million retail postpaid net additions, including 653,000 phone net additions and 873,000 postpaid smartphone net additions.
- Retail postpaid churn of 1.08 percent, and retail postpaid phone churn of 0.82 percent.
- Service revenue growth of 1.9 percent year over year, excluding the impact of the revenue recognition standard adopted on Jan. 1, 2018.
- Total revenue growth of 2.1 percent year over year, excluding the impact of the revenue recognition standard, to $24.3 billion.
Wireline:
- 54,000 Fios Internet net additions; Fios total revenue growth of 2.9 percent year over year.
2018 highlights
Consolidated:
- Full year EPS of $3.76, compared with $7.36 in 2017; adjusted EPS (non-GAAP), excluding special items, of $4.71, compared with 2017 adjusted EPS of $3.74.
- Full-year 2018 operating cash flow of $34.3 billion, an increase of $10 billion year over year.
- Unsecured debt is lower by $5.2 billion and total net debt is lower by $4.7 billion from year-end 2017.
NEW YORK, Jan. 29, 2019 (GLOBE NEWSWIRE) -- Verizon Communications Inc. (NYSE, Nasdaq: VZ) closed 2018 with fourth-quarter results highlighted by strong growth and retention at Verizon Wireless, increased cash flow and momentum leading into the 5G era.
“Verizon finished 2018 by delivering solid financial and operational performance, as evidenced by our strong wireless service revenue and earnings growth,” said CEO Hans Vestberg. “2018 was a remarkable year full of 5G firsts, including being first in the world to commercially deploy 5G with our 5G Home product. As we head into 2019 and the 5G era, we’re beginning a period of transformational change. We are laser focused on delivering customers a best-in-class and game-changing experience on our networks.”
For fourth-quarter 2018, Verizon reported EPS of 47 cents, compared with $4.56 in fourth-quarter 2017. On an adjusted basis (non-GAAP), fourth-quarter 2018 EPS, excluding special items, was $1.12, compared with adjusted EPS of 86 cents in fourth-quarter 2017. Verizon’s fourth-quarter 2018 EPS included a 9 cent impact due to the effects of accounting changes for revenue recognition.
Fourth-quarter 2018 adjusted EPS included a net pre-tax loss from special items of about $4.9 billion, which consisted of a previously announced goodwill impairment for Verizon Media of $4.6 billion, acquisition and integration charges of $189 million, and severance and annual mark-to-market for pension and OPEB (other post-employment benefits) charges of $165 million. Adjusted EPS also included a deferred tax benefit of $2.1 billion related to an internal reorganization.
For full-year 2018, Verizon reported $3.76 in EPS, compared with $7.36 in full-year 2017. On an adjusted basis (non-GAAP), 2018 EPS was $4.71, compared with 2017 EPS of $3.74.
Consolidated results
Total consolidated operating revenues in fourth-quarter 2018 were $34.3 billion, up 1.0 percent from fourth-quarter 2017. Full-year 2018 consolidated operating revenues were $130.9 billion, up 3.8 percent year over year. Excluding the impact of the revenue recognition standard, fourth-quarter 2018 consolidated operating revenues were $34.1 billion, an increase of 0.5 percent year over year.
Cash flow from operations totaled $34.3 billion in 2018, an increase of $10 billion year over year. This increase was driven by strong operating results, tax reform benefits, reduced impacts from the wireless device payment plan model, and lower discretionary pension and benefit contributions.
Full-year 2018 capital expenditures totaled $16.7 billion. In 2018, Verizon made $9.8 billion in cash dividend payments to shareholders. The company’s unsecured debt decreased by $5.2 billion and its total net debt decreased by $4.7 billion during 2018.
Verizon is on track to deliver against its goal to achieve $10 billion in cumulative cash savings by 2021. This initiative includes zero-based budgeting and has yielded approximately $2.3 billion of cumulative cash savings by year-end 2018, of which a majority has been derived from capital efficiencies.
For fourth-quarter 2018, Verizon Media revenues were $2.1 billion, down 5.8 percent year over year. Revenue trends were up sequentially from third-quarter 2018 due to seasonal advertising spending.
In the telematics business, total Verizon Connect revenues, excluding the impact of the revenue recognition standard, were $242 million in fourth-quarter 2018. IoT (Internet of Things) fourth-quarter revenues, including Verizon Connect, increased approximately 9.5 percent year over year, excluding the impact of the revenue recognition standard.
Net income was $2.1 billion in fourth-quarter 2018. EBITDA (non-GAAP, earnings before interest, taxes, depreciation and amortization) totaled approximately $6.9 billion. Consolidated operating income margin was 1.9 percent. Consolidated EBITDA margin (non-GAAP) was 20.2 percent in fourth-quarter 2018, compared with 25.4 percent in fourth-quarter 2017. Adjusted EBITDA margin (non-GAAP) in fourth-quarter 2018 was 33.8 percent. Excluding the impact of the revenue recognition standard, adjusted EBITDA margin (non-GAAP) was 32.2 percent.
Wireless results
- Verizon reported 1.2 million retail postpaid net additions in fourth-quarter 2018, consisting of 653,000 phone net additions, 11,000 tablet additions and 556,000 other connected devices, primarily wearables. Postpaid smartphone net additions were 873,000, compared with 647,000 in fourth-quarter 2017, a 34.9 percent increase.
- Verizon reported full-year 2018 postpaid net additions of 2.5 million, consisting of phone net additions of 1.1 million, tablet losses of 181,000 and 1.6 million other connected device additions. Postpaid smartphone net additions for full-year 2018 were 2 million, up 13 percent year over year.
- Total revenues were $24.4 billion, an increase of 2.7 percent year over year. For full-year 2018, operating revenues totaled $91.7 billion, an increase of 4.8 percent year over year. Excluding the impact of the revenue recognition standard, total revenues grew 2.1 percent year over year in fourth-quarter 2018 and 4.4 percent for the full year, compared with 2017, to $24.3 billion and $91.3 billion, respectively.
- Service revenues increased 0.1 percent in fourth-quarter 2018, driven by ongoing customer growth, step-ups to unlimited plans and the benefits of customers customizing their experience through mix-and-match plans. Full-year service revenues decreased 0.2 percent year over year. Excluding the impact of the revenue recognition standard, service revenues increased 1.9 percent in fourth-quarter 2018 and 1.7 percent for the full year, on a year over year basis.
- Total retail postpaid churn was 1.08 percent in fourth-quarter 2018, and retail postpaid phone churn was 0.82 percent.
- Segment EBITDA (non-GAAP) totaled $10.4 billion in fourth-quarter 2018, an increase of 9.7 percent year over year. Excluding the impact of the revenue recognition standard, segment EBITDA totaled $9.8 billion in fourth-quarter 2018. Segment EBITDA margin on total revenues (non-GAAP) was 42.5 percent. Excluding the impact of the revenue recognition standard, segment EBITDA margin was 40.5 percent. For the full year, segment EBITDA margin was 46.4 percent in 2018, compared with 44.1 percent in 2017.
Wireline results
- Total wireline revenues decreased 3.2 percent year over year in fourth-quarter 2018 and 3.0 percent for the full year, compared with 2017, to $7.4 billion and $29.8 billion, respectively.
- Total Fios revenues grew 2.5 percent year over year, excluding the impact of the revenue recognition standard. In fourth-quarter 2018, Verizon added a net of 54,000 Fios Internet connections and lost a net of 46,000 Fios Video connections, continuing to reflect the shift from traditional linear video to over-the-top offerings. At year-end 2018, Verizon had 6.1 million Fios Internet connections and 4.5 million Fios Video connections.
- Wireline operating loss was $273 million in fourth-quarter 2018, and segment operating loss margin was 3.7 percent. Full-year 2018 segment operating loss was $273 million, and segment operating loss margin was 0.9 percent.
- Segment EBITDA (non-GAAP) was $1.3 billion in fourth-quarter 2018. Excluding the impact of the revenue recognition standard, segment EBITDA was $1.2 billion. Segment EBITDA margin (non-GAAP) was 17.6 percent in fourth-quarter 2018, compared with 20.9 percent in fourth-quarter 2017. Excluding the impact of the revenue recognition standard, segment EBITDA margin was 16.9 percent. For the full year, segment EBITDA margin was 19.9 percent in 2018, compared with 21.1 percent in 2017.
Outlook and guidance
For 2019, Verizon expects the following:
- Low single-digit percentage growth in full-year consolidated revenues on a GAAP reported basis.
- Adjusted EPS excluding the impact of the new lease accounting standard to be similar to 2018 adjusted EPS. The new lease accounting standard is expected to have an approximately 1 to 2 cent per quarter headwind impact on EPS for full-year 2019.
- The effective tax rate for full-year 2019 to be in the range of 24 to 26 percent.
- 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.
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:
Bob Varettoni
908.559.6388
robert.a.varettoni@verizon.com
Eric Wilkens
201.572.9317
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 | 12 Mos. Ended | 12 Mos. Ended | |||||||||||||||||
| Unaudited | 12/31/18 | 12/31/17 | % Change | 12/31/18 | 12/31/17 | % Change | ||||||||||||||
| Operating Revenues | ||||||||||||||||||||
| Service revenues and other | $ | 27,460 | $ | 27,480 | (0.1 | ) | $ | 108,605 | $ | 107,145 | 1.4 | |||||||||
| Wireless equipment revenues | 6,821 | 6,475 | 5.3 | 22,258 | 18,889 | 17.8 | ||||||||||||||
| Total Operating Revenues | 34,281 | 33,955 | 1.0 | 130,863 | 126,034 | 3.8 | ||||||||||||||
| Operating Expenses | ||||||||||||||||||||
| Cost of services | 8,163 | 8,219 | (0.7 | ) | 32,185 | 30,916 | 4.1 | |||||||||||||
| Wireless cost of equipment | 7,128 | 7,339 | (2.9 | ) | 23,323 | 22,147 | 5.3 | |||||||||||||
| Selling, general and administrative expense | 9,410 | 8,480 | 11.0 | 31,083 | 28,592 | 8.7 | ||||||||||||||
| Depreciation and amortization expense | 4,352 | 4,456 | (2.3 | ) | 17,403 | 16,954 | 2.6 | |||||||||||||
| Oath goodwill impairment | 4,591 | — | * | 4,591 | — | * | ||||||||||||||
| Total Operating Expenses | 33,644 | 28,494 | 18.1 | 108,585 | 98,609 | 10.1 | ||||||||||||||
| Operating Income | 637 | 5,461 | (88.3 | ) | 22,278 | 27,425 | (18.8 | ) | ||||||||||||
| Equity in earnings (losses) of unconsolidated businesses | 64 | (6 | ) | * | (186 | ) | (77 | ) | * | |||||||||||
| Other income (expense), net | 1,865 | (1,302 | ) | * | 2,364 | (2,021 | ) | * | ||||||||||||
| Interest expense | (1,199 | ) | (1,219 | ) | (1.6 | ) | (4,833 | ) | (4,733 | ) | 2.1 | |||||||||
| Income Before (Provision) Benefit For Income Taxes | 1,367 | 2,934 | (53.4 | ) | 19,623 | 20,594 | (4.7 | ) | ||||||||||||
| (Provision) benefit for income taxes | 698 | 15,849 | (95.6 | ) | (3,584 | ) | 9,956 | * | ||||||||||||
| Net Income | $ | 2,065 | $ | 18,783 | (89.0 | ) | $ | 16,039 | $ | 30,550 | (47.5 | ) | ||||||||
| Net income attributable to noncontrolling interests | $ | 126 | $ | 114 | 10.5 | $ | 511 | $ | 449 | 13.8 | ||||||||||
| Net income attributable to Verizon | 1,939 | 18,669 | (89.6 | ) | 15,528 | 30,101 | (48.4 | ) | ||||||||||||
| Net Income | $ | 2,065 | $ | 18,783 | (89.0 | ) | $ | 16,039 | $ | 30,550 | (47.5 | ) | ||||||||
| Basic Earnings Per Common Share | ||||||||||||||||||||
| Net income attributable to Verizon | $ | 0.47 | $ | 4.57 | (89.7 | ) | $ | 3.76 | $ | 7.37 | (49.0 | ) | ||||||||
| Weighted average number of common shares (in millions) | 4,137 | 4,087 | 4,128 | 4,084 | ||||||||||||||||
| Diluted Earnings Per Common Share (1) | ||||||||||||||||||||
| Net income attributable to Verizon | $ | 0.47 | $ | 4.56 | (89.7 | ) | $ | 3.76 | $ | 7.36 | (48.9 | ) | ||||||||
| Weighted average number of common | ||||||||||||||||||||
| shares-assuming dilution (in millions) | 4,141 | 4,090 | 4,132 | 4,089 | ||||||||||||||||
| 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 | 12/31/18 | 12/31/17 | $ Change | |||||||||||
| Assets | ||||||||||||||
| Current assets | ||||||||||||||
| Cash and cash equivalents | $ | 2,745 | $ | 2,079 | $ | 666 | ||||||||
| Accounts receivable, net | 25,102 | 23,493 | 1,609 | |||||||||||
| Inventories | 1,336 | 1,034 | 302 | |||||||||||
| Prepaid expenses and other | 5,453 | 3,307 | 2,146 | |||||||||||
| Total current assets | 34,636 | 29,913 | 4,723 | |||||||||||
| Property, plant and equipment | 252,835 | 246,498 | 6,337 | |||||||||||
| Less accumulated depreciation | 163,549 | 157,930 | 5,619 | |||||||||||
| Property, plant and equipment, net | 89,286 | 88,568 | 718 | |||||||||||
| Investments in unconsolidated businesses | 671 | 1,039 | (368 | ) | ||||||||||
| Wireless licenses | 94,130 | 88,417 | 5,713 | |||||||||||
| Goodwill | 24,614 | 29,172 | (4,558 | ) | ||||||||||
| Other intangible assets, net | 9,775 | 10,247 | (472 | ) | ||||||||||
| Other assets | 11,717 | 9,787 | 1,930 | |||||||||||
| Total assets | $ | 264,829 | $ | 257,143 | $ | 7,686 | ||||||||
| Liabilities and Equity | ||||||||||||||
| Current liabilities | ||||||||||||||
| Debt maturing within one year | $ | 7,190 | $ | 3,453 | $ | 3,737 | ||||||||
| Accounts payable and accrued liabilities | 22,501 | 21,232 | 1,269 | |||||||||||
| Other current liabilities | 8,239 | 8,352 | (113 | ) | ||||||||||
| Total current liabilities | 37,930 | 33,037 | 4,893 | |||||||||||
| Long-term debt | 105,873 | 113,642 | (7,769 | ) | ||||||||||
| Employee benefit obligations | 18,599 | 22,112 | (3,513 | ) | ||||||||||
| Deferred income taxes | 33,795 | 31,232 | 2,563 | |||||||||||
| Other liabilities | 13,922 | 12,433 | 1,489 | |||||||||||
| Total long-term liabilities | 172,189 | 179,419 | (7,230 | ) | ||||||||||
| Equity | ||||||||||||||
| Common stock | 429 | 424 | 5 | |||||||||||
| Additional paid in capital | 13,437 | 11,101 | 2,336 | |||||||||||
| Retained earnings | 43,542 | 35,635 | 7,907 | |||||||||||
| Accumulated other comprehensive income | 2,370 | 2,659 | (289 | ) | ||||||||||
| Common stock in treasury, at cost | (6,986 | ) | (7,139 | ) | 153 | |||||||||
| Deferred compensation – employee stock ownership plans and other | 353 | 416 | (63 | ) | ||||||||||
| Noncontrolling interests | 1,565 | 1,591 | (26 | ) | ||||||||||
| Total equity | 54,710 | 44,687 | 10,023 | |||||||||||
| Total liabilities and equity | $ | 264,829 | $ | 257,143 | $ | 7,686 | ||||||||
| Verizon - Selected Financial and Operating Statistics | ||||||||||||||
| Unaudited | 12/31/18 | 12/31/17 | ||||||||||||
| Total debt (in millions) | $ | 113,063 | $ | 117,095 | ||||||||||
| Net debt (in millions) | $ | 110,318 | $ | 115,016 | ||||||||||
| Net debt / Consolidated Adjusted EBITDA(1) | 2.3 | x | 2.6 | x | ||||||||||
| Common shares outstanding end of period (in millions) | 4,132 | 4,079 | ||||||||||||
| Total employees (‘000) | 144.5 | 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) | |||||||||||||
| 12 Mos. Ended | 12 Mos. Ended | ||||||||||||
| Unaudited | 12/31/18 | 12/31/17 | $ Change | ||||||||||
| Cash Flows from Operating Activities | |||||||||||||
| Net Income | $ | 16,039 | $ | 30,550 | $ | (14,511 | ) | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||
| Depreciation and amortization expense | 17,403 | 16,954 | 449 | ||||||||||
| Employee retirement benefits | (2,657 | ) | 440 | (3,097 | ) | ||||||||
| Deferred income taxes | 389 | (14,463 | ) | 14,852 | |||||||||
| Provision for uncollectible accounts | 980 | 1,167 | (187 | ) | |||||||||
| Equity in losses of unconsolidated businesses, net of dividends received | 231 | 117 | 114 | ||||||||||
| Net gain on sale of divested businesses | — | (1,774 | ) | 1,774 | |||||||||
| Oath goodwill impairment | 4,591 | — | 4,591 | ||||||||||
| Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses | (1,177 | ) | (5,938 | ) | 4,761 | ||||||||
| Discretionary employee benefits contributions | (1,679 | ) | (3,411 | ) | 1,732 | ||||||||
| Other, net | 219 | 676 | (457 | ) | |||||||||
| Net cash provided by operating activities | 34,339 | 24,318 | 10,021 | ||||||||||
| Cash Flows from Investing Activities | |||||||||||||
| Capital expenditures (including capitalized software) | (16,658 | ) | (17,247 | ) | 589 | ||||||||
| Acquisitions of businesses, net of cash acquired | (230 | ) | (5,880 | ) | 5,650 | ||||||||
| Acquisitions of wireless licenses | (1,429 | ) | (583 | ) | (846 | ) | |||||||
| Proceeds from dispositions of businesses | — | 3,614 | (3,614 | ) | |||||||||
| Other, net | 383 | 1,640 | (1,257 | ) | |||||||||
| Net cash used in investing activities | (17,934 | ) | (18,456 | ) | 522 | ||||||||
| Cash Flows from Financing Activities | |||||||||||||
| Proceeds from long-term borrowings | 5,967 | 27,707 | (21,740 | ) | |||||||||
| Proceeds from asset-backed long-term borrowings | 4,810 | 4,290 | 520 | ||||||||||
| Repayments of long-term borrowings and capital lease obligations | (10,923 | ) | (23,837 | ) | 12,914 | ||||||||
| Repayments of asset-backed long-term borrowings | (3,635 | ) | (400 | ) | (3,235 | ) | |||||||
| Dividends paid | (9,772 | ) | (9,472 | ) | (300 | ) | |||||||
| Other, net | (1,824 | ) | (4,439 | ) | 2,615 | ||||||||
| Net cash used in financing activities | (15,377 | ) | (6,151 | ) | (9,226 | ) | |||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | 1,028 | (289 | ) | 1,317 | |||||||||
| Cash, cash equivalents and restricted cash, beginning of period | 2,888 | 3,177 | (289 | ) | |||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 3,916 | $ | 2,888 | $ | 1,028 | |||||||
| Verizon Communications Inc. | |||||||||||||||||||
| Wireless - Selected Financial Results | |||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||
| 3 Mos. Ended | 3 Mos. Ended | 12 Mos. Ended | 12 Mos. Ended | ||||||||||||||||
| Unaudited | 12/31/18 | 12/31/17 | % Change | 12/31/18 | 12/31/17 | % Change | |||||||||||||
| Operating Revenues | |||||||||||||||||||
| Service | $ | 15,898 | $ | 15,880 | 0.1 | $ | 63,020 | $ | 63,121 | (0.2 | ) | ||||||||
| Equipment | 6,821 | 6,475 | 5.3 | 22,258 | 18,889 | 17.8 | |||||||||||||
| Other | 1,693 | 1,416 | 19.6 | 6,456 | 5,501 | 17.4 | |||||||||||||
| Total Operating Revenues | 24,412 | 23,771 | 2.7 | 91,734 | 87,511 | 4.8 | |||||||||||||
| Operating Expenses | |||||||||||||||||||
| Cost of services | 2,351 | 2,210 | 6.4 | 9,251 | 8,886 | 4.1 | |||||||||||||
| Cost of equipment | 7,128 | 7,339 | (2.9 | ) | 23,323 | 22,147 | 5.3 | ||||||||||||
| Selling, general and administrative expense | 4,552 | 4,760 | (4.4 | ) | 16,604 | 17,876 | (7.1 | ) | |||||||||||
| Depreciation and amortization expense | 2,395 | 2,344 | 2.2 | 9,736 | 9,395 | 3.6 | |||||||||||||
| Total Operating Expenses | 16,426 | 16,653 | (1.4 | ) | 58,914 | 58,304 | 1.0 | ||||||||||||
| Operating Income | $ | 7,986 | $ | 7,118 | 12.2 | $ | 32,820 | $ | 29,207 | 12.4 | |||||||||
| Operating Income Margin | 32.7 | % | 29.9 | % | 35.8 | % | 33.4 | % | |||||||||||
| Segment EBITDA | $ | 10,381 | $ | 9,462 | 9.7 | $ | 42,556 | $ | 38,602 | 10.2 | |||||||||
| Segment EBITDA Margin | 42.5 | % | 39.8 | % | 46.4 | % | 44.1 | % | |||||||||||
| 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 | 12/31/18 | 12/31/17 | % Change | |||||||||||||||||
| Connections (‘000) | ||||||||||||||||||||
| Retail postpaid | 113,353 | 110,854 | 2.3 | |||||||||||||||||
| Retail prepaid | 4,646 | 5,403 | (14.0 | ) | ||||||||||||||||
| Total retail | 117,999 | 116,257 | 1.5 | |||||||||||||||||
| 3 Mos. Ended | 3 Mos. Ended | 12 Mos. Ended | 12 Mos. Ended | |||||||||||||||||
| Unaudited | 12/31/18 | 12/31/17 | % Change | 12/31/18 | 12/31/17 | % Change | ||||||||||||||
| Net Add Detail (‘000) (1) | ||||||||||||||||||||
| Retail postpaid | 1,220 | 1,174 | 3.9 | 2,526 | 2,084 | 21.2 | ||||||||||||||
| Retail prepaid | (90 | ) | (184 | ) | 51.1 | (757 | ) | (43 | ) | * | ||||||||||
| Total retail | 1,130 | 990 | 14.1 | 1,769 | 2,041 | (13.3 | ) | |||||||||||||
| Account Statistics | ||||||||||||||||||||
| Retail postpaid accounts (‘000) (2) | 35,427 | 35,404 | 0.1 | |||||||||||||||||
| Retail postpaid connections per account (2) | 3.20 | 3.13 | 2.2 | |||||||||||||||||
| Retail postpaid ARPA (3) (5) | $ | 135.11 | $ | 135.78 | (0.5 | ) | $ | 134.49 | $ | 135.99 | (1.1 | ) | ||||||||
| Retail postpaid I-ARPA (4) (5) | $ | 170.51 | $ | 167.19 | 2.0 | $ | 168.61 | $ | 166.28 | 1.4 | ||||||||||
| Churn Detail | ||||||||||||||||||||
| Retail postpaid | 1.08 | % | 1.00 | % | 1.03 | % | 1.01 | % | ||||||||||||
| Retail | 1.24 | % | 1.24 | % | 1.23 | % | 1.25 | % | ||||||||||||
| Retail Postpaid Connection Statistics (2) | ||||||||||||||||||||
| Total smartphone postpaid phone base | 92.2 | % | 90.1 | % | ||||||||||||||||
| Total Internet postpaid base | 19.7 | % | 19 | % | ||||||||||||||||
| Other Operating Statistics | ||||||||||||||||||||
| Capital expenditures (in millions) | $ | 2,342 | $ | 3,383 | (30.8 | ) | $ | 8,486 | $ | 10,310 | (17.7 | ) | ||||||||
| 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) | |||||||||||||||||||
| 3 Mos. Ended | 3 Mos. Ended | 12 Mos. Ended | 12 Mos. Ended | ||||||||||||||||
| Unaudited | 12/31/18 | 12/31/17 | % Change | 12/31/18 | 12/31/17 | % Change | |||||||||||||
| Operating Revenues | |||||||||||||||||||
| Consumer Markets | $ | 3,169 | $ | 3,188 | (0.6 | ) | $ | 12,589 | $ | 12,777 | (1.5 | ) | |||||||
| Enterprise Solutions | 2,217 | 2,285 | (3.0 | ) | 8,840 | 9,167 | (3.6 | ) | |||||||||||
| Partner Solutions | 1,098 | 1,209 | (9.2 | ) | 4,692 | 4,917 | (4.6 | ) | |||||||||||
| Business Markets | 836 | 885 | (5.5 | ) | 3,397 | 3,585 | (5.2 | ) | |||||||||||
| Other | 53 | 50 | 6.0 | 242 | 234 | 3.4 | |||||||||||||
| Total Operating Revenues | 7,373 | 7,617 | (3.2 | ) | 29,760 | 30,680 | (3.0 | ) | |||||||||||
| Operating Expenses | |||||||||||||||||||
| Cost of services | 4,478 | 4,465 | 0.3 | 17,701 | 17,922 | (1.2 | ) | ||||||||||||
| Selling, general and administrative expense | 1,597 | 1,558 | 2.5 | 6,151 | 6,274 | (2.0 | ) | ||||||||||||
| Depreciation and amortization expense | 1,571 | 1,532 | 2.5 | 6,181 | 6,104 | 1.3 | |||||||||||||
| Total Operating Expenses | 7,646 | 7,555 | 1.2 | 30,033 | 30,300 | (0.9 | ) | ||||||||||||
| Operating Income (Loss) | $ | (273 | ) | $ | 62 | * | $ | (273 | ) | $ | 380 | * | |||||||
| Operating Income (Loss) Margin | (3.7 | )% | 0.8 | % | (0.9 | )% | 1.2 | % | |||||||||||
| Segment EBITDA | $ | 1,298 | $ | 1,594 | (18.6 | ) | $ | 5,908 | $ | 6,484 | (8.9 | ) | |||||||
| Segment EBITDA Margin | 17.6 | % | 20.9 | % | 19.9 | % | 21.1 | % | |||||||||||
| 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 | 12/31/18 | 12/31/17 | % Change | ||||||||||||||||
| Connections (‘000) | |||||||||||||||||||
| Fios video connections | 4,451 | 4,619 | (3.6 | ) | |||||||||||||||
| Fios Internet connections | 6,067 | 5,850 | 3.7 | ||||||||||||||||
| Fios digital voice residence connections | 3,803 | 3,905 | (2.6 | ) | |||||||||||||||
| Fios digital connections | 14,321 | 14,374 | (0.4 | ) | |||||||||||||||
| High-speed Internet (HSI) connections | 894 | 1,109 | (19.4 | ) | |||||||||||||||
| Total broadband connections | 6,961 | 6,959 | — | ||||||||||||||||
| Total voice connections | 11,732 | 12,821 | (8.5 | ) | |||||||||||||||
| 3 Mos. Ended | 3 Mos. Ended | 12 Mos. Ended | 12 Mos. Ended | ||||||||||||||||
| Unaudited | 12/31/18 | 12/31/17 | % Change | 12/31/18 | 12/31/17 | % Change | |||||||||||||
| Net Add Detail (‘000) | |||||||||||||||||||
| Fios video connections | (46 | ) | (29 | ) | (58.6 | ) | (168 | ) | (75 | ) | * | ||||||||
| Fios Internet connections | 54 | 47 | 14.9 | 217 | 197 | 10.2 | |||||||||||||
| Fios digital voice residence connections | (30 | ) | (15 | ) | * | (102 | ) | 10 | * | ||||||||||
| Fios digital connections | (22 | ) | 3 | * | (53 | ) | 132 | * | |||||||||||
| High-speed Internet (HSI) connections | (51 | ) | (66 | ) | 22.7 | (215 | ) | (276 | ) | 22.1 | |||||||||
| Total broadband connections | 3 | (19 | ) | * | 2 | (79 | ) | * | |||||||||||
| Total voice connections | (277 | ) | (279 | ) | 0.7 | (1,089 | ) | (1,118 | ) | 2.6 | |||||||||
| Revenue Statistics | |||||||||||||||||||
| Fios revenues (in millions) | $ | 3,046 | $ | 2,959 | 2.9 | $ | 11,939 | $ | 11,691 | 2.1 | |||||||||
| Other Operating Statistics | |||||||||||||||||||
| Capital expenditures (in millions) | $ | 1,855 | $ | 1,981 | (6.4 | ) | $ | 6,255 | $ | 5,339 | 17.2 | ||||||||
| Wireline employees (‘000) | 54.3 | 57.1 | |||||||||||||||||
| 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 12/31/18 | 3 Mos. Ended 12/31/17 | Year Over Year | ||||||||||||||||||||
| Unaudited | As reported | Balances without adoption of Topic 606 | Adjustments | As reported | $ Change | % Change | ||||||||||||||||
| Operating Revenues | ||||||||||||||||||||||
| Service revenues and other | $ | 27,460 | $ | 27,780 | $ | (320 | ) | $ | 27,480 | $ | 300 | 1.1 | ||||||||||
| Wireless equipment revenues | 6,821 | 6,340 | 481 | 6,475 | (135 | ) | (2.1 | ) | ||||||||||||||
| Total Operating Revenues | 34,281 | 34,120 | 161 | 33,955 | 165 | 0.5 | ||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||
| Cost of services | 8,163 | 8,180 | (17 | ) | 8,219 | (39 | ) | (0.5 | ) | |||||||||||||
| Wireless cost of equipment | 7,128 | 7,102 | 26 | 7,339 | (237 | ) | (3.2 | ) | ||||||||||||||
| Selling, general and administrative expense | 9,410 | 9,861 | (451 | ) | 8,480 | 1,381 | 16.3 | |||||||||||||||
| Depreciation and amortization expense | 4,352 | 4,352 | — | 4,456 | (104 | ) | (2.3 | ) | ||||||||||||||
| Oath goodwill impairment | 4,591 | 4,591 | — | — | 4,591 | * | ||||||||||||||||
| Total Operating Expenses | 33,644 | 34,086 | (442 | ) | 28,494 | 5,592 | 19.6 | |||||||||||||||
| Operating Income | $ | 637 | $ | 34 | $ | 603 | $ | 5,461 | $ | (5,427 | ) | (99.4 | ) | |||||||||
| (dollars in millions) | ||||||||||||||||||||||
| 12 Mos. Ended 12/31/18 | 12 Mos. Ended 12/31/17 | Year Over Year | ||||||||||||||||||||
| Unaudited | As reported | Balances without adoption of Topic 606 | Adjustments | As reported | $ Change | % Change | ||||||||||||||||
| Operating Revenues | ||||||||||||||||||||||
| Service revenues and other | $ | 108,605 | $ | 109,964 | $ | (1,359 | ) | $ | 107,145 | $ | 2,819 | 2.6 | ||||||||||
| Wireless equipment revenues | 22,258 | 20,474 | 1,784 | 18,889 | 1,585 | 8.4 | ||||||||||||||||
| Total Operating Revenues | 130,863 | 130,438 | 425 | 126,034 | 4,404 | 3.5 | ||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||
| Cost of services | 32,185 | 32,240 | (55 | ) | 30,916 | 1,324 | 4.3 | |||||||||||||||
| Wireless cost of equipment | 23,323 | 23,189 | 134 | 22,147 | 1,042 | 4.7 | ||||||||||||||||
| Selling, general and administrative expense | 31,083 | 32,588 | (1,505 | ) | 28,592 | 3,996 | 14.0 | |||||||||||||||
| Depreciation and amortization expense | 17,403 | 17,403 | — | 16,954 | 449 | 2.6 | ||||||||||||||||
| Oath goodwill impairment | 4,591 | 4,591 | — | — | 4,591 | * | ||||||||||||||||
| Total Operating Expenses | 108,585 | 110,011 | (1,426 | ) | 98,609 | 11,402 | 11.6 | |||||||||||||||
| Operating Income | $ | 22,278 | $ | 20,427 | $ | 1,851 | $ | 27,425 | $ | (6,998 | ) | (25.5 | ) | |||||||||
| Wireless(1)(2) | ||||||||||||||||||||||
| (dollars in millions) | ||||||||||||||||||||||
| 3 Mos. Ended 12/31/18 | 3 Mos. Ended 12/31/17 | Year Over Year | ||||||||||||||||||||
| Unaudited | As reported | Balances without adoption of Topic 606 | Adjustments | As reported | $ Change | % Change | ||||||||||||||||
| Operating Revenues | ||||||||||||||||||||||
| Service | $ | 15,898 | $ | 16,183 | $ | (285 | ) | $ | 15,880 | $ | 303 | 1.9 | ||||||||||
| Equipment | 6,821 | 6,340 | 481 | 6,475 | (135 | ) | (2.1 | ) | ||||||||||||||
| Other | 1,693 | 1,746 | (53 | ) | 1,416 | 330 | 23.3 | |||||||||||||||
| Total Operating Revenues | 24,412 | 24,269 | 143 | 23,771 | 498 | 2.1 | ||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||
| Cost of services | 2,351 | 2,351 | — | 2,210 | 141 | 6.4 | ||||||||||||||||
| Cost of equipment | 7,128 | 7,102 | 26 | 7,339 | (237 | ) | (3.2 | ) | ||||||||||||||
| Selling, general and administrative expense | 4,552 | 4,985 | (433 | ) | 4,760 | 225 | 4.7 | |||||||||||||||
| Depreciation and amortization expense | 2,395 | 2,395 | — | 2,344 | 51 | 2.2 | ||||||||||||||||
| Total Operating Expenses | 16,426 | 16,833 | (407 | ) | 16,653 | 180 | 1.1 | |||||||||||||||
| Operating Income | $ | 7,986 | $ | 7,436 | $ | 550 | $ | 7,118 | $ | 318 | 4.5 | |||||||||||
| (dollars in millions) | ||||||||||||||||||||||
| 12 Mos. Ended 12/31/18 | 12 Mos. Ended 12/31/17 | Year Over Year | ||||||||||||||||||||
| Unaudited | As reported | Balances without adoption of Topic 606 | Adjustments | As reported | $ Change | % Change | ||||||||||||||||
| Operating Revenues | ||||||||||||||||||||||
| Service | $ | 63,020 | $ | 64,222 | $ | (1,202 | ) | $ | 63,121 | $ | 1,101 | 1.7 | ||||||||||
| Equipment | 22,258 | 20,474 | 1,784 | 18,889 | 1,585 | 8.4 | ||||||||||||||||
| Other | 6,456 | 6,624 | (168 | ) | 5,501 | 1,123 | 20.4 | |||||||||||||||
| Total Operating Revenues | 91,734 | 91,320 | 414 | 87,511 | 3,809 | 4.4 | ||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||
| Cost of services | 9,251 | 9,251 | — | 8,886 | 365 | 4.1 | ||||||||||||||||
| Cost of equipment | 23,323 | 23,189 | 134 | 22,147 | 1,042 | 4.7 | ||||||||||||||||
| Selling, general and administrative expense | 16,604 | 18,006 | (1,402 | ) | 17,876 | 130 | 0.7 | |||||||||||||||
| Depreciation and amortization expense | 9,736 | 9,736 | — | 9,395 | 341 | 3.6 | ||||||||||||||||
| Total Operating Expenses | 58,914 | 60,182 | (1,268 | ) | 58,304 | 1,878 | 3.2 | |||||||||||||||
| Operating Income | $ | 32,820 | $ | 31,138 | $ | 1,682 | $ | 29,207 | $ | 1,931 | 6.6 | |||||||||||
| Wireline(1)(2) | ||||||||||||||||||||||
| (dollars in millions) | ||||||||||||||||||||||
| 3 Mos. Ended 12/31/18 | 3 Mos. Ended 12/31/17 | Year Over Year | ||||||||||||||||||||
| Unaudited | As reported | Balances without adoption of Topic 606 | Adjustments | As reported | $ Change | % Change | ||||||||||||||||
| Operating Revenues | ||||||||||||||||||||||
| Consumer Markets | $ | 3,169 | $ | 3,156 | $ | 13 | $ | 3,188 | $ | (32 | ) | (1.0 | ) | |||||||||
| Enterprise Solutions | 2,217 | 2,217 | — | 2,285 | (68 | ) | (3.0 | ) | ||||||||||||||
| Partner Solutions | 1,098 | 1,098 | — | 1,209 | (111 | ) | (9.2 | ) | ||||||||||||||
| Business Markets | 836 | 835 | 1 | 885 | (50 | ) | (5.6 | ) | ||||||||||||||
| Other | 53 | 47 | 6 | 50 | (3 | ) | (6.0 | ) | ||||||||||||||
| Total Operating Revenues | 7,373 | 7,353 | 20 | 7,617 | (264 | ) | (3.5 | ) | ||||||||||||||
| Operating Expenses | ||||||||||||||||||||||
| Cost of services | 4,478 | 4,494 | (16 | ) | 4,465 | 29 | 0.6 | |||||||||||||||
| Selling, general and administrative expense | 1,597 | 1,616 | (19 | ) | 1,558 | 58 | 3.7 | |||||||||||||||
| Depreciation and amortization expense | 1,571 | 1,571 | — | 1,532 | 39 | 2.5 | ||||||||||||||||
| Total Operating Expenses | 7,646 | 7,681 | (35 | ) | 7,555 | 126 | 1.7 | |||||||||||||||
| Operating Income (Loss) | $ | (273 | ) | $ | (328 | ) | $ | 55 | $ | 62 | $ | (390 | ) | * | ||||||||
| (dollars in millions) | ||||||||||||||||||||||
| 12 Mos. Ended 12/31/18 | 12 Mos. Ended 12/31/17 | Year Over Year | ||||||||||||||||||||
| Unaudited | As reported | Balances without adoption of Topic 606 | Adjustments | As reported | $ Change | % Change | ||||||||||||||||
| Operating Revenues | ||||||||||||||||||||||
| Consumer Markets | $ | 12,589 | $ | 12,588 | $ | 1 | $ | 12,777 | $ | (189 | ) | (1.5 | ) | |||||||||
| Enterprise Solutions | 8,840 | 8,840 | — | 9,167 | (327 | ) | (3.6 | ) | ||||||||||||||
| Partner Solutions | 4,692 | 4,692 | — | 4,917 | (225 | ) | (4.6 | ) | ||||||||||||||
| Business Markets | 3,397 | 3,395 | 2 | 3,585 | (190 | ) | (5.3 | ) | ||||||||||||||
| Other | 242 | 207 | 35 | 234 | (27 | ) | (11.5 | ) | ||||||||||||||
| Total Operating Revenues | 29,760 | 29,722 | 38 | 30,680 | (958 | ) | (3.1 | ) | ||||||||||||||
| Operating Expenses | ||||||||||||||||||||||
| Cost of services | 17,701 | 17,750 | (49 | ) | 17,922 | (172 | ) | (1.0 | ) | |||||||||||||
| Selling, general and administrative expense | 6,151 | 6,257 | (106 | ) | 6,274 | (17 | ) | (0.3 | ) | |||||||||||||
| Depreciation and amortization expense | 6,181 | 6,181 | — | 6,104 | 77 | 1.3 | ||||||||||||||||
| Total Operating Expenses | 30,033 | 30,188 | (155 | ) | 30,300 | (112 | ) | (0.4 | ) | |||||||||||||
| Operating Income (Loss) | $ | (273 | ) | $ | (466 | ) | $ | 193 | $ | 380 | $ | (846 | ) | * | ||||||||
| Fios Revenues | ||||||||||||||||||||||
| (dollars in millions) | ||||||||||||||||||||||
| 3 Mos. Ended 12/31/18 | 3 Mos. Ended 12/31/17 | Year Over Year | ||||||||||||||||||||
| Unaudited | As reported | Balances without adoption of Topic 606 | Adjustments | As reported | $ Change | % Change | ||||||||||||||||
| Fios Revenues | $ | 3,046 | $ | 3,033 | $ | 13 | $ | 2,959 | $ | 74 | 2.5 | |||||||||||
| (dollars in millions) | ||||||||||||||||||||||
| 12 Mos. Ended 12/31/18 | 12 Mos. Ended 12/31/17 | Year Over Year | ||||||||||||||||||||
| Unaudited | As reported | Balances without adoption of Topic 606 | Adjustments | As reported | $ Change | % Change | ||||||||||||||||
| Fios Revenues | $ | 11,939 | $ | 11,934 | $ | 5 | $ | 11,691 | $ | 243 | 2.1 | |||||||||||
| 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. | |||||||||||||||||||||||||
| 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) | |||||||||||||||||||||||||
| 3 Mos. | 3 Mos. | 3 Mos. | 3 Mos. | 3 Mos. | 3 Mos. | 3 Mos. | 3 Mos. | ||||||||||||||||||
| Ended | Ended | Ended | Ended | Ended | Ended | Ended | Ended | ||||||||||||||||||
| Unaudited | 12/31/18 | 9/30/18 | 6/30/18 | 3/31/18 | 12/31/17 | 9/30/17 | 6/30/17 | 3/31/17 | |||||||||||||||||
| Consolidated Net Income | $ | 2,065 | $ | 5,062 | $ | 4,246 | $ | 4,666 | $ | 18,783 | $ | 3,736 | $ | 4,478 | $ | 3,553 | |||||||||
| Add/(subtract): | |||||||||||||||||||||||||
| Provision (benefit) for income taxes | (698 | ) | 1,613 | 1,281 | 1,388 | (15,849 | ) | 1,775 | 2,489 | 1,629 | |||||||||||||||
| Interest expense | 1,199 | 1,211 | 1,222 | 1,201 | 1,219 | 1,164 | 1,218 | 1,132 | |||||||||||||||||
| Depreciation and amortization expense | 4,352 | 4,377 | 4,350 | 4,324 | 4,456 | 4,272 | 4,167 | 4,059 | |||||||||||||||||
| Consolidated EBITDA | $ | 6,918 | $ | 12,263 | $ | 11,099 | $ | 11,579 | $ | 8,609 | $ | 10,947 | $ | 12,352 | $ | 10,373 | |||||||||
| Add/subtract: | |||||||||||||||||||||||||
| Other (income) expense, net* | $ | (1,865 | ) | $ | (214 | ) | $ | (360 | ) | $ | 75 | $ | 1,302 | $ | 291 | $ | (199 | ) | $ | 627 | |||||
| Equity in losses (earnings) of unconsolidated businesses† | (64 | ) | 3 | 228 | 19 | 6 | 22 | 28 | 21 | ||||||||||||||||
| Oath goodwill impairment | 4,591 | — | — | — | — | — | — | — | |||||||||||||||||
| Severance charges | 1,818 | — | 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‡ | 187 | 130 | 109 | 105 | 154 | 166 | 559 | — | |||||||||||||||||
| 4,667 | (81 | ) | 766 | 199 | 2,083 | 479 | (1,191 | ) | 522 | ||||||||||||||||
| Consolidated Adjusted EBITDA | $ | 11,585 | $ | 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 | $ | 11,585 | $ | 12,182 | $ | 11,865 | $ | 11,778 | $ | 10,692 | $ | 11,409 | $ | 11,111 | $ | 10,791 | |||||||||
| Consolidated Operating Revenues - Quarter to Date | $ | 34,281 | $ | 33,955 | |||||||||||||||||||||
| Operating Income Margin - Quarter to Date | 1.9 | % | 16.1 | % | |||||||||||||||||||||
| Consolidated EBITDA Margin - Quarter to Date | 20.2 | % | 25.4 | % | |||||||||||||||||||||
| Consolidated Adjusted EBITDA Margin - Quarter to Date | 33.8 | % | 31.5 | % | |||||||||||||||||||||
| * 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 | 12/31/18 | 12/31/17 | ||||||||||||||||||||||
| Net Debt | ||||||||||||||||||||||||
| Debt maturing within one year | $ | 7,190 | $ | 3,453 | ||||||||||||||||||||
| Long-term debt | 105,873 | 113,642 | ||||||||||||||||||||||
| Total Debt | 113,063 | 117,095 | ||||||||||||||||||||||
| Less Cash and cash equivalents | 2,745 | 2,079 | ||||||||||||||||||||||
| Net Debt | $ | 110,318 | $ | 115,016 | ||||||||||||||||||||
| Net Debt to Consolidated Adjusted EBITDA Ratio | 2.3x | 2.6x | ||||||||||||||||||||||
| Adjusted Earnings per Common Share (Adjusted EPS)(1) | ||||||||||||||||||||||||
| Unaudited | 3 Mos. Ended 12/31/18 | 3 Mos. Ended 12/31/17 | ||||||||||||||||||||||
| Pre-tax | Tax | After-Tax | Pre-tax | Tax | After-Tax | |||||||||||||||||||
| EPS | $ | 0.47 | $ | 4.56 | ||||||||||||||||||||
| Severance, pension and benefits charges | $ | 165 | $ | (57 | ) | $ | 108 | 0.03 | $ | 1,196 | $ | (464 | ) | $ | 732 | 0.18 | ||||||||
| Acquisition and integration related charges | 189 | (47 | ) | 142 | 0.03 | 154 | (59 | ) | 95 | 0.02 | ||||||||||||||
| Oath goodwill impairment | 4,591 | (64 | ) | 4,527 | 1.09 | — | — | — | — | |||||||||||||||
| Wireless legal entity restructuring | — | (2,065 | ) | (2,065 | ) | (0.50 | ) | — | — | — | — | |||||||||||||
| Early debt redemption costs | — | — | — | — | 681 | (272 | ) | 409 | 0.10 | |||||||||||||||
| Product realignment charges | — | — | — | — | 671 | (210 | ) | 461 | 0.11 | |||||||||||||||
| Gain on spectrum license transactions | — | — | — | — | (144 | ) | 53 | (91 | ) | (0.02 | ) | |||||||||||||
| Impact of adoption of tax reform | — | — | — | — | — | (16,761 | ) | (16,761 | ) | (4.10 | ) | |||||||||||||
| $ | 4,945 | $ | (2,233 | ) | $ | 2,712 | 0.65 | $ | 2,558 | $ | (17,713 | ) | $ | (15,155 | ) | (3.71 | ) | |||||||
| Adjusted EPS | $ | 1.12 | $ | 0.86 | ||||||||||||||||||||
| Unaudited | 12 Mos. Ended 12/31/18 | 12 Mos. Ended 12/31/17 | ||||||||||||||||||||||
| Pre-tax | Tax | After-Tax | Pre-tax | Tax | After-Tax | |||||||||||||||||||
| EPS | $ | 3.76 | $ | 7.36 | ||||||||||||||||||||
| Severance, pension and benefits charges | $ | 50 | $ | (27 | ) | $ | 23 | 0.01 | $ | 1,391 | $ | (541 | ) | $ | 850 | 0.21 | ||||||||
| Early debt redemption costs | 725 | (189 | ) | 536 | 0.13 | 1,983 | (788 | ) | 1,195 | 0.29 | ||||||||||||||
| Product realignment charges | 658 | (149 | ) | 509 | 0.12 | 671 | (210 | ) | 461 | 0.11 | ||||||||||||||
| Acquisition and integration related charges | 553 | (134 | ) | 419 | 0.10 | 884 | (334 | ) | 550 | 0.13 | ||||||||||||||
| Oath goodwill impairment | 4,591 | (64 | ) | 4,527 | 1.10 | — | — | — | — | |||||||||||||||
| Wireless legal entity restructuring | — | (2,065 | ) | (2,065 | ) | (0.50 | ) | — | — | — | — | |||||||||||||
| Gain on spectrum license transactions | — | — | — | — | (270 | ) | 102 | (168 | ) | (0.04 | ) | |||||||||||||
| Net gain on sale of divested businesses | — | — | — | — | (1,774 | ) | 843 | (931 | ) | (0.23 | ) | |||||||||||||
| Impact of adoption of tax reform | — | — | — | — | — | (16,761 | ) | (16,761 | ) | (4.10 | ) | |||||||||||||
| $ | 6,577 | $ | (2,628 | ) | $ | 3,949 | 0.96 | $ | 2,885 | $ | (17,689 | ) | $ | (14,804 | ) | (3.62 | ) | |||||||
| Adjusted EPS | $ | 4.71 | $ | 3.74 | ||||||||||||||||||||
| (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 12/31/18 | 3 Mos. Ended 12/31/17 | |||||||
| Operating Income | $ | 7,986 | $ | 7,118 | |||||
| Add Depreciation and amortization expense | 2,395 | 2,344 | |||||||
| Segment EBITDA | $ | 10,381 | $ | 9,462 | |||||
| Year over year change | 9.7 | % | |||||||
| Total operating revenues | $ | 24,412 | $ | 23,771 | |||||
| Operating Income Margin | 32.7 | % | 29.9 | % | |||||
| Segment EBITDA Margin | 42.5 | % | 39.8 | % | |||||
| (dollars in millions) | |||||||||
| Unaudited | 12 Mos. Ended 12/31/18 | 12 Mos. Ended 12/31/17 | |||||||
| Operating Income | $ | 32,820 | $ | 29,207 | |||||
| Add Depreciation and amortization expense | 9,736 | 9,395 | |||||||
| Segment EBITDA | $ | 42,556 | $ | 38,602 | |||||
| Total operating revenues | $ | 91,734 | $ | 87,511 | |||||
| Operating Income Margin | 35.8 | % | 33.4 | % | |||||
| Segment EBITDA Margin | 46.4 | % | 44.1 | % | |||||
| Wireline | (dollars in millions) | ||||||||
| Unaudited | 3 Mos. Ended 12/31/18 | 3 Mos. Ended 12/31/17 | |||||||
| Operating Income (Loss) | $ | (273 | ) | $ | 62 | ||||
| Add Depreciation and amortization expense | 1,571 | 1,532 | |||||||
| Segment EBITDA | $ | 1,298 | $ | 1,594 | |||||
| Total operating revenues | $ | 7,373 | $ | 7,617 | |||||
| Operating Income (Loss) Margin | (3.7 | )% | 0.8 | % | |||||
| Segment EBITDA Margin | 17.6 | % | 20.9 | % | |||||
| (dollars in millions) | |||||||||
| Unaudited | 12 Mos. Ended 12/31/18 | 12 Mos. Ended 12/31/17 | |||||||
| Operating Income (Loss) | $ | (273 | ) | $ | 380 | ||||
| Add Depreciation and amortization expense | 6,181 | 6,104 | |||||||
| Segment EBITDA | $ | 5,908 | $ | 6,484 | |||||
| Total operating revenues | $ | 29,760 | $ | 30,680 | |||||
| Operating Income (Loss) Margin | (0.9 | )% | 1.2 | % | |||||
| Segment EBITDA Margin | 19.9 | % | 21.1 | % | |||||
| Verizon Communications Inc. | ||||||||
| EBITDA Excluding Impact of Topic 606(1) | ||||||||
| Consolidated | ||||||||
| (dollars in millions) | ||||||||
| 3 Months | ||||||||
| Ended | ||||||||
| Unaudited | 12/31/18 | |||||||
| Consolidated Net Income | $ | 2,065 | ||||||
| Add/subtract: | ||||||||
| Benefit for income taxes | (698 | ) | ||||||
| Interest expense | 1,199 | |||||||
| Depreciation and amortization expense | 4,352 | |||||||
| Consolidated EBITDA | $ | 6,918 | ||||||
| Add/subtract: | ||||||||
| Other income, net* | $ | (1,865 | ) | |||||
| Equity in earnings of unconsolidated businesses† | (64 | ) | ||||||
| Oath goodwill impairment | 4,591 | |||||||
| Severance, pension and benefits charges | 1,818 | |||||||
| Acquisition and integration related charges‡ | 187 | |||||||
| 4,667 | ||||||||
| Consolidated Adjusted EBITDA | $ | 11,585 | ||||||
| Less Impact of Topic 606 | 603 | |||||||
| Consolidated Adjusted EBITDA Excluding Impact of Topic 606 | $ | 10,982 | ||||||
| Total operating revenues | $ | 34,120 | ||||||
| Consolidated Adjusted EBITDA Margin Excluding Impact of Topic 606 | 32.2 | % | ||||||
| * 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) | ||||||||
| 3 Months | ||||||||
| Ended | ||||||||
| Unaudited | 12/31/18 | |||||||
| Operating Income | $ | 7,436 | ||||||
| Add Depreciation and amortization expense | 2,395 | |||||||
| Segment EBITDA | $ | 9,831 | ||||||
| Total operating revenues | $ | 24,269 | ||||||
| Segment EBITDA Margin | 40.5 | % | ||||||
| Wireline | ||||||||
| (dollars in millions) | ||||||||
| 3 Months | ||||||||
| Ended | ||||||||
| Unaudited | 12/31/18 | |||||||
| Operating Loss | $ | (328 | ) | |||||
| Add Depreciation and amortization expense | 1,571 | |||||||
| Segment EBITDA | $ | 1,243 | ||||||
| Total operating revenues | $ | 7,353 | ||||||
| Segment EBITDA Margin | 16.9 | % | ||||||
| (1) Amounts for the three months ended December 31, 2018 exclude the impact of Accounting Standard Update 2014-09, “Revenue from Contracts with Customers (Topic 606)”, which we adopted on January 1, 2018. | ||||||||